10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2005

or

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

US Airways Group, Inc.

(Exact name of registrant as specified in its charter)
(Commission File No. 1-8444)
54-1194634 (IRS Employer Identification No.)

111 West Rio Salado Parkway, Tempe, Arizona 85281
(Address of principal executive offices, including zip code)

and

America West Airlines, Inc.

(Exact name of registrant as specified in its charter)
(Commission File No. 0-12337)
86-0418245 (IRS Employer Identification No.)

4000 East Sky Harbor Blvd., Phoenix, Arizona 85034
(Address of principal executive offices, including zip code)

(480) 693-0800
(Registrant’s telephone number, including area code)

Delaware
(State of Incorporation of all Registrants)

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

US Airways Group, Inc.	Yes þ	No o
America West Airlines, Inc.	Yes o	No þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

US Airways Group, Inc.	Yes o	No þ
America West Airlines, Inc.	Yes o	No þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes þ No o

As of November 7, 2005, there were approximately 81,629,218 shares of US Airways Group, Inc. common stock outstanding.

As of November 7, 2005, America West Airlines, Inc. had 1,000 shares of Class B common stock outstanding, all of which are held by America West Holdings Corporation.

US Airways Group, Inc.
Form 10-Q
Quarterly Period Ended September 30, 2005

Table of Contents

		Page
Part I.	Financial Information
Item 1A.	Condensed Consolidated Financial Statements of US Airways Group, Inc.
	Condensed Consolidated Statements of Operations		1
	Condensed Consolidated Balance Sheets		2
	Condensed Consolidated Statements of Cash Flows		3
	Notes to the Condensed Consolidated Financial Statements		4
Item 1B.	Condensed Consolidated Financial Statements of America West Airlines, Inc.
	Condensed Consolidated Statements of Operations		27
	Condensed Consolidated Balance Sheets		28
	Condensed Consolidated Statements of Cash Flows		29
	Notes to the Condensed Consolidated Financial Statements		30
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		38
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		71
Item 4.	Controls and Procedures		72
Part II.	Other Information
Item 1.	Legal Proceedings		73
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		76
Item 4.	Submission of Matters to a Vote of Security Holders		76
Item 6.	Exhibits		76
Signatures			80
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 10.7
Exhibit 10.8
Exhibit 10.9
Exhibit 10.11
Exhibit 31.1
Exhibit 31.2
Exhibit 31.3
Exhibit 31.4
Exhibit 32.1
Exhibit 32.2

Part I. Financial Information

On September 27, 2005, US Airways Group, Inc. (US Airways Group) consummated the transactions contemplated by its plan of reorganization, including the merger transaction with America West Holdings Corporation (America West Holdings). As a result of the merger, America West Holdings became a wholly owned subsidiary of US Airways Group. As described in greater detail in Notes 1 and 2, while the merger was structured such that US Airways Group was the legal acquirer, the merger has been accounted for as a reverse acquisition such that America West Holdings has been treated as the accounting acquirer. Financial information for periods prior to the merger include the accounts and activities of America West Holdings. America West Holdings is the holding company that owns all of the stock of America West Airlines, Inc. (AWA). This combined Form 10-Q is filed by both US Airways Group and AWA and includes the financial statements of each company in Item 1A and Item 1B, respectively.

Item 1A. Condensed Consolidated Financial Statements of US Airways Group, Inc.

US Airways Group, Inc.
Condensed Consolidated Statements of Operations
(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
	(in millions, except share and per share amounts)
Operating revenues
Mainline passenger	$	704		$	542		$	1,935		$	1,649
Express revenue		157			98			392			260
Cargo		9			6			25			20
Other		56			33			130			93
Total operating revenues		926			679			2,482			2,022
Operating expenses
Aircraft fuel and related taxes		252			153			611			416
Gain on fuel hedging instruments, net		(56	)		(26	)		(124	)		(36	)
Salaries and related costs		193			165			542			493
Express expenses		168			101			414			264
Aircraft rent		90			77			248			227
Aircraft maintenance		64			54			162			157
Other rent and landing fees		48			43			135			127
Selling expenses		48			38			129			117
Special charges, net		84			2			85			1
Depreciation and amortization		16			13			39			40
Other		90			69			232			185
Total operating expenses		997			689			2,473			1,991
Operating income (loss)		(71	)		(10	)		9			31
Nonoperating income (expense)
Interest income		4			2			8			5
Interest expense, net		(21	)		(20	)		(60	)		(59	)
Other, net		1			(1	)		3			3
Total nonoperating expense, net		(16	)		(19	)		(49	)		(51	)
Loss before income taxes		(87	)		(29	)		(40	)		(20	)
Income tax expenses		—			—			—			—
Net loss	$	(87	)	$	(29	)	$	(40	)	$	(20	)
Loss per common share
Basic	$	(5.04	)	$	(1.92	)	$	(2.51	)	$	(1.32	)
Diluted	$	(5.04	)	$	(1.92	)	$	(2.51	)	$	(1.32	)
Weighted average shares used for computation (000)
Basic		17,262			14,896			15,737			14,845
Diluted		17,262			14,896			15,737			14,845

See accompanying notes to condensed consolidated financial statements.

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US Airways Group, Inc.
Condensed Consolidated Balance Sheets
(in millions, except share and per share amounts)

	September 30,			December 31,
	2005			2004
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	1,210		$	149
Short-term investments		168			127
Restricted cash		87			41
Accounts receivable, net		425			109
Materials and supplies, net		206			58
Prepaid expenses and other		372			141
Total current assets		2,468			625
Property and equipment
Flight equipment		2,892			927
Other property and equipment		521			291
Less accumulated depreciation and amortization		(545	)		(625	)
		2,868			593
Equipment purchase deposits		52			63
Net property and equipment		2,920			656
Other assets
Goodwill		584			—
Other intangibles, net		592			—
Restricted cash		702			72
Other assets, net		362			122
Total other assets		2,240			194
	$	7,628		$	1,475
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of debt and capital leases	$	244		$	155
Accounts payable		544			174
Air traffic liability		898			195
Accrued compensation and vacation		214			43
Accrued taxes		199			33
Other accrued expenses		743			65
Total current liabilities		2,842			665
Noncurrent liabilities and deferred credits
Long-term debt and capital leases, net of current maturities		2,902			640
Deferred credits		219			43
Employee benefit liabilities and other		758			91
Total noncurrent liabilities and deferred credits		3,879			774
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value; 48,800,000 shares authorized, no shares issued		—			—
Class A common stock, $0.01 par value; 1,200,000 shares authorized, 460,657 shares issued and outstanding at December 31, 2004		—			—
Class B common stock, $0.01 par value; 100,000,000 shares authorized, 21,270,506 shares issued and outstanding at December 31, 2004		—			1
Common stock, $0.01 par value; 200,000,000 shares authorized, 74,584,120 shares outstanding at September 30, 2005		1			—
Additional paid-in capital		1,234			632
Accumulated deficit		(328	)		(289	)
Treasury stock, Class B common stock at cost, 6,780,500 shares in 2004		—			(308	)
Total stockholders’ equity		907			36
	$	7,628		$	1,475

See accompanying notes to condensed consolidated financial statements.

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US Airways Group, Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)

	Nine Months Ended September 30,
	2005			2004
Net cash provided by operating activities	$	164		$	90
Cash flows from investing activities
Purchase of property and equipment		(148	)		(126	)
Sales (purchases) of short-term investments		(12	)		33
Increase in restricted cash		(22	)		(1	)
Acquisition of business, net of cash acquired		305			—
Proceeds from dispositions of assets		74			2
Increase in investments in debt securities		—			(20	)
Net cash provided by (used for) for investing activities		197			(112	)
Cash flows from financing activities
Proceeds from issuance of common stock, net		694			—
Proceeds from issuance of debt, net		314			110
Principal payments on debt and capital lease obligations		(306	)		(174	)
Other		(2	)		—
Net cash provided by (used for) financing activities		700			(64	)
Net increase (decrease) in cash and cash equivalents		1,061			(86	)
Cash and cash equivalents at beginning of period		149			153
Cash and cash equivalents at end of period	$	1,210		$	67
Noncash investing and financing activities
Reclassification of investments in debt securities to short-term investments	$	30		$	16
Notes payable cancelled under the aircraft purchase agreement		12			—
Notes payable issued under aircraft purchase agreement		9			7
Payment in kind notes issued, net of returns		—			5
Acquisition of shares due to loan default		—			2
Supplemental Information
Interest paid during the period, net of amounts capitalized	$	28		$	18
Income taxes paid during the period		—			1

See accompanying notes to condensed consolidated financial statements.

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US Airways Group, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Merger with America West Holdings Corporation

     On September 12, 2004, US Airways Group, Inc. (US Airways Group or the Company) and its domestic subsidiaries, US Airways, Inc. (US Airways), Piedmont Airlines, Inc., PSA Airlines, Inc. and Material Services Company, Inc. (collectively referred to as the Debtors), which accounted for substantially all of the operations of US Airways Group, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States bankruptcy court for the Eastern District of Virginia, Alexandria Division. On May 19, 2005, US Airways Group signed a merger agreement with America West Holdings Corporation (America West Holdings) pursuant to which America West Holdings merged with a wholly owned subsidiary of US Airways Group upon US Airways Group’s emergence from bankruptcy. US Airways Group’s plan of reorganization was confirmed by the bankruptcy court on September 16, 2005 and became effective on September 27, 2005, the same day that the merger with America West Holdings became effective.

     Critical to US Airways Group’s emergence from bankruptcy and the merger with America West Holdings was additional financing and liquidity to fund operations. The financing and liquidity was provided through a combination of new equity investments, new and restructured debt instruments and agreements with significant stakeholders as described below.

The New Equity Investments — On September 27, 2005, US Airways Group received new equity investments of $565 million, in the aggregate, from ACE Aviation Holdings Inc. (ACE); Par Investment Partners, L.P. (Par); Peninsula Investment Partners, L.P. (Peninsula); a group of investors under the management of Wellington Management Company, LLP (Wellington); Tudor Proprietary Trading, L.L.C. and certain investors advised by Tudor Investment Corp. (Tudor); and Eastshore Aviation, LLC (Eastshore). In connection with the equity investments, each of the equity investors received an option to purchase additional shares at $15.00 per share. Par purchased the options granted to ACE and Eastshore, and each option holder exercised the first two-thirds of its option on September 28, 2005, for aggregate proceeds to US Airways Group of approximately $75 million. The remaining one-third of the options was scheduled to expire on October 13, 2005, at which time each of the equity investors exercised the remaining portion of its option for aggregate proceeds to US Airways Group of approximately $38 million. The total new equity investment was $678 million.

Public stock offering — On September 30, 2005, US Airways Group completed a public offering of common stock in which it issued 9,775,000 shares of its common stock for net proceeds of $189 million. Net of fees, the proceeds from the offering were $180 million.

GE Merger MOU — US Airways Group and America West Holdings reached a comprehensive agreement with General Electric Capital Corporation (GECC), and its affiliates as described in the Master Merger Memorandum of Understanding (GE Merger MOU). The GE Merger MOU provided for the following:

• The GE Merger MOU provided for continued use by US Airways Group of certain leased Airbus, Boeing and regional jet aircraft, the modification of monthly lease rates, and the return to GECC of certain other leased Airbus and Boeing aircraft.

• GECC provided a bridge facility of approximately $56 million for use by US Airways Group during the pendency of the Chapter 11 proceedings. US Airways paid an affiliate of General Electric (GE) $125 million in cash on September 30, 2005 in exchange for retirement of the bridge facility, forgiveness and release of US Airways from certain prepetition obligations, deferral of certain payment obligations, and amendments to maintenance agreements.

• In June 2005, GECC purchased and immediately leased back to US Airways Group: (a) the assets securing the credit facility obtained from GE in 2001 (the 2001 GE Credit Facility) and the liquidity facility obtained from GE in 2003 in connection with US Airways Group’s emergence from the first bankruptcy (the 2003 GE Liquidity Facility), and other GE obligations, consisting of 11 Airbus aircraft and 28 spare engines and engine stands, and (b) ten regional jet aircraft previously debt financed by GECC. The proceeds from the sale leaseback transaction of approximately $633 million were used to pay down balances due to GE by US Airways Group under the 2003 GE Liquidity Facility in full, the GECC

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mortgage-debt financed CRJ aircraft in full, and a portion of the 2001 GE Credit Facility. The 2001 GE Credit Facility was amended to allow certain additional borrowings of up to $28 million.

Airbus MOU — In connection with the merger, a Memorandum of Understanding was executed between AVSA S.A.R.L., an affiliate of Airbus S.A.S. (Airbus), US Airways Group, US Airways and AWA (Airbus MOU). The key aspects of the Airbus MOU are as follows:

• On September 27, 2005, US Airways and AWA entered into two loan agreements with Airbus Financial Services (AFS), as Initial Lender and Loan Agent, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and US Airways Group, as guarantor, with commitments in initial aggregate amounts of up to $161 million and up to $89 million (the Airbus $161 Million Loan and the Airbus $89 Million Loan and, collectively, the Airbus Loans). The Airbus Loans bear interest at a rate of LIBOR plus a margin, subject to adjustment, and have been recorded as an obligation of US Airways Group.

• Airbus has rescheduled US Airways Group’s A320-family and A330-200 delivery commitments and has agreed to provide backstop financing for a substantial number of aircraft, subject to certain terms and conditions, on an order of 20 A350 aircraft. US Airways Group’s A320-family aircraft are now scheduled for delivery in 2009 and 2010. US Airways Group’s A330-200 aircraft are scheduled for delivery in 2009 and 2010 and A350 aircraft deliveries are currently scheduled to occur beginning in 2011. The Airbus MOU also eliminates cancellation penalties on US Airways Group’s orders for the ten A330-200 aircraft, provided that US Airways Group has met certain predelivery payment obligations under the A350 order. In connection with the restructuring of aircraft firm orders, US Airways Group and America West Holdings were required to pay an aggregate non-refundable restructuring fee which was paid by means of set-off against existing equipment purchase deposits of US Airways Group and America West Holdings held by Airbus. The US Airways Group restructuring fee of $39 million was recorded as a reduction in the assets acquired by America West Holdings in purchase accounting. The America West Holdings restructuring fee of $50 million has been recorded as a special charge in the accompanying consolidated statement of operations, along with $7 million in related capitalized interest.

Restructuring of the ATSB Loan Guarantees — US Airways Group and America West Holdings each had loans outstanding guaranteed under the Air Transportation Safety and System Stabilization Act by the Air Transportation Stabilization Board (ATSB and the loans, ATSB Loans). In connection with the September 12, 2004 Chapter 11 filing, the ATSB and the lenders under the US Airways ATSB Loan agreed to authorize the Company to continue to use cash collateral securing the US Airways ATSB Loan on an interim basis (Cash Collateral Agreement). US Airways reached agreements with the ATSB concerning interim extensions to the ATSB Cash Collateral Agreement, the last of which was extended to the earlier of the effective date of the plan of reorganization or October 25, 2005. The Cash Collateral Agreement and subsequent extensions each required US Airways Group, among other conditions, to maintain a weekly minimum unrestricted cash balance which decreased periodically during the term of the extension.

     On July 22, 2005, US Airways Group and America West Holdings announced that the ATSB approved the proposed merger. Under the negotiated new loan terms, the US Airways ATSB Loan is guaranteed by US Airways Group (including all domestic subsidiaries, with certain limited exceptions) and is secured by substantially all of the present and future assets of US Airways Group not otherwise encumbered, other than certain specified assets, including assets which are subject to other financing agreements. The AWA ATSB Loan is also guaranteed by US Airways Group (including all domestic subsidiaries, with certain limited exceptions) and is secured by a second lien in the same collateral. The loans continue to have separate repayment schedules and interest rates; however, the loans are subject to similar repayments and mandatory amortization in the event of additional debt issuances, with certain limited exceptions.

     As of September 30, 2005, $583 million was outstanding under the US Airways ATSB Loan, of which $525 million was guaranteed by the ATSB under the Air Transportation Safety and System Stabilization Act. The US Airways ATSB Loan bears interest as follows:

• 90% of the US Airways ATSB Loan (Tranche A), the guaranteed portion of the loan, was funded through a participating lender’s commercial paper conduit program and bears interest at a rate equal to the conduit provider’s weighted average cost related to the issuance of certain commercial paper notes and other short term borrowings plus 0.30%, provided that portions of Tranche A that are held by the ATSB or by an assignee and are no longer subject to such commercial paper conduit program bear

5

	interest at LIBOR plus 40 basis points, and portions of Tranche A that are under certain circumstances assigned free of the ATSB guarantee bear interest at LIBOR plus 6.0%; and
•	10% of the US Airways ATSB Loan (Tranche B) bears interest at the greater of the Tranche A interest rate plus 6.0% and LIBOR plus 6.0% from a current rate of LIBOR plus 4.0%.

     In addition, US Airways is charged an annual guarantee fee in respect of the ATSB guarantee equal to 6.0% of the guaranteed amount (initially $525 million). The US Airways ATSB Loan also reschedules amortization payments for US Airways with semi-annual payments beginning on March 31, 2007, and continuing through September 30, 2010.

     US Airways must pay down the principal of its loan with the first $125 million of net proceeds from specified asset sales identified in connection with its Chapter 11 proceedings, whether completed before or after emergence. US Airways then retains the next $83 million of net proceeds from specified assets sales, and must pay 60% of net proceeds in excess of an aggregate of $208 million from specified asset sales to the ATSB. Any such asset sales proceeds up to $275 million are to be applied in order of maturity, and any such asset sales proceeds in excess of $275 million are to be applied pro rata across all maturities in accordance with the loan’s early amortization provisions. US Airways completed in excess of $125 million in asset sales prior to emergence from the Chapter 11 proceedings, satisfying the minimum prepayment requirement.

     As of September 30, 2005, $249 million was outstanding under the AWA ATSB Loan, of which $228 million is guaranteed by the ATSB. Certain third party counter-guarantors have fully and unconditionally guaranteed the payment of an aggregate amount of $19 million of the remaining principal amount of the loan plus accrued and unpaid interest thereon. The AWA ATSB Loan bears interest at a rate of LIBOR plus 40 basis points. The guarantee fee on the AWA ATSB Loan is 8.0% with annual increases of 5 basis points. The amortization payments under the AWA ATSB Loan become due in seven installments of $42 million on each March 31 and September 30, commencing on September 30, 2005 and ending on September 30, 2008. The AWA ATSB Loan also requires a premium, in certain instances, for voluntary prepayments. AWA made a voluntary prepayment of $9 million dollars in principal amount on September 27, 2005, after the closing of the AWA ATSB Loan, prepaying in full the portion of the loan subject to one of the counter-guarantees, which prepayment has been applied pro rata against each scheduled amortization payment.

     The terms of both amended and restated loans require US Airways Group to meet certain financial covenants, including minimum cash requirements and required minimum ratios of earnings before interest, taxes, depreciation, amortization and aircraft rent to fixed charges. Starting with the quarter ended December 31, 2005.

     On October 19, 2005, the ATSB Loan was sold to 13 fixed income investors. As a result of that sale, the ATSB no longer has an interest in any of the Company’s debt (see also Note 13, “Subsequent Events”).

New Convertible Notes — On September 30, 2005, US Airways Group issued $144 million aggregate principal amount of 7% Senior Convertible Notes due 2020 (the 7% Senior Convertible Notes) for proceeds, net of expenses, of approximately $139 million. The 7% Senior Convertible Notes are US Airways Group’s senior unsecured obligations and rank equally in right of payment to its other senior unsecured and unsubordinated indebtedness and are effectively subordinated to its secured indebtedness to the extent of the value of assets securing such indebtedness. The 7% Senior Convertible Notes are fully and unconditionally guaranteed, jointly and severally and on a senior unsecured basis, by US Airways Group’s two major operating subsidiaries, US Airways and AWA. The guarantees are the guarantors’ unsecured obligations and rank equally in right of payment to the other senior unsecured and unsubordinated indebtedness of the guarantors and are effectively subordinated to the guarantors’ secured indebtedness to the extent of the value of assets securing such indebtedness.

Restructuring of Affinity Credit Card Partner Agreement — In connection with the merger, AWA, US Airways Group and Juniper Bank, a subsidiary of Barclays PLC (Juniper), entered into an agreement on August 8, 2005 amending AWA’s co-branded credit card agreement with Juniper, dated January 25, 2005. Pursuant to the amended credit card agreement, Juniper will offer and market an airline mileage award credit card program to the general public to participate in US Airways Group’s Dividend Miles program through the

6

use of a co-branded credit card.

     US Airways Group’s credit card program is currently administered by Bank of America, N.A. (USA) (Bank of America) and will terminate approximately two years and three months after the effective date of the merger. During that period both Juniper and Bank of America will run credit card programs for US Airways Group. (See also Note 14, “Legal Proceedings.”)

     Under the amended credit card agreement, Juniper will pay to US Airways Group fees for each mile awarded to each credit card account administered by Juniper, subject to certain exceptions. Juniper also agreed to pay a one-time bonus payment of $130 million, following the effectiveness of the merger, subject to certain conditions. The bonus payment was made to AWA on October 3, 2005.

     In addition, Juniper will pre-purchase miles from US Airways Group for an aggregate of $325 million, subject to the same conditions as apply to the $130 million bonus payment. To the extent that these miles are not used by Juniper in connection with the co-branded credit card program, US Airways Group will repurchase these miles in 12 equal quarterly installments beginning on the fifth year prior to the expiration date until paid in full. US Airways Group will make monthly interest payments at LIBOR plus 4.75% to Juniper, beginning on November 1, 2005, based on the amount of pre-purchased miles that have not been used by Juniper in connection with the co-branded credit card program and have not been repurchased by US Airways Group. US Airways Group will be required to repurchase pre-purchased miles under certain reductions in the collateral held under the credit card processing agreement with JPMorgan Chase Bank, N.A. Accordingly, the prepayment will be recorded as additional indebtedness.

     Juniper may, at its option, terminate the amended credit card agreement, make payments to US Airways Group under the amended credit card agreement in the form of pre-purchased miles rather than cash, or commence the repurchase of the pre-purchased miles before the fifth year prior to the expiration date in the event that US Airways Group breaches its obligations under the amended credit card agreement, or upon the occurrence of certain events.

Restructuring of Credit Card Processing Agreement — In connection with the merger, AWA, JPMorgan Chase Bank, N.A., successor-in-interest to JPMorgan Chase Bank, and Chase Merchant Services, L.L.C., entered into the First Amendment to the Merchant Services Bankcard Agreement on August 8, 2005. Pursuant to the amended card processing agreement, JPMorgan Chase and Chase Merchant Services (collectively, Chase) will perform authorization, processing and settlement services for sales on Visa and Mastercard for AWA and US Airways following the merger. The original card processing agreement is guaranteed by America West Holdings, and US Airways Group executed a guaranty of the amended card processing agreement on the effective date of the merger.

     US Airways’ credit card processing is currently administered by Bank of America and such processing services are expected to be transferred to Chase as soon as possible, but not later than 120 days, after the merger. US Airways will become a party to the amended card processing agreement at the time that Chase begins processing for US Airways.

     The amended card processing agreement took effect at the effective time of the merger and continues until the expiration of the initial term, which is three years from the date the amended card processing agreement takes effect. Upon expiration of the initial term, the amended card processing agreement will automatically renew for successive one-year periods pursuant to the terms of the agreement.

     Under the amended card processing agreement, AWA will pay to Chase fees in connection with card processing services such as sales authorization, settlement services and customer service. AWA and US Airways are also required to maintain a reserve account to secure Chase’s exposure to outstanding air traffic liability. In October 2005, AWA was required to provide $153 million in cash collateral.

Asset Based Financings — During the third quarter of 2005, the Company executed flight equipment asset sale and sale lease back transactions resulting in net proceeds of $29 million and a reduction in aircraft related debt of $38 million.

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Subsequent to September 30, 2005, the Company executed additional flight equipment asset sale and sale leaseback transactions resulting in net cash proceeds of $108 million and a reduction in aircraft related debt of $394 million.

US Airways Group’s Emergence from Bankruptcy — On September 16, 2005, the bankruptcy court entered an order approving and confirming the Joint Plan of Reorganization of US Airways, Inc. and its Affiliated Debtors and Debtors-in-Possession. The plan of reorganization provides for a reorganization of each of the five Debtors. In accordance with the plan of reorganization, US Airways Group entered into a merger transaction with America West Holdings.

     In accordance with the U.S. bankruptcy code, the plan of reorganization divided claims into classes according to their relative seniority and other criteria and provides for the treatment for each claim of a particular class. These include claims related to the Debtors’ assumption or rejection of various contracts and unexpired leases, the assumption of Debtors’ existing collective bargaining agreements with their unions and the termination of certain employee benefit plans with employees and retirees, and other matters. The ultimate resolution of certain of the claims asserted against the Debtors in the Chapter 11 cases will be subject to negotiations, elections and bankruptcy court procedures. The amount of stock distributed to any particular general unsecured creditor under the plan of reorganization will depend on the resolution of claims filed by these creditors, as well as on the value of shares of the new common stock of US Airways Group in the marketplace. The class of unsecured creditors eligible for stock distributions are expected, in the aggregate, to recover between approximately 3.1% and 17.4% of the value of those claims as determined through the bankruptcy process.

• PBGC Claim — On November 12, 2004, US Airways filed a motion requesting a determination from the United States Bankruptcy Court for the Eastern District of Virginia that US Airways satisfied the financial requirements for a “distress termination” of the Retirement Plan for Flight Attendants in the Service of US Airways, Inc. (AFA Plan), the Pension Plan for Employees of US Airways, Inc. Who Are Represented by the International Association of Machinists and Aerospace Workers (IAM Plan), and the Retirement Plan for Certain Employees of US Airways, Inc. (CE Plan) under section 4041(c)(2)(B)(ii)(IV) of the Employee Retirement Security Act of 1974, as amended (ERISA), and approval of each such plan’s termination. These plans were projected to have benefit obligations and plan assets aggregating $2.7 billion and $1.7 billion, respectively, as of September 30, 2004, the most recent valuation date. On January 6, 2005, the Bankruptcy Court entered an order (i) finding that the financial requirements under section 4041(c)(2)(B)(ii)(IV) of ERISA for a distress termination of the plans had been met and (ii) approving termination of the plans. The AFA Plan and the IAM Plan were terminated effective January 10, 2005, by agreement between the Pension Benefit Guaranty Corporation (PBGC) and US Airways. The CE Plan was terminated effective January 17, 2005, by agreement between the PBGC and US Airways. Effective February 1, 2005, the PBGC was appointed trustee for each of the three plans. As a result of these terminations, the PBGC filed claims against the Company for the unfunded portion of each of the Plans. Under the plan of reorganization, the PBGC received, as treatment for its claims: (i) cash in the amount of $13,500,000; (ii) an unsecured promissory note in the principal amount of $10,000,000 issued by US Airways and guaranteed by US Airways Group, bearing interest at a rate of 6.00% per annum payable annually in arrears, with such promissory note to be payable in a single installment on the seventh anniversary of the effective date of the plan of reorganization; and (iii) 70 percent, or 4,873,485 shares, of common stock of US Airways Group issued to the unsecured creditors, net of the shares allocated to the Air Line Pilots Association (ALPA).

• Agreements with ALPA — On September 14, 2005, US Airways Group, US Airways, America West Holdings and AWA reached agreement with the two ALPA-represented pilot groups at the separate airlines on a comprehensive agreement (the Transition Agreement) that will govern many merger-related aspects of the parties’ relationships until there is a single collective bargaining agreement covering all pilots. US Airways Group and US Airways entered into a letter of agreement which provides that US Airways pilots designated by ALPA will receive 1.25 million shares of US Airways Group common stock and options to purchase 1.1 million shares of US Airways Group common stock. The 1.25 million shares are drawn from

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the 8.21 million shares initially allocated to the unsecured creditors in the plan of reorganization. ALPA will notify US Airways of the allocations to pilots designated to receive shares and options no later than 60 days after September 27, 2005. Shares will be issued to those pilots no later than 30 days after ALPA’s notification. The options will be issued according to the following schedule: the first tranche of 500,000 options will be issued on January 31, 2006, a second tranche of 300,000 options will be issued on January 31, 2007, and the third tranche of 300,000 options will be issued on January 31, 2008. The options will have a term of five years from date of issuance. The exercise price for each tranche of options will be the average of the closing price per share of US Airways common stock as reflected on the New York Stock Exchange for the 20 business day period prior to the applicable option issuance date. The letter of agreement also includes provisions restricting transfer of the options and governing anti-dilution. In connection with the negotiation of the Transition Agreement and the letter of agreement, US Airways also agreed with ALPA to eliminate an existing 1% pay reduction that would apply to all pilots as a result of a lump sum payment due to pilots recalled from furlough and agreed to pay $500,000 to resolve an outstanding grievance over pay credits for pilots assigned by US Airways to travel to and from certain duty assignments.

     While a significant amount of the Debtors’ liabilities were extinguished as a result of the discharge granted upon confirmation of the plan of reorganization, not all of the Debtors’ liabilities were subject to discharge. The types of obligations that the Debtors remain responsible for include those relating to their secured financings, aircraft financings, certain environmental liabilities and the continuing obligations arising under contracts and leases assumed by the Debtors, as well as allowed administrative claims. Allowed administrative claims consist primarily of the costs and expenses of administration of the Chapter 11 cases, including the costs of operating the Debtors’ businesses since filing for bankruptcy. The bankruptcy court set August 22, 2005 as the bar date by which creditors asserting administrative claims, other than administrative claims arising in the ordinary course of business, were required to be filed. The Debtors received a large number of administrative claims in response to this bar date, for timely filed claims as well as additional claims that were late filed without permission of the bankruptcy court. Included in these claims, however, are claims for amounts arising in the ordinary course that have either already been paid, or that are included in the Debtors’ business plan and are expected to be paid in the ordinary course. Also included are claims that are duplicative, claims for which the Debtors believe there is no legal merit for a claim of any status, and claims that the Debtors believe may be valid as unsecured claims but are not entitled to administrative claims status. Accordingly, the Debtors believe that only a very small portion of the claims filed in response to the bar date for non-ordinary course administrative expense claims will actually be allowed in amounts exceeding the ordinary course expenditures already contained in the Debtors’ business plan. However, there can be no assurances that the aggregate amount of the claims ultimately allowed will not be material. To the extent any of these claims are allowed, they will generally be satisfied in full.

2. Basis of Presentation

     The merger has been accounted for as a reverse acquisition using the purchase method of accounting. Although the merger was structured such that America West Holdings became a wholly owned subsidiary of US Airways Group, America West Holdings will be treated as the acquiring company for accounting purposes under Statement of Financial Accounting Standards No. 141 “Business Combinations,” due to the following factors: (1) America West Holdings’ stockholders received the largest share of the Company’s common stock in the merger in comparison to the unsecured creditors of US Airways; (2) America West Holdings received a larger number of designees to the board of directors; and (3) America West Holdings’ Chairman and Chief Executive Officer prior to the merger became the Chairman and Chief Executive Officer of the combined company. As a result of the reverse acquisition, the statements of operations presented include the results of America West Holdings for the three months and nine months ended September 30, 2005 and consolidated results of US Airways Group for the four days ended September 30, 2005. The financial information reflected in the financial statements for periods prior to the merger are comprised of the accounts and activities of America West Holdings, the holding company of AWA.

     America West Holdings is a guarantor of AWA’s 7.25% Senior Exchangeable Notes. The Company has not provided the financial statements of America West Holdings as subsidiary guarantor, as required under Rule 3-10 of Regulation S-X, as the financial statements of US Airways Group are those of America West Holdings, the accounting acquirer in the merger.

     The accompanying unaudited condensed consolidated financial statements include the accounts of US Airways Group and its wholly owned subsidiaries. Principal subsidiaries include US Airways, AWA, Piedmont Airlines, Inc. and PSA Airlines, Inc. All significant intercompany accounts and transactions have

9

been eliminated. Management believes that all adjustments, consisting of normally recurring items, necessary for a fair presentation of results have been included in the condensed consolidated financial statements for the interim periods presented, which are unaudited. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The principal areas of judgment relate to fair values assigned in fresh-start and purchase accounting, passenger revenue recognition and frequent traveler programs.

     The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in America West Holdings’ Annual Report on Form 10-K for the year ended December 31, 2004 as well as the consolidated financial statements and related notes contained in US Airways Group’s Annual Report on Form 10-K for the year ended December 31, 2004.

     The Company classifies revenues and expenses under capacity purchase agreements with third party regional airlines and the operations of its wholly owned regional airline subsidiaries as “Express” revenue and expense in the accompanying consolidated statements of operations.

     Certain prior year amounts have been reclassified to conform with the 2005 presentation. In the first quarter of 2005, America West Holdings changed its method of reporting for its regional alliance agreement with Mesa Airlines (Mesa) from the net basis of presentation to the gross basis of presentation. See also Note 6, “Change in Method of Reporting for America West Express Results,” for additional information about the agreement with Mesa and the reclassification related to the change in presentation.

Change in Accounting Policy

     AWA historically recorded the cost of major scheduled airframe, engine and certain component overhauls as capitalized assets that are subsequently amortized over the periods benefited (the deferral method). US Airways Group charges maintenance and repair costs for owned and leased flight equipment to operating expense as incurred. Effective October 1, 2005, AWA changed its accounting policy from the deferral method to the expense as incurred method. While the deferral method is permitted under accounting principles generally accepted in the United States of America, US Airway Group believes that the expense as incurred method is preferable and the predominant method used in the airline industry. The effect of this change in accounting for aircraft maintenance and repairs could approximate $250 million, and will be treated as a cumulative effect of a change in accounting principle (see also Note 12, “Recent Accounting Pronouncements”).

3. New Equity Structure and Conversion

     Pursuant to US Airways Group’s plan of reorganization, all securities of US Airways Group outstanding prior to September 27, 2005 were cancelled upon emergence from the Chapter 11 proceedings. In connection with the merger, US Airways Group adopted an Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws effective September 27, 2005. US Airways Group’s authorized capital stock, following the merger, consists of 200 million shares of common stock, par value $0.01 per share. Holders of new US Airways Group common stock are entitled to one vote per share on all matters submitted to a vote of common shareholders, except that voting rights of non-U.S. citizens are limited to the extent that the shares of common stock held by such non-U.S. persons would otherwise be entitled to more than 24.9% of the aggregate votes of all outstanding equity securities of US Airways Group.

     In the merger, holders of America West Holdings Class A common stock received 0.5362 of a share of new US Airways Group common stock for each share of America West Holdings Class A common stock they owned, and holders of America West Holdings Class B common stock received 0.4125 of a share of new US Airways Group common stock for each share of America West Holdings Class B common stock they owned, according to the terms specified in the merger agreement.

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     As noted in Note 1 above, the new equity investors acquired an aggregate of approximately 44 million shares of common stock, including the shares acquired upon exercise of their options. In connection with these new equity investments, the new equity investors entered into stockholders agreements that prohibit the equity investors’ sale of US Airways Group common stock for a period of six months following the closing date of the investment. Under the terms of the PBGC settlement agreement, shares issued to the PBGC shall not be sold, assigned, transferred or pledged prior to five months after the merger effective date.

     Upon expiration of each tranche of the investor options, US Airways Group was required to make an additional offer to Eastshore, in an amount equal to one-third of the proceeds received from exercise of the options, to repurchase shares of common stock held by Eastshore at a purchase price of $15.00 per share, and Eastshore has the right, but not the obligation to accept that offer to repurchase in whole or in part for a period of at least 30 days after the receipt of the offer. On October 4, 2005, the Company made the offer in connection with the first expiration date, and on November 3, 2005 the offer expired. On November 8, 2005, the Company made the offer to Eastshore in connection with the second expiration date. This offer will expire on December 8, 2005.

4. Loss per Common Share

     Basic Earnings (Loss) per Common Share (EPS) is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the maximum dilution that would result after giving effect to all potential dilutive common shares from stock options, warrants, and convertible debt. The number of additional shares is calculated by assuming that outstanding, in-the-money stock options and warrants were exercised and the proceeds from such exercises were used to buy back shares of common stock at the average market price for the reporting period.

     For the three and nine months ended September 30, 2005, options to acquire common shares of 3,283,594 and 2,841,625 respectively, are not included in the computation of diluted EPS because of the antidilutive effect on EPS. In addition, 4,929,653 and 3,890,310 warrants for the three and nine months ended September 30, 2005, issued in conjunction with the AWA ATSB Loan and related transactions are not included in the computation of diluted EPS because of the antidilutive effect on EPS. In addition, 5,959,784 incremental shares from assumed conversion of the 7% Senior Convertible Notes, 3,860,289 incremental shares from assumed conversion of the 7.5% Senior Convertible Notes and 4,032,130 incremental shares from assumed conversion of the 7.25% convertible notes, are not included in the computation of diluted EPS for the third quarter because of the antidilutive effect on EPS.

     For the three and nine months ended September 30, 2004, options to acquire 3,018,743 and 2,772,590 common shares, respectively, are not included in the computation of diluted EPS because of the antidilutive effect on EPS. In addition, 3,720,750 and 3,586,275 incremental shares from assumed conversion of the 7.5% convertible senior notes are not included in the computation of diluted EPS for the third quarter and the nine-month period because of the antidilutive effect on EPS. Similarly, the 3,339,535 shares issuable upon conversion of the 7.25% Senior Exchangeable Notes due 2023 were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2004 because of the antidilutive effect on EPS. In addition, 4,348,111 and 5,313,297 warrants for the three and nine months ended September 30, 2004, issued in conjunction with the AWA ATSB Loan and related transactions, are not included in the computation of diluted EPS because of the antidilutive effect on EPS.

5. Stock Options

     The Company accounts for its stock option plans in accordance with the provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations (APB 25). As such, compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. The Company issues its stock options at a price equal to fair market value on the date of grant. Accordingly, no compensation cost has been recognized for stock options in the accompanying condensed consolidated financial statements.

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     Had the Company determined compensation cost based on the fair value at the grant date for its stock options under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” the Company’s net loss and loss per share would have been decreased to the pro forma amounts indicated below (in millions except per share data):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Net loss, as reported	$	(87	)	$	(29	)	$	(40	)	$	(20	)
Stock-based compensation expense		(7	)		(2	)		(9	)		(4	)
Pro forma net loss	$	(94	)	$	(31	)	$	(49	)	$	(24	)
Loss per share:
Basic — as reported	$	(5.04	)	$	(1.92	)	$	(2.51	)	$	(1.32	)
Basic — pro forma	$	(5.44	)	$	(2.05	)	$	(3.10	)	$	(1.64	)
Diluted — as reported	$	(5.04	)	$	(1.92	)	$	(2.51	)	$	(1.32	)
Diluted — pro forma	$	(5.44	)	$	(2.05	)	$	(3.10	)	$	(1.64	)

6. Change in Method of Reporting for America West Express Results

     AWA has a regional airline alliance agreement with Mesa (the Mesa Agreement) that commenced in February 2001. Mesa, operating as America West Express, provides feeder service for AWA. As of September 30, 2005, the America West Express fleet included 61 aircraft comprised of 37 86-seat CRJ 900s, 18 50-seat CRJ 200s and six 37-seat Dash 8 turbo prop aircraft. The Mesa Agreement is anticipated to expire in June 2012.

     Under the Mesa Agreement, Mesa is required to fly the routes and flights designated by AWA using Mesa’s aircraft, flight crews and other related services. Mesa maintains and operates the aircraft; employs, trains, manages and compensates personnel necessary to provide the flight services; and provides related passenger handling services for and on the flights. AWA is responsible for establishing the routes, scheduling Express flights, pricing of the tickets, marketing and selling the tickets, collecting all sales amounts, paying all costs of sales and marketing and taking inventory risk on the inventory of seats for sale on Mesa. The ground handling of aircraft is performed by either AWA or Mesa, depending upon the airport.

     AWA collects the revenue and income generated from the services provided by Mesa pursuant to the Mesa Agreement. In return, AWA: (i) reimburses Mesa for actual non-controllable costs incurred by Mesa such as fuel, insurance, taxes, fees and security; (ii) pays Mesa for actual controllable non-maintenance costs, subject to a cap, such as aircraft lease expense and crew expense; (iii) pays Mesa for controllable maintenance costs at fixed rates (subject to reimbursement of excess costs if actual costs during the term are less than fixed amounts paid by AWA); (iv) reimburses Mesa costs and expenses incurred at stations maintained and operated by Mesa; and (v) shares with Mesa a percentage of the revenue allocated to the flight segments flown by Mesa on a pro rata basis.

     To improve the visibility of America West Express operating results, effective in the first quarter of 2005, America West Holdings changed its method of accounting for the Mesa Agreement from the net basis to the gross basis of presentation. Under the gross basis of presentation, passenger revenues and operating expenses associated with the Mesa agreement are reported gross (i.e. in Operating revenues as “Express revenue” and within Operating Expenses as “Express expenses”) in the condensed consolidated statement of operations. Under the net basis of presentation, America West Express passenger revenues and the associated operating expenses were netted and classified in Operating Revenues in “Other.” Prior period amounts have been reclassified to be consistent with the 2005 presentation. These reclassifications did not impact operating income or net income for the periods presented. The following table presents the effect of this reclassification for the three and nine months ended September 30, 2004 (in millions):

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	Three Months Ended September 30, 2004
	As Reported		Adjustments			As Reclassified
Operating revenues:
Mainline passenger	$	542	$	—		$	542
Express revenue		—		98	(1)		98
Cargo and other		37		2			39
Total operating revenues	$	579	$	100		$	679
Operating expenses:
Operating expenses	$	589	$	(1	)	$	588
Express expenses		—		101	(2)		101
Total operating expenses	$	589	$	100		$	689

	Nine Months Ended September 30, 2004
	As Reported		Adjustments			As Reclassified
Operating revenues:
Mainline passenger	$	1,649	$	—		$	1,649
Express revenue		—		260	(3)		260
Cargo and other		111		2			113
Total operating revenues	$	1,760	$	262		$	2,022
Operating expenses:
Operating expenses	$	1,729	$	(2	)	$	1,727
Express expenses		—		264	(4)		264
Total operating expenses	$	1,729	$	262		$	1,991

1.	Reclassification of Express revenue from “Operating Revenues — Other.”
2.	Reclassification of $100 million and $1 million of Express operating expenses from “Operating Revenues — Other” and “Operating Expenses — Other,” respectively.
3.	Reclassification of Express revenue from “Operating Revenues — Other.”
4.	Reclassification of $262 million and $2 million of Express operating expenses from “Operating Revenues — Other” and “Operating Expenses — Other,” respectively.

     The operating margin that results from using the gross basis of presentation for Express revenues and expenses does not include passenger revenue generated by feed into AWA’s mainline operations from Express flights, which is referred to as beyond contribution passenger revenue.

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7. Debt, Including Capital Lease Obligations

     Long-term debt at September 30, 2005 and December 31, 2004 consists of the following (variable interest rates listed are the rates as of September 30, 2005 unless noted) (in millions):

	September 30,			December 31,
	2005			2004
Secured
Equipment notes payable, variable interest rates of 5.71% to 9.01%, averaging 8.37% during quarter ended September 30, 2005	$	1,640		$	39
US Airways ATSB Loan, variable interest rates of 3.89%, installments due 2007 through 2010 (a)		583			—
AWA ATSB Loan, variable interest rate of 3.89%, installments due 2005 through 2008 (a)		249			—
Airbus Loans, variable interest rates of 9.96%, installments due 2008 to 2010 (b)		175			—
GECC term loan, variable interest rate of 7.78%, quarterly installments beginning 2006 through 2010 (c)		111			111
Slot financing, installments due through 2015 (d)		51			—
Capital lease obligations, installments due through 2023 (e)		45			8
Senior secured discount notes, variable interest rate of 7.91%, installments due 2005 through 2009 (f)		36			36
GECC facility, variable interest rate of 8.32%, installments due 2006 to 2010 (g)		28			—
		2,918			194
Unsecured
AWA ATSB Loan, variable interest rate of 3.89%, installments due 2005 through 2008 (a)	$	—		$	343
7% senior convertible notes, interest only payments until due in 2020 (h)		144			—
10 3/4 % senior unsecured notes, interest only payments until due in 2005 (i)		—			40
7.5% convertible senior notes, interest only payments until due in 2009 (j)		112			112
7.25% senior exchangeable notes, due 2023 with cash interest at 2.49% payable through 2008 and original issue discount of 7.25% thereafter (k)		253			253
Equipment notes payable, interest rates of 90-day LIBOR +1.25%, averaging 4.88%, installments due through 2005		12			16
Industrial development bonds, fixed interest rate of 6.3% due 2023 (l)		29			29
Note payable to PBGC, interest rate of 6%, interest only payments until due 2012 (m)		10			—
State loan, variable interest rate of 8.3%, installments due 2005 through 2007		1			1
		561			794
Total long-term debt and capital lease obligations		3,479			988
Less: Unamortized discount on debt		(333	)		(193	)
Current maturities		(244	)		(155	)
	$	2,902		$	640

(a) US Airways ATSB Loan
In connection with the consummation of the merger, on September 27, 2005, US Airways, as borrower, entered into an Amended and Restated Loan Agreement (the US Airways ATSB Loan) with the ATSB. Also on September 27, 2005, AWA entered into an Amended and Restated Loan Agreement (the AWA ATSB Loan). The ATSB Loans amend and restate the previously outstanding loans of both US Airways and AWA, each guaranteed in part by the ATSB.

As of September 30, 2005, $583 million was outstanding under the US Airways ATSB Loan, of which $525 million is guaranteed by the ATSB. The US Airways ATSB Loan bears interest as follows:

• 90% of the US Airways ATSB Loan (Tranche A), the guaranteed portion of the loan, was funded through participating lender’s commercial paper conduit program and bears interest at a rate equal to the conduit provider’s weighted average cost related to the issuance of certain commercial paper notes and other short term borrowings plus 0.30%, provided that portions of Tranche A that are held by the ATSB or by an assignee and no longer subject to such commercial paper conduit program bear interest at LIBOR plus 40 basis points, and portions of Tranche A that are under certain circumstances assigned free of the ATSB guarantee bear interest at LIBOR plus 6.0%; and

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• 10% of the US Airways ATSB Loan (Tranche B) bears interest at the greater of the Tranche A interest rate plus 6.0% and LIBOR plus 6.0%, as compared with the previous rate of LIBOR plus 4.0%.

In addition, US Airways is charged an annual guarantee fee in respect of the ATSB guarantee equal to 6.0% of the guaranteed amount (initially $525 million). The US Airways ATSB Loan also reschedules amortization payments for US Airways with semi-annual payments beginning on March 31, 2007 and continuing through September 30, 2010.

AWA ATSB Loan
As of September 30, 2005, $249 million was outstanding under the AWA ATSB Loan, of which $228 million was guaranteed by the ATSB. Certain third party counter-guarantors have fully and unconditionally guaranteed the payment of an aggregate amount of $19 million of the remaining principal amount of the loan plus accrued and unpaid interest thereon. The AWA ATSB Loan bears interest at a rate of LIBOR plus 40 basis points. The guarantee fee on the AWA ATSB Loan is 8.0% with annual increases of 5 basis points. The amortization payments under the AWA ATSB Loan become due in seven installments of $42 million on each March 31 and September 30, commencing on September 30, 2005 and ending on September 30, 2008. The AWA ATSB Loan also requires a premium, in certain instances, for voluntary prepayments. AWA made a voluntary prepayment of $9 million dollars in principal amount on September 27, 2005, after the closing of the merger, prepaying in full the portion of the loan subject to one of the counter-guarantees, which prepayment has been applied pro rata against each scheduled amortization payment.

General information regarding ATSB Loans
The ATSB Loans require certain prepayments from the proceeds of specified asset sales by US Airways Group and the other loan parties, and US Airways Group is required to maintain consolidated unrestricted cash and cash equivalents, less: (a) the amount of all outstanding advances by credit card processors and clearing houses in excess of 20% of the air traffic liabilities; (b) $250 million presumed necessary to fund a subsequent tax trust (to the extent not otherwise funded by US Airways Group); (c) $35 million presumed necessary to post collateral to clearing houses (to the extent not posted); and (d) any unrestricted cash or cash equivalents held in unperfected accounts; in an amount (subject to partial reduction under certain circumstances upon mandatory prepayments made with the net proceeds of future borrowings and issuances of capital stock) not less than:

• $525 million through March 2006;

• $500 million through September 2006;

• $475 million through March 2007;

• $450 million through September 2007;

• $400 million through March 2008;

• $350 million through September 2008; and

• $300 million through September 2010.

US Airways must pay down the principal of its loan with the first $125 million of net proceeds from specified asset sales identified in connection with its Chapter 11 proceedings, whether completed before or after emergence. US Airways then retains the next $83 million of net proceeds from specified assets sales, and must pay 60% of net proceeds in excess of an aggregate of $208 million from specified asset sales to the ATSB. Any such asset sales proceeds up to $275 million are to be applied in order of maturity, and any such asset sales proceeds in excess of $275 million are to be applied pro rata across all maturities in accordance with the loan’s early amortization provisions. US Airways completed in excess of $125 million in asset sales prior to emergence from the Chapter 11 proceedings, satisfying the minimum prepayment requirement.

On October 19, 2005, the ATSB sold its interest in the ATSB Loans to 13 fixed income investors. Terms associated with those loans remain unchanged. See also Note 13, “Subsequent Events.”

(b) On September 27, 2005, US Airways and AWA entered into two loan agreements with Airbus Financial Services (AFS), as Initial Lender and Loan Agent, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and US Airways Group, as guarantor, with commitments in initial aggregate amounts of up to $161 million and up to $89 million (the Airbus $161 Million Loan and the Airbus $89 Million Loan and, collectively, the Airbus Loans). The Airbus Loans bear interest at a rate of LIBOR plus a margin, subject to adjustment, and have been

15

recorded as an obligation of US Airways Group.

On September 27, 2005, all of the Airbus $161 Million Loan and $14 million of the Airbus $89 Million Loan were drawn and are available for use for general corporate purposes. The remaining portion of the Airbus Loans is payable in multiple draws upon the occurrence of certain conditions, including the taking of delivery of certain aircraft, on the due dates for certain amounts owing to AFS or its affiliates to refinance such amounts, after payment of certain invoices for goods and services provided by AFS or its affiliates, or upon receipt by AFS of certain amounts payable in respect of existing aircraft financing transactions. The full amount of the Airbus Loans is expected to be available by the end of 2006.

Amounts drawn upon the Airbus Loans are drawn first upon the Airbus $161 Million Loan until it has been drawn in its full amount, in which event the remaining portion of the $250 million total commitment is drawn upon the Airbus $89 Million Loan. The amortization payments under the Airbus $161 Million Loan will become due in equal quarterly installments of $13 million beginning on March 26, 2008, with the final installment due on December 31, 2010. The outstanding principal amount of the Airbus $89 Million Loan will be forgiven in writing on December 31, 2010, or an earlier date, if on that date the outstanding principal amount of, accrued interest on, and all other amounts due under the Airbus $161 Million Loan have been paid in full and the Company complies with the agreed upon delivery schedule.

(c) On September 10, 2004, AWA entered into a term loan financing with GECC providing for loans in an aggregate amount of $111 million. AWA used approximately $77 million of the proceeds from this financing to repay in full its term loan with Mizuho Corporate Bank, Ltd. and certain other lenders and to pay certain costs associated with this transaction. AWA used the remaining proceeds for general corporate purposes. The term loan financing consists of two secured term loan facilities: a $76 million term loan facility secured primarily by spare parts, rotables and appliances (the Spare Parts Facility); and a $35 million term loan facility secured primarily by aircraft engines and parts installed in such engines (the Engine Facility).

The facilities are cross-collateralized on a subordinated basis and the collateral securing the facilities also secures on a subordinated basis certain of AWA’s other existing debt and lease obligations to GECC and its affiliates.

The loans under the Spare Parts Facility are payable in full at maturity on September 10, 2010. The loans under the Engine Facility are payable in equal quarterly installments of approximately $1 million beginning on March 10, 2006 through June 10, 2010, with the remaining loan amount of $12 million payable at maturity on September 10, 2010. The loans under each facility may be prepaid in an amount not less than $5 million at any time after the 30th monthly anniversary of the funding date under such facility. If AWA fails to maintain a certain ratio of rotables to loans under the Spare Parts Facility, it may be required to pledge additional rotables or cash as collateral, provide a letter of credit or prepay some or all of the loans under the Spare Parts Facility. In addition, the loans under the Engine Facility are subject to mandatory prepayment upon the occurrence of certain events of loss applicable to, or certain dispositions of, aircraft engines securing the facility.

Principal amounts outstanding under the loans bear interest at a rate per annum based on three-month LIBOR plus a margin. Both facilities contain customary events of default, including payment defaults, cross-defaults, breach of covenants, bankruptcy and insolvency defaults and judgment defaults.

(d)	In September 2005, US Airways entered into an agreement to sell and leaseback certain of its commuter slots at Ronald Reagan Washington National Airport and New York LaGuardia Airport. US Airways continues to hold the right to repurchase the slots anytime after the second anniversary of the slot sale/leaseback transaction. Installments are due monthly through 2015.
(e)	Capital lease obligations consist principally of certain airport maintenance and facility leases which expire in 2018 and 2023.
(f)	On December 27, 2004, AWA raised additional capital by financing its Phoenix maintenance facility and flight training center. The flight training center was previously unencumbered, and the maintenance facility became unencumbered earlier in 2004 when AWA refinanced its term loan. Using its leasehold interest in these two facilities as collateral, AWA, through a wholly owned subsidiary named FTCHP LLC, raised $31 million

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through the issuance of a senior secured discount notes. The notes were issued by FTCHP at a discount pursuant to the terms of a senior secured term loan agreement among AWA, FTCHP, Heritage Bank SSB, as administrative agent, Citibank, N.A., as the initial lender, and the other lenders from time to time party thereto. Citibank, N.A. subsequently assigned all of its interests in the notes to third party lenders.

AWA has fully and unconditionally guaranteed the payment and performance of FTCHP’s obligations under the notes and the loan agreement. The notes require aggregate principal payments of $36 million with principal payments of $2 million due on each of the first two anniversary dates and the remaining principal amount due on the fifth anniversary date. The notes may be prepaid in full at any time (subject to customary LIBOR breakage costs) and in partial amounts of $2 million on the third and fourth anniversary dates. The unpaid principal amount of the notes bears interest based on LIBOR plus a margin subject to adjustment based on a loan to collateral value ratio.

The loan agreement contains customary covenants applicable to loans of this type, including obligations relating to the preservation of the collateral and restrictions on the activities of FTCHP. In addition, the loan agreement contains events of default, including payment defaults, cross-defaults to other debt of FTCHP, if any, breach of covenants, bankruptcy and insolvency defaults and judgment defaults.

In connection with this financing, AWA sold all of its leasehold interests in the maintenance facility and flight training center to FTCHP and entered into subleases for the facilities with FTCHP at lease rates expected to approximate the interest payments due under the notes. In addition, AWA agreed to make future capital contributions to FTCHP in amounts sufficient to cover principal payments and other amounts owing pursuant to the notes and the loan agreement.

The proceeds from this financing, together with $11 million from operating cash flow, were irrevocably deposited with the trustee for AWA’s 10 ³/4% senior unsecured notes due 2005, and these notes were subsequently redeemed on January 26, 2005.

(g) The GECC facility bears interest at LIBOR plus 4.25% and is payable quarterly in arrears. Principal payments are due quarterly commencing in September 2006 through 2010.

(h) On September 30, 2005, US Airways Group issued $144 million aggregate principal amount of 7% Senior Convertible Notes due 2020 (the 7% Senior Convertible Notes) for proceeds, net of expenses, of approximately $139 million. The 7% Senior Convertible Notes are US Airways Group’s senior unsecured obligations and rank equally in right of payment to its other senior unsecured and unsubordinated indebtedness and are effectively subordinated to its secured indebtedness to the extent of the value of assets securing such indebtedness. The 7% Senior Convertible Notes are fully and unconditionally guaranteed, jointly and severally and on a senior unsecured basis, by US Airways Group’s two major operating subsidiaries, US Airways and AWA. The guarantees are the guarantors’ unsecured obligations and rank equally in right of payment to the other senior unsecured and unsubordinated indebtedness of the guarantors and are effectively subordinated to the guarantors’ secured indebtedness to the extent of the value of assets securing such indebtedness.

The 7% Senior Convertible Notes bear interest at the rate of 7% per year payable in cash semiannually in arrears on March 30 and September 30 of each year, beginning March 30, 2006. The 7% Senior Convertible Notes mature on September 30, 2020.

Holders may convert, at any time on or prior to maturity or redemption, any outstanding notes (or portions thereof) into shares of US Airways Group’s common stock, initially at a conversion rate of 41.4508 shares of US Airways Group’s common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $24.12 per share of US Airways Group’s common stock). If a holder elects to convert its notes in connection with certain specified fundamental changes that occur prior to October 5, 2015, the holder will be entitled to receive additional shares of US Airways Group’s common stock as a make whole premium upon conversion. In lieu of delivery of shares of US Airways Group’s common stock upon conversion of all or any portion of the notes, US Airways Group may elect to pay holders surrendering notes for conversion cash or a combination of shares and cash.

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Holders may require US Airways Group to purchase for cash or shares or a combination thereof, at US Airways Group’s election, all or a portion of their 7% Senior Convertible Notes on September 30, 2010 and September 30, 2015 at a purchase price equal to 100% of the principal amount of the 7% Senior Convertible Notes to be repurchased plus accrued and unpaid interest, if any, to the purchase date. In addition, if US Airways Group experiences a fundamental change, holders may require US Airways Group to purchase for cash, shares or a combination thereof, at its election, all or a portion of their 7% Senior Convertible Notes, subject to specified exceptions, at a price equal to 100% of the principal amount of the 7% Senior Convertible Notes plus accrued and unpaid interest, if any, to the purchase date. Prior to October 5, 2010, the 7% Senior Convertible Notes will not be redeemable at US Airways Group’s option. US Airways Group may redeem all or a portion of the 7% Senior Convertible Notes at any time on or after October 5, 2010, at a price equal to 100% of the principal amount of the 7% Senior Convertible Notes plus accrued and unpaid interest, if any, to the redemption date if the closing price of US Airways Group’s common stock has exceeded 115% of the conversion price for at least 20 trading days in the 30 consecutive trading day period ending on the trading day before the date on which US Airways Group mails the optional redemption notice.

(i) In August 1995, AWA issued $75 million principal amount of 10 ³/4% senior unsecured notes due 2005, of which $40 million remained outstanding at December 31, 2004. Interest on the 10 ³/4% senior unsecured notes was payable semiannually in arrears on March 1 and September 1 of each year. On December 27, 2004, AWA called for the redemption on January 26, 2005 of all of the senior unsecured notes at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest through the redemption date. In addition, AWA irrevocably deposited the $31 million raised through the maintenance facility and flight training center financing discussed in note (f) above, together with an additional $11 million from its operating cash flow, with the trustee for the senior unsecured notes. The senior notes were subsequently redeemed on January 26, 2005.

(j) In January 2002, in connection with the closing of the original AWA ATSB Loan and the related transactions in 2002, America West Holdings issued $105 million of 7.5% convertible senior notes due 2009, of which approximately $112 million remained outstanding at September 30, 2005 (including $22 million of interest paid through December 31, 2004 as a deemed loan added to the initial principal thereof). Beginning January 18, 2005, these notes became convertible into shares of common stock, at the option of the holders, at an initial conversion price of $29.09 per share or a conversion ratio of approximately 34.376 shares per $1,000 principal amount of such notes, subject to standard anti-dilution adjustments. Interest on the 7.5% convertible senior notes is payable semiannually in arrears on June 1 and December 1 of each year. At America West Holdings’ option, the first six interest payments were payable in the form of a deemed loan added to the principal amount of these notes. The 7.5% convertible senior notes mature on January 18, 2009 unless earlier converted or redeemed. The payment of principal, premium and interest on the 7.5% convertible senior notes is fully and unconditionally guaranteed by AWA and US Airways Group.

(k) In July and August of 2003, AWA completed a private placement of approximately $87 million issue price of 7.25% Senior Exchangeable Notes due 2023. The notes bear cash interest at 2.49% per year until July 30, 2008. Thereafter, the notes will cease bearing cash interest and begin accruing original issue discount daily at a rate of 7.25% per year until maturity. Each note was issued at a price of $343.61 and is exchangeable for common stock at an exchange ratio of 13.216 shares per $1,000 principal amount at maturity of the notes (subject to adjustment in certain circumstances). This represents an equivalent conversion price of approximately $26.00 per share. The aggregate amount due at maturity, including accrued original issue discount from July 31, 2008, will be approximately $253 million. The notes are unconditionally guaranteed on a senior unsecured basis by America West Holdings and US Airways Group.

Holders have the right to exchange their notes for the shares of common stock in any fiscal quarter commencing after September 30, 2003, if, as of the last day of the preceding fiscal quarter, the closing sale price of US Airways Group common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of such preceding fiscal quarter is more than 110% of the accreted exchange price per share of common stock on the last day of such preceding fiscal quarter. If the foregoing condition is satisfied, then the notes are exchangeable at any time at the option of the holder through maturity. The accreted exchange price per share as of any day equals the issue price of a note plus accrued original issue discount to that day divided by 13.216, subject to any adjustments to the exchange rate through that day.

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	On or before July 30, 2018, a holder also may exchange notes for shares of common stock at any time after a ten consecutive trading-day period in which the average of the trading prices for the notes for that ten trading-day period was less than 103% of the average exchange value for the notes during that period. Exchange value is equal to the product of the closing sale price for the shares of common stock on a given day multiplied by the then current exchange rate, which is the number of shares of common stock for which each note is then exchangeable.
	In addition, the holders may exchange the notes if the notes have been called for redemption, if the Company declares certain dividends or distributions or if certain specified corporate transactions have occurred.
	Holders of the notes may require AWA to repurchase the notes at a price equal to the original issue price plus accrued cash interest and original issue discount, if any, on July 30, 2008, 2013 and 2018. The purchase price of such notes may be paid in cash or common stock, subject to certain restrictions. In addition, each holder may require AWA to purchase all or a portion of such holder’s notes upon the occurrence of certain change of control events concerning AWA or America West Holdings. AWA may redeem the notes, in whole or in part, on or after July 30, 2008 at a price equal to the original issue price plus accrued cash interest and original issue discount, if any.
	Completion of the merger constituted a “change of control” under AWA’s 7.25% senior exchangeable notes due 2023 and required AWA to make an offer to purchase those notes within 30 days after the effective time of the merger at a purchase price of $343.61 per $1,000 principal amount at maturity. Under the terms of the notes and the related guarantee and exchange agreement, US Airways Group could satisfy AWA’s obligation to purchase those notes by delivery of shares of US Airways Group common stock having a “fair market value” of not less than $343.61 per $1,000 principal amount at maturity for a total of $87 million plus accrued but unpaid interest. For this purpose “fair market value” means 95% of the average market price of the US Airways Group common stock calculated over the five business days ending on the third business day before the purchase date of October 24, 2005. On October 24, 2005, the Company issued a total of 4,156,411 shares of its common stock in exchange for approximately 99% of the outstanding notes. See also Note 13, “Subsequent Events”.
(l)	The industrial development revenue bonds are due April 2023. Interest at 6.3% is payable semiannually (April 1 and October 1). The bonds are subject to optional redemption prior to the maturity date on or after April 1, 2008, in whole or in part, on any interest payment date at the following redemption prices: 102% on April 1 or October 1, 2008; 101% on April 1 or October 1, 2009; and 100% on April 1, 2010 and thereafter.
(m)	In connection with US Airways Group’s emergence from bankruptcy in September 2005 and the settlement with the PBGC related to the termination of three of US Airways’ defined benefit pension plans, US Airways issued a $10 million note which matures in 2012 and bears interest at 6.00% payable annually in arrears.

     Secured financings are collateralized by assets, primarily aircraft, engines, simulators, rotable aircraft parts and hangar and maintenance facilities.

     At September 30, 2005, the estimated maturities of long-term debt are as follows (in millions):

2005	$	15
2006		238
2007		299
2008		365
2009		469
Thereafter		2,093
	$	3,479

     Certain of the Company’s and its subsidiaries’ long-term debt agreements contain minimum cash balance requirements and other covenants with which US Airways Group and its subsidiaries are in compliance. Certain of these covenants restrict the Company’s ability to pay cash dividends on its common stock and make certain other restricted payments (as specified therein). Certain of the Company’s and its subsidiaries’ long-term debt agreements contain cross-default provisions, which may be triggered by defaults by AWA or US Airways under other agreements relating to indebtedness. As of September 30, 2005, US Airways Group

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and its subsidiaries were in compliance with the covenants in their long-term debt agreements.

8. Income Taxes

     The Company recorded no income tax expense for the three and nine months ended September 30, 2005 and September 30, 2004. Due to the change in ownership upon completion of the merger, the annual usage of tax attributes generated prior to the merger may be substantially limited.

9. Special Charges

     AWA recorded $84 million and $85 million of special charges for the three and nine months ended September 30, 2005, respectively. In connection with the merger and the Airbus MOU executed between Airbus, US Airways Group, US Airways and AWA, certain aircraft firm orders were restructured. In connection with that restructuring, US Airways Group and America West Holdings were required to pay non-refundable restructuring fees. AWA’s restructuring fee of $50 million has been classified as a special charge in the three month period ended September 30, 2005, along with $7 million in associated capitalized interest. The restructuring fee was paid by means of set-off against existing equipment deposits of AWA held by Airbus. Special charges also includes a loss of $27 million related to the sale and leaseback during the period of six 737-300 aircraft and two 757 aircraft.

     In August 2004, AWA entered into definitive agreements with two lessors to return six Boeing 737-200 aircraft. Three of these were returned to lessors in the third quarter. In connection with the return of these aircraft, AWA recorded $2 million of special charges which include lease termination payments of $2 million, the write-down of leasehold improvements and aircraft rent balances of $2 million, offset by the reversal of maintenance reserves of $2 million.

     In the first quarter of 2004, AWA recorded a $1 million reduction in special charges related to the revision of estimated costs associated with the sale and leaseback of certain aircraft.

10. Related Party Transactions

     Richard A. Bartlett, a member of the board of directors of US Airways Group, is a greater than 10% shareholder of Air Wisconsin Airlines Corporation (Air Wisconsin), the majority owner of Eastshore. Mr. Bartlett is also a minority owner of Eastshore. In February 2005, Eastshore entered into an agreement with US Airways Group to provide a $125 million financing commitment to provide equity funding for a plan of reorganization, in the form of a debtor in possession term loan. Under the terms of US Airways Group’s plan of reorganization, Eastshore received a cash payment in the amount of all accrued interest on the loan, and the principal amount of $125 million was converted into 8,333,333 shares of US Airways Group common stock at a conversion price of $15.00 per share. US Airways and Air Wisconsin also entered into a regional jet services agreement under which Air Wisconsin may, but is not required to, provide regional jet service under a US Airways Express code share arrangement. On April 8, 2005, Air Wisconsin notified US Airways Group of its intention to deploy 70 regional jets, the maximum number provided for in the agreement, into the US Airways Express network. The amount expected to be paid to Air Wisconsin in 2005 will be approximately $80 million.

     Robert A. Milton, a member of the board of directors of US Airways Group, is the Chairman, President and Chief Executive Officer of ACE. ACE purchased 5,000,000 shares of US Airways Group common stock at a purchase price of $15.00 per share, for a total investment of $75 million. ACE or its subsidiaries entered into commercial agreements with US Airways Group and America West Holdings for various services including maintenance and airport handling.

     Edward L. Shapiro, a member of the board of directors of US Airways Group, is a Vice President and partner of PAR Capital Management, the general partner of Par. Par purchased 10,768,485 shares of US Airways Group common stock at a purchase price of $15.00 per share, for a total investment of $162 million.

     Richard P. Shifter, a member of the board of directors of US Airways Group, is a partner of Texas Pacific Group, which was a controlling stockholder of America West Holdings prior to the completion of the merger. An affiliate of Texas Pacific Group received $6.4 million as an advisory fee for providing financial advisory services rendered in connection with the merger and in contribution for and reimbursement for certain expenses

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incurred by Texas Pacific Group and its affiliates in connection with the merger. In addition, Texas Pacific Group had agreed to reimburse America West Holdings approximately $2.5 million for expenses incurred by America West Holdings in the second half of 2004 on its behalf. The full amount was reimbursed to America West Holdings in 2005.

     With the approval of the bankruptcy court, prior to the emergence from bankruptcy protection, US Airways, Inc. contracted with Air Wisconsin, a related party, and Republic Airlines, Inc. (Republic) to purchase a significant portion of these companies’ regional jet capacity. As noted above, Eastshore, an affiliate of Air Wisconsin, has an equity investment in US Airways Group. US Airways Group also entered into a sale leaseback with Republic for certain assets. The contracted capacity purchases phase-in largely in the fourth quarter of 2005 and early 2006. During the fourth quarter, the Company will evaluate the applicability of FASB Interpretation No. 46 (revised), “Consolidation of Variable Interest Entities,” to the capacity purchase arrangements.

11. Merger Accounting and Pro Forma Information

Purchase price allocation

     The value of the merger consideration was determined based upon America West Holdings’ traded market price per share due to the fact that US Airways Group was operating under bankruptcy protection. The outstanding shares in America West Holdings at September 27, 2005 were valued at $4.82 per share, resulting in an aggregate value assigned to the shares of $175 million. The $4.82 per share value was based on the five-day average share price of America West Holdings, with May 19, 2005, the merger announcement date, as the midpoint. The outstanding shares of America West Holdings Class A and Class B common stock were converted into shares of US Airways Group common stock at a conversion rate of 0.5362 and 0.4125, respectively. Certain unsecured creditors of US Airways Group have been or will be issued an aggregate of approximately 8.2 million shares of US Airways Group common stock in settlement of their claims, including stock issued to the PBGC and ALPA. The fair value of that common stock valued at an equivalent price based on the $4.82 value of the America West Holdings stock is $96 million. America West Holdings incurred $21 million of direct acquisition costs in connection with the merger. The following table summarizes the components of purchase price (in millions):

Fair value of common shares issued to US Airways Group’s unsecured creditors	$	96
Estimated merger costs		21
Total purchase price	$	117

     The fair value of the assets acquired and liabilities assumed have been based on preliminary estimates and may be revised at a later date. The net assets acquired and liabilities assumed in connection with the merger and initial allocation of purchase price is as follows (in millions):

Current assets	$	1,188
Property and equipment		2,390
Other assets		1,394
Goodwill		584
Liabilities assumed		(5,439	)
Total purchase price	$	117

     In connection with US Airways Group’s emergence from bankruptcy, significant prepetition liabilities were discharged. The surviving liabilities and the assets acquired in the merger are shown at estimated fair value based on preliminary valuation and may be revised at a later date. US Airways Group has engaged an outside appraisal firm to assist in determining the fair value of the long-lived tangible and identifiable intangible assets. The final appraised values may materially differ from the preliminary estimates. Significant assets and liabilities adjusted to fair market value which are subject to finalization of valuation studies include expendable spare parts and supplies, property and equipment, airport take-off and landing slots, aircraft leases, deferred revenue and continuing debt obligations. Also in connection with the merger, US Airways accrued in purchase accounting $24 million of severance and benefits related to planned reductions in force.

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     Included in other assets is $592 million of acquired intangible assets attributed to trademarks, route authorities, airport take-off and landing slots, and airport leasehold rights. The transaction resulted in $584 million of goodwill based upon the initial allocation of purchase price.

Pro Forma Information

     The following information is presented assuming the merger and the conversion of America West Holdings Corporation’s (America West Holdings) Class A and Class B common stock had been completed as of January 1, 2004. The pro forma consolidated results of operations include estimated purchase accounting adjustments, such as fair market value adjustments of the assets and liabilities of US Airways Group, adjustments to reflect the expected disposition of prepetition liabilities upon US Airways Group’s emergence from bankruptcy, and adjustments to conform certain accounting policies of US Airways Group and America West Holdings, together with related income tax effects. Certain other transactions critical to US Airways Group’s emergence from bankruptcy and the completion of the merger that became effective either before, at or immediately following the merger have also been reflected in the pro forma financial information. These transactions include the new equity investments, the comprehensive agreements with GECC, the comprehensive agreement with Airbus, the restructuring of the ATSB Loans, and the restructuring of the credit card partner and credit card processing agreements. The unaudited pro forma information presented below is not necessarily indicative of the results of operations that would have occurred had the purchase been made at the beginning of the periods presented or of future results of the combined operations (in millions, except per share amounts).

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Operating revenues	$	2,721		$	2,483		$	7,861		$	7,496
Operating expenses		2,811			2,673			8,027			7,704
Operating loss		(90	)		(190	)		(166	)		(208	)
Net loss	$	(158	)	$	(252	)	$	(405	)	$	(388	)
Basic and fully diluted loss per share	$	(9.15	)	$	(16.92	)	$	(25.74	)		(26.14	)
Basic and diluted shares		17,262			14,896			15,737			14,845

12. Recent Accounting Pronouncements

     In November 2004, the FASB issued Revised Statement No. 123, “Accounting for Share-Based Payment” (SFAS 123R). This statement requires the Company to recognize the grant-date fair value of stock options in its statement of operations. In addition, the Company will be required to calculate this compensation using the fair-value based method, versus the intrinsic value method previously allowed under SFAS 123. As issued, this revision was effective for interim periods beginning after June 15, 2005. On April 14, 2005, the Securities and Exchange Commission amended the compliance date for SFAS 123R to the beginning of the next fiscal year that begins after June 15, 2005. Accordingly, the Company will adopt this revised SFAS effective January 1, 2006. The Company is currently evaluating how it will adopt SFAS 123R and has not determined the method it will use to value granted stock options. The adoption of SFAS 123R is expected to have a material effect on the Company’s results of operations.

     In May 2005, the FASB issued SFAS No 154, “Accounting Changes and Error Corrections — A replacement of APB Opinion No. 20 and FASB Statement No. 3” (SFAS 154). The Statement applies to all voluntary changes in accounting principle, and changes the requirements for accounting for and reporting of a change in accounting principle. SFAS 154 requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle unless it is impracticable. APB Opinion 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. The provisions in SFAS 154 are effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. Accordingly, the Company will adopt SFAS 154 effective January 1, 2006. The adoption of SFAS 154 is not expected to have a material effect on the Company’s results of operations.

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13. Subsequent Events

ATSB Warrant Repurchase

     On October 1, 2005, US Airways Group repurchased all of the warrants it had issued to the ATSB in exchange for warrants previously issued by America West Holdings. These replacement warrants are related to the ATSB Loan with AWA. The Company repurchased approximately 7.7 million warrants to purchase shares of common stock that had an exercise price of $7.27 per share. The total purchase price for the warrants was $116 million.

Sale of ATSB Loan

     On October 19, 2005, $777 million of the Company’s debt, of which $753 million was guaranteed by the ATSB, was sold by the lender by order of the ATSB to 13 fixed income investors. The sale of the debt removed the ATSB guaranty. These loans were granted to AWA and US Airways in the aftermath of September 11, 2001. The total current outstanding balance of these loans as of September 30, 2005 was $832 million, with $55 million held by two other existing investors. Terms associated with these loans remain unchanged, with AWA ATSB Loan terminating in 2008 and the US Airways ATSB Loan terminating in 2010. As a result of that sale, the ATSB no longer has an interest in any of the Company’s debt.

Exchange of Common Stock for AWA’s 7.25 Percent Senior Exchangeable Notes

     On October 24, 2005, US Airways Group issued a total of 4,156,411 shares of its common stock in exchange for approximately $250 million in principal amount at maturity of AWA’s Senior Exchangeable Notes due 2023 (the Exchangeable Notes). Following the issuance of such shares, US Airways Group had approximately 82 million shares of common stock issued and outstanding and $2 million in principal amount at maturity of the Exchangeable Notes remained outstanding. The Exchangeable Notes are fully and unconditionally guaranteed by US Airways Group and America West Holdings.

     Completion of the merger between US Airways Group and America West Holdings on September 27, 2005 constituted a “change of control” under the Exchangeable Notes and required AWA to make an offer to holders to purchase those notes within 30 business days after the effective time of the merger at a purchase price of $343.61 per $1,000 principal amount at maturity. Under the terms of the Exchangeable Notes and the related Guarantee and Exchange Agreement, dated as of July 30, 2003, between America West Holdings and U.S. Bank National Association, as trustee (the Trustee), as supplemented by the Guarantee and Exchange Agreement Supplement No. 1 among America West Holdings, US Airways Group and the Trustee, dated as of September 27, 2005, AWA’s obligation to purchase the Exchangeable Notes was satisfied at US Airways Group’s election by delivery of shares of US Airways Group common stock having a “fair market value” of not less than $343.61 per $1,000 principal amount at maturity. For this purpose, “fair market value” means 95% of the market price of US Airways Group common stock calculated as the average closing prices over the five business days ending on and including the third business day before the purchase date.

14. Legal Proceedings

     On September 12, 2004, US Airways Group and its domestic subsidiaries (the Debtors) filed voluntary petitions for relief under Chapter 11 of the bankruptcy code in the United States bankruptcy court for the Eastern District of Virginia, Alexandria Division (Case Nos. 04-13819-SSM through 03-13823-SSM) (the 2004 Bankruptcy). On September 16, 2005, the bankruptcy court issued an order confirming the plan of reorganization submitted by the Debtors and on September 27, 2005, the Debtors emerged from the 2004 Bankruptcy. The court’s order confirming the plan included a provision called the plan injunction, which forever bars other parties from pursuing most claims against the Debtors that arose prior to September 27, 2005 in any forum other than the bankruptcy court. The great majority of these claims are pre-petition claims that, if paid out at all, will be paid out in common stock of the post-bankruptcy US Airways Group at a fraction of the actual claim value.

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     On February 26, 2004, a company called I.A.P. Intermodal, LLC filed suit against US Airways Group and its wholly owned airline subsidiaries in the United States District Court for the Eastern District of Texas alleging that the defendants’ computer scheduling system infringes upon three patents held by plaintiffs, all of which patents are entitled, “Method to Schedule a Vehicle in Real-Time to Transport Freight and Passengers.” Plaintiff seeks various injunctive relief as well as costs, fees and treble damages. US Airways Group and its subsidiaries were formally served with the complaint on June 21, 2004. US Airways Group is unable to ascertain at this time the likelihood or potential scale of liability. On the same date, the same plaintiff filed what US Airways Group believes to be substantially similar cases against nine other major airlines, including British Airways, Northwest Airlines Corporation, Korean Airlines Co., Ltd., Deutsche Lufthansa AG, Air France, Air Canada, Singapore Airlines Ltd., Delta Air Lines and Continental Airlines, Inc., and had filed a suit against the parent company of American Airlines in December 2003. This action was stayed as to US Airways Group and its wholly owned subsidiaries as a result of the 2004 Bankruptcy. The case remains stayed.

     The Port Authority of New York and New Jersey filed a proof of claim against US Airways in the bankruptcy case filed on August 11, 2002 (the 2002 Bankruptcy). The claim was in the amount of $8.5 million and it alleged environmental contamination and building deficiencies at LaGuardia Airport. US Airways’ liability and defenses to this liability were unaffected by the 2002 Bankruptcy. In connection with the 2004 Bankruptcy, the Port Authority filed a proof of claim in the amount of approximately $24 million again alleging environmental contamination and building deficiencies at LaGuardia Airport, of which approximately $2 million is related to alleged environmental contamination.

     On January 7, 2003, the IRS issued a notice of proposed adjustment to US Airways Group proposing to disallow $573 million of capital losses that US Airways Group sustained in the tax year 1999 on the sale of stock of USLM Corporation (the USLM matter). On February 5, 2003, the IRS filed a proof of claim with the bankruptcy court in connection with the 2002 Bankruptcy asserting the following claims against US Airways with respect to the USLM matter: (1) secured claims for U.S. federal income tax and interest of $1 million; (2) unsecured priority claims for U.S. federal income tax of $68 million and interest of $14 million; and (3) an unsecured general claim for penalties of $25 million. On May 8, 2003, US Airways Group reached a tentative agreement with the IRS on the amount of U.S. federal income taxes, interest and penalties due subject to final approval from the Joint Committee on Taxation. By letter dated September 11, 2003, US Airways Group was notified that the Joint Committee on Taxation had accepted the tentative agreement with the IRS, including a settlement of all federal income taxes through the end of 2002. Due to the 2004 Bankruptcy filing, which suspended payment of prepetition liabilities, final payment terms under the agreement have not been submitted to the Bankruptcy Court for approval. The IRS has submitted a proof of claim relating to the USLM matter in the 2004 Bankruptcy in the amount of approximately $31 million, and on August 2, 2005 the IRS filed a motion for relief from the automatic stay seeking to setoff against approximately $4 million of tax refunds due to the Debtors. On October 20, 2005, the IRS filed an amended proof of claim reducing its claim in the USLM matter to $11 million. On November 3, 2005, the IRS filed an amended motion continuing to seek relief for the $4 million setoff. A hearing has been set for December 15, 2005 on this matter. The debtors are in the process of analyzing the IRS’ amended motion.

     Williard, Inc., together with the joint venture of Williard, Inc. and Len Parker Associates, was awarded construction contracts with US Airways for work to be performed at the Philadelphia International Airport. On May 29, 2002, US Airways terminated the largest contract between the parties. Williard, Inc. and the joint venture sued US Airways in Pennsylvania state court for over $14 million in damages representing termination costs and lost profits, along with other alleged contractual damage claims. Subsequently, Limbach Company, LLC alleged that it purchased the claims of Williard, Inc. After a trial, the bankruptcy court in the 2002 Bankruptcy, on June 7, 2004, determined the value of the Limbach Company and the joint venture claims to be approximately $3 million. Limbach Company and the joint venture are challenging on appeal various rulings of

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the bankruptcy court, including the amount of the claim and its status as an unsecured claim. US Airways has also filed an appeal. Limbach Company and the joint venture have filed an action in state court against the City of Philadelphia and the Philadelphia Authority for Industrial Development and received permission to include US Airways as a co-defendant, provided that Limbach Company and the joint venture did not make any claims against US Airways in that action. In the lawsuit against the City of Philadelphia and the Philadelphia Authority for Industrial Development, Limbach Company and the joint venture are seeking the same sums as in their earlier lawsuit and proofs of claim against US Airways, but this time under the equitable theories of third-party beneficiary, quantum meruit and constructive trust. The court in the Philadelphia action dismissed US Airways from the lawsuit and dismissed the third-party beneficiary claims against the City of Philadelphia and the Philadelphia Authority for Industrial Development. These rulings are subject to appeal at a later date. On May 21, 2004, the City of Philadelphia and the Philadelphia Authority for Industrial Development filed a Motion for Summary Judgment seeking dismissal of the lawsuit. In July 2005, the court granted the Motion for Summary Judgment. Limbach Company and the joint venture have appealed the decision. Should Limbach Company and/or the joint venture recover in the Philadelphia action against the City of Philadelphia and the Philadelphia Authority for Industrial Development, that award would be paid at 100 cents on the dollar. US Airways may have an obligation to indemnify the City of Philadelphia and the Philadelphia Authority for Industrial Development under its agreements related to the airport development, although these agreements have neither been assumed nor rejected as part of the 2004 Bankruptcy. If the agreements are assumed, any recovery by Limbach Company and/or the joint venture against the City of Philadelphia and the Philadelphia Authority for Industrial Development could result in an indemnification claim that US Airways may have to pay at full value. Proceedings in the bankruptcy court related to the claims in the 2002 Bankruptcy remain stayed by the 2004 Bankruptcy filing.

     US Airways Group and US Airways have been named as defendants in two lawsuits filed in federal district court for the Eastern District of Michigan in May 1999. Delta Air Lines is also named as a defendant in both actions, while Northwest Airlines and the Airlines Reporting Corporation were sued separately in a third action. The complaints were filed on behalf of a class of airline passengers who originated or terminated their trips at the defendant carriers’ respective hubs. These passengers allege that they paid excessive fares due to the respective airlines’ enforcement of ticketing rules that prohibit the use of a connecting segment coupon that is part of a through-fare ticket where the passenger does not fly or intend to fly the entire ticketed itinerary. Plaintiffs allege monopolization and restraint of trade in violation of federal antitrust laws. They seek recovery of treble damages from all named defendants in the amount of $390 million and an injunction prohibiting future enforcement of the rules at issue. On May 16, 2002, the court denied the defendant airlines’ Motion for Summary Judgment and granted the plaintiffs’ Motion for Class Certification in each of the cases. On May 31, 2002, US Airways Group and US Airways filed a petition with the United States Court of Appeals for the Sixth Circuit seeking a discretionary review of the certification order. On November 21, 2002, the petition for permission to appeal the class certification decision was denied. On December 4, 2002, Delta Air Lines and Northwest Airlines filed a rehearing petition seeking en banc review of the initial Sixth Circuit denial. On February 24, 2003, Northwest Airlines’ and Delta Air Lines’ petition for rehearing en banc was denied. Notwithstanding the district court’s denial of summary judgment and the petition, US Airways Group and US Airways believe the claims are without merit and intend to pursue a vigorous defense. The action was stayed as to US Airways during the 2002 Bankruptcy and again during the 2004 Bankruptcy. On April 29, 2005, Northwest Airlines and Delta Air Lines filed a renewed motion for summary judgment on all counts. That motion was denied. Delta Air Lines and Northwest Airlines filed two additional motions: one seeking decertification of the class and the other seeking dismissal of all class members who received ticket refunds. While those motions were pending, Delta Air Lines and Northwest Airlines filed for bankruptcy. The federal district court has now deactivated the case because of the bankruptcy filings.

     On September 29, 2000, US Airways intervened in a proceeding that was originally brought on January 26, 1998, by the Pennsylvania Department of Environment Protection against Allegheny County, Pennsylvania, and the Allegheny County Aviation Administration alleging that a variety of airfield and aircraft de-icing activities at Pittsburgh International Airport violated the requirements of (a) a 1994 Consent Order and

25

Adjudication issued to Allegheny County and air carrier tenants at the Pittsburgh International Airport, (b) the Pittsburgh International Airport’s National Pollutant Discharge Elimination System Permit, and (c) the Pennsylvania Clean Streams Law. The action was brought before the Pennsylvania Environmental Hearing Board. During March 2001, the Environmental Hearing Board approved Allegheny County’s Motion to Withdraw the Appeal without Prejudice, thereby terminating the appeal. However, during the course of settlement discussions leading to the termination of the appeal, the Pennsylvania Department of Environment Protection advised Allegheny County and US Airways that the Department of Environment Protection will require additional measures to be taken to control de-icing materials at the Pittsburgh International Airport, and will assess a civil penalty against Allegheny County and US Airways for the alleged violations described above. The Allegheny County Aviation Administration, US Airways and the Pennsylvania Department of Environment Protection have continued to work together with the goal of fashioning an ultimate resolution to the de-icing issues. US Airways Group does not believe that the settlement of this matter will have a material adverse effect on its financial condition, results of operations or liquidity.

     On October 7, 2005, 240 pilots employed by the MidAtlantic division of US Airways, filed a complaint in the federal district court for the Eastern District of New York against ALPA, US Airways, US Airways Group, Republic Airways Holdings, Inc., Wexford Capital LLC and AWA, alleging that defendants conspired to deceive plaintiffs into believing that MidAtlantic was a separate entity from US Airways in order to deprive them of the benefits they are due as US Airways pilots pursuant to the US Airways collective bargaining agreement. Plaintiffs’ claims against the airline defendants include breach of collective bargaining agreement, violation of the Railway Labor Act and racketeering under the Racketeering Influenced and Corrupt Organizations Act. Plaintiffs’ complaint requests $2 billion in damages from the airline defendants and injunctive relief.

     On October 12, 2005, Bank of America, N.A., which is the issuing bank of the US Airways frequent flier program credit card and also acts as the processing bank for most airline ticket purchases paid for with credit cards, filed suit in the Delaware Chancery Court in Newcastle County, against US Airways, US Airways Group and AWA, alleging that US Airways breached its frequent flier credit card contract with Bank of America by entering into a similar, competing agreement with Juniper and allowing Juniper to issue a US Airways frequent flier credit card. Bank of America also alleges that US Airways Group and AWA induced these breaches. Bank of America seeks an order requiring US Airways to market the Bank of America card and prohibit Juniper from issuing a US Airways credit card, as well as unspecified damages. On October 27, 2005, Juniper, which was not originally a party to the lawsuit, sought and later received court permission to intervene as a defendant in the case and has made counterclaims against Bank of America. Juniper seeks an order declaring the validity of its new agreement to issue a US Airways frequent flier credit card. On November 3, 2005, Bank of America filed a motion for partial summary judgement on the breach of contract claim against US Airways.

     The Company is unable to estimate at this time the amount of loss or probable losses, if any that might result from an adverse resolution of the proceedings discussed above, and currently is unable to predict whether the outcome of these proceedings will have a material adverse effect on its results of operations or financial condition. The Company intends, however, to vigorously pursue all available defenses and claims in these matters.

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Item 1B. Condensed Consolidated Financial Statements of America West Airlines, Inc.

The unaudited condensed financial statements of AWA, a wholly-owned subsidiary of America West Holdings, as of and for the three and nine months ended, together with the related notes, are set forth on the following pages.

America West Airlines, Inc.

Condensed Consolidated Statements of Operations

(in millions)
(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Operating revenues
Mainline passenger	$	653		$	542		$	1,884		$	1,649
Express revenue		137			98			371			260
Cargo		7			6			24			20
Other		49			32			123			93
Total operating revenues		846			678			2,402			2,022
Operating expenses
Aircraft fuel and related taxes		225			153			584			416
Gains on fuel hedging instruments, net		(56	)		(26	)		(124	)		(36	)
Salaries and related costs		178			165			526			492
Express expenses		149			101			395			264
Aircraft rent		85			76			243			227
Aircraft maintenance		60			54			158			157
Other rent and landing fees		43			43			130			127
Selling expenses		45			38			126			117
Special charges, net		84			2			85			1
Depreciation and amortization		14			13			37			40
Other		77			68			217			183
Total operating expenses		904			687			2,377			1,988
Operating income(loss)		(58	)		(9	)		25			34
Nonoperating income (expenses):
Interest income		5			4			12			10
Interest expense, net		(20	)		(22	)		(62	)		(64	)
Other, net		2			(1	)		3			3
Total nonoperating expenses, net		(13	)		(19	)		(47	)		(51	)
Loss before income taxes		(71	)		(28	)		(22	)		(17	)
Income taxes		—			—			—			—
Net loss	$	(71	)	$	(28	)	$	(22	)	$	(17	)

See accompanying notes to condensed consolidated financial statements.

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America West Airlines, Inc.

Condensed Consolidated Balance Sheets

September 30, 2005 and December 31, 2004
(in millions, except share data)

	September 30,			December 31,
	2005			2004
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	589		$	128
Short-term investments		168			127
Restricted cash		—			41
Accounts receivable, net		126			109
Materials and supplies, net		70			58
Prepaid expenses and other		187			141
Total current assets		1,140			604
Property and equipment
Flight equipment		752			927
Other property and equipment		302			289
Less accumulated depreciation and amortization		(545	)		(624	)
		509			592
Equipment deposits		20			64
Net property and equipment		529			656
Other assets
Restricted cash		94			72
Advances to parent company, net		261			259
Other assets, net		162			120
Total other assets		517			451
	$	2,186		$	1,711
LIABILITIES & STOCKHOLDER’S EQUITY
Current liabilities
Current maturities of debt and capital leases	$	101		$	154
Accounts payable		189			173
Payable to affiliate, net		541			—
Air traffic liability		263			195
Accrued compensation and vacation		52			43
Accrued taxes		42			21
Other accrued expenses		67			66
Total current liabilities		1,255			652
Long-term debt and capital leases, net of current maturities		513			640
Deferred gains and other liabilities		153			132
Commitments and contingencies
Stockholder’s equity
Common stock, $0.01 par, 1,000 shares authorized, issued and outstanding		—			—
Additional paid-in capital		555			555
Accumulated deficit		(290	)		(268	)
Total stockholder’s equity		265			287
	$	2,186		$	1,711

See accompanying notes to condensed consolidated financial statements.

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America West Airlines, Inc.

Condensed Consolidated Statements of Cash Flows

(in millions)
(unaudited)

	Nine Months Ended
	September 30,
	2005			2004
Net cash provided by operating activities(1)	$	754		$	90
Cash flows from investing activities:
Purchases of property and equipment		(148	)		(126	)
Purchases of short-term investments		(316	)		(435	)
Sales of short-term investments		304			468
Purchases of investments in debt securities		—			(35	)
Sales of investments in debt securities		—			15
Increase in restricted cash		(22	)		(2	)
Proceeds from disposition of assets		74			3
Net cash used in investing activities		(108	)		(112	)
Cash flows from financing activities:
Repayment of debt		(181	)		(174	)
Proceeds from issuance of debt, net		—			109
Other		(4	)		—
Net cash used in financing activities		(185	)		(65	)
Net increase (decrease) in cash and cash equivalents		461			(87	)
Cash and cash equivalents at beginning of period		128			134
Cash and cash equivalents at end of period	$	589		$	47
Cash paid for:
Interest, net of amounts capitalized	$	28		$	18
Income taxes	$	—		$	—
Non-cash investing and financing activities:
Reclassification of investments in debt securities to short-term investments	$	30		$	16
Notes payable cancelled under the aircraft purchase agreement	$	12		$	—
Notes payable issued under the aircraft purchase agreement	$	9		$	7
Payment in kind notes issued	$	—		$	5

See accompanying notes to condensed consolidated financial statements.

(1) Included in net cash provided by operating activities is net advances to parent company of $261 million and a net payable to affiliate of $541 million (see Note 3).

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America West Airlines, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements include the accounts of America West Airlines, Inc. (AWA), a wholly owned subsidiary of America West Holdings Corporation (America West Holdings). On September 27, 2005, America West Holdings merged with Barbell Acquisition Corp., a wholly owned subsidiary of US Airways Group, Inc. (US Airways Group), and as a result itself became a wholly owned subsidiary of US Airways Group.

     Certain prior year amounts have been reclassified to conform with the 2005 presentation. In the first quarter of 2005, America West Holdings changed its method of reporting for its regional alliance agreement with Mesa Airlines (Mesa) from the net basis of presentation to the gross basis of presentation. See also Note 4, “Change in Method of Reporting for America West Express Results” for additional information about the agreement with Mesa and the reclassification related to the change in presentation.

     Management believes that all adjustments, consisting of normally recurring items, necessary for a fair presentation of results have been included in the condensed consolidated financial statements for the interim periods presented, which are unaudited. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The principal areas of judgment relate to impairment of long-lived assets and intangible assets, passenger revenue recognition and frequent traveler programs.

     The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in AWA’s Annual Report on Form 10-K for the year ended December 31, 2004.

2. Stock Options

     Certain of AWA’s employees are eligible to participate in the stock option plans of America West Holdings. America West Holdings accounts for its stock option plans in accordance with the provisions of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. As such, compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. America West Holdings issued its stock options at a price equal to the fair market value on the date of grant. Accordingly, no compensation cost has been recognized for stock options in America West Holdings’ condensed consolidated financial statements. Had America West Holdings determined compensation cost based on the fair value at the grant date for its stock options under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (SFAS 123) and allocated the compensation expense to AWA for its employees participating in the stock option plans, AWA’s net loss would have been increased to the pro forma amounts indicated below:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
	(in millions)
Net loss, as reported	$	(71	)	$	(28	)	$	(22	)	$	(17	)
Stock-based compensation expense		(7	)		(2	)		(9	)		(4	)
Pro forma net loss	$	(78	)	$	(30	)	$	(31	)	$	(21	)

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3. Advances To Parent Company and Affiliate

     As of September 30, 2005, AWA had net advances to parent company of $261 million, which were classified in “Other Assets” on AWA’s condensed consolidated balance sheet. The net receivable due from America West Holdings was due to certain restrictions related to the timing of repayment under the AWA ATSB guaranteed loan, of which $249 million remains outstanding.

     In addition, AWA had a net payable to affiliate of $541 million, which were classified in “Current Liabilities” on AWA’s condensed balance sheet. The net payable to affiliate was comprised of a net payable to US Airways Group of $686 million and a net receivable from US Airways, Inc. (US Airways) and US Airways Group of $125 million and $21 million, respectively. The net payable to US Airways Group consists of proceeds received by AWA on behalf of US Airways Group in connection with the initial equity investments, public stock offering, the exercise of options by equity investors, the issuance of 7% Senior Convertible Notes and the Airbus Loans, net of cash retained by US Airways Group. The net receivable from US Airways consists of payments made on behalf of US Airways of $125 million to extinguish debt in connection with the GE Merger MOU and $21 million in merger related costs made on behalf of US Airways Group. Payables and receivables among affiliates are expected to be short-term in duration.

4. Change In Method Of Reporting For Express Results

     AWA has a regional airline alliance agreement with Mesa (the Mesa Agreement) that commenced in February 2001. Mesa, operating as America West Express, provides feeder service for AWA. As of September 30, 2005, the America West Express fleet included 61 aircraft comprised of 37 86-seat CRJ 900s, 18 50-seat CRJ 200s and six 37-seat Dash 8 turbo prop aircraft. The Mesa Agreement is anticipated to expire in June 2012.

     Under the Mesa Agreement, Mesa is required to fly the routes and flights designated by AWA using Mesa’s aircraft, flight crews and other related services. Mesa maintains and operates the aircraft; employs, trains, manages and compensates personnel necessary to provide the flight services; and provides related passenger handling services for and on the flights. AWA is responsible for establishing the routes, scheduling Express flights, pricing of the tickets, marketing and selling the tickets, collecting all sales amounts, paying all costs of sales and marketing and taking inventory risk on the inventory of seats for sale on Mesa. The ground handling of aircraft is performed by either AWA or Mesa, depending upon the airport.

     AWA collects the revenue and income generated from the services provided by Mesa pursuant to the Mesa Agreement. In return, AWA: (i) reimburses Mesa for actual non-controllable costs incurred by Mesa such as fuel, insurance, taxes, fees and security; (ii) pays Mesa for actual controllable non-maintenance costs, subject to a cap, such as aircraft lease expense and crew expense; (iii) pays Mesa for controllable maintenance costs at fixed rates (subject to reimbursement of excess costs if actual costs during term are less than fixed amount paid by AWA); (iv) reimburses Mesa costs and expenses incurred at stations maintained and operated by Mesa; and (v) shares with Mesa a percentage of the revenue allocated to the flight segments flown by Mesa on a pro rata basis.

     To improve the visibility of America West Express operating results, effective in the first quarter of 2005, America West Holdings changed its method of accounting for the Mesa Agreement from the net basis to the gross basis of presentation. Under the gross basis of presentation, passenger revenues and operating expenses associated with the Mesa agreement are reported gross (i.e. in Operating revenues as “Express revenue” and within Operating Expenses as “Express expenses”) in the condensed consolidated statement of operations. Under the net basis of presentation, America West Express passenger revenues and the associated operating expenses were netted and classified in Operating Revenues in “Other.” Prior period amounts have been reclassified to be consistent with the 2005 presentation. These reclassifications did not impact operating income or net income for the periods presented.

     The following table presents the effect of this reclassification for the three and nine months ended September 30, 2004:

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	Three Months Ended September 30, 2004
	As Reported		Adjustments			As Reclassified
	(in millions)
Operating revenues:
Mainline passenger	$	542	$	—		$	542
Express revenue		—		98	(1)		98
Cargo and other		36		2			38
Total operating revenues	$	578	$	100		$	678
Operating expenses:
Operating expenses	$	587	$	(1	)	$	586
Express expenses		—		101	(2)		101
Total operating expenses	$	587	$	100		$	687

	Nine Months Ended September 30, 2004
	As Reported		Adjustments			As Reclassified
	(in millions)
Operating revenues:
Mainline passenger	$	1,649	$	—		$	1,649
Express revenue		—		260	(3)		260
Cargo and other		111		2			113
Total operating revenues	$	1,760	$	262		$	2,022
Operating expenses:
Operating expenses	$	1,726	$	(2	)	$	1,724
Express expenses		—		264	(4)		264
Total operating expenses	$	1,726	$	262		$	1,988

1.	Reclassification of Express revenue from “Operating Revenues — Other.”
2.	Reclassification of $100 million and $1 million of Express operating expenses from “Operating Revenues — Other” and “Operating Expenses — Other,” respectively.
3.	Reclassification of Express operating expenses from “Operating Revenues — Other.”
4.	Reclassification of $262 million and $2 million of Express operating expenses from “Operating Revenues — Other” and “Operating Expenses — Other,” respectively.

     The operating margin that results from using the gross basis of presentation for Express revenues and expenses does not include passenger revenue generated by the feed into AWA’s mainline operations from Express flights, which is referred to as beyond contribution passenger revenue.

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5. Debt, Including Capital Lease Obligations

     Long-term debt at September 30, 2005 and December 31, 2004 consists of the following (variable interest rates listed are the rates as of September 30, 2005 unless noted):

	September 30,			December 31,
	2005			2004
	(in millions)
Secured
ATSB loan, variable interest rate of 3.89%, installments due 2005 through 2008 (a)	$	249		$	—
Equipment notes payable, variable interest rates of 3.94% to 4.72%, averaging 4.07% during quarter ended June 30, 2005, notes retired September, 2005		—			39
Capital lease obligations, installments due until 2006		—			8
GECC term loan, variable interest rate of 7.78%, quarterly installments beginning 2006 through 2010 (b)		111			111
Senior secured discount notes, variable interest rate of 7.91%, installments due 2005 through 2009 (c)		36			36
		396			194
Unsecured
ATSB loan, variable interest rate of 3.89%, installments due 2005 through 2008 (c)		—			343
10 3/4 % senior unsecured notes, interest only payments until due in 2005 (d)		—			40
7.5% convertible senior notes, interest only payments until due in 2009 (e)		112			112
7.25% senior exchangeable notes, due 2023 with cash interest at 2.49% payable through 2008 and original issue discount of 7.25% thereafter (f)		253			253
Equipment notes payable, interest rates of 90-day LIBOR +1.25%, averaging 4.88%, installments due through 2005		12			16
Industrial development bonds, fixed interest rate of 6.3% due 2023 (g)		29			29
State loan, variable interest rate of 8.3%, installments due 2005 through 2007		1			1
		407			794
Total long-term debt		803			988
Less: Unamortized discount on debt		(189	)		(194	)
Current maturities		(101	)		(154	)
	$	513		$	640

(a)	In January 2002, AWA closed a $429 million loan backed by a $380 million federal loan guarantee provided by the Air Transportation Stabilization Board (the ATSB). Certain third-party counter-guarantors have fully and unconditionally guaranteed the payment of an aggregate of $45 million of the outstanding principal amount under the government guaranteed loan plus accrued and unpaid interest thereon. In addition, America West Holdings fully and unconditionally guaranteed the payment of all principal, premium, interest and other obligations outstanding under the government guaranteed loan and pledged the stock of AWA to secure its obligations under such guarantee. Principal amounts under this loan become due in ten installments of $42 million on each March 31 and September 30, commencing on March 31, 2004 and ending on September 30, 2008. In addition, AWA was charged an annual guarantee fee in respect of the ATSB guarantee equal to 8.0% of the guaranteed amount. On September 27, 2005, AWA made a voluntary prepayment of $9 million in principal thus reducing the remaining semi-annual installments due to $42 million. Principal amounts outstanding under the government guaranteed loan bear interest at a rate per annum equal to LIBOR plus 40 basis points.
	Completion of the merger with US Airways Group on September 27, 2005 revised certain requirements and restrictions under this loan. See Note 7, “Debt, Including Capital Lease Obligations,” to US Airways Group, Inc’s condensed consolidated financial statements.
(b)	On September 10, 2004, AWA entered into a term loan financing with GECC providing for loans in an aggregate amount of $111 million. AWA used approximately $77 million of the proceeds from this financing to repay in full its term loan with Mizuho Corporate Bank, Ltd. and certain other lenders and to pay certain costs associated with this transaction. AWA used the remaining proceeds for general corporate purposes. The new term loan financing consists of two secured term loan facilities: a $76 million term loan facility secured primarily by spare parts, rotables and appliances (the Spare Parts Facility); and a $35 million term loan facility secured primarily by aircraft engines and parts installed in such engines (the Engine Facility).
	The facilities are cross-collateralized on a subordinated basis and the collateral securing the facilities also secures on a subordinated basis certain of AWA’s other existing debt and lease obligations to GECC and its affiliates.
	The loans under the Spare Parts Facility are payable in full at maturity on September 10, 2010. The loans under the Engine Facility are payable in equal quarterly installments of approximately $1 million beginning on March 10, 2006 through June 10, 2010 with the remaining loan amount of $12 million payable at maturity on September 10, 2010. The loans under each facility may be prepaid in an amount not less than $5 million at any time after the 30th monthly anniversary of the funding date under such facility. If AWA fails to maintain a certain ratio of rotables to loans under the Spare Parts Facility, it may be required to pledge additional rotables or cash as collateral, provide a letter of credit or prepay some or all of the loans under the Spare Parts Facility. In addition, the loans under the Engine Facility are subject to mandatory prepayment upon the occurrence of certain events of loss applicable to, or certain dispositions of, aircraft engines securing the facility.
	Principal amounts outstanding under the loans bear interest at a rate per annum based on three-month LIBOR

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	plus a margin. Both facilities contain customary events of default, including payment defaults, cross-defaults, breach of covenants, bankruptcy and insolvency defaults and judgment defaults.
(c)	On December 27, 2004, AWA raised additional capital by financing its Phoenix maintenance facility and flight training center. The flight training center was previously unencumbered, and the maintenance facility became unencumbered earlier this year when AWA refinanced its term loan. Using its leasehold interest in these two facilities as collateral, AWA, through a wholly owned subsidiary named FTCHP LLC, raised $31 million through the issuance of a senior secured discount notes. The notes were issued by FTCHP at a discount pursuant to the terms of a senior secured term loan agreement among the Company, FTCHP, Heritage Bank SSB, as administrative agent, Citibank, N.A., as the initial lender, and the other lenders from time to time party thereto. Citibank, N.A. subsequently assigned all of its interests in the notes to third party lenders.
	AWA has fully and unconditionally guaranteed the payment and performance of FTCHP’s obligations under the notes and the loan agreement. The notes require aggregate principal payments of $36 million with principal payments of $2 million due on each of the first two anniversary dates and the remaining principal amount due on the fifth anniversary date. The notes may be prepaid in full at any time (subject to customary LIBOR breakage costs) and in partial amounts of $2 million on the third and fourth anniversary dates. The unpaid principal amount of the notes bears interest based on LIBOR plus a margin subject to adjustment based on a loan to collateral value ratio.
	The loan agreement contains customary covenants applicable to loans of this type, including obligations relating to the preservation of the collateral and restrictions on the activities of FTCHP. In addition, the loan agreement contains events of default, including payment defaults, cross-defaults to other debt of FTCHP, if any, breach of covenants, bankruptcy and insolvency defaults and judgment defaults.
	In connection with this financing, AWA sold all of its leasehold interests in the maintenance facility and flight training center to FTCHP and entered into subleases for the facilities with FTCHP at lease rates expected to approximate the interest payments due under the notes. In addition, AWA agreed to make future capital contributions to FTCHP in amounts sufficient to cover principal payments and other amounts owing pursuant to the notes and the loan agreement.
	The proceeds from this financing, together with $11 million from operating cash flow, were irrevocably deposited with the trustee for AWA’s 10 3/4% senior unsecured notes due 2005, and the notes were subsequently redeemed on January 26, 2005.

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(d)	In August 1995, AWA issued $75 million principal amount of 10 3/4% senior unsecured notes due 2005 of which $40 million remained outstanding at December 31, 2004. Interest on the 10 3/4% senior unsecured notes was payable semi-annually in arrears on March 1 and September 1 of each year. On December 27, 2004, AWA called for the redemption on January 26, 2005 of all of the senior unsecured notes at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest through the redemption date. In addition, AWA irrevocably deposited the $31 million raised through the maintenance facility and flight training center financing, as discussed in note (b) above, together with an additional $11 million from its operating cash flow, with the trustee for the senior unsecured notes. The senior notes were subsequently redeemed on January 26, 2005.
(e)	In January, 2002 in connection with the closing of the original AWA ATSB loan and the related transactions, America West Holdings issued $105 million of 7.5% convertible senior notes due 2009, of which approximately $112 million remained outstanding at September 30, 2005 (including $22 million of interest paid through December 31, 2004 as a deemed loan added to the initial principal thereof). Beginning January 18, 2005, these notes are convertible into shares of common stock, at the option of the holders, at an initial conversion price of $29.09 per share or a conversion ratio of approximately 34.376 shares per $1,000 principal amount of such notes, subject to standard anti-dilution adjustments. Interest on the 7.5% convertible senior notes is payable semiannually in arrears on June 1 and December 1 of each year. At America West Holdings’ option, the first six interest payments were payable in the form of a deemed loan added to the principal amount of these notes. The 7.5% convertible senior notes will mature on January 18, 2009 unless earlier converted or redeemed. The payment of principal, premium and interest on the 7.5% convertible senior notes is fully and unconditionally guaranteed by AWA and US Airways Group. For financial reporting purposes, America West Holdings recorded the convertible senior notes at their fair market value on the date of issuance. The balance at September 30, 2005 is net of an unamortized discount of $19 million.
(f)	In July and August of 2003, AWA completed a private placement of approximately $87 million issue price of 7.25% Senior Exchangeable Notes due 2023. The notes bear cash interest at 2.49% per year until July 30, 2008. Thereafter, the notes will cease bearing cash interest and begin accruing original issue discount daily at a rate of 7.25% per year until maturity. Each note was issued at a price of $343.61 and is exchangeable for common stock at an exchange ratio of 13.216 shares of US Airways Group common stock per $1,000 principal amount at maturity of the notes (subject to adjustment in certain circumstances). This represents an equivalent conversion price of approximately $26.00 per share. The aggregate amount due at maturity, including accrued original issue discount from July 31, 2008, will be $253 million. The notes are unconditionally guaranteed on a senior unsecured basis by America West Holdings and US Airways Group.
	Holders have the right to exchange their notes for the shares of common stock in any fiscal quarter commencing after September 30, 2003, if, as of the last day of the preceding fiscal quarter, the closing sale price of US Airways Group common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of such preceding fiscal quarter is more than 110% of the accreted exchange price per share of common stock on the last day of such preceding fiscal quarter. If the foregoing condition is satisfied, then the notes will be exchangeable at any time at the option of the holder through maturity. The accreted exchange price per share as of any day will equal the issue price of a note plus accrued original issue discount to that day divided by 13.216, subject to any adjustments to the exchange rate through that day.
	On or before July 30, 2018, a holder also may exchange its notes for shares of common stock at any time after a 10 consecutive trading-day period in which the average of the trading prices for the notes for that 10 trading-day period was less than 103% of the average exchange value for the notes during that period. Exchange value is equal to the product of the closing sale price for the shares of common stock on a given day multiplied by the then current exchange rate, which is the number of shares of common stock for which each note is then exchangeable.
	In addition, the holders may exchange the notes if the notes have been called for redemption, if US Airways Group declares certain dividends or distinctions or if certain specified corporate transactions have occurred.
	Holders of the notes may require AWA to repurchase the notes at a price equal to the original issue price plus

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	accrued cash interest and original issue discount, if any, on July 30, 2008, 2013 and 2018. The purchase price of such notes may be paid in cash or common stock, subject to certain restrictions. In addition, each holder may require AWA to purchase all or a portion of such holder’s notes upon the occurrence of certain change of control events concerning AWA or America West Holdings. AWA may redeem the notes, in whole or in part, on or after July 30, 2008 at a price equal to the original issue price plus accrued cash interest and original issue discount, if any.
	Completion of the merger with US Airways Group constituted a “change of control” under AWA’s 7.25% senior exchangeable notes due 2023 and required AWA to make an offer to purchase those notes within 30 days after the effective time of the merger at a purchase price of $343.61 per $1,000 principal amount at maturity. Under the terms of the notes and the related guarantee and exchange agreement, the US Airways Group could satisfy AWA’s obligation to purchase those notes by delivery of shares of new US Airways Group common stock having a “fair market value” of not less than $343.61 per $1,000 principal amount at maturity for a total of $87 million plus accrued but unpaid interest. For this purpose “fair market value” means 95% of the average market price of the new US Airways Group common stock calculated over the 5 business days ending on the third business day before the purchase date of October 24, 2005. On October 24, 2005, the US Airways Group issued a total of 4,156,411 shares of its common stock in exchange for approximately 99% of the outstanding notes. See also Note 7, “Subsequent Events.”
(g)	The industrial development revenue bonds are due April 2023. Interest at 6.3% is payable semiannually (April 1 and October 1). The bonds are subject to optional redemption prior to the maturity date on or after April 1, 2008, in whole or in part, on any interest payment date at the following redemption prices: 102% on April 1 or October 1, 2008; 101% on April 1 or October 1, 2009; and 100% on April 1, 2010 and thereafter.

     Certain of the Company’s long-term debt agreements contain minimum cash balance requirements and other covenants with which the Company is in compliance. Certain of these covenants restrict the Company’s ability to pay cash dividends on its common stock and make certain other restricted payments (as specified therein). Finally, AWA’s long-term debt agreements contain cross-default provisions, which may be triggered by defaults by AWA under other agreements relating to indebtedness.

6. Special Charges

     AWA recorded $84 million and $85 million of special charges for the three and nine months ended September 30, 2005, respectively. In connection with that the merger and the Airbus MOU executed between Airbus, US Airways Group, US Airways and AWA, certain aircraft firm orders were restructured. In connection with that restructuring, US Airways Group and America West Holdings were required to pay non-refundable restructuring fees. AWA’s restructuring fee of $50 million has been classified as a special charge in the three month period ended September 30, 2005, along with $7 million in associated capitalized interest. The restructuring fee was paid by means of set-off against existing equipment deposits of AWA held by Airbus. Special charges also includes a loss of $27 million related to the sale and leaseback during the period of six 737-300 aircraft and two 757 aircraft.

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7. Subsequent Events

Sale of ATSB Loan

     On October 19, 2005, $777 million on the Company’s debt, of which $753 million was guaranteed by the ATSB, was sold by the lender by order of the ATSB to 13 fixed income investors. The sale of the debt removed the ATSB guaranty. These loans were granted to AWA and US Airways in the aftermath of September 11, 2001. The total current outstanding balance of these loans as of September 30, 2005 was $832 million, with $55 million held by two other existing investors. Terms associated with these loans remain unchanged, with the AWA ATSB Loan terminating in 2008 and the US Airways ATSB loan terminating in 2010. As a result of that sale, the ATSB no longer has an interest in any of the Company’s debt.

Exchange of Common Stock for America West Airlines’ 7.25 Percent Senior Exchangeable Notes

     On October 24, 2005, US Airways Group issued a total of 4,156,411 shares of its common stock in exchange for approximately $250 million in principal amount at maturity of AWA’s Senior Exchangeable Notes due 2023 (the “Exchangeable Notes”). Following the issuance of such shares outstanding and $2 million in principal amount at maturity of the Exchangeable Notes remained outstanding. The Exchangeable Notes are fully and unconditionally guaranteed by US Airways Group.

     Completion of the merger between US Airways Group and America West Holdings on September 27, 2005 constituted a “change of control” under the Exchangeable Notes and required AWA to make an offer to holders to purchase those notes within 30 business days after the effective time of the merger at a purchase price of $343.61 per $1,000 principal amount at maturity. Under the terms of the Exchangeable Notes and the related Guarantee and Exchange Agreement, dated as of July 30, 2003, between America West Holdings and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the Guarantee and Exchange Agreement Supplement No. 1 among America West Holdings, US Airways Group and the Trustee, dated as of September 27, 2005 (the Exchange Agreement), AWA’s obligation to purchase the Exchangeable Notes was satisfied at US Airways Group’s election by delivery of shares of US Airways Group common stock having a “fair market value” of not less than $343.61 per $1,000 principal amount at maturity. For this purpose, “fair market value” means 95% of the market price of US Airways Group common stock calculated as the average closing prices over the five business days ending on and including the third business day before the purchase date.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of US Airways Group and America West Airlines, Inc.

     Part I, Item 2 of this report should be read in conjunction with Part II, Item 7 of America West Holdings’s Annual Report on Form 10-K for the year ended December 31, 2004 as well as Part II, Item 7 of US Airways Group’s Annual Report on Form 10-K for the year ended December 31, 2004. The information contained herein is not a comprehensive discussion and analysis of the financial condition and results of operations of the Company, but rather updates disclosures made in the aforementioned filing.

     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 of US Airways Group, Inc. (the Company), expected fuel costs, the revenue and pricing environment, and expected financial performance. Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving America West Holdings and US Airways Group, including future financial and operating results, the combined companies’ plans, objectives, expectations and intentions and other statements that are not historical facts. Such 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 ability of the Company to obtain and maintain any necessary financing for operations and other purposes (including compliance with financial covenants); the ability of the Company to maintain adequate liquidity; the impact of changes in fuel prices; the impact of economic conditions; changes in prevailing interest rates; the ability to attract and retain qualified personnel; the ability of the Company to attract and retain customers; the ability of the Company to obtain and maintain commercially reasonable terms with vendors and service providers; the cyclical nature of the airline industry; competitive practices in the industry, including significant fare restructuring activities by major airlines; labor costs; security-related and insurance costs; weather conditions; government legislation and regulation; relations with unionized employees generally and the impact and outcome of the labor negotiations; the impact of global instability including the potential impact of current and future hostilities, terrorist attacks, infectious disease outbreaks or other global events; the impact of the resolution of remaining claims in US Airways Group’s Chapter 11 proceedings; the ability of the Company to fund and execute its business plan following the Chapter 11 proceedings and the merger; and other risks and uncertainties listed from time to time in the companies’ 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” below and in the filings of the Company with the SEC, which are available at www.usairways.com.

     As used in this quarterly report on Form 10-Q, the terms “US Airways Group”, the “Company”, “we”, “us” and “our” refer to US Airways Group, Inc. and its consolidated subsidiaries.

Background

     US Airways Group is a holding company whose primary business activity, prior to the merger, was the operation of a major network air carrier through its ownership of the common stock of US Airways, Inc. (US Airways), Piedmont Airlines, Inc., PSA Airlines, Inc., Material Services Company, Inc. and Airways Assurance Limited. US Airways, along with US Airways Group’s regional airline subsidiaries and affiliated carriers flying as US Airways Express, is a hub-and-spoke carrier with a substantial presence in the Eastern United States and with service to Canada, the Caribbean, Latin America and Europe. US Airways had

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approximately 42 million passengers boarding its planes in 2004 and is the seventh largest U.S. air carrier based on available seat miles (ASMs). As of September 30, 2005, US Airways operated 251 jet aircraft and 25 regional jet aircraft and provided regularly scheduled service at 100 airports in the continental United States, Canada, the Caribbean, Latin America and Europe. As of September 30, 2005, the US Airways Express network served 131 airports in the United States, Canada and the Bahamas, including approximately 48 airports also served by US Airways.

     On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Piedmont Airlines, Inc., PSA Airlines, Inc. and Material Services Company, Inc., which accounted for substantially all of the operations of US Airways Group, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division.

     America West Holdings is a holding company whose primary business activity was operation of a low-cost air carrier through its ownership of America West Airlines, Inc. (AWA), a Delaware corporation formed in 1981. AWA accounted for most of America West Holdings’ revenues and expenses in 2004. Based on 2004 operating revenues and ASMs, AWA is the eighth largest passenger airline and the second largest low-cost carrier in the United States. AWA operates a hub-and-spoke network, with large hubs in both Phoenix, Arizona and Las Vegas, Nevada. As of September 30, 2005, AWA operated a fleet of 142 aircraft and served 62 destinations in North America, including eight in Mexico, two in Canada and one in Costa Rica. Through regional alliance and code share arrangements with other airlines, AWA served an additional 52 destinations in North America. Through its America West Vacations (“AWV”) division, AWA also arranges and sells vacation packages primarily to Las Vegas, Nevada that may include airfare, hotel accommodations and ground transportation.

     On May 19, 2005, US Airways Group signed a merger agreement with America West Holdings pursuant to which America West Holdings merged with a wholly owned subsidiary of US Airways Group. The merger agreement was amended by a letter agreement on July 7, 2005. The merger became effective upon US Airways Group’s emergence from bankruptcy on September 27, 2005.

     The new US Airways Group operates under the single brand name of US Airways through two principal operating subsidiaries, US Airways and AWA. We expect to integrate the two operating subsidiaries into one operation over approximately 24 to 36 months following the merger. As a result of the merger, US Airways Group is projected to be the fifth largest airline operating in the United States as measured by domestic revenue passenger miles and by ASMs with primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Pittsburgh, Las Vegas, New York, Washington, D.C. and Boston. US Airways Group is a low-cost carrier offering scheduled passenger service on approximately 3,600 flights daily to 229 cities in the U.S., Canada, the Caribbean, Latin America and Europe. The Company’s airline subsidiaries will operate 360 mainline jets and will be supported by the Company’s regional airline subsidiaries and affiliates operating as US Airways Express, which will operate approximately 241 regional jets, of which 80 will be aircraft with 70 or more seats, and approximately 112 turboprops.

     The merger has been accounted for as a reverse acquisition using the purchase method of accounting. Although the merger was structured such that America West Holdings became a wholly owned subsidiary of US Airways Group, America West Holdings will be treated as the acquiring company for accounting purposes due to the following factors: (1) America West Holdings’ stockholders received the largest share of the Company’s common stock in the merger in comparison to unsecured creditors of US Airways Group; (2) America West Holdings received a larger number of designees to the board of directors; and (3) America West Holdings’ Chairman and Chief Executive Officer prior to the merger became the Chairman and Chief Executive Officer of the combined company. As a result of the reverse acquisition, the statement of operations presented includes the results of America West Holdings for the three months and nine months ended September 30, 2005 and consolidated results of US Airways Group for the four days ended September 30, 2005.

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Emergence and Merger Transactions

US Airways Group’s and its domestic subsidiaries plan of reorganization was confirmed by the bankruptcy court on September 16, 2005 and the plan of reorganization and the merger became effective on September 27, 2005. Critical to the Company’s emergence from bankruptcy and the merger with America West Holdings was additional financing and liquidity to fund operations. The financing and liquidity was provided through a combination of new equity investments, new and restructured debt instruments and agreements with significant stakeholders as described below.

The New Equity Investments - On September 27, 2005, US Airways Group received new equity investments of $565 million in the aggregate from ACE Aviation Holdings Inc. (ACE); Par Investment Partners, L.P. (Par); Peninsula Investment Partners, L.P. (Peninsula); a group of investors under the management of Wellington Management Company, LLP (Wellington); Tudor Proprietary Trading, L.L.C. and certain investors advised by Tudor Investment Corp. (Tudor); and Eastshore Aviation, LLC (Eastshore). In connection with the equity investments, each of the equity investors received an option to purchase additional shares at $15.00 per share. Par purchased the options granted to ACE and Eastshore, and each option holder exercised the first two-thirds of its option on September 28, 2005, for aggregate proceeds to US Airways Group of approximately $75 million. The remaining one-third of the options was scheduled to expire on October 13, 2005, at which time each of the equity investors exercised the remaining portion of its option for aggregate proceeds to US Airways Group of approximately $38 million. The total new equity investment was $678 million.

Public stock offering — On September 30, 2005, US Airways Group completed a public offering of common stock in which it issued 9,775,000 shares of its common stock for net proceeds of $189 million. Net of fees, the proceeds from the offering were $180 million.

GE Merger MOU - US Airways Group and America West Holdings reached a comprehensive agreement with General Electric Capital Corporation (GECC), and its affiliates as described in the Master Merger Memorandum of Understanding (GE Merger MOU). The GE Merger MOU provided for the following:

• The GE Merger MOU provided for continued use by US Airways Group of certain leased Airbus, Boeing and regional jet aircraft, the modification of monthly lease rates, and the return to GECC of certain other leased Airbus and Boeing aircraft.

• GECC provided a bridge facility of approximately $56 million for use by US Airways Group during the pendency of the Chapter 11 proceedings. US Airways paid an affiliate of General Electric (GE) $125 million in cash on September 30, 2005 in exchange for retirement of the bridge facility, forgiveness and release of US Airways from certain prepetition obligations, deferral of certain payment obligations, and amendments to maintenance agreements.

• In June 2005, GECC purchased and immediately leased back to US Airways Group: (a) the assets securing the credit facility obtained from GE in 2001 (the 2001 GE Credit Facility) and the liquidity facility obtained from GE in 2003 in connection with US Airways Group’s emergence from the first bankruptcy (the 2003 GE Liquidity Facility), and other GE obligations, consisting of 11 Airbus aircraft and 28 spare engines and engine stands, and (b) ten regional jet aircraft previously debt financed by GECC. The proceeds from the sale leaseback transaction of approximately $633 million were used to pay down balances due to GE by US Airways Group under the 2003 GE Liquidity Facility in full, the GECC mortgage-debt financed CRJ aircraft in full, and a portion of the 2001 GE Credit Facility. The 2001 GE Credit Facility was amended to allow certain additional borrowings of up to $28 million.

Airbus MOU — In connection with the merger, a Memorandum of Understanding was executed between AVSA S.A.R.L., an affiliate of Airbus S.A.S. (Airbus), US Airways Group, US Airways and AWA (Airbus MOU). The key aspects of the Airbus MOU are as follows:

• On September 27, 2005, US Airways and AWA entered into two loan agreements with Airbus Financial Services (AFS), as Initial Lender and Loan Agent, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and US Airways Group, as guarantor, with commitments in initial aggregate amounts of up to $161 million and up to $89 million (the Airbus $161 Million Loan and the Airbus $89 Million Loan and, collectively, the Airbus Loans). The Airbus Loans bear interest at a rate of LIBOR plus a margin, subject to adjustment and have been recorded as an obligation of US Airways Group.

• Airbus has rescheduled US Airways Group’s A320-family and A330-200 delivery commitments and has agreed to provide backstop financing for a substantial number of aircraft, subject to certain terms

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and conditions, on an order of 20 A350 aircraft. US Airways Group’s A320-family aircraft are now scheduled for delivery in 2009 and 2010. US Airways Group’s A330-200 aircraft are scheduled for delivery in 2009 and 2010 and A350 aircraft deliveries are currently scheduled to occur beginning in 2011. The Airbus MOU also eliminates cancellation penalties on US Airways Group’s orders for the ten A330-200 aircraft, provided that US Airways Group has met certain predelivery payment obligations under the A350 order. In connection with the restructuring of aircraft firm orders, US Airways Group and America West Holdings were required to pay an aggregate non-refundable restructuring fee which was paid by means of set-off against existing equipment purchase deposits of US Airways Group and America West Holdings held by Airbus. The US Airways Group restructuring fee of $39 million was recorded as a reduction in the assets acquired by America West Holdings in purchase accounting. The America West Holdings restructuring fee of $50 million has been recorded as a special charge in the accompanying consolidated statement of operations, along with $7 million in related capitalized interest.

Restructuring of the ATSB Loan Guarantees — US Airways Group and America West Holdings each had loans outstanding guaranteed under the Air Transportation Safety and System Stabilization Act by the Air Transportation Stabilization Board (ATSB and the loans, ATSB Loans). In connection with the September 12, 2004 Chapter 11 filing, the ATSB and the lenders under the US Airways ATSB Loan agreed to authorize the Company to continue to use cash collateral securing the US Airways ATSB Loan on an interim basis (Cash Collateral Agreement). US Airways reached agreements with the ATSB concerning interim extensions to the ATSB Cash Collateral Agreement, the last of which was extended to the earlier of the effective date of the plan of reorganization or October 25, 2005. The Cash Collateral Agreement and subsequent extensions each required US Airways Group, among other conditions, to maintain a weekly minimum unrestricted cash balance which decreased periodically during the term of the extension.

     On July 22, 2005, US Airways Group and America West Holdings announced that the ATSB approved the proposed merger. Under the negotiated new loan terms, the US Airways ATSB Loan is guaranteed by US Airways Group (including all domestic subsidiaries, with certain limited exceptions) and is secured by substantially all of the present and future assets of US Airways Group not otherwise encumbered, other than certain specified assets, including assets which are subject to other financing agreements. The AWA ATSB Loan is also guaranteed by US Airways Group (including all domestic subsidiaries, with certain limited exceptions) and is secured by a second lien in the same collateral. The loans continue to have separate repayment schedules and interest rates; however, the loans are subject to similar repayments and mandatory amortization in the event of additional debt issuances, with certain limited exceptions.

     As of September 30, 2005, $583 million was outstanding under the US Airways ATSB Loan, of which $525 million was guaranteed by the ATSB under the Air Transportation Safety and System Stabilization Act. The US Airways ATSB Loan bears interest as follows:

• 90% of the US Airways ATSB Loan (Tranche A), the guaranteed portion of the loan, was funded through a participating lender’s commercial paper conduit program and bears interest at a rate equal to the conduit provider’s weighted average cost related to the issuance of certain commercial paper notes and other short-term borrowings plus 0.30%, provided that portions of Tranche A that are held by the ATSB or by an assignee and are no longer subject to such commercial paper conduit program bear interest at LIBOR plus 40 basis points, and portions of Tranche A that are under certain circumstances assigned free of the ATSB guarantee bear interest at LIBOR plus 6.0%; and

• 10% of the US Airways ATSB Loan (Tranche B) bears interest at the greater of the Tranche A interest rate plus 6.0% and LIBOR plus 6.0% from a current rate of LIBOR plus 4.0%.

     In addition, US Airways is charged an annual guarantee fee in respect of the ATSB guarantee equal to 6.0% of the guaranteed amount (initially $525 million). The US Airways ATSB Loan also reschedules amortization payments for US Airways with semi-annual payments beginning on March 31, 2007, and continuing through September 30, 2010.

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     US Airways must pay down the principal of its loan with the first $125 million of net proceeds from specified asset sales identified in connection with its Chapter 11 proceedings, whether completed before or after emergence. US Airways then retains the next $83 million of net proceeds from specified assets sales, and must pay 60% of net proceeds in excess of an aggregate of $208 million from specified asset sales to the ATSB. Any such asset sales proceeds up to $275 million are to be applied in order of maturity, and any such asset sales proceeds in excess of $275 million are to be applied pro rata across all maturities in accordance with the loan’s early amortization provisions. US Airways completed in excess of $125 million in asset sales prior to emergence from the Chapter 11 proceedings, satisfying the minimum prepayment requirement.

     As of September 30, 2005, $249 million was outstanding under the AWA ATSB Loan, of which $228 million is guaranteed by the ATSB. Certain third party counter-guarantors have fully and unconditionally guaranteed the payment of an aggregate amount of $19 million of the remaining principal amount of the loan plus accrued and unpaid interest thereon. The AWA ATSB Loan bears interest at a rate of LIBOR plus 40 basis points. The guarantee fee on the AWA ATSB Loan is 8.0% with annual increases of 5 basis points. The amortization payments under the AWA ATSB Loan become due in seven installments of $42 million on each March 31 and September 30, commencing on September 30, 2005 and ending on September 30, 2008. The AWA ATSB Loan also requires a premium, in certain instances, for voluntary prepayments. AWA made a voluntary prepayment of $9 million dollars in principal amount on September 27, 2005, after the closing of the AWA ATSB Loan, prepaying in full the portion of the loan subject to one of the counter-guarantees, which prepayment has been applied pro rata against each scheduled amortization payment.

     The terms of both amended and restated loans require US Airways Group to meet certain financial covenants, including minimum cash requirements and required minimum ratios of earnings before interest, taxes, depreciation, amortization and aircraft rent to fixed charges.

     On October 19, 2005 the ATSB Loan was sold to 13 fixed income investors. As a result of that sale, the ATSB no longer has an interest in any of the Company’s debt. See also Note 13, “Subsequent Events” in Notes to Condensed Consolidated Financial Statements.

New Convertible Notes -— On September 30, 2005, US Airways Group issued $144 million aggregate principal amount of 7% Senior Convertible Notes due 2020 (the 7% Senior Convertible Notes) for proceeds, net of expenses, of approximately $139 million. The 7% Senior Convertible Notes are US Airways Group’s senior unsecured obligations and rank equally in right of payment to its other senior unsecured and unsubordinated indebtedness and are effectively subordinated to its secured indebtedness to the extent of the value of assets securing such indebtedness. The 7% Senior Convertible Notes are fully and unconditionally guaranteed, jointly and severally and on a senior unsecured basis, by US Airways Group’s two major operating subsidiaries, US Airways and AWA. The guarantees are the guarantors’ unsecured obligations and rank equally in right of payment to the other senior unsecured and unsubordinated indebtedness of the guarantors and are effectively subordinated to the guarantors’ secured indebtedness to the extent of the value of assets securing such indebtedness.

Restructuring of Affinity Credit Card Partner Agreement — In connection with the merger, AWA, US Airways Group and Juniper Bank, a subsidiary of Barclays PLC (Juniper), entered into an agreement on August 8, 2005 amending AWA’s co-branded credit card agreement with Juniper, dated January 25, 2005. Pursuant to the amended credit card agreement, Juniper will offer and market an airline mileage award credit card program to the general public to participate in US Airways Group’s Dividend Miles program through the use of a co-branded credit card.

     US Airways Group’s credit card program is currently administered by Bank of America, N.A. (USA) (Bank of America) and will terminate approximately two years and three months after the effective date of the merger. During that period both Juniper and Bank of America will run credit card programs for US Airways Group. (See also Part II, Item 3, “Legal Proceedings.”)

     Under the amended credit card agreement, Juniper will pay to US Airways Group fees for each mile awarded to each credit card account administered by Juniper, subject to certain exceptions. Juniper also agreed to pay a one-time bonus payment of $130 million, following the effectiveness of the merger, subject to certain conditions. The bonus payment was made to AWA on October 3, 2005.

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     In addition, Juniper will pre-purchase miles from US Airways Group for an aggregate of $325 million, subject to the same conditions as apply to the $130 million bonus payment. To the extent that these miles are not used by Juniper in connection with the co-branded credit card program, US Airways Group will repurchase these miles in 12 equal quarterly installments beginning on the fifth year prior to the expiration date until paid in full. US Airways Group will make monthly interest payments at LIBOR plus 4.75% to Juniper, beginning on November 1, 2005, based on the amount of pre-purchased miles that have not been used by Juniper in connection with the co-branded credit card program and have not been repurchased by US Airways Group. US Airways Group will be required to repurchase pre-purchased miles under certain reductions in the collateral held under the credit card processing agreement with JPMorgan Chase Bank, N.A. Accordingly, the prepayment will be recorded as additional indebtedness.

     Juniper may, at its option, terminate the amended credit card agreement, make payments to US Airways Group under the amended credit card agreement in the form of pre-purchased miles rather than cash, or commence the repurchase of the pre-purchased miles before the fifth year prior to the expiration date in the event that US Airways Group breaches its obligations under the amended credit card agreement, or upon the occurrence of certain events.

Restructuring of Credit Card Processing Agreement — In connection with the merger, AWA, JPMorgan Chase Bank, N.A., successor-in-interest to JPMorgan Chase Bank, and Chase Merchant Services, L.L.C., entered into the First Amendment to the Merchant Services Bankcard Agreement on August 8, 2005. Pursuant to the amended card processing agreement, JPMorgan Chase and Chase Merchant Services (collectively, Chase) will perform authorization, processing and settlement services for sales on Visa and Mastercard for AWA and US Airways following the merger. The original card processing agreement is guaranteed by America West Holdings, and US Airways Group executed a guaranty of the amended card processing agreement on the effective date of the merger.

     US Airways’ credit card processing is currently administered by Bank of America and such processing services are expected to be transferred to Chase as soon as possible, but not later than 120 days, after the merger. US Airways will become a party to the amended card processing agreement at the time that Chase begins processing for US Airways.

     The amended card processing agreement took effect at the effective time of the merger and continues until the expiration of the initial term, which is three years from the date the amended card processing agreement takes effect. Upon expiration of the initial term, the amended card processing agreement will automatically renew for successive one-year periods pursuant to the terms of the agreement.

     Under the amended card processing agreement, AWA will pay to Chase fees in connection with card processing services such as sales authorization, settlement services and customer service. AWA and US Airways are also required to maintain a reserve account to secure Chase’s exposure to outstanding air traffic liability. In October 2005, AWA was required to provide $153 million in cash collateral.

US Airways Group’s Emergence from Bankruptcy — In accordance with the U.S. bankruptcy code, the plan of reorganization divided claims into classes according to their relative seniority and other criteria and provides for the treatment for each claim of a particular class. These include claims related to the Debtors’ assumption or rejection of various contracts and unexpired leases, the assumption of Debtors’ existing collective bargaining agreements with their unions and the termination of certain employee benefit plans with employees and retirees, and other matters. The ultimate resolution of certain of the claims asserted against the Debtors in the Chapter 11 cases will be subject to negotiations, elections and bankruptcy court procedures. The amount of stock distributed to any particular general unsecured creditor under the plan of reorganization will depend on the resolution of claims filed by these creditors, as well as on the value of shares of the new common stock of US Airways Group in the marketplace. The class of unsecured creditors eligible for stock distributions will, in the aggregate, recover between approximately 3.1% and 17.4% of the value of those claims as determined through the bankruptcy process.

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• PBGC Claim — On November 12, 2004, US Airways filed a motion requesting a determination from the Bankruptcy Court that US Airways satisfied the financial requirements for a “distress termination” of the Retirement Plan for Flight Attendants in the Service of US Airways, Inc. (AFA Plan), the Pension Plan for Employees of US Airways, Inc. Who Are Represented by the International Association of Machinists and Aerospace Workers (IAM Plan), and the Retirement Plan for Certain Employees of US Airways, Inc. (CE Plan) under section 4041(c)(2)(B)(ii)(IV) of the Employee Retirement Security Act of 1974, as amended (ERISA), and approval of each such plan’s termination. These plans were projected to have benefit obligations and plan assets aggregating $2.7 billion and $1.7 billion, respectively, as of September 30, 2004, the most recent valuation date. On January 6, 2005, the bankruptcy court entered an order (i) finding that the financial requirements under section 4041(c)(2)(B)(ii)(IV) of ERISA for a distress termination of the plans had been met and (ii) approving termination of the plans. The AFA Plan and the IAM Plan were terminated effective January 10, 2005, by agreement between the Pension Benefit Guaranty Corporation (PBGC) and US Airways. The CE Plan was terminated effective January 17, 2005, by agreement between the PBGC and US Airways. Effective February 1, 2005, the PBGC was appointed trustee for each of the three plans. As a result of these terminations, the PBGC filed claims against the Company for the unfunded portion of each of the Plans. Under the plan of reorganization, the PBGC received, as treatment for its claims: (i) cash in the amount of $13,500,000; (ii) an unsecured promissory note in the principal amount of $10,000,000 issued by US Airways and guaranteed by US Airways Group, bearing interest at a rate of 6.00% per annum payable annually in arrears, with such promissory note to be payable in a single installment on the seventh anniversary of the effective date of the plan of reorganization; and (iii) 70 percent, or 4,873,485 shares, of common stock of US Airways Group issued to the unsecured creditors, net of the shares allocated to the Air Line Pilots Association (ALPA).

• Agreements with ALPA — On September 14, 2005, US Airways Group, US Airways, America West Holdings and AWA reached agreement with the two ALPA-represented pilot groups at the separate airlines on a comprehensive agreement (the Transition Agreement) that will govern many merger-related aspects of the parties’ relationships until there is a single collective bargaining agreement covering all pilots. US Airways Group and US Airways entered into a letter of agreement which provides that US Airways pilots designated by ALPA will receive 1.25 million shares of US Airways Group common stock and options to purchase 1.1 million shares of US Airways Group common stock. The 1.25 million shares are drawn from the 8.21 million shares initially allocated to unsecured creditors in the plan of reorganization. ALPA will notify US Airways of the allocations to pilots designated to receive shares and options no later than 60 days after September 27, 2005. Shares will be issued to those pilots no later than 30 days after ALPA’s notification. The options will be issued according to the following schedule: the first tranche of 500,000 options will be issued on January 31, 2006, a second tranche of 300,000 options will be issued on January 31, 2007, and the third tranche of 300,000 options will be issued on January 31, 2008. The options will have a term of five years from date of issuance. The exercise price for each tranche of options will be the average of the closing price per share of US Airways common stock as reflected on the New York Stock Exchange for the 20 business day period prior to the applicable option issuance date. The letter of agreement also includes provisions restricting transfer of the options and governing anti-dilution. In connection with the negotiation of the Transition Agreement and the letter of agreement, US Airways also agreed with ALPA to eliminate an existing 1% pay reduction that would apply to all pilots as a result of a lump sum payment due to pilots recalled from furlough and agreed to pay $500,000 to resolve an outstanding grievance over pay credits for pilots assigned by US Airways to travel to and from certain duty assignments.

     While a significant amount of the Debtors’ liabilities were extinguished as a result of the discharge granted upon confirmation of the plan of reorganization, not all of the Debtors’ liabilities were subject to discharge. The types of obligations that the Debtors remain responsible for include those relating to their secured financings, aircraft financings, certain environmental liabilities and the continuing obligations arising under contracts and leases assumed by the Debtors, as well as allowed administrative claims. Allowed administrative claims consist primarily of the costs and expenses of administration of the Chapter 11 cases, including the costs of operating the Debtors’ businesses since filing for bankruptcy. The bankruptcy court set August 22, 2005 as the bar date by which creditors asserting administrative claims,

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other than administrative claims arising in the ordinary course of business, were required to be filed. The Debtors received a large number of administrative claims in response to this bar date, for timely filed claims as well as additional claims that were late filed without permission of the bankruptcy court. Included in these claims, however, are claims for amounts arising in the ordinary course that have either already been paid, or that are included in the Debtors’ business plan and budget to be paid in the ordinary course. Also included are claims that are duplicative, claims for which the Debtors believe there is no legal merit for a claim of any status, and claims that the Debtors believe may be valid as unsecured claims but are not entitled to administrative claims status. Accordingly, the Debtors believe that only a very small portion of the claims filed in response to the bar date for non-ordinary course administrative expense claims will actually be allowed in amounts exceeding the ordinary course expenditures already contained in the Debtors’ business plan. However, there can be no assurances that the aggregate amount of the claims ultimately allowed will not be material. To the extent any of these claims are allowed, they will generally be satisfied in full.

Overview

     For the third quarter of 2005, US Airways Group’s operating revenues were $926 million, operating loss was $71 million and loss per common share was $5.04 on a net loss of $87 million. For the third quarter of 2004, operating revenues were $679 million, operating loss was $10 million and loss per common share was $1.92 on a net loss of $29 million. As noted above, the statement of operations presented includes the results of America West Holdings through September 27, 2005, the effective date of the merger, and the consolidated results of US Airways Group and its subsidiaries, including US Airways, America West Holdings and AWA, for the four days ended September 30, 2005. The table below shows the consolidated results of the four days of US Airways Group and the operating results of America West Holdings for the three and nine months ended September 30, 2005:

Three months ended September 30, 2005
	Consolidated			4 Days
	US Airways			US Airways			America West
	Group			Group, Inc.			Holdings
Operating revenues	$	926		$	79		$	847
Operating expenses		997			91			906
Operating loss		(71	)		(12	)		(59	)
Nonoperating expense, net		(16	)		(2	)		(14	)
Net loss	$	(87	)	$	(14	)	$	(73	)

Nine months ended September 30, 2005
	Consolidated			4 Days
	US Airways			US Airways			America West
	Group			Group, Inc.			Holdings
Operating revenues	$	2,482		$	79		$	2,403
Operating expenses		2,473			91			2,382
Operating income (loss)		9			(12	)		21
Nonoperating expense, net		(49	)		(2	)		(47	)
Net loss	$	(40	)	$	(14	)	$	(26	)

     Increases in passenger revenue helped to mitigate the impact of rising fuel prices during the third quarter. Passenger revenue increased $162 million, of which $111 million of the increase relates to an increase in passenger revenue at AWA and $51 million relates to the four days of activity of US Airways Group. AWA’s increase in passenger revenue of $111 million, or 20.5%, is due to a 18.4% increase in yield and a 1.7% increase in revenue passenger miles (RPMs). As a result, passenger revenue per available seat mile (RASM) increased to 8.29 cents or 16.9% for the third quarter of 2005 from 7.09 cents in the third quarter of 2004. AWA’s strong unit revenue improvement was due to more aggressive peak day yield management in the 2005 third quarter, more balanced capacity in the markets served by AWA in the western United States and the positive impact of numerous legacy and low cost carrier fare increases in the winter and spring of 2005. Reductions in late 2004 of AWA’s

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transcontinental flying, which yields were negatively impacted by competitive responses, also contributed to improved period-over-period RASM and yield performance.

     The airline industry and the Company incurred and continue to face an increase in costs resulting from record high jet fuel prices. The average price per gallon of fuel at AWA increased 45.5% from $1.32 in the third quarter of 2004 to $1.92 per gallon in the third quarter of 2005. As a result, aircraft fuel expense for AWA for the quarter was $225 million, an increase of $72 million, or 47.1%, from the third quarter of 2004.

     US Airways Group realized a net loss of $87 million for the third quarter of 2005. Net loss for the third quarter included $56 million of net gains associated with the AWA’s fuel hedging transactions. This includes $29 million of net realized gains on settled hedge transactions and $27 million of unrealized gains resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging instruments. AWA is required to use mark-to-market accounting as its fuel hedging instruments do not meet the requirements for hedge accounting as established by Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities.” If these instruments had qualified for hedge accounting treatment, any unrealized gains or losses, including the $27 million discussed above, would be deferred in other comprehensive income, a subset of stockholders’ equity, until the jet fuel is purchased and the underlying fuel hedging instrument is settled. Given the market volatility of jet fuel, the fair value of these fuel hedging instruments is expected to change until settled.

     The third quarter results include a $50 million special charge related to the amended Airbus purchase agreement, along with $7 million in capitalized interest. The restructuring fee was paid by means of set-off against existing equipment purchase deposits held by Airbus. The 2005 quarter also includes a $27 million loss on the sale and leaseback of six 737-300 aircraft and two 757 aircraft.

     As of September 30, 2005, US Airways Group unrestricted and restricted cash, cash equivalents and short-term investments totaled $2.17 billion, of which $1.38 billion was unrestricted. Since the quarter ended, US Airways Group’s cash position has increased as a number of merger-related transactions closed after September 30, 2005. As of October 31, 2005, total cash and investments were $2.6 billion, of which $1.7 billion was unrestricted. Although there can be no assurances, the company believes that cash flows from operating activities, combined with cash balances and financing commitments, will be adequate to fund operating and capital needs as well as to maintain compliance with its various debt agreements through the end of 2006.

US Airways Group’s Results of Operations

     The following discussion provides an analysis of US Airway Group’s results of operations for the three and nine months ended September 30, 2005 and material changes compared to the three and nine months ended September 30, 2004. As discussed above and throughout the discussion below, the results for the three and nine month periods include the results of America West Holdings through September 27, 2005, the effective date of the merger, and the consolidated results of US Airways Group for the four days ended September 30, 2005. See also discussion below related to the operating results of AWA, including operating and financial statistics for AWA’s mainline operations.

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Three Months Ended September 30, 2005
Compared with the
Three Months Ended September 30, 2004

     Total operating revenues for the third quarter of 2005 were $926 million, an increase of $247 million, or 36.4% over the prior year. Passenger revenues at AWA were $653 million for the third quarter of 2005, an increase of $111 million from the comparable 2004 quarter, and passenger revenue for the four days of US Airways Group contributed $51 million. At AWA, RPMs increased 1.7% as ASMs increased 3.0%, resulting in a 1.0 point decrease in load factor. This decrease in load factor was more than offset by higher passenger yield which increased 18.4% to 10.31 cents. As a result, AWA’s RASM increased 16.9% to 8.29 cents in the third quarter 2005 from 7.09 cents in the 2004 quarter. AWA’s strong unit revenue improvement was driven by more aggressive peak day yield management in the 2005 third quarter, more balanced capacity in the markets served by AWA in the western United States and the positive impact of numerous legacy and low cost carrier fare increases in the winter and spring of 2005. Reductions in late 2004 of AWA’s transcontinental flying, which yields were negatively impacted by competitive responses, also contributed to improved period-over-period RASM and yield performance.

     Express revenues were $157 million for the third quarter of 2005, an increase of $59 million from the comparable 2004 quarter. Of the $59 million increase, $38 million is due to increased flying by Mesa under its alliance agreement with AWA and $21 million is attributable to the four days of Express revenue from US Airways Group’s wholly owned and regional affiliate Express carriers.

     Cargo revenues increased 50.0% in the third quarter of 2005 to $9 million primarily due to increased mail volume at AWA and $1 million of cargo revenue from US Airways for the four days. Other revenues increased 69.7% to $56 million in the third quarter of 2005 from $33 million in the third quarter of 2004 due principally to an increase in net revenues associated with the sale of tour packages by the America West Vacations division, an increase in ticket change and service fees and a financial statement presentation change in 2005 related to frequent traveler program credits reclassified from other operating expenses to other revenues. US Airways Group contributed $6 million in other revenue for the four days ended September 30, 2005.

     The table below sets forth operating expenses for US Airways Group:

	Three Months Ended
	September 30,
	2005			2004
	(in millions)
Operating expenses:
Aircraft fuel and related taxes	$	252		$	153
Gains on fuel hedging instruments, net		(56	)		(26	)
Salaries and related costs		193			165
Express expenses		168			101
Aircraft rent		90			77
Aircraft maintenance		64			54
Other rent and landing fees		48			43
Selling expenses		48			38
Special charges, net		84			2
Depreciation and amortization		16			13
Other		90			69
Total operating expenses	$	997		$	689

     Total operating expenses in the third quarter of 2005 were $997 million, an increase of $308 million, or 44.7%. This included an increase of $217 million related to America West Airlines, or 31.5%, as compared to the third quarter of 2004, and $91 million of operating expenses related to US Airways Group. Significant drivers in the increase in operating expenses were as follows:

• Aircraft fuel and related tax expense, excluding the impact of fuel hedges, increased 47.1% at AWA, primarily due to a 45.5% increase in the average price per gallon of fuel to $1.92 in the third

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	quarter of 2005 from $1.32 in the comparable 2004 quarter. Aircraft fuel and related tax expense for the four days of US Airways Group was $27 million.
•	Salaries and related costs increased $28 million, of which $15 million relates to the four days of US Airways Group. The increase of $13 million at AWA is primarily due to an increase in the accrual for employee performance bonuses ($8 million) and a net increase in benefit related expenses including defined contribution plan payments which our pilots became eligible for on January 1, 2005 ($3 million). While capacity, as measured by ASMs, at AWA increased 3.0%, average full-time equivalent employees (FTEs) for AWA only increased 1.4%.
•	Express expenses increased 66.3% in the third quarter of 2005 to $168 million from $101 million in the third quarter of 2004. Express expenses consisted of $149 million of AWA related Express expenses, an increase of $48 million as compared to 2004, and $19 million in Express expenses for the four days of US Airways Group. Aircraft operating expense for Express at AWA for the quarter was $96 million, which accounted for $22 million of the period-over-period increase in Express operating expenses. In addition, aircraft fuel expense was $53 million, which accounted for $26 million of the period-over-period increase.
•	Aircraft rent expense increased $13 million, of which $5 million relates to the four days of US Airways Group. The increase in aircraft rent at AWA was principally due to aircraft mix as previously owned and leased Boeing 737-200 aircraft were retired or returned to aircraft lessors and replaced with leased Airbus A320 and A319 aircraft at higher monthly lease rates.
•	Selling expenses increased $10 million, of which $3 million relates to the four days of US Airways Group. Increases at AWA were primarily due to higher advertising expenses and credit card fees.
•	Aircraft maintenance expense increased $10 million, of which $4 million relates to the four days of US Airways Group. The increase in aircraft maintenance expense at AWA is primarily due to an $8 million increase in capitalized maintenance amortization expense, offset in part by a $1 million decrease in airframe maintenance expenses.
•	AWA recorded $84 million of special charges in the third quarter of 2005. In connection with the merger and the Airbus MOU executed between Airbus, US Airways Group, US Airways and AWA, certain aircraft firm orders were restructured. In connection with that restructuring, US Airways Group and America West Holdings were required to pay non-refundable restructuring fees. AWA’s restructuring fee of $50 million has been classified as a special charge in the three month period ended September 30, 2005, along with $7 million in associated capitalized interest. The restructuring fee was paid by means of set-off against existing equipment deposits of AWA held by Airbus. Special charges also includes a loss of $27 million related to the sale and leaseback of six 737-300 aircraft and two 757 aircraft.
•	Other operating expenses increased by $21 million, with $11 million in other operating expenses from four days of US Airways Group. The increase in other operating expenses at AWA of $10 million relates to the financial statement presentation change discussed above and increases in property taxes and postage expenses associated with merger related communications to Frequent Flyers. The increases were offset in part by a decrease in legal fees.

     US Airways Group had net nonoperating expenses of $16 million in the third quarter of 2005 compared to $19 million in the third quarter of 2004. Interest income increased $2 million due to higher cash balances and higher average rates of returns on investments.

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Interest expense increased by $1 million due to $3 million of interest attributable to the four day period of US Airways Group. Interest expense at AWA decreased by $2 million primarily due to debt issuance costs that were written-off in connection with the refinancing or term loan with the Industrial bank of Japan (IBJ) in the 2004 period.

Nine Months Ended September 30, 2005
Compared with the
Nine Months Ended September 30, 2004

     Total operating revenues for the nine months ended September 30, 2005 were $2.48 billion. Passenger revenues were $1.94 billion for the nine-month period, an increase of $286 million from the comparable 2004 period. Passenger revenues at AWA were $1.88 billion for the third quarter of 2005, an increase of $235 million from the comparable 2004 quarter, and passenger revenues for the four days of US Airways Group contributed $51 million. At AWA, RPMs increased 5.4% as ASMs increased 1.7%, resulting in a 2.8 point increase in load factor to 80.2%. This increase in load factor was achieved with higher passenger yield, which increased 8.4% in the 2005 period. As a result, RASM increased 12.3% to 8.21 cents in the nine months ended September 30, 2005 from 7.31 cents in the comparable 2004 period. AWA’s strong unit revenue improvement was driven by more aggressive peak day yield management in the 2005 period, more balanced capacity in the markets served by AWA in the western United States and the positive impact of numerous legacy and low cost carrier fare increases in the winter and spring of 2005. Reductions in late 2004 of AWA’s transcontinental flying, which yields were negatively impacted by competitive responses, also contributed to improved period-over-period RASM and yield performance.

     Express revenues were $392 million for the nine months ended September 30, 2005, an increase of $132 million. Of the $132 million increase, $111 million is due to increased flying by Mesa under its alliance agreement with AWA and $21 million is attributable to the four days of Express revenue from US Airways Group’s wholly owned and regional affiliate Express carriers.

     Cargo revenues increased 25.0% for the nine months ended September 30, 2005 to $25 million due primarily to increased mail volume at AWA. Other revenues at AWA increased by $31 million in the 2005 period from $93 million in the comparable period of 2004 due principally to an increase net revenues associated with the sale of tour packages by the America West vacations division, an increase in ticket change and service fees. US Airways Group contributed $6 million in other revenue for the four days ended September 30, 2005.

     The table below sets forth operating expenses for US Airways Group.

	Nine Months Ended
	September 30,
	2005			2004
	(in millions)
Operating expenses:
Aircraft fuel and related taxes	$	611		$	416
Gains on fuel hedging instruments, net		(124	)		(36	)
Salaries and related costs		542			493
Express expenses		414			264
Aircraft rent		248			227
Aircraft maintenance		162			157
Other rent and landing fees		135			127
Selling expenses		129			117
Special charges, net		85			1
Depreciation and amortization		39			40
Other		232			185
Total operating expenses	$	2,473		$	1,991

     Total operating expenses in the nine months of 2005 were $2.47 billion, an increase of $482 million, or 24.2%. This included an increase of $389 million related to AWA, or 19.6%, as compared to the nine

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months ended September 30, 2004, and $91 million of operating expenses related to US Airways Group. Significant drivers in the increase in operating expenses were as follows.

• Aircraft fuel and related tax expense, excluding the impact of fuel hedges, increased 40.4% at AWA, primarily due to a 39.8% increase in the average price per gallon of fuel to $1.72 in the third quarter of 2005 from $1.23 in the comparable 2004 period. Aircraft fuel and related tax expense for the four days of US Airways Group was $27 million.

• Salaries and related costs increased $49 million, of which $15 million relates to the four days of US Airways Group. The increase of $34 million at AWA is primarily due to due to a $20 million increase in benefit related expenses including $10 million in defined contribution plan payments which our pilots became eligible for on January 1, 2005, an accrual for employee performance bonuses of $8 million, self-funded disability requirements of $3 million, increases in medical insurance costs of $3 million and a $1 million increase in workers compensation claim coverage.

• Express expenses increased 56.8% in the nine months ended 2005 to $414 million from $264 million in the third quarter of 2004. Express expenses consisted of $395 million of AWA related Express expenses, an increase of $131 million as compared to 2004, and $19 million in Express expenses for the four days of US Airways Group. Aircraft operating expense for Express at AWA for the quarter was $266 million, which accounted for $70 million of the period-over-period increase in Express operating expenses. In addition, aircraft fuel expense was $129 million, which accounted for $61 million of the period-over-period increase.

• Aircraft rent expense increased $21 million, of which $5 million relates to the four days of US Airways Group. The increase in aircraft rent at AWA was principally due to aircraft mix as previously owned and leased Boeing 737-200 aircraft were retired or returned to aircraft lessors and replaced with leased Airbus A320 and A319 aircraft at higher monthly lease rates.

• Selling expenses increased $12 million, including $3 million relates to the four days of US Airways Group. Selling expenses at AWA increased $9 million, primarily due to higher advertising expenses and credit card fees.

• Aircraft maintenance expense increased $5 million, of which $4 million relates to the four days of US Airways Group. Aircraft maintenance expense for AWA was relatively flat as an increase in capitalized maintenance amortization of $11 million was offset by decreases in aircraft C-Check of $6 million, airframe maintenance of $3 million, and engine overhaul and other maintenance related expenses of $2 million. The decrease in other maintenance related expenses resulted from a reduction in the rates charged for the repair of certain rotable equipment under a power-by-the-hour agreement.

• AWA recorded $85 million of special charges in the nine months ended September 30, 2005. In connection with the merger and the Airbus MOU executed between Airbus, US Airways Group, US Airways and AWA, certain aircraft firm orders were restructured. In connection with that restructuring, US Airways Group and America West Holdings were required to pay non-refundable restructuring fees. AWA’s restructuring fee of $50 million has been classified as a special charge in the three month period ended September 30, 2005, along with $7 million in associated capitalized interest. The restructuring fee was paid by means of set-off against existing equipment deposits AWA held by Airbus. Special charges also includes a loss of $27 million related to the sale and leaseback of six 737-300 aircraft and two 757 aircraft.

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• Depreciation and amortization expense was flat despite the inclusion of $2 million in depreciation and amortization related to the four days of US Airways Group. Depreciation at AWA decreased due principally to lower amortization expense related to computer hardware and software as a result of AWA’s cash conservation program, which reduced capital expenditures.

• Other operating expenses increased by $47 million, of which $11 million is other operating expenses from four days of US Airways Group. The increase in other operating expenses at AWA of $36 million relates primarily to an $8 million aggregate loss associated with two aircraft sale-leaseback transactions and increases in property taxes ($4 million), ground handling services ($4 million), airport guard services ($3 million) and crew per diem ($2 million). These increases were offset in part by lower legal fees. The first nine months of 2004 included a $2 million gain resulting from the settlement of a lawsuit related to certain computer hardware and software that had previously been written off and a $2 million reduction in bad debt expense due to a recovery of a previously reserved debt. A $4 million gain resulting from the settlement of a claim in bankruptcy for amounts earned under an executory contract and a $1 million volume incentive earned due to certain Affinity Card sales levels meeting certain contract thresholds in the 2004 period also contributed to the increase.

     US Airways Group had net nonoperating expenses of $49 million in the first nine months of 2005 compared to $51 million in the 2004 period. The 2004 period benefited from a $2 million gain on the disposition of property and equipment due principally to the sale of one Boeing 737-200 aircraft. Interest income increased $3 million or 60.0% due to higher average rates of return on investments. Interest expense increased $1 million, or 1.7%, due to the inclusion of $3 million of interest for the four day period of US Airways Group. Interest expense at AWA decreased by $2 million primarily due to debt issue costs that were written-off in connection with the refinancing of the IBJ term loan in the 2004 period.

AWA’s Results of Operations

     The following discussion provides an analysis of AWA’s results of operations for the three and nine months ended September 30, 2005 and material changes compared to the three and nine months ended September 30, 2004.

     For the third quarter of 2005, AWA realized an operating loss of $58 million as compared to a $9 million loss in last year’s third quarter. Operating loss in the 2005 period included $56 million of net gains associated with fuel hedging transactions. This includes $29 million of net realized gains on settled hedge transactions and $27 million of net unrealized gains resulting from mark-to-market accounting for changes in the fair value of the fuel hedging instruments. The 2004 period included $26 million of net gains associated with fuel hedging transactions. This includes $6 million of net realized gains on settled hedge transactions and $20 million of net unrealized gains resulting from mark-to-market accounting for changes in the fair value of the fuel hedging instruments. Loss before income taxes for the third quarter of 2005 was $71 million as compared to $28 million for the comparable 2004 period.

     For the nine months ended September 30, 2005, AWA realized operating income of $25 million as compared to $34 million in the first nine months of 2004. Operating income in the 2005 period included $124 million of net gains associated with fuel hedging transactions. This includes $51 million of net realized gains on settled hedge transactions and $73 million of net unrealized gains resulting from mark-to-market accounting for changes in the fair value of fuel hedging instruments. The 2004 period included $36 million of net gains associated with fuel hedging transactions. This includes $11 million of net realized gains on settled hedge transactions and $25 million of net unrealized gains resulting from mark-to-market accounting for changes in the fair value of fuel hedging instruments. Loss before income taxes for the nine month period was $22 million as compared to $17 million for the comparable 2004 period.

     The table below sets forth selected mainline operating data for AWA.

	Three Months Ended				Percent			Nine Months Ended				Percent
	September 30,				Change			September 30,				Change
	2005		2004		2005-2004			2005		2004		2005-2004
Revenue passenger miles (in millions) (a)		6,333		6,227		1.7			18,390		17,448		5.4
Available seat miles (in millions) (b)		7,875		7,646		3.0			22,932		22,550		1.7
Passenger load factor (percent) (c)		80.4		81.4		(1.0	) pts		80.2		77.4		2.8	pts
Yield (cents) (d)		10.31		8.71		18.4			10.24		9.45		8.4
Passenger revenue per available seat mile (cents) (e)		8.29		7.09		16.9			8.21		7.31		12.3
Total revenue per available seat mile (cents) (f)		9.01		7.60		18.6			8.85		7.81		13.3

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	Three Months Ended				Percent			Nine Months Ended				Percent
	September 30,				Change			September 30,				Change
	2005		2004		2005-2004			2005		2004		2005-2004
Passenger enplanements (in thousands) (g)		5,802		5,556		4.4			16,725		15,796		5.9
Aircraft (end of period)		142		139		2.2			142		139		2.2
Average daily aircraft utilization (hours) (h)		10.9		10.9		—			11.0		10.9		0.9
Block hours (i)		144,332		140,076		3.0			424,194		415,956		2.0
Average stage length (miles) (j)		1,030		1,067		(3.5	)		1,030		1,054		(2.3	)
Average passenger journey (miles) (k)		1,733		1,771		(2.1	)		1,680		1,688		(0.5	)
Fuel consumption (gallons in millions)		117.0		115.5		1.3			338.6		337.9		0.2
Average fuel price including tax (dollars per gallon)		1.92		1.32		45.5			1.72		1.23		39.8
Average number of full-time equivalent employees		12,179		11,936		2.0			12,178		11,924		2.1

(a)	Revenue passenger mile (RPM) — A basic measure of sales volume. It is one passenger flown one mile.
(b)	Available seat mile (ASM) — A basic measure of production. It is one seat flown one mile.
(c)	Load factor — The percentage of available seats that are filled with revenue passengers.
(d)	Yield — A measure of airline revenue derived by dividing passenger revenue by revenue passenger miles and expressed in cents per mile.
(e)	Passenger revenue per available seat mile (RASM) — Total passenger revenues divided by total available seat miles.
(f)	Total revenue per available seat mile — Total operating revenues divided by total available seat miles.
(g)	Passenger enplanements — The number of passengers on board an aircraft including local, connecting and through passengers.
(h)	Average daily aircraft utilization — The average number of block hours per day for all aircraft in service.
(i)	Block hours — The hours measured from the moment an aircraft first moves under its own power, including taxi time, for the purposes of flight until the aircraft is docked at the next point of landing and its power is shut down.
(j)	Average stage length — The average of the distances flown on each segment of every route.
(k)	Average passenger journey — The average one-way trip measured in miles for one passenger origination.

Three Months Ended September 30, 2005
Compared with the
Three Months Ended September 30, 2004

     Total operating revenues for the third quarter of 2005 were $846 million. Passenger revenues were $653 million for the third quarter of 2005, an increase of $111 million from the comparable 2004 quarter. RPMs increased 1.7% as ASMs increased 3.0%, resulting in an 1.0 point decrease in load factor. This decrease in load factor was more than offset by higher passenger yield which increased 18.4% to 10.3%. As a result, RASM increased 16.9% to 8.29 cents in the third quarter 2005 from 7.09 cents in the 2004 quarter. The strong unit revenue improvement was driven by more aggressive peak day yield management in the 2005 third quarter, more balanced capacity in the markets served by AWA in the western United States and the positive impact of numerous legacy and low cost carrier fare increases in the winter and spring of 2005. Reductions in late 2004 of AWA’s transcontinental flying, which yields were negatively impacted by competitive responses, also contributed to improved period-over-period RASM and yield performance.

     Express revenues were $137 million for the third quarter of 2005, an increase of $39 million from the comparable 2004 quarter due to increased flying by Mesa under its alliance agreement with AWA.

     Cargo revenues increased 16.7% in the third quarter of 2005 to $7 million due to increased mail volume. Other revenues increased 53.1% to $49 million in the third quarter of 2005 from $32 million in the third quarter of 2004 due principally to an increase in net revenues associated with the sale of tour packages by the America West Vacations division, an increase in ticket change and service fees and a financial statement presentation change in 2005 related to frequent flyer credits reclassified from other operating expenses to other revenues.

     The table below sets forth mainline and Express operating expenses for AWA:

	Three Months Ended
	September 30,
	2005			2004
	(in millions)
Operating expenses:
Aircraft fuel and related taxes	$	225		$	153
Gains on fuel hedging instruments, net		(56	)		(26	)
Salaries and related costs		178			165
Aircraft rent		85			76
Aircraft maintenance		60			54
Other rent and landing fees		43			43
Special charges, net		84			2
Selling expenses		45			38
Depreciation and amortization		14			13
Other		77			68
Total mainline operating expenses		755			586
Express expenses		149			101
Total operating expenses	$	904		$	687

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     Total operating expenses in the third quarter of 2005 were $904 million, an increase of $217 million or 31.6%, compared to the 2004 quarter. Mainline operating expenses were $755 million in the third quarter of 2005, an increase of $169 million from the third quarter of 2004. Mainline cost per available seat mile (Mainline CASM) increased 25.1% to 9.60 cents in the third quarter of 2005 from 7.68 cents for the comparable 2004 period. The 2005 third quarter results include special charges of $84 million, which comprises 1.07 cents of mainline CASM for the period. The increase in CASM was driven by a 45.5% increase in the average fuel price per gallon from $1.32 in the 2004 third quarter to $1.92 per gallon in the third quarter of 2005. As a result, aircraft fuel expense for the quarter was $225 million, which accounted for $72 million of the period-over-period increase in operating expenses.

     The table below sets forth the major components of Mainline CASM for AWA.

	Three Months Ended
	September 30,						Percent Change
	2005			2004			2005-2004
(in cents)
Aircraft fuel and related taxes		2.85			1.99			42.8
Realized and unrealized gains on fuel hedging instruments, net		(0.71	)		(0.34	)		—
Salaries and related costs		2.26			2.16			4.8
Aircraft rent		1.08			1.00			8.4
Aircraft maintenance		0.77			0.71			7.6
Other rent and landing fees		0.55			0.57			(2.8	)
Selling expenses		0.57			0.50			14.1
Special charges, net		1.07			0.02			—
Depreciation and amortization		0.18			0.17			1.5
Other		0.98			0.90			10.2
		9.60			7.68			25.1

     Significant changes in the components of Mainline CASM are explained as follows:

• Aircraft fuel and related tax expense per ASM increased 42.8% primarily due to a 45.5% increase in the average price per gallon of fuel to $1.92 in the third quarter of 2005 from $1.32 in the comparable 2004 quarter.

• Salaries and related costs per ASM increased 4.8% primarily due to an increase in the accrual for employee performance bonuses ($8 million) and a net increase in benefit related expenses including $3 million in defined contribution plan payments which our pilots became eligible for on January 1, 2005. While capacity, as measured by ASMs, increased 3.0%, average FTEs only increased 1.4%.

• Aircraft rent expense per ASM increased 8.4% due principally to aircraft mix as previously owned and leased Boeing 737-200 aircraft were retired or returned to aircraft lessors and replaced with leased Airbus A320 and A319 aircraft at higher monthly lease rates.

• Selling expenses per ASM increased 14.1% primarily due to higher advertising expenses of

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	$2 million and credit card fee expense of $4 million.
•	Aircraft maintenance materials and repairs expense per ASM increased 7.6% primarily due to an $8 million increase in capitalized maintenance amortization expense, offset in part by a $1 million decrease in airframe maintenance expenses.
•	AWA recorded $84 million of special charges in the third quarter of 2005. In connection with the merger and the Airbus MOU executed between Airbus, US Airways Group, US Airways and AWA, certain aircraft firm orders were restructured. In connection with that restructuring, US Airways Group and America West Holdings were required to pay non-refundable restructuring fees. AWA’s restructuring fee of $50 million has been classified as a special charge in the three month period ended September 30, 2005, along with $7 million in associated capitalized interest. The restructuring fees was paid by means of set-off against existing equipment deposits of AWA held by Airbus. Special charges also includes a loss of $27 million related to the sale and leaseback of six 737-300 aircraft and two 757 aircraft.
•	Other operating expenses increased by $21 million, with $11 million in other operating expenses from four days of US Airways Group. The increase in other operating expenses at AWA of $10 million relates to the financial statement presentation change discussed above and increases in property taxes and postage expenses associated with merger related communications to frequent flyers. Those increases were offset in part by a decrease in legal fees.

     Express expenses increased 47.5% in the third quarter of 2005 to $149 million from $101 million in the third quarter of 2004. Aircraft operating expense for the quarter was $96 million which accounted for $22 million of the period-over-period increase in Express operating expenses. In addition, aircraft fuel expense was $53 million which accounted for $26 million of the period-over-period increase.

     AWA had net nonoperating expenses of $13 million in the third quarter of 2005 compared to $19 million in the third quarter of 2004. Interest income increased $1 million or 25.0% due to higher cash balances and higher average rates of returns on investments while interest expense decreased 9.1% due to debt issue costs of approximately $1 million that were written off in connection with the refinancing of the IBJ term loan in the 2004 period.

Nine Months Ended September 30, 2005
Compared with the
Nine Months Ended September 30, 2004

     Total operating revenues for the nine months ended September 30, 2005 were $2.40 billion. Passenger revenues were $1.88 billion for the nine-month period, an increase of $235 million from the comparable 2004 period. RPMs increased 5.4% as ASMs increased 1.7%, resulting in a 2.8 point increase in load factor to 80.2%. This increase in load factor was achieved with higher passenger yield, which increased 8.4% in the 2005 period. As a result, RASM increased 12.3% to 8.21 cents in the nine months ended September 30, 2005 from 7.31 cents in the 2004 period. AWA’s strong unit revenue improvement was driven by more aggressive peak day yield management in the 2005 period, more balanced capacity in the markets served by AWA (principally in the western United States) and the positive impact of numerous legacy and low cost carrier fare increases in the winter and spring of 2005. Reductions in late 2004 of AWA’s transcontinental flying, which yields were negatively impacted by competitive responses, also contributed to improved period-over-period RASM and yield performance.

     Express revenues were $371 million for the nine months ended September 30, 2005, an increase of $111 million from the comparable 2004 quarter due to increased flying by Mesa under its alliance agreement with AWA.

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     Cargo revenues increased 20.0% for the nine months ended September 30, 2005 to $24 million due to increased mail volume. Other revenues increased 32.3% to $123 million in the 2005 period from $93 million in the comparable period of 2004 due principally to net revenues associated with the sale of tour packages by the America West Vacations division, and an increase in ticket change and service fees.

     The table below sets forth the Mainline and Express expenses for AWA:

	Nine Months Ended
	September 30,
	2005			2004
	(in millions)
Operating expenses:
Aircraft fuel and related taxes	$	584		$	416
Realized and unrealized gains on fuel hedging instruments, net		(124	)		(36	)
Salaries and related costs		526			492
Aircraft rent		243			227
Aircraft maintenance		158			157
Other rent and landing fees		130			127
Selling expenses		126			117
Special charges, net		85			1
Depreciation and amortization		37			40
Other		217			183
Total mainline operating expenses		1,982			1,724
Express expenses		395			264
Total operating expenses	$	2,377		$	1,988

     Total operating expenses for the nine months ended September 30, 2005 were $2.38 billion, an increase of $389 million or 19.6%, compared to the 2004 nine-month period. Mainline operating expenses were $1.98 billion in the nine-month period in 2005, an increase of $258 million from the same period in 2004, while ASMs increased 1.7%. Mainline CASM increased 13.1% to 8.64 cents in the first nine months of 2005 from 7.65 cents for the comparable 2004 period. The 2005 nine month period included special charges of $85 million, which comprises 0.37 cents of mainline CASM for the period. The increase in CASM was driven principally by a 39.8% increase in the average fuel price per gallon offset by the $124 million net gain associated with the fuel hedging transactions discussed above.

     The table below sets forth the major components of Mainline CASM for AWA.

	Nine Months Ended						Percent
	September 30,						Change
(in cents)	2005			2004			2005-2004
Aircraft fuel and related taxes		2.54			1.84			38.1
Realized and unrealized gains on fuel hedging instruments, net		(0.54	)		(0.16	)		—
Salaries and related costs		2.30			2.18			5.1
Aircraft rent		1.06			1.01			5.2
Aircraft maintenance		0.69			0.69			(1.1	)
Other rent and landing fees		0.57			0.56			1.5
Selling expenses		0.54			0.52			5.5
Special charges		0.37			0.01			—
Depreciation and amortization		0.16			0.17			(7.4	)
Other		0.95			0.83			16.5
		8.64			7.65			13.1

     Significant changes in the components of Mainline CASM are explained as follows:

• Aircraft fuel and related tax expense per ASM increased 38.1% primarily due to a 39.8% increase in the average price per gallon of fuel to $1.72 in the first nine months of 2005 from $1.23 in the comparable 2004 period.

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• Salaries and related costs per ASM increased 5.1% primarily due to a $19 million increase in benefit related expenses including $10 million in defined contribution plan payments which our pilots became eligible for on January 1, 2005, an $8 million accrual for employee performance bonuses, an increase of $3 million related to self-funded disability requirements, higher medical insurance costs of $3 million and $1 million increase in workers compensation claim coverage.

• Aircraft rent expense per ASM increased 5.2% due principally to aircraft mix as previously owned and leased Boeing 737-200 aircraft were retired or returned to aircraft lessors and replaced with leased Airbus A320 and A319 aircraft at higher monthly lease rates.

• Aircraft maintenance materials and repairs expense per ASM decreased 1.1% primarily due to a decrease of $6 million in aircraft C-Check expense, a $3 million reduction in airframe maintenance, and a $2 million decrease in engine overhaul and other maintenance related expenses. The decrease in other maintenance related expenses resulted from a reduction in the rates charged for the repair of certain rotable equipment under a power-by-the-hour agreement. These decreases were offset in part by an $11 million increase in capitalized maintenance amortization.

• AWA recorded $84 million of special charges in the third quarter of 2005. In connection with the merger and the Airbus MOU executed between Airbus, US Airways Group, US Airways and AWA, certain aircraft firm orders were restructured. In connection with that restructuring, US Airways Group and America West Holdings were required to pay non-refundable restructuring fees. AWA’s restructuring fee of $50 million has been classified as a special charge in the three month period ended September 30, 2005, along with $7 million in associated capitalized interest. The restructuring fee was paid by means of set-off against existing equipment deposits of AWA held by Airbus. Special charges also includes a loss of $27 million related to the sale and leaseback of six 737-300 aircraft and two 757 aircraft.

• Selling expenses per ASM increased 5.5% primarily due to higher advertising expenses of $3 million and credit card fee expenses of $7 million.

• Depreciation and amortization expense per ASM decreased 7.4% due principally to a $2 million decrease in amortization expense related to computer hardware and software as a result of AWA’s cash conservation program, which reduced capital expenditures.

• Other operating expenses per ASM increased 16.5% due primarily to an $8 million aggregate loss associated with two aircraft sale-leaseback transactions and increases in property taxes ($4 million), ground handling services ($4 million), airport guard services ($3 million) and crew per diem ($2 million). These increases were offset in part by lower legal fees. The first nine months of 2004 included a $2 million gain resulting from the settlement of a lawsuit related to certain computer hardware and software that had previously been written off and a $2 million reduction in bad debt expense due to a recovery of a previously reserved debt. A $4 million gain resulting from the settlement of a claim in bankruptcy for amounts earned under an executory contract and a $1 million volume incentive earned due to certain Affinity Card sales levels meeting certain contract thresholds in the 2004 period also contributed to the increase.

     Express expenses increased 49.6% in the first nine months of 2005 to $395 million from $264 million in the nine-month period of 2004. Aircraft operating expense for the nine-month period was $266 million which accounted for $70 million of the period-over-period increase in Express operating

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expenses. In addition, aircraft fuel expense was $129 million which accounted for $61 million of the period-over-period increase.

     AWA had net nonoperating expenses of $47 million in the first nine months of 2005 compared to $51 million in the 2004 period. The 2004 period benefited from a $2 million gain on the disposition of property and equipment due principally to the sale of one Boeing 737-200 aircraft. Interest income increased $2 million or 20.0% due to higher average rates of return on investments. Interest expense decreased 3.1% primarily due to debt issue costs of approximately $1 million that were written off in connection with the refinancing of the term loan in the 2004 period.

Liquidity and Capital Resources

     As of September 30, 2005, US Airways Group’s cash, cash equivalents, short-term investments and restricted cash was $2.17 billion, of which $1.38 billion was unrestricted. The merger of US Airways Group and America West Holdings created more than $1.7 billion in new liquidity from equity investments, a common stock offering, a convertible debt offering, cash infusions from commercial partners and asset-based financings.

     As discussed above in “Emergence and Merger Transactions,” obtaining additional financing and liquidity to fund operations was critical to US Airways Group’s emergence from bankruptcy and merger with America West Holdings. Several new equity investors provided an aggregate of $565 million of initial equity investments, and exercised the full amount of options they held for additional equity of $113 million. The public stock offering completed on September 30, 2005 provided an additional $180 million in net proceeds, and the convertible notes offering completed on September 30, 2005 provided an additional $139 million in net proceeds. In addition, US Airways Group has received over $700 million of cash infusions from commercial partners, including approximately $455 million from an affinity credit card partner received in October 2005 and a $250 million line of credit provided by Airbus, and approximately $100 million from asset-based financings or sales of aircraft, net after prepayments of US Airways’ ATSB Loan.

New Convertible Notes

     US Airways Group received net proceeds of $139 million related to the 7% Senior Convertible Notes due 2020 issued on September 30, 2005. As described above, the 7% Senior Convertible Notes are US Airways Group’s senior unsecured obligations, rank equally in right of payment to its other senior unsecured and unsubordinated indebtedness and are effectively subordinated to its secured indebtedness to the extent of the value of assets securing such indebtedness. The 7% Senior Convertible Notes are fully and unconditionally guaranteed, jointly and severally and on a senior unsecured basis, by US Airways Group’s two major operating subsidiaries, US Airways and AWA. The guarantees are the guarantors’ unsecured obligations, rank equally in right of payment to the other senior unsecured and unsubordinated indebtedness of the guarantors and are effectively subordinated to the guarantors’ secured indebtedness to the extent of the value of assets securing such indebtedness.

     The 7% Senior Convertible Notes bear interest at the rate of 7% per year payable in cash semiannually in arrears on March 30 and September 30 of each year, beginning March 30, 2006. The 7% Senior Convertible Notes mature on September 30, 2020. Holders may convert, at any time on or prior to maturity or redemption, any outstanding notes (or portions thereof) into shares of US Airways Group’s common stock, initially at a conversion rate of 41.4508 shares of US Airways Group’s common stock per $1,000 principal amount of 7% Senior Convertible Notes (equivalent to an initial conversion price of approximately $24.12 per share of US Airways Group’s common stock). If a holder elects to convert its 7% Senior Convertible Notes in connection with certain specified fundamental changes that occur prior to October 5, 2015, the holder will be entitled to receive additional shares of US Airways Group’s common stock as a make whole premium upon conversion. In lieu of delivery of shares of US Airways Group’s common stock upon

57

conversion of all or any portion of the 7% Senior Convertible Notes, US Airways Group may elect to pay holders surrendering 7% Senior Convertible Notes for conversion cash or a combination of shares and cash.

     Holders of the 7% Senior Convertible Notes may require US Airways Group to purchase for cash or shares or a combination thereof, at US Airways Group’s election, all or a portion of their notes on September 30, 2010 and September 30, 2015 at a purchase price equal to 100% of the principal amount of the notes to be repurchased plus accrued and unpaid interest, if any, to the purchase date. In addition, if US Airways Group experiences a fundamental change, holders may require US Airways Group to purchase for cash, shares or a combination thereof, at its election, all or a portion of their notes, subject to specified exceptions, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the purchase date. Prior to October 5, 2010, the notes will not be redeemable at US Airways Group’s option. US Airways Group may redeem all or a portion of the notes at any time on or after October 5, 2010, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the redemption date if the closing price of US Airways Group’s common stock has exceeded 115% of the conversion price for at least 20 trading days in the 30 consecutive trading day period ending on the trading day before the date on which US Airways Group mails the optional redemption notice.

GE

     Of the $144 million gross proceeds from the 7% Senior Convertible Notes, $125 million was paid in September 2005 to General Electric and its affiliates (GE). Under certain agreements among GE and US Airways Group, GE agreed, in consideration for the early return of 51 aircraft and six engines, the assumption of certain modified leases and the payment of $125 million in cash by September 30, 2005, to (1) to retire an existing bridge loan facility, (2) to complete a purchase by GE of 21 aircraft and 28 engines with a simultaneous lease back of the equipment to US Airways at market rates, (3) to allow US Airways Group to draw additional amounts under an existing credit facility, which resulted in a total principal outstanding balance thereunder of approximately $28 million, (4) to restructure lease obligations of US Airways relating to 59 aircraft to market rates, (5) to provide financing for current and growth aircraft, (6) to grant concessions regarding return condition obligations with respect to the return of aircraft and engines, and (7) to waive penalties for the removal of engines currently under GE engine maintenance agreements.

Airbus Term Loans

     On September 27, 2005, US Airways and AWA entered into two loan agreements with Airbus Financial Services (AFS), an affiliate of Airbus, with commitments in initial aggregate amounts of up to $161 million and up to $89 million (collectively, the Airbus Loans). The Airbus Loans bear interest at a rate of LIBOR plus a margin, subject to adjustment, and has been recorded as an obligation of US Airways Group.

     On September 27, 2005, all of the Airbus $161 Million Loan and $14 million of the Airbus $89 Million Loan were drawn and are available for use for general corporate purposes. The remaining portion of the Airbus Loans is payable in multiple draws upon the occurrence of certain conditions, including the taking of delivery of certain aircraft, on the due dates for certain amounts owing to AFS or its affiliates to refinance such amounts, after payment of certain invoices for goods and services provided by AFS or its affiliates, or upon receipt by AFS of certain amounts payable in respect of existing aircraft financing transactions. The full amount of the Airbus Loans is expected to be available by the end of 2006.

     Amounts drawn upon the Airbus Loans are drawn first upon the Airbus $161 Million Loan until it has been drawn in its full amount, in which event the remaining portion of the $250 million total commitment will be drawn upon the Airbus $89 Million Loan. The amortization payments under the Airbus $161 Million Loan will become due in equal quarterly installments of $13 million beginning on March 26, 2008, with the final installment due on December 31, 2010. The outstanding principal amount of Airbus $89 Million Loan will be forgiven in writing December 31, 2010, or an earlier date, if on that date the outstanding principal amount of, accrued interest on, and all other amounts due under the Airbus $161 Million Loan have been paid in full and the Company complies with the agreed upon delivery schedule.

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ATSB Loans

     US Airways Group and America West Holdings each had loans outstanding guaranteed under the Air Transportation Safety and System Stabilization Act by the ATSB. In connection with the consummation of the merger, on September 27, 2005, US Airways, as borrower entered into an Amended and Restated Loan Agreement with the ATSB. Also on September 27, 2005, AWA, as borrower, entered into an Amended and Restated Loan Agreement. The ATSB Loans amend and restate the previously outstanding loans of both US Airways and AWA, each guaranteed in part by the ATSB.

     As of September 30, 2005, $583 million was outstanding under the US Airways ATSB Loan, of which $525 million was guaranteed by the ATSB. The US Airways ATSB Loan bears interest as follows:

• 90% of the US Airways ATSB Loan (Tranche A), the guaranteed portion of the loan, was funded through participating lender’s commercial paper conduit program and bears interest at a rate equal to the conduit provider’s weighted average cost related to the issuance of certain commercial paper notes and other short term borrowings plus 0.30%, provided that portions of Tranche A that are held by the ATSB or by an assignee and no longer subject to such commercial paper conduit program bear interest at LIBOR plus 40 basis points, and portions of Tranche A that are under certain circumstances assigned free of the ATSB guarantee bear interest at LIBOR plus 6.0%; and

• 10% of the US Airways ATSB Loan (Tranche B) bears interest at the greater of the Tranche A interest rate plus 6.0% and LIBOR plus 6.0% from a current rate of LIBOR plus 4.0%.

     In addition, US Airways is charged an annual guarantee fee in respect of the ATSB guarantee equal to 6.0% of the guaranteed amount (initially $525 million). The US Airways ATSB Loan also reschedules amortization payments for US Airways with semi-annual payments beginning on March 31, 2007 and continuing through September 30, 2010.

     US Airways must pay down the principal of its loan with the first $125 million of net proceeds from specified asset sales identified in connection with its Chapter 11 proceedings, whether completed before or after emergence. US Airways then retains the next $83 million of net proceeds from specified assets sales, and must pay 60% of net proceeds in excess of an aggregate of $208 million from specified asset sales to the ATSB. Any such asset sales proceeds up to $275 million are to be applied in order of maturity, and any such asset sales proceeds in excess of $275 million are to be applied pro rata across all maturities in accordance with the loan’s early amortization provisions. US Airways completed in excess of $125 million in asset sales prior to emergence from the Chapter 11 proceedings, satisfying the minimum prepayment requirement.

     As of September 30, 2005, $249 million was outstanding under the AWA ATSB Loan, of which $228 million was guaranteed by the ATSB. Certain third party counter-guarantors have fully and unconditionally guaranteed the payment of an aggregate amount of $32 million of the remaining principal amount of the loan plus accrued and unpaid interest thereon. The AWA ATSB Loan bears interest at a rate of LIBOR plus 40 basis points. The guarantee fee on the AWA ATSB Loan is 8.0% with annual increases of 5 basis points. The amortization payments under the AWA ATSB Loan become due in seven installments of $43 million on each March 31 and September 30, commencing on September 30, 2005 and ending on September 30, 2008. The AWA ATSB Loan also requires a premium, in certain instances, for voluntary prepayments. AWA made a voluntary prepayment of $9 million dollars in principal amount on September 27, 2005, after the closing of the AWA ATSB Loan, prepaying in full the portion of the loan subject to one of the counter-guarantees, which prepayment has been applied pro rata against each scheduled amortization payment.

     The ATSB Loans require certain prepayments from the proceeds of specified asset sales by US Airways Group and the other loan parties, and US Airways Group is required to maintain consolidated unrestricted cash and cash equivalents, less: (a) the amount of all outstanding advances by credit card processors and clearing houses in excess of 20% of the air traffic liabilities; (b) $250 million presumed necessary to fund a subsequent tax trust (to the extent not otherwise funded by US Airways Group); (c) $35 million presumed

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necessary to post collateral to clearing houses (to the extent not posted); and (d) any unrestricted cash or cash equivalents held in unperfected accounts; in an amount (subject to partial reduction under certain circumstances upon mandatory prepayments made with the net proceeds of future borrowings and issuances of capital stock) not less than:

• $525 million through March 2006;

• $500 million through September 2006;

• $475 million through March 2007;

• $450 million through September 2007;

• $400 million through March 2008;

• $350 million through September 2008; and

• $300 million through September 2010.

     On October 19, 2005, the ATSB Loan was sold to 13 fixed income investors. As a result of that sale, the ATSB no longer has an interest in any of the Company's debt. Also, in October 2005, US Airways Group repurchased all of the warrants it had issued to the ATSB in exchange for warrants previously issued by America West Holdings. These replacement warrants are related to the ATSB Loan with AWA. The Company repurchased approximately 7.7 million warrants to purchase shares of common stock that had an exercise price of $7.27 per share. The total purchase price for the warrants was $116 million. See also Note 13, “Subsequent Events,” to the notes to US Airways Group’s condensed consolidated financial statements included in this report.

Restructuring of Affinity Credit Card Partner Agreement

     In connection with the merger, AWA, US Airways Group and Juniper Bank, a subsidiary of Barclays PLC, or Juniper, entered into an amended credit card agreement on August 8, 2005. Pursuant to the amended credit card agreement, Juniper will offer and market an airline mileage award credit card program to the general public to participate in US Airways Group’s Dividend Miles program through the use of a co-branded credit card.

     US Airways Group’s credit card program is currently administered by Bank of America, N.A. (USA), or Bank of America, and will terminate approximately two years and three months after the effective date of the merger. During that period both Juniper and Bank of America will run credit card programs for US Airways Group. (See Part II, Item 3, “Legal Proceedings”)

     The amended credit card agreement took effect at the effective time of the merger and the credit card services provided by Juniper under the amended credit card agreement are expected to commence on January 1, 2006, or, if later, the date on which Juniper commences marketing to the general public, and continue until the expiration date, which is the later of December 31, 2012 or seven years from the date on which Juniper commences marketing to the general public.

     Under the amended credit card agreement, Juniper will pay US Airways Group fees for each mile awarded to each credit card account administered by Juniper, subject to certain exceptions. Juniper will also pay to US Airways Group a one-time bonus payment of $130 million and an annual bonus of $5 million to US Airways Group, subject to certain exceptions, for each year after Juniper becomes the exclusive issuer of the co-branded credit card.

     In addition, following the effective time of the merger, Juniper will pre-purchase miles from US Airways Group for an aggregate of $325 million, subject to the same conditions as apply to the $130 million bonus payment described above. To the extent that these miles are not used by Juniper in connection with the co-branded credit card program, US Airways Group will repurchase these miles in 12 equal quarterly installments beginning on the fifth year prior to the expiration date until paid in full. US Airways Group will make monthly interest payments at LIBOR plus 4.75% to Juniper, beginning on the first day of the month following the effective date of the merger, based on the amount of pre-purchased miles that have not been used by Juniper in connection with the co-branded credit card program and have not been repurchased by US Airways Group. US Airways Group will be required to repurchase pre-purchased miles under certain reductions in the collateral held under the credit card processing agreement with JPMorgan Chase Bank, N.A.

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     Juniper may, at its option, terminate the amended credit card agreement, make payments to US Airways Group under the amended credit card agreement in the form of pre-purchased miles rather than cash, or commence the repurchase of the pre-purchased miles before the fifth year prior to the expiration date in the event that US Airways Group breaches its obligations under the amended credit card agreement, or upon the occurrence of certain events.

     In October 2005, the Company received $455 million pursuant to the Juniper agreement.

Exchange of Common Stock for AWA’s 7.25 Percent Senior Exchangeable Notes

     On October 24, 2005, US Airways Group issued a total of 4,156,411 shares of its common stock in exchange for approximately $250 million in principal amount at maturity of AWA’s Senior Exchangeable Notes due 2023 (the Exchangeable Notes). Following the issuance of such shares, US Airways Group had approximately 82 million shares of common stock issued and outstanding and $2 million in principal amount at maturity of the Exchangeable Notes remained outstanding. The Exchangeable Notes are fully and unconditionally guaranteed by US Airways Group and America West Holdings.

     Completion of the merger between US Airways Group and America West Holdings on September 27, 2005 constituted a “change of control” under the Exchangeable Notes and required AWA to make an offer to holders to purchase those notes within 30 business days after the effective time of the merger at a purchase price of $343.61 per $1,000 principal amount at maturity. Under the terms of the Exchangeable Notes and the related Guarantee and Exchange Agreement, dated as of July 30, 2003, between America West Holdings and U.S. Bank National Association, as trustee (the Trustee), as supplemented by the Guarantee and Exchange Agreement Supplement No. 1 among America West Holdings, US Airways Group and the Trustee, dated as of September 27, 2005, AWA’s obligation to purchase the Exchangeable Notes was satisfied at US Airways Group’s election by delivery of shares of US Airways Group common stock having a “fair market value” of not less than $343.61 per $1,000 principal amount at maturity. For this purpose, “fair market value” means 95% of the market price of US Airways Group common stock calculated as the average closing prices over the five business days ending on and including the third business day before the purchase date.

Restructuring of Credit Card Processing Agreement — In connection with the merger, AWA, JPMorgan Chase Bank, N.A., successor-in-interest to JPMorgan Chase Bank, and Chase Merchant Services, L.L.C., entered into the First Amendment to the Merchant Services Bankcard Agreement on August 8, 2005. Pursuant to the amended card processing agreement, JPMorgan Chase and Chase Merchant Services (collectively, Chase) will perform authorization, processing and settlement services for sales on Visa and Mastercard for AWA and US Airways following the merger. The original card processing agreement is guaranteed by America West Holdings, and US Airways Group executed a guaranty of the amended card processing agreement on the effective date of the merger.

     US Airways’ credit card processing is currently administered by Bank of America and such processing services are expected to be transferred to Chase as soon as possible, but not later than 120 days, after the merger. US Airways will become a party to the amended card processing agreement at the time that Chase begins processing for US Airways.

     The amended card processing agreement took effect at the effective time of the merger and continues until the expiration of the initial term, which is three years from the date the amended card processing agreement takes effect. Upon expiration of the initial term, the amended card processing agreement will automatically renew for successive one-year periods pursuant to the terms of the agreement.

     Under the amended card processing agreement, AWA will pay to Chase fees in connection with card processing services such as sales authorization, settlement services and customer service. AWA and US Airways will also be required to maintain a reserve account to secure Chase’s exposure to outstanding air traffic liability. As of September 30, 2005, $410 million in cash collateral is classified as restricted cash on US Airways Group’s consolidated balance sheet to secure credit card sales under its various processing agreements. In October 2005, AWA increased the amount of the reserve securing Chases’ exposure to outstanding air traffic liability by an additional $153 million.

Asset Based Financings

     During the third quarter of 2005, the Company executed flight equipment asset sale and sale lease back transactions resulting in net proceeds of $29 million and a reduction in aircraft related debt of $38 million. Subsequent to September 30, 2005, the Company executed additional flight equipment asset sale and sale leaseback transactions resulting in net cash proceeds of $133 million and a reduction in aircraft related debt of $394 million.

Airbus Purchase Commitments

     On September 27, 2005, US Airways Group, US Airways and AWA entered into an Airbus A350 Purchase Agreement with Airbus. This agreement provides for the delivery of 20 A350 aircraft during the period 2011 through 2014. The agreement contains terms and conditions with respect to aircraft price, escalation, payment terms and pre-delivery payments, inspection and certification, technical acceptance, excusable and inexcusable delays, warranties and service life policy, patent and copyright indemnity, technical data and training aids, training, supplier product support, indemnities and insurance, assignments

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and transfers, and termination events. Airbus also agreed to provide backstop financing with respect to a substantial number of these A350 aircraft.

     On September 27, 2005, US Airways Group entered into Amendment 16 to the A319/A320/A321 Purchase Agreement dated as of October 31, 1997 among US Airways Group and AVSA, S.A.R.L. The amendment provides for the rescheduling of 19 firm order A320 family aircraft for delivery during the period 2009 and 2010. The amendment also modifies other provisions of the Purchase Agreement relating to the deletion of certain aircraft cancellation rights and the rescheduling of aircraft.

     On September 27, 2005, US Airways Group entered into Amendment 10 to the A330/340 Purchase Agreement dated as of November 24, 2998 among US Airways Group and AVSA, S.A.R.L. The amendment provides for the rescheduling of ten firm order A330-200 aircraft for delivery during the period 2009 and 2010 and allows for cancellation in the event that US Airways takes certain deliveries under the A350 Purchase Agreement described above. Other provisions of the Purchase Agreement which have been modified by the amendment relate to the application of existing pre-delivery payments, adjustments to various cancellation rights and the cancellation of the right for additional A330 aircraft.

     On September 27, 2005, AWA entered into Amendment No. 9 and Amendment No. 10 to the Airbus A320/A319 Purchase Agreement dated as of September 12, 1997 between AWA and AVSA, S.A.R.L. Amendment No. 9 provides for the rescheduling of 11 firm order A320 family aircraft for delivery during 2009. Amendment No. 10 sets forth provisions for restructuring fees and adjustments to escalation provisions and added purchase rights for aircraft.

     During the three months ended September 30, 2005, AWA incurred a $57 million special charge related to the amended Airbus purchase agreement. US Airways’ also incurred a restructuring fee of $39 million which was recorded as a reduction in the assets acquired by America West Holdings in purchase accounting. The restructuring fees were paid by means of set-off against existing equipment purchase deposits held by Airbus.

Covenants and Credit Rating

     In addition to the minimum cash balance requirements, our long-term debt agreements contain various negative covenants that restrict our actions, including our ability to pay dividends, or make other restricted payments. Finally, our long-term debt agreements contain cross-default provisions, which may be triggered by defaults by us under other agreements relating to indebtedness. See “Risk Factors Relating to the Company and Industry Related Risks — Our high level of fixed obligations limits our ability to fund general corporate requirements and obtain additional financing, limits our flexibility in responding to competitive developments and increases our vulnerability to adverse economic and industry conditions.” As of September 30, 2005, US Airways Group and its subsidiaries were in compliance with the covenants in their long-term debt agreements.

     The Company’s credit ratings, like most airlines, are relatively low, with Moody’s assessment of AWA’s long term corporate family rating and senior unsecured debt rating at B3 and Caa2, respectively, Standard & Poor’s assessment of AWA’s corporate credit ratings at B- and senior unsecured rating at CCC and Fitch Ratings’ assessment of AWA’s senior unsecured debt rating at CC. Moody’s, S&P and Fitch placed AWA on “Negative” watch following the merger announcement. Low credit ratings could cause our borrowing costs to increase, which would increase our interest expense and could affect our net income, and our credit ratings could adversely affect our ability to obtain additional financing. The rating agencies base their ratings on our financial performance and operations, our cash flow and liquidity, the level of our indebtedness and industry conditions in general. If our financial performance or industry conditions do not improve, we may face future downgrades, which could further negatively impact our borrowing costs and the prices of our equity or debt securities. In addition, any downgrade of our credit ratings may indicate a decline in our business and in our ability to satisfy our obligations under our indebtedness.

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Statement of Cash Flows Narrative

     As of September 30, 2005, US Airways Group’s total cash, cash equivalents, short-term investments and restricted cash were $2.17 billion. Net cash provided by operating activities was $164 million for the first nine months of 2005. This compares to net cash provided by operating activities of $90 million for the first nine months of 2004. The year-over-year increase in net cash provided by operating activities of $74 million was due to a $32 million year-over-year increase in air traffic liability and the associated taxes due to higher passenger demand and improved pricing during 2005 offset in part by the higher net loss in the 2005 period. The 2004 period included a decrease in accounts payable ($43 million), due to the timing of vendor payments and the payment in February 2004 of $20 million related to the execution of a new pilot agreement, which was accrued at December 31, 2003. In addition, the 2004 period was impacted by a decrease in accrued compensation and vacation benefits primarily due to the payment in March 2004 of the Company’s obligation for employee performance bonuses and AWArd pay ($20 million), which was accrued at December 31, 2003.

     In the first nine months of 2005, net cash provided by investing activities was $197 million. This compares to net cash used in investing activities of $112 million for the first nine months of 2004. Principal investing activities during the first nine months of 2005 included the acquisition of US Airways Group, which net of cash acquired, provided $305 million and purchases of property and equipment totaling $148 million. The Company also received proceeds from the sale and leaseback of six aircraft totaling $72 million. The 2004 period included purchases of property and equipment totaling $126 million.

     In the first nine months of 2005, net cash provided in financing activities was $700 million. Principal financing activities in 2005 included proceeds of $694 million for the issuance of common stock, $175 million from the Airbus Loans, $139 million from the issuance of the 7% Senior Convertible Notes, offset by the repayment of debt totaling $306 million. The $306 million is primarily comprised of the GE debt repayment of $125 million, approximately $90 million in ATSB Loan repayments and the redemption of AWA’s remaining outstanding 10.75% senior secured notes of $40 million, which was included in current restricted cash at December 31, 2004. This compares to $174 million of debt repayments during the comparable 2004 period, offset by the proceeds from the GECC term loan of $111 million.

     Capital expenditures for the first nine months of 2005 were approximately $148 million as compared to capital expenditures of approximately $126 million for the first nine months of 2004. Included in these amounts are capital expenditures for capitalized maintenance of approximately $117 million and $96 million for the first nine months of 2005 and 2004, respectively.

Related Party Transactions

     The Company has entered into transactions with various members of its board of directors and related entities. See Note 10, “Related Party Transactions” in the notes to the condensed consolidated financial statements of US Airways Group for additional information, which information is incorporated herein by reference.

Risk Factors

Risk Factors Relating to US Airways Group and Industry Related Risks

     We caution the reader that these risk factors may not be exhaustive. We operate in a continually changing business environment and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or the extent to which any factor or combination of factors may impact our business.

Our business is dependent on the price and availability of aircraft fuel. Continued periods of historically high fuel costs, significant disruptions in the supply of aircraft fuel or significant further increases in fuel costs could have a significant negative impact on our operating results.

     Our operating results are significantly impacted by changes in the availability or price of aircraft fuel. Fuel prices increased substantially in 2004 compared with 2003 and have continued to increase in 2005. Due to the competitive nature of the airline industry, we generally have not been able to increase our fares when fuel prices have risen in the past and we may not be able to do so in the future. Although we are currently able to obtain adequate supplies of aircraft fuel, it is impossible to predict the future availability or price of aircraft fuel. In addition, from time to time we enter into hedging arrangements to protect against

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rising fuel costs. Our ability to hedge in the future, however, may be limited. See also the discussion in Item 3, “Quantitative and Qualitative Disclosures About Market Risk.”

Our high level of fixed obligations limits our ability to fund general corporate requirements and obtain additional financing, limits our flexibility in responding to competitive developments and increases our vulnerability to adverse economic and industry conditions.

     We have a significant amount of fixed obligations, including debt, aircraft leases and financings, aircraft purchase commitments, leases of airport and other facilities and other cash obligations. We also have guaranteed costs associated with our regional alliance with Mesa and commitments to purchase aircraft from Airbus. As a result of the substantial fixed costs associated with these obligations:

• A decrease in revenues results in a disproportionately greater percentage decrease in earnings.

• We may not have sufficient liquidity to fund all of these fixed costs if our revenues decline or costs increase.

• We may have to use our working capital to fund these fixed costs instead of funding general corporate requirements, including capital expenditures.

• We may not have sufficient liquidity to respond to competitive developments and adverse economic conditions.

     Our obligations also impair our ability to obtain additional financing, if needed, and our flexibility in the conduct of our business. Our existing indebtedness is secured by substantially all of our assets, leaving us with limited collateral for additional financing. Moreover, the terms of the ATSB Loans restrict our ability to incur additional indebtedness or issue equity unless we use the proceeds of those transactions to repay the loan, require prepayment if our employee compensation costs exceed a certain threshold, require us to maintain a minimum cash balance of $100 million, and restrict our ability to take certain other actions, including mergers and acquisitions, investments and asset sales.

     Our ability to pay the fixed costs associated with our contractual obligations depends on our operating performance and cash flow, which in turn depend on general economic and political conditions. A failure to pay our fixed costs or breach of the contractual obligations could result in a variety of adverse consequences, including the acceleration of our indebtedness, the withholding of credit card proceeds by the credit card servicers and the exercise of remedies by our creditors and lessors. In such a situation, it is unlikely that we would be able to fulfill our obligations under or repay the accelerated indebtedness, make required lease payments or otherwise cover our fixed costs.

We may not perform as well financially as we expect following the merger.

     In deciding to enter into the merger agreement, US Airways Group and America West Holdings considered the benefits of operating as a combined company, including, among others: an enhanced ability to compete in the airline industry and the fact that the proprietary brands of the combined company would permit US Airways Group to further differentiate itself from other airline companies. The success of the merger will depend, in part, on our ability to realize the anticipated revenue opportunities and cost savings from combining the businesses of US Airways Group and America West Holdings. We have estimated that the combined companies expect to realize approximately $600 million in incremental operating cost and revenue synergies. We cannot assure you, however, that these synergies will be realized.

     To realize the anticipated benefits from the merger, we must successfully combine the businesses of US Airways Group and America West Holdings in a manner that permits those costs savings and other synergies to be realized in a timely fashion. In addition, we must achieve these savings without adversely affecting revenues or suffering a business interruption. If we are not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to

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realize than expected.

The integration of US Airways Group and America West Holdings following the merger will present significant challenges.

     US Airways Group and America West Holdings will face significant challenges in consolidating functions, integrating their organizations, procedures and operations in a timely and efficient manner and retaining key US Airways Group and America West Holdings personnel. The integration of US Airways Group and America West Holdings will be costly, complex and time consuming, and the management of US Airways Group and America West Holdings will have to devote substantial effort to such integration that could otherwise be spent on operational matters or other strategic opportunities.

     We expect that the merger will result in certain synergies, business opportunities and growth prospects. We, however, may never realize these expected synergies, business opportunities and growth prospects. New US Airways Group may experience increased competition that limits its ability to expand its business. We may not be able to capitalize on expected business opportunities, including retaining current customers. In addition, assumptions underlying estimates of expected cost savings and expected revenue synergies may be inaccurate, or general industry and business conditions may deteriorate. Furthermore, integrating operations will require significant efforts and expenses. Our management may have its attention diverted from ongoing operations while trying to integrate.

US Airways Group continues to experience significant operating losses.

     Despite significant labor cost reductions and other cost savings achieved in the prior bankruptcy, US Airways Group has continued to experience significant operating losses which we expect to continue through 2006. Since early 2001, the U.S. airline industry’s revenue performance has fallen short of what would have been expected based on historical growth trends. This shortfall has been caused by a number of factors, including rising fuel costs, as discussed above, and the factors discussed below.

     The rapid growth of low-cost carriers has had a profound impact on industry revenues. Using the advantage of low unit costs, these carriers offer lower fares, particularly those targeted at business passengers, in order to shift demand from larger, more-established airlines. As a result of growth, low-cost carriers now transport nearly 30% of all domestic U.S. passengers compared to less than 10% a decade ago. They now compete for, and thus influence industry pricing on, approximately 81% of all domestic U.S. passenger ticket sales compared to less than 20% a decade ago. As a result of their better financial performance they have access to capital to fund fleet growth. Low-cost carriers are expected to continue to increase their market share through pricing and growth.

     The advent of Internet travel websites has lowered the cost to airlines of selling tickets. However, it has also had a large negative impact on airline revenues because travel consumers now have access to nearly perfect pricing information and, as a result, have become more efficient at finding lower fare alternatives.

Union disputes, employee strikes and other labor-related disruptions may adversely affect our operations.

     Our business plan includes assumptions about labor costs going forward. Currently, the labor costs of both America West Holdings and US Airways Group are very competitive and very similar; however, we cannot assure you that labor costs going forward will remain competitive, either because our agreements may become amendable or because competitors may significantly reduce their labor costs.

     Approximately 78% of the employees within US Airways Group are represented for collective bargaining purposes by labor unions. In the United States, these employees are organized into nine labor groups represented by five different unions at US Airways, seven labor groups represented by four different unions at AWA, four labor groups represented by four different unions at Piedmont Airlines, and four labor groups represented by four different unions at PSA Airlines. There are additional unionized groups of

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US Airways employees abroad.

     Relations between air carriers and labor unions in the United States are governed by the Railway Labor Act (RLA). Under the RLA, collective bargaining agreements generally contain “amendable dates” rather than expiration dates, and the RLA requires that a carrier maintain the existing terms and conditions of employment following the amendable date through a multi-stage and usually lengthy series of bargaining processes overseen by the National Mediation Board. This process continues until either the parties have reached agreement on a new collective bargaining agreement, or the parties have been released to “self-help” by the National Mediation Board. Although in most circumstances the RLA prohibits strikes, after release by the National Mediation Board carriers and unions are free to engage in self-help measures such as strikes and lock-outs. None of the US Airways labor agreements becomes amendable until December 31, 2009. Of the AWA labor agreements, three are currently amendable, a fourth becomes amendable in 2006 and negotiations are proceeding with a fifth group for an initial collective bargaining agreement.

     There is the potential for litigation to arise in the context of airline mergers. Unions may seek to delay or halt a transaction, may seek monetary damages, either in court or in grievance arbitration, may seek to compel airlines to engage in the bargaining processes where the airline believes it has no such obligation or may seek to assert rights to participate in corporate governance, including through board representation. There is a risk that one or more unions may pursue such judicial or arbitral avenues in the context of the merger, and if successful, could create additional costs that we did not anticipate.

     There is also a risk that disgruntled employees, either with or without union involvement, could engage in illegal slow-downs, work stoppages, partial work stoppages, sick-outs or other action short of a full strike that could individually or collectively harm the operation of the airline and impair its financial performance.

Fluctuations in interest rates could adversely affect our liquidity, operating expenses and results.

     A substantial portion of our indebtedness bears interest at fluctuating interest rates. These are primarily based on the London interbank offered rate for deposits of U.S. dollars, or LIBOR. LIBOR tends to fluctuate based on general economic conditions, general interest rates, federal reserve rates and the supply of and demand for credit in the London interbank market. We have not hedged our interest rate exposure and, accordingly, our interest expense for any particular period may fluctuate based on LIBOR and other variable interest rates. To the extent these interest rates increase, our interest expense will increase, in which event, we may have difficulties making interest payments and funding our other fixed costs and our available cash flow for general corporate requirements may be adversely affected.

We rely heavily on automated systems to operate our business and any failure of these systems, or the failure to integrate them successfully following the merger, could harm our business.

     We depend on automated systems to operate our business, including our computerized airline reservation systems, our flight operations systems, our telecommunication systems and our websites. Our website and reservation systems must be able to accommodate a high volume of traffic and deliver important flight information. Substantial or repeated website, reservations systems or telecommunication systems failures could reduce the attractiveness of our services and could cause our customers to purchase tickets from another airline. Furthermore, we must integrate the automated systems of America West Holdings and US Airways Group. Any disruption in these systems could result in the loss of important data, increase our expenses and generally harm our business.

If we incur problems with any of our third party service providers, our operations could be adversely affected by a resulting decline in revenue or negative public perception about our services.

     Our reliance upon others to provide essential services on behalf of our operations may result in the relative inability to control the efficiency and timeliness of contract services. We have entered into agreements with contractors to provide various facilities and services required for our operations, including aircraft maintenance, ground facilities and baggage handling. It is likely that similar agreements will be

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entered into in any new markets we decide to serve. All of these agreements are subject to termination after notice. Any material problems with the efficiency and timeliness of contract services could have a material adverse effect on our business, financial condition and results of operations.

The travel industry, materially adversely affected by the September 11, 2001 terrorist attacks, continues to face on-going security concerns and cost burdens associated with security.

     The attacks of September 11, 2001 materially impacted and continue to impact air travel. In November 2001, the President signed into law the Aviation and Transportation Security Act (the Aviation Security Act). This law federalized substantially all aspects of civil aviation security, creating a new Transportation Security Administration (TSA). Under the Aviation Security Act, substantially all security screeners at airports are now federal employees and significant other elements of airline and airport security are now overseen and performed by federal employees, including federal security managers, federal law enforcement officers, federal air marshals and federal security screeners. Among other matters, the law mandates improved flight deck security, deployment of federal air marshals onboard flights, improved airport perimeter access security, airline crew security training, enhanced security screening of passengers, baggage, cargo, mail, employees and vendors, enhanced training and qualifications of security screening personnel, additional provision of passenger data to U.S. Customs and enhanced background checks. These increased security procedures introduced at airports since the attacks have increased costs to airlines. We would also be materially impacted in the event of further terrorist attacks or perceived terrorist threats.

Increases in insurance costs or reductions in insurance coverage may adversely impact our operations and financial results.

     The terrorist attacks of September 11, 2001 led to a significant increase in insurance premiums and a decrease in the insurance coverage available to commercial airline carriers. Accordingly, our insurance costs increased significantly and our ability to continue to obtain insurance even at current prices remains uncertain. In addition, we have obtained third party war risk (terrorism) insurance through a special program administered by the FAA resulting in lower premiums than if we had obtained this insurance in the commercial insurance market. If the federal insurance program terminates, we would likely face a material increase in the cost of war risk insurance. Because of competitive pressures in our industry, our ability to pass additional insurance costs to passengers is limited. As a result, further increases in insurance costs or reductions in available insurance coverage could harm our earnings.

Changes in government regulation could increase our operating costs and limit our ability to conduct our business.

     Airlines are subject to extensive regulatory requirements. In the last several years, Congress has passed laws and the U.S. Federal Aviation Administration has issued a number of maintenance directives and other regulations. These requirements impose substantial costs on airlines. Additional laws, regulations, taxes and airport rates and charges have been proposed from time to time that could significantly increase the cost of airline operations or reduce revenues. The ability of U.S. carriers to operate international routes is subject to change because the applicable arrangements between the U.S. and foreign governments may be amended from time to time, or because appropriate slots or facilities may not be available. We cannot assure you that laws or regulations enacted in the future will not adversely affect our operating costs.

The use of America West Holdings’ and US Airways Group’s respective pre-merger NOLs and certain other tax attributes may be limited following the merger.

     Although US Airways Group today is the same legal entity as US Airways Group prior to the merger and continues as the publicly traded parent entity, each of America West Holdings and US Airways Group underwent an “ownership change,” as defined in Internal Revenue Code Section 382, in connection with the merger. When such an ownership change occurs, Section 382 limits the companies’ future ability to utilize any net operating losses (NOLs), generated before the ownership change and certain subsequently recognized “built-in” losses and deductions, if any, existing as of the date of the ownership change. The

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companies’ ability to utilize new NOLs arising after the ownership change would not be affected. An ownership change generally occurs if certain persons or groups increase their aggregate ownership percentage in a corporation’s stock by more than 50 percentage points in the shorter of any three-year period or the period since the last ownership change.

The airline industry is intensely competitive.

     Our competitors include other major domestic airlines as well as foreign, regional and new entrant airlines, some of which have more financial resources or lower cost structures than ours, and other forms of transportation, including rail and private automobiles. In most of our markets we compete with at least one other low-cost air carrier. Our revenues are sensitive to numerous factors, and the actions of other carriers in the areas of pricing, scheduling and promotions can have a substantial adverse impact on overall industry revenues. These factors may become even more significant in periods when the industry experiences large losses, as airlines under financial stress, or in bankruptcy, may institute pricing structures intended to achieve near-term survival rather than long-term viability.

Certain US Airways Group liabilities were not fully extinguished as a result of confirmation of the plan of reorganization.

     While a significant amount of US Airways Group’s prepetition liabilities were discharged as a result of the Debtors’ bankruptcy proceedings, a large number of US Airways Group obligations remain in effect following the merger. Various agreements and liabilities remain in place, including secured financings, aircraft agreements, certain environmental liabilities, certain grievances with our labor unions, leases and other contracts, as well as allowed administrative claims, that will still subject us to substantial obligations and liabilities.

Interruptions or disruptions in service at one of our hub airports could have a material adverse impact on our operations.

     We expect that we will operate primarily through primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Pittsburgh, Las Vegas, New York, Washington, D.C. and Boston. A majority of our flights will either originate or fly into one of these hubs. A significant interruption or disruption in service at one of our hubs could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe impact on our business, operations and financial performance.

We are at risk of losses and adverse publicity stemming from any accident involving any of our aircraft.

     If one of our aircraft were to be involved in an accident, we could be exposed to significant tort liability. The insurance we carry to cover damages arising from any future accidents may be inadequate. In the event that US Airways Group’s insurance is not adequate, we may be forced to bear substantial losses from an accident. In addition, any accident involving an aircraft that US Airways Group operates could create a public perception that our aircraft are not safe or reliable, which could harm our reputation, result in air travelers being reluctant to fly on US Airways Group’s aircraft and adversely impact our financial condition and operations.

Our business is subject to weather factors and seasonal variations in airline travel, which cause our results to fluctuate.

     Our operations are vulnerable to severe weather conditions in parts of our network that could disrupt service, create air traffic control problems, decrease revenue, and increase costs, such as during hurricane season in the Caribbean and Southeast United States, and snow and severe winters in the Northeast United States. In addition, the air travel business historically fluctuates on a seasonal basis. Due to the greater demand for air and leisure travel during the summer months, revenues in the airline industry in the second and third quarters of the year tend to be greater than revenues in the first and fourth quarters of the year. The

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results of operations of the combined company will likely reflect weather factors and seasonality, and therefore quarterly results are not necessarily indicative of those for an entire year and the prior results of America West Holdings and US Airways Group are not necessarily indicative of the combined company’s future results.

Employee benefit plans represent significant continuing costs to the sponsoring employers.

     US Airways Group and its subsidiaries sponsor employee benefit plans and arrangements that provide retirement, medical, disability, and other benefits to our employees and participating retirees. Many of the benefits provided under these plans are mandated under various collective bargaining agreements, while others are provided on a voluntary basis as a means to recruit and retain valuable employees.

     While US Airways Group recently terminated certain defined benefit pension plan and related retiree benefits, the benefit obligations associated with the remaining employee benefit plans and related costs represent a substantial continuing cost to the sponsors. In addition, many of these employee benefit plans are subject to federal laws such as the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code, and must be maintained accordingly. Continued compliance with these employee benefit plans’ rules is necessary, as even unintentional failures to comply can result in significant fines and penalties. Employee benefit plans in general also are increasingly the subject of protracted litigation, especially following significant plan design changes. Certain of the plans sponsored by the subsidiaries of US Airways Group have undergone several changes in connection with the Chapter 11 cases.

Risks Related to Our Common Stock

Our common stock has no trading history and its market price may be volatile.

     Because our common stock began trading on the New York Stock Exchange on September 27, 2005, there is only a limited trading history for our common stock. The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including:

• our operating results failing to meet the expectations of securities analysts or investors;

• changes in financial estimates or recommendations by securities analysts;

• material announcements by us or our competitors;

• movements in fuel prices;

• new regulatory pronouncements and changes in regulatory guidelines;

• general and industry-specific economic conditions;

• public sales of a substantial number of shares of our common stock following this offering; and general market conditions.

Substantial sales of our common stock after the merger could cause our stock price to fall.

     Upon completion of all of the merger related equity transactions, we had outstanding approximately $77.1 million shares of common stock. Each of the new equity investors entered into a stockholders agreement that prohibits the equity investors’ sale of our common stock for a period of six months following September 27, 2005. The stockholders agreement generally provides that the equity investors will not offer, sell, contract to sell or grant any option to purchase or otherwise dispose of our common stock or any securities exercisable for or convertible into our common stock owned by them, subject to limited exceptions. Approximately 44.0 million shares, or 57% of the outstanding shares of our common stock, owned by the equity investors will be eligible for resale after the expiration of the lock-up period. In addition, under the terms of the PBGC settlement under the plan of reorganization, the approximately 4.9 million shares of common stock issued to the PBGC may not be sold, assigned, transferred or pledged prior to the end of five months after September 27, 2005. Sales of these shares into the market after the expiration of the respective lock-up

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periods could cause the market price of our common stock to drop significantly, even if our business is doing well.

Conversion of our convertible notes will dilute the ownership interest of existing shareholders and could adversely affect the market price of our common stock.

     The conversion of some or all of the 7% Senior Convertible Notes due 2020, the 7.5% Convertible Senior Notes due 2009 or the 7.25% Senior Exchangeable Notes due 2023 will dilute the ownership interests of existing shareholders. Beginning January 18, 2005, the 7.5% notes became convertible into shares of our common stock, at the option of the holder. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the notes may encourage short selling by market participants because the conversion of the notes could depress the price of our common stock.

A small number of shareholders beneficially own a substantial amount of our common stock.

     A significant portion of US Airways Group’s common stock is beneficially owned by a relatively small number of equity investors. As a result, until these stockholders sell a substantial portion of their shares, they will have a greater percentage vote in matters that may be presented for a vote to stockholders than most other stockholders. This may make it more difficult for other stockholders to influence votes on matters that may come before stockholders of US Airways Group.

Certain provisions of the amended and restated certificate of incorporation and amended and restated bylaws of US Airways Group will make it difficult for stockholders to change the composition of our board of directors and may discourage takeover attempts that some of our stockholders may consider beneficial.

     Certain provisions of the amended and restated certificate of incorporation and amended and restated bylaws of US Airways Group may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of US Airways Group and its stockholders. These provisions include, among other things, the following:

• a classified board of directors with three-year staggered terms;

• advance notice procedures for stockholder proposals to be considered at stockholders’ meetings;

• the ability of US Airways Group’s board of directors to fill vacancies on the board;

• a prohibition against stockholders taking action by written consent;

• a prohibition against stockholders calling special meetings of stockholders;

• requiring the approval of holders of at least 80% of the voting power of the shares entitled to vote in the election of directors for the stockholders to amend the amended and restated bylaws; and

• super majority voting requirements to modify or amend specified provisions of US Airways Group’s amended and restated certificate of incorporation.

     These provisions are not intended to prevent a takeover, but are intended to protect and maximize the value of US Airways Group’s stockholders’ interests. While these provisions have the effect of encouraging persons seeking to acquire control of our company to negotiate with our board of directors, they could enable our board of directors to prevent a transaction that some, or a majority, of our stockholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors. In addition, US Airways Group is subject to the provisions of Section 203 of the Delaware General Corporation Law, which prohibits business combinations with interested stockholders. Interested stockholders do not include stockholders whose acquisition of US Airways Group’s securities is pre-approved by the board of directors under Section 203.

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Our charter documents include provisions limiting voting and ownership by foreign owners.

     Our amended and restated certificate of incorporation provides that shares of capital stock may not be voted by or at the direction of persons who are not citizens of the United States if the number of such shares would exceed 24.9% of the voting stock of our company. In addition, any attempt to transfer equity securities to a non-U.S. person in excess of 49.9% of our outstanding equity securities will be void and of no effect.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk Sensitive Instruments

     US Airways Group’s primary market risk exposures include commodity price risk (i.e., the price paid to obtain aviation fuel), interest rate risk and equity price risk. The potential impact of adverse increases in these risks and general strategies employed by US Airways Group to manage these risks are discussed below. The risks identified below are consistent from year to year. The following sensitivity analyses do not consider the effects that an adverse change may have on the overall economy nor do they consider additional actions US Airways Group may take to mitigate its exposure to these changes. Actual results of changes in prices or rates may differ materially from the following hypothetical results.

(a) Commodity Price Risk

     Prices and availability of all petroleum products are subject to political, economic and market factors that are generally outside of US Airways Group’s control. Accordingly, the price and availability of aviation fuel, as well as other petroleum products, can be unpredictable. Prices may be affected by many factors, including:

• the impact of global political instability on crude production;

• unexpected changes to the availability of petroleum products due to disruptions in distribution systems or refineries as evidenced in the third quarter of 2005 when Hurricane Katrina and Hurricane Rita caused widespread disruption to oil production, refinery operations and pipeline capacity along certain portions of the U.S. Gulf Coast. As a result of these disruptions, the price of jet fuel increased significantly and the availability of jet fuel supplies was diminished;

• unpredicted increases to oil demand due to weather or the pace of economic growth;

• inventory levels of crude, refined products and natural gas; and

• other factors, such as the relative fluctuation between the U.S. dollar and other major currencies and influence of speculative positions on the futures exchanges.

     Because the operations of US Airways Group are dependent upon aviation fuel, significant increases in aviation fuel costs materially and adversely affect US Airways Group’s liquidity, results of operations and financial condition. Forecasted fuel consumption for US Airways Group is approximately 1.59 billion gallons per year.

     As of September 30, 2005, the Company had entered into costless collar transactions, which establish an upper and lower limit on heating oil futures prices. These transactions are in place with respect to approximately 16% and 10% of remaining projected 2005 and 2006 fuel requirements, respectively.

     The use of such hedging transactions in the Company’s fuel hedging program could result in the Company not fully benefiting from certain declines in heating oil futures prices or certain declines in the differential between jet fuel and heating oil futures prices. At September 30, 2005, the Company estimates

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that a 10% increase in heating oil futures prices would increase the fair value of the costless collar transactions by approximately $30 million. The Company estimates that a 10% decrease in heating oil futures prices would decrease the fair value of the costless collar transactions by approximately $27 million.

     As of November 7, 2005, approximately 18% and 12% of the Company’s remaining 2005 and 2006 projected fuel requirements, respectively, are hedged.

(b) Interest Rate Risk

     The Company’s exposure to interest rate risk relates primarily to its variable rate long-term debt obligations. At September 30, 2005, the Company’s variable-rate long-term debt obligations of approximately 2.84 billion represented approximately 90 percent of its total long-term debt. If interest rates increased 10% in 2006, the impact on the Company’s results of operations would not be material.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures.

     An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (the CEO) and Chief Financial Officer (the CFO), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the rules promulgated under the Exchange Act) as of September 30, 2005. Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of September 30, 2005.

Changes in internal control over financial reporting.

     There has been no change to the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2005 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting other than controls established to properly account for the merger and consolidation of acquired operations. The Company will face significant challenges in integrating procedures and operations in a timely and efficient manner and retaining key personnel. Management will continue to evaluate its internal control over financial reporting as it executes merger integration activities as it is possible that integration activities could materially affect the Company’s internal control over financial reporting.

Limitation on the effectiveness of controls.

     We believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and the CEO and CFO believe that our disclosure controls and procedures were effective at the “reasonable assurance” level as of September 30, 2005.

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Part II. Other Information

Item 1. Legal Proceedings

     On September 12, 2004, US Airways Group and its domestic subsidiaries (the Debtors) filed voluntary petitions for relief under Chapter 11 of the bankruptcy code in the United States bankruptcy court for the Eastern District of Virginia, Alexandria Division (Case Nos. 04-13819-SSM through 03-13823-SSM) (the 2004 Bankruptcy). On September 16, 2005, the bankruptcy court issued an order confirming the plan of reorganization submitted by the Debtors and on September 27, 2005, the Debtors emerged from the 2004 Bankruptcy. The court’s order confirming the plan included a provision called the plan injunction, which forever bars other parties from pursuing most claims against the Debtors that arose prior to September 27, 2005 in any forum other than the bankruptcy court. The great majority of these claims are pre-petition claims that, if paid out at all, will be paid out in common stock of the post-bankruptcy US Airways Group at a fraction of the actual claim value.

     On February 26, 2004, a company called I.A.P. Intermodal, LLC filed suit against US Airways Group and its wholly owned airline subsidiaries in the United States District Court for the Eastern District of Texas alleging that the defendants’ computer scheduling system infringes upon three patents held by plaintiffs, all of which patents are entitled, “Method to Schedule a Vehicle in Real-Time to Transport Freight and Passengers.” Plaintiff seeks various injunctive relief as well as costs, fees and treble damages. US Airways Group and its subsidiaries were formally served with the complaint on June 21, 2004. US Airways Group is unable to ascertain at this time the likelihood or potential scale of liability. On the same date, the same plaintiff filed what US Airways Group believes to be substantially similar cases against nine other major airlines, including British Airways, Northwest Airlines Corporation, Korean Airlines Co., Ltd., Deutsche Lufthansa AG, Air France, Air Canada, Singapore Airlines Ltd., Delta Air Lines and Continental Airlines, Inc., and had filed a suit against the parent company of American Airlines in December 2003. This action was stayed as to US Airways Group and its wholly owned subsidiaries as a result of the 2004 Bankruptcy. The case remains stayed.

     The Port Authority of New York and New Jersey filed a proof of claim against US Airways in the bankruptcy case filed on August 11, 2002 (the 2002 Bankruptcy). The claim was in the amount of $8.5 million and it alleged environmental contamination and building deficiencies at LaGuardia Airport. US Airways’ liability and defenses to this liability were unaffected by the 2002 Bankruptcy. In connection with the 2004 Bankruptcy, the Port Authority filed a proof of claim in the amount of approximately $24 million again alleging environmental contamination and building deficiencies at LaGuardia Airport, of which approximately $2 million is related to alleged environmental contamination.

     On January 7, 2003, the IRS issued a notice of proposed adjustment to US Airways Group proposing to disallow $573 million of capital losses that US Airways Group sustained in the tax year 1999 on the sale of stock of USLM Corporation (the USLM matter). On February 5, 2003, the IRS filed a proof of claim with the bankruptcy court in connection with the 2002 Bankruptcy asserting the following claims against US Airways with respect to the USLM matter: (1) secured claims for U.S. federal income tax and interest of $1 million; (2) unsecured priority claims for U.S. federal income tax of $68 million and interest of $14 million; and (3) an unsecured general claim for penalties of $25 million. On May 8, 2003, US Airways Group reached a tentative agreement with the IRS on the amount of U.S. federal income taxes, interest and penalties due subject to final approval from the Joint Committee on Taxation. By letter dated September 11, 2003, US Airways Group was notified that the Joint Committee on Taxation had accepted the tentative agreement with the IRS, including a settlement of all federal income taxes through the end of 2002. Due to the 2004 Bankruptcy filing, which suspended payment of prepetition liabilities, final payment terms under the agreement have not been submitted to the Bankruptcy Court for approval. The IRS has submitted a proof of claim relating to the USLM matter in the 2004 Bankruptcy in the amount of approximately $31 million, and on August 2, 2005 the IRS filed a motion for relief from the automatic stay seeking to setoff against approximately $4 million of tax refunds due to the Debtors. On October 20, 2005, the IRS filed an amended proof of claim reducing its claim in the USLM matter to $11 million. On November 3, 2005, the IRS filed an amended motion continuing to seek relief for the $4 million setoff. A hearing has been set for December 15, 2005 on this matter. The debtors are in the process of analyzing the IRS’ amended motion.

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     Williard, Inc., together with the joint venture of Williard, Inc. and Len Parker Associates, was awarded construction contracts with US Airways for work to be performed at the Philadelphia International Airport. On May 29, 2002, US Airways terminated the largest contract between the parties. Williard, Inc. and the joint venture sued US Airways in Pennsylvania state court for over $14 million in damages representing termination costs and lost profits, along with other alleged contractual damage claims. Subsequently, Limbach Company, LLC alleged that it purchased the claims of Williard, Inc. After a trial, the bankruptcy court in the 2002 Bankruptcy, on June 7, 2004, determined the value of the Limbach Company and the joint venture claims to be approximately $3 million. Limbach Company and the joint venture are challenging on appeal various rulings of the bankruptcy court, including the amount of the claim and its status as an unsecured claim. US Airways has also filed an appeal. Limbach Company and the joint venture have filed an action in state court against the City of Philadelphia and the Philadelphia Authority for Industrial Development and received permission to include US Airways as a co-defendant, provided that Limbach Company and the joint venture did not make any claims against US Airways in that action. In the lawsuit against the City of Philadelphia and the Philadelphia Authority for Industrial Development, Limbach Company and the joint venture are seeking the same sums as in their earlier lawsuit and proofs of claim against US Airways, but this time under the equitable theories of third-party beneficiary, quantum meruit and constructive trust. The court in the Philadelphia action dismissed US Airways from the lawsuit and dismissed the third-party beneficiary claims against the City of Philadelphia and the Philadelphia Authority for Industrial Development. These rulings are subject to appeal at a later date. On May 21, 2004, the City of Philadelphia and the Philadelphia Authority for Industrial Development filed a Motion for Summary Judgment seeking dismissal of the lawsuit. In July 2005, the court granted the Motion for Summary Judgment. Limbach Company and the joint venture have appealed the decision. Should Limbach Company and/or the joint venture recover in the Philadelphia action against the City of Philadelphia and the Philadelphia Authority for Industrial Development, that award would be paid at 100 cents on the dollar. US Airways may have an obligation to indemnify the City of Philadelphia and the Philadelphia Authority for Industrial Development under its agreements related to the airport development, although these agreements have neither been assumed nor rejected as part of the 2004 Bankruptcy. If the agreements are assumed, any recovery by Limbach Company and/or the joint venture against the City of Philadelphia and the Philadelphia Authority for Industrial Development could result in an indemnification claim that US Airways may have to pay at full value. Proceedings in the bankruptcy court related to the claims in the 2002 Bankruptcy remain stayed by the 2004 Bankruptcy filing.

     US Airways Group and US Airways have been named as defendants in two lawsuits filed in federal district court for the Eastern District of Michigan in May 1999. Delta Air Lines is also named as a defendant in both actions, while Northwest Airlines and the Airlines Reporting Corporation were sued separately in a third action. The complaints were filed on behalf of a class of airline passengers who originated or terminated their trips at the defendant carriers’ respective hubs. These passengers allege that they paid excessive fares due to the respective airlines’ enforcement of ticketing rules that prohibit the use of a connecting segment coupon that is part of a through-fare ticket where the passenger does not fly or intend to fly the entire ticketed itinerary. Plaintiffs allege monopolization and restraint of trade in violation of federal antitrust laws. They seek recovery of treble damages from all named defendants in the amount of $390 million and an injunction prohibiting future enforcement of the rules at issue. On May 16, 2002, the court denied the defendant airlines’ Motion for Summary Judgment and granted the plaintiffs’ Motion for Class Certification in each of the cases. On May 31, 2002, US Airways Group and US Airways filed a petition with the United States Court of Appeals for the Sixth Circuit seeking a discretionary review of the certification order. On November 21, 2002, the petition for permission to appeal the class certification decision was denied. On December 4, 2002, Delta Air Lines and Northwest Airlines filed a rehearing petition seeking en banc review of the initial Sixth Circuit denial. On February 24, 2003, Northwest Airlines’ and Delta Air Lines’ petition for rehearing en banc was denied. Notwithstanding the district

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court’s denial of summary judgment and the petition, US Airways Group and US Airways believe theclaims are without merit and intend to pursue a vigorous defense. The action was stayed as to US Airways during the 2002 Bankruptcy and again during the 2004 Bankruptcy. On April 29, 2005, Northwest Airlines and Delta Air Lines filed a renewed motion for summary judgment on all counts. That motion was denied. Delta Air Lines and Northwest Airlines filed two additional motions: one seeking decertification of the class and the other seeking dismissal of all class members who received ticket refunds. While those motions were pending, Delta Air Lines and Northwest Airlines filed for bankruptcy. The federal district court has now deactivated the case because of the bankruptcy filings.

     On September 29, 2000, US Airways intervened in a proceeding that was originally brought on January 26, 1998, by the Pennsylvania Department of Environment Protection against Allegheny County, Pennsylvania, and the Allegheny County Aviation Administration alleging that a variety of airfield and aircraft de-icing activities at Pittsburgh International Airport violated the requirements of (a) a 1994 Consent Order and Adjudication issued to Allegheny County and air carrier tenants at the Pittsburgh International Airport, (b) the Pittsburgh International Airport’s National Pollutant Discharge Elimination System Permit, and (c) the Pennsylvania Clean Streams Law. The action was brought before the Pennsylvania Environmental Hearing Board. During March 2001, the Environmental Hearing Board approved Allegheny County’s Motion to Withdraw the Appeal without Prejudice, thereby terminating the appeal. However, during the course of settlement discussions leading to the termination of the appeal, the Pennsylvania Department of Environment Protection advised Allegheny County and US Airways that the Department of Environment Protection will require additional measures to be taken to control de-icing materials at the Pittsburgh International Airport, and will assess a civil penalty against Allegheny County and US Airways for the alleged violations described above. The Allegheny County Aviation Administration, US Airways and the Pennsylvania Department of Environment Protection have continued to work together with the goal of fashioning an ultimate resolution to the de-icing issues. US Airways Group does not believe that the settlement of this matter will have a material adverse effect on its financial condition, results of operations or liquidity.

     On October 7, 2005, 240 pilots employed by the MidAtlantic division of US Airways, filed a complaint in the federal district court for the Eastern District of New York against ALPA, US Airways, US Airways Group, Republic Airways Holdings, Inc., Wexford Capital LLC and AWA, alleging that defendants conspired to deceive plaintiffs into believing that MidAtlantic was a separate entity from US Airways in order to deprive them of the benefits they are due as US Airways pilots pursuant to the US Airways collective bargaining agreement. Plaintiffs’ claims against the airline defendants include breach of collective bargaining agreement, violation of the Railway Labor Act and racketeering under the Racketeering Influenced and Corrupt Organizations Act. Plaintiffs’ complaint requests $2 billion in damages from the airline defendants and injunctive relief.

     On October 12, 2005, Bank of America, N.A., which is the issuing bank of the US Airways frequent flier program credit card and also acts as the processing bank for most airline ticket purchases paid for with credit cards, filed suit in the Delaware Chancery Court in Newcastle County, against US Airways, US Airways Group and AWA, alleging that US Airways breached its frequent flier credit card contract with Bank of America by entering into a similar, competing agreement with Juniper and allowing Juniper to issue a US Airways frequent flier credit card. Bank of America also alleges that US Airways Group and AWA induced these breaches. Bank of America seeks an order requiring US Airways to market the Bank of America card and prohibit Juniper from issuing a US Airways credit card, as well as unspecified damages. On October 27, 2005, Juniper, which was not originally a party to the lawsuit, sought and later received court permission to intervene as a defendant in the case and has made counterclaims against Bank of America. Juniper seeks an order declaring the validity of its new agreement to issue a US Airways frequent flier credit card. On November 3, 2005, Bank of America filed a motion for partial summary judgement on the breach of contract claim against US Airways.

     The Company is unable to estimate at this the amount of loss or probable losses, if any that might result from an adverse resolution of the proceedings discussed above, and currently is unable to predict whether the outcome of these proceedings will have a material adverse effect on its results of operations or financial condition. The Company intends, however, to vigorously pursue all available defenses and claims in these matters.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     The following table sets forth all purchases made by us or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) of the Securities Exchange Act of 1934, as amended, of America West Holdings Class B Common Stock during each month within the third quarter of 2005. No purchases were made pursuant to a publicly announced repurchase plan or program.

					(c) Total	(d) Maximum
					Number of	Number (or
					Shares	Approximate
	(a) Total				Purchased as	Dollar Value) of
	Number of		(b)		Part of Publicly	Shares that May
	Shares		Average		Announced	Yet be Purchased
	Purchased		Price Paid		Plans or	Under the Plans
Period	(1)		per Share		Programs	or Programs
July 1, 2005 — July 31, 2005		5,196		14.52	—	—
August 1, 2005 — August 31, 2005		—		—	—	—
September 1, 2005 — September 26, 2005		8,209		17.21	—	—

(1) Amounts consist of shares of our common stock purchased on the open market by the America West Holdings Corporation Future Care 401(k) Plan. (shares are post conversion)

Item 4. Submission of Matters to a Vote of Security Holders

     At a special meeting held on September 13, 2005, the shareholders of America West Holdings approved a proposal to adopt the Agreement and Plan of Merger, dated as of May 19, 2005, among US Airways Group, America West Holdings and Barbell Acquisition Corp., a wholly owned subsidiary of US Airways Group, as amended (the Merger Agreement), and approved the merger contemplated by the Merger Agreement. The following table sets forth the vote of the stockholders regarding the merger:

For	58,928,513
Against	822,193
Abstain	1,948,448

Item 6. Exhibits

Exhibit No.	Description
2.1	Letter Agreement, dated as of July 7, 2005, by and among US Airways Group, Inc., America West Holdings Corporation, Barbell Acquisition Corp., ACE Aviation Holdings, inc., Eastshore Aviation, LLC, Par Investment Partners, L.P., Peninsula Investment Partners, L.P. and Wellington Management Company, LLP (incorporated by reference to Exhibit 2.2 to Amendment No. 1 to US Airways Group’s Registration Statement on Form S-4 filed on August 8, 2005).
3.1	Amended and Restated Certificate of Incorporation of US Airways Group, Inc., effective as of September 27, 2005 (incorporated by reference to Exhibit 3.1 to US Airways Group’s Form 8-K filed on October 3, 2005).
3.2	Amended and Restated Bylaws of US Airways Group, Inc., effective as of September 27, 2005 (incorporated by reference to Exhibit 3.2 to US Airways Group’s Form 8-K filed on October 3, 2005).
4.1	Indenture, dated as of September 30, 2005, between US Airways Group, Inc., the guarantors listed therein and U.S. Bank National Association, as trustee (incorporated by reference to

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Exhibit No.	Description
	Exhibit 4.1 to US Airways Group’s Form 8-K filed on October 3, 2005).
4.2	Registration Rights Agreement, dated as of September 30, 2005, between US Airways Group, Inc., America West Airlines, Inc. and US Airways, Inc., as guarantors, and the initial purchaser named therein (incorporated by reference to Exhibit 4.2 to US Airways Group’s Form 8-K filed on October 3, 2005).
4.3	Supplemental Indenture No. 1, dated as of September 27, 2005, among America West Holdings Corporation, US Airways Group, Inc. and Wilmington Trust Company (incorporated by reference to Exhibit 10.1 to US Airways Group’s Form 8-K filed on October 3, 2005).
4.4	Guarantee and Exchange Agreement Supplement No. 1, dated as of September 27, 2005, among America West Holdings Corporation, US Airways Group, Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 10.2 to US Airways Group’s Form 8-K filed on October 3, 2005).
4.5	US Airways Group, Inc. Warrant to Purchase Common Stock, dated September 27, 2005, issued to AFS Cayman Limited (incorporated by reference to Exhibit 10.2 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.1	Amended and Restated Loan Agreement, dated as of September 27, 2005, by and among US Airways, Inc., US Airways Group, Inc., the affiliates of US Airways, Inc. party thereto, the lenders from time to time party thereto, Citibank, N.A., as Agent, Citicorp North America, Inc., as Govco Administrative Agent, Wilmington Trust Company, as Collateral Agent, and the Air Transportation Stabilization Board.
10.2	Amended and Restated Loan Agreement, dated as of September 27, 2005, by and among America West Airlines, Inc., US Airways Group, Inc., the other affiliates of America West Airlines, Inc. party thereto, the several lenders from time to time party thereto, Citibank, N.A., as Agent, Wilmington Trust Company, as Collateral Agent, and the Air Transportation Stabilization Board.
10.3*	Loan Agreement, dated as of September 27, 2005, by and among US Airways, Inc., America West Airlines, Inc., US Airways Group, Inc., as guarantor, Airbus Financial Services, as Initial Lender and Loan Agent, and Wells Fargo Bank Northwest, National Association, as Collateral Agent, with commitments in an initial aggregate amount of $161,000,000.
10.4*	Loan Agreement, dated as of September 27, 2005, by and among US Airways, Inc., America West Airlines, Inc., US Airways Group, Inc., as guarantor, Airbus Financial Services, as Initial Lender and Loan Agent, and Wells Fargo Bank Northwest, National Association, as Collateral Agent, with commitments in an initial aggregate amount of $89,000,000.
10.5*	Airbus A350 Purchase Agreement, dated as of September 27, 2005, by and among AVSA, S.A.R.L. and US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc.
10.6*	Amendment No. 16, dated as of September 27, 2005, to the Airbus A319/A320/A321 Purchase Agreement, dated as of October 31, 1997, between US Airways Group, Inc. and AVSA, S.A.R.L.
10.7*	Amendment No. 10, dated as of September 27, 2005, to the Airbus A330/A340 Purchase Agreement, dated as of November 24, 1998, between US Airways Group, Inc. and AVSA, S.A.R.L.
10.8*	Amendment No. 9, dated as of September 27, 2005, to the Airbus A320/319 Purchase Agreement, dated as of September 12, 1997, between America West Airlines, Inc. and AVSA

77

Exhibit No.	Description
	S.A.R.L.
10.9*	Amendment No. 10, dated as of September 27, 2005, to the Airbus A320/319 Purchase Agreement, dated as of September 12, 1997, between America West Airlines, Inc. and AVSA S.A.R.L.
10.10	Investment Agreement, dated as of July 7, 2005, by and among US Airways Group, Inc., America West Holdings Corporation, Tudor Proprietary Trading, L.L.C. and certain investors listed on Schedule I thereto for which Tudor Investment Corp. acts as investment Advisor (incorporated by reference to Exhibit 10.1 to America West Holdings’ Form 8-K filed on July 13, 2005).
10.11	Letter Agreement dated September 16, 2005 by and among US Airways Group, Inc., America West Holdings Corporation, Barbell Acquisition Corp., ACE Aviation Holdings, inc., Eastshore Aviation, LLC, Par Investment Partners, L.P., Peninsula Investment Partners, L.P. and Wellington Management Company, LLP
10.12	Amended and Restated Participation Agreement, dated as of July 7, 2005, between America West Holdings Corporation and Par Investment Partners, L.P. (incorporated by reference to Exhibit 10.1 to America West Holdings’ Form 8-K filed on July 13, 2005).
10.13	Amended and Restated Participation Agreement, dated as of July 7, 2005, between America West Holdings Corporation and Peninsula Investment Partners, L.P. (incorporated by reference to Exhibit 10.1 to America West Holdings’ Form 8-K filed on July 13, 2005).
10.14*	Assignment and First Amendment to America West Co-Branded Card Agreement, dated as of August 8, 2005, by and among US Airways Group, Inc., America West Airlines, Inc. and Juniper Bank (incorporated by reference to Exhibit 10.110 to Amendment No. 2 to the Registration Statement on Form S-4 filed by US Airways Group on August 10, 2005).
10.15*	First Amendment to Merchant Services Bankcard Agreement, dated as of August 8, 2005, by and among America West Airlines, Inc., JPMorgan Chase Bank, N.A. and Chase Merchant Services, L.L.C. (incorporated by reference to Exhibit 10.111 to Amendment No. 2 to the Registration Statement on Form S-4 filed by US Airways Group on August 10, 2005).
10.16	Purchase Agreement, dated as of September 27, 2005, between US Airways Group, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 10.1 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.17	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group, Inc. and ACE Aviation Holdings Inc. (incorporated by reference to Exhibit 10.1 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.18	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group, Inc. and Eastshore Aviation LLC (incorporated by reference to Exhibit 10.2 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.19	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group, Inc. and Par Investment Partners, L.P. (incorporated by reference to Exhibit 10.3 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.20	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group, Inc. and Peninsula Investment Partners, L.P. (incorporated by reference to Exhibit 10.4 to US Airways Group’s Form 8-K filed on October 3, 2005).

78

Exhibit No.	Description
10.21	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group, Inc. and the group of investors named therein under the management of Wellington Management Company, LLP (incorporated by reference to Exhibit 10.5 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.22	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group, Inc., Tudor Proprietary Trading L.L.C. and the group of investors named therein for which Tudor Investment Corp. acts as investment advisor (incorporated by reference to Exhibit 10.6 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.23+	US Airways Group, Inc. 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.24+	Letter Agreement, dated as of September 27, 2005, between US Airways Group, Inc. and Bruce R. Lakefield (incorporated by reference to Exhibit 10.2 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.25+	Employment Agreement, dated as of September 27, 2005, between US Airways Group, Inc. and Alan W. Crellin (incorporated by reference to Exhibit 10.3 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.26+	Employment Agreement, dated as of September 27, 2005, between US Airways Group, Inc. and Jerrold A. Glass (incorporated by reference to Exhibit 10.4 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.27+	Employment Agreement, dated as of September 27, 2005, between US Airways Group, Inc. and Elizabeth K. Lanier (incorporated by reference to Exhibit 10.5 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.28+	Stock Unit Award Agreement, dated as of September 27, 2005, between US Airways Group, Inc. and W. Douglas Parker (incorporated by reference to Exhibit 10.6 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.29+	Form of Stock Unit Agreement under US Airways Group, Inc.’s 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.30+	Form of Stock Appreciation Rights Award Agreement under US Airways Group, Inc.’s 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.8 to US Airways Group’s Form 8-K filed on October 3, 2005).
10.31+	Form of Indemnity Agreement (incorporated by reference to Exhibit 10.1 to US Airways Group’s Form 8-K filed on October 6, 2005).
31.1	Certification of US Airways Group, Inc.’s Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
31.2	Certification of US Airways Group, Inc.’s Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
31.3	Certification of America West Airlines, Inc.’s Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
31.4	Certification of America West Airlines, Inc.’s Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

79

Exhibit No.	Description
32.1	Certification of US Airways Group, Inc.’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of America West Airlines, Inc.’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(+)	Represents a management contract or compensatory plan or arrangement.
(*)	The Company has sought confidential treatment for portions of the referenced exhibit.

Signatures

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

	US Airways Group, Inc. (Registrant)
Date: November 9, 2005	By:	/s/ Derek J. Kerr
		Derek J. Kerr
		Senior Vice President and Chief Financial Officer
	America West Airlines, Inc. (Registrant)
Date: November 9, 2005	By:	/s/ Derek J. Kerr
		Derek J. Kerr
		Senior Vice President and Chief Financial Officer

80

Exhibit Index

Exhibit
Number	Description
10.1*	Amended and Restated Loan Agreement, dated as of September 27, 2005, by and among US Airways, Inc., US Airways Group, Inc., the affiliates of US Airways, Inc. party thereto, the lenders from time to time party thereto, Citibank, N.A., as Agent, Citicorp North America, Inc., as Govco Administrative Agent, Wilmington Trust Company, as Collateral Agent, and the Air Transportation Stabilization Board.
10.2*	Amended and Restated Loan Agreement, dated as of September 27, 2005, by and among America West Airlines, Inc., US Airways Group, Inc., the other affiliates of America West Airlines, Inc. party thereto, the several lenders from time to time party thereto, Citibank, N.A., as Agent, Wilmington Trust Company, as Collateral Agent, and the Air Transportation Stabilization Board.
10.3*	Loan Agreement, dated as of September 27, 2005, by and among US Airways, Inc., America West Airlines, Inc., US Airways Group, Inc., as guarantor, Airbus Financial Services, as Initial Lender and Loan Agent, and Wells Fargo Bank Northwest, National Association, as Collateral Agent, with commitments in an initial aggregate amount of $161,000,000.
10.4*	Loan Agreement, dated as of September 27, 2005, by and among US Airways, Inc., America West Airlines, Inc., US Airways Group, Inc., as guarantor, Airbus Financial Services, as Initial Lender and Loan Agent, and Wells Fargo Bank Northwest, National Association, as Collateral Agent, with commitments in an initial aggregate amount of $89,000,000.
10.5*	Airbus A350 Purchase Agreement, dated as of September 27, 2005, by and among AVSA, S.A.R.L. and US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc.
10.6*	Amendment No. 16, dated as of September 27, 2005, to the Airbus A319/A320/A321 Purchase Agreement, dated as of October 31, 1997, between US Airways Group, Inc. and AVSA, S.A.R.L.
10.7*	Amendment No. 10, dated as of September 27, 2005, to the Airbus A330/A340 Purchase Agreement, dated as of November 24, 1998, between US Airways Group, Inc. and AVSA, S.A.R.L.
10.8*	Amendment No. 9, dated as of September 27, 2005, to the Airbus A320/319 Purchase Agreement, dated as of September 12, 1997, between America West Airlines, Inc. and AVSA S.A.R.L.
10.9*	Amendment No. 10, dated as of September 27, 2005, to the Airbus A320/319 Purchase Agreement, dated as of September 12, 1997, between America West Airlines, Inc. and AVSA S.A.R.L.
10.11	Letter Agreement dated September 16, 2005 by and among US Airways Group, Inc., America West Holdings Corporation, Barbell Acquisition Corp., ACE Aviation Holdings, inc., Eastshore Aviation, LLC, Par Investment Partners, L.P., Peninsula Investment Partners, L.P. and Wellington Management Company, LLP
31.1	Certification of US Airways Group, Inc.’s Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
31.2	Certification of US Airways Group, Inc.’s Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
31.3	Certification of America West Airlines, Inc.’s Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
31.4	Certification of America West Airlines, Inc.’s Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
32.1	Certification of US Airways Group, Inc.’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of America West Airlines, Inc.’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(+)	Represents a management contract or compensatory plan or arrangement.
(*)	The Company has sought confidential treatment for portions of the referenced exhibit.

EX-10.1

                                                                    Exhibit 10.1

                                                                  EXECUTION COPY

================================================================================

                       AMENDED AND RESTATED LOAN AGREEMENT

                         DATED AS OF SEPTEMBER 27, 2005

                                      AMONG

                                US AIRWAYS, INC.,
                                  AS BORROWER,

                             US AIRWAYS GROUP, INC.
                            AND ITS SUBSIDIARIES FROM
                           TIME TO TIME PARTY HERETO,

                            THE SEVERAL LENDERS FROM
                           TIME TO TIME PARTY HERETO,

                                 CITIBANK, N.A.,
                                    AS AGENT,

                          CITICORP NORTH AMERICA, INC.,
                         AS GOVCO ADMINISTRATIVE AGENT,

                            WILMINGTON TRUST COMPANY,
                               AS COLLATERAL AGENT

                                       AND

                     AIR TRANSPORTATION STABILIZATION BOARD

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS..............      2

   Section 1.1.    Defined Terms........................................      2
   Section 1.2.    Computation of Time Periods..........................     31
   Section 1.3.    Accounting Terms and Principles......................     31
   Section 1.4.    Certain Terms........................................     32

ARTICLE II THE LOAN.....................................................     32

   Section 2.1.    The Loan.............................................     32
   Section 2.2.    Scheduled Repayment of the Loan......................     32
   Section 2.3.    Evidence of Debt.....................................     34
   Section 2.4.    Optional Prepayments.................................     35
   Section 2.5.    Mandatory Prepayments................................     35
   Section 2.6.    Interest.............................................     39
   Section 2.7.    Fees.................................................     39
   Section 2.8.    Payments and Computations............................     40
   Section 2.9.    Certain Provisions Governing the Loan................     42
   Section 2.10.   Capital Adequacy.....................................     44
   Section 2.11.   Taxes................................................     45
   Section 2.12.   Limitations with respect to RSA......................     47

ARTICLE III CONDITIONS PRECEDENT TO EFFECTIVENESS.......................     47

ARTICLE IV REPRESENTATIONS AND WARRANTIES...............................     51

   Section 4.1.    Organization, Powers, Qualification, Good Standing,
                   Business, Subsidiaries, the Act and the Regulations..     51
   Section 4.2.    Authorization of Loan Documents, etc.................     52
   Section 4.3.    Financial Condition..................................     53
   Section 4.4.    No Material Adverse Change; No Restricted Payments...     54
   Section 4.5.    Title to Properties; Liens...........................     54
   Section 4.6.    Litigation; Adverse Facts............................     54
   Section 4.7.    Payment of Taxes.....................................     54
   Section 4.8.    Performance of Agreements; Materially Adverse
                   Agreements...........................................     55
   Section 4.9.    Governmental Regulation..............................     55
   Section 4.10.   Securities Activities................................     55
   Section 4.11.   Employee Benefit Plans...............................     56
   Section 4.12.   Environmental Protection.............................     56
   Section 4.13.   Disclosure...........................................     57
   Section 4.14.   Compliance with Laws.................................     57
   Section 4.15.   Indebtedness.........................................     57
   Section 4.16.   Insurance............................................     57
   Section 4.17.   Perfected Security Interests.........................     58
   Section 4.18.   Compliance with the Plan of Reorganization...........     58
   Section 4.19.   Absence of Labor Disputes............................     58
   Section 4.20.   Compliance with certain Gate Leases..................     58



                                       -i-



                                                                          
   Section 4.21.   Slot Utilization.....................................     58
   Section 4.22.   Deposit Accounts and Securities Accounts.............     58
   Section 4.23.   Unrestricted Cash and Cash Equivalents...............     58

ARTICLE V AFFIRMATIVE COVENANTS.........................................     59

   Section 5.1.    Accounting Controls; Financial Statements and
                   Other Reports........................................     59
   Section 5.2.    Corporate Existence..................................     64
   Section 5.3.    Payment of Taxes and Claims..........................     64
   Section 5.4.    Maintenance of Properties; Insurance.................     64
   Section 5.5.    Inspection...........................................     65
   Section 5.6.    Compliance with Laws, Etc............................     65
   Section 5.7.    Remedial Action Regarding Hazardous Materials........     66
   Section 5.8.    Additional Obligors; Collateral......................     66
   Section 5.9.    Employee Benefit Plans...............................     68
   Section 5.10.   FAA Matters; Citizenship.............................     68
   Section 5.11.   Board Guaranty.......................................     68
   Section 5.12.   Audits and Reviews...................................     68
   Section 5.13.   Control of Deposit Accounts and Securities Accounts..     69
   Section 5.14.   Lower-Tier Covered Transaction.......................     69
   Section 5.15.   Contractual Obligations..............................     70
   Section 5.16.   Slot Utilization.....................................     70
   Section 5.17.   Stock Exchange Listing...............................     70
   Section 5.18.   Further Assurances...................................     70
   Section 5.19.   Credit Rating of Loan................................     70

ARTICLE VI NEGATIVE COVENANTS...........................................     70

   Section 6.1.    Liens and Related Matters............................     70
   Section 6.2.    Investments..........................................     72
   Section 6.3.    Restricted Payments..................................     73
   Section 6.4.    Financial Covenants..................................     73
   Section 6.5.    Restriction on Acquisitions; Change in Fiscal Year...     75
   Section 6.6.    Sales-Leasebacks.....................................     75
   Section 6.7.    Transactions with Affiliates.........................     76
   Section 6.8.    Conduct of Business..................................     77
   Section 6.9.    Merger or Consolidation..............................     77
   Section 6.10.   Limitations on Amendments............................     77
   Section 6.11.   No Further Negative Pledges..........................     78
   Section 6.12.   Speculative Transactions.............................     78
   Section 6.13.   Asset Sales..........................................     78
   Section 6.14.   Spare Parts..........................................     79

ARTICLE VII EVENTS OF DEFAULT...........................................     80

   Section 7.1.    Events of Default....................................     80
   Section 7.2.    Remedies.............................................     82

ARTICLE VIII THE AGENT AND THE COLLATERAL AGENT.........................     83

   Section 8.1.    Authorization and Action.............................     83
   Section 8.2.    Reliance, Etc........................................     84
   Section 8.3.    Affiliates...........................................     85




                                      -ii-




                                                                          
   Section 8.4.    Representations of the Lenders and the Board.........     85
   Section 8.5.    Events of Default; Termination of Board Guaranty.....     86
   Section 8.6.    Agent's and Collateral Agent's Right to Indemnity....     86
   Section 8.7.    Indemnification of Agent and Collateral Agent........     86
   Section 8.8.    Successor Agent and Collateral Agent.................     87
   Section 8.9.    Release of Liens on Collateral and Subsidiary
                   Guarantors...........................................     87
   Section 8.10.   Co-Collateral Agent; Separate Collateral Agent.......     88
   Section 8.11.   Collateral Agents' Lien..............................     89

ARTICLE IX MISCELLANEOUS................................................     89

   Section 9.1.    Amendments, Waivers, Etc.............................     89
   Section 9.2.    Assignments and Participations; Successors and
                   Assigns..............................................     91
   Section 9.3.    Costs and Expenses...................................     93
   Section 9.4.    Indemnities..........................................     93
   Section 9.5.    Right of Set-Off.....................................     94
   Section 9.6.    Sharing of Payments, Etc.............................     95
   Section 9.7.    Notices, Etc.........................................     95
   Section 9.8.    No Waiver; Remedies..................................     95
   Section 9.9.    Governing Law........................................     95
   Section 9.10.   Submission to Jurisdiction; Service of Process.......     96
   Section 9.11.   Waiver of Jury Trial.................................     96
   Section 9.12.   Marshaling; Payments Set Aside.......................     96
   Section 9.13.   Section Titles.......................................     97
   Section 9.14.   Execution in Counterparts............................     97
   Section 9.15.   Severability.........................................     97
   Section 9.16.   Confidentiality......................................     97
   Section 9.17.   No Proceedings.......................................     98
   Section 9.18.   Govco Administrative Agent...........................     98
   Section 9.19.   Acknowledgment Regarding Federal Authority...........     98
   Section 9.20.   Independence of Representations, Warranties and
                   Covenants............................................     99
   Section 9.21.   Board Acknowledgment.................................     99
   Section 9.22.   GE Acknowledgement...................................     99



Annexes
Annex A   Notice Addresses
Annex B   Lending Office

Schedules
Schedule 1.1(a)    Slots
Schedule 2.5(b)    Collateral Release Values
Schedule 2.5(d)    Designated Asset Sales
Schedule 3(a)(v)   Stock Certificates
Schedule 3.1(b)    Other Agreements
Schedule 4.1(b)    Operating Authority
Schedule 4.1(c)    Subsidiaries
Schedule 4.2(c)    Consents, Approvals, etc.
Schedule 4.3(d)    Financial Condition
Schedule 4.6       Material Litigation


                                      -iii-



Schedule 4.7(a)    Payment of Taxes
Schedule 4.7(b)    Government Tax Claims
Schedule 4.8(c)    Other Agreements
Schedule 4.11(a)   Plans and Multiemployer Plans
Schedule 4.12(b)   Hazardous Material Activity
Schedule 4.12(c)   Environmental Claims
Schedule 4.15      Indebtedness
Schedule 4.20      Gate Leases
Schedule 4.22      Deposit Accounts and Securities Accounts
Schedule 5.13      Account Control Agreements
Schedule 6.1(a)    Permitted Liens
Schedule 6.1(b)    Permitted Payment Restrictions
Schedule 6.6       Sale-Leasebacks
Schedule 6.7(b)    Transactions with Affiliates

Exhibits
Exhibit A     Form of Assignment and Acceptance
Exhibit B-1   Form of Tranche A Note
Exhibit B-2   Form of Tranche B Note
Exhibit C     Form of Amended and Restated First Lien Aircraft Mortgage and
              Security Agreement for Borrower
Exhibit D     Form of Amended and Restated First Lien Aircraft Mortgage and
              Security Agreement for Piedmont
Exhibit E     Form of Amended and Restated First Lien Slot Security Agreement
Exhibit F     Form of Amended and Restated First Lien Security Agreement
Exhibit G     Form of Amended and Restated First Lien Intellectual Property
              Security Agreement
Exhibit H     Form of Amended and Restated First Lien Leasehold Mortgage,
              Security Agreement, Assignment of Rents and Leases and Fixture
              Filing (Pennsylvania)
Exhibit I     Form of Collateral Value Certificate
Exhibit J     Form of First Lien Guaranty
Exhibit K     [Reserved]
Exhibit L     Form of Summary Report of Slot Utilization
Exhibit M     Form of Subsidiary Joinder
Exhibit N     Investment Guidelines


                                      -iv-



          AMENDED AND RESTATED LOAN AGREEMENT, dated as of September 27, 2005,
among US AIRWAYS, INC., a Delaware corporation (the "Borrower"), US AIRWAYS
GROUP, INC., a Delaware corporation ("Group"), the direct and indirect
Subsidiaries of Group parties hereto from time to time, the several banks and
other financial institutions or entities from time to time parties to this
Agreement as Lenders, CITIBANK, N.A., as agent for the Lenders (in such
capacity, together with its successors and permitted assigns, the "Agent"),
CITICORP NORTH AMERICA, INC., as Govco Administrative Agent (in such capacity,
together with its successors and permitted assigns, the "Govco Administrative
Agent"), WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Collateral
Agent (in such capacity, together with its successors and permitted assigns, the
"Collateral Agent") and AIR TRANSPORTATION STABILIZATION BOARD, created pursuant
to Section 102 of the Act referred to below (the "Board").

                                   WITNESSETH:

          WHEREAS, the Borrower, Group, the Subsidiaries of Group referred to
therein, the Board, the lenders and agents referred to therein and Phoenix
American Financial Services Inc., as Loan Administrator, are parties to that
certain Loan Agreement dated as of March 31, 2003 (as amended, supplemented or
otherwise modified through the date hereof, the "Original Loan Agreement")
pursuant to which the lenders thereunder made a single term loan to the Borrower
in the amount of $1,000,000,000;

          WHEREAS, on September 12, 2004, the Borrower, Group and certain of
their affiliates (the "Debtors") filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
Eastern District of Virginia, Alexandria Division (the "Bankruptcy Court"),
jointly administered Case No. 04-13819 (the "Bankruptcy Case");

          WHEREAS, the Plan of Reorganization (as defined below) in the
Bankruptcy Case contemplates, among other things, (i) the merger (the "Merger")
of Barbell Acquisition Corp., a Delaware corporation and wholly owned Subsidiary
of Group ("Merger Sub"), with and into America West Holdings Corporation, a
Delaware corporation ("AWA Holdings"), pursuant to that certain Agreement and
Plan of Merger dated as of May 19, 2005 (the "Merger Agreement") among Group,
AWA Holdings and Merger Sub, and (ii) the reinstatement of the Loan upon the
terms and conditions set forth herein;

          WHEREAS, the Borrower has requested that the Board and the Lenders
consent to the Merger and the transactions contemplated by the Plan of
Reorganization, and, in connection therewith, amend and restate the Original
Loan Agreement as provided herein; and

          WHEREAS, the Board and the Lenders are willing to consent to the
Merger and the transactions contemplated by the Plan of Reorganization and amend
and restate the Original Loan Agreement upon the terms and subject to the
conditions set forth herein.

          NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree to amend and
restate the Original Loan Agreement as follows:



                                    ARTICLE I

                DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

          SECTION 1.1. DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

          "Act" means the Air Transportation Safety and System Stabilization
Act, P.L. 107-42, as the same may be amended from time to time.

          "Adjusted Cash Amount" has the meaning specified in Section 6.4(a).

          "Adjusted Excess Cash Flow" means, for any period, (i) Excess Cash
Flow of Group for such period, minus (ii) the sum of (A) 25% of such Excess Cash
Flow, and (B) 100% of the aggregate amount of prepayments of the Loan previously
made pursuant to Section 5.8(d) during such period.

          "Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

          "Affiliate Transaction" has the meaning specified in Section 6.7(a).

          "After-Acquired Section 1110 Equipment" means Section 1110 Equipment
acquired by an Obligor after the Effective Date.

          "Agent" has the meaning specified in the preamble to this Agreement.

          "Aggregate Amounts Due" has the meaning specified in Section 9.6.

          "Agreement" means this Amended and Restated Loan Agreement.

          "Airbus Financing Letter Agreement" means the A350/A330 Financing
Letter Agreement, dated as of September 27, 2005, among Borrower, AWA, Group,
and AVSA, S.A.R.L., or any financing pursuant thereto, as amended, restated,
supplemented or modified.

          "Airbus Financings" means the Airbus Loan Agreements and the Airbus
Financing Letter Agreement.

          "Airbus Loan Agreements" means the $161,000,000 Loan Agreement and the
$89,000,000 Loan Agreement, each dated as of September 27, 2005, among the
Borrower, AWA, Group, Airbus Financial Services, individually and as loan agent,
and Wells Fargo Bank Northwest, National Association, as collateral agent, each
as amended, restated, supplemented or modified.

          "Aircraft Related Equipment" means each Obligor's aircraft fleet
(including engines, airframes, propellers and appliances), spare aircraft
engines and propellers, spare parts, aircraft parts, simulators and other
training devices, passenger loading bridges or other flight or ground equipment
and Aircraft Related Facilities.


                                        2



          "Aircraft Related Facilities" means (i) airport terminal facilities,
including without limitation, baggage systems, loading bridges and related
equipment, building, infrastructure and maintenance, club rooms, apron, fueling
systems or facilities, signage/image systems, administrative offices,
information technology systems and security systems, (ii) airline support
facilities, including without limitation, cargo, catering, mail, ground service
equipment, ramp control, deicing, hangars, aircraft parts/storage, training and
reservations facilities and (iii) all equipment used in connection with the
foregoing.

          "Alternate Tranche A Lender" means Citibank, N.A, and each permitted
assignee thereof in accordance with Section 9.2.

          "ALPA Letter Agreement" means the Letter Agreement, dated September
14, 2005, among Group, AWA Holdings and the Airline Pilots Association.

          "Appraisal Report" means, with respect to each category of Appraised
Collateral, a desktop appraisal (or, if applicable, pursuant to Section 5.8(c),
a physical inspection report) in form and substance reasonably satisfactory to
the Controlling Creditor and prepared by an Appraiser, which certifies, at the
time of determination, the current market value and the liquidation value of the
assets subject to such appraisal; provided that with respect to aircraft,
engines, spare engines, spare parts and flight simulators, the terms "current
market value" and "liquidation value" shall be as defined by the International
Society of Transport Aircraft Trading if applicable to the particular
Collateral; provided, further, that except as otherwise agreed to by the
Controlling Creditor, each Appraisal Report obtained subsequent to the
preparation of the Baseline Appraisal with respect to each category of Appraised
Collateral shall be (A) prepared by the same Appraiser used in the Baseline
Appraisal for such category of Appraised Collateral, unless such Appraiser is no
longer providing appraisals for such type of property or the Borrower, the Agent
and the Board (so long as the Board is either a guarantor of Tranche A or a
Lender hereunder) agree that good cause exists to change Appraisers and (B) in
any event, based on the same methodologies and assumptions (including, without
limitation, the time period for the disposition of such Appraised Collateral and
the market conditions perceived to exist at the time) used in the Baseline
Appraisal for such category of Appraised Collateral.

          "Appraised Collateral" means (i) all aircraft, spare engines, flight
simulators, ground service equipment, passenger loading bridges and spare parts
that are part of the Collateral, (ii) Slots and Gate Leases that are part of the
Collateral, (iii) each item of Pledged Real Property that is the subject of a
Mortgage, and (iv) such other Aircraft Related Equipment that is part of the
Collateral and for which the Obligors elect to obtain Appraisal Reports.

          "Appraised Value" means, with respect to any item of Collateral, the
liquidation value of such Collateral as reflected in the most recent Appraisal
Report obtained in respect of such Collateral in accordance with this Agreement.

          "Appraiser" means BACK Aviation Solutions, AVITAS, Inc. or Simat
Helliesen & Eichner, Inc. or any other firm of nationally recognized,
independent appraisers as may be agreed by the Borrower and the Controlling
Creditor.

          "Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation, exchange of assets or sale-leaseback
transactions) by an Obligor to any Person other than another Obligor of (i) all
or any of the Capital Stock of any Obligor other than Group or (ii) any other
property or assets of an Obligor (including spare parts); provided that the term
"Asset Sale" shall not include (a) any sale or disposition of spare parts,
inventory (including available seat miles and frequent flier miles (including
dividend and flightfund miles)), receivables and other current assets, in each
case in


                                        3



the ordinary course of business; provided that with respect to a sale or
disposition of spare parts, the aggregate Appraised Value of the remaining spare
parts which would be counted in the computation of Collateral Value as of such
date is not less than 75% of the Appraised Value of the spare parts set forth in
the Baseline Appraisal; (b) any licensing or sublicensing of intellectual
property in the ordinary course of business of the Obligors; (c) any leasing or
subleasing of property in the ordinary course of business; (d) a sale, transfer
or other disposition resulting from a casualty or a condemnation by a
Governmental Authority; (e) any sale or disposition (in a single transaction or
related series of transactions) of obsolete or worn out property (other than
spare parts) in the ordinary course of business that generate(s) consideration
to the Obligors of $100,000 or less; (f) the contemporaneous exchange, in the
ordinary course of business, of property for property of a like kind; (g) any
disposition of property which is not Collateral in connection with the making of
an Investment permitted under Section 6.2; or (h) a sale or disposition of cash
or Cash Equivalents.

          "Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Lender, consented to by the Board and the
Borrower (if applicable) and accepted by the Agent (unless consummated pursuant
to Section 9.2(d)), in substantially the form of Exhibit A.

          "AWA" means America West Airlines, Inc., a Delaware corporation.

          "AWA Holdings" has the meaning specified in the recitals to this
Agreement.

          "AWA Loan" means the "Loan" under and as defined in the AWA Loan
Agreement.

          "AWA Loan Agreement" means that certain Amended and Restated Loan
Agreement dated as of the date hereof among AWA, as borrower thereunder, Group,
the other direct and indirect Subsidiaries of Group parties thereto, Citibank,
N.A., in its capacity as lender thereunder, Citibank, N.A., in its capacity as
agent thereunder, Wilmington Trust Company, in its capacity as collateral agent
thereunder, and the Board.

          "AWA Loan Prepayment Account" means the "Prepayment Account" under and
as defined in the AWA Loan Agreement.

          "Bankruptcy Case" has the meaning specified in the recitals to this
Agreement.

          "Bankruptcy Code" means Title 11 of the United States Code as now and
hereafter in effect, or any successor statute.

          "Bankruptcy Court" has the meaning specified in the recitals to this
Agreement.

          "Base Rate Loan" means a Loan that bears interest based on a
fluctuating rate per annum for any day equal to the sum of (a) the higher of (i)
the Federal Funds Rate plus 1/2 of 1% and (ii) the rate of interest in effect
for such day as publicly announced from time to time by Citibank, N.A. (or any
successor thereto) as its "prime rate" plus (b) 3.00%. For purposes of this
definition, "Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Citibank, N.A. on
such day on such transactions as determined by the Agent.


                                        4



Furthermore, the "prime rate" is a rate set by Citibank, N.A. based upon various
factors including its costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in such prime
rate announced by Citibank, N.A. shall take effect at the opening of business on
the day specified in the public announcement of such change.

          "Baseline Appraisal" means, as to each category of Appraised
Collateral, the first Appraisal Report with respect to such category of
Appraised Collateral obtained by the Obligors after the Effective Date pursuant
to Section 5.8(c).

          "Board" has the meaning specified in the preamble to this Agreement,
and any successor approved by or established in accordance with the Act.

          "Board Guaranty" means the Second Amended and Restated Guarantee
Agreement dated as of the date hereof and executed by the Board, the Lenders
referred to therein and the Agent.

          "Borrower" has the meaning specified in the preamble to this
Agreement.

          "Business Day" means a day of the year on which banks are not required
or authorized to close in New York, New York, Charlotte, North Carolina or
Phoenix, Arizona and, if the applicable Business Day relates to notices,
determinations, fundings and payments in connection with LIBOR, a day on which
dealings in Dollar deposits are also carried on in the London interbank market.

          "Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person, and the amount of Indebtedness represented by such
lease shall be the capitalized amount of the obligations evidenced thereby
determined in accordance with GAAP.

          "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock, or corresponding equity
rights in any partnership, limited liability company or other entity, whether
now outstanding or issued after the date of this Agreement, including, without
limitation, all Common Stock.

          "Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States government or (b) issued by any
agency or instrumentality of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case maturing
within one year after such date; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any instrumentality thereof, in each case maturing within one year
after such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either S&P or Moody's; (iii) commercial paper not issued
by the Borrower maturing no more than one year after such date and having, at
the time of the acquisition thereof, a rating of at least A-2 from S&P or at
least P-2 from Moody's; (iv) certificates of deposit or bankers' acceptances
maturing within one year after such date and issued or accepted by any Lender or
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $500,000,000; (v) shares of any money market mutual fund that
(a) has at least 95% of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and


                                        5



(c) has the highest rating obtainable from either S&P or Moody's; and (vi)
investments made pursuant to the Investment Guidelines, so long as an amount
equal to 100% of the Minimum Adjusted Cash Amount required to be maintained at
such time pursuant to Section 6.4(a) is maintained in cash and/or investments
covered in clauses (i) through (v) above.

          "Cash Proceeds" means, (a) with respect to any Asset Sale, the cash or
Cash Equivalents proceeds of such Asset Sale, including payments of deferred
payment obligations (to the extent corresponding to the principal, but not the
interest component thereof) when received in the form of cash or Cash
Equivalents and proceeds from the conversion of other property received when
converted to cash or Cash Equivalents, and (b) with respect to any Future
Issuance, the cash proceeds of such Future Issuance.

          "CFC" means a "controlled foreign corporation" under Section 957 of
the Internal Revenue Code.

          "Change of Control" means (i) the acquisition at any time by any
Person of "beneficial ownership" (within the meaning of Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder ("Section
13(d)")) in excess of 35% of the total voting power of the Voting Stock of
Borrower, AWA, AWA Holdings or Group; (ii) the sale, lease, transfer or other
disposition, of all or substantially all of the assets of the Borrower, AWA, AWA
Holdings or Group to any Person as an entirety or substantially as an entirety
in one transaction or a series of related transactions; (iii) the merger or
consolidation of the Borrower, AWA, AWA Holdings or Group, with or into another
corporation, or the merger of another corporation into the Borrower, AWA, AWA
Holdings or Group, or any other transaction, with the effect that a Person
acquires as a result of such transaction "beneficial ownership" in excess of 35%
of the total voting power of the Voting Stock of the Borrower, AWA, AWA Holdings
or Group, or (if the Borrower, AWA, AWA Holdings or Group is not the surviving
corporation in such transaction) such other corporation (including, in any such
case, indirect ownership through another Person); (iv) the liquidation or
dissolution of the Borrower, AWA or Group, other than a liquidation or
dissolution in which another Obligor acquires all of the assets of the
liquidating entity; or (v) if a majority of the board of directors of Group
shall no longer be composed of individuals (a) who were members of said board on
the Effective Date (after giving effect to the Consummation of the Plan), (b)
whose election or nomination to said board was approved by individuals referred
to in clause (a) above constituting at the time of such election or nomination
at least a majority of said board, (c) whose election or nomination to said
board was approved by individuals referred to in clauses (a) and (b) above
constituting at the time of such election or nomination at least a majority of
said board or (d) in the case of individuals nominated by the investors under
the Equity Investment Agreements, who were nominated or proposed by such
investors; provided, however, that notwithstanding the provisions of clauses (i)
through (v) above, none of (A) the Merger, (B) the Consummation of the Plan and
the implementation of the transactions contemplated thereby, or (C) entry by the
Obligors into any contract or arrangement that provides for or is conditioned
upon payment in full in cash of all Obligations shall constitute a "Change of
Control" hereunder. For purposes of this definition, the term Person includes a
"person" or "group" within the meaning of Rule 13d-3 under the Exchange Act but
does not include any other Obligor.

          "Collateral" means all of the properties and assets that are (or are
purported to be) from time to time subject to the Liens granted to the
Collateral Agent pursuant to the Collateral Documents as security for the
Obligations but not including Excluded Property.

          "Collateral Agent" has the meaning set forth in the preamble to this
Agreement.

          "Collateral Documents" means, collectively, (i) that certain Amended
and Restated First Lien Aircraft Mortgage and Security Agreement, dated as of
the date hereof, between the Borrower and


                                        6



the Collateral Agent, in substantially the form of Exhibit C (the "Borrower
Aircraft Mortgage"); (ii) that certain Amended and Restated First Lien Aircraft
Mortgage and Security Agreement, dated as of the date hereof, between Piedmont
and the Collateral Agent, in substantially the form of Exhibit D (the "Piedmont
Aircraft Mortgage," and together with the Borrower Aircraft Mortgage, the
"Aircraft Mortgages"); (iii) that certain Amended and Restated First Lien Slot
Security Agreement, dated as of the date hereof, among the Borrower, AWA,
Piedmont, PSA Airlines, Inc. and the Collateral Agent, in substantially the form
of Exhibit E (the "Slot Security Agreement"); (iv) that certain Amended and
Restated First Lien Security Agreement, dated as of the date hereof, among the
Obligors and the Collateral Agent, in substantially the form of Exhibit F (the
"Security Agreement"); (v) that certain Amended and Restated First Lien
Intellectual Property Security Agreement, dated as of the date hereof, among the
Obligors party thereto and the Collateral Agent, in substantially the form of
Exhibit G (the "Intellectual Property Security Agreement"); (vi) the Amended and
Restated First Lien Leasehold Mortgage, Security Agreement, Assignment of Rents
and Leases and Fixture Filing (Pennsylvania) dated as of the date hereof, by the
Borrower for the benefit of the Collateral Agent, in substantially the form of
Exhibit H (the "Mortgage"); (vii) the Intercreditor Agreement; (viii) each other
certificate, agreement or document executed and delivered by any Obligor
pursuant to any of the foregoing agreements, including any Control Agreement,
certificate, agreement or document delivered pursuant hereto or to the terms of
Section 5.8; and (ix) any consents of lessors of any of the Collateral to the
pledge of such Collateral pursuant to the agreements or documents listed in (i)
through (vi) above.

          "Collateral Document Supplement" means a supplement to a Collateral
Document that subjects additional Collateral to the Lien granted by such
Collateral Document.

          "Collateral Release Value" means, for each item of Collateral with
respect to which the Lien of the Collateral Agent is being released (or
subordinated) in connection with a Replacement Secured Financing, an amount
equal to (a) with respect to (i) Slots or (ii) rotable, repairable and
expendable spare parts, 100% of the dollar amount therefor set forth on Schedule
2.5(b) (which amount, for the avoidance of doubt, shall not be pro rated for a
Replacement Secured Financing with respect to less than all of the Obligors'
Slots or spare parts), and (b) with respect to aircraft and spare engines, the
product of (i) the Appraised Value of such Collateral (based on an Appraisal
Report obtained within sixty (60) days of the date of such transaction and
otherwise satisfactory to the Controlling Creditor) and (ii) the prepayment
percentage for such item or type of Collateral which is set forth on Schedule
2.5(b).

          "Collateral Value" means, as of any date of determination, the sum of:
(a) the Appraised Value of all Appraised Collateral, as stated in the then most
current Appraisal Report(s) therefor and (b) 85% of the Eligible Accounts as of
such date; provided that none of the following assets shall be included in the
computation of Collateral Value (collectively, the "Ineligible Assets"): (A)
property or assets not subject to a first-priority perfected Lien in favor of
the Collateral Agent (subject to Permitted Encumbrances), including, without
limitation, any property or assets that may no longer be owned by an Obligor as
a result of an Asset Sale or otherwise; (B) After-Acquired Section 1110
Equipment; and (C) property or assets subject to any event of loss, damage or
other casualty that has materially and adversely affected the value of such
Collateral, whether insured or not, and in the event that any Ineligible Assets
are excluded from the computation of the Collateral Value based on this proviso,
the Collateral Value computed in accordance with the foregoing method shall be
adjusted to exclude such Ineligible Assets.

          "Collateral Value Certificate" means a certificate executed by a
Responsible Officer of the Borrower in substantially the form of Exhibit I
annexed hereto (provided that such certificate may be incorporated into a
certificate contemporaneously delivered pursuant to clause (iv) of Section
5.1(b)).


                                        7



          "Collateral Value Deficiency" means, as of any date of determination,
the positive amount, if any, equal to the difference of (i) 135% of (x) the sum
of the aggregate outstanding amount of principal of and accrued interest on the
Loan on such date plus the aggregate outstanding amount of principal of and
accrued interest on the AWA Loan on such date less (y) the Minimum Adjusted Cash
Amount required to be maintained by the Obligors on such date minus (ii) the
Collateral Value as of such date.

          "Collateral Value Test Date" has the meaning specified in Section
5.8(d).

          "Commercial Paper" has the meaning set forth in the definition of
"Tranche A Applicable Interest Rate."

          "Commodity Agreement" means any agreement or arrangement the value of
which fluctuates based on the value of a commodity.

          "Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Agreement, including, without limitation, all
series and classes of such common stock.

          "Confirmation Order" means the order of the Bankruptcy Court, dated
September 16, 2005, confirming the Plan of Reorganization pursuant to Section
1129 of the Bankruptcy Code.

          "Consolidated EBITDAR" means, with respect to any Person, for any
period, the sum of (i) the operating income of such Person for such period, (ii)
rental expenses of such Person for such period under aircraft Operating Leases
and (iii) depreciation and amortization and stock compensation expenses and
extraordinary charges and non-cash unusual items of such Person that were
recognized in arriving at the amount of such operating income for such period,
all as determined on a consolidated basis in accordance with GAAP.

          "Consolidated Fixed Charges" means, with respect to any Person, for
any period, the sum of (a) the aggregate gross interest expense relating to
Indebtedness of such Person for such period (calculated without regard to any
limitations on the payment thereof), including the corresponding amounts for
such period under Capital Lease obligations and Synthetic Lease obligations of
such Person (and including, for the avoidance of doubt, the Guarantee Fee
hereunder and the "Guarantee Fee" under and as defined in the AWA Loan Agreement
payable for such period), (b) the aggregate rental expenses of such Person for
such period under aircraft Operating Leases, and (c) dividends or any other
payments or distributions in respect of any class of Capital Stock of such
Person, including in connection with any redemption, purchase, retirement or
other acquisition, directly or indirectly of any such class of Capital Stock,
paid or payable during such period (but only to the extent payment thereof is
permitted under this Agreement), all determined on a consolidated basis.

          "Consummation of the Plan" means substantial consummation of the Plan
of Reorganization within the meaning of Section 1101(2) of the Bankruptcy Code.

          "Contractual Obligation" means, as applied to any Person, any
provision of any equity security issued by that Person or of any indenture,
mortgage, deed of trust, contract, lease, license, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.

          "Control Agreement" has the meaning specified in Section 5.13 hereof.


                                        8



          "Controlling Creditor" means, as of any date, (a) the Board, so long
as (i) the Board Guaranty is in full force and effect as of such date and has
not been terminated without payment having been made thereunder and (ii) the
outstanding amount of Tranche A guaranteed under the Board Guaranty as of such
date represents a majority of the principal amount of the Loan then outstanding,
and (b) at all other times, the Requisite Lenders.

          "Convertible Note Offering" means the offering of $125,000,000 of US
Airways Group, Inc. Senior Convertible Notes as described in the Confidential
Offering Memorandum dated September 20, 2005, together with the offering of such
principal amount of such notes pursuant to any overallotment option granted to
the initial purchasers thereof in connection therewith.

          "Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement.

          "DCA" means Ronald Reagan Washington National Airport.

          "Debtors" has the meaning specified in the recitals to this Agreement.

          "Default" means any condition or event which with the required passing
of time or the giving of any required notice or both would, unless cured or
waived, become an Event of Default.

          "Designated Asset Sale" means an Asset Sale with respect to an asset
identified on Schedule 2.5(d), whether consummated prior to, on or after the
Effective Date. Schedule 2.5(d) sets forth the amount of Net Cash Proceeds
received by the Obligors with respect to any Designated Asset Sales consummated
prior to the Effective Date.

          "Disclosure Statement" means the Disclosure Statement with respect to
the Plan of Reorganization of US Airways Group, Inc. and its Affiliated Debtors
and Debtors-in-Possession pursuant to Section 1125 of the Bankruptcy Code which
was approved by the Bankruptcy Court on August 9, 2005, together with any
amendments, supplements or modifications thereto that have been approved by the
Bankruptcy Court prior to the Effective Date.

          "Dollars" and the sign "$" each mean the lawful money of the United
States of America.

          "Effective Date" has the meaning specified in Article III hereof.

          "Eligible Accounts" means, as of any date of determination, accounts
receivable shown on the consolidated balance sheet of Group as of the end of the
then most recently ended fiscal quarter, net of, without duplication, all
reserves against such accounts receivables and all accounts receivables owed by
another Obligor, provided that:

          (a) such accounts receivable arise out of sales of goods or rendering
     of services in the ordinary course of the relevant Obligor's business;

          (b) such accounts receivable are payable in Dollars and are otherwise
     on terms normal and customary in the relevant Obligor's business;

          (c) such accounts receivable are not more than 90 days past original
     invoice date or more than 60 days past the date due;


                                        9



          (d) such accounts receivable are not owing from any Person from which
     an aggregate amount of more than 20% of the accounts receivable owing
     therefrom is more than 60 days past the date due;

          (e) such accounts receivable are not owing from any Person that (i)
     has disputed liability for any account receivable owing from such Person
     (but only to the extent of such dispute) or (ii) has otherwise asserted any
     claim, demand or liability against any Obligor, whether by action, suit,
     counterclaim or otherwise (but only to the extent of such claim, demand or
     liability);

          (f) such accounts receivable are not owing from any Person that has
     taken or is the subject of any action or proceeding under any bankruptcy,
     insolvency or similar law;

          (g) such accounts receivable (i) are not owing from any Person that is
     also a supplier to, or creditor of, any Obligor, is a credit card
     processor, travel agent or marketing partner of any Obligor, or to whom any
     Obligor is otherwise indebted, and (ii) do not represent any manufacturer's
     or supplier's credits, discounts, incentive plans or similar arrangements
     entitling any Obligor to discounts on future purchase therefrom;

          (h) such accounts receivable do not arise out of sales to account
     debtors outside the United States or Canada;

          (i) such accounts receivable do not arise out of sales on a
     bill-and-hold, guaranteed sale, sale-or-return, sale on approval or
     consignment basis or subject to any right of return, setoff or chargeback
     (including, without limitation, accounts receivables for unutilized
     tickets);

          (j) such accounts receivable are not owing from an account debtor that
     is an agency, department or instrumentality of the United States or any
     state thereof; and

          (k) such accounts receivables arise out of sales for which the account
     debtors' obligations to pay are not conditioned upon any Obligor's
     completion of any further performance or as to which the goods or services
     giving rise thereto have been delivered or performed by the Obligors, and
     if applicable, have been accepted by the account debtors, and the account
     debtors have not revoked their acceptance.

          "Eligible Collateral" means property and assets of the Obligors other
than Excluded Property.

          "Eligible Lender" means a "lender" as defined in the Act.

          "Environmental Claim" means any investigation, notice, claim, suit,
proceeding, demand or order, by any Governmental Authority or any Person arising
in connection with any alleged or actual violation of Environmental Laws or with
any Hazardous Materials Activity, or any actual or alleged damage, or harm to
health, safety, property or the environment.

          "Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents,
judgments, governmental authorizations, or any other requirement of Governmental
Authorities relating to (a) the prevention or control of pollution or protection
of the environment, (b) solid, gaseous or liquid waste generation, handling,
treatment, storage, disposal, discharge, Release, emission or transportation, or
(c) exposure to Hazardous Materials. "Environmental Laws" shall include, but not
be limited to, the Comprehensive Environmental Response,


                                       10



Compensation and Liability Act (42 U.S.C. 9601 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. 6901 et seq.), the National
Environmental Policy Act (42 U.S.C. 4321 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. 1801 et seq.), the Toxic Substances Control Act
(49 U.S.C. 2601 et seq.), the Clean Air Act (42 U.S.C. 7401 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), the Safe Drinking
Water Act (42 U.S.C. 3007 et seq.), the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. 11001 et seq.), the Occupational Safety and Health
Act (29 U.S.C. 641 et seq.), and the State of Arizona Environmental Quality Act
(A.R.S. 49-101 et seq.).

          "Equity Investment Agreements" means (i) the Investment Agreement,
dated as of May 19, 2005, by and among Peninsula Investment Partners, L.P.,
Group and AWA Holdings, (ii) the Investment Agreement, dated as of May 19, 2005,
by and among ACE Aviation Holdings, Inc., Group and AWA Holdings, (iii) the
Investment Agreement, dated as of May 19, 2005, by and among Par Investment
Partners, L.P., Group and AWA Holdings, (iv) the Investment Agreement, dated as
of May 19, 2005, by and among Eastshore Aviation, LLC, Group and AWA Holdings,
(v) the Investment Agreement, dated May 27, 2005, by and among Wellington
Investment Management Company, LLP, Group and AWA Holdings, and (vi) the
Investment Agreement, dated as of July 7, 2005, by and among Tudor Proprietary
Trading, L.L.C., certain investors listed on Schedule 1 thereto, Group and AWA
Holdings, in each case as amended, restated, supplemented or otherwise modified
through the date hereof.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.

          "ERISA Affiliate" means, as applied to Group, (i) any corporation
which is, or (other than for purposes of the first sentence of each of Section
4.11(a) and Section 5.1(b)(viii)) was at any time in the preceding six (6)
years, a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which Group is a member; (ii) any
trade or business (whether or not incorporated) which is a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which Group is a member; and (iii) any member of
an affiliated service group within the meaning of Section 414(m) or (o) of the
Internal Revenue Code of which Group, any corporation described in clause (i)
above or any trade or business described in clause (ii) above is a member.

          "ERISA Event" means (a) any "reportable event," as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which reporting is waived); (b) the existence with respect to
any Plan of an "accumulated funding deficiency" (as defined in Section 412 of
the Internal Revenue Code or Section 302 of ERISA); (c) the filing pursuant to
Section 412(d) of the Internal Revenue Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by Group or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e)(i) the receipt by Group or any ERISA Affiliate from the PBGC of a notice of
determination that PBGC intends to seek termination of any Plan or to have a
trustee appointed for any Plan, or (ii) the filing by Group or any ERISA
Affiliate of a notice of intent to terminate any Plan; (f) the incurrence by
Group or any of its ERISA Affiliates of any liability (i) with respect to the
withdrawal from a Multiemployer Plan pursuant to Sections 4063 and 4064 of
ERISA, (ii) with respect to a facility closing pursuant to Section 4062(e) of
ERISA, or (iii) with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; or (g) the receipt by Group or any ERISA Affiliate of any
notice concerning the imposition of Withdrawal Liability or a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

          "Event of Default" has the meaning specified in Section 7.1.


                                       11



          "Excess Cash Flow" means, for any period, (i) Consolidated EBITDAR of
Group for such period, minus (plus) (ii) any increase (decrease) in Working
Capital of Group from the first day of such period to the last day of such
period (as adjusted for fresh start accounting as of the first day of such
period), minus (iii) the sum of (A) payments by the Obligors of principal and
interest with respect to the consolidated Indebtedness of Group (but excluding
Indebtedness that is solely the obligation of any Subsidiary that is not an
Obligor) during such period, to the extent such payments are not prohibited
under this Agreement, (B) income taxes paid during such period, (C) aircraft
rentals paid during such period under Operating Leases, (D) cash used during
such period for capital expenditures, (E) deposit and pre-delivery payments made
in respect of Aircraft Related Equipment, and (F) an amount equal to pension or
FASB 106 payments made in excess, if any, of pension or FASB 106 expenses, plus
(iii) an amount equal to the excess of pension or FASB 106 expense in excess, if
any, of pension or FASB 106 payments.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

          "Excluded Cash" means cash and Cash Equivalents maintained in accounts
that are not subject to Control Agreements to the extent that such accounts are
any of the following:

          (i) subject to Liens arising or granted in the ordinary course of
     business in favor of Persons performing credit card processing services,
     travel charge processing services or clearinghouse services for any
     Obligor, including IATA, Diners Club, Discover Card, NPC, ARC and American
     Express, so long as such Liens are on cash and Cash Equivalents that are
     subject to holdbacks by, or are pledged (in lieu of such holdbacks) to,
     such Persons to secure amounts that may be owed to such Persons under the
     Obligors' agreements with them in connection with their provision of credit
     card processing, travel charge processing or clearinghouse services to the
     Obligors; being Liens of the type described in clause (iii)(B) of the
     definition of "Permitted Encumbrances";

          (ii) subject to Liens in favor of customs and revenue authorities
     arising as a matter of law to secure payment of customs duties in
     connection with the importation of goods in the ordinary course of
     business; being Liens of the type described in clause (v) of the definition
     of "Permitted Encumbrances";

          (iii) subject to Liens incurred or deposits made in each case required
     under or in connection with the Trust Agreements (not including the
     Obligors' residuary interest in, claims to or refunds of any such trust
     funds); being Liens of the type described in clause (ix) of the definition
     of "Permitted Encumbrances";

          (iv) subject to Liens securing reimbursement obligations in respect of
     letters of credit issued for the account of any Obligor in the ordinary
     course of business and consistent with past practice, so long as the
     aggregate amount of such cash and Cash Equivalents does not exceed 115% of
     the maximum available amount under the secured letters of credit; being
     Liens of the type described in Section 6.1(a)(viii)(A);

          (v) subject to Liens securing reimbursement or other margin
     requirements in connection with, in the case of Liens contemplated in this
     clause (v), (x) transactions designed to hedge against fluctuations in fuel
     costs, entered into in the ordinary course of business, consistent with
     past business practice or then current industry practice, and not entered
     into for speculative purposes, (y) transactions designed to hedge interest
     rates entered into with respect to notional amounts not to exceed actual or
     anticipated Indebtedness, not entered into for speculative


                                       12



     purposes and (z) transactions designed to hedge against risks associated
     with fluctuations in currencies entered into in the ordinary course of
     business; being Liens of the type described in Section 6.1(a)(viii)(B);

          (vi) subject to Liens securing prepaid fuel and healthcare expenses in
     the ordinary course of business and consistent with past practice; being
     Liens of the type described in Section 6.1(a)(viii)(C);

          (vii) subject to Liens incurred or deposits (other than with respect
     to the Plans described in Section 4.11) made in the ordinary course of
     business in connection with workers' compensation, unemployment insurance
     and other types of social security, or to secure the performance of
     tenders, statutory obligations, surety and appeal bonds, bids, leases,
     government contracts, trade contracts, performance and return-of-money
     bonds, reimbursement obligations and chargeback rights of Persons
     performing services for an Obligor (including Liens securing Trade Payables
     arising from the Obligors' use in the ordinary course of business,
     consistent with past practice, of credit advance facilities to purchase
     goods and services) and other similar obligations (exclusive of obligations
     for the payment of borrowed money); being Liens of the type described in
     clause (iii)(A) of the definition of "Permitted Encumbrances";

          (viii) referred to in any of clauses (i) through (iii) of Section
     5.13; or

          (ix) the AWA Loan Prepayment Account.

For the avoidance of doubt, all amounts on deposit in deposit accounts and
securities accounts not subject to Control Agreements or otherwise pledged to
the Collateral Agent in reliance on Section 5.13 hereof shall constitute
Excluded Cash.

          "Excluded Property" means (i)(A) any lease or other written agreement
under which an Obligor leases real property (other than Gate Leases) and (1)
that requires such Obligor to pay annual rentals of $10,000,000 or more but
where the grant of a Lien in favor of the Collateral Agent would violate such
lease or other written agreement, provided, that if requested by the Controlling
Creditor such Obligor has used commercially reasonable efforts to obtain the
consent of the lessor to the grant of a Lien on such lease or other agreement in
favor of the Collateral Agent, (2) that requires such Obligor to pay annual
rentals of less than $10,000,000, or (3) that the Controlling Creditor has
agreed in writing in its or their sole discretion is not material or (B) Gate
Leases, other than (upon receipt of consent of the respective lessors thereof)
the Gate Leases at LGA and DCA; (ii) any property which is subject to a Lien of
the type described in Section 6.1(a)(ii), (iii), (iv), (vi), (x) or (xii) but
only while subject to such Lien; (iii) any After-Acquired Section 1110 Equipment
which the Obligors have owned for a period of less than fifteen (15) days; (iv)
any right in any agreement (A) the grant of a security interest in which would
violate the agreement under which such right arises except to the extent
provided under Sections 9-406 and 9-407 of the UCC of the State of New York, if
such Obligor has failed to obtain a waiver or other relief from such provision,
but provided that such Obligor has, if requested by the Controlling Creditor,
used commercially reasonable efforts (without obligation to incur more than
immaterial costs or expenses in connection with such commercially reasonable
efforts) to obtain such waiver or other relief or (B) to the extent that the
pledge or assignment of such agreement requires the consent of any third party,
unless such third party has consented thereto, except to the extent provided
under Sections 9-406 and 9-407 of the UCC of the State of New York, so long as
such Obligor has, if requested by the Controlling Creditor, used commercially
reasonable efforts (without obligation to incur more than immaterial costs or
expenses in connection with such commercially reasonable efforts) to obtain such
consent; (v) Excluded Cash; (vi) 100% of the Capital Stock of Excluded
Subsidiaries, 35% of the voting Capital Stock of Subsidiaries of the Obligors
that are CFCs, and all beneficiary interests of third parties in the trusts
created by or


                                       13



pursuant to the Trust Agreements (which does not include the Obligors' residuary
interest in, claims to or refunds of any trust funds in respect of such trusts);
(vii) assets pledged to secure a Permitted Acquisition Financing; and (viii)
aircraft purchase agreements which by their terms are not assignable; provided
that if an Obligor nonetheless pledges to the Collateral Agent pursuant to
Section 5.8 or otherwise assets that otherwise would constitute Excluded
Property absent this proviso, unless or until the Lien with respect to such
assets is released in accordance with this Agreement and the applicable
Collateral Document, such assets shall constitute Collateral for all purposes
under this Agreement and under the other Loan Documents and shall not be treated
as Excluded Property.

          "Excluded Subsidiaries" means (i) FTCHP LLC, a Delaware limited
liability company, if and for so long as (A) the assets of and ownership
interests in FTCHP LLC are pledged to secure its obligations under that certain
Senior Secured Term Loan Agreement dated as of December 23, 2004 among FTCHP
LLC, AWA, Heritage Bank, SSB, Citibank, N.A. and the other lenders named therein
(and any amendments, restatements, supplements, modifications, refinancings or
replacements thereof) or (B) restrictions contained in its constituent documents
prevent it from becoming an Obligor under the Loan Documents, (ii) Airways
Assurance Limited LLC, (iii) AWHQ LLC and (iv) America West Company Store LLC.

          "Exercising Lender" has the meaning specified in Section 2.2(c).

          "FAA" means the Federal Aviation Administration.

          "Facilities" means any and all real property now, hereafter or
heretofore owned, leased, operated or used by an Obligor.

          "Fair Market Value" means, with respect to any asset subject to an
Asset Sale, the price that could be obtained for such asset by a seller in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer.

          "FASB" means the Financial Accounting Standards Board.

          "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.

          "First Lien Guaranty" means the First Lien Guaranty dated as of the
date hereof made by Group and the Subsidiary Guarantors, in substantially the
form of Exhibit J.

          "Fiscal Year" means Group's fiscal year referenced in the financial
statements to be delivered by Group pursuant to Section 5.1.

          "Fitch" means Fitch, Inc., and any successor thereto that is a
nationally recognized rating agency.

          "Fixed Cash Amount" has the meaning specified in Section 6.4(a)(i).

          "Future Issuance" means, without duplication, each (i) borrowing after
the Effective Date by an Obligor from any source (including in the debt capital
markets or from commercial bank lenders) (other than any other Obligor) of any
Indebtedness of the type described in clauses (i), (ii), (x) or (xii) of the
definition of "Indebtedness" and (ii) issuance after the Effective Date of any
Capital Stock or any warrants, options or other rights to acquire Capital Stock
by any Obligor (other than to another Obligor) or the exercise after the
Effective Date of any warrants, options or other rights to acquire Capital Stock
of


                                       14



any Obligor (other than exercise by another Obligor) other than, in each case,
the issuance of restricted stock or the exercise or issuance of options or
similar rights, in each case as compensation by or to existing or former
officers, directors or employees of an Obligor or cashless exercise of warrants
issued by any Obligor; provided, however, that notwithstanding the provisions of
clauses (i) and (ii) above, no borrowing, issuance of Capital Stock or exercise
or issuance of any warrants, options or other rights to acquire Capital Stock
(including any Capital Stock issued pursuant to the terms of such Capital Stock,
warrants, options or other rights to acquire Capital Stock) in each case,
effected on or around the Effective Date or otherwise in connection with the
Consummation of the Plan shall constitute a "Future Issuance" hereunder
(including, without limitation, the issuance of shares of Common Stock of Group
pursuant to the Stock Offering and the Equity Investment Agreements, the
borrowing pursuant to the Convertible Note Offering or the issuance of options
and warrants pursuant to the ALPA Letter Agreement).

          "GAAP" means, subject to the limitations on the application thereof
set forth in Section 1.3, accounting principles generally accepted in the United
States, as in effect from time to time as set forth in opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of FASB approved
by a significant segment of the accounting profession in the United States,
subject to requirements of applicable law.

          "Gate Leases" means all right, title and interest of each Obligor, now
existing or hereafter acquired, in and to any airport facility use, operation or
occupancy lease, license or other agreement with respect to arrival and
departure gates, aircraft parking spaces, passenger lounges, ticket counters,
terminal common areas, baggage handling areas, carousels and other facilities,
crew briefing areas, club lounges, kiosks, flight simulator buildings and other
related properties and rights with respect to airports at which any Obligor
lands, takes off or otherwise conducts operations or maintains property (not
including Slots).

          "GE 2001 Credit Agreement" means the Credit Agreement, dated as of
November 16, 2001, among Borrower, Group, and General Electric Capital
Corporation, as amended, restated, supplemented or modified, including pursuant
to that certain Credit Agreement Amendment No. 1, dated as of January 30, 2003,
that certain Credit Agreement Amendment No. 2, dated as of March 31, 2003, among
the parties thereto, and that certain Amended and Restated Credit Agreement,
dated as of July 15, 2005 among the Borrower, Group and General Electric Capital
Corporation.

          "GE Engine Financing" means the Loan Agreement [Engines], dated as of
September 3, 2004, among AWA, General Electric Capital Corporation, individually
and as administrative agent, Wells Fargo Bank Northwest, National Association,
as security trustee, and the lenders party thereto, as amended, restated,
supplemented or modified.

          "GE Expendables Mortgage" means the Expendables Mortgage and Security
Agreement dated as of September 27, 2005 between AWA and Wells Fargo Bank
Northwest, National Association, as security trustee, as amended, restated,
supplemented or modified.

          "GE Financings" means the GE Engine Financing and the GE Spare Parts
Financing.

          "GE Merger MOU" means the Master Merger Memorandum of Understanding,
dated as of June 13, 2005, among Group, AWA, the Borrower, AWA Holdings, General
Electric Capital Corporation and General Electric Company.

          "GE Spare Parts Financing" means the Loan Agreement [Spare Parts],
dated as of September 3, 2004, among AWA, General Electric Capital Corporation,
individually and as


                                       15



administrative agent, Wells Fargo Bank Northwest, National Association, as
security trustee, and the lenders party thereto, as amended, restated,
supplemented or modified.

          "Govco Administrative Agent" has the meaning set forth in the preamble
to this Agreement.

          "Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

          "Governmental Authorization" means any permit, license, certificate,
authorization, plan, directive, consent order or consent decree or agreement of,
from or with any Governmental Authority.

          "Group" has the meaning specified in the preamble to this Agreement.

          "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such first Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), including any pledge of any assets to
secure indebtedness of another or (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of such other Person so as to enable such Person to pay such
Indebtedness. The term "Guarantee" used as a verb has a corresponding meaning.

          "Guarantee Fee" has the meaning specified in Section 2.06 of the Board
Guaranty.

          "Hazardous Materials" means all substances defined as Hazardous
Substances, Oil, Pollutants or Contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. Section 300.5, or defined as
such by or regulated as such under, any Environmental Law.

          "Hazardous Materials Activity" means any past, current, proposed, or
threatened use, storage, Release, generation, treatment, remediation or
transportation of any Hazardous Material (i) from, under, in, into or on the
Facilities or surrounding property; and (ii) caused by, or undertaken by or on
behalf of, an Obligor or any of their respective predecessors or Affiliates.

          "Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto); (iv) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six (6) months after the date of placing
such property in service or taking delivery and title thereto or the completion
of such services, except Trade Payables; (v) all Capital Lease obligations of
such Person (the amount of the Indebtedness in respect of Capital Lease
obligations to be determined as provided in the definition of Capital Lease in
this Section 1.1); (vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person, provided that the amount of such Indebtedness shall be the


                                       16



lesser of (A) the fair market value of such asset at such date of determination
and (B) the stated principal amount of such Indebtedness, provided, however,
that if such Indebtedness is assumed by such Person or provides for recourse
against such Person, the amount of such Indebtedness shall be the greater of (A)
and (B) above; (vii) all Indebtedness of other Persons Guaranteed by such Person
to the extent such Indebtedness is Guaranteed by such Person; (viii) to the
extent not otherwise included in this definition and to the extent treated as a
liability under GAAP, obligations under Currency Agreements, Interest Rate
Agreements and Commodity Agreements; (ix) the capitalized amount of remaining
lease payments owing by such Person under Synthetic Leases that would appear on
the balance sheet of such Person if such lease were treated as a Capital Lease;
(x) the aggregate amount of uncollected accounts receivable of such Person
subject at such time to a sale of receivables (or similar transaction) to the
extent such transaction is effected with recourse to such Person (whether or not
such transaction would be reflected on the balance sheet of such Person in
accordance with GAAP); (xi) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer to the extent such Indebtedness is recourse to such Person; and
(xii) all prepaid forward sales in bulk of dividend miles or available seat
miles or like transactions other than in the ordinary course of business. The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date; provided that the amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness less the remaining unamortized portion
of the original issue discount of such Indebtedness at such time as determined
in conformity with GAAP.

          "Indemnified Liabilities" has the meaning specified in Section 9.4.

          "Indemnified Taxes" has the meaning specified in Section 2.11(a).

          "Indemnitees" has the meaning specified in Section 9.4.

          "Initial Indebtedness" has the meaning specified in Section 6.10(a).

          "Intercreditor Agreement" means that certain Intercreditor Agreement,
dated as of the date hereof, by and among the Borrower, AWA, the other
Subsidiary Guarantors, Group, the Collateral Agent and Wilmington Trust Company,
as Collateral Agent under the AWA Loan Agreement.

          "Interest Payment Date" means the last Business Day of each December,
March, June, and September, commencing September 2005; provided, however, that

          (i) the Loan Maturity Date shall be an Interest Payment Date; and

          (ii) following a Default or an Event of Default, each "Interest
     Payment Date" shall be the last day of each Interest Period occurring
     during such period in which such Default or Event of Default exists.

          "Interest Period" means (a) initially, the period commencing on July
1, 2005 and ending on but excluding the next succeeding Interest Payment Date
and (b) thereafter, each successive period commencing on and including the
immediately preceding Interest Payment Date and ending on but excluding the next
succeeding Interest Payment Date; provided, however, that during the continuance
of an Event of Default, each "Interest Period" shall be for such duration of one
(1) month or less as shall be selected by the Agent by notice to the Borrower,
each Lender, the Board and the Loan Administrator on or prior to the start of
such Interest Period (and in the absence of any such notice or selection, the
applicable Interest Period shall be determined as provided above without regard
to this proviso).


                                       17



          "Interest Rate Agreement" means any interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement.

          "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.

          "Investment" means with respect to any Person, any direct or indirect
advance, loan (other than loans or advances to customers in the ordinary course
of business that are recorded as accounts receivable on the balance sheet of
such Person or its Subsidiaries) or other extensions of credit or capital
contribution or other equity investment by such Person to any other Person,
including by means of any transfer of cash or other property to others or any
payment for property or services for the account or use of others, any Guarantee
(including any support for a letter of credit issued on behalf of such Person)
incurred for the benefit of such Person or any purchase or acquisition by such
Person of Capital Stock (or warrants, options or rights convertible into or
exercisable for Capital Stock), bonds, notes, debentures or other similar
instruments issued by any other Person; provided that advances or loans by any
Obligor to any other Obligor, Guarantees (including any support for a letter of
credit issued on behalf of another Obligor) incurred by any Obligor for the
benefit of any other Obligor, capital contributions or other equity investments
by an Obligor in any other Obligor and deposits made by any Obligor in
connection with the purchase by an Obligor of Aircraft Related Equipment or
other property shall not constitute an "Investment."

          "Investment Guidelines" means investment guidelines in the form
attached hereto as Exhibit N, together with any amendments, restatements,
supplements or other modifications thereof permitted in accordance with Section
6.10(c).

          "IRS" means the Internal Revenue Service of the United States or any
successor thereto.

          "Juniper Financing" means the America West Co-Branded Card Agreement,
dated January 25, 2005, between AWA and Juniper Bank, as amended, restated,
supplemented or modified, including pursuant to the Assignment and First
Amendment to the America West Co-Branded Card Agreement, dated as of August 8,
2005, among AWA, Group and Juniper Bank.

          "Lender" means each of the Primary Tranche A Lender, the Alternate
Tranche A Lender and/or the Tranche B Lenders (including its respective
successors and permitted assigns), as the context may require, and the term
"Lenders" means the Primary Tranche A Lender, the Alternate Tranche A Lender
and/or the Tranche B Lenders (including their respective successors and
permitted assigns) collectively, as the context may require; provided that the
terms "Lender" and "Lenders" shall include the Board to the extent it acquires
any interest in Tranche A as contemplated by Section 2.8(f) hereof and by the
Board Guaranty.

          "Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Lending Office" opposite its name on Annex B or on the
Assignment and Acceptance by which it became a Lender or such other office of
such Lender as such Lender may from time to time specify to the Borrower and the
Agent.

          "LGA" means LaGuardia Airport.

          "LIBOR" means, with respect to any Interest Period, the offered rate
in the London interbank market for deposits in Dollars of amounts equal or
comparable to the then unpaid principal amount of the Loan not being funded by
the Primary Tranche A Lender with Commercial Paper offered


                                       18



for a term comparable to such Interest Period, as currently shown on the
Bridge/Telerate page 3750 as of 11:00 a.m., London time, two (2) Business Days
prior to the first day of such Interest Period; provided, however, that (A)
LIBOR for the initial Interest Period shall be 3.51% per annum, (B) if more than
one offered rate as described above appears on such Bridge/Telerate page, the
rate used to determine LIBOR will be the arithmetic average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of such offered rates, (C) if no such
offered rates appear, the rate used for such Interest Period will be the
arithmetic average (rounded upward, if necessary, to the next higher 1/100 of
1%) of rates quoted by the Reference Banks at approximately 10:00 a.m., New York
time, two (2) Business Days prior to the first day of such Interest Period for
deposits in Dollars offered to leading European banks for a period comparable to
such Interest Period in an amount comparable to the unpaid principal amount of
the Loan, and (D) in the case of an Interest Period commencing after an
assignment of all or any portion of Tranche A from the Primary Tranche A Lender
to the Alternate Tranche A Lender or the Primary Tranche A Lender ceases to fund
all of its Tranche A through the issuance of Commercial Paper, all
determinations of LIBOR with respect to the applicable portion of the Loan so
assigned shall be made on the first day of such Interest Period (rather than two
(2) Business Days prior to the first day of such Interest Period). If the Agent
ceases generally to use such Bridge/Telerate page for determining interest rates
based on eurodollar deposit rates, a comparable internationally recognized
interest rate reporting service shall be used to determine such offered rates.

          "LIBOR Lenders" means Lenders holding Notes that bear interest at a
rate determined by reference to LIBOR.

          "Lien" means any lien, mortgage, pledge, assignment for security,
security interest, charge, hypothecation, lease or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any easement, right of way or other encumbrance on title to
real property and any agreement to give any security interest).

          "Liquidation Period" has the meaning specified in Section 2.9(f).

          "Loan" means the loan outstanding under this Agreement and consisting
of Tranche A and Tranche B.

          "Loan Administration Agreement" means that certain Loan Administration
Agreement dated as of the date hereof among the Loan Administrator, the
Borrower, AWA, Group, the Board, the Lenders and the lenders under the AWA Loan
Agreement.

          "Loan Administrator" means Capstone Advisory Group, LLC, a New Jersey
limited liability company.

          "Loan Discharge Exercise" has the meaning specified in Section 2.2(c).

          "Loan Documents" means, collectively, this Agreement, the Notes, the
Collateral Documents, the First Lien Guaranty, the Loan Administration Agreement
and each certificate, agreement or document executed by an Obligor and delivered
to the Agent, the Lenders or the Board in connection with or pursuant to this
Agreement.

          "Loan Prepayment Percentage" means, with respect to any mandatory
prepayment required to be made by the Borrower pursuant to Section 2.5, the
fraction, expressed as a percentage, whose numerator is the outstanding
principal amount of the Loan as of the date of such prepayment and whose
denominator is the sum of (a) the outstanding principal amount of the Loan and
(b) the outstanding principal amount of the AWA Loan, in each case as of such
date.


                                       19



          "Marketing and Service Agreements" means those certain business,
marketing and service agreements among an Obligor and any of Mesa Airlines,
Inc., Chautauqua Airlines, Inc., Trans States Airlines, Inc., United Air Lines,
Inc., Republic Airline, Inc., and Air Wisconsin Airlines Corporation and such
other parties or agreements from time to time that include, but are not limited
to, code-sharing, pro-rate, capacity purchase, service, frequent flyer, ground
handling and marketing agreements that are entered into in the ordinary course
of business.

          "Material Adverse Effect" means (a) a material adverse effect on (i)
the business, condition (financial or otherwise), operations, performance,
prospects, assets or properties of the Obligors, taken as a whole or (ii) the
legality, validity, binding effect or enforceability against any Obligor of any
Loan Document, or the rights and remedies of the Agent, the Collateral Agent,
the Board or any Lender under any Loan Document, or (b) any material adverse
effect on or material impairment of (i) the ability of the Obligors, taken as a
whole, to perform their payment or other material obligations under the Loan
Documents or (ii) the value of the Collateral or the validity and priority of
the Liens on the Collateral in each case taken as a whole.

          "Maturity Date" means September 30, 2010, except that if such date is
not a Business Day, then the Maturity Date shall be the immediately preceding
Business Day.

          "Merger" has the meaning specified in the recitals to this Agreement.

          "Merger Agreement" has the meaning specified in the recitals to this
Agreement.

          "Merger Sub" has the meaning specified in the recitals to this
Agreement.

          "Minimum Adjusted Cash Amount" has the meaning specified in Section
6.4(a).

          "Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.

          "Mortgage" has the meaning specified in the definition of "Collateral
Documents."

          "Multiemployer Plan" means a multiemployer plan as defined Section
4001(a)(3) of ERISA, and in respect of which Group or any ERISA Affiliate is (or
with the application of Section 4212(c) of ERISA would be) (a) an "employer" as
defined in Section 3(5) of ERISA or (b) a "seller" as defined in Section 4204 of
ERISA.

          "Net Cash Proceeds" means, with respect to any Asset Sale, the Cash
Proceeds of such Asset Sale, net of (i) reasonable and customary brokerage
commissions and other reasonable and customary fees and expenses (including
reasonable fees and expenses of counsel, investment bankers, accountants and
other professionals, consultants and advisors) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale without regard
to the consolidated results of operations of Group, the Borrower and their
respective Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
(or any related expenses required to be paid to third parties pursuant to
documentation related to the financing of the assets subject to such Asset Sale)
that (A) is secured by a Lien on the property or assets sold and (B) is required
by its terms to be paid as a result of such Asset Sale and (iv) appropriate
amounts to be provided by any Obligor as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP, but limited to the
period of the required reserve.


                                       20



          "Net Condemnation Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor as a result of any condemnation or
other taking or temporary or permanent requisition of any property, any interest
therein or right appurtenant thereto, or any change of grade affecting any
property, as the result of the exercise of any right of condemnation or eminent
domain by a Governmental Authority (including a transfer to a Governmental
Authority in lieu or anticipation of a condemnation), minus (ii) (a) any actual
and reasonable costs incurred by an Obligor in connection with any such
condemnation or taking (including reasonable fees and expenses of counsel), (b)
provisions for all taxes payable as a result of such condemnation, without
regard to the consolidated results of operations of Group, the Borrower, and
their respective Subsidiaries, taken as a whole, (c) the amount of any
Indebtedness secured by a Lien on any property subject to such condemnation or
taking and any related expenses of third parties, in each case, required by the
documentation related to such Indebtedness to be discharged or paid from the
proceeds thereof and (d) any amounts required to be paid to any Person (other
than an Obligor) owning a beneficial interest in the property subject to such
condemnation or taking.

          "Net Insurance Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor under any casualty insurance policy
in respect of a covered loss thereunder with respect to tangible, real or
personal property, minus (ii) (a) any actual and reasonable costs incurred by an
Obligor in connection with the adjustment or settlement of any claims of an
Obligor in respect thereof (including reasonable fees and expenses of counsel),
(b) provisions for all taxes payable as a result of such event without regard to
the consolidated results of operations of Group, the Borrower and their
respective Subsidiaries, taken as a whole, (c) the amount of any Indebtedness
secured by a Lien on any property subject to such covered loss and any related
expenses of third parties, in each case, required by the documentation related
to such Indebtedness to be discharged or paid from the proceeds thereof and (d)
any amounts required to be paid to any Person (other than an Obligor) owning a
beneficial interest in the property subject to such loss.

          "Net Issue Proceeds" means, with respect to any Future Issuance, the
Cash Proceeds of such Future Issuance net of (i) any reasonable and customary
brokers' and advisors' fees, any underwriting discounts and commissions and
other costs incurred in connection with such transaction (provided that evidence
of such fees, discounts, commissions and costs is provided to the Board and the
Agent), (ii) provisions for all taxes payable as a result of such transaction
without regard to the consolidated results of operations of Group, the Borrower
and their respective Subsidiaries, taken as a whole, and (iii) payments made to
repay Indebtedness or any other obligation outstanding at the time of such
Future Issuance that is secured by a Lien on the property or assets pledged to
secure such Future Issuance.

          "Non-Consenting Lender" has the meaning specified in Section 9.1(c).

          "Non-U.S. Person" means a Person that is not a United States person as
defined in Section 7701(a)(30) of the Internal Revenue Code.

          "Note" and "Notes" have the meanings specified in Section 2.3(d).

          "Obligations" means all payment and performance obligations of every
nature of any Obligor from time to time owed to the Agent, the Collateral Agent,
the Govco Administrative Agent, the Lenders, the Loan Administrator or the Board
(together with their respective permitted successors and assigns), or any of
their respective Affiliates, officers, directors, employees, agents or advisors
under or in respect of any Loan Document, whether for principal, interest, fees,
expenses, indemnification or otherwise.


                                       21



          "Obligors" means Group, the Borrower and each Subsidiary Guarantor,
and their respective successors and assigns.

          "Officer" means, as applied to any corporation, each Responsible
Officer, the Chairman of the Board (if an officer), Assistant Treasurer,
Secretary or Assistant Secretary.

          "Officer's Certificate" means, as applied to Group or the Borrower, a
certificate executed by a Responsible Officer of such Person in his/her capacity
as such; provided that every Officer's Certificate shall include a statement
that, in the opinion of the signer, such Responsible Officer has made or has
caused to be made such examination or investigation as is necessary to enable
such Responsible Officer to express an informed opinion as to the substance of
such Officer's Certificate in light of the provisions hereof pursuant to which
it is being delivered.

          "Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) under which such
Person is lessee, that is not a Capital Lease.

          "Original Loan Agreement" has the meaning specified in the recitals to
this Agreement.

          "Other Taxes" has the meaning specified in Section 2.11(b).

          "Participant" has the meaning specified in Section 9.2(e).

          "Payee" has the meaning specified in Section 9.12.

          "Payment Restriction" means, with respect to a Subsidiary of any
Person, any encumbrance, restriction or limitation, whether by operation of the
terms of its charter or by reason of any agreement or instrument, on the ability
of (i) such Subsidiary to (a) pay dividends or make other distributions on its
Capital Stock or make payments on any obligation, liability or Indebtedness owed
to such Person or any other Subsidiary of such Person, (b) make loans or
advances to such Person or any other Subsidiary of such Person or (c) transfer
any of its property or assets to such Person or any other Subsidiary of such
Person or (ii) such Person or any other Subsidiary of such Person to receive or
retain any such (a) dividend, distributions or payments, (b) loans or advances
or (c) property or assets.

          "PBGC" means the Pension Benefit Guaranty Corporation.

          "Permitted Acquisition Financing" means Indebtedness incurred by an
Obligor in connection with an acquisition, merger or consolidation which is
permitted by Section 6.5 and/or Section 6.9 (as applicable) if and to the extent
used (i) to refinance existing Indebtedness of the Person acquired or
Indebtedness secured by the assets acquired or (ii) to pay consideration or
related expenses in connection with such transaction.

          "Permitted Encumbrances" means the following types of Liens (other
than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA) as applied to property:

          (i) Liens for taxes, assessments or governmental charges or claims the
     payment of which is either (a) not delinquent for a period of more than 30
     days or (b) being contested in good faith by appropriate proceedings, if
     such reserve or other appropriate provision, if any, as shall be required
     by GAAP shall have been made therefor, as set forth in Section 5.3;


                                       22



          (ii) statutory Liens of landlords and Liens of carriers, vendors,
     warehousemen, repairmen, mechanics and materialmen and other Liens imposed
     by law incurred in the ordinary course of business for sums either (a) not
     delinquent for a period of more than thirty (30) days or (b) being
     contested in good faith by appropriate proceedings, if such reserve or
     other appropriate provision, if any, as shall be required by GAAP shall
     have been made therefor;

          (iii) (A) Liens incurred or deposits (other than with respect to the
     Plans described in Section 4.11) made in the ordinary course of business in
     connection with workers' compensation, unemployment insurance and other
     types of social security, or to secure the performance of tenders,
     statutory obligations, surety and appeal bonds, bids, leases, government
     contracts, trade contracts, performance and return-of-money bonds,
     reimbursement obligations and chargeback rights of Persons performing
     services for an Obligor (including Liens securing Trade Payables arising
     from the Obligors' use in the ordinary course of business, consistent with
     past practice, of credit advance facilities to purchase goods and services)
     and other similar obligations (exclusive of obligations for the payment of
     borrowed money) and (B) Liens arising or granted in the ordinary course of
     business in favor of Persons performing credit card processing services,
     travel charge processing services or clearinghouse services for any
     Obligor, including IATA, Diners Club, Discover Card, NPC, ARC and American
     Express, so long as such Liens are on cash and Cash Equivalents that are
     subject to holdbacks by, or are pledged (in lieu of such holdbacks) to,
     such Persons to secure amounts that may be owed to such Persons under the
     Obligors' agreements with them in connection with their provision of credit
     card processing, travel charge processing or clearinghouse services to the
     Obligors;

          (iv) with respect to real property, easements, rights-of-way,
     restrictions, minor defects, encroachments or irregularities in title and
     other similar charges or encumbrances not interfering in any material
     respect with the ordinary conduct of the business of an Obligor; provided
     that such charges or encumbrances, if affecting any of the Collateral
     constituting real property, comply with the terms of the Mortgage;

          (v) Liens in favor of customs and revenue authorities arising as a
     matter of law to secure payment of customs duties in connection with the
     importation of goods in the ordinary course of business;

          (vi) any interest or title of a lessor in property leased by an
     Obligor under any Capital Lease obligation or Operating Lease which, in
     each case, is not prohibited under this Agreement;

          (vii) Liens in favor of collecting or payor banks and other banks
     providing cash management services, in each case, having a right of setoff,
     revocation, refund or chargeback against money or instruments of any
     Obligor on deposit with or in possession of such bank arising for the
     payments of bank fees and other similar amounts owed in the ordinary course
     of business;

          (viii) Liens of creditors of any Person to whom any Obligor's assets
     are consigned for sale in the ordinary course of business;

          (ix) Liens incurred or deposits made in connection with the Trust
     Agreements;

          (x) any renewal of or substitution for any Lien permitted by any of
     the preceding clauses; provided that the Indebtedness secured is not
     increased nor the Lien extended to any additional assets;


                                       23



          (xi) any licensing or sublicensing of intellectual property in the
     ordinary course of business of the Obligors;

          (xii) Liens arising from precautionary UCC and similar financing
     statements relating to Operating Leases not otherwise prohibited under any
     Loan Document; and

          (xiii) Liens created under the Collateral Documents.

          "Permitted Refinancing Indebtedness" means Indebtedness of any Obligor
the cash proceeds of which are used to refinance (for purposes of this
definition, "Refinancing Indebtedness") then outstanding Indebtedness (for
purposes of this definition, "Old Indebtedness") (including by way of an
extension, renewal or replacement of, or substitution for, such Old
Indebtedness) in an amount not to exceed the then outstanding principal amount
of the Old Indebtedness, plus accrued and unpaid interest, premiums, fees and
expenses; provided that: (a) if the Old Indebtedness is subordinated in right of
payment to the Loan, the Refinancing Indebtedness, by its terms or by the terms
of any agreement or instrument pursuant to which it is outstanding, is expressly
made subordinate in right of payment to the Loan, (b) the Refinancing
Indebtedness does not have a final scheduled maturity prior to the final
scheduled maturity of the Old Indebtedness and (c) the average life of the
Refinancing Indebtedness calculated as of the consummation of the refinancing is
not less than the remaining average life of the Old Indebtedness.

          "Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.

          "Piedmont" means Piedmont Airlines, Inc.

          "Plan" means any "employee benefit plan" as defined in Section 3(3) of
ERISA which is, or was at any time during the preceding six (6) years,
maintained or contributed to, or required to be contributed to, by Group or any
of its ERISA Affiliates, other than a multiemployer plan, within the meaning of
Section 4001(a)(3) of ERISA.

          "Plan of Reorganization" means the Plan of Reorganization of US
Airways Group, Inc. and its Affiliated Debtors and Debtors-in-Possession dated
June 30, 2005 together with amendments, supplements or modifications thereto, as
confirmed by the Confirmation Order, together with any amendments, supplements
or modifications thereto that have been approved or authorized by the Bankruptcy
Court prior to the Effective Date.

          "Pledged Cash" means, as of any time of determination, the aggregate
Dollar amount of unrestricted cash and Cash Equivalents of the Obligors held in
deposit and securities accounts over which the Collateral Agent maintains
perfected first priority security interests in accordance with (and subject to)
Section 5.13 (it being acknowledged and agreed for the avoidance of doubt that
Pledged Cash shall not include Excluded Cash and cash held in the Prepayment
Account or in the AWA Loan Prepayment Account.

          "Pre-Funded Amount" means, as of any date of determination, an amount
equal to the sum of (i) the aggregate amount of (A) Excluded Cash held by the
Obligors as of such date for the purpose of satisfying their obligations under
or in respect of the Trust Agreements plus (B) cash and Cash Equivalents held as
of such date by a Person performing credit card processing services or travel
charge processing services for an Obligor which such Person has unconditionally
agreed in writing to transfer to or at the direction of such Obligor as and when
needed to satisfy the obligations of such Obligor under or


                                       24



in respect of the Trust Agreements; and (ii) the aggregate amount of cash and
Cash Equivalents held by a Person performing clearinghouse services for an
Obligor (including, without limitation IATA, ARC and ACH) to secure amounts that
may be owed to such Person in connection with such Person's performance of
clearinghouse services for such Obligor; provided that for purposes of
calculating the Adjusted Cash Amount under Section 6.4(a) hereof, the aggregate
amount under clause (i) above shall not exceed $250,000,000 and the aggregate
amount under clause (ii) above shall not exceed $35,000,000.

          "Prepayment Account" has the meaning specified in the definition of
"Prepayment Breakage Avoidance Procedure."

          "Prepayment Breakage Avoidance Procedure" means, with respect to any
prepayment of the Loan required or permitted by Section 2.5 or Section 2.9, that
the Borrower shall at its option have the right to apply any amounts required or
permitted to be prepaid by Section 2.5 or Section 2.9 with respect to the Loan
as follows: (i) the Borrower may immediately prepay the Loan (in whole or in
part) as required or permitted by Section 2.5 or Section 2.9, as applicable,
and/or (ii) the Borrower may deposit all or a portion of such amount in an
account established by the Borrower with the Agent and over which the Agent
shall have a perfected first priority security interest (the "Prepayment
Account"). To the extent the Borrower elects to deposit cash in the Prepayment
Account as provided in the preceding sentence, the Agent shall apply any cash so
deposited in the Prepayment Account to prepay the Loan on the last day of the
relevant Interest Period for the applicable tranche. The Borrower shall be
deemed to have satisfied the prepayment requirements of Section 2.5 or Section
2.9, as applicable, upon deposit of cash in the Prepayment Account in an amount
equal to the amount of the prepayment otherwise remaining due pursuant to
Section 2.5 or Section 2.9, as applicable. The Agent shall, at the request of
the Borrower, invest amounts on deposit in the Prepayment Account in Cash
Equivalents maturing on or prior to the last day of the next Interest Period
with any interest thereon for the benefit of the Borrower.

          "Primary Tranche A Lender" means Govco Incorporated, a Delaware
corporation.

          "Principal Obligors" means Borrower, Group and AWA.

          "Pro Forma Basis" means, with respect to compliance with any covenant
hereunder, compliance with such covenant after giving effect to the acquisition
(whether by purchase, merger or otherwise) or disposition (whether by sale,
merger or otherwise) of any company, entity or business or any asset by any
Obligor or any other action which requires compliance on a Pro Forma Basis. In
making any determination of compliance on a Pro Forma Basis, such determination
shall be performed using the consolidated financial statements of such Obligor
which shall be reformulated as if any such acquisition, disposition or other
action had been consummated at the beginning of the period specified in the
covenant with respect to which Pro Forma Basis compliance is required.

          "Proceedings" has the meaning specified in Section 5.1(b)(vii).

          "Program Support Provider" means and includes any Person now or
hereafter extending credit or having a commitment to extend credit to or for
account of, or to make purchases from, the Primary Tranche A Lender or issuing a
letter of credit, surety bond or other instrument to support any obligations
arising under or in connection with the Primary Tranche A Lender's commercial
paper program.

          "Prohibited Transferee" has the meaning specified in Section 9.2(a).

          "Redeemable Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise (i) is required to be redeemed prior to
the Maturity Date, (ii) may be required to be


                                       25



redeemed at the option of the holder of such class or series of Capital Stock at
any time prior to the Maturity Date or (iii) is convertible into or exchangeable
for (a) Capital Stock referred to in clause (i) or (ii) above or (b)
Indebtedness having a scheduled maturity prior to the Maturity Date; provided
that any Capital Stock that would constitute Redeemable Stock solely because of
the provisions thereof offering holders thereof the right to require the issuer
thereof to repurchase or redeem such Capital Stock upon the occurrence of an
"asset sale" occurring prior to the Maturity Date shall not constitute
Redeemable Stock if the asset sale provisions contained in such Capital Stock
specifically provide that, in respect of any particular asset sale proceeds, the
issuer thereof will not be required to repurchase or redeem any such Capital
Stock pursuant to such provisions so long as the Borrower applies the full
amount of such proceeds (net of associated taxes and transaction costs) to the
permanent reduction of the aggregate outstanding principal amount of the Loan.

          "Reference Banks" means Citibank, N.A., JPMorgan Chase Bank and Bank
of America, N.A., and each of their respective successors.

          "Register" has the meaning specified in Section 2.3(e).

          "Regulations" means the regulations for Air Carrier Guarantee Loan
Program issued pursuant to the Act, 14 C.F.R. Part 1300, as the same may be
amended from time to time.

          "Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facilities, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.

          "Replacement Secured Financing" means any financing transaction,
whether structured as Indebtedness, sale-leaseback or otherwise, (a) which is
secured by any of the Obligors' (i) Slots, (ii) rotable, repairable and
expendable spare parts, (iii) aircraft, or (iv) spare engines, in each case
which immediately prior to such transaction constituted Collateral, and (b) the
Net Issue Proceeds of which are at least equal to the Collateral Release Value
of the Collateral released in connection with such transaction, other than a
financing transaction referred to in the proviso to Section 5.8(b) with respect
to After-Acquired Section 1110 Equipment.

          "Reporting Obligor" means any Obligor which files or is required to
file reports with the SEC under Section 13(a) or 15(d) of the Exchange Act.

          "Requisite Lenders" means, collectively, Lenders holding not less than
a majority of the principal amount of the Loan then outstanding; provided that
if (i) the Board Guaranty is in full force and effect as of such date and has
not been terminated without payment having been made thereunder and (ii) the
outstanding amount of Tranche A guaranteed under the Board Guaranty as of such
date represents less than a majority of the principal amount of the Loan then
outstanding (such that the Board is not the Controlling Creditor at such time),
then for purposes of this definition, the Board shall be deemed to be the Lender
with respect to the outstanding amount of Tranche A then guaranteed under the
Board Guaranty.

          "Requisite LIBOR Lenders" means, collectively, Lenders holding not
less than a majority of the principal amount of the portion of the Loan bearing
interest at a rate determined by reference to LIBOR.


                                       26



          "Responsible Officer" means with respect to an Obligor, any of its
Chief Executive Officer, President, Chief Financial Officer, General Counsel,
Treasurer or Controller, but in any event, with respect to financial matters,
its Chief Financial Officer, Treasurer or Controller.

          "Restricted Payment" means, with respect to any Person (i) any
declaration or payment of dividends on or making of any distributions in respect
of the Capital Stock of such Person (other than dividends or distributions
payable solely in shares of Capital Stock (other than Redeemable Stock) or in
options, warrants, or other rights to purchase Capital Stock (other than
Redeemable Stock)) to holders of Capital Stock of such Person, (ii) any
purchase, redemption or other acquisition or retirement for value (other than
through the issuance solely of Capital Stock (other than Redeemable Stock) or
options, warrants or other rights to purchase Capital Stock (other than
Redeemable Stock)) of any Capital Stock or warrants, rights (other than
exchangeable or convertible Indebtedness of such Person not prohibited under
clause (iii) below) or options to acquire Capital Stock of such Person, and
(iii) any prepayment, redemption, repurchase, defeasance (including, but not
limited to, in substance or legal defeasance) or other acquisition or retirement
for value (other than through the issuance solely of Capital Stock (other than
Redeemable Stock) or warrants, rights or options to acquire Capital Stock (other
than Redeemable Stock)) of Indebtedness of such Person or any Subsidiary of such
Person, directly or indirectly (including by way of setoff or amendment of the
terms of any Indebtedness in connection with any retirement or acquisition of
such Indebtedness), which is made other than at any scheduled maturity thereof
or by any scheduled repayment or scheduled sinking fund payment (collectively, a
"prepayment"); provided that the following shall not constitute Restricted
Payments: (a) any declaration, payment, distribution, purchase, redemption,
acquisition or retirement for value, repurchase or defeasance referred to in
clauses (i) through (iii) above in each case solely among Obligors, (b)
repayment of the Loan, (c) subject to the terms of the Intercreditor Agreement
and the other the Loan Documents, repayment of the AWA Loan, (d) repayment of
the loan outstanding under the GE Financings (and any replacements or
refinancings of any thereof) to cure a collateral value deficiency thereunder
and repayment of obligations secured by the GE Expendables Mortgage, (e)
payments made pursuant to the Plan of Reorganization, and (f) payments of cash
in lieu of fractional shares in connection with repurchases or conversions of
securities of an Obligor not prohibited hereunder.

          "RSA" means Retirement Systems of Alabama Holdings LLC, a Delaware
limited liability company, and its successors and assigns.

          "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto that is a nationally
recognized rating agency.

          "SEC" means the Securities and Exchange Commission of the United
States or any successor thereto.

          "Secondary Slots" means (a) Air-21 slot exemptions, (b) the Essential
Air Services Slots identified on Schedule 1.1(a) hereto, (c) any other Slots
which, under the Slot Regulations, are not transferable among private parties,
(d) for so long as their aggregate Appraised Value does not exceed $5,000,000,
Slots at John F. Kennedy International Airport, (e) the Slots identified on
Schedule 1.1(a) hereto as "pool" Slots (within the meaning of 14 C.F.R. Section
93.226(e)), (f) all 6:00 a.m. arrival and departure Slots at LaGuardia Airport,
(g) all arrival and departure Slots at LaGuardia Airport commencing at or after
9:30 p.m. (2130), (h) all 6:00 a.m. Slots at Ronald Reagan Washington National
Airport, and (i) all Slots at Ronald Reagan Washington National Airport
commencing at or after 9:00 p.m. (2100).

          "Section 1110 Equipment" means airframes, aircraft, aircraft engines,
propellers and appliances which are not spare parts (as such terms are used in
Section 1110 of the Bankruptcy Code).


                                       27



          "Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.

          "Security Agreement" has the meaning specified in clause (iv) of the
definition of Collateral Documents.

          "Slot Regulations" means 49 U.S.C. Section 40103 and 14 C.F.R.
Sections 93.211 - 93.227, and any amendment, supplement or other modification
thereto, or successor, replacement or substitute federal law or regulation
concerning the right or operational authority to conduct landing or takeoff
operations at any airports.

          "Slots" means all of the rights and operational authority granted
under the Slot Regulations and now or hereafter acquired or held by each Obligor
to conduct one instrument flight rule landing or takeoff operation in a
specified time period at DCA, John F. Kennedy International Airport, LGA, or any
other airport.

          "Solvent" means, with respect to any Person, that as of the date of
determination (a) the then fair saleable value of the business of such Person is
not less than the amount that will be required to pay the probable liabilities
on such Person's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and (c)
such Person does not intend to incur, or believes that it will not incur, debts
beyond its ability to pay such debts as they become due. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

          "Stock Offering" means the offering of common stock pursuant to the
registration statement on form S-1 (file no. 33-126226) of Group filed with the
SEC on June 29, 2005, as amended, including any overallotment option.

          "Subsidiary" means, with respect to any Person, any corporation,
partnership, association, limited liability company, trust or estate, joint
venture or other business entity of which more than 50% of the issued and
outstanding shares of Voting Stock at the time of determination are owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.

          "Subsidiary Guarantor" means each Person that is a direct or indirect
Subsidiary of Group as of the Effective Date and after giving effect to the
Merger (other than the Borrower and the Excluded Subsidiaries) and each other
Subsidiary of Group that becomes a party to the First Lien Guaranty pursuant to
Section 5.8(a), but with respect to any such Subsidiary, subject to the last
sentence of Section 8 of the First Lien Guaranty and excluding in each case any
Subsidiary that is a CFC. As of the Effective Date the Subsidiary Guarantors are
AWA Holdings, AWA, Piedmont, Material Services Company, Inc. and PSA Airlines,
Inc.

          "Substitute Basis" has the meaning specified in Section 2.9(b).

          "Synthetic Lease" means (a) a so-called synthetic, off-balance sheet
lease or lease in which the lessee is contractually entitled to the tax benefits
of ownership of the leased assets, or (b) an agreement for the use or possession
of property creating obligations that do not appear on the balance


                                       28



sheet of such Person but which, upon the insolvency or bankruptcy of such
Person, would be characterized as the indebtedness of such Person (without
regard to accounting treatment).

          "Taxes" means any and all present or future taxes, levies, fees,
duties, imposts, deductions, charges or withholdings of any nature, and all
interest, penalties and other liabilities thereon or computed by reference
thereto imposed by any Governmental Authority.

          "Title 49" means Title 49 of the United States Code, as amended and in
effect from time to time, and the regulations promulgated pursuant thereto.

          "Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries and
arising in the ordinary course of business in connection with the acquisition of
goods or services but limited to current liabilities in accordance with GAAP.

          "Tranche A" has the meaning specified in Section 2.1.

          "Tranche A Applicable Interest Rate" means, for any Interest Period
(or part thereof), (a) with respect to such portion of Tranche A which is held
by the Primary Tranche A Lender, a rate per annum equal to the sum of (i) the
Primary Tranche A Lender's weighted average cost (as defined below) related to
the issuance of commercial paper notes and other short-term borrowings or the
sale of participation interests (collectively, "Commercial Paper"), which in
each case have been allocated by the Primary Tranche A Lender to Tranche A
during such Interest Period, which rate includes related issuance costs incurred
by the Primary Tranche A Lender (the "Govco COF Rate") and (ii) 0.30% (such
Tranche A Applicable Interest Rate to be calculated by the Govco Administrative
Agent and specified in a notice sent to the Borrower, with a copy to the Agent
and the Loan Administrator, at least five Business Days prior to each Interest
Payment Date on which the interest so calculated is payable); (b) with respect
to such portion of Tranche A which is held by (i) an assignee (permitted under
Section 9.2) of the Primary Tranche A Lender or the Alternate Tranche A Lender
and is guaranteed under and entitled to the benefits of the Board Guaranty, (ii)
the Alternate Tranche A Lender, or (iii) the Board, a rate per annum equal to
LIBOR for such Interest Period plus 0.40% per annum; and (c) with respect to
such portion of Tranche A which is held by an assignee (permitted under Section
9.2) of the Primary Tranche A Lender or the Alternate Tranche A Lender (or a
permitted assignee of such Person) and is not guaranteed under or entitled to
the benefits of the Board Guaranty, a rate per annum equal to LIBOR for such
Interest Period plus 6.00% per annum. As used in this definition, "weighted
average cost" of Commercial Paper means (A) the actual interest rate paid to
purchasers of Commercial Paper, (B) the costs associated with the issuance of
the Commercial Paper, and (C) other borrowings the Primary Tranche A Lender may
incur, including the amount to fund small or odd dollar amounts that are not
easily accommodated in the commercial paper market.

          "Tranche A Lender" means the Primary Tranche A Lender and each other
Person who becomes the holder of Tranche A pursuant to the provisions of this
Agreement, including the Board, if it acquires any interest in Tranche A as
contemplated by Section 2.8(f) hereof and the Board Guaranty, and the Alternate
Tranche Lender.

          "Tranche A Note" has the meaning specified in Section 2.3(d).

          "Tranche B" has the meaning specified in Section 2.1.

          "Tranche B Applicable Interest Rate" means a rate per annum
(determined for each Interest Payment Date) equal to: (i) with respect to an
undivided pro rata portion of Tranche B equal to


                                       29



the pro rata portion of Tranche A for which the Tranche A Applicable Interest
Rate is determined by clause (a) thereof, the Govco COF Rate (as defined in the
definition of "Tranche A Applicable Interest Rate") plus 6.30% per annum; (ii)
with respect to an undivided pro rata portion of Tranche B equal to the pro rata
portion of Tranche A for which the Tranche A Applicable Interest Rate is
determined by clause (b) thereof, LIBOR plus 6.40% per annum; and (iii) with
respect an undivided pro rata portion of Tranche B equal to the pro rata portion
of Tranche A for which the Tranche A Applicable Interest Rate is determined by
clause (c) thereof, LIBOR plus 6.00% per annum; provided, that in no event shall
the Tranche B Applicable Interest Rate be less than LIBOR plus 6.00% per annum.

          "Tranche B Lender" means each Lender that is the holder of Tranche B.
As of the Effective Date, the Tranche B Lenders are RSA and Bank of America,
N.A.

          "Tranche B Note" has the meaning specified in Section 2.3(d).

          "Trust Agreements" means all special purpose trust funds established
by any Obligor to manage the collection and payment of amounts collected by the
Obligors for the express benefit of third-party beneficiaries relating to (a)
federal income tax withholding and backup withholding tax, employment taxes,
transportation excise taxes and security related charges, including (i) federal
payroll withholding taxes, as described in Sections 3101, 3111 and 3402 of the
Internal Revenue Code; (ii) federal Unemployment Tax Act taxes, as described in
Chapter 23 of Subtitle C of the Internal Revenue Code; (iii) federal air
transportation excise taxes, as described in Sections 4261 and 4271 of the
Internal Revenue Code; (iv) federal security charges, as described in Title 49
of the Code of Federal Regulations of 2002 (referred to in this definition as
the "CFR"), Chapter XII, Part 1510; (v) federal Animal and Plant Health
Inspection Service of the United States Department of Agriculture (APHIS) user
fees, as described in Title 21 United States Code (2002) (referred to in this
definition as "U.S.C.") Section 136a and 7 CFR Section 354.3; (vi) federal
Immigration and Naturalization Service (INS) fees, as described in 8 U.S.C.
Section 1356 and 8 CFR Part 286; (vii) federal customs fees as described in 19
U.S.C. Section 58c and 19 CFR Section 24.22; and (viii) federal jet fuel taxes
as described in Sections 4091 and 4092 of the Internal Revenue Code collected on
behalf of and owed to the federal government, (b) any and all state and local
income tax withholding, employment taxes and related charges and fees and
similar taxes, charges and fees, including, but not limited to, state and local
payroll withholding taxes, unemployment and supplemental unemployment taxes,
disability taxes, workman's or workers' compensation charges and related charges
and fees that are analogous to those described in Subtitle C of the Internal
Revenue Code and that are described in or are analogous to Chapter 23 of Title
19 Delaware Code Annotated (2002) (referred to in this definition as "D.C.A.")
collected on behalf of and owed to state and local authorities, agencies and
entities, (c) Passenger Facility Charges as described in Title 49 United States
Code Section 40117 (2004) and Title 14 of the Code of Federal Regulations,
Subchapter 1, Part 158 collected on behalf of and owed to various
administrators, institutions, authorities, agencies and entities and (d)
voluntary and/or other non-statutorily required employee payroll deductions,
whether authorized by the employee, imposed by court order, agreed to pursuant
to collective bargaining arrangement or otherwise, including (i) employee
contributions made for the purpose of participating in any employer-sponsored
retirement plan as described and defined in Section 401(k) of the Internal
Revenue Code (including repayment of any 401(k) related loans made to the
employee but excluding any funds matched and/or contributed by the employer on
behalf of any employee), (ii) employee payments made for the purpose of
participating in any employer-sponsored medical, dental or related health plan,
(iii) employee payments made for the purpose of satisfying periodic union dues,
(iv) employee payments made for the purpose of purchasing United States Savings
Bonds, (v) employee payments made for the purpose of making deposits to an
account at or making repayment of an extension of credit from an
employer-associated credit union, (vi) employee payments made for the purpose of
purchasing life, accident, disability or other insurance, (vii) employee
payments made for the purpose of participating in any employer-sponsored
cafeteria plan as described and defined in Section 125 of the Internal Revenue


                                       30



Code, (viii) employee-directed donations to charitable organizations and (ix)
levys, garnishments and other attachments on employee compensation (as described
in Sections 6305 and 6331 of the Internal Revenue Code, in Section 4913 of Title
10 of D.C.A. or in any analogous provision of other applicable federal, state or
local law) collected on behalf of any Governmental Authority or any other Person
authorized to receive funds of the type described in this clause (d).

          "UCC" means the Uniform Commercial Code.

          "United States Citizen" has the meaning specified in Section 4.1(b).

          "Variable Cash Amount" has the meaning specified in Section
6.4(a)(ii).

          "Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to vote for the election of directors, managers or trustees of any
Person (or Persons performing similar functions) irrespective of whether or not
at the time stock of any such class or classes will have or might have such
voting power by the reason of the happening of any contingency.

          "Warrants" means (i) the Warrant to purchase up to 7,735,770 shares of
Groups' Common Stock issued by Group to the Board, which Warrant is being issued
in replacement for the Warrant to purchase up to 18,754,000 shares of AWA
Holdings' class B common stock issued by AWA Holdings to the Board on January
18, 2002 and (ii) the Warrant to purchase up to 386,925 shares of Groups' Common
Stock issued by Group to AFS Cayman Limited, which Warrant is being issued in
replacement for the Warrant to purchase up to 938,000 shares of AWA Holdings'
class B common stock issued by AWA Holdings to AFS Cayman Limited on January 18,
2002, in each case in substantially the form of Exhibit O to the AWA Loan
Agreement.

          "Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

          "Working Capital" means, as of any date, (i) the current assets
(excluding cash and Cash Equivalents) of Group minus (ii) the current
liabilities of Group (other than the current portion of long term debt), in each
case, determined on a consolidated basis and otherwise, in accordance with GAAP
as of such date.

          SECTION 1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including".

          SECTION 1.3. ACCOUNTING TERMS AND PRINCIPLES.

          (a) Accounting Terms. All accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.

          (b) Change in GAAP. If any change in accounting principles used in the
preparation of the most recent financial statements referred to in Section 5.1
is hereafter required or permitted by the rules, regulations, pronouncements and
opinions of FASB or the American Institute of Certified Public Accountants (or
any successor thereto) and such change is adopted by an Obligor with the
agreement of


                                       31



its independent public accountants and results in a change in any of the
calculations required by Article VI had such accounting change not occurred, the
parties hereto agree to promptly enter into good faith negotiations in order to
amend such provisions so as to equitably reflect such change with the desired
result that the criteria for evaluating compliance with such covenants by the
Obligors shall be the same after such change as if such change had not been
made; provided, however, that no change in GAAP that would affect a calculation
that measures compliance with any covenant contained in Article VI shall be
given effect until such provisions are amended to reflect such changes in GAAP.

          SECTION 1.4. CERTAIN TERMS.

          (a) Certain References. The words "herein," "hereof" and "hereunder"
and similar words refer to this Agreement as a whole, and not to any particular
Article, Section, subsection or clause in, this Agreement.

          (b) References to Exhibits, Schedules, etc. References in this
Agreement to an Exhibit, Schedule, Article, Section, subsection or clause refer
to the appropriate Exhibit or Schedule to, or Article, Section, subsection or
clause in this Agreement unless otherwise indicated.

          (c) References to Agreements. Each agreement defined in this Article I
shall include all appendices, exhibits and schedules thereto. If the prior
written consent of any Person is required hereunder for an amendment,
restatement, supplement or other modification to any such agreement and the
consent of each such Person is obtained, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified. If no such consent is required, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified. (d) References to Statutes. References in this Agreement to any
statute shall be to such statute as amended or modified and in effect at the
time any such reference is operative.

          (e) Miscellaneous. The term "including" when used in any Loan Document
means "including without limitation" except when used in the computation of time
periods.

                                   ARTICLE II

                                    THE LOAN

          SECTION 2.1. THE LOAN. The aggregate principal amount of the Loan on
the date hereof is $582,850,558.77 comprised of (i) a Tranche A portion of the
Loan ("Tranche A") in the principal amount of $524,565,502.89 and (ii) a Tranche
B portion of the Loan ("Tranche B") in the principal amount of $58,285,055.88.
Any amount of Tranche A or Tranche B repaid or prepaid may not be reborrowed.

          SECTION 2.2. SCHEDULED REPAYMENT OF THE LOAN.

          (a) Repayment of Tranche A. The Borrower shall repay principal amounts
with respect to Tranche A on the dates and in the amounts set forth below:


                                       32





INTEREST PAYMENT DATE FALLING ON OR ABOUT   REPAYMENT AMOUNT
- -----------------------------------------   ----------------
                                         
March 31, 2007                               $23,265,502.89
September 30, 2007                           $80,100,000.00
March 31, 2008                               $57,600,000.00
September 30, 2008                           $57,600,000.00
March 31, 2009                               $76,500,000.00
September 30, 2009                           $76,500,000.00
March 31, 2010                               $76,500,000.00
September 30, 2010                           $76,500,000.00


          Notwithstanding anything herein to the contrary, the Borrower shall
repay the entire unpaid principal amount of Tranche A together with accrued and
unpaid interest thereon and all other amounts owing hereunder in respect thereof
on the Maturity Date (or, if earlier, the date the Loan is accelerated pursuant
to Section 7.2).

          (b) Repayment of Tranche B. The Borrower shall repay principal amounts
with respect to Tranche B on the dates and in the amounts set forth below:



INTEREST PAYMENT DATE FALLING ON OR ABOUT   REPAYMENT AMOUNT
- -----------------------------------------   ----------------
                                         
March 31, 2007                               $2,585,055.88
September 30, 2007                           $8,900,000.00
March 31, 2008                               $6,400,000.00
September 30, 2008                           $6,400,000.00
March 31, 2009                               $8,500,000.00
September 30, 2009                           $8,500,000.00
March 31, 2010                               $8,500,000.00
September 30, 2010                           $8,500,000.00


          Notwithstanding anything herein to the contrary, the Borrower shall
repay the entire unpaid principal amount of Tranche B together with accrued and
unpaid interest thereon and all other amounts owing hereunder in respect thereof
on the Maturity Date (or, if earlier, the date the Loan is accelerated pursuant
to Section 7.2).

          (c) Reduction of Principal Amount upon Exercise of Warrants. Any
Lender holding Warrants shall be entitled to pay some or all of the Exercise
Price (as defined in the Warrants) for any of its Warrants by offsetting amounts
owed to such Lender (such Lender, an "Exercising Lender") in respect of its
interest in the Loan as provided in Section 2.1(b)(ii) of the Warrants (such
exercise, a "Loan Discharge Exercise"). In such event, the principal amount of
the Loan outstanding and owing to the Exercising Lender on the effective date of
such exercise shall be discharged on a dollar-for-dollar basis by the amount of
the Exercising Lender's interest in the Loan which was applied to pay such
Exercise Price. Any such reduction in the principal amount of the Loan shall be
applied to the then remaining installments of the outstanding principal amount
of the Loan owed to such Exercising Lender in the inverse order of maturity
thereof. For the avoidance of doubt, no discharge of the principal amount of the
Loan as provided herein shall discharge the principal amount of the Loan owed to
any other Lender or otherwise impair the Borrower's obligations with respect
thereto. An Exercising Lender shall give prompt written notice to the Agent
(with a copy to the Borrower) of any exercise of its Warrants in the manner
described in this subsection in order to enable the Agent to record such
transaction.


                                       33



          (d) Principal Payments. Each payment of the principal amount of the
Loan due and owing on each date specified in Section 2.2(a) and (b) shall be
made after giving effect to all repayments and prepayments of the Loan and each
Loan Discharge Exercise effected on or prior to such date.

          SECTION 2.3. EVIDENCE OF DEBT.

          (a) Lenders' Accounts. Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing such Lender's portion of
the Loan outstanding from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.

          (b) Agent's Records of Loan. The Agent shall establish and maintain a
register for recording with respect to the Loan (i) the date and amount of each
payment on the Loan made by or on behalf of, or collected from, the Borrower,
(ii) the amount of each such payment applied in accordance with Section 2.8(d)
and (e) or other applicable terms hereof to scheduled principal of or interest
on the Loan and to each of the fees identified in Section 2.7(a) through Section
2.7(d), (iii) the amount by which the principal amount of the Loan owing to an
Exercising Lender is reduced in connection with the exercise by such Exercising
Lender of its Warrant as described in Section 2.2(c), (iv) the then outstanding
principal balance of the Loan (without reliance on the Lender's accounts), and
(v) the date and amount of each payment made by the Board under the Board
Guaranty.

          (c) Entries Prima Facie Evidence. The entries made in the accounts
maintained pursuant to this Section 2.3 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligations of the Borrower to repay the Loan in accordance
with its terms.

          (d) Notes. The Borrower shall execute and deliver to the Agent on the
Effective Date (i) a promissory note substantially in the form of Exhibit B-1 in
the principal amount of Tranche A of the Loan outstanding on the date hereof,
dated the Effective Date and otherwise appropriately completed (such note,
including any replacement note therefor issued in accordance with the provisions
of this Section 2.3(d), the "Tranche A Note"), and (ii) promissory notes
substantially in the form of Exhibit B-2 in the principal amount of Tranche B of
the Loan outstanding on the date hereof owing to each Tranche B Lender, dated
the Effective Date and otherwise appropriately completed, (each such note,
including any replacement note therefor issued in accordance with the provisions
of this Section 2.3(d), a "Tranche B Note" and the Tranche B Notes collectively,
together with the Tranche A Note, the "Notes"). Each Note shall be made payable
to the Agent at the office of the Agent; provided that at the request of any
Lender, the Borrower shall execute and deliver a Note (or replacement thereof)
payable directly to such Lender in the amount of its interest in the Loan. If a
Note is mutilated, lost, stolen or destroyed, the Borrower shall issue a new
Note of the same tranche, in the same principal amount and having the same
interest rate, date and maturity as the Note so mutilated, lost, stolen or
destroyed endorsed to indicate all payments thereon. In the case of any lost,
stolen or destroyed Note, there shall first be furnished to the Borrower and the
Board an instrument of indemnity from the Agent (or Lender, as applicable) and
evidence of such loss, theft or destruction reasonably satisfactory to each of
them. Upon the execution and delivery by the Borrower of the Notes, the
promissory notes executed and delivered by the Borrower under the Original Loan
Agreement shall be null and void and of no further force and effect, and shall
be contemporaneously returned to the Borrower for cancellation.

          (e) Register. A manually signed copy of this Agreement and the
original of a Note shall be evidence of (i) the rights of each Lender under this
Agreement and such Note and (ii) the rights of the Agent under this Agreement.
Neither this Agreement nor any of the Notes is a bearer instrument.


                                       34



The Agent will establish and maintain a record of ownership (the "Register") in
which the Agent agrees to register by book entry the Agent's and each Lender's
interest in the Loan, the Notes and this Agreement, and in the right to receive
any payments hereunder or thereunder (including any adjustment pursuant to
Section 2.2(c)) and any assignment of any such interest or rights. In connection
with any assignment pursuant to Section 9.2, the Agent shall maintain a copy of
each Assignment and Acceptance delivered to and accepted by it and shall record
the names and addresses of the Lenders and principal amount of the Loan owing to
each Lender from time to time. Solely for purposes of this Section 2.3(e), the
Agent shall be the Borrower's agent for purposes of establishing and maintaining
the Register. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, the Board, the Agent and
the Lenders shall treat each Person whose name is recorded in the Register as a
Lender for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower, the Agent, the Board (so long as the Board is either
a guarantor of Tranche A or a Lender hereunder), the Loan Administrator or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

          SECTION 2.4. OPTIONAL PREPAYMENTS.

          (a) Notice. The Borrower may, upon at least fifteen (15) days' prior
revocable notice to the Board, the Loan Administrator, the Govco Administrative
Agent and the Agent stating the proposed date and aggregate principal amount of
the prepayment, elect to prepay the outstanding principal amount of the Loan
ratably as to Tranche A and Tranche B, in whole or in part (but not less than a
minimum amount of $5,000,000), together with accrued interest to the date of
such prepayment on the principal amount prepaid; provided, however, that upon
any prepayment of all or a portion of the Loan by the Borrower, or if the
Borrower revokes such notice at any time within such fifteen (15) days, the
Borrower shall also pay any amounts owing pursuant to Section 2.9(e) or (f).

          (b) Amounts Due upon Notice. Upon the giving of any notice of
prepayment under Section 2.4(a), the principal amount of the Loan specified to
be prepaid together with accrued and unpaid interest thereon shall (subject to
the proviso below) become due and payable on the date specified for such
prepayment; provided, however, that any failure to make any such prepayment in
full on such date shall be deemed to be an automatic revocation of the notice of
prepayment given under Section 2.4(a) and such failure shall not constitute a
Default or an Event of Default hereunder; provided, further, however, that the
Borrower shall be obligated to pay on such date any amounts owing under Section
2.9(e) or (f) due to such failure to prepay.

          (c) Application of Optional Prepayments. Any partial prepayment of the
Loan under this Section 2.4 shall be applied to the outstanding principal amount
of the Loan ratably as to each Lender and, with respect to each Lender, pro rata
across the remaining scheduled principal payments on the Loan owing to each such
Lender (and not in the inverse order of maturity). Any such prepayment shall be
paid to the Agent for application as provided in Section 2.8. The Borrower shall
have no right to optionally prepay the principal amount of the Loan other than
as provided in this Section 2.4, Section 2.9(b) or Section 2.9(d).

          SECTION 2.5. MANDATORY PREPAYMENTS.

          (a) Certain Future Issuances within Six Months of Effective Date. Upon
receipt by an Obligor of any Cash Proceeds from any Future Issuance of
Indebtedness convertible into Capital Stock (or convertible into warrants,
options or other rights to acquire Capital Stock) which is consummated no later
than six (6) months after the Effective Date, the Borrower shall prepay the Loan
in the manner provided below in an amount equal to the product of (x) the Loan
Prepayment Percentage and (y) an amount equal to fifty percent (50%) of the Net
Issue Proceeds of such Future Issuance; provided that the


                                       35



Borrower shall not be obligated to so prepay the Loan if and to the extent that
the Future Issuance is of Permitted Refinancing Indebtedness. Any prepayment of
the Loan under this subsection shall be made on the Business Day following the
receipt by such Obligor of the proceeds of the applicable Future Issuance.

          (b) Replacement Secured Financing. Upon receipt by an Obligor of any
Cash Proceeds from any Future Issuance constituting a Replacement Secured
Financing, the Borrower shall prepay the Loan from the proceeds thereof in the
manner provided below in an aggregate amount equal to the Collateral Release
Value for each item or category (as applicable) of Collateral subject to such
Replacement Secured Financing. Any prepayment of the Loan under this subsection
shall be made on the Business Day following the receipt by such Obligor of the
proceeds of the applicable Future Issuance.

          (c) Other Future Issuances. Upon receipt by an Obligor of any Cash
Proceeds from any Future Issuances other than a Future Issuance described in (or
excluded from prepayment pursuant to) subsections (a) and (b) above, the
Borrower shall prepay the Loan in the manner provided below in an amount equal
to the product of (x) the Loan Prepayment Percentage and (y) 100% of the Net
Issue Proceeds of such transaction; provided that:

          (i) with respect to Future Issuances of Capital Stock or warrants,
     options or other rights to acquire Capital Stock consummated after the
     Effective Date (excluding Indebtedness which is convertible into Capital
     Stock), the Borrower (A) shall not be obligated to prepay the Loan from the
     first $75,000,000 of Net Issue Proceeds therefrom, and (B) thereafter,
     shall be obligated to prepay the Loan in an amount equal to the product of
     (x) the Loan Prepayment Percentage and (y)(1) 25% on a dollar-for-dollar
     basis of Net Issue Proceeds from the next $75,000,000 of Net Issue Proceeds
     and (2) 50% on a dollar-for-dollar basis of Net Issue Proceeds in excess of
     $150,000,000, with all calculations of Net Issue Proceeds for the purpose
     of this clause (i) being made on a cumulative basis from the Effective Date
     through the life of the Loan;

          (ii) with respect to Net Issue Proceeds from a Future Issuance of
     Indebtedness incurred to refinance any Aircraft Related Equipment that is
     not (and is not required to be pursuant to the terms of the Loan Documents)
     Collateral, the Borrower shall only be required to pay an amount equal to
     the product of (x) the Loan Prepayment Percentage and (y) an amount equal
     to fifty percent (50%) of the Net Issue Proceeds from such Future Issuance;
     provided that the Obligors shall not be required to prepay the Loan as
     provided in this clause (ii) if such Future Issuance is a refinancing of
     Aircraft Related Equipment acquired by the Obligors within the twenty-four
     (24) months preceding the date of such Future Issuance; and

          (iii) the Borrower shall not be obligated to so prepay the Loan (A) if
     and to the extent that the Future Issuance is (x) Permitted Refinancing
     Indebtedness or (y) Permitted Acquisition Financing, (B) if and to the
     extent that an Obligor applies the proceeds of a Future Issuance of
     Indebtedness to make pre-delivery payments, deposits or progress payments
     (or other similar payments) with respect to the acquisition of Aircraft
     Related Equipment (or reimburses itself or any other Obligor for any such
     payment or deposit) (including After-Acquired Section 1110 Equipment), an
     Obligor applies such proceeds to purchase (or reimburse itself or any other
     Obligor for the purchase of) Aircraft Related Equipment (including
     After-Acquired Section 1110 Equipment), or an Obligor otherwise sets aside
     such proceeds (through an escrow account or otherwise) for a period not to
     exceed twelve (12) months for the express purpose of making any of the
     payments described above in this subclause (iii)(B) and the Obligor makes
     such payment within such period, or (C) with the Net Issue Proceeds of (x)
     the Juniper Financing or (y) the Airbus Financing, it being understood
     that, subject to subsection (c)(ii) above, the Loan Prepayment Percentage
     of all Net Issue Proceeds in excess of amounts otherwise applied in


                                       36



     accordance with clause (iii)(A) or (iii) (B) above, as applicable, shall be
     applied to prepay the Loan.

Any prepayment of the Loan under this subsection (c) shall be made on the
Business Day following the receipt by such Obligor of the proceeds of the
applicable Future Issuance.

          (d) Asset Sales. Upon receipt by an Obligor of any Cash Proceeds from
an Asset Sale permitted under Section 6.13, the Borrower shall prepay the Loan
as follows:

          (i) with respect to Net Cash Proceeds from an Asset Sale in a
     sale-leaseback transaction of (A) Aircraft Related Equipment that is not
     (and is not required to be pursuant to the terms of the Loan Documents)
     Collateral or (B) After-Acquired Section 1110 Equipment which has been
     pledged as Collateral but is subject to release pursuant to Section 5.8(b),
     the Borrower shall prepay the Loan in an amount equal to the product of (x)
     the Loan Prepayment Percentage and (y) an amount equal to fifty percent
     (50%) of the Net Cash Proceeds of such sale-leaseback; provided that the
     Obligors shall not be required to prepay the Loan with the Net Cash
     Proceeds from any such sale-leaseback transaction entered into within
     twenty-four (24) months of the acquisition of such Aircraft Related
     Equipment or After-Acquired Section 1110 Equipment (as applicable);

          (ii) with respect to Net Cash Proceeds from Designated Asset Sales,
     the Borrower shall prepay the Loan in such amount (if any) so that after
     giving effect to such prepayment the aggregate amount prepaid in connection
     with Designated Asset Sales is equal to the greater of (A) $125,000,000 and
     (B) 60% of the aggregate Net Cash Proceeds received in respect of all
     Designated Asset Sales, taking into account Net Cash Proceeds in respect of
     Designated Asset Sales consummated on or prior to the Effective Date and
     applied to reduce the principal amount of the Loan on or prior to the
     Effective Date as set forth on Schedule 2.5(d) hereto;

          (iii) with respect to all other Asset Sales, the Borrower shall prepay
     the Loan in an aggregate amount equal to one hundred percent (100%) of the
     Net Cash Proceeds from such Asset Sales; provided, however, that the
     Borrower shall not be obligated to so prepay the Loan (A) if and to the
     extent that the Borrower furnishes to the Agent and the Board on or prior
     to the date such prepayment is otherwise required to be made an Officer's
     Certificate certifying that it or another Obligor intends to replace the
     assets from which such Net Cash Proceeds derived, and does so (or enters
     into a definitive agreement committing to do so) within one (1) year of
     receipt thereof (it being understood that any Net Cash Proceeds retained by
     the Borrower but not actually expended within such year or pursuant to such
     agreement to replace the assets from which such Net Cash Proceeds derived
     shall be used to prepay the Loan on the expiration of such year), (B) with
     Net Cash Proceeds from Asset Sales to the extent such Net Cash Proceeds do
     not exceed $1,000,000 in the aggregate per Fiscal Year, or (C) from the
     sale or disposition of Investments permitted to be made pursuant to Section
     6.2 hereof, other than the Investments permitted under clauses (viii), (x)
     and (xii) of Section 6.2.

Any prepayment of the Loan under this subsection (d) shall be made no later than
three (3) Business Days following the receipt by such Obligor of the proceeds of
such Asset Sale.

          (e) Insurance/Condemnation Proceeds. No later than three (3) Business
Days following (x) the date of receipt by an Obligor of any Net Insurance
Proceeds or Net Condemnation Proceeds, or (y) if applicable, the end of the one
(1) year period described in the proviso below or in the case of the Collateral,
such other time as provided in the applicable Collateral Document (as
contemplated in the proviso below), the Borrower shall prepay the Loan in an
amount equal to the amount by which the


                                       37



aggregate amount of the sum of such Net Insurance Proceeds and Net Condemnation
Proceeds in any Fiscal Year (excluding any amounts used to repair, restore or
replace assets in accordance with the immediately following proviso or any
Collateral Document) exceeds $5,000,000; provided the Borrower shall not be
obligated to so prepay the Loan if and to the extent that (i) the Borrower
furnishes to the Board and the Agent on or prior to the date such prepayment is
otherwise required to be made an Officer's Certificate certifying that it or
another Obligor intends to repair, restore or replace the assets from which such
Net Insurance Proceeds or Net Condemnation Proceeds derived, and does so (or
enters into a definitive agreement committing to do so) within one (1) year of
receipt thereof, or (ii) in the case of proceeds derived from Collateral, the
Obligor uses such proceeds to repair, replace or restore such Collateral in
accordance with the applicable provisions of the applicable Collateral Document,
including any time frames contemplated thereby (it being understood that any Net
Insurance Proceeds or Net Condemnation Proceeds retained by an Obligor but not
actually expended within such year or such other time as provided in an
applicable Collateral Document or pursuant to such agreement to repair, restore
or replace the assets from which such Net Insurance Proceeds or Net Condemnation
Proceeds derived shall be used to prepay the Loan on the expiration of such year
or such other time as provided in an applicable Collateral Document).

          (f) Change of Control. Upon the occurrence of a Change of Control, the
Borrower shall promptly give the Agent, the Lenders, the Board and the Loan
Administrator written notice thereof, and the Controlling Creditor shall have
the right, by written notice to the Borrower (with a copy to the Agent and each
Lender) given not more than thirty (30) days following its or their receipt of
the notice of the Change of Control, to require the Borrower to prepay the Loan
in full, together with accrued interest thereon to the date of such prepayment,
on the date specified in such notice (which date shall be a Business Day not
less than ten (10) nor more than twenty (20) Business Days after the date of
such notice), and upon the specified payment date, the Borrower shall so prepay
the then outstanding principal amount of the Loan together with such accrued
interest thereon.

          (g) Gate Leases. In the event that the Obligors shall not have pledged
to the Collateral Agent the Gate Leases at both LGA and DCA (with the consent of
the lessors thereof) by January 1 of any year, the Borrower shall prepay the
Loan on such date in the amount of $10,000,000.

          (h) Collateral Value Deficiency. Upon the occurrence and during the
continuance of a Collateral Value Deficiency under Section 5.8(d), the Borrower
shall prepay the Loan if and to the extent required thereunder.

          (i) Application of Prepayments. Any partial prepayments of the Loan
made by the Borrower in accordance with this Section 2.5 shall be applied to the
outstanding principal balance of the Loan ratably as to each Lender and, with
respect to each Lender, pro rata across the remaining scheduled principal
payments on the Loan owing to each such Lender (and not in the inverse order of
maturity); provided that the first $275,000,000 in prepayments made under
subsection (d)(ii) of this Section 2.5 shall be applied (ratably as to each
Lender) first, to the principal payment scheduled for March 31, 2007 until such
amount is fully reduced, and, thereafter, to the principal payment scheduled for
September 30, 2007 (with any excess above $275,000,000 to be applied pro rata
across the remaining scheduled principal payments on the Loan). Subject to the
Borrower's right to elect the Prepayment Breakage Avoidance Procedure, the
Borrower shall also pay any amounts owing pursuant to Section 2.9(e) or (f) in
connection with any prepayment under this Section 2.5. All prepayments under
this Section 2.5 shall be paid to the Agent for application as provided in
Section 2.8.


                                       38



          SECTION 2.6. INTEREST.

          (a) Rate of Interest. Except as otherwise provided in Section 2.6(c)
and Section 2.9, (i) Tranche A shall bear interest on the unpaid principal
amount thereof from the first day of the initial Interest Period hereunder until
paid in full at the Tranche A Applicable Interest Rate and (ii) Tranche B shall
bear interest on the unpaid principal amount thereof from the first day of the
initial Interest Period hereunder until paid in full at the Tranche B Applicable
Interest Rate; provided, that interest on Tranche A and Tranche B of the Loan
from the first day of the initial Interest Period hereunder until the Effective
Date shall accrue at the Tranche A Applicable Interest Rate and Tranche B
Applicable Interest Rate, respectively (including the default rates, as
applicable), provided for in the Original Loan Agreement.

          (b) Interest Payments. Interest accrued on the Loan shall be payable
in arrears on each Interest Payment Date, upon the payment or prepayment thereof
in whole or in part, and, if not previously paid in full, at maturity (whether
by acceleration or otherwise). Interest on the Loan shall be calculated on the
basis of a year of 360 days and actual number of days elapsed.

          (c) Default Interest. Notwithstanding the rate of interest specified
in Section 2.6(a), if any principal of or interest on the Loan is not paid when
due, whether at stated maturity, upon acceleration, by mandatory prepayment or
otherwise (but other than any voluntary prepayment), such overdue amount shall
bear interest at a rate which is two percent (2.0%) per annum in excess of the
then applicable interest rates on the Loan.

          (d) Assignment of Tranche A During an Interest Period. If some or all
of Tranche A is assigned in compliance with Section 9.2 on a date which is not
the first day of an Interest Period and the Tranche A Applicable Interest Rate
on the portion so assigned will be adjusted as a result thereof (as provided in
the definition of "Tranche A Applicable Interest Rate"), then interest on the
portion of Tranche A so assigned shall accrue at the adjusted Tranche A
Applicable Interest Rate from and including the effective date of such
assignment until paid in full.

          SECTION 2.7. FEES.

          (a) Agency Fees. The Borrower agrees to pay to the Agent on the
Effective Date and annually thereafter on each Interest Payment Date occurring
on or about September 30th of each year (beginning September 30, 2006), an
agency fee in an amount equal to $70,000 per annum for so long as the Loan shall
remain outstanding. In addition, the Borrower agrees to pay to the Govco
Administrative Agent on each Interest Payment Date falling on or about March
31st an agency fee in an amount equal to $25,000 per annum for so long as
Tranche A is funded by the Primary Tranche A Lender.

          (b) Loan Administrator Fee. The Borrower agrees to pay the Loan
Administrator the fees provided for in the Loan Administration Agreement.

          (c) Guarantee Fees. The Borrower agrees to pay to the Agent for the
account of the Board quarterly in advance on each Interest Payment Date for so
long as the Board Guaranty shall remain in effect the Guarantee Fee set forth in
Section 2.06 of the Board Guaranty.

          (d) Collateral Agent Fee. The Borrower agrees to pay to the Agent, for
the account of the Collateral Agent, (i) a setup fee on the Effective Date in
the amount of $7,500, and (ii) on the Effective Date and annually thereafter on
each Interest Payment Date occurring on or about September 30th of each year
(beginning September 30, 2006), a collateral agency fee in an amount equal to
$42,500 per annum for so long as the Loan shall remain outstanding.


                                       39



          (e) Board Fee. The Borrower agrees to pay to the Board on the
Effective Date a fee in the amount of $250,000.

          (f) Lazard Fee. The Borrower agrees to pay to Lazard Freres & Co. on
the Effective Date a fee in the amount of $1,000,000, which fee is the fee
referenced in paragraph II.B of that certain engagement letter dated as of
September 9, 2004, which was approved by the Bankruptcy Court in the Final Order
(I) Authorizing Debtors' Use of Cash Collateral and (II) Providing Adequate
Protection Pursuant to Bankruptcy Rules 4001(b) and 4001(d) dated October 14,
2004.

          (g) Distribution of Fees. On the Effective Date and upon the Agent's
receipt thereof, the Agent shall distribute to the Person entitled thereto each
of the fees referred to in this Section 2.7 payable on such date. Thereafter,
the Agent will distribute any and all fees payable under this Section 2.7 in
accordance with Section 2.8(d) or (e) hereof, as applicable.

          (h) Fees Non-refundable. All fees paid under this Section 2.7 shall be
non-refundable.

          (i) Interest on Fees. If any fee or other amount payable by the
Borrower hereunder is not paid when due, such overdue amount shall bear interest
at a rate which is two percent (2.0%) per annum in excess of the Tranche B
Applicable Interest Rate as in effect from time to time.

          SECTION 2.8. PAYMENTS AND COMPUTATIONS.

          (a) Payments. The Borrower shall make each payment hereunder
(including fees and expenses) not later than 12:00 noon (New York City time) on
the day when due, in Dollars, to the Agent at Citibank, N.A., ABA #021000089,
Account No. 3041-9849, Account Name: Project Finance, Reference: US Airways, in
immediately available funds without set-off, defense, recoupment or
counterclaim. All payments in respect of any Obligations shall at all times be
made to the Agent, whether or not a demand shall have been made or paid under
the Board Guaranty. The Agent will promptly cause all such payments received by
it to be distributed to the Person entitled thereto in accordance with the
priorities of payment set forth below in Section 2.8(d) or (e), or both, as
applicable. Payments received by the Agent after 12:00 noon (New York City time)
shall be deemed to be received on the next Business Day.

          (b) Computation. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

          (c) Payments on Business Days. Whenever any payment hereunder shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be.

          (d) Application of Payments - No Event of Default. So long as no Event
of Default under any of clauses (a) (including any failure to pay all amounts
hereunder upon acceleration as a result of any other Event of Default), (f) or
(g) of Section 7.1 has occurred and is continuing or would result therefrom, the
Agent shall apply all payments in respect of any Obligations in the following
order:

          (i) first, to pay any fees then due and payable under Section 2.7(a),
     (b) and (d) to the Agent, the Govco Administrative Agent, the Collateral
     Agent and the Loan Administrator, as the case may be, on a pro rata basis;


                                       40



          (ii) second, to pay interest then due and payable in respect of the
     Loan to the Lenders on a pro rata basis, provided that, so long as the
     Board Guaranty is in effect, to the extent that any amounts received by the
     Agent constitute interest accrued on any overdue principal of or interest
     on Tranche A in accordance with Section 2.6(c), such amounts shall be
     distributed to the Board under this clause (ii) as if it were a Lender (it
     being understood that following the Board's honoring of a demand for
     payment in accordance with the Board Guaranty and until the Board is
     reimbursed for the amount of all payments thereunder, all amounts paid in
     respect of Tranche A shall be distributed to the Board and amounts paid in
     respect of Tranche B shall be distributed to the Tranche B Lenders, all on
     a pro rata basis);

          (iii) third, to pay principal then due and payable on the Loan to the
     Lenders, on a pro rata basis (it being understood that following the
     Board's honoring of a demand for payment in accordance with the Board
     Guaranty and until the Board is reimbursed for the amount of all payments
     thereunder, the amounts paid in respect of Tranche A shall be distributed
     to the Board and amounts paid in respect of Tranche B shall be distributed
     to the Tranche B Lenders, in each case on a pro rata basis);

          (iv) fourth, to pay any fees then due and payable under Section 2.7(c)
     to the Board; and

          (v) fifth, to pay any other Obligations then due and payable to the
     Agent, the Govco Administrative Agent, the Collateral Agent, the Loan
     Administrator, the Board and the Lenders, on a pro rata basis.

          (e) Application of Payments After Event of Default. After the
occurrence and during the continuance of an Event of Default under any of
clauses (a) (including any failure to pay all amounts hereunder upon
acceleration as a result of any other Event of Default), (f) or (g) of Section
7.1, the Agent shall apply all payments in respect of any Obligations (including
amounts received by the Collateral Agent upon the exercise of remedies under the
Collateral Documents) in the following order:

          (i) first, to pay Obligations in respect of any expenses, fees,
     indemnities or other sums owing hereunder then due to the Agent, the
     Collateral Agent and the Loan Administrator, on a pro rata basis;

          (ii) second, to pay Obligations in respect of any expenses, fees,
     indemnities or other sums owing hereunder not referred to in clauses (iii)
     through (v) below then due to the Board, the Govco Administrative Agent and
     the Lenders, on a pro rata basis;

          (iii) third, to pay on a pro rata basis (A) interest then due and
     payable in respect of the Loan to the Lenders, provided that so long as the
     Board Guaranty is in effect, to the extent that any amounts received by the
     Agent constitute interest accrued on any overdue principal or interest on
     Tranche A in accordance with Section 2.6(c), such amounts shall be
     distributed to the Board under this clause (iii) as if it were a Lender and
     (B) in the event that any fees payable to the Board under Section 2.7(c)
     were not paid when due under Section 2.7(c), the portion of such unpaid
     fees which is equal to the amount which the Board would have been then
     entitled to receive if the fee payable under Section 2.7(c) were payable
     daily in arrears (instead of quarterly in advance) (including interest
     accrued thereon through the date of payment in accordance with Section
     2.7(i)), on a pro rata basis (it being understood that following the
     Board's honoring of a demand for payment in accordance with the Board
     Guaranty and until the Board is reimbursed for the amount of all payments
     thereunder, all amounts paid in respect of Tranche A shall be


                                       41



     distributed to the Board and amounts paid in respect of Tranche B shall be
     distributed to the Tranche B Lenders, all on a pro rata basis);

          (iv) fourth, to pay or prepay principal payments on the Loan to the
     Lenders, on a pro rata basis (it being understood that following the
     Board's honoring of a demand for payment in accordance with the Board
     Guaranty and until the Board is reimbursed for the amount of all payments
     thereunder, amounts paid in respect of Tranche A shall be distributed to
     the Board and amounts paid in respect of Tranche B shall be distributed to
     the Tranche B Lenders, in each case on a pro rata basis); and

          (v) fifth, to pay any fees due and payable under Section 2.7(c) to the
     Board under and in accordance with Section 2.7(c) (including interest
     accrued thereon through the date of payment in accordance with Section
     2.7(i)) and not otherwise paid pursuant to clause (iii) above.

          (f) Assignment to Board of Lender's Interest in Loan. Upon the
assignment to the Board of any Tranche A Lender's right, title and interest in
and to its pro rata portion of the principal of and interest on Tranche A in
accordance with the Board Guaranty, the Board shall have the rights and
privileges of a Tranche A Lender with respect to such payment (to the extent of
the interests in Tranche A so assigned to the Board). No payment by the Board to
the Agent or any Tranche A Lender under the Board Guaranty shall reduce,
discharge, satisfy, modify or terminate the corresponding payment or any other
obligation of the Borrower under this Agreement or any Tranche A Note, which
obligations shall remain in full force and effect.

          (g) Funding Defaults. Unless the Borrower has notified the Agent,
prior to the date any payment is required to be made by it to the Agent
hereunder, that the Borrower will not make such payment, the Agent may assume
that the Borrower has timely made such payment and may (but shall not be so
required to), in reliance thereon, make available a corresponding amount to the
Person entitled thereto. If and to the extent that such payment was not in fact
made to the Agent in immediately available funds, then each Lender (or the
Board, if applicable) shall forthwith on demand repay to the Agent the portion
of such assumed payment that was made available to such Lender (or the Board, if
applicable) in immediately available funds, together with interest thereon in
respect of each day from and including the date such amount was made available
by the Agent to such Lender (or the Board, if applicable) to the date such
amount is repaid to the Agent in immediately available funds, at the applicable
Federal Funds Rate (as defined in the definition of "Base Rate Loan") from time
to time in effect. A notice of the Agent to the Borrower with respect to any
amount owing under this subsection (g) shall be conclusive, absent manifest
error.

          SECTION 2.9. CERTAIN PROVISIONS GOVERNING THE LOAN.

          (a) Determination of Interest Rate. The Tranche A Applicable Interest
Rate and the Tranche B Applicable Interest Rate shall be determined by the Govco
Administrative Agent (as applicable) and Agent, respectively, pursuant to the
procedures set forth in the definition of "Tranche A Applicable Interest Rate"
and "LIBOR", and shall promptly thereafter be notified to the Borrower, the
Board, the Primary Tranche A Lender or the Alternate Tranche A Lender, as
applicable, and each Tranche B Lender.

          (b) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that: (i) the Agent determines that adequate and fair means do not exist for
ascertaining the applicable interest rates by reference to which the LIBOR then
being determined is to be fixed or (ii) the Requisite LIBOR Lenders notify the
Agent that the LIBOR for any Interest Period will not adequately reflect the
cost to the LIBOR Lenders of making or maintaining the portion of the loan for
which the interest rate is determined


                                       42



by reference to LIBOR for such Interest Period, the Agent shall forthwith so
notify the Borrower, the Board, the Loan Administrator and the Lenders,
whereupon during the thirty (30) days following the date of any such notice the
Borrower, the Agent and the LIBOR Lenders shall negotiate in good faith (subject
to the consent of the Board) in order to arrive at a mutually acceptable
alternative basis for determining the interest rate from time to time applicable
to Tranche A or Tranche B, as applicable, (the "Substitute Basis"). If within
the twenty (20) days following the date of any such notice the Borrower, the
Agent and the LIBOR Lenders shall agree upon, and the Board shall consent to, a
Substitute Basis, such Substitute Basis shall be retroactive to and effective
from the first day of the then current Interest Period until and including the
last day of such Interest Period. If after twenty (20) days from the date of
such notice, the Borrower, the Agent and the LIBOR Lenders shall have failed to
agree upon, or the Board shall have failed to consent to, a Substitute Basis,
then the Agent (upon instructions from the Requisite LIBOR Lenders) shall
certify in writing to the Borrower (such certification to be conclusive and
binding on all LIBOR Lenders and all other parties hereto absent manifest error)
the interest rate at which the LIBOR Lenders are prepared to maintain their
portion of the Loan for such Interest Period, it being understood that such
Lenders' interest rate shall be at a rate per annum equal to a rate which
adequately and fairly reflects the cost to such Lenders of obtaining the funds
necessary to maintain their portion of the Loan for such Interest Period. If no
Substitute Basis is established, upon receipt of notice of the interest rates at
which the Requisite LIBOR Lenders are prepared to maintain their respective
portion of the Loan, the Borrower shall have the right exercisable upon ten (10)
Business Days' prior notice to the Lenders, the Board and the Loan Administrator
through the Agent (i) to continue to borrow the Loan at the interest rate so
advised by the Agent (as such rate may be modified, from time to time, at the
outset of each subsequent Interest Period), (ii) to convert the Loan to a Base
Rate Loan, or (iii) to prepay in full the Loan together with accrued but unpaid
interest thereon at the interest rate certified in writing by the Requisite
LIBOR Lenders as provided above and all other amounts due under the Loan
Documents, whereupon the Loan shall become due and payable on the date specified
by the Borrower in such notice.

          (c) Increased Costs. If at any time any Lender or Program Support
Provider shall determine that as a result of the introduction of or any change
after the date hereof in or in the interpretation of any law, treaty or
governmental rule, regulation or order or the compliance by such Lender or
Program Support Provider with any guideline, request or directive after the date
hereof from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Lender
or Program Support Provider of agreeing to make or making, funding, guaranteeing
or maintaining any portion of the Loan (except in respect of Taxes), then the
Borrower shall from time to time, within five (5) Business Days of a demand
(which demand shall be accompanied by a statement setting forth the basis for
such demand and a calculation of the amount thereof in reasonable detail) by
such Lender or Program Support Provider (with a copy of such demand to the
Agent, the Board and the Loan Administrator), pay to the Agent for the account
of such Lender or Program Support Provider additional amounts sufficient to
compensate such Lender or Program Support Provider for such increased cost;
provided that no Lender or Program Support Provider shall be entitled to claim
any such additional amount for amounts incurred more than six (6) months prior
to the making of such demand. A certificate as to the amount of such increased
cost, submitted to the Borrower (and the Agent and the Board) by such Lender or
Program Support Provider shall be conclusive and binding for all purposes,
absent manifest error. Each Lender or Program Support Provider shall promptly
notify in writing the Borrower, the Agent and the Board of any event of which
such Lender or Program Support Provider has knowledge, occurring after the date
hereof, which would entitle such Lender or Program Support Provider to
compensation pursuant to this Section 2.9(c) and will designate a different
lending office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Lender or Program
Support Provider be otherwise materially disadvantageous to it.


                                       43



          (d) Illegality. Notwithstanding any other provision of this Agreement,
if any Lender determines that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for such Lender
to maintain its portion of the Loan, then, on notice thereof by such Lender to
the Borrower through the Agent (with a copy to the Board and the Loan
Administrator), the obligation of such Lender to continue to fund or maintain
its portion of the Loan shall be terminated and the Borrower shall either (i)
convert the affected portion of the Loan of such Lender to a Base Rate Loan,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain its portion of the Loan based on LIBOR to such
day, or immediately, if such Lender may not lawfully continue to maintain such
portion of the Loan based on LIBOR or (ii) prepay such affected portion of the
Loan to such Lender together with accrued but unpaid interest thereon and all
other sums payable hereunder with respect thereto on the last day of the then
current Interest Period or earlier if necessary to avoid such illegality. Any
such partial prepayment of the Loan shall be applied ratably to the then unpaid
installments thereof in accordance with the amount of each such unpaid
installment.

          (e) Breakage Costs. In addition to all amounts required to be paid by
the Borrower pursuant to Section 2.5 but without duplication of any amounts
payable under Section 2.9(f), the Borrower shall compensate each Lender upon
demand, for all losses, expenses and liabilities (including any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender or the termination of any other financial arrangement it
may have entered into to fund or maintain or support such Lender's portion of
the Loan, but excluding Taxes) which that Lender may sustain (i) subject to the
Borrower's right to utilize the Prepayment Breakage Avoidance Procedure, if for
any reason any portion of the Loan is prepaid (including mandatorily pursuant to
Section 2.5 or this Section 2.9) on a date which is not the last day of the
applicable Interest Period or (ii) as a consequence of any failure by a Borrower
to repay any portion of the Loan when required by the terms hereof. The Lender
making demand for such compensation shall deliver to the Borrower (with a copy
to the Agent, the Board and the Loan Administrator) concurrently with such
demand a written statement as to such losses, expenses and liabilities, and this
statement shall be conclusive as to the amount of compensation due to that
Lender absent manifest error, and such compensation shall be paid to the Agent
for the account of such Lender.

          (f) Primary Tranche A Lender Prepayment Compensation. In connection
with all prepayments under Section 2.4, Section 2.5 and Section 2.9(d), if the
Primary Tranche A Lender is the Tranche A Lender, the Borrower shall pay to the
Primary Tranche A Lender within 10 Business Days of demand an amount equal to
(i) the amount of yield that the Primary Tranche A Lender is required to pay to
holders of its Commercial Paper during the Liquidation Period (as defined below)
on an amount of Commercial Paper having an aggregate issue price equal to the
amount of the Borrower's prepayment less (ii) the amount of the investment
earnings, if any, received as reasonably determined by the Govco Administrative
Agent, on the prepayment amount during the Liquidation Period. As used herein,
"Liquidation Period" means the period from the date on which a prepayment is
made to the date on which the Primary Tranche A Lender's total amount of
Commercial Paper related to the funding of Tranche A is reduced (without
prepayment thereof) by an amount equal to the amount of the Borrower's
prepayment.

          SECTION 2.10. CAPITAL ADEQUACY. If at any time any Lender or Program
Support Provider determines that (a) the adoption of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement regarding capital adequacy, (b) compliance with
any such law, treaty, rule, regulation, or order or (c) compliance with any
guideline or request or directive from any central bank or other Governmental
Authority or any accounting board or authority (whether or not a Governmental
Authority) which is responsible for the establishment or interpretation of
national or international accounting principles (in each case, whether or not
having the


                                       44



force of law) shall have the effect of reducing the rate of return on such
Lender's or Program Support Provider's (or any corporation controlling such
Lender's or Program Support Provider's) capital as a consequence of its
obligations hereunder (other than with respect to Taxes) to a level below that
which such Lender, Program Support Provider or corporation could have achieved
but for such adoption, change, compliance or interpretation, then, upon demand
from time to time by such Lender or Program Support Provider (with a copy of
such demand to the Agent and the Board), the Borrower shall within five (5)
Business Days of such demand pay to the Agent for the account of such Lender or
Program Support Provider from time to time as specified by such Lender or
Program Support Provider additional amounts sufficient to compensate such Lender
or Program Support Provider for such reduction; provided that the Borrower shall
not be required to compensate a Lender or Program Support Provider pursuant to
this Section 2.10 for any amounts incurred more than six (6) months prior to the
date of such demand. A certificate as to such amounts submitted to the Borrower
(and the Agent and the Board) by such Lender or Program Support Provider shall
be conclusive and binding for all purposes absent manifest error. Each Lender or
Program Support Provider shall promptly notify the Borrower, the Agent and the
Board of any event of which such Lender or Program Support Provider has
knowledge, occurring after the date hereof, which would entitle such Lender or
Program Support Provider to compensation pursuant to this Section 2.10 and will
designate a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender or Program Support Provider, be otherwise disadvantageous to it. For
the avoidance of doubt, any interpretation of Accounting Research Bulletin No.
51 by FASB (including Interpretation No. 46 - Consolidation of Variable Interest
Entities) shall constitute an adoption, change, request or directive, and any
implementation thereof shall be, subject to this Section 2.10.

          SECTION 2.11. TAXES.

          (a) No Withholding, etc. Except as otherwise provided in the next
sentence and Section 9.2, any and all payments by the Obligors under each Loan
Document shall be made free and clear of and without deduction for any and all
Taxes, excluding (i) in the case of each Lender, the Loan Administrator, each
Participant and the Agent, Taxes measured by its net income and franchise Taxes,
in each case if imposed on it as a result of such Person being organized under
the laws of the jurisdiction imposing such Taxes or doing business in such
jurisdiction unrelated to the transactions contemplated by the Original Loan
Agreement or any Loan Document, (ii) in the case of each Lender and each
Participant, Taxes measured by its net income and franchise Taxes imposed on it
by the jurisdiction in which its Lending Office is located or in which it booked
its participation for tax accounting purposes, (iii) in the case of each Lender,
the Loan Administrator, each Participant and the Agent, Taxes imposed on it as a
result of its failure to comply with its obligations under Section 2.11(f),
Section 2.11(g) or Section 9.2, (iv) in the case of each Lender, the Loan
Administrator, each Participant and the Agent (A) that is a party hereto or
Participant, as the case may be, on the Effective Date, United States federal
withholding Taxes except to the extent imposed as a result of a change in
applicable law, including income tax conventions, after the Effective Date and
(B) that becomes a party hereto or Participant, as the case may be, after the
Effective Date, United States federal withholding Taxes except to the extent
imposed as a result of a change in applicable law, including income tax
conventions, after the date of the Assignment and Acceptance pursuant to which
it becomes a Lender or after the date such Person becomes a Participant, the
Loan Administrator or the Agent, as applicable, and (v) Taxes imposed as a
result of such Person's gross negligence or willful misconduct (all such
non-excluded Taxes being hereinafter referred to as "Indemnified Taxes"). If any
Indemnified Taxes shall be required by law to be deducted from or in respect of
any sum payable under any Loan Document to any Lender, the Loan Administrator or
the Agent (1) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.11) such Lender, the Loan
Administrator or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (2) the Obligors
shall make such deductions, and


                                       45



(3) the Obligors shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law.

          (b) Other Taxes. In addition, the Obligors agree to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction which arise from any payment made under any
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, any Loan Document (collectively, "Other Taxes") to the Agent
for the account of the affected party.

          (c) Tax Indemnity. The Obligors will indemnify each Lender, the Agent
and the Loan Administrator for the full amount of Indemnified Taxes or Other
Taxes (including any Taxes imposed by any jurisdiction on amounts payable under
this Section 2.11) paid by such Lender, the Loan Administrator or the Agent (as
the case may be) and any liability (including for penalties, interest and
expenses) arising therefrom or with respect thereto, other than any liability,
including for penalties, interest and expenses, arising from the gross
negligence or willful misconduct of the Lender, the Loan Administrator or the
Agent, as the case may be. This indemnification shall be made to the Agent for
account of the relevant Lender, the Loan Administrator or the Agent, as the case
may be, within 30 days from the date such Lender, the Loan Administrator, or the
Agent (as the case may be) makes written demand therefor (with a copy to the
Agent if made by a Lender or the Loan Administrator and accompanied by a
statement setting forth the basis for such taxation and the calculation of the
amount thereof in reasonable detail).

          (d) Evidence of Payment. Within 30 days after the date of any payment
of Indemnified Taxes or Other Taxes, the Obligors will furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof or other
documentation reasonably satisfactory to the Agent.

          (e) Survival. Without prejudice to the survival of any other agreement
of the Obligors hereunder, the agreements and obligations of the parties
contained in this Section 2.11 shall survive the payment in full of the
Obligations.

          (f) Certain Withholding Tax Matters. Each Lender, each Participant,
the Loan Administrator and the Agent that is a Non-U.S. Person and that is
entitled at such time to an exemption from United States withholding tax, or
that is subject to such tax at a reduced rate under an applicable tax treaty,
shall, on or prior to the Effective Date or on or prior to the date of the
Assignment and Acceptance pursuant to which it becomes a Lender or on or prior
to the date such Person becomes a Participant, the Loan Administrator or the
Agent, as applicable, and from time to time thereafter if requested by the Agent
or the Obligors, provide the Agent and the Obligors with two completed copies of
either IRS Form W-8BEN or W-8ECI or other applicable form, certificate or
document prescribed by the IRS certifying as to such Non-U.S. Person's
entitlement to such exemption from United States withholding tax or reduced rate
with respect to all payments to be made to such Non-U.S. Person under the Loan
Documents. In addition, each Lender, each Participant, the Loan Administrator
and the Agent that is a Non-U.S. Person, as the case may be, shall deliver to
the Obligors and the Agent, notice of any event (other than a change in
applicable law, including income tax conventions) requiring a change in the most
recent form previously delivered by such Person to the Obligors and the Agent.
Each Lender, each Participant, the Loan Administrator and Agent (other than an
entity treated as a corporation for U.S. federal income tax purposes) that is a
"United States person" within the meaning of Section 7701(a)(30) of the Internal
Revenue Code shall deliver two duly signed and completed copies of IRS Form W-9
to the Agent and the Obligors, at the times and in the manner described above
with respect to IRS Forms W-8. Unless the Agent and the Obligors have received
forms or other documents satisfactory to them indicating that payments under the
Loan Documents are not subject to United States withholding tax or are subject
to


                                       46



such tax at a rate reduced by an applicable tax treaty, the Agent or the
Obligors shall, notwithstanding the provisions of Section 2.11(a) and (c) and
without impairing any obligation of the Obligors under this Section 2.11 with
respect to such tax, withhold such United States withholding taxes from such
payments at the appropriate rate; provided that if such Person is a Lender,
Participant, Agent or Loan Administrator and shall have satisfied the
requirement of this Section 2.11(f) on the date it became a Lender, Participant,
Agent or Loan Administrator, nothing in this Section 2.11(f) shall relieve the
Obligors of their obligation to pay any amounts pursuant to this Section 2.11 in
the event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in governmental
interpretation, administration or application thereof, such Lender, Participant,
Agent or Loan Administrator is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing that it is not
subject to withholding or is subject to withholding at a reduced rate. The
obligation of the Obligors under this Section 2.11 shall survive the repayment
of all other Obligations hereunder and the resignation of the Agent.

          (g) Mitigation. Any Lender claiming any additional amounts payable
pursuant to this Section 2.11 shall use its reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which would
be payable or may thereafter accrue and would not, in the reasonable judgment of
such Lender, be otherwise materially disadvantageous to such Lender.

          SECTION 2.12. LIMITATIONS WITH RESPECT TO RSA. Notwithstanding
anything to the contrary contained herein, RSA, as a Tranche B Lender, shall not
be entitled to the benefits of Section 2.9(b) or Section 2.10; provided,
however, that any permitted assignee or participant of RSA which is a bank
organized under the laws of the United States or any state thereof shall be
entitled to the benefits of Section 2.9(b) and Section 2.10 (subject, in the
case of any permitted participant, to the limitation set forth in Section
9.2(e)).

                                  ARTICLE III

                      CONDITIONS PRECEDENT TO EFFECTIVENESS

          This Agreement shall become effective on the date hereof (the
"Effective Date") subject to the satisfaction (in the judgment of the Agent, the
Board and the Lenders (except as otherwise provided below in this Article III))
of all of the following conditions precedent:

          (a) Certain Agreements and Documents. The Agent, the Collateral Agent,
the Primary Tranche A Lender, the Alternate Tranche A Lender, the Tranche B
Lenders and the Board shall have received on or prior to the Effective Date each
of the following (with only the Agent or the requesting Lender receiving
originals of the Notes), each dated as of the Effective Date, in form and
substance satisfactory to the Agent, the Collateral Agent, the Board, the
Primary Tranche A Lender, the Alternate Tranche A Lender and the Tranche B
Lenders:

          (i) this Agreement, duly executed and delivered by the parties hereto;

          (ii) the Notes, duly executed by the Borrower and conforming to the
     requirements set forth in Section 2.3(d);

          (iii) the First Lien Guaranty, duly executed and delivered by the
     parties thereto;

          (iv) the Board Guaranty, duly executed and delivered by the parties
     thereto;


                                       47



          (v) the Collateral Documents specified in clauses (i) through (vii) of
     the definition thereof, duly executed and delivered by the parties thereto,
     together with (A) financing statements in form and substance reasonably
     acceptable to the Board, as may be required or advisable to grant, continue
     and maintain an enforceable security interest in the Collateral (subject to
     the terms hereof and of the other Loan Documents) in accordance with the
     UCC as enacted in all relevant jurisdictions; (B) such Collateral Documents
     (together with any other necessary documents, instruments, affidavits or
     certificates) as may be required in order to perfect and maintain the
     security interest in the Collateral, perfection of a security interest in
     which requires a filing for recordation with the FAA, in proper form for
     recordation with the FAA; (C) insurance certificates and brokers' reports
     evidencing the insurance coverages required under the Loan Documents,
     including with respect to the Collateral (in accordance with the
     requirements of the Collateral Documents) naming the Collateral Agent as
     loss payee and otherwise in form and substance reasonably acceptable to the
     Collateral Agent; (D) a Collateral Value Certificate, together with
     Appraisal Reports in respect of the Appraised Collateral in form and
     substance reasonably acceptable to the Board; (E) any other necessary
     documents, certificates, forms and filing fees as may be required in order
     to perfect and maintain the security interest in the Collateral in the
     records of the appropriate Governmental Authorities' offices of the various
     land records offices located in Pennsylvania; (F) Control Agreements with
     respect to the deposit accounts and securities accounts of the Obligors
     (except to the extent not required pursuant to Section 5.13 hereof); and
     (G) original stock certificates representing the Obligors' interests in
     each of the entities listed on Schedule 3(a)(v) (being all entities listed
     on Schedule 4.1(c) whose securities are certificated), together with
     undated stock powers executed in blank (delivered only to the Collateral
     Agent);

          (vi) the Loan Administration Agreement, duly executed and delivered by
     the parties thereto;

          (vii) the favorable opinions of (A) Skadden, Arps, Slate, Meagher &
     Flom LLP and/or its affiliates, special counsel to the Obligors, (B) Arnold
     & Porter LLP, special counsel to the Obligors; (C) James E. Walsh III,
     Senior Vice President and General Counsel of AWA, (D) Janet Dhillon, Vice
     President - Deputy General Counsel of the Borrower, (E) Kozloff Stoudt,
     special Pennsylvania real estate counsel to the Obligors, (F) Daugherty,
     Fowler, Peregrin & Haught, special FAA counsel; (G) O'Melveny & Myers LLP,
     special counsel to the Obligors; (H) Marguerite Owen, legal counsel to the
     Board (which need be addressed and delivered only to the Agent and Tranche
     A Lenders), and (I) Curtis, Mallet-Prevost, Colt & Mosle LLP, special New
     York counsel to the Board (which need be addressed and delivered only to
     the Agent and the Tranche A Lenders);

          (viii) a copy of the certificate of incorporation of each Obligor,
     certified as of a recent date by the Secretary of State of the state of its
     incorporation or organization, together with a "long-form" certificate of
     such official attesting to the good standing of such Person;

          (ix) a certificate of each Obligor signed on behalf of such Person by
     its Secretary or an Assistant Secretary certifying (A) the names and true
     signatures of each officer of such Person who has been authorized to
     execute and deliver each Loan Document required to be executed and
     delivered on or prior to the Effective Date by or on behalf of such Person
     hereunder or thereunder, (B) the by-laws of such Person as in effect on the
     date of such certification, (C) the resolutions of such Person's board of
     directors approving and authorizing the execution, delivery and performance
     of each Loan Document to which it is a party and (D) that there have been
     no changes in the certificate of incorporation of such Person from the
     certificate of incorporation delivered pursuant to the immediately
     preceding clause;


                                       48



          (x) an Officer's Certificate of the Borrower certifying (A) that all
     representations and warranties in Article IV hereof (other than the
     representation set forth in Section 4.3(b)(i)) are true and correct in all
     material respects on and as of the Effective Date after giving effect to
     the Consummation of the Plan, as though made on and as of such date, (B)
     that no Default or Event of Default has occurred and is continuing and (C)
     as to the matters specified in subsection (p) of this Article III;

          (xi) an Officer's Certificate of the Borrower certifying that as of
     the Effective Date, the written information furnished to the Board by or on
     behalf of the Obligors for use in connection with negotiation and closing
     of the transaction contemplated by this Agreement is true and complete in
     all material respects; provided that with respect to pro forma and
     projected financial information and other forward-looking statements, the
     Borrower represents only that such information was prepared in good faith
     based upon assumptions believed to be reasonable at the time; and

          (xii) an Officer's Certificate of the Borrower certifying that
     attached thereto is a true, correct and complete copy of the Disclosure
     Statement, Plan of Reorganization and the Confirmation Order.

          (b) Other Agreements. The Agent, the Board, the Primary Tranche A
Lender, the Alternate Tranche A Lender and the Tranche B Lenders shall have
received on or before the Effective Date evidence that the Obligors have
consummated the transactions contemplated by the following agreements (which
agreements shall be in form and substance reasonably satisfactory to the Board,
the Lenders and the Agent): (i) the AWA Loan Agreement and the other "Loan
Documents" (under and as defined therein) which are required to be executed and
delivered by the parties thereto on the effective date thereof, and (ii) the
other agreements listed on Schedule 3.1(b).

          (c) Fees and Expenses Paid. The Borrower shall have paid all fees due
and payable on the Effective Date (including, without limitation, the fees
referenced in Section 2.7), and all expenses of the Agent and its Affiliates,
the Primary Tranche A Lender, the Alternate Tranche A Lender, the Tranche B
Lenders, the Board, the Collateral Agent and the Loan Administrator due and
payable on or before the Effective Date.

          (d) Consents, Etc. The Obligors shall have received all consents and
authorizations required pursuant to any material Contractual Obligation with any
other Person in form and substance reasonably satisfactory to the Board and the
Lenders and shall have obtained all consents, waivers and authorizations of, and
effected all notices to and filings with, the New York Stock Exchange, the SEC
and any other Governmental Authority as may be necessary (i) in connection with
the effectiveness of the Plan of Reorganization and (ii) to allow the Obligors
lawfully to execute, deliver and perform, in all material respects, their
obligations under the Loan Documents to which they are, or shall be, a party and
each other agreement or instrument to be executed and delivered by them,
pursuant thereto or in connection therewith.

          (e) No Illegality. No law or regulation shall be applicable in the
judgment of the Agent or the Board that restrains, prevents or imposes
materially adverse conditions upon the transactions contemplated hereby.

          (f) Representations and Warranties of the Obligors. All
representations and warranties set forth in Article IV hereof shall be true and
correct in all material respects on and as of the Effective Date after giving
effect to the Consummation of the Plan as though made on and as of such date
(except to the extent any such representation or warranty by its terms is made
as of a different specified


                                       49



date in which event such representation or warranty shall be true and correct in
all material respects as of such specified date).

          (g) No Event of Default. After giving effect to the Consummation of
the Plan, no Default or Event of Default shall have occurred and be continuing.

          (h) Corporate and Other Proceedings. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Agent, the Board, the Primary Tranche
A Lender, the Alternate Tranche A Lender and the Tranche B Lenders.

          (i) No Material Adverse Change. Since the August 9, 2005, no material
adverse change shall have occurred in the financial condition, assets,
liabilities, business or results of operations of the Obligors taken as a whole
(excluding any such changes resulting from (i) changes or conditions generally
affecting the U.S. economy or financial markets, (ii) changes or conditions
generally affecting any of the segments of the airline industry in which any of
the Obligors operate, to the extent such conditions or changes do not
disproportionately impact the Obligors, or (iii) the announcement or
consummation of the Merger) or in the Borrower's ability to repay the Loan or
perform its obligations under the Loan Documents.

          (j) Plan of Reorganization. (i) The Plan of Reorganization shall be
reasonably satisfactory to the Lenders and the Board, (ii) all conditions
precedent to the occurrence of the effective date of the Plan of Reorganization
shall have been satisfied and the Plan of Reorganization shall have become
effective, subject only to consummation of the transactions contemplated under
the Loan Documents, and (iii) no Obligor shall be in default with respect to any
material obligation under the Plan of Reorganization and the Consummation of the
Plan shall have occurred, subject only to consummation of the transactions under
the Loan Documents.

          (k) Confirmation Order. (i) The Confirmation Order shall be in form
and substance reasonably satisfactory to the Lenders and the Board and shall not
have been stayed by the Bankruptcy Court (or by any court having jurisdiction to
issue any such stay) or reversed, vacated, amended, supplemented or modified,
(ii) the time to appeal the Confirmation Order shall have expired, (iii) no
appeal or petition for review, rehearing, or certiorari with respect to the
Confirmation Order shall be pending, and (iv) the Confirmation Order shall
otherwise be in full force and effect.

          (l) Projections. The Lenders and the Board shall have received
satisfactory projections and pro forma financial information for Group (on a
consolidated basis) for the fiscal years 2005 through and including 2010, which
projections shall be certified by the Chief Executive Officer or the Chief
Financial Officer of Group as being reasonable estimates as of the Effective
Date of future financial performance and based upon assumptions that are
reasonable in light of conditions and facts known to Group as of the Effective
Date.

          (m) Jurisdiction of Bankruptcy Court. The Lenders and the Board shall
be satisfied that the Bankruptcy Court's retention of jurisdiction under the
Confirmation Order will not govern the enforcement of the Loan Documents or any
rights or remedies relating thereto, except as may be otherwise consented to by
them.

          (n) Certificates of Incorporation. The certificates of incorporation
or other applicable governing documents of the Obligors, as provided for in the
Plan or the Merger Agreement, shall be reasonably satisfactory to the Lenders
and the Board, and shall have been filed with and accepted


                                       50



by the Secretary of State or other appropriate Governmental Authority in the
applicable jurisdictions and shall have become effective.

          (o) Merger. The Effective Time (as defined in the Merger Agreement)
shall have occurred.

          (p) Unrestricted Cash and Cash Equivalents. After the Consummation of
the Plan, the Obligors shall have on a pro forma basis as of the Effective Date,
taking into account net cash proceeds of the Stock Offering, the Convertible
Note Offering, the Juniper Financing and the Airbus Financing expected to be
received within seven (7) days of the Effective Date, unrestricted cash and Cash
Equivalents (as determined in accordance with GAAP) of not less than
$1,250,000,000.

          (q) Equity Investment Agreements. The Obligors shall have consummated
the transactions contemplated by the Equity Investment Agreements and in
connection therewith shall have received Cash Proceeds of no less than
$565,000,000.

          (r) Designated Asset Sales. The Obligors shall have on or prior to the
Effective Date consummated Designated Asset Sales which resulted in Net Cash
Proceeds to the Obligors of not less than $125,000,000.

          (s) Other Documents and Information. The Agent, the Lenders and the
Board shall have received such other certificates, documents, agreements and
information respecting the Obligors as each of them may have reasonably
requested.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

          To induce the other parties (excluding any other Obligors) to enter
into this Agreement, each of the Obligors represents and warrants to each other
party hereto (excluding any other Obligors) that, on and as of the Effective
Date, after giving effect to the Consummation of the Plan (references to
"Obligors" contained in this Article IV shall be limited to Obligors as of the
Effective Date):

          SECTION 4.1. ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING,
BUSINESS, SUBSIDIARIES, THE ACT AND THE REGULATIONS.

          (a) Organization, Power and Authority. Each Obligor is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each Obligor has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated hereby and
thereby.

          (b) Foreign Qualification; "Air Carrier Status". Each Obligor is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing could not reasonably be expected to have a Material Adverse
Effect. The Borrower is an "air carrier" within the meaning of the Act and holds
a certificate under Section 41102 of Title 49. Each of the Borrower and any
other Obligor engaged in operations as an "air carrier" is a "citizen of the
United States" within the meaning of Section 40102(a)(15) of Title 49, as
interpreted by the United States Department of Transportation (a "United States
Citizen") and holds an air carrier operating certificate issued pursuant to
Chapter 447 of Title 49 for aircraft capable of carrying 10 or more individuals
or 6,000


                                       51



pounds or more of cargo. Each Obligor possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which are
material to the conduct of its business and operations as currently conducted
(including in the case of each Obligor engaged in operations as an "air
carrier", the operation of the routes flown by it), a true and complete list of
which are set forth on Schedule 4.1(b).

          (c) Subsidiaries. All of the Subsidiaries of each Obligor and all
other Persons in which any Obligor owns any Capital Stock, in each case, as of
the Effective Date, are identified in Schedule 4.1(c). Schedule 4.1(c) correctly
sets forth as of the Effective Date the equity and voting interest of Group in
each of the Subsidiaries identified therein. There are no limitations on the
rights of Group to vote the Capital Stock it owns of any Person listed on
Schedule 4.1(c). Airways Assurance Limited, a Bermuda corporation, is a
wholly-owned Subsidiary of Group whose business is limited to securing insurance
for the Obligors. AWHQ LLC, an Arizona limited liability company, is a
wholly-owned Subsidiary of the Obligors, owned 99% by Holdings and 1% by AWA,
whose business is limited to acting as a real estate holding company. America
West Company Store LLC, an Arizona limited liability company, is a wholly-owned
Subsidiary of AWA whose business is limited to operation of the America West
company store.

          SECTION 4.2. AUTHORIZATION OF LOAN DOCUMENTS, ETC.

          (a) Authorization. Each Obligor has duly authorized by all necessary
corporate action the execution, delivery and performance of the Loan Documents
to which it is a party.

          (b) No Conflicts. After giving effect to the Consummation of the Plan,
the execution, delivery and performance by each Obligor of the Loan Documents
and the consummation of the transactions contemplated by the Loan Documents to
which it is a party do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to any Obligor, the certificate
or articles of incorporation or bylaws of any Obligor or any order, judgment or
decree of any court or other agency of government binding on any Obligor, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default or require any payment under (A) any Loan Document or
(B) any other Contractual Obligation of any Obligor, except that with respect to
clause (B), for any such conflict, breach, default or requirement of payment
which could not reasonably be expected to have a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of any Obligor (other than the Liens created under the
Collateral Documents) or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of any
Obligor, except for such approvals or consents (A) which will have been obtained
on or before the Effective Date and have been disclosed in writing to the Agent
and the Board or (B) with respect to any Contractual Obligation, which if not
obtained, could not reasonably be expected to have a Material Adverse Effect.

          (c) No Consents, Approvals, etc. The execution, delivery and
performance by each Obligor of the Loan Documents to which it is a party and the
consummation of the transactions contemplated by the Loan Documents to which
such Obligor is a party do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other Governmental Authority or regulatory body or any other
Person which is required to be obtained or made on or prior to the Effective
Date and which has not been obtained or made, except as is disclosed on Schedule
4.2(c).

          (d) Execution, Delivery, Enforceability. Each Obligor has duly
executed and delivered each of the Loan Documents to which it is party and after
giving effect to the Consummation of the Plan, each such Loan Document is the
valid and binding obligation of such Obligor, enforceable against such Obligor
in accordance with its respective terms, except as may be limited by bankruptcy,


                                       52



insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws relating to or affecting the enforcement of creditors' rights generally,
including materiality, reasonableness, good faith and fair dealing, and by
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).

          SECTION 4.3. FINANCIAL CONDITION.

          (a) The Borrower has heretofore delivered to the Agent, the Board and
the Loan Administrator (i) the audited consolidated balance sheets of the
Borrower and Group as at December 31, 2004, and the related consolidated
statements of income, stockholders' equity and cash flows of the Borrower and
Group for the Fiscal Year then ended, (ii) the unaudited consolidated balance
sheets of the Borrower and Group as at June 30, 2005 and the related unaudited
consolidated statements of income, stockholders' equity and cash flows of the
Borrower and Group for the six months then ended, and (iii) audited consolidated
balance sheets of AWA Holdings and AWA as at December 31, 2004, and the related
consolidated statements of income, stockholders' equity and cash flows of AWA
Holdings and AWA for the Fiscal Year then ended, and (iv) the unaudited
consolidated balance sheets of AWA Holdings and AWA as at June 30, 2005 and the
related unaudited consolidated statements of income, stockholders' equity and
cash flows of AWA Holdings and AWA for the six months then ended. All such
financial statements were prepared in accordance with GAAP (except that any
unaudited financial statements are subject to normal year-end adjustments and
may not be accompanied by footnotes) and fairly present, in all material
respects, the consolidated financial position of such Persons as at the date
thereof and the consolidated results of operations and cash flows of such Person
for the period then ended.

          (b) After giving effect to the Consummation of the Plan, (i) the
Obligors taken as a whole are Solvent and (ii) no Obligor has any material
liability, including reasonably likely contingent liability or liability for
taxes, long-term lease or any unusual forward or long-term commitment of a type
required to be reflected in financial statements prepared in conformity with
GAAP, that is not reflected in the projections and pro forma financial
information delivered pursuant to clause (l) of Article III or, in the case of a
Reporting Obligor, taken into account in the preparation of the annual report on
Form 10-K for the fiscal year ended December 31, 2004 of such Reporting Obligor.

          (c) Each Reporting Obligor maintains disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the Obligors and has (i) caused such disclosure
controls and procedures to be designed to ensure that material information
relating to the Obligors is reported internally, (ii) caused such internal
controls over financial reporting to be designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP, (iii)
evaluated the effectiveness of such disclosure controls and procedures and
presented as required in the Reporting Obligors' Annual Report on Form 10-K for
the Fiscal Year ended December 31, 2004, conclusions about the effectiveness of
the disclosure controls and procedures, and (iv) disclosed as required in such
Annual Report any change in such internal control over financial reporting that
occurred during the relevant reporting period that has materially affected, or
is reasonably likely to materially affect, their internal control over financial
reporting.

          (d) Other than as disclosed on Schedule 4.3(d) or as disclosed in the
Annual Report on Form 10-K for the Fiscal Year ended December 31, 2004 of any
Obligor, no Obligor is a party to any "off-balance sheet arrangement" (within
the meaning of Item 303(a)(4) of Regulation S-K under the Securities Act and the
Exchange Act, as amended by SEC Release No. 33-8182 (January 28, 2003)).


                                       53



          SECTION 4.4. NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS. Since
August 9, 2005, no material adverse change has occurred in the financial
condition, assets, liabilities, business or results of operations of the
Obligors, taken as a whole (excluding any such changes resulting from (i)
changes or conditions generally affecting the U.S. economy or financial markets,
(ii) changes or conditions generally affecting any of the segments of the
airline industry in which any of the Obligors operate, to the extent such
conditions or changes do not disproportionately impact the Obligors, or (iii)
the announcement or consummation of the Merger), or in the Borrower's ability to
repay the Loan or perform its obligations under the Loan Documents or with
respect to the matters included in the financial projections delivered to the
Board and the Agent on July 28, 2005. Since August 9, 2005, no Obligor has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Payment or agreed to do so except as would have
been permitted by Section 6.3, as if such section were in effect at all times
after such date. After giving effect to the Consummation of the Plan, no event
or occurrence which would constitute a Default or Event of Default has occurred
and is continuing.

          SECTION 4.5. TITLE TO PROPERTIES; LIENS. Each Obligor has (i) good and
insurable fee title to (in the case of fee interests in real property), (ii)
valid, and in the case of leasehold interests in real property, insurable,
leasehold interests in (in the case of leasehold interests in real or personal
property) or (iii) good title to (in the case of all other personal property)
all of the properties and assets necessary to the conduct of its business
including property and assets reflected in the financial statements referred to
in Section 4.3, except for assets disposed of since the date of such financial
statements in the ordinary course of business or pursuant to the restructuring
contemplated by the Plan of Reorganization. Except as otherwise permitted by
this Agreement and the Collateral Documents, all such properties and assets are
free and clear of Liens.

          SECTION 4.6. LITIGATION; ADVERSE FACTS. There are no actions, suits,
proceedings, arbitrations or investigations (whether or not purportedly on
behalf of Group, the Borrower or any other Obligor) at law or in equity or
before or by any Governmental Authority pending or, to the knowledge of any
Responsible Officer of any Principal Obligor, threatened against or affecting
(in either case, whether asserted or unasserted) any of the Obligors or any
property of the Obligors that, individually or in the aggregate, (a) except for
matters disclosed on Schedule 4.6, in the reasonable judgment of the Obligors
could be expected to have a Material Adverse Effect, or (ii) challenge the
legality, validity or binding effect of, or seeks to restrain or enjoin any
Obligor from entering into or performing under, any Loan Document including,
without limitation, this Agreement or any Collateral Document. No Obligor is
subject to any final judgments, writs, injunctions or decrees of any court or
any Governmental Authority, compliance with which could reasonably be expected
to have a Material Adverse Effect, or is in default with respect to any such
judgments, writs, injunctions or decrees, which default could reasonably be
expected to have a Material Adverse Effect.

          SECTION 4.7. PAYMENT OF TAXES.

          (a) Except as otherwise set forth on Schedule 4.7(a): (i) the Obligors
have timely filed all material Tax returns and reports required to have been
filed, and have paid or made adequate provision for payment of all material
Taxes levied or imposed upon them or their properties (including the
Collateral), income or assets that have become due and payable, except (A) in
those instances in which such Taxes are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
have been made in accordance with GAAP and (B) that the Debtors' obligations to
pay Taxes that relate to a Tax period (or portion thereof) ending on or before
the commencement of the Bankruptcy Cases and which first became due and payable
after the time of the commencement of the Bankruptcy Cases, have been stayed or
enjoined pursuant to the Plan of Reorganization, the Confirmation Order or the
Bankruptcy Code, it being understood that the exception in this clause (B) does
not affect the Obligors' representation that they have made adequate provision
for such Taxes; (ii) there is no proposed


                                       54



Tax assessment against any Obligor that relates to a material amount of Taxes,
and neither Group nor the Borrower knows of any basis for any such assessment;
and (iii) no Obligor is party to any Tax sharing agreement with any Person other
than another Obligor, other than tax indemnity agreements in leasing
transactions entered into in the ordinary course of business.

          (b) Schedule 4.7(b) is a true and complete list of each claim of a
governmental unit of the kind entitled to priority in payment, as specified in
section 502(i) and 507(a)(8) of the Bankruptcy Code, that the Debtors will or
expect to pay or to be required to pay during the six (6) years immediately
following the Effective Date.

          SECTION 4.8. PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.

          (a) No Default. After giving effect to the Consummation of the Plan,
no Obligor is in default in the performance, observance or fulfillment of any
Contractual Obligations other than defaults which are not reasonably expected to
have a Material Adverse Effect, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default; it being
understood that the existence on the Effective Date of any default under (i)
certain executory contracts and unexpired leases that the Obligors are entitled
to reject in accordance with the Plan of Reorganization or prior order of the
Bankruptcy Court and (ii) certain other contracts relating to property that any
Obligor has abandoned pursuant to an order of the Bankruptcy Court shall be
deemed not to be a breach of this Section 4.8(a).

          (b) No Adverse Agreements. No Obligor is a party to or is otherwise
subject to any agreements or instruments or any charter or other internal
restrictions which, individually or in the aggregate, could reasonably be
expected to impair the ability of the Obligors, taken as a whole, to perform
their payment or other material obligations under the Loan Documents.

          (c) Other Agreements. Except as disclosed on Schedule 4.8(c), no
Obligor is a party to or is otherwise subject to any agreement or arrangement,
including, but not limited to, agreements relating to Indebtedness, lease
agreements or Guarantees, that provide for early payment, additional collateral
support, changes in terms or acceleration of maturity, or the creation of an
additional financial obligation, as a result of any of (i) an adverse change in
the credit rating of an Obligor, (ii) an adverse change in the financial ratios,
earnings, cash flow or stock price of an Obligor or (iii) changes in the value
of underlying, linked or indexed assets, except to the extent that such
agreements or arrangements could not reasonably be expected to have a Material
Adverse Effect.

          SECTION 4.9. GOVERNMENTAL REGULATION. No Obligor is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940 or under any other federal or
state statute or regulation (other than the Bankruptcy Code) which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of its Obligations unenforceable.

          SECTION 4.10. SECURITIES ACTIVITIES. No Obligor owns or is engaged
principally in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock (as defined below), and no proceeds of the Loan were
used to purchase or carry Margin Stock or to extend credit to any Person for the
purpose of purchasing or carrying any Margin Stock in a manner that violated or
caused a violation of Regulations T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors. For
purposes of this Section 4.10, the term "Margin Stock" has the meaning assigned
to that term in Regulation T, U or X of the Board of Governors of the Federal
Reserve System as in effect from time to time.


                                       55



          SECTION 4.11. EMPLOYEE BENEFIT PLANS.

          (a) Schedule 4.11(a) lists each Plan and each Multiemployer Plan
maintained or contributed to, or required to be contributed to, by Group or any
of its ERISA Affiliates as of the Effective Date. Each Plan has been operated
and administered in compliance with all applicable requirements of ERISA, and,
if intended to qualify under Section 401(a) or 403(a) of the Internal Revenue
Code, in compliance with all applicable requirements of such provisions except
where the failure to do so could not reasonably be expected to have, taking all
instances in the aggregate, a Material Adverse Effect.

          (b) Full payment has been made by Group or any of its ERISA Affiliates
of all minimum amounts which such entities are required to pay under the terms
of each Plan and Multiemployer Plan except where the failure to so comply,
taking all instances in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.

          (c) No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to have a Material
Adverse Effect.

          (d) Neither Group nor any of its ERISA Affiliates maintains or
contributes to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee pension benefit
plan (as defined in Section 3(2) of ERISA), other than a Plan the obligations
with respect to which, when taken together with the projected contributions
thereto reflected in the projections and pro forma financial information
delivered pursuant to clause (l) of Article III, could not reasonably be
expected to have a Material Adverse Effect.

          (e) After giving effect to the Consummation of the Plan, no Plan
maintained by Group or any ERISA Affiliate is underfunded (based on the present
value of all accumulated benefit obligations thereunder) except to the extent
that the aggregate amount of underfunding with respect to all such plans, when
taken together with the projected contributions thereto reflected in the
projections and pro forma financial information delivered pursuant to clause (l)
of Article III, could not reasonably be expected to have a Material Adverse
Effect.

          SECTION 4.12. ENVIRONMENTAL PROTECTION.

          (a) Compliance with Environmental Laws. All Facilities and operations
of each Obligor are, and have been to the knowledge of each Principal Obligor,
in compliance with all Environmental Laws except for any noncompliance which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

          (b) Hazardous Materials Activity. Except as disclosed on Schedule
4.12(b), there are no, and have been no, conditions, occurrences, or Hazardous
Materials Activity (i) arising at any Facilities or (ii) arising in connection
with the operations of the Obligors or of past or current Affiliates of any
Obligor (while under the control of a Principal Obligor or otherwise to the
knowledge of a Principal Obligor) (including the transportation of Hazardous
Materials in accordance with applicable regulations), which conditions,
occurrences or Hazardous Materials Activity could reasonably be expected to form
the basis of an Environmental Claim against any Obligor and which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.


                                       56



          (c) Environmental Claims. Except as disclosed on Schedule 4.12(c),
there are no pending or, to the knowledge of any Principal Obligor, threatened
Environmental Claims against any Obligor, and no Principal Obligor has received
any notices, inquiries, or requests for information with respect to any
Environmental Claims which could reasonably be expected to have a Material
Adverse Effect.

          (d) Orders, Decrees, etc. No Obligor is currently operating or
required to be operating under any compliance order, schedule, decree or
agreement, any consent decree, order or agreement, and/or any corrective action
decree, order or agreement issued or entered into under any Environmental Law
the failure to comply with which could reasonably be expected to have a Material
Adverse Effect.

          SECTION 4.13. DISCLOSURE.

          (a) No representation or warranty or certification of any Obligor or
of any Responsible Officer of the Borrower or Group or any other Officer of any
Obligor contained in this Agreement, any other Loan Document or in any other
document, certificate or written statement furnished to the Board, the Agent or
the Lenders by or on behalf of any Obligor (as modified or supplemented by other
written information so furnished) for use in connection with the negotiation and
closing of the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein at the time, and in light of the circumstances under
which they were made, not misleading; provided that with respect to projected
financial information contained in any such document or furnished to any party
hereto by or on behalf of the Obligors, the Obligors represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time, it being recognized that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered thereby may differ from the projected results.

          (b) None of the Reporting Obligors' filings under the Exchange Act (as
amended or supplemented through the date hereof) nor the Disclosure Statement
(as amended or supplemented through the date hereof) contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

          SECTION 4.14. COMPLIANCE WITH LAWS. Each Obligor is in compliance with
all laws, statutes, rules, regulations and orders binding on or applicable to
such Obligor, and all of its properties, except to the extent failure to so
comply (either individually or in the aggregate) could not reasonably be
expected to have a Material Adverse Effect.

          SECTION 4.15. INDEBTEDNESS. Schedule 4.15 correctly sets forth the
consolidated Indebtedness of Group and its Subsidiaries as of the Effective Date
and identifies each primary obligor and each guarantor or other secondary
obligor thereof, if any.

          SECTION 4.16. INSURANCE. The properties, business and operations of
the Obligors are insured or reinsured with financially sound and reputable
insurance companies or by the United States of America, in such amounts, with
such deductibles and covering such risks as are insured against (including, but
not limited to, war risk and third party liability) and carried in accordance
with applicable law and prudent industry practice by major U.S. commercial air
carriers similarly situated with the Obligors and owning or operating similar
properties, aircraft and engines.


                                       57



          SECTION 4.17. PERFECTED SECURITY INTERESTS. The Collateral Agent, on
behalf of the Lenders and the Board, has valid security interests in the
Collateral, with such priority and perfected to such extent as is provided in
the Collateral Documents.

          SECTION 4.18. COMPLIANCE WITH THE PLAN OF REORGANIZATION. No Obligor
is in default with respect to any material obligation under the Plan of the
Reorganization.

          SECTION 4.19. ABSENCE OF LABOR DISPUTES. No strikes, boycotts, work
stoppages or lockouts with respect to any of the Obligors exist, and no Obligor
has received written notice, sanctioned by any collective bargaining unit
representing employees of such Obligor, threatening a strike, boycott or work
stoppage.

          SECTION 4.20. COMPLIANCE WITH CERTAIN GATE LEASES. After giving effect
to the Consummation of the Plan, each Obligor is in compliance in all material
respects with all Gate Leases with respect to the airports listed on Schedule
4.20.

          SECTION 4.21. SLOT UTILIZATION. Each Obligor which holds or operates
Slots is utilizing its Slots in a manner consistent with the Slot Regulations in
order to avoid the withdrawal of any Slot (other than Slots of the type
referenced in clauses (f) through (i) of the definition of "Secondary Slots") by
the FAA, taking into account any waivers or other relief granted by the FAA in
connection with the failure to utilize Slots. None of the Obligors has received
any notice of withdrawal from the FAA, nor (other than with respect to Slots of
the type referenced in clauses (d) and (f) through (i) of the definition of
"Secondary Slots") is any Obligor aware of any other event or circumstance
(other than any proposed change of law, regulation or rule, including the
scheduled removal of slot restrictions at John F. Kennedy International Airport
and LGA on January 1, 2007), that could reasonably be expected to result in the
withdrawal of any Slot or otherwise impair any of the Slots or the value thereof
(it being understood, however, that the Slot Regulations provide for withdrawal
in certain circumstances other than for failure to utilize Slots, and the FAA
has asserted the right to withdraw and reallocate "pool" Slots (within the
meaning of 14 C.F.R. Section 93.226(e)), including those identified on Schedule
1.1(a) hereto, at its discretion). The Obligors maintain personnel, policies,
procedures and a computer database for the monitoring, utilization and
management of the Slots in compliance with the Slot Regulations so as to ensure,
to the greatest extent operationally feasible, that the Slot Regulations are
complied with and no Slot becomes subject to withdrawal by the FAA.

          SECTION 4.22. DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Schedule 4.22
contains a true, complete and correct list of all deposits accounts and
securities accounts of the Obligors, including, with respect to each account,
the name of such account, the account number, the bank or financial institution
with which such account is maintained, and the balance therein as of a specified
date (which shall be no earlier than August 31, 2005), indicating thereon
whether each such account is subject to a Control Agreement in favor of the
Collateral Agent.

          SECTION 4.23. UNRESTRICTED CASH AND CASH EQUIVALENTS. After the
Consummation of the Plan, the Obligors have on a pro forma basis as of the
Effective Date, taking into account net cash proceeds of the Stock Offering, the
Convertible Note Offering, the Juniper Financing and the Airbus Financing
expected to be received within seven (7) days of the Effective Date,
unrestricted cash and Cash Equivalents (as determined in accordance with GAAP)
of not less than $1,250,000,000.


                                       58



                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

          To induce the other parties to enter into this Agreement (excluding
any other Obligor), the Obligors agree with each other party hereto (excluding
any other Obligor) that, so long as any of the Obligations (other than
contingent indemnification obligations) remain outstanding:

          SECTION 5.1. ACCOUNTING CONTROLS; FINANCIAL STATEMENTS AND OTHER
REPORTS.

          (a) Accounting Controls. Each Obligor will maintain a system of
accounting established and administered in accordance with sound business
practices and applicable law, rules and regulations issued by any Governmental
Authority to permit preparation of financial statements in conformity with GAAP,
including, without limitation, as set forth in Section 4.3(c).

          (b) Financial Certificates; Information. Group will deliver to the
Agent, the Loan Administrator and the Board:

          (i) Quarterly Financials: within two (2) Business Days after the date
     on which a Reporting Obligor files or is required to file its Form 10-Q
     under the Exchange Act (after giving effect to any extension pursuant to
     Rule 12b-25 under the Exchange Act (or any successor rule)), (A) the
     consolidated balance sheets of such Person as at the end of such fiscal
     quarter and the related consolidated statements of income of such Person
     for such fiscal quarter for the period from the beginning of the then
     current Fiscal Year to the end of such fiscal quarter and cash flows of
     such Person for the period from the beginning of the then current Fiscal
     Year to the end of such fiscal quarter, setting forth in each case in
     comparative form the corresponding figures from the corresponding dates and
     periods of the previous Fiscal Year, all prepared in accordance with GAAP
     (except that any unaudited financial statements are subject to normal
     year-end adjustments and may not be accompanied by footnotes) and in
     reasonable detail and certified by the Chief Financial Officer, Controller,
     Chief Executive Officer or Treasurer of such Person that they fairly
     present in all material respects the consolidated financial condition of
     such Person as at the dates indicated and the results of its operations and
     its cash flows for the periods indicated, and (B) a narrative report
     describing the operations of such Person in the form prepared for
     presentation to senior management for such fiscal quarter and for the
     period from the beginning of the then current Fiscal Year to the end of
     such fiscal quarter; provided that delivery of such Person's Form 10-Q for
     such fiscal quarter shall be deemed to satisfy all of the requirements of
     this clause (i); provided, further, that in lieu of delivering a hard copy
     of Form 10-Q hereunder, Group may transmit by e-mail an electronic copy of
     such document or a link to an electronic copy of such document on the EDGAR
     database (or a comparable service) or an Obligor's website;

          (ii) Monthly Reporting: within 45 days after the end of each of the
     first twenty-four (24) calendar months following the Effective Date, the
     consolidated balance sheets of each Reporting Obligor as at the end of such
     month and the related consolidated statements of income of such Person for
     such calendar month and for the period from the beginning of the then
     current Fiscal Year to the end of such month and cash flows of each such
     Person for the period from the beginning of the then current Fiscal Year to
     the end of such calendar month, and together therewith, a statement of the
     Adjusted Cash Amount as of the last Business Day of such calendar month,
     all prepared in accordance with GAAP (except that any unaudited financial
     statements are subject to normal year-end adjustments and may not be
     accompanied by footnotes) and in reasonable detail and certified by the
     Chief Financial Officer, Chief Executive Officer, Controller or Treasurer
     of such Person that they fairly present in all material respects the
     consolidated


                                       59



     financial condition of such Person as at the dates indicated and the
     results of its operations and its cash flows for the periods indicated;

          (iii) Year-End Financials: within two (2) Business Days after the date
     on which a Reporting Obligor files or is required to file its Form 10-K
     under the Exchange Act (after giving effect to any extension pursuant to
     Rule 12b-25 under the Exchange Act (or any successor rule)), (A) the
     consolidated balance sheets of such Person at the end of such Fiscal Year
     and the related consolidated statements of income, stockholders' equity and
     cash flows of such Person for such Fiscal Year, setting forth in each case
     in comparative form the corresponding figures for the previous Fiscal Year
     and the corresponding figures from the annual financial plan delivered
     pursuant to clause (ix) of this Section 5.1(b) for the Fiscal Year covered
     by such financial statements of such Person, all in reasonable detail, and
     certified by the Chief Financial Officer or the Chief Executive Officer of
     such Person that they fairly present in all material respects the
     consolidated financial condition of such Person as at the date indicated
     and the results of its operations and its cash flows for the periods
     indicated, (B) a narrative report describing the operations of such Person
     in the form prepared for presentation to senior management for such Fiscal
     Year, and (C) an accountant's report thereon of KPMG LLP or other
     independent certified public accountants of recognized national standing
     selected by the Borrower or Group, as the case may be, which report (1)
     shall be unqualified as to scope, (2) shall not, for each Fiscal Year
     commencing with the Fiscal Year ending December 31, 2006, contain a going
     concern qualification, and (3) shall state that such consolidated financial
     statements fairly present the consolidated financial position of such
     Person as at the dates indicated and the results of their operations and
     their cash flows for the periods indicated in conformity with GAAP applied
     on a basis consistent with prior years, and that the examination by such
     accountants in connection with such consolidated financial statements has
     been made in accordance with generally accepted auditing standards;
     provided that (x) references in such report to changes in GAAP, changes in
     accounting standards, highlighting contents of footnotes, limitations in
     the scope of the audit or exclusions from the audit information not
     required by GAAP that are, in each case, customary in industry practice and
     not prejudicial to the opinion stated therein shall not be deemed to be
     "qualifications" for the purpose of clause (C) of this Section 5.1(b)(iii)
     and (y) delivery of such Person's Form 10-K for such Fiscal Year, and which
     satisfy the requirements of clause (C) above, shall be deemed to satisfy
     the requirements of this Section 5.1(b)(iii); provided, further, that in
     lieu of delivering a hard copy of Form 10-K hereunder, Group may transmit
     by e-mail an electronic copy of such document or a link to an electronic
     copy of such document on the EDGAR database (or a comparable service) or an
     Obligor's website;

          (iv) Officers' Certificates: together with each delivery of financial
     statements pursuant to clauses (i) and (iii) above, an Officer's
     Certificate of the Borrower (which certificate may incorporate the
     Collateral Value Certificate and schedule of deposit accounts and
     securities accounts of the Obligors deliverable on such date pursuant to
     clauses (xix) and (xxii) of this Section 5.1(b), respectively) (I) stating
     that the signer has made, or caused to be made under his or her
     supervision, a review of the terms of this Agreement and of the
     transactions and condition of the Obligors during the accounting period
     covered by such financial statements and that such review has not disclosed
     the existence, and that the signer does not have knowledge of the existence
     as at the date of such Officer's Certificate, of any condition or event
     that constitutes a Default or an Event of Default, or, if any such
     condition or event existed at the date of the certificate, specifying the
     nature and period of existence thereof and what action the Obligors have
     taken, are taking and propose to take with respect thereto, (II)
     demonstrating in reasonable detail compliance (or noncompliance) during and
     at the end of the applicable accounting periods with the restrictions
     contained in Section 6.3 and Section 6.4, and (III) with respect to the
     delivery of financial statements pursuant to clause (iii) above, stating
     whether any change in


                                       60



     GAAP or in the application thereof has occurred since the date of delivery
     of the preceding year-end financial statements, and if any such change has
     occurred, describing the effect of such change on the financial statements
     of Group and the Borrower;

          (v) SEC Filings and Press Releases: promptly upon their filing, copies
     of (A) all financial statements, reports, notices and proxy statements sent
     or made available generally by a Reporting Obligor to its security holders
     and (B) all regular, periodic and current reports (including all Form 8-K
     reports) and all registration statements and prospectuses, if any, filed by
     any Reporting Obligor with any securities exchange or with the SEC or any
     Governmental Authority or private regulatory authority; provided that in
     lieu of delivering a hard copy of any such document, Group may transmit by
     e-mail an electronic copy of such document or a link to an electronic copy
     of such document on the EDGAR database (or a comparable service) or an
     Obligor's website;

          (vi) Notice of Events of Default, etc.: promptly upon any Responsible
     Officer of a Principal Obligor obtaining knowledge of (A) any condition or
     event that constitutes a Default or an Event of Default or (B) the
     occurrence of any event or change that has had, or is reasonably expected
     to have, a Material Adverse Effect (disregarding for purposes of this
     clause (vi) publicly known facts, circumstances, events or conditions
     applicable to the airline and travel industries generally), an Officer's
     Certificate of Group specifying the nature and period of existence of such
     Default or Event of Default or condition, event or change and what action
     the Obligors have taken, are taking and propose to take with respect
     thereto;

          (vii) Litigation or Other Proceedings: to the extent not otherwise
     disclosed pursuant to this Section 5.1, promptly upon any Responsible
     Officer of a Principal Obligor obtaining knowledge of (A) the institution
     of, or threat of, any action, suit, proceeding (whether administrative,
     judicial or otherwise), governmental investigation or arbitration against
     or affecting any Obligor or any property of any Obligor, unless Group's
     general counsel or outside legal counsel has determined that a favorable
     outcome to such Obligor is reasonably likely (collectively, "Proceedings")
     or (B) any material development in any Proceeding that, in either case:

               (1) if adversely determined, would be reasonably likely to have a
          Material Adverse Effect;

               (2) seeks to enjoin or otherwise prevent the consummation of, or
          to recover any damages or obtain relief as a result of, the
          transactions contemplated hereby; or

               (3) challenges or calls into question in any material respect the
          reliability or accuracy of a Reporting Obligor's SEC filings;

     written notice thereof together with such other information as may be
     reasonably available to the Obligors to enable the Agent and the Board, and
     their respective counsel to evaluate such matters;

          (viii) ERISA Reports: promptly after the receipt by the Borrower of a
     request therefor by the Agent, the Loan Administrator or the Board, copies
     of any annual and other reports (including Schedule B thereto) with respect
     to a Plan filed by an Obligor or any ERISA Affiliate with the United States
     Department of Labor, the IRS or the PBGC;

          (ix) Financial Plan and Projections: annually, as soon as practicable
     after preparation thereof in the ordinary course of business but in no
     event later than February 28 of each year,


                                       61



     copies of the Principal Obligors' annual financial plans and projections,
     together with a reconciliation of actual results to projected results for
     such periods;

          (x) Environmental Audits and Assessments: as soon as practicable
     following receipt thereof by a Principal Obligor, copies of all
     environmental audits and assessments, whether prepared by personnel of an
     Obligor or by independent consultants (except to the extent protected by
     the "attorney work product" privilege or similar privilege expressly
     granted by statute with respect to the work product of environmental
     consultants), with respect to material environmental matters at any
     Facility or which relate to an Environmental Claim which could reasonably
     be expected to have a Material Adverse Effect;

          (xi) Ratings Change: promptly after any public release by S&P or
     Moody's raising or lowering (i) an Obligor's general unsecured credit
     rating or (ii) a credit rating on the Loan obtained pursuant to Section
     5.19 hereof, notice (which may be sent by e-mail) of such change;

          (xii) Insurance Reports: No later than January 30 of each year,
     insurance brokers reports with respect to all insurance maintained by the
     Obligors, together with schedules detailing the type and amount of coverage
     provided and the insurance carrier;

          (xiii) Insurance/Condemnation Proceeds: in addition to any similar
     reporting obligations under the Collateral Documents but without the
     duplication of any such obligation, upon (A) a Responsible Officer of a
     Principal Obligor obtaining knowledge of the occurrence of an event of loss
     or damage to, or any taking, condemnation or requisition by any
     Governmental Authority of, any property of any Obligor having fair market
     value in excess of $5,000,000 whether or not such loss or damage is
     expected to result in receipt of insurance or condemnation proceeds or of
     any other event of loss or damage that the Obligors reasonably expect to
     result in proceeds reasonably estimated by them to exceed $5,000,000 and
     (B) the receipt of insurance proceeds or condemnation proceeds from an
     event of loss or material damage to, or any taking, condemnation or
     requisition by any Governmental Authority of, any property of any Obligor
     giving rise to a mandatory prepayment obligation under Section 2.5, notice
     of such occurrence;

          (xiv) Future Issuance and Asset Sales: prior to an Obligor
     consummating any Future Issuance or Asset Sale greater than $1,000,000 in
     an individual transaction or series of related transactions giving rise to
     a mandatory prepayment obligation under Section 2.5, notice of such event;
     provided that in the case of a Replacement Secured Financing, the
     applicable Obligor shall give no less than fifteen (15) Business Days'
     prior notice of such event and include therein (A) a specific
     identification of the Collateral proposed to be pledged, (B) the Collateral
     Release values therefor together with copies of the Appraisal Reports upon
     which such Collateral Release Values are based, if applicable, and (C) a
     detailed summary of the terms and conditions of such Replacement Secured
     Financing;

          (xv) Plan Audits and Liabilities: promptly after (A) an Obligor or any
     ERISA Affiliate contacts the IRS or the PBGC for the purpose of
     participating in a closing agreement or any voluntary resolution program
     with respect to a Plan or Multiemployer Plan which could reasonably be
     expected to have a Material Adverse Effect, or (B) a Responsible Officer of
     a Principal Obligor knows or has reason to know that any event with respect
     to any Plan or Multiemployer Plan occurred that could reasonably be
     expected to have a Material Adverse Effect, notice of such contact or the
     occurrence of such event;

          (xvi) Funding Changes and New Plan Benefits: promptly after the
     change, a notification of any material increases in the benefits, or
     material change in funding method, with


                                       62



     respect to which an Obligor may have any liability, under any Plan or
     Multiemployer Plan or the establishment of any material new Plan or
     Multiemployer Plan with respect to which an Obligor may have any liability
     or the commencement of contributions to any Plan or Multiemployer Plan to
     which an Obligor or any ERISA Affiliate was not previously contributing,
     except to the extent that such an event could not reasonably be expected to
     have a Material Adverse Effect;

          (xvii) Claims and Proceedings: promptly after receipt of written
     notice of commencement thereof, notification of all (A) claims made by
     participants or beneficiaries with respect to any Plan and (B) actions,
     suits and proceedings before any court or governmental department,
     commission, board, bureau, agency or instrumentality, domestic or foreign,
     affecting an Obligor or any ERISA Affiliate with respect to any Plan,
     except those which, in the aggregate, if adversely determined, could not
     reasonably be expected to have a Material Adverse Effect;

          (xviii) ERISA Event: promptly after the occurrence of any ERISA Event
     (A) that could reasonably be expected to have a Material Adverse Effect or
     (B) that relates to the occurrence or existence of an event or condition
     that could reasonably be expected to have a Material Adverse Effect, notice
     of such ERISA Event;

          (xix) Collateral Value Certificates: no later than the date upon which
     an Officer's Certificate is required to be delivered under clause (iv) of
     this Section 5.1(b) with respect to each of the four fiscal quarters of
     each Fiscal Year (and, in the case of the last fiscal quarter of each
     Fiscal Year, no later than the first Interest Payment Date occurring after
     the end of such Fiscal Year), a Collateral Value Certificate certifying the
     Collateral Value (based on the most recently completed Appraisal Report),
     in each case as of a date no earlier than the end of the fiscal quarter or
     the Fiscal Year to which such Officer's Certificate relates, together with
     the Appraisal Report upon which such Collateral Value Certificate is based;

          (xx) Slot Utilization Reports: as soon as available, but in any event
     no later than the date on which each report referred to in clause (A) below
     is submitted to the FAA, each of the following: (A) a true and complete
     copy of each Slot utilization report required to be delivered to the FAA
     under the Slot Regulations, (B) any related requests for waivers or other
     documentation provided to the FAA in connection therewith, and (C) a
     summary report, in the form of Exhibit L, of Slot utilization during the
     period covered by the report to the FAA referred to in (A) above;

          (xxi) Adjusted Cash Amount: within one Business Day following the end
     of each calendar week, by e-mail, the Adjusted Cash Amount as of the last
     Business Day of the prior calendar week and for each Business Day in such
     prior calendar week; provided that if the Obligors do not have current
     information regarding the Obligors' aggregate outstanding air traffic
     liability for purposes of calculating the Adjusted Cash Amount, such weekly
     reports may be based on a good-faith estimate of the Obligors' aggregate
     then outstanding air traffic liability based on all available data;

          (xxii) Deposit Accounts and Securities Accounts: no later than the
     date upon which an Officer's Certificate is required to be delivered under
     clause (iv) of this Section 5.1(b) with respect to each Fiscal Year and
     each fiscal quarter of each Fiscal Year, a schedule of all deposits
     accounts and securities accounts of the Obligors, including, with respect
     to each account, the name of such account, the account number, the bank or
     financial institution with which such account is maintained and the balance
     therein as of the end of the accounting period covered by the financial
     statements deliverable with such Officer's Certificate, indicating thereon
     whether each such account is subject to a Control Agreement in favor of the
     Collateral Agent;


                                       63



          (xxiii) Cash Forecast: if for a period of five (5) consecutive
     Business Days the Adjusted Cash Amount is less than 125% of the Minimum
     Adjusted Cash Amount required to be maintained at such time pursuant to
     Section 6.4(a), no later than Wednesday of each week thereafter, a rolling
     13-week cash forecast including reports, in form, detail and substance
     reasonably satisfactory to the Board (so long as the Board is either a
     guarantor of Tranche A or a Lender hereunder), or thereafter, the Agent,
     which show the Obligors' sources and uses of cash from the prior week, and
     material variances associated therewith; and

          (xxiv) Other Information: with reasonable promptness, such other
     information and data with respect to an Obligor as from time to time may be
     reasonably requested by the Agent, the Loan Administrator or the Board.

Promptly upon its receipt of any such notice, report, certificate or other
information from Group or any Obligor pursuant to this Section 5.1(b), the Agent
shall provide a copy of such notice, report, certificate or other information to
each Lender (which may be sent by e-mail), other than a Lender who has notified
the Agent that it does not wish to receive any such notice, report, certificate
or other information.

          SECTION 5.2. CORPORATE EXISTENCE. Except as permitted by Section 6.9,
each Obligor will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each Obligor and the material rights, permits,
licenses (charter and statutory) and franchises of each Obligor; provided that
subject to Section 5.10, no Obligor shall be required to preserve any such
right, permit, license or franchise, and, subject to compliance with Section
6.9, as applicable, no Obligor shall be required to preserve any such corporate,
partnership or other existence, if in each case, the Chief Executive Officer of
Group or the Borrower shall determine in the exercise of his or her business
judgment that the preservation thereof is no longer desirable in the conduct of
the business of the Obligors taken as a whole and that abandonment of any such
right, permit, license or franchise or failure to preserve such existence could
not reasonably be expected to have a Material Adverse Effect.

          SECTION 5.3. PAYMENT OF TAXES AND CLAIMS. Each Obligor will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material Taxes levied or imposed upon an Obligor or upon the
income, profits or property of an Obligor except (a) that this Section 5.3 shall
not require the Obligors who were debtors in the Bankruptcy Cases to pay Taxes
that relate to a Tax period (or portion thereof) ending on or before the
commencement of the Bankruptcy Cases and which first became due and payable
after the time of the commencement of the Bankruptcy Cases, to the extent that,
and for so long as, such Taxes are stayed or enjoined pursuant to the Plan of
Reorganization, the Confirmation Order or the Bankruptcy Code, it being
understood that notwithstanding the exception in this clause (a), such Obligors
shall make adequate reserves in accordance with GAAP for Taxes stayed or
enjoined pursuant to the Plan of Reorganization, the Confirmation Order or the
Bankruptcy Code, or (b) where the amount, applicability or validity of such
Taxes are being contested in good faith by appropriate proceedings and for which
adequate reserves have been made in accordance with GAAP and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, might by law become a
Lien on the property of an Obligor. No Obligor will file or consent to the
filing of, any consolidated income tax return with any Person (other than any
other Obligor or any Subsidiary of any Obligor).

          SECTION 5.4. MAINTENANCE OF PROPERTIES; INSURANCE.

          (a) Maintenance of Properties. Each Obligor will maintain all
properties used or useful in the conduct of the business of the Obligors in good
condition, repair and working order (ordinary wear and tear excepted) and supply
such properties with all necessary equipment and make all


                                       64



necessary repairs, renewals, replacements, betterments and improvements thereto,
all as in the reasonable judgment of an Obligor may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that no Obligor shall be restricted
from discontinuing the operation and maintenance of any such properties if such
discontinuance is, in the good faith judgment of Group, desirable in the conduct
of the business of such Obligor and could not reasonably be expected to have a
Material Adverse Effect, but subject in each case to all applicable provisions
of the Collateral Documents.

          (b) Insurance. Each Obligor will insure and keep insured or reinsured
with financially sound and reputable insurance companies that are not Affiliates
of the Obligors or by the United States of America, their businesses and
operations and such of their respective properties, in such amounts, with such
deductibles and covering such risks as are insured against (including, but not
limited to, war risk and third party liability) and carried in accordance with
applicable law and prudent industry practice by U.S. commercial air carriers
similarly situated with the Obligors and owning or operating similar properties,
aircraft and engines, including such insurance coverage as is required to be
maintained under the Collateral Documents, and providing for not less than
thirty (30) days' (or in the case of war risk coverage, the maximum time as is
available) prior notice to the Agent, the Board, the Loan Administrator and the
Collateral Agent of termination, lapse or cancellation of such insurance or
reinsurance; provided that this Section 5.4(b) shall not prohibit any Obligor
from procuring and maintaining all or any portion of its insurance through
Airways Assurance Limited LLC so long as Airways Assurance Limited LLC reinsures
100% of such risk as provided above in this Section 5.4(b) and such reinsurance
policies contain a cut-through endorsement.

          SECTION 5.5. INSPECTION. Each Obligor will permit any authorized
representatives designated by the Agent, any Lender, the Loan Administrator or
the Board to visit and inspect any of the properties of the Obligors, including
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss their affairs, finances and accounts with its and
their officers and independent public accountants (it being understood that a
representative of an Obligor will be present), at the Borrower's expense, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may be reasonably requested; provided that so long as the
Controlling Creditor is not exercising material remedies under the Loan
Documents, such inspection shall not be disruptive to the business of the
Obligors. Without limiting the generality of the foregoing, the Obligors will
meet with the Loan Administrator on a quarterly basis (in person or, if deemed
appropriate by the Loan Administrator, telephonically) to review the Obligors'
financial and accounting records and will make their officers and independent
public accountants available to discuss with the Loan Administrator the
Obligors' affairs, financial condition, results of operations, business plan,
prospects, projections, accounts and other related matters (including, without
limitation, the integration of AWA and the Borrower), and otherwise will
cooperate with the Loan Administrator and provide such information as it may
reasonably request to enable it to perform the services described in the Loan
Administration Agreement.

          SECTION 5.6. COMPLIANCE WITH LAWS, ETC. Each Obligor will comply with
all applicable statutes, rules, regulations, orders, restrictions and
Governmental Authorizations of any applicable Governmental Authority, in respect
of the conduct of the businesses of the Obligors and the ownership of their
respective properties (including, without limitation, Gate Leases and Slots),
except such as are being contested in good faith by appropriate proceedings and
except for such noncompliance as could not in any case or in the aggregate
reasonably be expected to have a Material Adverse Effect. None of the Obligors
shall conduct any Hazardous Materials Activity at any Facility or at any other
location in a manner that does not comply in all material respects with
Environmental Laws. Each Obligor will use commercially reasonable efforts to
cause all other Persons operating or occupying any of their properties to comply
in all material respects with Environmental Laws.


                                       65



          SECTION 5.7. REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.

          (a) To the extent required by Environmental Laws, each Obligor will
take any and all necessary remedial action (except to the extent that such
remedial action is taken by other Persons responsible for such remedial action
through contractual arrangements with an Obligor) in connection with the
presence, storage, use, disposal, transportation, Release or threatened Release
of any Hazardous Materials on, under or about any Facility in order to comply
timely with all applicable Environmental Laws and Governmental Authorizations
except for such non-compliance as could not in any case or in the aggregate
reasonably be expected to have a Material Adverse Effect. In the event any
Obligor undertakes any remedial action with respect to any Hazardous Materials
on, under or about any Facility, Group, Borrower or such Obligor will conduct
and complete such remedial action (or will cause such action to be taken
pursuant to contractual rights of such Obligor against third parties) in
compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local Governmental
Authorities except when, and only to the extent that, such Obligor's liability
for such presence, storage, use, disposal, transportation or discharge of any
Hazardous Materials is being contested in good faith and by appropriate
proceedings diligently conducted by such Obligor or except for such
non-compliance as could not in any case or in the aggregate reasonably be
expected to have a Material Adverse Effect.

          (b) The Requisite Lenders or the Board may request (i) from time to
time, if and when such Person(s) have reason to believe that an Environmental
Claim or Release of Hazardous Materials which could reasonably be expected to
have a Material Adverse Effect may exist at or with respect to any Facility, and
(ii) not more than once during any twelve month period for the purpose of
determining whether there is belief that an Environmental Claim or Release of
Hazardous Materials which could reasonably be expected to have a Material
Adverse Effect exists at or with respect to any Facility, and in the case of any
such request, the Borrower will provide to the Lenders and the Board, within
sixty (60) days after such request, at the expense of the Borrower, an
environmental site assessment report for any of its, or any other Obligor's
properties described in such request, prepared by an environmental consulting
firm reasonably acceptable to the Board evaluating the Environmental Claim or
Release of Hazardous Materials and estimating the cost of any required
compliance, removal or remedial action in connection with the Environmental
Claim or Release of Hazardous Materials. Without limiting the generality of the
foregoing clause (b), if the Agent determines at any time that a material risk
exists that any such report will not be provided in the time referred to above,
the Agent may retain an environmental consulting firm to prepare such report at
the expense of the Borrower, and each Obligor hereby agrees to grant at the time
of such request, to the Agent, the Lenders, the Board, such firm and any agents
or representatives thereof an irrevocable non-exclusive license, subject to the
rights of tenants, to enter into their respective properties to undertake such
an assessment.

          SECTION 5.8. ADDITIONAL OBLIGORS; COLLATERAL.

          (a) With reasonable promptness (and in any event within 30 days)
following the formation or acquisition by any Obligor of a Subsidiary or of any
Capital Stock of any other Person, the Borrower (i) shall provide the Agent, the
Loan Administrator and the Board the name, corporate structure and allocation of
Voting Stock and equity interests of such Subsidiary or other Person, (ii) in
the case of any such Subsidiary that is not a CFC, shall cause such Subsidiary
to execute and deliver to the Agent and the Board a Subsidiary Joinder in the
form of Exhibit M hereto, pursuant to which such Subsidiary shall become a party
to this Agreement, and a joinder to the First Lien Guaranty pursuant to which
such Subsidiary shall become a guarantor thereunder, and (iii) shall deliver to
the Agent and the Board documents of the types referred to in clauses (a)(viii)
and (a)(ix) of Article III, all in form, content and scope reasonably
satisfactory to the Agent and the Board.


                                       66



          (b) Each Obligor (including, without limitation, each Subsidiary
created or acquired after the Effective Date that is required to be a Subsidiary
Guarantor) will cause all of its properties and assets as of the Effective Date
(or the date such Person was created or acquired) and all properties and assets
acquired thereafter (including, without limitation, the Capital Stock of each
Subsidiary created or acquired and the Capital Stock of each other Person
acquired after the Effective Date) other than Excluded Property to be pledged to
the Collateral Agent on a perfected first priority basis (subject to the Liens
permitted by Section 6.1) to secure the Obligations; provided that if the
Borrower or another Obligor enters into an agreement to finance any pledged
After-Acquired Section 1110 Equipment, the Collateral Agent shall, and is hereby
directed to, release its Lien on such After-Acquired Section 1110 Equipment upon
its receipt from the Borrower (with a copy to the Agent and the Board) of an
Officer's Certificate describing in reasonable detail the Section 1110 Equipment
proposed to be financed and certifying that such transaction complies with this
Section.

          (c) The Borrower shall obtain one or more Appraisal Reports
establishing the value of the Appraised Collateral as of (i) the last day of
each Fiscal Year beginning December 31, 2005, (ii) the date upon which any
additional property or assets that constitutes Appraised Collateral is pledged
as Collateral to the Collateral Agent pursuant to Section 5.8(d) to secure the
Obligations, but only with respect to such additional Collateral, (iii) in
connection with a Replacement Secured Financing of aircraft and spare engines,
and (iv) no more than once during any twelve (12) month period, a date which is
no later than 60 days after the Controlling Creditor has requested that the
Borrower obtain an Appraisal Report (it being understood that the obligation
herein of the Borrower to periodically obtain Appraisal Reports shall be in
addition to any rights or obligations under the Collateral Documents); provided
that no more than one Appraisal Report shall be required with respect to any
item of Appraised Collateral within any 60 day period. Such Appraisal Reports
may be based on desktop appraisals unless the Controlling Creditor shall have
requested that an Appraisal Report be based on physical inspection.

          (d) If as of the end of any fiscal quarter (each such date a
"Collateral Value Test Date") there exists a Collateral Value Deficiency, the
Borrower shall do one of the following to the extent (but only to the extent)
necessary to eliminate such Collateral Value Deficiency: (i) prepay the Loan in
an amount equal to Group's Adjusted Excess Cash Flow for the period commencing
on the Effective Date and ending on such Collateral Value Test Date (which
payment shall be made on the Interest Payment Date first occurring on or after
delivery of the Collateral Value Certificate that evidences such Collateral
Value Deficiency); (ii) pledge additional Eligible Collateral to the Collateral
Agent pursuant to a Collateral Document Supplement or other Collateral Document,
in each case on terms and conditions as are reasonably satisfactory to the
Agent, the Board and the Collateral Agent, or (iii) prepay the Loan as provided
in clause (i) above and pledge additional Eligible Collateral as provided in
clause (ii) above; provided that if Group's Adjusted Excess Cash Flow for such
period, together with all Eligible Collateral that is available to be pledged is
not sufficient to eliminate such Collateral Value Deficiency, the Borrower shall
continue to prepay the Loan in an amount equal to Group's Adjusted Excess Cash
Flow for the period commencing on the Effective Date and ending on the last day
of each fiscal quarter following the Collateral Value Test Date as of which the
Collateral Value Deficiency was established (which payments shall be made on the
Interest Payment Dates respectively relating to the Interest Periods first
occurring after each such fiscal quarter) and pledge all additional Eligible
Collateral to the Collateral Agent as it becomes available until the Collateral
Value Deficiency no longer exists (whether as a result of prepayments of the
Loan, pledge of additional collateral, or increase in Collateral Value or any
combination of the foregoing).

          (e) If additional Collateral is being pledged in accordance with
Section 5.8(d), such additional Collateral shall be free and clear of any Liens
(other than as permitted under the applicable Collateral Document) and the
pledgor(s) shall execute and deliver to the Collateral Agent such applicable
Collateral Document Supplements or Collateral Documents (in form and substance
reasonably


                                       67



satisfactory to the Agent and the Board) necessary to grant a security interest
to the Collateral Agent and shall take all other actions (as are in the
reasonable judgment of the Agent or the Controlling Creditor) necessary or
desirable to cause the Liens created thereby to be perfected first priority
Liens under applicable law (except as otherwise provided under the applicable
Collateral Document), and, if requested by the Controlling Creditor, furnish
favorable legal opinions to the Collateral Agent with respect to such additional
Collateral, including the perfection and priority of the Collateral Agent's Lien
thereon and evidence of applicable filings to the Loan Administrator, and shall
otherwise comply with the provisions of the applicable Collateral Documents that
apply to a pledge of such Collateral.

          (f) In connection with each prepayment or pledge of additional
Eligible Collateral pursuant to subsection (d) of this Section 5.8, the Borrower
shall deliver to the Collateral Agent, the Loan Administrator and the Board
either (i) a Collateral Value Certificate which establishes that the applicable
Collateral Value Deficiency no longer exists, or (ii) an Officer's Certificate
of Group that certifies (A) the amount of Group's Excess Cash Flow since the
Effective Date, and (B) that Group has identified to the Collateral Agent and
the Board all of its material property (other than Excluded Property) that is
not subject to a Lien in favor of the Collateral Agent under a Collateral
Document.

          (g) Any partial prepayment of the Loan under subsection (d) of this
Section 5.8 shall be applied as provided in Section 2.5(i). Any such prepayment
shall be paid to the Agent for application as provided in Section 2.8.

          (h) No later than ninety (90) days after the Effective Date, the
Borrower shall cause the applicable Obligor to grant a first priority mortgage
(subject to the Liens permitted under Section 6.1) in the real property located
at 250 W. Rio Salado Parkway, Tempe, Arizona 85281 and known as the Penny Saver
Building for the benefit of the Collateral Agent. Such mortgage shall be
substantially in the form of Exhibit H hereto (with such other changes which
result from the application of Arizona law thereto and other changes necessary
to reflect the fee ownership thereof).

          SECTION 5.9. EMPLOYEE BENEFIT PLANS. Each Obligor will ensure that the
Plans and Multiemployer Plans with respect to which the Obligors may have any
liability are operated in compliance with all applicable laws, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

          SECTION 5.10. FAA MATTERS; CITIZENSHIP. The Borrower shall at all
times hereunder be an "air carrier" within the meaning of the Act and hold a
certificate under 49 U.S.C. Section 41102(a)(1) as currently in effect or as may
be amended or recodified from time to time. The Borrower and each other Obligor
engaged in operations as an "air carrier" will at all times hereunder be a
United States Citizen holding an air carrier operating certificate issued
pursuant to Chapter 447 of Title 49 for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo.

          SECTION 5.11. BOARD GUARANTY. Each Obligor will comply with all of the
terms, requirements and conditions applicable to it under the Act and the
Regulations, or as may otherwise be imposed by, or agreed with, the Board in
connection with the issuance of the Board Guaranty, and shall promptly furnish
the Board, the Loan Administrator and the Agent all such information as may be
reasonably requested by the Board, the Loan Administrator or the Agent in
connection with the Board Guaranty. Each Obligor will execute such documents and
take such actions in furtherance of its obligations under the Act and the
Regulations as the Board, the Loan Administrator or the Agent may request.

          SECTION 5.12. AUDITS AND REVIEWS. Each Obligor will permit and
cooperate in the conduct of such audits and reviews during the period that both
(i) the Loan is outstanding and (ii) the


                                       68



Board is a guarantor of Tranche A or a Lender hereunder, and for three (3) years
thereafter, as the Board may deem appropriate, by an independent auditor
acceptable to the Board or the United States Comptroller General. To the extent
requested by the Board or the Loan Administrator, each Obligor will provide
reasonable access to the officers and employees, books, records, accounts,
documents, correspondence, and other information of the Obligors, financial
advisors, consultants and independent certified accountants that the Board or
the United States Comptroller General considers necessary.

          SECTION 5.13. CONTROL OF DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS.
Except as otherwise provided in this Section 5.13, the Obligors shall maintain
deposit accounts and securities accounts (other than with respect to Excluded
Cash) only with banks or financial institutions with which they and the
Collateral Agent have entered into control agreements in form and substance
reasonably satisfactory to the Collateral Agent and the Controlling Creditor
(each, a "Control Agreement"), unless the Collateral Agent's security interest
in any such account is otherwise perfected. In furtherance thereof, with respect
to any deposit account or securities account listed on Schedule 5.13 in
existence on the Effective Date, and thereafter prior to establishing any other
deposit account or securities account at any financial institution (other than
with respect to Excluded Cash), each Obligor shall enter into a Control
Agreement with such financial institution and the Collateral Agent, except that
the Obligors shall not be obligated to enter into Control Agreements (or
otherwise provide for the perfection the Collateral Agent's security interest)
with respect to (i) payroll, trust, or fiduciary accounts, including the Trust
Accounts, (ii) zero balance cash management accounts through which disbursements
are made and settled on a daily basis with no balance remaining overnight, and
disbursement accounts for the clearing of drafts, holding only funds in respect
of drafts already made or issued, and (iii) deposit accounts and securities
accounts that have an average weekly aggregate balance of less than $2,000,000;
provided that the aggregate amount of all deposit accounts and securities
accounts not subject to Control Agreements (or otherwise perfected) in reliance
on clause (iii) above shall not, in the case of such accounts located outside
the United Sates, exceed $25,000,000 at any time in the aggregate, and in the
case of all such accounts (including accounts located outside the United Sates),
exceed $35,000,000 in the aggregate at any time.

          SECTION 5.14. LOWER-TIER COVERED TRANSACTION. If and for so long as
the Board is a guarantor of Tranche A or a Lender hereunder, in the event that
any Obligor enters into any "lower-tier covered transaction" (as such term is
defined in 31 C.F.R. Section 19.110, as amended or modified from time to time
and not excepted therefrom by 31 C.F.R. Section 19.200(c)) in respect of the
transactions contemplated hereunder, each Obligor will include the clause
entitled "Certificate Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion - Lower Tier Covered Transactions" as set forth in Appendix
B to Part 19 of title 31 of the C.F.R. in such lower-tier covered transaction
and each Obligor will obtain a certification from the other Person or Persons
party to such lower-tier covered transaction to the effect that each such other
Person (and each "principal" thereof, as such term is defined in 31 C.F.R.
Section 19.105, as amended or modified from time to time) is not presently
debarred, suspended, proposed for debarment, declared ineligible, or voluntarily
excluded from participation in such transaction by any Federal department or
agency, or an explanation why such Person is unable to so certify. Further, no
Obligor will enter into a lower-tier covered transaction with a Person who has
been proposed for debarment under 48 C.F.R. Section 9.4, debarred or suspended
unless granted an exception for such lower-tier covered transaction pursuant to
31 C.F.R. Section 19.215.


                                       69



          SECTION 5.15. CONTRACTUAL OBLIGATIONS. Each Obligor will perform,
observe or fulfill the obligations, covenants and conditions contained in each
of its Contractual Obligations, provided that a failure to so perform, observe
or fulfill such obligations, covenants and conditions that (i) could not (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect or (ii) does not preclude continued operations by the Obligors at
any of the airport terminals listed on Schedule 4.20 shall not constitute a
breach of this Section 5.15.

          SECTION 5.16. SLOT UTILIZATION. Each Obligor holding or operating
Slots shall utilize its Slots in a manner consistent with the Slot Regulations
so as to avoid the withdrawal of any Slot by the FAA or other revocation or
termination for failure to comply with the Slot Regulations, taking into account
any waivers or other relief granted by the FAA or otherwise under the Slot
Regulations; provided, however, that the Obligors shall not be required to so
utilize Secondary Slots to the extent the Obligors determine that such Secondary
Slots are no longer commercially required. The Obligors shall maintain
personnel, policies, procedures and a computer database for the monitoring,
utilization and management of the Slots in compliance with the Slot Regulations
so as to ensure, to the greatest extent operationally feasible, that no Slot
becomes subject to withdrawal by the FAA or is otherwise revoked or terminated
based upon the failure to comply with the Slot Regulations.

          SECTION 5.17. STOCK EXCHANGE LISTING. Group (a) will use reasonable
efforts to list its common stock on the New York Stock Exchange or another
national securities exchange or for quotation on a national automated
interdealer quotation system, and (b) after the effectiveness of such listing,
will comply in all material respects with all applicable corporate governance
listing standards of such national securities exchange or national automated
interdealer quotation system, including standards relating to the composition,
duties and responsibilities, and functioning of boards of directors and board
committees.

          SECTION 5.18. FURTHER ASSURANCES. Promptly upon the request of the
Board or the Agent, each Obligor will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and things
as the Board, the Loan Administrator or the Agent may reasonably request in
order to effect fully the purposes of the Loan Documents and to maintain and
ensure the validity, effectiveness, priority and perfection of the Collateral
Agent's Liens pursuant to the Collateral Documents.

          SECTION 5.19. CREDIT RATING OF LOAN. The Borrower agrees to obtain by
December 31, 2005, and maintain for the term of the Loan, if available, and at
the expense of the Borrower, credit and recovery ratings on the Loan from S&P or
Moody's, which ratings shall assess both (x) the risk of default and ultimate
recovery on the Loan and (y) the likely recovery or loss given a default on the
Loan (in each case, without regard to the Board Guaranty). The credit and
recovery ratings shall be available to the Agent, the Collateral Agent, the Loan
Administrator, the Lenders and the Board.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

          To induce the other parties to enter into this Agreement (excluding
any other Obligor), the Obligors agree with each other party hereto (excluding
any other Obligor) that, so long as any of the Obligations (other than
contingent indemnification obligations) remain outstanding:

          SECTION 6.1. LIENS AND RELATED MATTERS.

          (a) Prohibition on Liens. No Obligor will, nor will it permit any
other Obligor to, directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any property


                                       70



or asset of any kind (including any document or instrument in respect of goods
or accounts receivable) of any Obligor, whether now owned or hereafter acquired,
or any income or profits therefrom, or file or consent to the filing of any
financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the UCC of any state or under any
similar recording or notice statute, except:

          (i) Permitted Encumbrances;

          (ii) (A) Liens existing on the Effective Date on Aircraft Related
     Equipment securing Indebtedness used to acquire such Aircraft Related
     Equipment, (B) Liens on Aircraft Related Equipment acquired after the
     Effective Date created or incurred in connection with the financing of such
     Aircraft Related Equipment (including a financing transaction referred to
     in the proviso to Section 5.8(b) with respect to After-Acquired Section
     1110 Equipment), (C) Liens on Aircraft Related Equipment and related
     property as contemplated under the Airbus Financings, the GE Financings,
     the GE 2001 Credit Agreement and the GE Expendables Mortgage, (D) leases
     and/or subleases of Aircraft Related Equipment to any Obligor or any US
     Airways Express affiliate that is not an Obligor and operates such Aircraft
     Related Equipment for the Borrower or another Obligor pursuant to a
     services agreement with the Borrower or such Obligor, which lease or
     sublease is entered into in connection with the debt financing or leasing
     of such Aircraft Related Equipment, as applicable, and the assignment of
     any such lease or sublease and the proceeds thereof, in the case of a
     lease, to any Person owed Indebtedness used to acquire such Aircraft
     Related Equipment or, in the case of a sublease, to any Person leasing such
     Aircraft Related Equipment to the Borrower or such Obligor, (E) Liens on
     Aircraft Related Equipment securing Permitted Refinancing Indebtedness in
     respect of Indebtedness previously secured by such Aircraft Related
     Equipment in accordance with subclause (A) or (B) above, including in each
     case, Liens securing special facility revenue bonds that finance Aircraft
     Related Facilities, (F) Liens on Aircraft Related Equipment securing
     refinancing Indebtedness of the type described in Section 2.5(c)(ii) so
     long as the Borrower shall have complied with its prepayment obligations
     thereunder, (G) Liens incurred or deposits made in the ordinary course of
     business to secure the performance of contracts for the purchase of
     aircraft, (H) Liens in existence on the Effective Date (1) on aircraft and
     engines (other than Collateral covered by Aircraft Mortgages) and (2)
     securing special facility revenue bonds, and (I) Liens on an Obligor's
     interest as lessee or sublessor in respect of any Aircraft Related
     Equipment or interests related thereto (including without limitation
     subleases, refunds or rebates, security deposits, rent, supplemental rent,
     reserves, or return condition adjustment payments);

          (iii) other Liens on assets acquired after the Effective Date securing
     or relating to Indebtedness and other liabilities and obligations in each
     case not otherwise prohibited under this Agreement in an aggregate amount
     not to exceed $5,000,000 at any time outstanding;

          (iv) Liens described in Schedule 6.1(a);

          (v) judgment and attachment Liens not (A) giving rise to an Event of
     Default or (B) relating to an action or judgment giving rise to an Event of
     Default under Section 7.1(h);

          (vi) Liens on the assets of any entity or on any asset existing at the
     time such entity or asset is acquired by an Obligor, whether by merger,
     consolidation, purchase of assets or otherwise; provided that (A) such
     Liens are not created, incurred or assumed by such entity in contemplation
     of or in connection with the financing of such entity's being acquired by
     an Obligor, (B) such Liens were created to secure the financing of Aircraft
     Related Equipment or other specific assets, (C) such Liens do not extend to
     any other assets of any Obligor other than


                                       71



     the assets acquired with such financing and (D) the Indebtedness secured by
     such Liens is permitted pursuant to this Agreement;

          (vii) leases or subleases of real or personal property granted by any
     Obligor to other Persons not interfering in any material respect with the
     ordinary conduct of the business of the Obligors, taken as a whole;

          (viii) Liens on cash and Cash Equivalents securing (A) reimbursement
     obligations in respect of letters of credit issued for the account of any
     Obligor in the ordinary course of business and consistent with past
     practice, so long as the aggregate amount of such cash and Cash Equivalents
     does not exceed 115% of the maximum available amount under the secured
     letters of credit, (B) reimbursement or other margin requirements in
     connection with, in the case of Liens contemplated in this clause (B),
     transactions contemplated by the proviso in Section 6.12, and (C) prepaid
     fuel and healthcare expenses in the ordinary course of business and
     consistent with past practice;

          (ix) (A) Liens on the Collateral to the extent permitted by the
     Intercreditor Agreement securing the obligations of the Obligors with
     respect to the Indebtedness under the AWA Loan, (B) the first priority lien
     of the agent under the AWA Loan on the AWA Loan Prepayment Account, and (C)
     Liens securing a refinancing, refunding or replacement of the AWA Loan (but
     only if the collateral agent thereunder is party to the Intercreditor
     Agreement or a replacement intercreditor agreement in accordance with
     Section 8.19 of the Intercreditor Agreement);

          (x) Liens on assets pledged in connection with a Replacement Secured
     Financing; provided that the Borrower prepays the Loan with the Net Issue
     Proceeds of such Replacement Secured Financing as provided in Section
     2.5(b);

          (xi) Liens on assets pledged to secure a Permitted Acquisition
     Financing; provided, that the Liens attach only to assets acquired in
     connection with the acquisition financed by such Permitted Acquisition
     Financing; and

          (xii) any renewal or substitution of any Lien for any of the preceding
     clauses (ii), (iv) or (vi); provided that any such Liens are not extended
     to additional assets;

provided that the Obligors will not create, incur, assume or permit to exist any
Lien permitted under any of clauses (ii) or (iii) above on any property of an
Obligor already constituting Collateral (which, for the avoidance of doubt, does
not apply to Liens permitted under clause (x) above).

          (b) No Restrictions on Subsidiary Distributions. Except (i) as
provided herein or in the other Loan Documents, (ii) as described on Schedule
6.1(b), (iii) for restrictions on the use of proceeds from a permitted financing
of Aircraft Related Equipment, or (iv) Payment Restrictions contained in
refinancings or replacements of the financings listed in clause (a)(ii) above
that are not more restrictive in a material respect than the corresponding
Payment Restrictions in the original financing, no Obligor will, nor will it
permit any other Obligor to, create or otherwise cause to exist any Payment
Restriction with respect to any Subsidiary of any Obligor.

          SECTION 6.2. INVESTMENTS. No Obligor will, nor will it permit any
other Obligor to, make any Investment other than (i) Investments consisting of
Cash Equivalents; (ii) accounts receivable if credited or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) payroll advances and advances for business and
travel expenses in the ordinary course of business; (iv) Investments made by way
of any endorsement of negotiable instruments


                                       72



received by any Obligor in the ordinary course of its business and presented by
it to any bank for collection or deposit; (v) stock, obligations or securities
received in settlement of amounts owing to any Obligor in the ordinary course of
business or in a distribution received in respect of an Investment permitted
hereunder; (vi) Investments made in connection with the Trust Agreements; (vii)
in addition to any other permitted investments, any other Investments by the
Obligors in an aggregate outstanding amount not exceeding $25,000,000 at any
time; (viii) Investments pursuant to and in compliance with Section 6.5 or
Section 6.9; (ix) Investments made in Excluded Subsidiaries consistent with past
practice; (x) the Merger; (xi) Investments in travel or airline related
businesses made in connection with Marketing and Service Agreements, alliance
agreements, distribution agreements, agreements with respect to fuel consortium,
agreements relating to flight training, agreements relating to insurance
arrangements, agreements relating to spare parts management systems and other
similar agreements which Investments under this clause (xi) (excluding
Investments existing on the date hereof) shall not exceed $50,000,000 in the
aggregate at any time outstanding; and (xii) Investments constituting non-cash
consideration received in respect of a transaction pursuant to and in compliance
with Section 6.13.

          SECTION 6.3. RESTRICTED PAYMENTS. No Obligor will, nor will it permit
any other Obligor to, directly or indirectly, declare, order, pay, make or set
apart, or be obligated to declare, order, pay, make or set apart, any sum for
any Restricted Payment; except that:

          (a) the Obligors may prepay (i) Indebtedness which is secured by a
Lien on property or assets sold in an Asset Sale which is permitted hereunder or
subject to a condemnation, taking, temporary or permanent requisition, or change
of grade, or a covered loss under a casualty insurance policy, in each case in
this clause (a)(i), to the extent that such Indebtedness is required by its
terms to be paid as a result of such Asset Sale, condemnation, taking, temporary
or permanent requisition, change of grade, or covered loss, as applicable, (ii)
Indebtedness with the proceeds of Permitted Refinancing Indebtedness, or (iii) a
Capital Lease of property which is obsolete, worn out or no longer required in
the businesses of the Obligors;

          (b) the Obligors may purchase or redeem (i) the Warrants held by the
Board or AFS Cayman Limited and (ii) Capital Stock (including options on any
such Capital Stock or related stock appreciation rights or similar securities)
that was issued as compensation from their officers, directors and employees (or
their estates or beneficiaries under their estates) upon death, disability,
retirement, termination of employment or pursuant to the terms of any plan or
any other agreement under which such Capital Stock or related rights were
issued, in an amount not to exceed $1,000,000 per Fiscal Year; and

          (c) the Obligors may pay after the date hereof $125,000,000 to General
Electric Capital Corporation or its Affiliates pursuant to the GE Merger MOU.

          SECTION 6.4. FINANCIAL COVENANTS.

          (a) Group shall not, at the close of any Business Day during the
periods set forth in the tables below, permit (i) the aggregate amount of
Pledged Cash less (ii) the sum of (A) the amount by which all outstanding
advances to the Obligors by credit card processors exceeds twenty percent (20%)
of the Obligors' aggregate outstanding air traffic liability (as determined in
accordance with GAAP, but excluding air traffic liability associated with the
Obligors' frequent flyer, affinity card and like programs) and (B) $285,000,000
less the Pre-Funded Amount (the amount, if any, by which (i) exceeds (ii) being
the "Adjusted Cash Amount") to be less than the lesser of (x) the Fixed Cash
Amount (as defined in clause (i) below) for such period and (y) the Variable
Cash Amount (as defined in clause (ii) below) at such time (such lesser amount,
the "Minimum Adjusted Cash Amount").


                                       73



     (i) The term "Fixed Cash Amount" means, for each period, the amount set
forth in the table below across from such period:



PERIOD                                       FIXED CASH AMOUNT
- ------                                       -----------------
                                          
Effective Date through March 31, 2006           $525,000,000
April 1, 2006 through September 30, 2006        $500,000,000
October 1, 2006 through March 31, 2007          $475,000,000
April 1, 2007 through September 30, 2007        $450,000,000
October 1, 2007 through March 31, 2008          $400,000,000
April 1, 2008 through September 30, 2008        $350,000,000
October 1, 2008 through September 30, 2010      $300,000,000


     (ii) The term "Variable Cash Amount" means:

          (x) with respect to the remainder of any period following a prepayment
     of the Loan and the AWA Loan pursuant to Section 2.5(a) and (c) of this
     Agreement and of the AWA Loan Agreement with the proceeds of any Future
     Issuance, an amount equal to the product of (A) the cash coverage
     percentage for such period set forth in the table below and (B) the
     difference of (I) the sum of the aggregate principal amounts of the Loan
     and the AWA Loan scheduled to be outstanding at the start of such period as
     set forth in the table below less (II) the aggregate amount of mandatory
     prepayments of the Loan and the AWA Loan made in all periods prior to such
     period pursuant to Section 2.5(a) and (c) of this Agreement and of the AWA
     Loan Agreement with the proceeds of Future Issuances:



                                             SCHEDULED PRINCIPAL   CASH COVERAGE
PERIOD                                             AMOUNT            PERCENTAGE
- ------                                       -------------------   -------------
                                                             
Effective Date through March 31, 2006          $840,250,558.77          68.7%
April 1, 2006 through September 30, 2006       $771,500,000.00          71.3%
October 1, 2006 through March 31, 2007         $728,600,000.00          71.7%
April 1, 2007 through September 30, 2007       $685,700,000.00          72.2%
October 1, 2007 through March 31, 2008         $553,800,000.00          79.5%
April 1, 2008 through September 30, 2008       $446,900,000.00          86.1%
October 1, 2008 through September 30, 2010     $345,000,000.00          97.1%


               and (y) for each period subsequent to the period referred to in
     clause (x) above, the amount determined in accordance with paragraph (x)
     less the amount set forth in the table below across from such subsequent
     period:



PERIOD                                       REDUCTION AMOUNT
- ------                                       ----------------
                                          
April 1, 2006 through September 30, 2006       $ 25,000,000
October 1, 2006 through March 31, 2007         $ 50,000,000
April 1, 2007 through September 30, 2007       $ 75,000,000
October 1, 2007 through March 31, 2008         $125,000,000
April 1, 2008 through September 30, 2008       $175,000,000
October 1, 2008 through September 30, 2010     $225,000,000


          (b) Group shall not permit its ratio of Consolidated EBITDAR to
Consolidated Fixed Charges for the four consecutive fiscal quarters ending on
the dates specified below, to be less than the applicable ratio specified below:


                                       74





PERIOD               APPLICABLE RATIO
- ------               ----------------
                  
December 31, 2006       0.900:1.00
March 31, 2007          0.929:1.00
June 30, 2007           0.958:1.00
September 30, 2007      0.986:1.00
December 31, 2007       1.015:1.00
March 31, 2008          1.061:1.00
June 30, 2008           1.108:1.00
September 30, 2008      1.154:1.00
December 31, 2008       1.200:1.00
March 31, 2009          1.225:1.00
June 30, 2009           1.250:1.00
September 30, 2009      1.275:1.00
December 31, 2009       1.300:1.00
March 31, 2010          1.325:1.00
June 30, 2010           1.350:1.00


          SECTION 6.5. RESTRICTION ON ACQUISITIONS; CHANGE IN FISCAL YEAR.

          (a) No Obligor will, nor will it permit any other Obligor to, acquire
by purchase or otherwise all or substantially all of the business, property or
assets of any Person or any division or line of business of any Person
(excluding purchases and acquisitions in the ordinary course of business by an
Obligor of property from any Person not constituting all or substantially all of
the property of such Person), or all or substantially all of the Capital Stock
or other evidence of beneficial ownership of any Person, or acquire any Person
as a new Subsidiary, other than the Merger, except that the Obligors may make
acquisitions of Capital Stock, the assets and/or the business of another Person
(including any division or line of business of such Person) or acquire any
Person as a new Subsidiary so long as (i) the acquisition primarily involves the
acquisition of assets to be used in the business of an Obligor as engaged in by
such Obligor on the date hereof, (ii) immediately before and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing,
(iii) immediately after giving effect to the acquisition, the Obligors shall be
in compliance on a Pro Forma Basis with Section 6.4 (in the case of Section
6.4(b), based on Consolidated EBITDAR for the four quarters ended as of the end
of the most recently ended fiscal quarter) and such compliance shall be
evidenced by an Officer's Certificate of the Borrower demonstrating such
compliance, (iv) prior to the consummation of such acquisition, neither S&P nor
Moody's shall have lowered the corporate credit rating of the Obligors by more
than one notch as a result of such acquisition (whether or not in combination
with other factors), (v) the aggregate purchase price in connection with all
such acquisitions (including therein any Indebtedness assumed in connection with
such acquisitions) consummated after the date hereof, together with all
Investments pursuant to clause (xi) of Section 6.2, does not exceed $50,000,000
during any twelve (12) month period and $150,000,000 in the aggregate during the
term of the Loan, (vi) if the acquisition is structured as a consolidation or
merger, it complies with Section 6.9, and (vii) the Obligors comply with their
obligations under Section 5.8(a) and/or (b) with respect to the properties,
assets or Person so acquired (as applicable).

          (b) No Principal Obligor shall change its Fiscal Year.

          SECTION 6.6. SALES-LEASEBACKS. Except with respect to Aircraft Related
Equipment, no Obligor will, nor will it permit any other Obligor to, directly or
indirectly, become liable after the Effective Date as lessee or as a guarantor
or other surety with respect to any lease, whether an Operating Lease or a
Capital Lease, of any property (whether real, personal or mixed), whether now
owned or


                                       75



hereafter acquired, in each case which (i) an Obligor has sold or transferred or
is to sell or transfer to any other Person (other than another Obligor) or (ii)
an Obligor intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by such Obligor to any
Person (other than another Obligor) in connection with such lease; provided that
after the Effective Date the Obligors may become and remain liable as lessee,
guarantor or other surety with respect to any such lease if and to the extent
that (A) the annual aggregate rentals under all such leases (other than leases
with respect to Aircraft Related Equipment) shall not exceed $20,000,000 and (B)
the Obligors comply with any prepayment obligations under Section 2.5(d); and
provided, further, that the restrictions contained in this Section 6.6 shall not
apply to the transactions described on Schedule 6.6.

          SECTION 6.7. TRANSACTIONS WITH AFFILIATES.

          (a) No Obligor shall, directly or indirectly, (i) sell, lease,
transfer or otherwise dispose of any of its properties or assets, or issue
securities to, (ii) purchase any property, assets or securities from, (iii) make
any Investment in or (iv) enter into any contract or agreement with or for the
benefit of, any Affiliate or holder of 5% or more of any class of Capital Stock
(and any Affiliate of such holder) of any Obligor (an "Affiliate Transaction"),
other than (x) Affiliate Transactions permitted under Section 6.7(b) and (y)
Affiliate Transactions (including lease transactions) which are on fair and
reasonable terms no less favorable to such Obligor than those as might
reasonably have been obtainable at such time from an unaffiliated party;
provided that if an Affiliate Transaction or series of related Affiliate
Transactions involves or has a value in excess of $10,000,000, such Obligor
shall not enter into such Affiliate Transaction or series of Affiliate
Transactions unless a majority of the disinterested members of the board of
directors of Group shall reasonably and in good faith determine that such
Affiliate Transaction is fair and reasonable to such Obligor or is on terms no
less favorable to such Obligor than those that might reasonably have been
obtained at such time from an unaffiliated party. For purposes of this Section
6.7, Section 9.9 notwithstanding, the determination of whether a transaction is
"fair" shall be governed by the Delaware General Corporation Law, including
decisional law thereunder.

          (b) The provisions of Section 6.7(a) shall not apply to (i) the
agreements listed on Schedule 6.7(b) as in effect on the Effective Date or any
transaction contemplated thereby; (ii) any payments or other transactions
pursuant to any tax sharing agreement between any Obligor and any other Obligor
or Excluded Subsidiary and any other transaction solely between or among
Obligors (subject to Section 6.14(a), if applicable) and between or among any
Obligors and an Excluded Subsidiary (including the guaranty of obligations of
other Obligors, but not including the guaranty of obligations of Excluded
Subsidiaries) provided that such transactions are not otherwise prohibited by
this Agreement; (iii) reasonable and customary fees and compensation paid to,
and indemnity provided on behalf of, officers, directors and employees of any
Obligor or Excluded Subsidiary, as determined by the board of directors of such
Obligor or the senior management of the Borrower or Group in good faith; (iv)
any Restricted Payments permitted by Section 6.3; (v) transactions contemplated
by the Marketing and Service Agreements; (vi) transactions between any Obligor
with any employee labor unions or other employee groups of such Obligor provided
such transactions are not otherwise prohibited by this Agreement; (vii) the Loan
Documents and the transactions contemplated thereby; and (viii) transactions
expressly contemplated by the Plan of Reorganization, without giving affect to
any subsequent amendments to the terms governing such transactions. The Obligors
rights under clause (ii) of this subsection (b) notwithstanding, the Obligors
expressly acknowledge and agree that, in the case of any sale, transfer or other
disposition of assets or property which are Collateral from one Obligor to
another Obligor (or to an Excluded Subsidiary), whether pursuant to this Section
6.7, Section 6.9 or otherwise, the Lien of the Collateral Agent in such assets
or property immediately prior to such sale, transfer or other disposition shall
continue and survive such transaction and remain attached to (and perfected in)
such assets or property following such transaction, and each Obligor which takes
title to such assets or property acknowledges and agrees that such title is
subject to the Lien of the Collateral Agent.


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          SECTION 6.8. CONDUCT OF BUSINESS. From and after the date hereof, (a)
no Obligor shall engage in any principal line of business other than (i) the
businesses engaged in by the Obligors on the date hereof and related businesses
and (ii) such other lines of business as may be consented to by the Board and
the Requisite Lenders, and (b) each of the Excluded Subsidiaries shall not
engage in any business other than the business engaged in by it on the Effective
Date.

          SECTION 6.9. MERGER OR CONSOLIDATION. No Obligor will consolidate with
or merge with any other Person or convey, lease or transfer its properties and
assets substantially as an entirety to any Person, other than the Merger,
unless: (i) (a) in the case of a consolidation or merger involving the Borrower
or AWA, the Borrower or AWA (as applicable) is the surviving entity or if the
Borrower or AWA (as applicable) is not the surviving entity, such surviving
entity or the Person that acquires by conveyance, lease or transfer the
properties and assets of the Borrower or AWA (as applicable) substantially as an
entirety, shall be a corporation organized and existing under the laws of the
United States of America or any State thereof or the District of Columbia and
can make the representations contained in Section 4.1(b), and shall expressly
assume, by an agreement executed and delivered to the Agent and the Board in
form and substance reasonably satisfactory to the Agent and the Board, the
Borrower's obligations to repay the Loan (in the case of the Borrower) and all
(other) obligations of the Borrower or AWA (as applicable) under the Loan
Documents, or (b) in the case of a consolidation or merger involving Group,
Group is the surviving entity or if Group is not the surviving entity, such
surviving entity or the Person that acquires by conveyance, lease or transfer
the properties and assets of Group substantially as an entirety, shall be a
corporation organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia, and shall expressly
assume, by an agreement executed and delivered to the Agent and the Board, in
form and substance reasonably satisfactory to the Agent and the Board, all of
Group's obligations under each Loan Document to which it is a party; (ii)
immediately before and after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing and immediately after
giving effect to such transaction, Group or if applicable, its successor, shall
be in compliance, on a Pro Forma Basis, with Section 6.4 (in the case of Section
6.4(b), based on Consolidated EBITDAR for the four quarters ended as of the end
of the most recently ended fiscal quarter); (iii) if Section 6.14(b) is
applicable to such transaction, the Obligors shall comply therewith; and (iv)
the Borrower has delivered to the Agent an Officer's Certificate and an opinion
of counsel from counsel reasonably satisfactory to the Agent, in form and
substance reasonably satisfactory to the Agent, stating that such consolidation,
merger, conveyance, lease or transfer and such agreement comply with this
Section 6.9 and that all conditions precedent herein provided for relating to
such transaction have been complied with and addressing such other matters as
may be reasonably requested by the Board and the Agent. Notwithstanding anything
to the contrary contained in this Section 6.9 but subject to Section 6.14(a)(i)
and (b) (in each case, if applicable), (A) any Obligor may merge or consolidate
with any other Obligor; provided that in the case of each such merger or
consolidation involving a Principal Obligor, if such Principal Obligor shall not
be the continuing or surviving Person, the surviving Obligor shall comply with
clauses (i)(a) or (i)(b) (as applicable) and (iii) above, and (B) any Obligor
(other than a Principal Obligor, except in compliance with the preceding clause
(i)) may convey, lease or transfer its properties and assets substantially as an
entirety to any other Obligor.

          SECTION 6.10. LIMITATIONS ON AMENDMENTS.

          (a) No Obligor shall amend, waive or modify, nor shall it consent to
or request any amendment, waiver or modification, of any of the material terms,
conditions, representations and covenants contained in any Indebtedness for
borrowed money that (i) shortens the final maturity date of such Indebtedness
(without giving effect to any amendment, waiver or modification, the "Initial
Indebtedness") or (ii) requires the acceleration of the final scheduled maturity
date and/or any principal payments, including but not limited to scheduled
payments and mandatory prepayments, and/or increases


                                       77



the principal amount payable on any date (including, without limitation,
pursuant to mandatory prepayments) prior to the dates of analogous payments of
such Initial Indebtedness; provided, however, that this Section 6.10(a) shall
not prohibit the incurrence of Permitted Refinancing Indebtedness, the repayment
of the Indebtedness being refinanced, or any amendment, waiver or modification
of the terms of the Indebtedness being refinanced necessary to effect such
repayment. No Obligor shall amend, waive or modify, nor shall it consent to or
request any amendment, waiver or modification, of the AWA Loan Agreement unless
such amendment, waiver or modification is permitted by and in compliance with
the Intercreditor Agreement.

          (b) No Obligor will, nor will it permit any other Obligor to, amend,
adopt or terminate any Plan (i) unless such action could not reasonably be
expected to have a Material Adverse Effect, or (ii) in any manner that could
reasonably be expected to give the PBGC a sound and just basis to commence
Proceedings against the Obligors on the basis that such action constitutes a
subsequent change in connection with the Obligor's termination or replacement of
the defined benefit Retirement Income Plan for Pilots of US Airways, Inc. with
the 2003 Pilots Defined Contribution Plan.

          (c) No Obligor shall amend, restate, supplement or modify (or consent
to or permit any amendment, restatement, supplement or modification of) its
Investment Guidelines without the prior written consent of the Controlling
Creditor; provided that, for the avoidance of doubt, this Section 6.10(c) shall
not be deemed to prohibit the adoption of the Investment Guidelines by any
Obligor.

          SECTION 6.11. NO FURTHER NEGATIVE PLEDGES. Except with respect to (a)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to a permitted Asset Sale
(including sale-leaseback transactions not prohibited by this Agreement), (b)
restrictions by reason of customary provisions restricting pledges, Liens,
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be), (c) negative pledges contained in the Airbus
Financings and the GE Financings (and any replacements or refinancings of any
thereof), and (d) permitted refinancings or replacements of Indebtedness
outstanding on the Effective Date, after the date hereof, no Obligor will, nor
will it permit any other Obligor to, enter into any agreement prohibiting the
creation or assumption of any Lien to secure the Obligations upon any of its
properties or assets, whether now owned or hereafter acquired to the extent that
such properties or assets are required to be pledged to secure the Obligations.

          SECTION 6.12. SPECULATIVE TRANSACTIONS. No Obligor will, nor will it
permit any other Obligor to, become a general partner in any general or limited
partnership or joint venture engaged or involved in, nor will any Obligor engage
in any transaction involving, commodity options or future contracts or any
similar speculative transactions; provided, however, that the following
transactions shall not be prohibited by this Section 6.12: (i) transactions
designed to hedge against fluctuations in fuel costs, entered into in the
ordinary course of business, consistent with past business practice or then
current industry practice, and not entered into for speculative purposes, (ii)
transactions designed to hedge interest rates entered into with respect to
notional amounts not to exceed actual or anticipated Indebtedness and not
entered into for speculative purposes and (iii) transactions designed to hedge
against risks associated with fluctuations in currencies entered into in the
ordinary course of business.

          SECTION 6.13. ASSET SALES. No Obligor will, nor will it permit any
other Obligor to, directly or indirectly, consummate any Asset Sale unless (i)
the consideration received in respect of such Asset Sale is at least equal to
the Fair Market Value of the assets subject to such Asset Sale and (ii) at least
85% of the value of the consideration received by such Obligor in respect of
such Asset Sale (net of the amount of any Indebtedness secured by the assets
sold in such Asset Sale which is assumed by the


                                       78



purchaser thereof) is in the form of cash or Cash Equivalents; provided that
without the prior written consent of the Controlling Creditor, the Obligors
shall not consummate any Asset Sales if and to the extent that the aggregate Net
Cash Proceeds from all such Asset Sales would exceed $10,000,000 per Fiscal
Year, other than (x) Designated Asset Sales and (y) sale-leasebacks not
prohibited by Section 6.6 (subject to compliance with Section 2.5(d), if
applicable).

          SECTION 6.14. SPARE PARTS.

          (a) No Obligor shall (i) sell, lease, transfer or otherwise dispose of
its spare parts which are Collateral to another Obligor if such other Obligor
has pledged spare parts which are not Collateral to secure any other
Indebtedness or obligation, other than in the ordinary course of business as
though between unaffiliated air carriers (including pursuant to interchange,
pooling, exchange and other similar arrangements customary in the airline
industry and consistent with Section 3.4(f) of the Aircraft Mortgages (as
defined in clause (ii) of the definition of Collateral Documents) or (ii)
commingle at any location its spare parts which are Collateral with the spare
parts of another Obligor if such other Obligor has pledged spare parts which are
not Collateral to secure any other Indebtedness or obligation, unless the
ownership of each such commingled spare part can be definitively determined at
all times by reference to the Obligors' spare parts tracking numbers and system;
provided that spare parts that are segregated on a separate shelf or in a
separate storage bin or other storage unit shall not be considered as having
been commingled even though such spare parts are present at the same location so
long the Obligors install signs on each such shelf, bin or other storage unit
containing Collateral bearing the inscription: "Property of US Airways, Inc. (or
other applicable Obligor), Mortgaged to Wilmington Trust Company, as Collateral
Agent" (such sign to be replaced if there is a successor Collateral Agent).

          (b) No Obligor who has pledged spare parts as Collateral will
consolidate or merge with, or convey, lease or transfer its properties and
assets substantially as an entirety to, or liquidate into, or otherwise combine
with, any other Obligor if such other Obligor has pledged spare parts which are
not Collateral to secure any other Indebtedness or obligation, unless (i)
following such transaction the Lien of the Collateral Agent in such spare parts
Collateral will remain perfected with the same priority as existed immediately
prior to such transaction, (ii) the surviving Obligor has established adequate
tracking and other systems to ensure that the spare parts which are Collateral
are not commingled with the surviving Obligor's other spare parts which are not
Collateral, (iii) at all times following such transaction the surviving Obligor
will be required to maintain spare parts subject to the Lien of the Collateral
Agent having an aggregate Appraised Value of at least 75% of the Appraised Value
of the spare parts Collateral set forth in the Baseline Appraisal, (iv) the
Obligors have provided thirty (30) days' prior written notice of such
transaction to the Agent, Collateral Agent, Loan Administrator and the Board
describing in reasonable detail the actions the Obligors will take to ensure
compliance with clauses (i) and (ii) above, and (v) no later than thirty (30)
days following the consummation of such transaction, Group has provided an
Officer's Certificate to the Agent (with a copy to the Collateral Agent, Loan
Administrator and the Board) certifying that such transaction complies with this
Section 6.14(b).

          (c) Notwithstanding the foregoing clauses (a) and (b), the Borrower
may, on behalf of the other Obligors, from time to time propose amendments to
this Section 6.14 designed to both adequately protect the Collateral Agent's
interest in the spare parts Collateral and, to the extent consistent therewith,
maximize the Obligors' operational flexibility, and the Obligors, the Agent, and
the Board (so long as the Board is either a guarantor of Tranche A or a Lender
hereunder) shall have the ability by written consent to adopt any such proposal
and amend this Agreement to reflect the same without the consent of any other
Person, without regard to the provisions of Section 9.1(a).


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                                   ARTICLE VII

                                EVENTS OF DEFAULT

          SECTION 7.1. EVENTS OF DEFAULT. Each of the following events shall
constitute an "Event of Default":

          (a) (i) failure by the Borrower to pay any installment of principal of
the Loan when due, whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise or (ii) failure by the Borrower to pay any interest on
the Loan or any fee or any other amount due under this Agreement or any other
Loan Document within five (5) Business Days after the date due; or

          (b) any Obligor (i) fails to make when due (after giving effect to
applicable cure or grace periods, and whether as primary obligor or as guarantor
or other surety) payments in respect of rents, principal, interest or premium or
other payments, if any, under or in respect of one or more Capital Leases or
other Indebtedness or Operating Leases (other than Indebtedness referred to in
clause (a) of this Section 7.1) and the aggregate amount of all payment defaults
(after giving effect to applicable cure or grace periods) then existing in
respect of Indebtedness and aggregate amounts under Operating Leases shall equal
or exceed $25,000,000 or (ii) fails to duly observe, perform or comply with any
agreement with any Person or any term or condition of any instrument, if such
failure, either individually or in the aggregate, shall have (A) resulted in the
acceleration of, or entitles any Person to accelerate, the payment of
Indebtedness owed by such Obligor which, together with all other accelerated
Indebtedness and Indebtedness that is entitled to be accelerated, has a
principal amount that equals or exceeds $25,000,000, (B) given rise under one or
more Operating Leases to obligations by, or rights of any other Person(s) to
require, an Obligor to make payments that equal or exceed, or to return assets
leased by an Obligor and having a fair market value that equals or exceeds,
$25,000,000 or (C) resulted in the termination of or given rise to rights of any
other Person(s) to terminate one or more Operating Leases under which the
aggregate net present value of the remaining basic rent payments (as determined
in accordance with the formulas for calculating "net present value" under the
applicable leases or for leases without such formulas, in accordance with
formulas under leases for comparable terms and comparable amounts) equals or
exceeds $25,000,000; provided that the failure by an Obligor to make one or more
payments that are attributable to and relate solely to return conditions under
aircraft leases shall not constitute an Event of Default under this Section
7.1(b) so long as the Obligor is, in good faith, disputing the amount of such
payments; or

          (c) failure by an Obligor to perform or comply with any term or
condition contained in Section 5.2, Section 5.10 or Article VI of this Agreement
(other than Section 6.4);

          (d) any representation, warranty, certification or other statement
made by any Obligor in any Loan Document or in any statement or certificate at
any time given by any Obligor in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or

          (e) any default by any Obligor in the performance of or compliance
with any provision contained in this Agreement or any of the other Loan
Documents required to be performed or complied with by it (other than any such
provision referred to in any other clause of this Section 7.1), and (i) with
respect to a default under Section 6.4(a), such default shall not have been
waived within two (2) Business Days after the date of such default and (ii) with
respect to any other default, such default shall not have been remedied or
waived within thirty (30) days after the earliest of (A) a Responsible Officer
of a Principal Obligor obtaining knowledge of such default (which, in the case
of Section 6.4(b), will be presumed to have occurred no later than the date of
the delivery of financial statements pursuant to


                                       80



Section 5.1 for the end of the accounting period as of which such default
exists) or (B) receipt by the Borrower of notice from the Agent or the Board of
such default; or

          (f) (i) a court shall enter a decree or order for relief in respect of
any Obligor in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
any other relief described in clause (ii) below or other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against any Obligor seeking (A) relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, (B) the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
such Obligor, or over all or a substantial part of its property, or (C) the
appointment of an interim receiver, trustee or other custodian of any Obligor
for all or a substantial part of its property, and any such event described in
this clause (ii) against such Obligor shall continue for 60 days without being
dismissed or discharged; or (iii) a warrant of attachment, execution or similar
process shall have been issued against all or any substantial part of the
property of any Obligor; or

          (g) (i) any Obligor shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian of all or a substantial part of its
property; or (ii) any Obligor shall make any assignment for the benefit of
creditors; or (iii) the board of directors of any Obligor (or any committee
thereof) shall adopt any resolution to approve any of the actions referred to in
clauses (i) or (ii) above; or

          (h) (i) one or more final judgments or orders for the payment of money
in an aggregate amount in excess of $25,000,000 and which are not covered by
insurance (treating any deductibles, self-insurance (except to the extent
reinsured) or retention as not so covered) or (ii) one or more non-monetary
judgments or orders that could reasonably be expected to have a Material Adverse
Effect shall have been entered against one or more Obligors and shall remain
undischarged or unstayed, by reason of a pending appeal or otherwise, for a
period in excess of sixty (60) days; or

          (i) the Board Guaranty shall for any reason (other than by reason of
Sections 2.03, 2.04, 2.05 or 2.06 of the Board Guaranty) cease to be in full
force and effect or the Board shall assert that any of its obligations
thereunder are invalid or unenforceable; or

          (j) any order, judgment or decree shall be entered against any Obligor
decreeing the dissolution of such Obligor and such order shall remain
undischarged or unstayed for a period in excess of thirty (30) days; or

          (k) (i)(A) any of the Loan Documents shall cease to be in full force
and effect or (B) any Obligor shall so assert or (ii) any Lien under the
Collateral Documents on any material portion of the Collateral shall cease to be
enforceable and of the same effect and priority purported to be created thereby,
and except in the case of clause (i)(A) of this subsection (k), such default
shall continue unremedied for a period of ten (10) days; or

          (l) any of the insurance coverages required to be maintained by the
Obligors pursuant hereto or under the Collateral Documents shall lapse,
terminate or otherwise cease to be in full force and effect, other than coverage
of losses and liabilities that in the aggregate are reasonably expected to be
immaterial to the operations or financial condition of the Obligors taken as a
whole; or


                                       81



          (m) the "Net Investment" (as defined below) shall exceed the "Net
Receivables Balance" (as defined below) at any time (for purposes hereof, "Net
Investment" means the outstanding principal amount of Tranche A of the Loan and
accrued and unpaid interest thereon, and "Net Receivables Balance" means the
maximum amount payable under the Board Guaranty), other than pursuant to the
terms of Section 9.2(f) or any other provision of any Loan Document; or

          (n) any Obligor shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or

          (o) (i) Slots, other than Secondary Slots which the Obligors have
determined are no longer commercially required, (x) shall have been withdrawn by
the FAA or otherwise revoked or terminated during the term of the Loan as the
result of failure to comply with the Slot Regulations and (y) the aggregate
Appraised Value of such Slots (in each case, as of the date of such withdrawal,
revocation or termination) shall have exceeded $10,000,000; or (ii) any Obligor
implements a cessation, cancellation or curtailment of flight operations or a
change in flight schedules which, assuming no subsequent further action (such as
the sale, lease or trade of the affected Slots or their allocation to new or
additional flights) is taken, could reasonably be expected to result in the
withdrawal by the FAA or other revocation or termination based upon failure to
comply with the Slot Regulations of Slots, other than Secondary Slots, the
aggregate Appraised Value of which (as of the date of such cessation,
cancellation or curtailment) exceeds $10,000,000; it being understood, however,
that an Event of Default shall not have occurred under this clause (ii) if the
Slots otherwise affected are sold, leased or traded in arm's length transactions
or allocated to new or additional flights prior to the implementation of such
cessation, cancellation or curtailment of flight operations or change in flight
schedules; or

          (p) any default by any Obligor in the performance of or compliance
with Section 5.14 of this Agreement and such default shall not have been
remedied or waived within 180 days after the earlier of (i) a Responsible
Officer of Group or the Borrower obtaining knowledge of such default or (ii)
receipt by the Borrower of notice from the Agent or the Board of such default.

          SECTION 7.2. REMEDIES. During the continuance of any Event of Default,
the Agent shall, solely at the request of the Controlling Creditor or, if while
the Board is the Controlling Creditor (i) an Event of Default under Section
7.1(a) has occurred and within 60 days following such occurrence such Event of
Default has not been cured or (ii) an Event of Default under Section 7.1(e) has
occurred as a result of Group's failure to comply with the covenant contained in
Section 6.4(a) and within 60 days following such occurrence such Event of
Default has not been waived, then at the request of the Board or the Tranche B
Lenders holding at least twenty-five percent (25%) of principal amount of then
outstanding Tranche B, in each case by notice to the Borrower (with a copy to
the Board and the Loan Administrator), declare that the Loan, all interest
thereon and all other amounts and Obligations payable under this Agreement to be
immediately due and payable, whereupon the Loan, all such interest and all such
amounts and Obligations shall become and be immediately due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that upon the
occurrence of an Event of Default specified in clause (f) or (g) of Section 7.1,
the Loan, all such interest and all such amounts and Obligations shall
automatically become and be immediately due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower. Except with respect to the Agent as provided in the
immediately preceding sentence, remedies exercisable by the Agent or the
Collateral Agent hereunder or under any Collateral Document shall be exercised
solely upon instructions received by the Agent or the Collateral Agent from the
Controlling Creditor in writing; provided, however, that in connection with its
exercise of remedies or forbearance from such exercise in connection with any
Event of Default under clause (a), (b), (c), or (d) of Section 7.1, the Board,
if it is the Controlling Creditor at the time, will make itself reasonably
available to consult in good faith with the Tranche B Lenders for the purpose of


                                       82



obtaining their view on the actions that may be taken in connection with such
Event of Default and the exercise of remedies or forbearance, it being
understood that exercise of such remedies or forbearance nonetheless shall
remain within the sole discretion of the Board.

                                  ARTICLE VIII

                       THE AGENT AND THE COLLATERAL AGENT

          The parties hereto agree as follows:

          SECTION 8.1. AUTHORIZATION AND ACTION. Each Lender and the Board
hereby appoints and authorizes each of the Agent and the Collateral Agent to
take such action as administrative agent and collateral agent, respectively, on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated by such Lender to it as Agent or Collateral Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto, and each of the Agent and the Collateral Agent hereby
accepts such authorization and appointment. The Agent and the Collateral Agent
shall be obligated to perform such duties and only such duties as are
specifically set forth in this Agreement and the other Loan Documents and no
implied covenants or obligations shall be read into this Agreement or any other
Loan Document against the Agent or the Collateral Agent. Except with respect to
any matter as to which the Agent or the Collateral Agent is expressly directed
to take any specific action (or refrain from taking any specific action) by the
terms of this Agreement or any other Loan Documents, neither the Agent nor the
Collateral Agent shall be required to take any action (including making any
determination) or refrain from taking any action except upon the written
instructions of the Controlling Creditor, and neither the Agent nor the
Collateral Agent shall be required to exercise any discretion vested in the
Agent or the Collateral Agent under this Agreement or any other Loan Document,
but each of the Agent and the Collateral Agent shall be required to act or to
refrain from acting with regard to any such action (and shall be fully protected
in, and shall have no liability for, so acting or refraining from action) upon
such written instructions of the Controlling Creditor (including, without
limitation, with respect to matters arising under the Collateral Documents and
the other Loan Documents), and such instructions shall be binding upon all
Lenders and the Board; provided, however, that neither the Agent nor the
Collateral Agent shall be required to take any action which could reasonably be
expected to expose either the Agent or the Collateral Agent to liability or
which is contrary to this Agreement, the Board Guaranty, any other Loan Document
or applicable law. As to any provisions of this Agreement or any other Loan
Document under which action may be taken or approval given by less than all of
the Lenders or the Board or both, as the case may be, the action taken or
approval given by the required Lenders or the Board or both, as the case may be,
shall be binding upon all Lenders and the Board to the same extent and with the
same effect as if each Lender and the Board had joined therein. Each of the
Agent and the Collateral Agent shall be entitled to rely upon any note, notice,
consent, certificate, affidavit, letter, telegram, teletype message, facsimile
transmission, statement, order or other document, instrument or writing believed
by it to be genuine and to have been signed or sent by the proper person or
persons and, in respect of legal matters, upon the opinion of counsel selected
by the Agent or the Collateral Agent. Each of the Agent and the Collateral Agent
may deem and treat the payee of the Notes as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
shall have been filed with the Agent and the Collateral Agent. Any request,
authority or consent of any Person who at the time of making such request or
giving such authority or consent is the holder of the Loan shall be conclusive
and binding on any subsequent holder, transferee or assignee of the Loan. Upon
any delivery of any instructions to the Collateral Agent by the Requisite
Lenders pursuant to this Agreement, the Agent shall certify to the Collateral
Agent that the Lenders delivering such instructions constitute the Requisite
Lenders under the Agreement and (i) the Collateral Agent may but shall be under
no obligation to follow such instructions until the Agent shall certify to the
Collateral Agent that the Lenders delivering such instructions constitute the
Requisite


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Lenders under the Agreement and (ii) the Collateral Agent shall be fully
protected in, and shall have no liability for, following such instructions
whether or not the Agent shall have made the certification referred to in clause
(i) above or declining to follow such instructions until the Agent shall have
made the certification referred to in clause (i) above. Each Lender and the
Board hereby authorizes and directs the Collateral Agent to enter into the
Collateral Documents on its behalf, and acknowledges and agrees to all of the
terms and conditions thereof and agrees to be bound thereby. No provision of
this Agreement or any other Loan Document shall be deemed to impose any duty or
obligation on the Collateral Agent to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal or in which the Collateral Agent shall be
unqualified or incompetent to perform any such act or acts or to exercise any
such right, power, duty or obligation or if such performance or exercise would
constitute doing business by the Collateral Agent in such jurisdiction or impose
a tax on the Collateral Agent by reason thereof or to risk its own funds or
otherwise incur any financial liability in the performance of its duties
hereunder.

          SECTION 8.2. RELIANCE, ETC. Neither the Agent nor the Collateral Agent
nor any of their respective Affiliates, directors, officers, agents or employees
shall be liable to any Lender, the Loan Administrator or the Board for any
action taken or omitted to be taken by it or by such directors, officers, agents
or employees under or in connection with this Agreement, the Notes or any other
Loan Document, except for its or their own gross negligence or willful
misconduct as actually and finally determined by a final, non-appealable
judgment of a court of competent jurisdiction and only to the extent of direct
(as opposed to special, indirect, consequential or punitive) damages. Without
limitation of the generality of the foregoing, each of the Agent and the
Collateral Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Lender, the Loan Administrator or the Board for any action taken or omitted to
be taken in good faith by it in accordance with the advice of such experts; (ii)
makes no warranty or representation to any Lender, the Loan Administrator or,
except, with respect to the Agent as expressly provided in the Board Guaranty,
the Board, and shall not be responsible to any Lender, the Loan Administrator
or, except, with respect to the Agent as expressly provided in the Board
Guaranty, the Board, for any statements, warranties or representations (whether
oral or written) made in or in connection with this Agreement, the Notes or any
other Loan Document; (iii) shall not have any duty, and shall incur no liability
for its failure, to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement, the Notes or any
other Loan Document on the part of any Obligor or to inspect the property
(including the books and records) of any Obligor; (iv) shall not be responsible
to any Lender, the Loan Administrator or the Board for any recitals, statements,
representations or warranties in this Agreement, the Notes or any other Loan
Document, or any other instrument or document furnished pursuant thereto, or for
the validity, perfection, priority or enforceability of the liens or security
interests in any of the Collateral created or intended to be created by any Loan
Document, or for the validity or sufficiency of the Collateral or any Loan
Document, or for insuring the Collateral or for any payment of taxes, charges,
assessments, or liens upon the Collateral or otherwise as to the maintenance of
the Collateral, for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Notes or any other Loan
Document, or any other instrument or document furnished pursuant thereto; (v)
shall incur no liability under or in respect to this Agreement, the Notes or any
other Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, facsimile transmission, cable
or telex) believed by it to be genuine and signed or sent by the proper party or
parties; and (vi) may deem and treat each Lender which makes a loan hereunder as
the holder of the indebtedness resulting therefrom for all purposes hereof until
the Agent receives and accepts an Assignment and Acceptance entered into by such
Lender, as assignor, and an eligible assignee as provided in Section 9.2. The
Collateral Agent shall be under no obligation or duty to take any action under
this Agreement or any other Loan Document or otherwise if taking such action (i)
would subject the Collateral Agent to a tax in any jurisdiction where it is not
then subject to a tax or (ii) would require the Collateral Agent to qualify to
do business in any jurisdiction where it is not then so qualified, unless


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in each such case the Collateral Agent shall receive security, or indemnity
satisfactory to it against such tax and any liability resulting from such
qualification, in each case as results from the taking of such action under this
Agreement or any other Loan Document. The Collateral Agent may execute any of
the trusts or powers hereof and perform any duty hereunder, or under any other
Loan Document, either directly or by or through agents or attorneys-in-fact. The
Collateral Agent shall be entitled to the advice of counsel concerning all
matters pertaining to such trusts, powers and duties and shall not be liable to
any Lender, the Loan Administrator or the Board for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel.
The Collateral Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it without gross negligence or
willful misconduct. The Collateral Agent shall not be liable for interest on any
money or assets received by it except as the Collateral Agent may agree in
writing. Assets held by the Collateral Agent pursuant to this Agreement or any
Collateral Document need not be segregated from other assets except to the
extent expressly required hereunder or thereunder or required by law.
Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, (i) if any provision of this Agreement or any other Loan Document
provides that the Collateral Agent shall act at the direction of the Agent, the
Collateral Agent shall be fully protected in, and shall have no liability for,
taking any action pursuant to such direction, and (ii) if the Collateral Agent
shall request instructions from the Controlling Creditor with respect any act or
action (including the failure to act) in connection with this Agreement or any
other Loan Document, the Collateral Agent shall be entitled to refrain from such
act or taking such action unless and until the Collateral Agent shall have
received written instructions from the Controlling Creditor and the Collateral
Agent shall not incur any liability to any Person by reason of so refraining and
shall be fully protected in following any such written instructions. Whenever in
the administration of this Agreement or any other Collateral Document, the
Collateral Agent shall deem it necessary or desirable that a factual matter be
proved or established in connection with the Collateral Agent taking, suffering
or omitting any action hereunder or thereunder, such matter (unless other
evidence in respect thereof is specifically prescribed) may be deemed to be
conclusively proved and established by a certificate of a Responsible Officer of
the Borrower (with a copy to the Agent), the Agent or the Controlling Creditor
delivered to the Collateral Agent, and such certificate shall be full warrant to
the Collateral Agent for any action taken, suffered or omitted in reliance
thereon and the Collateral Agent shall be fully protected in connection
therewith and shall have no liability therefor.

          SECTION 8.3. AFFILIATES. If and so long as the Agent or the Collateral
Agent shall remain a Lender, the Agent or the Collateral Agent, as applicable,
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent or the
Collateral Agent, and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include the Agent and the Collateral Agent, each in its
individual capacity. Unrelated to its role as Agent or Collateral Agent as set
forth herein, the Agent and the Collateral Agent and their respective Affiliates
may accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, any Obligor and any Person who
may do business with or own securities of any Obligor, all as if it were not the
Agent or the Collateral Agent, as applicable, hereunder and without any duty to
account therefor to the Lenders.

          SECTION 8.4. REPRESENTATIONS OF THE LENDERS AND THE BOARD. Each
Lender, the Loan Administrator and the Board's representatives have actively
engaged in the negotiation of all of the terms of this Agreement. The Board's
representatives have met with the Obligors to discuss the business, affairs,
financial condition and prospects of the Obligors. Except as otherwise expressly
provided in this Agreement or any of the other Loan Documents, neither the Agent
nor the Collateral Agent shall have any duty or responsibility, either initially
or on a continuing basis, under this Agreement or any other Loan Document, to
provide any Lender, the Loan Administrator or the Board with any credit or other
information with respect to the Borrower whether coming into its possession as
of the date of this


                                       85



Agreement or at any time thereafter, or to notify any Lender, the Loan
Administrator or the Board of any Default or Event of Default except as provided
in Section 8.5. This Agreement and all instruments or documents delivered in
connection with this Agreement have been reviewed and approved by each Lender,
the Loan Administrator and the Board and none of the Lenders, the Loan
Administrator or the Board has relied on the Agent or the Collateral Agent as to
any legal or factual matter in connection therewith or in connection with the
transactions contemplated thereunder.

          SECTION 8.5. EVENTS OF DEFAULT; TERMINATION OF BOARD GUARANTY.

          (a) In the event of the occurrence of any Default or Event of Default,
any Lender or the Board knowing of such event may (but shall have no duty to),
or any Principal Obligor pursuant to Section 5.1(b)(vi) hereof shall, give the
Agent and the Collateral Agent written notice specifying such Default or Event
of Default and expressly stating that such notice is a "notice of default".
Neither the Agent nor the Collateral Agent shall be deemed to have knowledge of
such events unless the Agent or the Collateral Agent, as applicable, has
received such notice or, with respect to the Agent only, unless the Default or
Event of Default consists of a failure of payment of principal or interest on
the Loan. In the event that the Agent or the Collateral Agent receives such a
notice of the occurrence of a Default or Event of Default, the Agent or the
Collateral Agent, as applicable, shall give written notice thereof to the
Lenders, the Board and the Loan Administrator. In the event that such notice is
a notice of an Event of Default or such Default matures into an Event of
Default, the Agent and the Collateral Agent shall take such action with respect
to such Default or Event of Default as shall be directed in writing by the
Board, the Tranche B Lenders or the Lenders, as provided in Section 7.2;
provided, however, that, unless and until the Agent or the Collateral Agent
shall have received such directions, the Agent and the Collateral Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable and
in the best interest of the Lenders and the Board.

          (b) In the event the Agent or the Collateral Agent shall receive
written notice from the Board to the effect that (i) the Board has the right to
terminate the Board Guaranty under Sections 2.04 and 2.05 thereof, (ii) any
portion of the Board Guaranty has terminated under Section 2.03 thereof or
otherwise or (iii) the Board Guaranty shall for any reason have ceased to be in
full force and effect or the Board shall have asserted that any of its
obligations thereunder is invalid or unenforceable, the Agent or the Collateral
Agent, as applicable shall promptly give written notice thereof to the Lenders.
Neither the Agent nor the Collateral Agent shall be deemed to have knowledge of
any such event unless the Agent or the Collateral Agent, as applicable, has
received such notice (except with respect to the Agent if any such event results
from the failure of the Agent to perform any of its obligations under the Board
Guaranty).

          SECTION 8.6. AGENT'S AND COLLATERAL AGENT'S RIGHT TO INDEMNITY. The
Agent and the Collateral Agent shall be fully justified in failing or refusing
to take any action hereunder on behalf of any Lender or the Board unless it
shall first be indemnified to its satisfaction by such Lender (or, in the case
of the Primary Tranche A Lender, Citibank, N.A.) or the Board, as the case may
be, against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.

          SECTION 8.7. INDEMNIFICATION OF AGENT AND COLLATERAL AGENT. The
Lenders hereby agree to indemnify the Agent and the Collateral Agent and all of
their respective affiliates, directors, officers, employees, advisors and
representatives thereof (to the extent not reimbursed by the Borrower), ratably
as most recently in effect prior to the date indemnification is sought, from and
against any and all costs, losses, liabilities, claims, damages or expenses
which may be incurred by or asserted or awarded against the Agent or the
Collateral Agent in any way relating to or arising out of this Agreement and/or
the other Loan Documents or any action taken or omitted by the Agent or the
Collateral Agent under this


                                       86



Agreement and/or the other Loan Documents; provided, however, that any such
indemnification obligation in respect of any claim against the Primary Tranche A
Lender shall constitute an indemnification obligation solely of Citibank, N.A.
rather than the Primary Tranche A Lender and the Primary Tranche A Lender shall
have no indemnification obligation in respect thereof; provided, further, that
no Lender (or in the case of the Primary Tranche A Lender, Citibank, N.A.) shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's or the Collateral Agent's gross negligence or willful
misconduct as actually and finally determined by a final, non-appealable
judgment of a court of competent jurisdiction and only to the extent of direct
(as opposed to special, indirect, consequential or punitive) damages. Without
limiting the foregoing, each Lender (or in the case of the Primary Tranche A
Lender, Citibank, N.A.) agrees to reimburse the Agent and the Collateral Agent
promptly upon demand for its ratable share of any reasonable out-of-pocket
expenses (including reasonable counsel fees) incurred by the Agent or the
Collateral Agent in connection with the administration or enforcement of, or the
preservation of any rights under, this Agreement (including this Section 8.7)
and/or the other Loan Documents, to the extent that the Agent or the Collateral
Agent is not reimbursed for such expenses by the Borrower. The agreements in
this Section 8.7 shall survive the termination of the other provisions of this
Agreement and the other Loan Documents and the resignation or removal of the
Collateral Agent hereunder.

          SECTION 8.8. SUCCESSOR AGENT AND COLLATERAL AGENT. Each of the Agent
and the Collateral Agent may resign at any time by giving written notice thereof
to the Lenders, the Board, the Loan Administrator and the Borrower and may be
removed at any time with cause by the Controlling Creditor and, so long as the
Board is a guarantor of Tranche A or a Lender hereunder, with or without cause
by the Board. Any such resignation or removal shall be effective upon
appointment and acceptance of a successor Agent or Collateral Agent, as
applicable, in accordance with this Section 8.8. Upon any such resignation or
removal, the Borrower shall have the right to appoint a successor agent, subject
to confirmation by the Controlling Creditor. If no successor agent shall have
been appointed and accepted such appointment within sixty (60) days after the
retiring Agent's or Collateral Agent's, as applicable, giving of notice of
resignation or the Controlling Creditor's removal of the Agent or the Collateral
Agent, the Agent or the Collateral Agent, as applicable, may, with the consent
(not to be unreasonably withheld) of the Controlling Creditor and, so long as no
Event of Default shall have occurred and be continuing, the Borrower, appoint a
successor Agent or Collateral Agent, as applicable, who shall be willing to
accept such appointment. Each successor agent appointed hereunder shall be a
commercial bank organized under the laws of the United States of America or of
any State thereof and shall have a combined capital and surplus of at least
$1,000,000,000. Upon the acceptance of any appointment as Agent or Collateral
Agent hereunder by a successor Agent or Collateral Agent, such successor Agent
or the Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring or removed Agent or
Collateral Agent, and the retiring or removed Agent or Collateral Agent shall be
discharged from its duties and obligations as agent under this Agreement. After
any Agent's or Collateral Agent's resignation or removal hereunder as Agent or
Collateral Agent, as applicable, the provisions of this Article VIII shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent or Collateral Agent under this Agreement.

          SECTION 8.9. RELEASE OF LIENS ON COLLATERAL AND SUBSIDIARY GUARANTORS.
The Lenders and the Board irrevocably authorize and instruct the Collateral
Agent to release any Lien on any property granted to or held by the Collateral
Agent under any Collateral Document and to release any Subsidiary Guarantor from
its obligations under the First Lien Guaranty and the other Loan Documents to
which such Subsidiary may be a party (i) upon payment in full of all Obligations
(other than contingent indemnification obligations), (ii) upon the transfer of
property as part of or in connection with any Asset Sale that complies with
Section 6.13 and with respect to which the relevant Obligor complies with
Section 2.5(d), as applicable, (iii) upon the pledge, sale, transfer or other
disposition of property as part of


                                       87



or in connection with any Replacement Secured Financing with respect to which
the relevant Obligor complies with Section 2.5(b), (iv) to the extent release of
any Lien is otherwise permitted under this Agreement or any Collateral Document
(including, without limitation, in the proviso to Section 5.8(b) hereof), or (v)
subject to Section 9.1, if approved, authorized or ratified in writing by the
Controlling Creditor; provided, that the Collateral Agent shall not be obligated
to release any Lien pursuant to this Section 8.9 until its receipt from the
Borrower of an Officer's Certificate certifying that such release complies with
this Section 8.9, and upon receipt of such Officer's Certificate the Collateral
Agent shall release such Lien in accordance with such Officer's Certificate and
shall be fully protected in connection therewith. The Borrower shall send a copy
of any such Officer's Certificate to the Agent, the Board and the Loan
Administrator at the same time that it sends such Officer's Certificate to the
Collateral Agent.

          SECTION 8.10. CO-COLLATERAL AGENT; SEPARATE COLLATERAL AGENT.

          (a) If at any time or times it shall be necessary or prudent in order
to conform to any law of any jurisdiction in which any of the Collateral shall
be located, or to avoid any violation of law or imposition on the Collateral
Agent of taxes by such jurisdiction not otherwise imposed on the Collateral
Agent, or the Collateral Agent shall be advised by legal counsel that it is
necessary or prudent in the interest of the Lenders, or the Collateral Agent
shall deem it desirable for its own protection in the performance of its duties
hereunder, the Collateral Agent and the Borrower shall promptly execute and
deliver all instruments and agreements necessary or proper to constitute another
bank or trust company, or one or more persons approved by the Collateral Agent
and the Borrower (with the consent, not to be unreasonably withheld, of the
Controlling Creditor), either to act as Collateral Agent or co-Collateral Agents
of all or any of the Collateral under this Agreement, jointly with the
Collateral Agent originally named herein or therein or any successor Collateral
Agent, or to act as separate Collateral Agent or Collateral Agents of any of the
Collateral.

          (b) Every separate Collateral Agent and every co-Collateral Agent,
other than any successor Collateral Agent appointed pursuant to Section 8.8,
shall, to the extent permitted by law, be appointed and act and be such, subject
to the following provisions and conditions:

          (i) all rights, powers, duties and obligations conferred upon such
     Collateral Agent in respect of the custody, control and management of
     moneys, papers or securities shall be exercised by such Collateral Agent or
     any agent appointed by such Collateral Agent;

          (ii) all rights, powers, duties and obligations conferred or imposed
     upon the Collateral Agent hereunder shall be conferred or imposed and
     exercised or performed by the Collateral Agent and such separate Collateral
     Agent or separate Collateral Agents or co-Collateral Agent or co-Collateral
     Agents, jointly, as shall be provided in the instrument appointing such
     separate Collateral Agent or separate Collateral Agents or co-Collateral
     Agent or co-Collateral Agents, except to the extent that under any law of
     any jurisdiction in which any particular act or acts are to be performed
     the Collateral Agent shall be incompetent or unqualified to perform such
     act or acts, or unless the performance of such act or acts would result in
     the imposition of any tax on the Collateral Agent which would not be
     imposed absent such joint act or acts, in which event such rights, powers,
     duties and obligations shall be exercised and performed by such separate
     Collateral Agent or separate Collateral Agents or co-Collateral Agent or
     co-Collateral Agents;

          (iii) except as provided in clause (ii) above, no power given hereby
     to, or which it is provided herein or therein may be exercised by, any such
     co-Collateral Agent or co-Collateral Agents or separate Collateral Agent or
     separate Collateral Agents shall be exercised hereunder or thereunder by
     such co-Collateral Agent or co-Collateral Agents or separate Collateral
     Agent or


                                       88



     separate Collateral Agents except jointly with, or with the consent in
     writing of, the Collateral Agent, anything contained herein to the contrary
     notwithstanding;

          (iv) no Collateral Agent hereunder shall be personally liable by
     reason of any act or omission of any other Collateral Agent hereunder; and

          (v) the Borrower and the Collateral Agent, at any time by an
     instrument in writing executed by them jointly (with the consent, not to be
     unreasonably withheld, of the Controlling Creditor), may accept the
     resignation of or remove (for any reason or no reason at all) any such
     separate Collateral Agent or co-Collateral Agent and, in that case by an
     instrument in writing executed by them jointly, may appoint a successor to
     such separate Collateral Agent or co-Collateral Agent, as the case may be,
     anything contained herein to the contrary notwithstanding.

          SECTION 8.11. COLLATERAL AGENTS' LIEN. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, as security for the
payment of its fee under Section 2.7(d) and all other amounts payable to the
Collateral Agent hereunder including, without limitation, any and all expenses
and any amounts for which the Collateral Agent is entitled to reimbursement or
indemnification, (i) the Collateral Agent is hereby granted a lien on all
Collateral and (ii) the Collateral Agent shall have the right to use and apply
any of the funds held by the Collateral Agent to cover all such fees and other
amounts.

                                   ARTICLE IX

                                  MISCELLANEOUS

          SECTION 9.1. AMENDMENTS, WAIVERS, ETC.

          (a) Amendments and Waivers. No amendment, modification or waiver of
any provision of this Agreement or any other Loan Document nor consent to any
departure by any Obligor therefrom shall in any event be effective unless the
same shall be in writing and (x) signed by the Controlling Creditor and (y)
permitted by Section 5.3 of the Intercreditor Agreement (if applicable), and
then any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that:

          (i) no amendment, modification, waiver or consent shall, unless in
     writing and signed by each Lender affected thereby and the Board (so long
     as the Board is either a guarantor of Tranche A or a Lender hereunder), do
     any of the following:

               (1) subject the Lenders or the Board to any additional
          obligations;

               (2) extend the scheduled final maturity of the Loan or change the
          amount of or extend the scheduled date for payment of any principal of
          the Loan;

               (3) decrease the rate of interest on the Loan or any fee,
          indemnity or other amount payable to such Lender or the Board or
          extend any date fixed for payment of such interest, indemnity or other
          amount or fees;

               (4) amend the definition of "Requisite Lenders," "Controlling
          Creditor" or this Section 9.1;


                                       89



               (5) waive, amend, modify or release the First Lien Guaranty
          except as provided herein;

               (6) modify the application of payments to the Loan under Section
          2.8; and

               (7) waive, amend or modify Section 6.4(a) in a manner which would
          have the effect of reducing the Minimum Adjusted Cash Amount for any
          period thereunder (A) by more than 25% of the originally scheduled
          amount for such period or (B) to an amount which would result in the
          Collateral Value (as of the last Collateral Value Test Date) being
          less than the product of (x) the then outstanding principal amount of
          the Loan minus the Minimum Adjusted Cash Amount (as amended or
          modified) and (y) 1.35.

          (ii) no (A) amendment or modification of any material provision of
     Article II, Article III, Article IV, Article VIII or Section 5.1 (other
     than monthly reporting), Section 5.2, Section 5.5, Section 7.1 (other than
     to add Events of Default), Section 7.2, Section 9.2, Section 9.3, Section
     9.4, Section 9.5, Section 9.6, Section 9.7, Section 9.9, Section 9.10,
     Section 9.11, Section 9.12, Section 9.16, Section 9.17 or Section 9.19 or
     any of the definitions as relevant thereto, (B) release of all or
     substantially all of the Collateral, or any dilution or subordination of
     the Liens on any Collateral having a material value, or (C) waiver,
     amendment or modification of the Intercreditor Agreement in a manner
     adverse to the First Lien Claimholders (under and as defined therein), in
     each case shall be effective unless in writing and signed by (I) RSA so
     long as it continues to hold more than 37.5% of the principal amount of
     Tranche B Notes outstanding, (II) Bank of America, N.A., as a Tranche B
     Lender, so long as it continues to hold more than 12.5% of the principal
     amount of Tranche B Notes outstanding, (III) Citicorp North America, Inc.,
     as Govco Administrative Agent, and Citibank, N.A., so long as the Primary
     Tranche A Lender or the Alternate Tranche A Lender, respectively, continues
     to hold more than 50% of the principal amount of Tranche A Notes, and (IV)
     the Board, so long as the Board is either a guarantor of Tranche A or a
     Lender hereunder; and

          (iii) no amendment, modification, waiver or consent shall, unless in
     writing and signed by the Agent, the Collateral Agent or the Loan
     Administrator, as applicable, in addition to the Persons required above to
     take such action, affect the rights or duties of the Agent, the Collateral
     Agent or the Loan Administrator, as the case may be, under this Agreement,
     the other Loan Documents or the Board Guaranty.

          (b) Execution of Amendments and Waivers by the Agent. The Agent may,
but shall have no obligation to, with the written concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances.

          (c) Non-Consenting Lenders. In connection with any proposed amendment,
modification, waiver or termination requiring the consent of all affected
Lenders, if the consent of Requisite Lenders is obtained, but the consent of
other Lenders whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in this Section 9.1 being referred to as a
"Non-Consenting Lender"), then, so long as the Lender that is acting as the
Agent is not a Non-Consenting Lender, at the Borrower's request, the Agent or an
Eligible Lender that is acceptable to the Agent, the Board and, so long as no
Event of Default shall have occurred and be continuing, the Borrower, shall have
the right with the Agent's consent and in the Agent's sole discretion (but shall
have no obligation) to purchase from such Non-Consenting Lender, and such
Non-Consenting Lender agrees


                                       90



that it shall, upon the Agent's request, sell and assign to the Lender that is
acting as the Agent or such Eligible Lender, all of the portion of the Loan of
such Non-Consenting Lender for an amount equal to the principal balance of such
portion of the Loan held by the Non-Consenting Lender and all accrued interest
and fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment and Acceptance.

          SECTION 9.2. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS AND ASSIGNS.

          (a) Assignment. Each Lender may sell, transfer, negotiate or assign
either in whole or in part to one or more Eligible Lenders its rights and
obligations hereunder and under the Notes and the other Loan Documents; provided
that (i) the assigning Lender shall give prompt written notice to the Agent, the
Borrower, the Board and the Loan Administrator of the terms of and the parties
to any such assignment, (ii) the proposed assignee shall provide to the Agent,
the Borrower and the Board all documentation and certificates as required by the
Agent, the Borrower and the Board to confirm to the Agent's and the Board's
satisfaction that such proposed assignee is an Eligible Lender, (iii) the
Borrower will not be obligated to pay any greater amount under Section 2.9(c) or
Section 2.11 (in respect of increased costs or Indemnified Taxes or Other Taxes
imposed pursuant to applicable law in effect on the date of such assignment) to
the assignee than the Borrower is then obligated to pay to the assigning Lender
under such Sections, (iv) any sale, transfer or assignment of a Tranche A
Lender's rights, interests or obligations under the Board Guaranty shall be
subject to Sections 2.04 and 5.04 of the Board Guaranty, and (v) without the
consent of the Borrower (in its sole discretion), no right, obligation or
interest hereunder or under any Note or other Loan Document may be sold,
transferred, negotiated or assigned to (A) an airline, a commercial aircraft
operator, an air freight forwarder or an entity principally engaged in the
business of parcel transport by air (any such Person, a "Prohibited
Transferee"), (B) an Affiliate of a Prohibited Transferee or (C) a manufacturer
of, or a maintenance provider for, aircraft airframes, engines or related parts.
Notwithstanding the foregoing, no prior consent or approval of any Person shall
be required for an assignment of Tranche A from the Primary Tranche A Lender to
the Alternate Tranche A Lender.

          (b) Deliveries in Connection with Assignment. The parties to each
assignment under this Section 9.2 shall execute and deliver to the Agent, for
its acceptance and recording, an Assignment and Acceptance, and the assignee, if
a Non-U.S. Person, shall deliver to the Borrower and the Agent, on or prior to
the date of the assignment, two completed copies of IRS Form W-9, W-8BEN or
W-8ECI or other applicable form, certificate or document required to satisfy the
requirements of Section 2.11. Upon such execution, delivery and acceptance and
the receipt by the Agent of an assignment fee in the amount of $3,500 (which fee
shall be payable by the assignor, or if the assignor is the Board, the
Borrower), the Agent shall record such Assignment and Acceptance and from and
after the effective date specified in such Assignment and Acceptance (i) the
assignee thereunder of all or any portion of the Loan shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender and (ii) the assignor thereunder
shall, to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except those rights with respect to indemnification which survive the payment
in full of the Obligations) and be released from its obligations under the Loan
Documents, other than those relating to events or circumstances occurring prior
to such assignment (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under the Loan Documents, such Lender shall cease to be a party hereto).

          (c) Agent's Duties Upon Assignment. Upon its receipt of an Assignment
and Acceptance executed by an assigning Lender and an assignee, the Agent shall,
if such Assignment and Acceptance has been completed, (i) accept such Assignment
and Acceptance, (ii) record the information


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contained therein in the Register, (iii) give prompt notice thereof to the
Borrower and (iv) shall give prompt written notice of the terms of and parties
to any such assignment to the Borrower, the Board and the Loan Administrator.

          (d) Assignments to Federal Reserve Bank. In addition to the other
assignment rights provided in this Section 9.2, each Lender may assign, without
the prior consent of the Borrower, the Agent or the Board as collateral or
otherwise, any of its rights under this Agreement to any Federal Reserve Bank
pursuant to Regulation A of the Federal Reserve Board, provided, however, that
no such assignment shall release the assigning Lender from any of its
obligations hereunder.

          (e) Participations. Each Lender may, without the prior consent of the
Borrower or any other Person, sell participations, to the extent permitted by
the Regulations, in or to all or a portion of its rights and obligations
hereunder and under the Notes and the other Loan Documents (any such purchaser
of a participation being referred to as a "Participant"); provided that (i)
neither the Notes nor the Board Guaranty is assigned, conveyed, sold or
transferred in whole or in part, (ii) the Board's ability to assert any and all
defenses available to it under the Board Guaranty and the law is not adversely
affected, (iii) the Borrower will not be obligated to pay any greater amount
under Section 2.9(b) or Section 2.11 (in respect of increased costs, Indemnified
Taxes or Other Taxes) to the Participant than the Borrower is then obligated to
pay to the selling Lender under such Sections, (iv) no Participant shall,
without the consent of the Borrower (such consent to be in the Borrower's sole
discretion), be a (x) Prohibited Transferee, (y) an Affiliate of a Prohibited
Transferee or (z) a manufacturer of, or a maintenance provider for, aircraft
airframes, engines or related parts, without in each case the consent of the
Borrower. In the event of the sale of any participation by any Lender, (A) such
Lender's obligations under the Loan Documents shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties for the performance
of such obligations, (C) such Lender shall remain the holder of such Obligations
for all purposes of this Agreement, (D) the Borrower, the Agent, the Board and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
(E) each Participant, shall deliver to the Borrower and the Agent, on or prior
to the date of the sale of the participation, two completed copies of IRS Form
W-9, W-8BEN or W-8ECI or other applicable form, certificate or document required
to satisfy the requirements of Section 2.11. Any Participant will be entitled to
the benefits of Section 2.9(c), Section 2.9(e), Section 2.10 and Section 2.11 to
the same extent as if such Person were a Lender.

          (f) Assignment of Tranche A at the Direction of the Board. The Tranche
A Lender agrees that if and to the extent that the Board Guaranty remains in
effect, the Board shall have the right, upon ten (10) Business Days' prior
notice to the Tranche A Lender (with a copy to the Agent and the Borrower), to
require the Tranche A Lender to sell, transfer and assign Tranche A, in whole or
in part (but in no event in excess of the amount then guaranteed under the Board
Guaranty), and with or without the benefit of the Board Guaranty (which, if
without, shall be fully and irrevocably released upon the closing and to the
extent of such purchase), to a Person designated by the Board, for a purchase
price equal to 100% of the principal amount of such portion of Tranche A to be
sold, transferred and assigned, together with all accrued and unpaid interest
thereon through the date of purchase (which purchase price may include a payment
under the Board Guaranty) and payment of any losses, expenses and liabilities
under Section 2.9(e) hereof attributable to such sale, transfer and assignment
(it being acknowledged and agreed that any premium paid by such purchaser for
such portion of the Loan shall be for the benefit of the Board); provided, that
the Tranche A Lender (to the extent commercially reasonable) and the Borrower
shall cooperate with the Board to minimize any such losses, expenses and
liabilities so long as any such action would not result in the Tranche A Lender
incurring any additional costs or otherwise be disadvantageous to the Tranche A
Lender in its sole judgment; and provided, further that the Tranche A Lender
shall also be entitled to payment of all other unpaid Obligations owing to it
through the date of purchase from the Obligors, including, without limitation,
fees, expenses, indemnities and other amounts


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which are then due and payable pursuant to the terms of the Loan Documents,
which amounts the Obligors agree to pay to the Tranche A Lender on the date of
purchase. The closing of the Tranche A assignment shall be consummated pursuant
to an Assignment and Acceptance and such other documentation as the Tranche A
Lender, the Board and such assignee shall mutually agree is reasonably
necessary. Any such sale, transfer or assignment under this subsection (f) shall
be subject to the conditions specified in clauses (i), (ii), (iii) and (v) of
the proviso in subsection (a) of this Section 9.2.

          (g) Reimbursement of Guarantee Fee upon Certain Assignments. If during
any Interest Period some or all of Tranche A is assigned in compliance with this
Section 9.2 and as a result of such assignment the Tranche A Applicable Interest
Rate on the portion of Tranche A so assigned will accrue at the rate specified
in clause (c) of the definition of "Tranche A Applicable Interest Rate," then
the Board shall reimburse the Borrower on or prior to the first day of the next
Interest Period for a pro rata amount of the Guarantee Fee paid by the Borrower
to the Board for such Interest Period, which amount shall be equal to the
product of (x) the amount of the Guarantee Fee attributable to the portion of
Tranche A so assigned and (y) a fraction, the numerator of which is the number
of days in such Interest Period during which the assignee held such assigned
portion of Tranche A and the denominator of which is the total number of days in
such Interest Period.

          (h) Assignment Pursuant to of the Intercreditor Agreement. Each of the
Lenders and the Board hereby acknowledges and agrees to the purchase right set
forth in the Section 5.6 of the Intercreditor Agreement and agrees to sell,
assign and transfer its interest in the Loan upon the terms and conditions
specified therein. For the avoidance of doubt, any such sale, assignment or
transfer shall be made without the benefit of the Board Guaranty (which shall be
fully and irrevocably released upon the closing of such sale).

          (i) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, provided that except as otherwise expressly provided herein,
no Obligor may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Board, the Lenders and the
Agent (and any attempted assignment or transfer by an Obligor without such
consent shall be null and void).

          SECTION 9.3. COSTS AND EXPENSES. Whether or not the transactions
contemplated hereby shall be consummated, the Obligors agree to pay promptly (i)
all reasonable costs and expenses incurred by the Loan Administrator, the Board,
RSA, the Lenders, the Agent and the Collateral Agent in connection with the
negotiation, preparation, execution and delivery of the Loan Documents, the
Board Guaranty and all documents relating thereto (including reasonable legal
fees and expenses), (ii) all reasonable costs and expenses incurred by the Loan
Administrator, the Board, RSA, Bank of America, the Agent and the Collateral
Agent in connection with any consents, amendments, waivers or other
modifications hereto (including reasonable legal fees and expenses) and (iii)
all costs and expenses, including reasonable legal fees and expenses incurred by
the Agent, the Collateral Agent, the Lenders, the Loan Administrator and the
Board in enforcing any Obligations of, or in collecting any payments due from,
the Obligors hereunder or under the other Loan Documents, including any such
costs and expenses incurred after the filing of a bankruptcy or insolvency
proceeding with respect to any Obligor.

          SECTION 9.4. INDEMNITIES. Whether or not the transactions contemplated
hereby shall be consummated, the Obligors agree to defend, indemnify, pay and
hold harmless the Board, the Agent, the Collateral Agent, the Govco
Administrative Agent, the Lenders, the Loan Administrator and their respective
Affiliates, officers, directors, employees, agents and advisors (collectively
called the "Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including without limitation
the reasonable fees and disbursements of counsel for such Indemnitees, but
excluding


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Taxes), whether direct, indirect or consequential and whether based on any
federal, state or foreign laws, statutes, rules or regulations (including
without limitation securities and commercial laws, statutes and rules or
regulations), on common law or equitable cause or on contract or otherwise, that
may be imposed on, incurred by, or asserted against any such Indemnitee, in any
manner arising out of this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby (including, without limitation, the
use or intended use of the proceeds of the Loan) or any breach or default by the
Obligors of any provision of the Loan Documents (collectively called the
"Indemnified Liabilities"); provided that the Obligors shall not have any
obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise (i) from the gross
negligence or willful misconduct of that Indemnitee (as actually and finally
determined by a final and non-appealable judgment of a court of competent
jurisdiction) and only to the extent that such Indemnified Liabilities
constitute direct (as opposed to special, indirect, punitive or consequential)
damages or (ii) constitute ordinary and usual operating or overhead expenses of
an Indemnitee (excluding, without limitation, costs and expenses of any outside
counsel, consultant or agent). To the extent that the undertaking to defend,
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, each of the
Obligors shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them. No Indemnitee shall have
any liability (whether direct or indirect, in contract, tort or otherwise) to
any Obligor or any of its security holders or creditors for or in connection
with the transactions contemplated hereby, except to the extent such liability
is determined in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted primarily from such Indemnitee's gross negligence
or willful misconduct. In no event, however, shall any Indemnitee be liable on
any theory of liability for any special, indirect, consequential or punitive
damages (including, without limitation, any loss of profits, business or
anticipated savings). Without limitation of the generality of the foregoing,
each Indemnitee (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Obligor or any of its security holders or creditors for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
experts and (ii) shall incur no liability under or in respect to this Agreement,
the Notes or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, facsimile
transmission, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties. The agreements in this Section 9.4 shall survive
the termination of the other provisions of this Agreement and the other Loan
Documents and, in the case of the Collateral Agent, shall survive the
resignation or removal of the Collateral Agent hereunder.

          SECTION 9.5. RIGHT OF SET-OFF. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
to the fullest extent permitted by law, each Lender is hereby authorized by the
Obligors at any time or from time to time, with notice to the Obligors and to
each other Lender, the Board, the Agent, the Collateral Agent and the Loan
Administrator, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, Indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of any Obligor against and on account of the obligations and
liabilities of such Obligor to that Lender under this Agreement, the First Lien
Guaranty, the Notes and the other Loan Documents, including, but not limited to,
all claims of any nature or description arising out of or connected with this
Agreement, the First Lien Guaranty, the Notes, or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loan or any other
amounts due hereunder shall have become due and payable pursuant to Section 7.2
and although said obligations and liabilities, or any of them, may be contingent
or unmatured.


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          SECTION 9.6. SHARING OF PAYMENTS, ETC. The Lenders and the Board
hereby agree among themselves that if any of them shall, whether by voluntary
payment, by realization upon security, through the exercise of any right of
set-off or banker's lien, by counterclaim or cross action or by the enforcement
of any right under the Loan Documents or otherwise, or as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code, receive payment
or reduction of a proportion of the aggregate amount of principal, interest,
fees and other amounts then due and owing to the Lenders and the Board hereunder
or under the other Loan Documents (collectively, the "Aggregate Amounts Due")
which is greater than the proportion received by any other Lender or the Board
in respect of the Aggregate Amounts Due to such other Lender or the Board, then
the Lender or the Board receiving such proportionately greater payment shall (i)
notify the Agent and each other Lender and the Board of the receipt of such
payment and (ii) (A) in the case of a Lender, (1) apply a portion of such
payment to purchase participations equal to the portion of the Aggregate Amounts
Due to the other Lenders and (2) pay to the Board the portion of the Aggregate
Amounts Due to it or (B) in the case of the Board, pay to each Lender the
portion of the Aggregate Amounts Due to it (which participations shall be deemed
to have been purchased and payments made simultaneously upon the receipt by the
seller or the Board of its portion of such payment, and which participations
will be permitted notwithstanding any prohibition) to the contrary in Section
9.2(e)) so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders and the Board in proportion to the Aggregate Amounts Due to them,
provided that if all or part of such proportionately greater payment received by
such purchasing Lender or the Board is thereafter recovered from such Lender or
the Board upon the bankruptcy or reorganization of the Borrower or otherwise,
those purchases or other payments shall be rescinded and the purchase prices
paid for such participations or other payments shall be returned to such
purchasing Lender or the Board ratably to the extent of such recovery, but
without interest. The Borrower expressly consents to the foregoing arrangement
and agrees that any holder of a participation so purchased may exercise any and
all rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by the Borrower to that holder with respect thereto as fully as if
that holder were owed the amount of the participation held by that holder.

          SECTION 9.7. NOTICES, ETC. Unless otherwise specifically provided
herein, any notice, request or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or courier service and shall be deemed to have been given when
delivered in person or by courier service, or upon receipt of telefacsimile
(promptly confirmed in writing). For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on Annex A or such
other address as shall be designated by such party in a written notice delivered
to the Agent. A copy of any and all notices, requests, communications, demands,
reports, documents or other materials (including, without limitation, any of the
materials delivered by the Obligors under Section 5.1(b)) delivered or sent by
any party pursuant to the terms of this Agreement shall also be given to the
Loan Administrator. Anything to the contrary contained herein notwithstanding,
the Obligors shall not be required to provide the Board with any notices or
certificates required to be delivered to the Board hereunder and under the other
Loan Documents if, at the time such notice is required to be delivered, the
Board is neither a guarantor of Tranche A nor a Lender hereunder.

          SECTION 9.8. NO WAIVER; REMEDIES. No failure on the part of the Board,
any Lender or the Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

          SECTION 9.9. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (AND, TO THE EXTENT


                                       95



APPLICABLE, THE BANKRUPTCY CODE); PROVIDED THAT THE RIGHTS AND OBLIGATIONS OF
THE BOARD HEREUNDER (WHETHER AS GUARANTOR OR LENDER) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE FEDERAL LAW OF THE UNITED STATES OF AMERICA,
IF AND TO THE EXTENT SUCH FEDERAL LAW IS APPLICABLE, AND OTHERWISE IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.

          SECTION 9.10. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.

          (a) Submission to Jurisdiction. BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OBLIGOR HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT AGAINST IT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.

          (b) Service of Process. EACH OF THE OBLIGORS HEREBY IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED STATES OF
AMERICA ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS BY THE MAILING (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID)
OR DELIVERING OF A COPY OF SUCH PROCESS TO IT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 9.7.

          (c) No Limitation. Nothing contained in this Section 9.10 shall affect
the right of the Agent or any Lender or other party hereto to serve process in
any other manner permitted by law or commence legal proceedings or otherwise
proceed against any Obligor in any other jurisdiction.

          SECTION 9.11. WAIVER OF JURY TRIAL. EACH OBLIGOR IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT.

          SECTION 9.12. MARSHALING; PAYMENTS SET ASIDE. Neither the Agent nor
any Lender shall be under any obligation to marshal any assets in favor of any
Obligor or any other party or against or in payment of any or all of the
Obligations. To the extent that any Obligor makes a payment or payments to the
Agent for the account of the Board, the Loan Administrator or any Lender (each,
a "Payee") or any Payee receives payment from exercise of their rights of
setoff, and such payment or payments or the proceeds of such setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party,
then (i) to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all rights and remedies therefor, shall
be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred and (ii) each Payee
shall pay and return such amount to the Agent as the Agent may be required to
disgorge or otherwise pay to a trustee, receiver or any other party in respect
of the portion of the payment from such Obligor distributed by the Agent to such
Payee hereunder.


                                       96



          SECTION 9.13. SECTION TITLES. The Section titles and subtitles
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.

          SECTION 9.14. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrower and the Agent.

          SECTION 9.15. SEVERABILITY. In case any provision in or obligation
under this Agreement, the Notes or the other Loan Documents shall be invalid,
illegal or unenforceable in any jurisdiction the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

          SECTION 9.16. CONFIDENTIALITY.

          (a) Each party hereto (other than the Board) shall, and shall procure
that its respective officers, employees and agents shall, keep confidential and
shall not, without the prior written consent of the other parties, disclose to
any third party this Agreement, any other Loan Document or any of the
information, reports or documents supplied by or on behalf of such other party
not otherwise publicly available, except that a party shall be entitled to
disclose this Agreement, any other Loan Document, and any such information,
reports or documents:

          (i) in connection with any proceeding arising out of or in connection
     with this Agreement, any of the other Loan Documents or the Board Guaranty
     to the extent that such party may reasonably consider necessary to protect
     its interest;

          (ii) to any potential assignee or transferee of any party's rights
     under this Agreement or any of the Loan Documents or any other person
     proposing to enter into contractual arrangements with any party in relation
     to this Agreement, any of the other Loan Documents, the Board Guaranty
     subject to the relevant party obtaining an undertaking from such potential
     assignee or transferee or other person in corresponding terms to this
     Section 9.16;

          (iii) pursuant to any applicable laws, ordinances, judgments, decrees,
     injunctions, writs, rules, regulations, orders, interpretations, licenses,
     permits and orders of any competent court, arbitrator or governmental
     agency or authority in any relevant jurisdiction;

          (iv) to bank examiners or any other regulatory authority or rating
     agencies or similar entities, if requested to do so;

          (v) to its auditors, legal, tax or to other professional advisers; or

          (vi) to its Affiliates and their respective directors, officers,
     employees and agents.

          (b) The provisions of this Section 9.16 shall survive any termination
of this Agreement or any other Loan Document or any assignment, transfer or
participation under this Agreement or any other Loan Document.


                                       97



          SECTION 9.17. NO PROCEEDINGS. Each of the Borrower, Group, the Board,
the Loan Administrator, the Agent, the Collateral Agent and each Lender (other
than the Primary Tranche A Lender) hereby agrees that it will not institute
against, or join any other Person in instituting against, the Primary Tranche A
Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any federal or state bankruptcy or similar law, so long as any
Commercial Paper issued by the Primary Tranche A Lender shall be outstanding or
there shall have elapsed one (1) year plus one (1) day since the last day on
which any such Commercial Paper shall have been outstanding.

          SECTION 9.18. GOVCO ADMINISTRATIVE AGENT. Each of the Borrower, the
Board, the Loan Administrator, the Agent, the Collateral Agent and each Lender
acknowledges that the Govco Administrative Agent is a party hereto and certain
of the other Loan Documents only in its capacity as administrative agent of the
Primary Tranche A Lender and the Primary Tranche A Lender's Commercial Paper
holders. The parties hereto agree that none of the provisions hereof shall at
any time apply to, or restrict, the ability of the Govco Administrative Agent to
resign its position of Govco Administrative Agent.

          SECTION 9.19. ACKNOWLEDGMENT REGARDING FEDERAL AUTHORITY.

          (a) Each of the parties hereto acknowledges and agrees that:

          (i) the operations and assets of the Obligors (including, without
     limitation, Aircraft Related Equipment and other assets that constitute
     Collateral) are subject, directly and indirectly, to the actions, inaction
     and policies of various Governmental Authorities, including, in particular
     but without limitation, the United States Department of Transportation (of
     which the FAA is a component) and the United States Department of Justice;

          (ii) Governmental Authorities, in discharging their current and future
     statutory or regulatory responsibilities, may act, decline to act, or adopt
     policies resulting in material adverse effects on (A) the business,
     condition (financial or otherwise), operations, performance, prospects,
     assets or properties of the Obligors, (B) the ability of the Obligors to
     perform their payment or other material obligations under the Loan
     Documents, and (C) the value of the Collateral or the practical ability of
     the Collateral Agent to realize such value in the event of a Default or an
     Event of Default;

          (iii) no Governmental Authority, in discharging its statutory or
     regulatory responsibilities, has or shall have any obligation whatsoever to
     the Obligors, or to any secured party by reason of such Governmental
     Authority's representation on the Board, the Board's issuance of the Board
     Guaranty, or the Board's participation as a party to the other Loan
     Documents, to consider the potential that any of the material adverse
     effects referred to in clause (ii) above may result from such Governmental
     Authority's discharge of its statutory or regulatory responsibilities; and

          (iv) neither the Board, in discharging its rights and
     responsibilities, or in exercising its discretion, under the Act, the
     Regulations, the Board Guaranty or the other Loan Documents, nor any of the
     Board's members, acting in their capacities as such, has or shall have any
     obligation whatsoever to the Obligors or to any of the secured parties to
     take any action in connection with a Governmental Authority's discharge of
     its statutory or regulatory responsibilities which may have any of the
     material adverse effects referred to in clause (ii) above, and the Board
     may not take any action depriving a Governmental Authority of its rights
     and powers to discharge its statutory and regulatory responsibilities in
     any manner that may have any of the material adverse effects referred to in
     clause (ii) above.


                                       98



          (b) Without limiting the generality of the foregoing, the parties
acknowledge and agree that (i) the Department of Transportation, through the
FAA, has broad authority under Title 49 of the United States Code to regulate
the use of the navigable airspace of the United States so as to ensure its safe
and efficient utilization, (ii) the exercise of such authority may substantially
impair or eliminate altogether the utility to the Obligors and value to the
secured parties of Aircraft Related Equipment pledged as Collateral and other
assets of the Obligors such as Gate Leases and Slots utilized at airports, (iii)
nothing in this Agreement or in the Slot Security Agreement (as defined in
clause (iii) of the definition of "Collateral Documents") shall be construed or
asserted by any of the parties to impede or interfere with the FAA's exercise of
its authority under the Slot Regulations, and (iv) no assurance, express or
implied, has been given by any Governmental Authority, including the Board, to
the Obligors or to any secured party, nor has any of the Obligors or any secured
party relied upon any such assurance, with respect to any future action,
inaction or policy of the FAA or any other Governmental Authority relating to
any such Collateral or other assets.

          SECTION 9.20. INDEPENDENCE OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations and warranties made in and covenants under this
Agreement shall be given independent effect so that (a) if a particular
representation and warranty is unqualified, the fact that another representation
and warranty is qualified shall not affect the operation of the former
provision; and (b) if a particular action or condition is not permitted by any
of such covenants, the fact that it would be permitted by an exception to, or
would otherwise be within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.

          SECTION 9.21. BOARD ACKNOWLEDGMENT. The Board acknowledges and agrees
for the benefit of the Tranche A Lender that as of the date hereof the Board
Guaranty remains in full force and effect and is hereby ratified and confirmed.

          SECTION 9.22. GE ACKNOWLEDGEMENT. Nothing in this Agreement or in any
other Loan Document shall be construed as preventing any party from performing
any of the transactions contemplated by the GE Merger MOU, and the transactions
contemplated by the "Original MOU" as defined therein, as such GE Merger MOU and
Original MOU have been amended, supplemented or otherwise modified to the date
hereof, regardless of whether such transactions occur on, before or after the
Effective Date.

                           [SIGNATURE PAGES TO FOLLOW]


                                       99



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                        US AIRWAYS, INC.

                                        US AIRWAYS GROUP, INC.

                                        AMERICA WEST HOLDINGS CORPORATION

                                        AMERICA WEST AIRLINES, INC.


                                        By: /s/ Derek J. Kerr
                                            ------------------------------------
                                        Name: Derek J. Kerr
                                        Title: Chief Financial Officer of each
                                               person listed above


                                        MATERIAL SERVICES COMPANY, INC.


                                        By: /s/ Derek J. Kerr
                                            ------------------------------------
                                        Name: Derek J. Kerr
                                        Title: President and Chief Executive
                                               Officer


                                        PSA AIRLINES, INC.


                                        By: /s/ Keith D. Houk
                                            ------------------------------------
                                        Name: Keith D. Houk
                                        Title: President and Chief Executive
                                               Officer


                       [Signature page to Loan Agreement]



                                        PIEDMONT AIRLINES, INC.


                                        By: /s/ Stephen R. Farrow
                                            ------------------------------------
                                        Name: Stephen R. Farrow
                                        Title: President and Chief Executive
                                               Officer


                       [Signature page to Loan Agreement]



                                        GOVCO INCORPORATED,
                                        as Primary Tranche A Lender

                                        By: Citicorp North America, Inc., as its
                                        attorney-in-fact and administrative
                                        agent


                                        By: /s/ Barbara Kobelt
                                            ------------------------------------
                                        Name: Barbara Kobelt
                                        Title: Senior Vice President -
                                               Structured Portfolio Management


                                        CITICORP NORTH AMERICA, INC.,
                                        as Govco Administrative Agent


                                        By: /s/ Barbara Kobelt
                                            ------------------------------------
                                        Name:  Barbara Kobelt
                                        Title: Senior Vice President -
                                               Structured Portfolio Management


                                        CITIBANK, N.A.,
                                        as Alternate Tranche A Lender and
                                        for purposes of Section 8.7


                                        By: /s/ Barbara Kobelt
                                            ------------------------------------
                                        Name:  Barbara Kobelt
                                        Title: Senior Vice President -
                                               Structured Portfolio Management


                                        BANK OF AMERICA, N.A.,
                                        as a Tranche B Lender


                                        By: /s/ Bruce McCormick
                                            ------------------------------------
                                        Name: Bruce McCormick
                                        Title: Senior Vice President


                                        RETIREMENT SYSTEMS OF
                                        ALABAMA HOLDINGS LLC,
                                        as a Tranche B Lender


                                        By: /s/ William T. Stephens
                                            ------------------------------------
                                        Name: William T. Stephens
                                        Title: Secretary


                                        CITIBANK, N.A.,
                                        as Agent


                                        By: /s/ Barbara Kobelt
                                            ------------------------------------
                                        Name: Barbara Kobelt
                                        Title: Senior Vice President -
                                               Structured Portfolio Management


                       [Signature page to Loan Agreement]



                                        WILMINGTON TRUST COMPANY,
                                        as Collateral Agent


                                        By: /s/ Sandra R. Ortiz
                                            ------------------------------------
                                        Name: Sandra R. Ortiz
                                        Title: Senior Financial Services Officer


                                        AIR TRANSPORTATION
                                        STABILIZATION BOARD


                                        By: /s/ Mark R. Dayton
                                            ------------------------------------
                                        Name: Mark R. Dayton
                                        Title: Executive Director


                       [Signature page to Loan Agreement]



                                     ANNEX A

                     NOTICE ADDRESSES; PAYMENT INSTRUCTIONS

If to the Borrower, Group or the other Obligors:

US Airways Group, Inc.
111 West Rio Salado Parkway
Tempe, AZ 85281
Attention: Thomas T. Weir, Vice President and Treasurer
Phone: (480) 693-0800
Fax: (480) 693-5155
E-mail: tom.weir@americawest.com

with a copy to:

US Airways Group, Inc.
111 West Rio Salado Parkway
Tempe, AZ 85281
Attention: James E. Walsh III, Senior Vice President and General Counsel
Phone: (480) 693-0800
Fax: (480) 693-5155
E-mail: james.walsh@americawest.com

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive
Chicago, IL 60606
Attention: Seth E. Jacobson, Esq.
Phone: (312) 407-0889
Fax: (312) 407-0411
E-mail: sejacobs@skadden.com

If to the Primary Tranche A Lender:

Govco Incorporated
388 Greenwich Street
20th Floor
New York, NY 10013
Attention: Donna Donaldson, Govco Administrator
Phone: (212) 816-8612
Fax: (646) 862-9061
E-mail: donna.m.donaldson@citigroup.com

If to the Govco Administrative Agent:

Citicorp North America, Inc.
388 Greenwich Street, 20th Floor
New York, NY 10013
Attention: Donna Donaldson
Phone: 212-816-8612
Fax: 646-862-9061
E-mail: donna.m.donaldson@citigroup.com


                                    Annex A-1



If to the Alternate Tranche A Lender:

Citibank, N.A.
388 Greenwich Street
20th Floor
New York, NY 10013
Attention: Barbara Kobelt
Phone: (212) 816-1063
Fax: (646) 862-0263
E-mail: Barbara.kobelt@citigroup.com

If to RSA, as Tranche B Lender:

Retirement Systems of Alabama Holdings LLC
135 South Union Street
Montgomery, AL 36104
Attention: Dr. David G. Bronner
Phone: (334) 242-5718
Fax: (334) 240-3268
E-mail: dbronner@rsa.state.al.us

with a copy to:

William Stephens
Retirement Systems of Alabama Holdings LLC
135 South Union Street
Montgomery, AL 36104
Phone: (334) 242-5715
Fax: (334) 240-3230
E-mail: stephens@rsa.state.al.us

If to Bank of America, N.A., as Tranche B Lender:

Bank of America, N.A.
335 Madison Avenue
NY1-503-05-06
New York, NY 10017
Attention: Bruce M. McCormick
Telephone: (212) 503-7358
Fax: (212) 503-7080
E-mail: Bruce.McCormick@bankofamerica.com

If to the Loan Administrator:

Capstone Advisory Group, LLC
1065 Avenue of the Americas
New York, NY 10018
Attention: Jay Borow
Phone: (212) 782-1411
Fax: (212) 782-1478
E-mail: jborow@capstoneag.com

If to the Agent:


                                    Annex A-2



Citibank, N.A.
2 Penns Way Suite 100
New Castle, DE 19720
Attention: Kathleen Racer
Phone: (302) 894-6002
Fax: (212) 994-0849
E-mail: kathleen.c.racer@citigroup.com

If to the Collateral Agent:

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-1615
Attention: Sandra R. Ortiz
Phone: (302) 636-6056
Fax: (302) 636-4145
E-mail: sortiz@wilmingtontrust.com

If to the Board:

Air Transportation Stabilization Board
1120 Vermont Avenue
Suite 970
Washington, D.C. 20005
Attention: Executive Director
Phone: (202) 622-3550
Fax: (202) 622-3420
E-mail: mark.dayton@do.treas.gov

with a copy to:

United States Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220
Attention: Deputy Assistant Secretary for Government Financial Policy
Phone: (202) 622-7073
Fax: (202) 622-0387
E-mail: roger.kodat@do.treas.gov


                                    Annex A-3



                                     ANNEX B

                                 LENDING OFFICE

Govco Incorporated, as Primary Tranche A Lender
388 Greenwich Street
20th Floor
New York, NY 10013
Attention: Donna Donaldson, Govco Administrator
Phone: (212) 816-8612
Fax: (646) 862-9061
E-mail: donna.m.donaldson@citigroup.com

Citibank, N.A., as Alternate Tranche A Lender
388 Greenwich Street, 20th Floor
New York, NY 10013
Attention: Donna Donaldson
Phone: 212-816-8612
Fax: 646-862-9061
E-mail: donna.m.donaldson@citigroup.com

Bank of America, N.A.
335 Madison Avenue
NY1-503-05-06
New York, NY 10017
Attention: Bruce M. McCormick
Telephone: (212) 503-7358
Fax: (212) 503-7080
E-mail: Bruce.McCormick@bankofamerica.com

Retirement Systems of Alabama Holdings LLC, , as a Tranche B Lender
135 South Union Street
Montgomery, AL 36104
Attention: Dr. David G. Bronner
Phone: (334) 242-5718
Fax: (334) 240-3268
E-mail: dbronner@rsa.state.al.us


                                    Annex B-1



                                    EXHIBIT A

                            ASSIGNMENT AND ACCEPTANCE

          ASSIGNMENT AND ACCEPTANCE dated as of _________, ____, between
______________ (the "Assignor") and ______________ (the "Assignee"). Reference
is made to the Loan Agreement, dated as of September 27 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Loan Agreement"), among US Airways, Inc., US Airways Group, Inc., the other
Obligors from time to time party thereto, the several lenders from time to time
party thereto, Citibank, N.A., as Agent, Citicorp North America, Inc., as Govco
Administrative Agent, Wilmington Trust Company, as Collateral Agent and Air
Transportation Stabilization Board. Capitalized terms used herein and not
otherwise defined herein are used herein as defined in the Loan Agreement.

          The Assignor and the Assignee hereby agree as follows:

          (i) The Assignor hereby sells and assigns to the Assignee, and the
     Assignee hereby purchases and assumes from the Assignor, [all of] [a __%
     interest in] the Assignor's rights and obligations under the Loan Agreement
     as a Tranche [A][B] Lender. The principal amount of Tranche [A][B] of the
     Loan assigned to the Assignee are set forth in Section 1 of Schedule I [and
     the principal amount of Tranche [A][B] of the Loan retained by the Assignor
     after giving effect to such sale and assignment are set forth in Section 2
     of Schedule I]. [The Tranche A interest being assigned to the Assignor
     hereunder [is/is not] being assigned together with a corresponding interest
     under the Board Guaranty.] Such sale and assignment is without recourse to
     the Assignor or any of its representatives or agents (including any
     placement agent), and, except for those representations and warranties by
     the Assignor expressly set forth in this Assignment and Acceptance, without
     representation or warranty by any such Person.

          (ii) The Assignor (i) represents and warrants that it is the legal and
     beneficial owner of the interest being assigned by it hereunder and that
     such interest is free and clear of any lien, encumbrance or any adverse
     claim; (ii) makes no representation or warranty and assumes no
     responsibility with respect to any statements, warranties or
     representations made in or in connection with the Loan Agreement or any
     other Loan Document or any other instrument or document furnished pursuant
     thereto or the execution, legality, validity, enforceability, genuineness,
     sufficiency or value of the Loan Agreement or any other Loan Document or
     any other instrument or document furnished pursuant thereto or any
     collateral thereunder; and (iii) makes no representation or warranty and
     assumes no responsibility with respect to (A) the financial condition of
     the Borrower, any other Obligor or any other Person obligated under any
     Loan Document or any other instrument or document furnished pursuant
     thereto or (B) the performance or observance by the Borrower, any other
     Obligor or any other Person obligated under any Loan Document or any other
     instrument or document furnished pursuant thereto of any of their
     respective obligations under any Loan Document or any other instrument or
     document furnished pursuant thereto.

          (iii) The Assignee (i) agrees that it will, independently and without
     reliance upon the Agent, the Collateral Agent, the Assignor, the Board or
     any other Lender, or any of their respective representatives or agents
     (including any placement agent), and based on such documents and
     information as it shall deem appropriate at the time, continue to make its
     own credit decisions in taking or not taking action under the Loan
     Agreement; (ii) appoints and authorizes the Agent and the Collateral to
     take such action as administrative agent or collateral agent, respectively,
     on its behalf and to exercise such powers under the Loan Agreement and the
     other Loan Documents as are delegated to the Agent or the Collateral Agent
     by the terms thereof, together with such powers as are reasonably
     incidental thereto; (iii) agrees that it will perform in accordance with
     their terms all of the obligations which by the terms of the Loan Agreement
     are


                                   Exhibit A-1



     required to be performed by it as a Lender; (iv) represents and warrants
     that it is an Eligible Lender; (v) confirms it has received and had an
     opportunity to review a copy of the Loan Agreement and the other Loan
     Documents, together with copies of the most recent financial statements
     delivered pursuant to Article 5.1(b) thereof, and such other documents and
     information as it has deemed appropriate to make its own credit analysis
     and decision to enter into this Assignment and Acceptance and to purchase
     the interest being assigned hereunder on the basis of which it has made
     such analysis and decision independently and without reliance on the Agent,
     the Collateral Agent, the Assignor, the Board or any other Lender, or any
     of their respective representatives or agents (including any placement
     agent); (vi) specifies as its Lending Office (and address for notices) the
     office set forth beneath its name on the signature pages hereof; and (vii)
     acknowledges and agrees to the terms of the Loan Documents, including,
     without limitation, the terms of the Intercreditor Agreement.

          (iv) Following the execution of this Assignment and Acceptance by the
     Assignor and the Assignee, it will be delivered to the Agent (with a copy
     to the Board) for acceptance and recording by the Agent, together with an
     assignment fee of $3,500 payable by the [Assignor]. The effective date of
     this Assignment and Acceptance shall be __________ [or such later date as
     of which the Board shall have consented to the sale and assignment of [all
     of] [a __% interest in] the Assignor's rights and obligations under the
     Loan Agreement and the other Loan Documents to the Assignee as provided
     herein and as evidenced by its signed confirmation thereof set forth on the
     signature pages hereof] (the "Effective Date").

          (v) Upon such acceptance and recording by the Agent, then, as of the
     Effective Date, (i) the Assignee shall be a party to the Loan Agreement
     and, to the extent provided in this Assignment and Acceptance, have the
     rights and obligations under the Loan Agreement of a Lender and (ii) the
     Assignor shall, to the extent provided in this Assignment and Acceptance,
     relinquish its rights (except those which survive the payment in full of
     the Obligations) other than those relating to events or circumstances
     occurring prior to the Effective Date and be released from its obligations
     under the Loan Documents.

          (vi) Upon such acceptance and recording by the Agent, from and after
     the Effective Date, the Agent shall make all payments under the Loan
     Documents in respect of the interest assigned hereby (i) to or for the
     account of the Assignee, in the case of amounts accrued with respect to any
     period on or after the Effective Date and (ii) to or for the account of the
     Assignor, in the case of amounts accrued with respect to any period prior
     to the Effective Date.

          (vii) This Assignment and Acceptance shall be governed by, and be
     construed in accordance with, the law of the State of New York. (viii) This
     Assignment and Acceptance may be executed in any number of counterparts and
     by different parties on separate counterparts, each of which when so
     executed shall be deemed to be an original and all of which taken together
     shall constitute but one and the same agreement. Delivery of an executed
     counterpart of this Assignment and Acceptance by telecopier shall be
     effective as delivery of a manually executed counterpart of this Assignment
     and Acceptance.

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written.


                                   Exhibit A-2



                                        [Assignor]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        [Assignee]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        Lending Office (and address for
                                        notices):
                                        [Address]

                                        ----------------------------------------

Accepted this _____________ day

of ________________________, ____

CITIBANK, N.A.,
as Agent


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

[The Board hereby confirms its consent to this Assignment and Acceptance in
accordance with the provisions of Section 9.2 of the Loan Agreement

AIR TRANSPORTATION STABILIZATION BOARD


By:
    ---------------------------------
Name:
      -------------------------------
Title:                               ]
       ------------------------------

[The Borrower hereby confirms its consent to this Assignment and Acceptance in
accordance with the provisions of Section 9.2 of the Loan Agreement.

US AIRWAYS, INC.


By:
    ---------------------------------
Name:
      -------------------------------
Title:                               ]
       ------------------------------


                                   Exhibit A-3



                                   SCHEDULE I
                                       TO
                            ASSIGNMENT AND ACCEPTANCE

                                                        
SECTION 1.

Aggregate Outstanding Principal Amount of Tranche [A][B]
Assigned to Assignee:                                      $___________________

SECTION 2.

Aggregate Outstanding Principal Amount of Tranche [A][B]
retained by Assignor:                                      $___________________




                                       I-1



                                   EXHIBIT B-1

                             FORM OF TRANCHE A NOTE

$[_]                                                          September 27, 2005

     FOR VALUE RECEIVED, the undersigned US AIRWAYS, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay Citibank, N.A. as Agent, or
its registered assigns, for the account of Govco Incorporated and Citibank,
N.A., as the Tranche A Lenders, the principal amount set forth above, or, if
less, the aggregate unpaid principal amount of Tranche A of the Loan, payable at
such times, and in such amounts, as are specified in the Loan Agreement (as
defined below). The Borrower hereby promises to pay interest on the unpaid
principal amount of Tranche A from the date hereof until such principal amount
is paid in full, at the rate or rates, and payable at such times as are
specified in the Loan Agreement.

     This Tranche A Note shall be payable at the principal office of the Agent
presently located at 399 Park Avenue, New York, New York, 10022.

     This Tranche A Note is the "Tranche A Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, the several lenders from time to time party thereto,
Citibank, N.A., as Agent, Citicorp North America, Inc., as Govco Administrative
Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.

     Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche A Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.

     This Tranche A Note shall be governed by, and construed in accordance with,
the law of the State of New York (and to the extent applicable, the Bankruptcy
Code); provided that the rights and obligations of the Board hereunder shall be
governed by, and construed in accordance with, the Federal law of the United
States of America, if and to the extent such Federal law is applicable, and
otherwise in accordance with the law of the State of New York.

     IN WITNESS WHEREOF, the Borrower has caused this Tranche A Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.

                                        US AIRWAYS, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      B1-1



                                   EXHIBIT B-2

                             FORM OF TRANCHE B NOTE
                                    No. [--]

$[_]                                                          September 27, 2005

     FOR VALUE RECEIVED, the undersigned US AIRWAYS, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay Citibank, N.A. as Agent, or
its registered assigns, for the account of [_______] as a Tranche B Lender, the
principal amount set forth above, or, if less, the aggregate unpaid principal
amount of Tranche B, payable at such times, and in such amounts, as are
specified in the Loan Agreement (as defined below). The Borrower hereby promises
to pay interest on the unpaid principal amount of Tranche B from the date hereof
until such principal amount is paid in full, at the rate or rates, and payable
at such times as are specified in the Loan Agreement.

     This Tranche B Note shall be payable at the principal office of the Agent
presently located at 399 Park Avenue, New York, New York, 10022.

     This Tranche B Note is the "Tranche B Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, the several lenders from time to time party thereto,
Citibank, N.A., as Agent, Citicorp North America, Inc., as Govco Administrative
Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.

     Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche B Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.

     This Tranche B Note shall be governed by, and construed in accordance with,
the law of the State of New York (and to the extent applicable, the Bankruptcy
Code); provided that the rights and obligations of the Board hereunder shall be
governed by, and construed in accordance with, the Federal law of the United
States of America, if and to the extent such Federal law is applicable, and
otherwise in accordance with the law of the State of New York.

     IN WITNESS WHEREOF, the Borrower has caused this Tranche B Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.

                                        US AIRWAYS, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      B2-1



                                    EXHIBIT I

                      FORM OF COLLATERAL VALUE CERTIFICATE

          Reference is made to the Loan Agreement dated as of September 27, 2005
by and among US Airways, Inc. (the "Borrower"), US Airways Group, Inc.
("Group"), the Subsidiaries of Group parties thereto from time to time, the
several banks and other financial institutions or entities from time to time
parties thereto as lenders, Citibank, N.A., as Agent, Citicorp North America,
Inc., as Govco Administrative Agent, Wilmington Trust Company, as Collateral
Agent and Air Transportation Stabilization Board (as the same may be amended,
restated or supplemented or otherwise modified from time to time, the "Loan
Agreement"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Loan Agreement.

          The undersigned, being a Responsible Officer of the Borrower, does
hereby certify as of the date hereof that the Collateral Value is as follows:

                                                                                  
APPRAISED COLLATERAL (A - B)                                                         $______________

   A = Appraised Value based on the Appraisal Report(s) attached hereto as
   Schedule I: $_______________, of which $_____________ is the Appraised Value
   of spare parts

   B = Ineligible Assets (as identified and described on Schedule II attached
   hereto): $_______________

ELIGIBLE ACCOUNTS (A * B)                                                            $______________

   A = Eligible Accounts: $_______________

   B = 85%

TOTAL COLLATERAL VALUE (Appraised Collateral + Eligible Accounts)                    $______________

COLLATERAL VALUE DEFICIENCY ((135% of the sum of ((A +B) - C) - Total Collateral
Value)                                                                               $______________

   A = Outstanding principal and accrued interest on the Loan:

   $_______________

   B = Outstanding principal and accrued interest on the AWA Loan:

   $_______________

   C = required Minimum Adjusted Cash Amount: $_______________





     In addition, the undersigned hereby certifies as of the date hereof as
     follows:

1.   None of the Collateral included in the calculation of the Collateral Value
     is subject to any event of loss, damage or other casualty that (i) has
     materially and adversely affected the value of such Collateral, whether
     insured or not, or (ii) is not disclosed in a schedule referenced above and
     attached hereto.

2.   The Appraised Value of spare parts counted in the computation of Collateral
     Value [is] [is not] less than $_______, which amount is equal to 75% of the
     Appraised Value of the spare parts set forth in the Baseline Appraisal.

3.   [No Collateral Value Deficiency exists/A Collateral Value Deficiency
     exists].

          The undersigned hereby certifies that all statements made in this
Collateral Value Certificate are true and correct as of the date hereof.

Date: _________________

                                        US AIRWAYS, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      B2-1



                                    EXHIBIT K

                                   [RESERVED]


                                      B2-1



                                    EXHIBIT L

                         FORM OF SLOT UTILIZATION REPORT

          Reference is made to the Loan Agreement dated as of September 27, 2005
by and among US Airways, Inc., US Airways Group, Inc., the Subsidiaries of Group
parties thereto from time to time, the several banks and other financial
institutions or entities from time to time parties thereto as lenders, Citibank,
N.A., as Agent, Citicorp North America, Inc., as Govco Administrative Agent,
Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board (as the same may be amended, restated or supplemented or
otherwise modified from time to time, the "Loan Agreement"). This Slot
Utilization Report is being delivered pursuant to Section 5.1(b)(xx) of the Loan
Agreement. Capitalized terms used but not defined herein have the meanings
assigned to them in the Loan Agreement.

REPORTING PERIOD: _____________________

I.   SLOT USAGE*

Airport: ________________________



Slot Time   Total Held   Total Used   Pct. Usage (%)   Departure/Arrival
- ---------   ----------   ----------   --------------   -----------------
                                           



II.  RECALLED SLOTS

(a)  Slots recalled by the FAA or otherwise revoked or terminated during the
     current reporting period for failure to comply with Slot Regulations:



Slot Time   Slot ID   Date Recalled   Appraised Value
- ---------   -------   -------------   ---------------
                             



(b)  Slots recalled by the FAA or otherwise revoked or terminated in all prior
     reporting periods during the term of the Loan for failure to comply with
     Slot Regulations:



Slot Time   Slot ID   Date Recalled   Appraised Value
- ---------   -------   -------------   ---------------
                             



(c)  If any Slot identified in II(a) above is a Secondary Slot, establish in
     reasonable detail why the applicable Obligor determined that maintaining
     such Slot was no longer commercially required (within the meaning of
     Section 7.1(o)(i) of the Loan Agreement).

- ----------
*    A separate chart should be provided for each airport at which any of the
     Obligors holds or utilizes Slots.



III. ATTACHMENTS

     Attached to this report is a true and complete copy of each Slot
     utilization report required to be delivered to the FAA under the Slot
     Regulations for the two month reporting period summarized herein [together
     with any requests for waivers or other documentation provided to the FAA in
     connection therewith].

IV.  CERTIFICATION**

     The undersigned Responsible Officer of Group hereby certifies that the
     foregoing is true and correct in all material respects.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

- ----------
**   Certification required to be made by a Responsible Officer of Group.



                                    EXHIBIT M

                           FORM OF SUBSIDIARY JOINDER

          JOINDER AGREEMENT, dated as of ___________ ___, 200___ (this
"Joinder") by ______________________ (the "New Subsidiary") to the Loan
Agreement dated as of September 27, 2005 (as the same may be amended, restated
or supplemented or otherwise modified from time to time, the "Loan Agreement"),
among US Airways, Inc., as Borrower, US Airways Group, Inc., the other Obligors
from time to time party thereto, the several lenders from time to time party
thereto, Citibank, N.A., as Agent, Citicorp North America, Inc., as Govco
Administrative Agent, Wilmington Trust Company, as Collateral Agent and Air
Transportation Stabilization Board. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Loan Agreement.

                                    RECITALS

          WHEREAS, Section 5.8(a) of the Loan Agreement provides that, following
the formation or acquisition by any Obligor of a Subsidiary that is not a CFC,
such Obligor shall cause such Subsidiary to execute and deliver to the Agent and
the Board a Subsidiary Joinder, pursuant to which such Subsidiary shall become a
party to the Loan Agreement.

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the New Subsidiary, the New Subsidiary, intending legally to be
bound, hereby agrees as follows:

          1. Joinder. By the execution of this Joinder, the New Subsidiary
hereby agrees that it is, and shall be deemed for all purposes to be, a
Subsidiary Guarantor under the Loan Agreement, and agrees that it is bound by
the terms, conditions and obligations set forth therein, with the same force and
effect as if the New Subsidiary had been an original signatory thereto.

          2. Notice. The address of the New Subsidiary set forth below its
signature hereto shall be its address for all purposes of the Loan Agreement as
if set forth on Annex A thereto.

          3. Governing Law. This Joinder shall be construed in accordance with,
and shall be governed by, the laws of the State of New York.

          4. Further Assurances. The New Subsidiary agrees to perform any
further acts and execute and deliver any additional documents and instruments
that may be necessary or reasonably requested by the Agent or the Board (so long
as the Board is either a guarantor of Tranche A or a Lender under the Loan
Agreement) to carry out the provisions of this Joinder.



          IN WITNESS WHEREOF, the New Subsidiary has executed this Joinder
Agreement as of the date first above written.

                                        [NEW SUBSIDIARY]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        Address and Contact Information:

                                        Attn:
                                              ----------------------------------
                                        Tel:
                                             -----------------------------------
                                        Fax:
                                             -----------------------------------

ACKNOWLEDGED:

CITIBANK, N.A.,
as Agent


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------


AIR TRANSPORTATION
STABILIZATION BOARD


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

EX-10.2

                                                                    Exhibit 10.2

                                                                  EXECUTION COPY

================================================================================

                       AMENDED AND RESTATED LOAN AGREEMENT

                         DATED AS OF SEPTEMBER 27, 2005

                                      AMONG

                          AMERICA WEST AIRLINES, INC.,
                                  AS BORROWER,

                             US AIRWAYS GROUP, INC.
                            AND ITS SUBSIDIARIES FROM
                           TIME TO TIME PARTY HERETO,

                                 CITIBANK, N.A.,
                               AS INITIAL LENDER,

                                 CITIBANK, N.A.,
                                    AS AGENT,

                            WILMINGTON TRUST COMPANY,
                               AS COLLATERAL AGENT

                                       AND

                     AIR TRANSPORTATION STABILIZATION BOARD

================================================================================



                                TABLE OF CONTENTS



                                                                                 Page
                                                                                 ----
                                                                              
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS....................      2
   Section 1.1.    Defined Terms..............................................      2
   Section 1.2.    Computation of Time Periods................................     32
   Section 1.3.    Accounting Terms and Principles............................     32
   Section 1.4.    Certain Terms..............................................     32

ARTICLE II THE LOAN...........................................................     33
   Section 2.1.    The Loan...................................................     33
   Section 2.2.    Scheduled Repayment of the Loan............................     33
   Section 2.3.    Evidence of Debt...........................................     34
   Section 2.4.    Optional Prepayments.......................................     36
   Section 2.5.    Mandatory Prepayments......................................     37
   Section 2.6.    Interest...................................................     41
   Section 2.7.    Fees.......................................................     41
   Section 2.8.    Payments and Computations..................................     43
   Section 2.9.    Certain Provisions Governing the Loan......................     45
   Section 2.10.   Capital Adequacy...........................................     47
   Section 2.11.   Taxes......................................................     48

ARTICLE III CONDITIONS PRECEDENT TO EFFECTIVENESS.............................     50

ARTICLE IV REPRESENTATIONS AND WARRANTIES.....................................     54
   Section 4.1.    Organization, Powers, Qualification, Good Standing,
                   Business, Subsidiaries, the Act and the Regulations........     54
   Section 4.2.    Authorization of Loan Documents, etc.......................     55
   Section 4.3.    Financial Condition........................................     56
   Section 4.4.    No Material Adverse Change; No Restricted Payments.........     57
   Section 4.5.    Title to Properties; Liens.................................     57
   Section 4.6.    Litigation; Adverse Facts..................................     57
   Section 4.7.    Payment of Taxes...........................................     58
   Section 4.8.    Performance of Agreements; Materially Adverse Agreements...     58
   Section 4.9.    Governmental Regulation....................................     58
   Section 4.10.   Securities Activities......................................     59
   Section 4.11.   Employee Benefit Plans.....................................     59
   Section 4.12.   Environmental Protection...................................     59
   Section 4.13.   Disclosure.................................................     60
   Section 4.14.   Compliance with Laws.......................................     60
   Section 4.15.   Indebtedness...............................................     61
   Section 4.16.   Insurance..................................................     61
   Section 4.17.   Perfected Security Interests...............................     61
   Section 4.18.   Compliance with the Plan of Reorganization.................     61
   Section 4.19.   Absence of Labor Disputes..................................     61
   Section 4.20.   Compliance with certain Gate Leases........................     61
   Section 4.21.   Slot Utilization...........................................     61



                                       -i-



                                                                              
   Section 4.22.   Deposit Accounts and Securities Accounts...................     61
   Section 4.23.   Unrestricted Cash and Cash Equivalents.....................     62

ARTICLE V AFFIRMATIVE COVENANTS...............................................     62
   Section 5.1.    Accounting Controls; Financial Statements and Other
                   Reports....................................................     62
   Section 5.2.    Corporate Existence........................................     67
   Section 5.3.    Payment of Taxes and Claims................................     67
   Section 5.4.    Maintenance of Properties; Insurance.......................     68
   Section 5.5.    Inspection.................................................     68
   Section 5.6.    Compliance with Laws, Etc..................................     69
   Section 5.7.    Remedial Action Regarding Hazardous Materials..............     69
   Section 5.8.    Additional Obligors; Collateral............................     70
   Section 5.9.    Employee Benefit Plans.....................................     72
   Section 5.10.   FAA Matters; Citizenship...................................     72
   Section 5.11.   Board Guaranty.............................................     72
   Section 5.12.   Audits and Reviews.........................................     72
   Section 5.13.   Control of Deposit Accounts and Securities Accounts........     72
   Section 5.14.   Lower-Tier Covered Transaction.............................     73
   Section 5.15.   Contractual Obligations....................................     73
   Section 5.16.   Slot Utilization...........................................     73
   Section 5.17.   Stock Exchange Listing.....................................     73
   Section 5.18.   Further Assurances.........................................     73
   Section 5.19.   Credit Rating of Loan......................................     74

ARTICLE VI NEGATIVE COVENANTS.................................................     74
   Section 6.1.    Liens and Related Matters..................................     74
   Section 6.2.    Investments................................................     76
   Section 6.3.    Restricted Payments........................................     76
   Section 6.4.    Financial Covenants........................................     77
   Section 6.5.    Restriction on Acquisitions; Change in Fiscal Year.........     78
   Section 6.6.    Sales-Leasebacks...........................................     79
   Section 6.7.    Transactions with Affiliates...............................     79
   Section 6.8.    Conduct of Business........................................     80
   Section 6.9.    Merger or Consolidation....................................     80
   Section 6.10.   Limitations on Amendments..................................     81
   Section 6.11.   No Further Negative Pledges................................     81
   Section 6.12.   Speculative Transactions...................................     81
   Section 6.13.   Asset Sales................................................     82
   Section 6.14.   Spare Parts................................................     82

ARTICLE VII EVENTS OF DEFAULT.................................................     83
   Section 7.1.    Events of Default..........................................     83
   Section 7.2.    Remedies...................................................     85

ARTICLE VIII THE AGENT AND THE COLLATERAL AGENT...............................     86
   Section 8.1.    Authorization and Action...................................     86
   Section 8.2.    Reliance, Etc..............................................     87
   Section 8.3.    Affiliates.................................................     88
   Section 8.4.    Representations of the Lenders and the Board...............     88




                                      -ii-



                                                                              
   Section 8.5.    Events of Default; Termination of Board Guaranty...........     89
   Section 8.6.    Agent's and Collateral Agent's Right to Indemnity..........     89
   Section 8.7.    Indemnification of Agent and Collateral Agent..............     89
   Section 8.8.    Successor Agent and Collateral Agent.......................     90
   Section 8.9.    Release of Liens on Collateral and Subsidiary Guarantors...     90
   Section 8.10.   Co-Collateral Agent; Separate Collateral Agent.............     91
   Section 8.11.   Collateral Agents' Lien....................................     92

ARTICLE IX MISCELLANEOUS......................................................     92
   Section 9.1.    Amendments, Waivers, Etc...................................     92
   Section 9.2.    Assignments and Participations; Successors and Assigns.....     94
   Section 9.3.    Costs and Expenses.........................................     97
   Section 9.4.    Indemnities................................................     97
   Section 9.5.    Right of Set-Off...........................................     98
   Section 9.6.    Sharing of Payments, Etc...................................     98
   Section 9.7.    Notices, Etc...............................................     99
   Section 9.8.    No Waiver; Remedies........................................     99
   Section 9.9.    Governing Law..............................................     99
   Section 9.10.   Submission to Jurisdiction; Service of Process.............     99
   Section 9.11.   Waiver of Jury Trial.......................................    100
   Section 9.12.   Marshaling; Payments Set Aside.............................    100
   Section 9.13.   Section Titles.............................................    100
   Section 9.14.   Execution in Counterparts..................................    100
   Section 9.15.   Severability...............................................    100
   Section 9.16.   Confidentiality............................................    101
   Section 9.17.   Third Party Beneficiary....................................    101
   Section 9.18.   Acknowledgment Regarding Federal Authority.................    102
   Section 9.19.   Independence of Representations, Warranties and
                   Covenants..................................................    103
   Section 9.20.   Acknowledgment Regarding Second Lien.......................    103
   Section 9.21.   Board Acknowledgment.......................................    103
   Section 9.22.   Counter-Guarantor Acknowledgment...........................    103
   Section 9.23.   GE Acknowledgement.........................................    103



Annexes

Annex A   Notice Addresses
Annex B   Lending Office
Annex C   Guarantee Rate Schedule

Schedules

Schedule 1.1(a)      Slots
Schedule 2.5(b)      Collateral Release Values
Schedule 2.5(d)      Designated Asset Sales
Schedule 3(a)(vii)   Stock Certificates
Schedule 3.1(b)      Other Agreements
Schedule 4.1(b)      Operating Authority
Schedule 4.1(c)      Subsidiaries
Schedule 4.2(c)      Consents, Approvals, etc.
Schedule 4.3(d)      Financial Condition


                                      -iii-



Schedule 4.6         Material Litigation
Schedule 4.7(a)      Payment of Taxes
Schedule 4.7(b)      Government Tax Claims
Schedule 4.8(c)      Other Agreements
Schedule 4.11(a)     Plans and Multiemployer Plans
Schedule 4.12(b)     Hazardous Material Activity
Schedule 4.12(c)     Environmental Claims
Schedule 4.15        Indebtedness
Schedule 4.20        Gate Leases
Schedule 4.22        Deposit Accounts and Securities Accounts
Schedule 5.13        Account Control Agreements
Schedule 6.1(a)      Permitted Liens
Schedule 6.1(b)      Permitted Payment Restrictions
Schedule 6.6         Sale-Leasebacks
Schedule 6.7(b)      Transactions with Affiliates

Exhibits

Exhibit A     Form of Assignment and Acceptance
Exhibit B-1   Form of Tranche A Note
Exhibit B-2   Form of Tranche B-1 Note
Exhibit B-3   Form of Tranche B-2 Note
Exhibit B-4   Form of Tranche B-3 Note
Exhibit B-5   Form of Tranche B-4 Note
Exhibit C     Form of Second Lien Aircraft Mortgage and Security
              Agreement for US Airways
Exhibit D     Form of Second Lien Aircraft Mortgage and Security
              Agreement for Piedmont
Exhibit E     Form of Second Lien Slot Security Agreement
Exhibit F     Form of Second Lien Security Agreement
Exhibit G     Form of Second Lien Intellectual Property Security
              Agreement
Exhibit H     Leasehold Mortgage, Security Agreement, Assignment of
              Rents and Leases and Fixture Filing (Second Lien)
              (Pennsylvania)
Exhibit I     Form of Collateral Value Certificate
Exhibit J     Form of Second Lien Guaranty
Exhibit K     [Reserved]
Exhibit L     Form of Summary Report of Slot Utilization
Exhibit M     Form of Subsidiary Joinder
Exhibit N     Investment Guidelines
Exhibit O     Form of Warrants


                                      -iv-



          AMENDED AND RESTATED LOAN AGREEMENT, dated as of September 27, 2005,
among AMERICA WEST AIRLINES, INC., a Delaware corporation (the "Borrower"), US
AIRWAYS GROUP, INC., a Delaware corporation ("Group"), the direct and indirect
Subsidiaries of Group parties hereto from time to time, CITIBANK, N.A., as the
Initial Lender (in such capacity, together with its successors and permitted
assigns, the "Initial Lender"), CITIBANK, N.A., as agent for the Lenders (in
such capacity, together with its successors and permitted assigns, the "Agent"),
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Collateral Agent
(in such capacity, together with its successors and permitted assigns, the
"Collateral Agent") and AIR TRANSPORTATION STABILIZATION BOARD, created pursuant
to Section 102 of the Act referred to below (the "Board").

                                   WITNESSETH:

          WHEREAS, the Borrower, the Agent, the Initial Lender, the Board and
KPMG Consulting, Inc. (now known as BearingPoint, Inc.), as Loan Administrator,
are parties to that certain Loan Agreement dated as of January 18, 2002 (as
amended, supplemented or otherwise modified through the date hereof, the
"Original Loan Agreement") pursuant to which the Initial Lender made a single
term loan to the Borrower in the amount of $429,000,000;

          WHEREAS, America West Holdings Corporation, a Delaware corporation and
owner of 100% of the Common Stock of the Borrower ("AWA Holdings"), Group and
Barbell Acquisition Corp., a Delaware corporation and wholly owned Subsidiary of
Group ("Merger Sub"), are parties to that certain Agreement and Plan of Merger
dated as of May 19, 2005 (the "Merger Agreement") providing for the merger of
Merger Sub with and into AWA Holdings (the "Merger");

          WHEREAS, on September 12, 2004, Group, US Airways, Inc. ("US Airways")
and certain of their affiliates (the "Debtors") filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Eastern District of Virginia, Alexandria Division (the "Bankruptcy
Court"), jointly administered Case No. 04-13819 (the "Bankruptcy Case");

          WHEREAS, the Plan of Reorganization (as defined below) in the
Bankruptcy Case contemplates, among other things, the Merger;

          WHEREAS, the consummation of the Merger and the transactions
contemplated by the Plan of Reorganization requires the consent of, among
others, the Board and the Initial Lender;

          WHEREAS, the Borrower has requested that the Board, the
Counter-Guarantors (as defined below) and the Initial Lender consent to the
Merger and the transactions contemplated by the Plan of Reorganization, and, in
connection therewith, amend and restate the Original Loan Agreement as provided
herein; and

          WHEREAS, the Board, the Counter-Guarantors and the Initial Lender are
willing to consent to the Merger and the transactions contemplated by the Plan
of Reorganization and amend and restate the Original Loan Agreement upon the
terms and subject to the conditions set forth herein.

          NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree to amend and
restate the Original Loan Agreement as follows:



                                    ARTICLE I

                DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

          SECTION 1.1. DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

          "Act" means the Air Transportation Safety and System Stabilization
Act, P.L. 107-42, as the same may be amended from time to time.

          "Adjusted Cash Amount" has the meaning specified in Section 6.4(a).

          "Adjusted Excess Cash Flow" means, for any period, (i) Excess Cash
Flow of Group for such period, minus (ii) the sum of (A) 25% of such Excess Cash
Flow, (B) 100% of the aggregate amount of prepayments of the Loan previously
made pursuant to Section 5.8(d), during such period, and (C) 100% of the
aggregate amount of prepayments of the US Airways Loan previously made by US
Airways pursuant to Section 5.8(d) of the US Airways Loan Agreement.

          "Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

          "Affiliate Transaction" has the meaning specified in Section 6.7(a).

          "After-Acquired Section 1110 Equipment" means Section 1110 Equipment
acquired by an Obligor after the Effective Date.

          "Agent" has the meaning specified in the preamble to this Agreement.

          "Aggregate Amounts Due" has the meaning specified in Section 9.6.

          "Agreement" means this Amended and Restated Loan Agreement.

          "Airbus Counter-Guarantor" means AFS Cayman Limited, a company
incorporated under the laws of the Cayman Islands.

          "Airbus Financing Letter Agreement" means the A350/A330 Financing
Letter Agreement, dated as of September 27, 2005, among Borrower, US Airways,
Group, and AVSA, S.A.R.L., or any financing pursuant thereto, as amended,
restated, supplemented or modified.

          "Airbus Financings" means the Airbus Loan Agreements and the Airbus
Financing Letter Agreement.

          "Airbus Loan Agreements" means the $161,000,000 Loan Agreement and the
$89,000,000 Loan Agreement, each dated as of September 27, 2005, among the
Borrower, US Airways, Group, Airbus Financial Services, individually and as loan
agent, and Wells Fargo Bank Northwest, National Association, as collateral
agent, each as amended, restated, supplemented or modified.


                                       2



          "Aircraft Related Equipment" means each Obligor's aircraft fleet
(including engines, airframes, propellers and appliances), spare aircraft
engines and propellers, spare parts, aircraft parts, simulators and other
training devices, passenger loading bridges or other flight or ground equipment
and Aircraft Related Facilities.

          "Aircraft Related Facilities" means (i) airport terminal facilities,
including without limitation, baggage systems, loading bridges and related
equipment, building, infrastructure and maintenance, club rooms, apron, fueling
systems or facilities, signage/image systems, administrative offices,
information technology systems and security systems, (ii) airline support
facilities, including without limitation, cargo, catering, mail, ground service
equipment, ramp control, deicing, hangars, aircraft parts/storage, training and
reservations facilities and (iii) all equipment used in connection with the
foregoing.

          "ALPA Letter Agreement" means the Letter Agreement, dated September
14, 2005, among Group, AWA Holdings and the Airline Pilots Association.

          "Applicable Interest Rate" means, for any Interest Period, a rate per
annum equal to LIBOR for such Interest Period plus 0.40% per annum; provided
that if (i) some or all of Tranche A, Tranche B-1, Tranche B-2 or Tranche B-3 is
assigned pursuant to Section 9.2 and in connection with such assignment, the
Board Guaranty (in the case of Tranche A) is terminated in accordance with its
terms, or any applicable Counter-Guarantee (in the case of Tranche B-1, Tranche
B-2 or Tranche B-3) is no longer in effect, in each case, with respect to the
assigned portion of the applicable Tranche (such that the Guarantee Fee or any
Counter-Guarantee Fee is no longer payable with respect to such assigned
portion); or (ii) Tranche B-4 is assigned pursuant to Section 9.2 (such that the
Supplemental Facility Fee is no longer payable with respect to such assigned
portion), then in each such case the Applicable Interest Rate on such assigned
portion of the Loan will be LIBOR for such Interest Period plus 8.40%
(increasing by 0.05% on January 18 of each year, beginning January 18, 2006).

          "Appraisal Report" means, with respect to each category of Appraised
Collateral, a desktop appraisal (or, if applicable, pursuant to Section 5.8(c),
a physical inspection report) in form and substance reasonably satisfactory to
the Controlling Creditor and prepared by an Appraiser, which certifies, at the
time of determination, the current market value and the liquidation value of the
assets subject to such appraisal; provided that with respect to aircraft,
engines, spare engines, spare parts and flight simulators, the terms "current
market value" and "liquidation value" shall be as defined by the International
Society of Transport Aircraft Trading if applicable to the particular
Collateral; provided, further, that except as otherwise agreed to by the
Controlling Creditor, each Appraisal Report obtained subsequent to the
preparation of the Baseline Appraisal with respect to each category of Appraised
Collateral shall be (A) prepared by the same Appraiser used in the Baseline
Appraisal for such category of Appraised Collateral, unless such Appraiser is no
longer providing appraisals for such type of property or the Borrower, the Agent
and the Board (so long as the Board is either a guarantor of Tranche A or a
Lender hereunder) agree that good cause exists to change Appraisers and (B) in
any event, based on the same methodologies and assumptions (including, without
limitation, the time period for the disposition of such Appraised Collateral and
the market conditions perceived to exist at the time) used in the Baseline
Appraisal for such category of Appraised Collateral.

          "Appraised Collateral" means (i) all aircraft, spare engines, flight
simulators, ground service equipment, passenger loading bridges and spare parts
that are part of the Collateral, (ii) Slots and Gate Leases that are part of the
Collateral, (iii) each item of Pledged Real Property that is the subject of a
Mortgage, and (iv) such other Aircraft Related Equipment that is part of the
Collateral and for which the Obligors elect to obtain Appraisal Reports.


                                        3



          "Appraised Value" means, with respect to any item of Collateral, the
liquidation value of such Collateral as reflected in the most recent Appraisal
Report obtained in respect of such Collateral in accordance with this Agreement.

          "Appraiser" means BACK Aviation Solutions, AVITAS, Inc. or Simat
Helliesen & Eichner, Inc. or any other firm of nationally recognized,
independent appraisers as may be agreed by the Borrower and the Controlling
Creditor.

          "Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation, exchange of assets or sale-leaseback
transactions) by an Obligor to any Person other than another Obligor of (i) all
or any of the Capital Stock of any Obligor other than Group or (ii) any other
property or assets of an Obligor (including spare parts); provided that the term
"Asset Sale" shall not include (a) any sale or disposition of spare parts,
inventory (including available seat miles and frequent flier miles (including
dividend and flightfund miles)), receivables and other current assets, in each
case in the ordinary course of business; provided that with respect to a sale or
disposition of spare parts, the aggregate Appraised Value of the remaining spare
parts which would be counted in the computation of Collateral Value as of such
date is not less than 75% of the Appraised Value of the spare parts set forth in
the Baseline Appraisal; (b) any licensing or sublicensing of intellectual
property in the ordinary course of business of the Obligors; (c) any leasing or
subleasing of property in the ordinary course of business; (d) a sale, transfer
or other disposition resulting from a casualty or a condemnation by a
Governmental Authority; (e) any sale or disposition (in a single transaction or
related series of transactions) of obsolete or worn out property (other than
spare parts) in the ordinary course of business that generate(s) consideration
to the Obligors of $100,000 or less; (f) the contemporaneous exchange, in the
ordinary course of business, of property for property of a like kind; (g) any
disposition of property which is not Collateral in connection with the making of
an Investment permitted under Section 6.2; or (h) a sale or disposition of cash
or Cash Equivalents.

          "Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Lender, consented to by the Board and the
Borrower (if applicable) and accepted by the Agent (unless consummated pursuant
to Section 9.2(d)), in substantially the form of Exhibit A.

          "AWA Holdings" has the meaning specified in the recitals to this
Agreement.

          "Bankruptcy Case" has the meaning specified in the recitals to this
Agreement.

          "Bankruptcy Code" means Title 11 of the United States Code as now and
hereafter in effect, or any successor statute.

          "Bankruptcy Court" has the meaning specified in the recitals to this
Agreement.

          "Base Rate Loan" means a Loan that bears interest based on a
fluctuating rate per annum for any day equal to the sum of (a) the higher of (i)
the Federal Funds Rate plus 1/2 of 1% and (ii) the rate of interest in effect
for such day as publicly announced from time to time by Citibank, N.A. (or any
successor thereto) as its "prime rate" plus (b) 3.00%. For purposes of this
definition, "Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of


                                       4



1/100 of 1%) charged to Citibank, N.A. on such day on such transactions as
determined by the Agent. Furthermore, the "prime rate" is a rate set by
Citibank, N.A. based upon various factors including its costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such prime rate announced by Citibank, N.A.
shall take effect at the opening of business on the day specified in the public
announcement of such change.

          "Baseline Appraisal" means, as to each category of Appraised
Collateral, the first Appraisal Report with respect to such category of
Appraised Collateral obtained by the Obligors after the Effective Date pursuant
to Section 5.8(c).

          "Board" has the meaning specified in the preamble to this Agreement,
and any successor approved by or established in accordance with the Act.

          "Board Guaranty" means the Amended and Restated Guarantee Agreement
dated as of the date hereof and executed by the Board, the Initial Lender and
the Agent.

          "Borrower" has the meaning specified in the preamble to this
Agreement.

          "Business Day" means a day of the year on which banks are not required
or authorized to close in New York, New York, Charlotte, North Carolina or
Phoenix, Arizona and, if the applicable Business Day relates to notices,
determinations, fundings and payments in connection with LIBOR, a day on which
dealings in Dollar deposits are also carried on in the London interbank market.

          "Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person, and the amount of Indebtedness represented by such
lease shall be the capitalized amount of the obligations evidenced thereby
determined in accordance with GAAP.

          "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock, or corresponding equity
rights in any partnership, limited liability company or other entity, whether
now outstanding or issued after the date of this Agreement, including, without
limitation, all Common Stock.

          "Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States government or (b) issued by any
agency or instrumentality of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case maturing
within one year after such date; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any instrumentality thereof, in each case maturing within one year
after such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either S&P or Moody's; (iii) commercial paper not issued
by the Borrower maturing no more than one year after such date and having, at
the time of the acquisition thereof, a rating of at least A-2 from S&P or at
least P-2 from Moody's; (iv) certificates of deposit or bankers' acceptances
maturing within one year after such date and issued or accepted by any Lender or
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $500,000,000; (v) shares of any money market mutual fund that
(a) has at least 95% of its assets invested continuously in the types of


                                        5



investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody's; and (vi) investments made pursuant to the Investment Guidelines,
so long as an amount equal to 100% of the Minimum Adjusted Cash Amount required
to be maintained at such time pursuant to Section 6.4(a) is maintained in cash
and/or investments covered in clauses (i) through (v) above.

          "Cash Proceeds" means, (a) with respect to any Asset Sale, the cash or
Cash Equivalents proceeds of such Asset Sale, including payments of deferred
payment obligations (to the extent corresponding to the principal, but not the
interest component thereof) when received in the form of cash or Cash
Equivalents and proceeds from the conversion of other property received when
converted to cash or Cash Equivalents, and (b) with respect to any Future
Issuance, the cash proceeds of such Future Issuance.

          "CFC" means a "controlled foreign corporation" under Section 957 of
the Internal Revenue Code.

          "Change of Control" means (i) the acquisition at any time by any
Person of "beneficial ownership" (within the meaning of Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder ("Section
13(d)")) in excess of 35% of the total voting power of the Voting Stock of
Borrower, US Airways, AWA Holdings or Group; (ii) the sale, lease, transfer or
other disposition, of all or substantially all of the assets of the Borrower, US
Airways, AWA Holdings or Group to any Person as an entirety or substantially as
an entirety in one transaction or a series of related transactions; (iii) the
merger or consolidation of the Borrower, US Airways, AWA Holdings or Group, with
or into another corporation, or the merger of another corporation into the
Borrower, US Airways, AWA Holdings or Group, or any other transaction, with the
effect that a Person acquires as a result of such transaction "beneficial
ownership" in excess of 35% of the total voting power of the Voting Stock of the
Borrower, US Airways, AWA Holdings or Group, or (if the Borrower, US Airways,
AWA Holdings or Group is not the surviving corporation in such transaction) such
other corporation (including, in any such case, indirect ownership through
another Person); (iv) the liquidation or dissolution of the Borrower, US Airways
or Group, other than a liquidation or dissolution in which another Obligor
acquires all of the assets of the liquidating entity; or (v) if a majority of
the board of directors of Group shall no longer be composed of individuals (a)
who were members of said board on the Effective Date (after giving effect to the
Consummation of the Plan), (b) whose election or nomination to said board was
approved by individuals referred to in clause (a) above constituting at the time
of such election or nomination at least a majority of said board, (c) whose
election or nomination to said board was approved by individuals referred to in
clauses (a) and (b) above constituting at the time of such election or
nomination at least a majority of said board or (d) in the case of individuals
nominated by the investors under the Equity Investment Agreements, who were
nominated or proposed by such investors; provided, however, that notwithstanding
the provisions of clauses (i) through (v) above, none of (A) the Merger, (B) the
Consummation of the Plan and the implementation of the transactions contemplated
thereby, or (C) entry by the Obligors into any contract or arrangement that
provides for or is conditioned upon payment in full in cash of all Obligations
shall constitute a "Change of Control" hereunder. For purposes of this
definition, the term Person includes a "person" or "group" within the meaning of
Rule 13d-3 under the Exchange Act but does not include any other Obligor.

          "Closing Date" means January 18, 2002.

          "Collateral" means all of the properties and assets that are (or are
purported to be) from time to time subject to the Liens granted to the
Collateral Agent pursuant to the Collateral Documents as security for the
Obligations but not including Excluded Property.


                                        6



          "Collateral Agent" has the meaning set forth in the preamble to this
Agreement.

          "Collateral Documents" means, collectively, (i) that certain Second
Lien Aircraft Mortgage and Security Agreement, dated as of the date hereof,
between US Airways and the Collateral Agent, in substantially the form of
Exhibit C (the "US Airways Aircraft Mortgage"); (ii) that certain Second Lien
Aircraft Mortgage and Security Agreement, dated as of the date hereof, between
Piedmont and the Collateral Agent, in substantially the form of Exhibit D (the
"Piedmont Aircraft Mortgage," and together with the US Airways Aircraft
Mortgage, the "Aircraft Mortgages"); (iii) that certain Second Lien Slot
Security Agreement, dated as of the date hereof, among the Borrower, US Airways,
Piedmont, PSA Airlines, Inc. and the Collateral Agent, in substantially the form
of Exhibit E (the "Slot Security Agreement"); (iv) that certain Second Lien
Security Agreement, dated as of the date hereof, among the Obligors and the
Collateral Agent, in substantially the form of Exhibit F (the "Security
Agreement"); (v) that certain Second Lien Intellectual Property Security
Agreement, dated as of the date hereof, among the Obligors party thereto and the
Collateral Agent, in substantially the form of Exhibit G (the "Intellectual
Property Security Agreement"); (vi) Leasehold Mortgage, Security Agreement,
Assignment of Rents and Leases and Fixture Filing (Second Lien) (Pennsylvania)
dated as of the date hereof, by US Airways for the benefit of the Collateral
Agent, in substantially the form of Exhibit H (the "Mortgage"); (vii) the
Intercreditor Agreement; (viii) each other certificate, agreement or document
executed and delivered by any Obligor pursuant to any of the foregoing
agreements, including any Control Agreement, certificate, agreement or document
delivered pursuant hereto or to the terms of Section 5.8; and (ix) any consents
of lessors of any of the Collateral to the pledge of such Collateral pursuant to
the agreements or documents listed in (i) through (vi) above.

          "Collateral Document Supplement" means a supplement to a Collateral
Document that subjects additional Collateral to the Lien granted by such
Collateral Document.

          "Collateral Release Value" means, for each item of Collateral with
respect to which the Lien of the Collateral Agent is being released (or
subordinated) in connection with a Replacement Secured Financing, an amount
equal to (a) with respect to (i) Slots or (ii) rotable, repairable and
expendable spare parts, 100% of the dollar amount therefor set forth on Schedule
2.5(b) (which amount, for the avoidance of doubt, shall not be pro rated for a
Replacement Secured Financing with respect to less than all of the Obligors'
Slots or spare parts), and (b) with respect to aircraft and spare engines, the
product of (i) the Appraised Value of such Collateral (based on an Appraisal
Report obtained within sixty (60) days of the date of such transaction and
otherwise satisfactory to the Controlling Creditor) and (ii) the prepayment
percentage for such item or type of Collateral which is set forth on Schedule
2.5(b).

          "Collateral Value" means, as of any date of determination, the sum of:
(a) the Appraised Value of all Appraised Collateral, as stated in the then most
current Appraisal Report(s) therefor and (b) 85% of the Eligible Accounts as of
such date; provided that none of the following assets shall be included in the
computation of Collateral Value (collectively, the "Ineligible Assets"): (A)
property or assets not subject to a first-priority perfected Lien in favor of
the Collateral Agent (subject to Permitted Encumbrances and the prior Liens
securing the First Lien Obligations (as defined in the Intercreditor
Agreement)), including, without limitation, any property or assets that may no
longer be owned by an Obligor as a result of an Asset Sale or otherwise; (B)
After-Acquired Section 1110 Equipment; and (C) property or assets subject to any
event of loss, damage or other casualty that has materially and adversely
affected the value of such Collateral, whether insured or not, and in the event
that any Ineligible Assets are excluded from the computation of the Collateral
Value based on this proviso, the Collateral Value computed in accordance with
the foregoing method shall be adjusted to exclude such Ineligible Assets.


                                        7



          "Collateral Value Certificate" means a certificate executed by a
Responsible Officer of the Borrower in substantially the form of Exhibit I
annexed hereto (provided that such certificate may be incorporated into a
certificate contemporaneously delivered pursuant to clause (iv) of Section
5.1(b)).

          "Collateral Value Deficiency" means, as of any date of determination,
the positive amount, if any, equal to the difference of (i) 135% of (x) the sum
of the aggregate outstanding amount of principal of and accrued interest on the
Loan on such date plus the aggregate outstanding amount of principal of and
accrued interest on the US Airways Loan on such date less (y) the Minimum
Adjusted Cash Amount required to be maintained by the Obligors on such date
minus (ii) the Collateral Value as of such date.

          "Collateral Value Test Date" has the meaning specified in Section
5.8(d).

          "Commodity Agreement" means any agreement or arrangement the value of
which fluctuates based on the value of a commodity.

          "Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Agreement, including, without limitation, all
series and classes of such common stock.

          "Confirmation Order" means the order of the Bankruptcy Court, dated
September 16, 2005, confirming the Plan of Reorganization pursuant to Section
1129 of the Bankruptcy Code.

          "Consolidated EBITDAR" means, with respect to any Person, for any
period, the sum of (i) the operating income of such Person for such period, (ii)
rental expenses of such Person for such period under aircraft Operating Leases
and (iii) depreciation and amortization and stock compensation expenses and
extraordinary charges and non-cash unusual items of such Person that were
recognized in arriving at the amount of such operating income for such period,
all as determined on a consolidated basis in accordance with GAAP.

          "Consolidated Fixed Charges" means, with respect to any Person, for
any period, the sum of (a) the aggregate gross interest expense relating to
Indebtedness of such Person for such period (calculated without regard to any
limitations on the payment thereof), including the corresponding amounts for
such period under Capital Lease obligations and Synthetic Lease obligations of
such Person (and including, for the avoidance of doubt, the Guarantee Fee
hereunder and the "Guarantee Fee" under and as defined in the US Airways Loan
Agreement payable for such period), (b) the aggregate rental expenses of such
Person for such period under aircraft Operating Leases, and (c) dividends or any
other payments or distributions in respect of any class of Capital Stock of such
Person, including in connection with any redemption, purchase, retirement or
other acquisition, directly or indirectly of any such class of Capital Stock,
paid or payable during such period (but only to the extent payment thereof is
permitted under this Agreement), all determined on a consolidated basis.

          "Consummation of the Plan" means substantial consummation of the Plan
of Reorganization within the meaning of Section 1101(2) of the Bankruptcy Code.

          "Contractual Obligation" means, as applied to any Person, any
provision of any equity security issued by that Person or of any indenture,
mortgage, deed of trust, contract, lease, license, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.


                                        8



          "Control Agreement" has the meaning specified in Section 5.13 hereof.

          "Controlling Creditor" means, as of any date, (a) the Board, so long
as (i) the Board Guaranty is in full force and effect as of such date and has
not been terminated without payment having been made thereunder and (ii) the
outstanding amount of Tranche A guaranteed under the Board Guaranty as of such
date represents a majority of the principal amount of the Loan then outstanding,
and (b) at all other times, the Requisite Lenders.

          "Convertible Note Offering" means the offering of $125,000,000 of US
Airways Group, Inc. Senior Convertible Notes as described in the Confidential
Offering Memorandum dated September 20, 2005, together with the offering of such
principal amount of such notes pursuant to any overallotment option granted to
the initial purchasers thereof in connection therewith.

          "Counter-Guarantee" means, as the context may require, any or all of
(i) the Amended and Restated Counter-Guarantee Agreement dated as of the date
hereof among the Airbus Counter-Guarantor, the Initial Lender and the Agent;
(ii) the Amended and Restated Counter-Guarantee Agreement dated as of the date
hereof among the GECC Counter-Guarantor, the Initial Lender and the Agent; and
(iii) any counter-guarantee entered into after the date hereof for purposes of
guaranteeing Tranche B-2.

          "Counter-Guarantee Fee" means the counter-guarantee fee payable to
each Counter-Guarantor on an Interest Payment Date in an amount equal to the
product of (x) the applicable Guarantee Rate set forth on Annex C for such
Interest Payment Date and (y) the outstanding amount of Tranche B-1, Tranche B-2
or Tranche B-3 (as applicable) guaranteed under the applicable Counter-Guarantee
or held by the applicable Counter-Guarantor (as a result of a payment
thereunder) on such date (computed on the basis of a year of 360 days and actual
number of days elapsed) as determined by the Agent as of the date of payment of
such fee and after giving effect to any payment of principal of the Loan made on
such date.

          "Counter-Guarantee Taxes" has the meaning specified in Section
2.11(b).

          "Counter-Guarantor" means, as the context may require, any or all of
the Airbus Counter-Guarantor, the GECC Counter-Guarantor and any person who
becomes a counter-guarantor after the date hereof with respect to Tranche B-2.

          "Counter-Guarantor Letter of Credit" means, with respect to any
applicable Counter-Guarantee, an irrevocable standby letter of credit issued by
a "Letter of Credit Bank" (as defined in such Counter-Guarantee), in favor of
the Agent, in the form required under such Counter-Guarantee.

          "Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement.

          "DCA" means Ronald Reagan Washington National Airport.

          "Debtors" has the meaning specified in the recitals to this Agreement.

          "Default" means any condition or event which with the required passing
of time or the giving of any required notice or both would, unless cured or
waived, become an Event of Default.

          "Designated Asset Sale" means an Asset Sale with respect to an asset
identified on Schedule 2.5(d).


                                        9



          "Disclosure Statement" means the Disclosure Statement with respect to
the Plan of Reorganization of US Airways Group, Inc. and its Affiliated Debtors
and Debtors-in-Possession pursuant to Section 1125 of the Bankruptcy Code which
was approved by the Bankruptcy Court on August 9, 2005, together with any
amendments, supplements or modifications thereto that have been approved by the
Bankruptcy Court prior to the Effective Date.

          "Dollars" and the sign "$" each mean the lawful money of the United
States of America.

          "Effective Date" has the meaning specified in Article III hereof.

          "Eligible Accounts" means, as of any date of determination, accounts
receivable shown on the consolidated balance sheet of Group as of the end of the
then most recently ended fiscal quarter, net of, without duplication, all
reserves against such accounts receivables and all accounts receivables owed by
another Obligor, provided that:

          (a) such accounts receivable arise out of sales of goods or rendering
of services in the ordinary course of the relevant Obligor's business;

          (b) such accounts receivable are payable in Dollars and are otherwise
on terms normal and customary in the relevant Obligor's business;

          (c) such accounts receivable are not more than 90 days past original
invoice date or more than 60 days past the date due;

          (d) such accounts receivable are not owing from any Person from which
an aggregate amount of more than 20% of the accounts receivable owing therefrom
is more than 60 days past the date due;

          (e) such accounts receivable are not owing from any Person that (i)
has disputed liability for any account receivable owing from such Person (but
only to the extent of such dispute) or (ii) has otherwise asserted any claim,
demand or liability against any Obligor, whether by action, suit, counterclaim
or otherwise (but only to the extent of such claim, demand or liability);

          (f) such accounts receivable are not owing from any Person that has
taken or is the subject of any action or proceeding under any bankruptcy,
insolvency or similar law;

          (g) such accounts receivable (i) are not owing from any Person that is
also a supplier to, or creditor of, any Obligor, is a credit card processor,
travel agent or marketing partner of any Obligor, or to whom any Obligor is
otherwise indebted, and (ii) do not represent any manufacturer's or supplier's
credits, discounts, incentive plans or similar arrangements entitling any
Obligor to discounts on future purchase therefrom;

          (h) such accounts receivable do not arise out of sales to account
debtors outside the United States or Canada;

          (i) such accounts receivable do not arise out of sales on a
bill-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment
basis or subject to any right of return, setoff or chargeback (including,
without limitation, accounts receivables for unutilized tickets);

          (j) such accounts receivable are not owing from an account debtor that
is an agency, department or instrumentality of the United States or any state
thereof; and


                                       10



          (k) such accounts receivables arise out of sales for which the account
debtors' obligations to pay are not conditioned upon any Obligor's completion of
any further performance or as to which the goods or services giving rise thereto
have been delivered or performed by the Obligors, and if applicable, have been
accepted by the account debtors, and the account debtors have not revoked their
acceptance.

          "Eligible Collateral" means property and assets of the Obligors other
than Excluded Property.

          "Eligible Lender" means a "lender" as defined in the Act.

          "Environmental Claim" means any investigation, notice, claim, suit,
proceeding, demand or order, by any Governmental Authority or any Person arising
in connection with any alleged or actual violation of Environmental Laws or with
any Hazardous Materials Activity, or any actual or alleged damage, or harm to
health, safety, property or the environment.

          "Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
governmental authorizations, or any other requirement of Governmental
Authorities relating to (a) the prevention or control of pollution or protection
of the environment, (b) solid, gaseous or liquid waste generation, handling,
treatment, storage, disposal, discharge, Release, emission or transportation, or
(c) exposure to Hazardous Materials. "Environmental Laws" shall include, but not
be limited to, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. 9601 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. 6901 et seq.), the National Environmental Policy Act (42 U.S.C.
4321 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. 1801 et
seq.), the Toxic Substances Control Act (49 U.S.C. 2601 et seq.), the Clean Air
Act (42 U.S.C. 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.), the Safe Drinking Water Act (42 U.S.C. 3007 et seq.), the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. 11001 et seq.),
the Occupational Safety and Health Act (29 U.S.C. 641 et seq.), and the State of
Arizona Environmental Quality Act (A.R.S. 49-101 et seq.).

          "Equity Investment Agreements" means (i) the Investment Agreement,
dated as of May 19, 2005, by and among Peninsula Investment Partners, L.P.,
Group and AWA Holdings, (ii) the Investment Agreement, dated as of May 19, 2005,
by and among ACE Aviation Holdings, Inc., Group and AWA Holdings, (iii) the
Investment Agreement, dated as of May 19, 2005, by and among Par Investment
Partners, L.P., Group and AWA Holdings, (iv) the Investment Agreement, dated as
of May 19, 2005, by and among Eastshore Aviation, LLC, Group and AWA Holdings,
(v) the Investment Agreement, dated May 27, 2005, by and among Wellington
Investment Management Company, LLP, Group and AWA Holdings, and (vi) the
Investment Agreement, dated as of July 7, 2005, by and among Tudor Proprietary
Trading, L.L.C., certain investors listed on Schedule 1 thereto, Group and AWA
Holdings, in each case as amended, restated, supplemented or otherwise modified
through the date hereof.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.

          "ERISA Affiliate" means, as applied to Group, (i) any corporation
which is, or (other than for purposes of the first sentence of each of Section
4.11(a) and Section 5.1(b)(viii)) was at any time in the preceding six (6)
years, a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which Group is a member; (ii) any
trade or business (whether or not incorporated) which is a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which Group is a member; and (iii) any member of
an affiliated service group within the meaning of Section 414(m) or (o) of the


                                       11



Internal Revenue Code of which Group, any corporation described in clause (i)
above or any trade or business described in clause (ii) above is a member.

          "ERISA Event" means (a) any "reportable event," as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which reporting is waived); (b) the existence with respect to
any Plan of an "accumulated funding deficiency" (as defined in Section 412 of
the Internal Revenue Code or Section 302 of ERISA); (c) the filing pursuant to
Section 412(d) of the Internal Revenue Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by Group or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e)(i) the receipt by Group or any ERISA Affiliate from the PBGC of a notice of
determination that PBGC intends to seek termination of any Plan or to have a
trustee appointed for any Plan, or (ii) the filing by Group or any ERISA
Affiliate of a notice of intent to terminate any Plan; (f) the incurrence by
Group or any of its ERISA Affiliates of any liability (i) with respect to the
withdrawal from a Multiemployer Plan pursuant to Sections 4063 and 4064 of
ERISA, (ii) with respect to a facility closing pursuant to Section 4062(e) of
ERISA, or (iii) with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; or (g) the receipt by Group or any ERISA Affiliate of any
notice concerning the imposition of Withdrawal Liability or a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

          "Event of Default" has the meaning specified in Section 7.1.

          "Excess Cash Flow" means, for any period, (i) Consolidated EBITDAR of
Group for such period, minus (plus) (ii) any increase (decrease) in Working
Capital of Group from the first day of such period to the last day of such
period (as adjusted for fresh start accounting as of the first day of such
period), minus (iii) the sum of (A) payments by the Obligors of principal and
interest with respect to the consolidated Indebtedness of Group (but excluding
Indebtedness that is solely the obligation of any Subsidiary that is not an
Obligor) during such period, to the extent such payments are not prohibited
under this Agreement, (B) income taxes paid during such period, (C) aircraft
rentals paid during such period under Operating Leases, (D) cash used during
such period for capital expenditures, (E) deposit and pre-delivery payments made
in respect of Aircraft Related Equipment, and (F) an amount equal to pension or
FASB 106 payments made in excess, if any, of pension or FASB 106 expenses, plus
(iii) an amount equal to the excess of pension or FASB 106 expense in excess, if
any, of pension or FASB 106 payments.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

          "Excluded Cash" means cash and Cash Equivalents maintained in accounts
that are not subject to Control Agreements to the extent that such accounts are
any of the following:

          (i) subject to Liens arising or granted in the ordinary course of
     business in favor of Persons performing credit card processing services,
     travel charge processing services or clearinghouse services for any
     Obligor, including IATA, Diners Club, Discover Card, NPC, ARC and American
     Express, so long as such Liens are on cash and Cash Equivalents that are
     subject to holdbacks by, or are pledged (in lieu of such holdbacks) to,
     such Persons to secure amounts that may be owed to such Persons under the
     Obligors' agreements with them in connection with their provision of credit
     card processing, travel charge processing or clearinghouse services to the
     Obligors; being Liens of the type described in clause (iii)(B) of the
     definition of "Permitted Encumbrances";


                                       12



          (ii) subject to Liens in favor of customs and revenue authorities
     arising as a matter of law to secure payment of customs duties in
     connection with the importation of goods in the ordinary course of
     business; being Liens of the type described in clause (v) of the definition
     of "Permitted Encumbrances";

          (iii) subject to Liens incurred or deposits made in each case required
     under or in connection with the Trust Agreements (not including the
     Obligors' residuary interest in, claims to or refunds of any such trust
     funds); being Liens of the type described in clause (ix) of the definition
     of "Permitted Encumbrances";

          (iv) subject to Liens securing reimbursement obligations in respect of
     letters of credit issued for the account of any Obligor in the ordinary
     course of business and consistent with past practice, so long as the
     aggregate amount of such cash and Cash Equivalents does not exceed 115% of
     the maximum available amount under the secured letters of credit; being
     Liens of the type described in Section 6.1(a)(viii)(A);

          (v) subject to Liens securing reimbursement or other margin
     requirements in connection with, in the case of Liens contemplated in this
     clause (v), (x) transactions designed to hedge against fluctuations in fuel
     costs, entered into in the ordinary course of business, consistent with
     past business practice or then current industry practice, and not entered
     into for speculative purposes, (y) transactions designed to hedge interest
     rates entered into with respect to notional amounts not to exceed actual or
     anticipated Indebtedness, not entered into for speculative purposes and (z)
     transactions designed to hedge against risks associated with fluctuations
     in currencies entered into in the ordinary course of business; being Liens
     of the type described in Section 6.1(a)(viii)(B);

          (vi) subject to Liens securing prepaid fuel and healthcare expenses in
     the ordinary course of business and consistent with past practice; being
     Liens of the type described in Section 6.1(a)(viii)(C);

          (vii) subject to Liens incurred or deposits (other than with respect
     to the Plans described in Section 4.11) made in the ordinary course of
     business in connection with workers' compensation, unemployment insurance
     and other types of social security, or to secure the performance of
     tenders, statutory obligations, surety and appeal bonds, bids, leases,
     government contracts, trade contracts, performance and return-of-money
     bonds, reimbursement obligations and chargeback rights of Persons
     performing services for an Obligor (including Liens securing Trade Payables
     arising from the Obligors' use in the ordinary course of business,
     consistent with past practice, of credit advance facilities to purchase
     goods and services) and other similar obligations (exclusive of obligations
     for the payment of borrowed money); being Liens of the type described in
     clause (iii)(A) of the definition of "Permitted Encumbrances";

          (viii) referred to in any of clauses (i) through (iii) of Section
     5.13; or

          (ix) the US Airways Loan Prepayment Account.

For the avoidance of doubt, all amounts on deposit in deposit accounts and
securities accounts not subject to Control Agreements or otherwise pledged to
the Collateral Agent in reliance on Section 5.13 hereof shall constitute
Excluded Cash.

          "Excluded Property" means (i)(A) any lease or other written agreement
under which an Obligor leases real property (other than Gate Leases) and (1)
that requires such Obligor to pay annual


                                       13



rentals of $10,000,000 or more but where the grant of a Lien in favor of the
Collateral Agent would violate such lease or other written agreement, provided,
that if requested by the Controlling Creditor such Obligor has used commercially
reasonable efforts to obtain the consent of the lessor to the grant of a Lien on
such lease or other agreement in favor of the Collateral Agent, (2) that
requires such Obligor to pay annual rentals of less than $10,000,000, or (3)
that the Controlling Creditor has agreed in writing in its or their sole
discretion is not material or (B) Gate Leases, other than (upon receipt of
consent of the respective lessors thereof) the Gate Leases at LGA and DCA; (ii)
any property which is subject to a Lien of the type described in Section
6.1(a)(ii), (iii), (iv), (vi), (x) or (xii) but only while subject to such Lien;
(iii) any After-Acquired Section 1110 Equipment which the Obligors have owned
for a period of less than fifteen (15) days; (iv) any right in any agreement (A)
the grant of a security interest in which would violate the agreement under
which such right arises except to the extent provided under Sections 9-406 and
9-407 of the UCC of the State of New York, if such Obligor has failed to obtain
a waiver or other relief from such provision, but provided that such Obligor
has, if requested by the Controlling Creditor, used commercially reasonable
efforts (without obligation to incur more than immaterial costs or expenses in
connection with such commercially reasonable efforts) to obtain such waiver or
other relief or (B) to the extent that the pledge or assignment of such
agreement requires the consent of any third party, unless such third party has
consented thereto, except to the extent provided under Sections 9-406 and 9-407
of the UCC of the State of New York, so long as such Obligor has, if requested
by the Controlling Creditor, used commercially reasonable efforts (without
obligation to incur more than immaterial costs or expenses in connection with
such commercially reasonable efforts) to obtain such consent; (v) Excluded Cash;
(vi) 100% of the Capital Stock of Excluded Subsidiaries, 35% of the voting
Capital Stock of Subsidiaries of the Obligors that are CFCs, and all beneficiary
interests of third parties in the trusts created by or pursuant to the Trust
Agreements (which does not include the Obligors' residuary interest in, claims
to or refunds of any trust funds in respect of such trusts); (vii) assets
pledged to secure a Permitted Acquisition Financing; and (viii) aircraft
purchase agreements which by their terms are not assignable; provided that if an
Obligor nonetheless pledges to the Collateral Agent pursuant to Section 5.8 or
otherwise assets that otherwise would constitute Excluded Property absent this
proviso, unless or until the Lien with respect to such assets is released in
accordance with this Agreement and the applicable Collateral Document, such
assets shall constitute Collateral for all purposes under this Agreement and
under the other Loan Documents and shall not be treated as Excluded Property.

          "Excluded Subsidiaries" means (i) FTCHP LLC, a Delaware limited
liability company, if and for so long as (A) the assets of and ownership
interests in FTCHP LLC are pledged to secure its obligations under that certain
Senior Secured Term Loan Agreement dated as of December 23, 2004 among FTCHP
LLC, the Borrower, Heritage Bank, SSB, Citibank, N.A. and the other lenders
named therein (and any amendments, restatements, supplements, modifications,
refinancings or replacements thereof) or (B) restrictions contained in its
constituent documents prevent it from becoming an Obligor under the Loan
Documents, (ii) Airways Assurance Limited LLC, (iii) AWHQ LLC and (iv) America
West Company Store LLC.

          "Exercising Lender" has the meaning specified in Section 2.2(c).

          "FAA" means the Federal Aviation Administration.

          "Facilities" means any and all real property now, hereafter or
heretofore owned, leased, operated or used by an Obligor.

          "Fair Market Value" means, with respect to any asset subject to an
Asset Sale, the price that could be obtained for such asset by a seller in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer.


                                       14



          "FASB" means the Financial Accounting Standards Board.

          "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.

          "First Lien Claimholders" has the meaning given to such term in the
Intercreditor Agreement.

          "Fiscal Year" means Group's fiscal year referenced in the financial
statements to be delivered by Group pursuant to Section 5.1.

          "Fitch" means Fitch, Inc., and any successor thereto that is a
nationally recognized rating agency.

          "Fixed Cash Amount" has the meaning specified in Section 6.4(a)(i).

          "Future Issuance" means, without duplication, each (i) borrowing after
the Effective Date by an Obligor from any source (including in the debt capital
markets or from commercial bank lenders) (other than any other Obligor) of any
Indebtedness of the type described in clauses (i), (ii), (x) or (xii) of the
definition of "Indebtedness" and (ii) issuance after the Effective Date of any
Capital Stock or any warrants, options or other rights to acquire Capital Stock
by any Obligor (other than to another Obligor) or the exercise after the
Effective Date of any warrants, options or other rights to acquire Capital Stock
of any Obligor (other than exercise by another Obligor) other than, in each
case, the issuance of restricted stock or the exercise or issuance of options or
similar rights, in each case as compensation by or to existing or former
officers, directors or employees of an Obligor or cashless exercise of warrants
issued by any Obligor; provided, however, that notwithstanding the provisions of
clauses (i) and (ii) above, no borrowing, issuance of Capital Stock or exercise
or issuance of any warrants, options or other rights to acquire Capital Stock
(including any Capital Stock issued pursuant to the terms of such Capital Stock,
warrants, options or other rights to acquire Capital Stock) in each case,
effected on or around the Effective Date or otherwise in connection with the
Consummation of the Plan shall constitute a "Future Issuance" hereunder
(including, without limitation, the issuance of shares of Common Stock of Group
pursuant to the Stock Offering and the Equity Investment Agreements, the
borrowing pursuant to the Convertible Note Offering or the issuance of options
and warrants pursuant to the ALPA Letter Agreement).

          "GAAP" means, subject to the limitations on the application thereof
set forth in Section 1.3, accounting principles generally accepted in the United
States, as in effect from time to time as set forth in opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of FASB approved
by a significant segment of the accounting profession in the United States,
subject to requirements of applicable law.

          "Gate Leases" means all right, title and interest of each Obligor, now
existing or hereafter acquired, in and to any airport facility use, operation or
occupancy lease, license or other agreement with respect to arrival and
departure gates, aircraft parking spaces, passenger lounges, ticket counters,
terminal common areas, baggage handling areas, carousels and other facilities,
crew briefing areas, club lounges, kiosks, flight simulator buildings and other
related properties and rights with respect to airports at which any Obligor
lands, takes off or otherwise conducts operations or maintains property (not
including Slots).

          "GE 2001 Credit Agreement" means the Credit Agreement, dated as of
November 16, 2001, among US Airways, Group, and General Electric Capital
Corporation, as amended, restated, supplemented or modified, including pursuant
to that certain Credit Agreement Amendment No. 1, dated


                                       15



as of January 30, 2003, that certain Credit Agreement Amendment No. 2, dated as
of March 31, 2003, among the parties thereto, and that certain Amended and
Restated Credit Agreement, dated as of July 15, 2005 among US Airways, Group and
General Electric Capital Corporation.

          "GE Engine Financing" means the Loan Agreement [Engines], dated as of
September 3, 2004, among the Borrower, General Electric Capital Corporation,
individually and as administrative agent, Wells Fargo Bank Northwest, National
Association, as security trustee, and the lenders party thereto, as amended,
restated, supplemented or modified.

          "GE Expendables Mortgage" means the Expendables Mortgage and Security
Agreement dated as of September 27, 2005 between AWA and Wells Fargo Bank
Northwest, National Association, as security trustee, as amended, restated,
supplemented or modified.

          "GE Financings" means the GE Engine Financing and the GE Spare Parts
Financing.

          "GE Merger MOU" means the Master Merger Memorandum of Understanding,
dated as of June 13, 2005, among Group, US Airways, the Borrower, AWA Holdings,
General Electric Capital Corporation and General Electric Company.

          "GE Spare Parts Financing" means the Loan Agreement [Spare Parts],
dated as of September 3, 2004, among the Borrower, General Electric Capital
Corporation, individually and as administrative agent, Wells Fargo Bank
Northwest, National Association, as security trustee, and the lenders party
thereto, as amended, restated, supplemented or modified.

          "GECC Counter-Guarantor" means General Electric Capital Corporation, a
Delaware corporation and any Affiliate assignee thereof permitted under the
relevant Counter-Guarantee.

          "Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

          "Governmental Authorization" means any permit, license, certificate,
authorization, plan, directive, consent order or consent decree or agreement of,
from or with any Governmental Authority.

          "Group" has the meaning specified in the preamble to this Agreement.

          "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such first Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), including any pledge of any assets to
secure indebtedness of another or (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of such other Person so as to enable such Person to pay such
Indebtedness. The term "Guarantee" used as a verb has a corresponding meaning.

          "Guarantee Fee" has the meaning specified in Section 2.06 of the Board
Guaranty.


                                       16



          "Guarantee Rate" means, with respect to each date set forth in Annex C
hereto, the percentage set forth opposite such date.

          "Hazardous Materials" means all substances defined as Hazardous
Substances, Oil, Pollutants or Contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. Section 300.5, or defined as
such by or regulated as such under, any Environmental Law.

          "Hazardous Materials Activity" means any past, current, proposed, or
threatened use, storage, Release, generation, treatment, remediation or
transportation of any Hazardous Material (i) from, under, in, into or on the
Facilities or surrounding property; and (ii) caused by, or undertaken by or on
behalf of, an Obligor or any of their respective predecessors or Affiliates.

          "Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto); (iv) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six (6) months after the date of placing
such property in service or taking delivery and title thereto or the completion
of such services, except Trade Payables; (v) all Capital Lease obligations of
such Person (the amount of the Indebtedness in respect of Capital Lease
obligations to be determined as provided in the definition of Capital Lease in
this Section 1.1); (vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person, provided that the amount of such Indebtedness shall be the lesser of (A)
the fair market value of such asset at such date of determination and (B) the
stated principal amount of such Indebtedness, provided, however, that if such
Indebtedness is assumed by such Person or provides for recourse against such
Person, the amount of such Indebtedness shall be the greater of (A) and (B)
above; (vii) all Indebtedness of other Persons Guaranteed by such Person to the
extent such Indebtedness is Guaranteed by such Person; (viii) to the extent not
otherwise included in this definition and to the extent treated as a liability
under GAAP, obligations under Currency Agreements, Interest Rate Agreements and
Commodity Agreements; (ix) the capitalized amount of remaining lease payments
owing by such Person under Synthetic Leases that would appear on the balance
sheet of such Person if such lease were treated as a Capital Lease; (x) the
aggregate amount of uncollected accounts receivable of such Person subject at
such time to a sale of receivables (or similar transaction) to the extent such
transaction is effected with recourse to such Person (whether or not such
transaction would be reflected on the balance sheet of such Person in accordance
with GAAP); (xi) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer to the
extent such Indebtedness is recourse to such Person; and (xii) all prepaid
forward sales in bulk of dividend miles or available seat miles or like
transactions other than in the ordinary course of business. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date; provided that the amount outstanding
at any time of any Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.

          "Indemnified Liabilities" has the meaning specified in Section 9.4.

          "Indemnified Taxes" has the meaning specified in Section 2.11(a).

          "Indemnitees" has the meaning specified in Section 9.4.


                                       17



          "Initial Indebtedness" has the meaning specified in Section 6.10(a).

          "Initial Lender" has the meaning specified in the preamble to this
Agreement.

          "Intercreditor Agreement" means that certain Intercreditor Agreement,
dated as of the date hereof, by and among the Borrower, US Airways, the other
Subsidiary Guarantors, Group, the Collateral Agent and Wilmington Trust Company,
as Collateral Agent under the US Airways Loan Agreement.

          "Interest Payment Date" means the last Business Day of each December,
March, June, and September, commencing September 2005; provided, however, that

          (i) the Loan Maturity Date shall be an Interest Payment Date; and

          (ii) following a Default or an Event of Default, each "Interest
     Payment Date" shall be the last day of each Interest Period occurring
     during such period in which such Default or Event of Default exists.

          "Interest Period" means (a) initially, the period commencing on June
30, 2005 and ending on but excluding the next succeeding Interest Payment Date
and (b) thereafter, each successive period commencing on and including the
immediately preceding Interest Payment Date and ending on but excluding the next
succeeding Interest Payment Date; provided, however, that during the continuance
of an Event of Default, each "Interest Period" shall be for such duration of one
(1) month or less as shall be selected by the Agent by notice to the Borrower,
each Lender, the Board and the Loan Administrator on or prior to the start of
such Interest Period (and in the absence of any such notice or selection, the
applicable Interest Period shall be determined as provided above without regard
to this proviso).

          "Interest Rate Agreement" means any interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement.

          "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.

          "Investment" means with respect to any Person, any direct or indirect
advance, loan (other than loans or advances to customers in the ordinary course
of business that are recorded as accounts receivable on the balance sheet of
such Person or its Subsidiaries) or other extensions of credit or capital
contribution or other equity investment by such Person to any other Person,
including by means of any transfer of cash or other property to others or any
payment for property or services for the account or use of others, any Guarantee
(including any support for a letter of credit issued on behalf of such Person)
incurred for the benefit of such Person or any purchase or acquisition by such
Person of Capital Stock (or warrants, options or rights convertible into or
exercisable for Capital Stock), bonds, notes, debentures or other similar
instruments issued by any other Person; provided that advances or loans by any
Obligor to any other Obligor, Guarantees (including any support for a letter of
credit issued on behalf of another Obligor) incurred by any Obligor for the
benefit of any other Obligor, capital contributions or other equity investments
by an Obligor in any other Obligor and deposits made by any Obligor in
connection with the purchase by an Obligor of Aircraft Related Equipment or
other property shall not constitute an "Investment."


                                       18



          "Investment Guidelines" means investment guidelines in the form
attached hereto as Exhibit N, together with any amendments, restatements,
supplements or other modifications thereof permitted in accordance with Section
6.10(c).

          "IRS" means the Internal Revenue Service of the United States or any
successor thereto.

          "Juniper Financing" means the America West Co-Branded Card Agreement,
dated January 25, 2005, between the Borrower and Juniper Bank, as amended,
restated, supplemented or modified, including pursuant to the Assignment and
First Amendment to the America West Co-Branded Card Agreement, dated as of
August 8, 2005, among the Borrower, Group and Juniper Bank.

          "Lender" means each of the Tranche A Lender, the Tranche B-1 Lender,
the Tranche B-2 Lender, the Tranche B-3 Lender and/or the Tranche B-4 Lender
(including its respective successors and permitted assigns), as the context may
require, and the term "Lenders" means the Tranche A Lender, the Tranche B-1
Lender, the Tranche B-2 Lender, the Tranche B-3 Lender and/or the Tranche B-4
Lender (including their respective successors and permitted assigns)
collectively, as the context may require; provided that the terms "Lender" and
"Lenders" shall include the Board to the extent it acquires any interest in
Tranche A as contemplated by Section 2.8(f) hereof and by the Board Guaranty.

          "Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Lending Office" opposite its name on Annex B or on the
Assignment and Acceptance by which it became a Lender or such other office of
such Lender as such Lender may from time to time specify to the Borrower and the
Agent.

          "LGA" means LaGuardia Airport.

          "LIBOR" means, with respect to any Interest Period, the offered rate
in the London interbank market for deposits in Dollars of amounts equal or
comparable to the unpaid principal amount of the Loan offered for a term
comparable to such Interest Period, as currently shown on the Bridge/Telerate
page 3750 as of 11:00 a.m., London time, two (2) Business Days prior to the
first day of such Interest Period; provided, however, that (A) LIBOR for the
initial Interest Period shall be 3.49% per annum, (B) if more than one offered
rate as described above appears on such Bridge/Telerate page, the rate used to
determine LIBOR will be the arithmetic average (rounded upward, if necessary, to
the next higher 1/100 of 1%) of such offered rates, or (C) if no such offered
rates appear, the rate used for such Interest Period will be the arithmetic
average (rounded upward, if necessary, to the next higher 1/100 of 1%) of rates
quoted by the Reference Banks at approximately 10:00 a.m., New York time, two
(2) Business Days prior to the first day of such Interest Period for deposits in
Dollars offered to leading European banks for a period comparable to such
Interest Period in an amount comparable to the unpaid principal amount of the
Loan. If the Agent ceases generally to use such Bridge/Telerate page for
determining interest rates based on eurodollar deposit rates, a comparable
internationally recognized interest rate reporting service shall be used to
determine such offered rates.

          "Lien" means any lien, mortgage, pledge, assignment for security,
security interest, charge, hypothecation, lease or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any easement, right of way or other encumbrance on title to
real property and any agreement to give any security interest).

          "Loan" means the loan outstanding under this Agreement and consisting
of Tranche A and Tranche B.


                                       19



          "Loan Administration Agreement" means that certain Loan Administration
Agreement, dated as of the date hereof among the Loan Administrator, the
Borrower, US Airways, Group, the Board, the Lenders and the lenders under the US
Airways Loan Agreement.

          "Loan Administrator" means Capstone Advisory Group, LLC, a New Jersey
limited liability company.

          "Loan Discharge Exercise" has the meaning specified in Section 2.2(b).

          "Loan Documents" means, collectively, this Agreement, the Notes, the
Collateral Documents, the Second Lien Guaranty, the Loan Administration
Agreement, the Warrants, the Registration Rights Agreements, and each
certificate, agreement or document executed by an Obligor and delivered to the
Agent, the Lenders or the Board in connection with or pursuant to this
Agreement.

          "Loan Prepayment Percentage" means, with respect to any mandatory
prepayment required to be made by the Borrower pursuant to Section 2.5, the
fraction, expressed as a percentage, whose numerator is the outstanding
principal amount of the Loan as of the date of such prepayment and whose
denominator is the sum of (a) the outstanding principal amount of the Loan and
(b) the outstanding principal amount of the US Airways Loan, in each case as of
such date.

          "Mandatory Prepayment Date" has the meaning specified in Section
2.5(i).

          "Marketing and Service Agreements" means those certain business,
marketing and service agreements among an Obligor and any of Mesa Airlines,
Inc., Chautauqua Airlines, Inc., Trans States Airlines, Inc., United Air Lines,
Inc., Republic Airline, Inc., and Air Wisconsin Airlines Corporation and such
other parties or agreements from time to time that include, but are not limited
to, code-sharing, pro-rate, capacity purchase, service, frequent flyer, ground
handling and marketing agreements that are entered into in the ordinary course
of business.

          "Material Adverse Effect" means (a) a material adverse effect on (i)
the business, condition (financial or otherwise), operations, performance,
prospects, assets or properties of the Obligors, taken as a whole or (ii) the
legality, validity, binding effect or enforceability against any Obligor of any
Loan Document, or the rights and remedies of the Agent, the Collateral Agent,
the Board or any Lender under any Loan Document, or (b) any material adverse
effect on or material impairment of (i) the ability of the Obligors, taken as a
whole, to perform their payment or other material obligations under the Loan
Documents or (ii) the value of the Collateral or the validity and priority of
the Liens on the Collateral in each case taken as a whole.

          "Maturity Date" means September 30, 2008, except that if such date is
not a Business Day, then the Maturity Date shall be the immediately preceding
Business Day.

          "Merger" has the meaning specified in the recitals to this Agreement.

          "Merger Agreement" has the meaning specified in the recitals to this
Agreement.

          "Merger Sub" has the meaning specified in the recitals to this
Agreement.

          "Minimum Adjusted Cash Amount" has the meaning specified in Section
6.4(a).

          "Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.


                                       20



          "Mortgage" has the meaning specified in the definition of "Collateral
Documents."

          "Multiemployer Plan" means a multiemployer plan as defined Section
4001(a)(3) of ERISA, and in respect of which Group or any ERISA Affiliate is (or
with the application of Section 4212(c) of ERISA would be) (a) an "employer" as
defined in Section 3(5) of ERISA or (b) a "seller" as defined in Section 4204 of
ERISA.

          "Net Cash Proceeds" means, with respect to any Asset Sale, the Cash
Proceeds of such Asset Sale, net of (i) reasonable and customary brokerage
commissions and other reasonable and customary fees and expenses (including
reasonable fees and expenses of counsel, investment bankers, accountants and
other professionals, consultants and advisors) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale without regard
to the consolidated results of operations of Group, the Borrower and their
respective Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
(or any related expenses required to be paid to third parties pursuant to
documentation related to the financing of the assets subject to such Asset Sale)
that (A) is secured by a Lien on the property or assets sold and (B) is required
by its terms to be paid as a result of such Asset Sale and (iv) appropriate
amounts to be provided by any Obligor as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP, but limited to the
period of the required reserve.

          "Net Condemnation Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor as a result of any condemnation or
other taking or temporary or permanent requisition of any property, any interest
therein or right appurtenant thereto, or any change of grade affecting any
property, as the result of the exercise of any right of condemnation or eminent
domain by a Governmental Authority (including a transfer to a Governmental
Authority in lieu or anticipation of a condemnation), minus (ii) (a) any actual
and reasonable costs incurred by an Obligor in connection with any such
condemnation or taking (including reasonable fees and expenses of counsel), (b)
provisions for all taxes payable as a result of such condemnation, without
regard to the consolidated results of operations of Group, the Borrower, and
their respective Subsidiaries, taken as a whole, (c) the amount of any
Indebtedness secured by a Lien on any property subject to such condemnation or
taking and any related expenses of third parties, in each case, required by the
documentation related to such Indebtedness to be discharged or paid from the
proceeds thereof and (d) any amounts required to be paid to any Person (other
than an Obligor) owning a beneficial interest in the property subject to such
condemnation or taking.

          "Net Insurance Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor under any casualty insurance policy
in respect of a covered loss thereunder with respect to tangible, real or
personal property, minus (ii) (a) any actual and reasonable costs incurred by an
Obligor in connection with the adjustment or settlement of any claims of an
Obligor in respect thereof (including reasonable fees and expenses of counsel),
(b) provisions for all taxes payable as a result of such event without regard to
the consolidated results of operations of Group, the Borrower and their
respective Subsidiaries, taken as a whole, (c) the amount of any Indebtedness
secured by a Lien on any property subject to such covered loss and any related
expenses of third parties, in each case, required by the documentation related
to such Indebtedness to be discharged or paid from the proceeds thereof and (d)
any amounts required to be paid to any Person (other than an Obligor) owning a
beneficial interest in the property subject to such loss.

          "Net Issue Proceeds" means, with respect to any Future Issuance, the
Cash Proceeds of such Future Issuance net of (i) any reasonable and customary
brokers' and advisors' fees, any underwriting discounts and commissions and
other costs incurred in connection with such transaction


                                       21



(provided that evidence of such fees, discounts, commissions and costs is
provided to the Board and the Agent), (ii) provisions for all taxes payable as a
result of such transaction without regard to the consolidated results of
operations of Group, the Borrower and their respective Subsidiaries, taken as a
whole, and (iii) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Future Issuance that is secured by a Lien on the
property or assets pledged to secure such Future Issuance.

          "Non-Consenting Lender" has the meaning specified in Section 9.1(c).

          "Non-U.S. Person" means a Person that is not a United States person as
defined in Section 7701(a)(30) of the Internal Revenue Code.

          "Note" and "Notes" have the meanings specified in Section 2.3(d).

          "Obligations" means all payment and performance obligations of every
nature of any Obligor from time to time owed to the Agent, the Collateral Agent,
the Lenders, the Loan Administrator, any Counter-Guarantor or the Board
(together with their respective permitted successors and assigns), or any of
their respective Affiliates, officers, directors, employees, agents or advisors
under or in respect of any Loan Document, whether for principal, interest, fees,
expenses, indemnification or otherwise.

          "Obligors" means Group, the Borrower and each Subsidiary Guarantor,
and their respective successors and assigns.

          "Officer" means, as applied to any corporation, each Responsible
Officer, the Chairman of the Board (if an officer), Assistant Treasurer,
Secretary or Assistant Secretary.

          "Officer's Certificate" means, as applied to Group or the Borrower, a
certificate executed by a Responsible Officer of such Person in his/her capacity
as such; provided that every Officer's Certificate shall include a statement
that, in the opinion of the signer, such Responsible Officer has made or has
caused to be made such examination or investigation as is necessary to enable
such Responsible Officer to express an informed opinion as to the substance of
such Officer's Certificate in light of the provisions hereof pursuant to which
it is being delivered.

          "Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) under which such
Person is lessee, that is not a Capital Lease.

          "Original Loan Agreement" has the meaning specified in the recitals to
this Agreement.

          "Other Taxes" has the meaning specified in Section 2.11(c).

          "Participant" has the meaning specified in Section 9.2(e).

          "Payee" has the meaning specified in Section 9.12.

          "Payment Restriction" means, with respect to a Subsidiary of any
Person, any encumbrance, restriction or limitation, whether by operation of the
terms of its charter or by reason of any agreement or instrument, on the ability
of (i) such Subsidiary to (a) pay dividends or make other distributions on its
Capital Stock or make payments on any obligation, liability or Indebtedness owed
to such Person or any other Subsidiary of such Person, (b) make loans or
advances to such Person or any other Subsidiary of such Person or (c) transfer
any of its property or assets to such Person or any other


                                       22



Subsidiary of such Person or (ii) such Person or any other Subsidiary of such
Person to receive or retain any such (a) dividend, distributions or payments,
(b) loans or advances or (c) property or assets.

          "PBGC" means the Pension Benefit Guaranty Corporation.

          "Permitted Acquisition Financing" means Indebtedness incurred by an
Obligor in connection with an acquisition, merger or consolidation which is
permitted by Section 6.5 and/or Section 6.9 (as applicable) if and to the extent
used (i) to refinance existing Indebtedness of the Person acquired or
Indebtedness secured by the assets acquired or (ii) to pay consideration or
related expenses in connection with such transaction.

          "Permitted Encumbrances" means the following types of Liens (other
than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA) as applied to property:

          (i) Liens for taxes, assessments or governmental charges or claims the
     payment of which is either (a) not delinquent for a period of more than 30
     days or (b) being contested in good faith by appropriate proceedings, if
     such reserve or other appropriate provision, if any, as shall be required
     by GAAP shall have been made therefor, as set forth in Section 5.3;

          (ii) statutory Liens of landlords and Liens of carriers, vendors,
     warehousemen, repairmen, mechanics and materialmen and other Liens imposed
     by law incurred in the ordinary course of business for sums either (a) not
     delinquent for a period of more than thirty (30) days or (b) being
     contested in good faith by appropriate proceedings, if such reserve or
     other appropriate provision, if any, as shall be required by GAAP shall
     have been made therefor;

          (iii) (A) Liens incurred or deposits (other than with respect to the
     Plans described in Section 4.11) made in the ordinary course of business in
     connection with workers' compensation, unemployment insurance and other
     types of social security, or to secure the performance of tenders,
     statutory obligations, surety and appeal bonds, bids, leases, government
     contracts, trade contracts, performance and return-of-money bonds,
     reimbursement obligations and chargeback rights of Persons performing
     services for an Obligor (including Liens securing Trade Payables arising
     from the Obligors' use in the ordinary course of business, consistent with
     past practice, of credit advance facilities to purchase goods and services)
     and other similar obligations (exclusive of obligations for the payment of
     borrowed money) and (B) Liens arising or granted in the ordinary course of
     business in favor of Persons performing credit card processing services,
     travel charge processing services or clearinghouse services for any
     Obligor, including IATA, Diners Club, Discover Card, NPC, ARC and American
     Express, so long as such Liens are on cash and Cash Equivalents that are
     subject to holdbacks by, or are pledged (in lieu of such holdbacks) to,
     such Persons to secure amounts that may be owed to such Persons under the
     Obligors' agreements with them in connection with their provision of credit
     card processing, travel charge processing or clearinghouse services to the
     Obligors;

          (iv) with respect to real property, easements, rights-of-way,
     restrictions, minor defects, encroachments or irregularities in title and
     other similar charges or encumbrances not interfering in any material
     respect with the ordinary conduct of the business of an Obligor; provided
     that such charges or encumbrances, if affecting any of the Collateral
     constituting real property, comply with the terms of the Mortgage;


                                       23



          (v) Liens in favor of customs and revenue authorities arising as a
     matter of law to secure payment of customs duties in connection with the
     importation of goods in the ordinary course of business;

          (vi) any interest or title of a lessor in property leased by an
     Obligor under any Capital Lease obligation or Operating Lease which, in
     each case, is not prohibited under this Agreement;

          (vii) Liens in favor of collecting or payor banks and other banks
     providing cash management services, in each case, having a right of setoff,
     revocation, refund or chargeback against money or instruments of any
     Obligor on deposit with or in possession of such bank arising for the
     payments of bank fees and other similar amounts owed in the ordinary course
     of business;

          (viii) Liens of creditors of any Person to whom any Obligor's assets
     are consigned for sale in the ordinary course of business;

          (ix) Liens incurred or deposits made in connection with the Trust
     Agreements;

          (x) any renewal of or substitution for any Lien permitted by any of
     the preceding clauses; provided that the Indebtedness secured is not
     increased nor the Lien extended to any additional assets;

          (xi) any licensing or sublicensing of intellectual property in the
     ordinary course of business of the Obligors;

          (xii) Liens arising from precautionary UCC and similar financing
     statements relating to Operating Leases not otherwise prohibited under any
     Loan Document; and

          (xiii) Liens created under the Collateral Documents.

          "Permitted Refinancing Indebtedness" means Indebtedness of any Obligor
the cash proceeds of which are used to refinance (for purposes of this
definition, "Refinancing Indebtedness") then outstanding Indebtedness (for
purposes of this definition, "Old Indebtedness") (including by way of an
extension, renewal or replacement of, or substitution for, such Old
Indebtedness) in an amount not to exceed the then outstanding principal amount
of the Old Indebtedness, plus accrued and unpaid interest, premiums, fees and
expenses; provided that: (a) if the Old Indebtedness is subordinated in right of
payment to the Loan, the Refinancing Indebtedness, by its terms or by the terms
of any agreement or instrument pursuant to which it is outstanding, is expressly
made subordinate in right of payment to the Loan, (b) the Refinancing
Indebtedness does not have a final scheduled maturity prior to the final
scheduled maturity of the Old Indebtedness and (c) the average life of the
Refinancing Indebtedness calculated as of the consummation of the refinancing is
not less than the remaining average life of the Old Indebtedness.

          "Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.

          "Piedmont" means Piedmont Airlines, Inc.

          "Plan" means any "employee benefit plan" as defined in Section 3(3) of
ERISA which is, or was at any time during the preceding six (6) years,
maintained or contributed to, or required to be


                                       24



contributed to, by Group or any of its ERISA Affiliates, other than a
multiemployer plan, within the meaning of Section 4001(a)(3) of ERISA.

          "Plan of Reorganization" means the Plan of Reorganization of US
Airways Group, Inc. and its Affiliated Debtors and Debtors-in-Possession dated
June 30, 2005 together with amendments, supplements or modifications thereto, as
confirmed by the Confirmation Order, together with any amendments, supplements
or modifications thereto that have been approved or authorized by the Bankruptcy
Court prior to the Effective Date.

          "Pledged Cash" means, as of any time of determination, the aggregate
Dollar amount of unrestricted cash and Cash Equivalents of the Obligors held in
deposit and securities accounts over which the Collateral Agent maintains
perfected first priority security interests in accordance with (and subject to)
Section 5.13 and the terms of the Intercreditor Agreement (it being acknowledged
and agreed for the avoidance of doubt that Pledged Cash shall not include
Excluded Cash and cash held in the Prepayment Account (as defined in the
definition of "Prepayment Breakage Avoidance Procedure") or in the US Airways
Loan Prepayment Account).

          "Pre-Funded Amount" means, as of any date of determination, an amount
equal to the sum of (i) the aggregate amount of (A) Excluded Cash held by the
Obligors as of such date for the purpose of satisfying their obligations under
or in respect of the Trust Agreements plus (B) cash and Cash Equivalents held as
of such date by a Person performing credit card processing services or travel
charge processing services for an Obligor which such Person has unconditionally
agreed in writing to transfer to or at the direction of such Obligor as and when
needed to satisfy the obligations of such Obligor under or in respect of the
Trust Agreements; and (ii) the aggregate amount of cash and Cash Equivalents
held by a Person performing clearinghouse services for an Obligor (including,
without limitation IATA, ARC and ACH) to secure amounts that may be owed to such
Person in connection with such Person's performance of clearinghouse services
for such Obligor; provided that for purposes of calculating the Adjusted Cash
Amount under Section 6.4(a) hereof, the aggregate amount under clause (i) above
shall not exceed $250,000,000 and the aggregate amount under clause (ii) above
shall not exceed $35,000,000.

          "Prepayment Account" has the meaning specified in the definition of
"Prepayment Breakage Avoidance Procedure."

          "Prepayment Breakage Avoidance Procedure" means, with respect to any
prepayment of the Loan required or permitted by Section 2.5 or Section 2.9, that
the Borrower shall at its option have the right to apply any amounts required or
permitted to be prepaid by Section 2.5 or Section 2.9 with respect to the Loan
as follows: (i) the Borrower may immediately prepay the Loan (in whole or in
part) as required or permitted by Section 2.5 or Section 2.9, as applicable,
and/or (ii) the Borrower may deposit all or a portion of such amount in an
account established by the Borrower with the Agent and over which the Agent
shall have a perfected first priority security interest (the "Prepayment
Account"). To the extent the Borrower elects to deposit cash in the Prepayment
Account as provided in the preceding sentence, the Agent shall apply any cash so
deposited in the Prepayment Account to prepay the Loan on the last day of the
relevant Interest Period for the applicable tranche. The Borrower shall be
deemed to have satisfied the prepayment requirements of Section 2.5 or Section
2.9, as applicable, upon deposit of cash in the Prepayment Account in an amount
equal to the amount of the prepayment otherwise remaining due pursuant to
Section 2.5 or Section 2.9, as applicable. The Agent shall, at the request of
the Borrower, invest amounts on deposit in the Prepayment Account in Cash
Equivalents maturing on or prior to the last day of the next Interest Period
with any interest thereon for the benefit of the Borrower.

          "Prepayment Premium" has the meaning specified in Section 2.4(d).


                                       25



          "Principal Obligors" means Borrower, Group and US Airways.

          "Pro Forma Basis" means, with respect to compliance with any covenant
hereunder, compliance with such covenant after giving effect to the acquisition
(whether by purchase, merger or otherwise) or disposition (whether by sale,
merger or otherwise) of any company, entity or business or any asset by any
Obligor or any other action which requires compliance on a Pro Forma Basis. In
making any determination of compliance on a Pro Forma Basis, such determination
shall be performed using the consolidated financial statements of such Obligor
which shall be reformulated as if any such acquisition, disposition or other
action had been consummated at the beginning of the period specified in the
covenant with respect to which Pro Forma Basis compliance is required.

          "Proceedings" has the meaning specified in Section 5.1(b)(vii).

          "Prohibited Transferee" has the meaning specified in Section 9.2(a).

          "Redeemable Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise (i) is required to be redeemed prior to
the Maturity Date, (ii) may be required to be redeemed at the option of the
holder of such class or series of Capital Stock at any time prior to the
Maturity Date or (iii) is convertible into or exchangeable for (a) Capital Stock
referred to in clause (i) or (ii) above or (b) Indebtedness having a scheduled
maturity prior to the Maturity Date; provided that any Capital Stock that would
constitute Redeemable Stock solely because of the provisions thereof offering
holders thereof the right to require the issuer thereof to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" occurring prior to the
Maturity Date shall not constitute Redeemable Stock if the asset sale provisions
contained in such Capital Stock specifically provide that, in respect of any
particular asset sale proceeds, the issuer thereof will not be required to
repurchase or redeem any such Capital Stock pursuant to such provisions so long
as the Borrower applies the full amount of such proceeds (net of associated
taxes and transaction costs) to the permanent reduction of the aggregate
outstanding principal amount of the Loan.

          "Reference Banks" means Citibank, N.A., JPMorgan Chase Bank and Bank
of America, N.A., and each of their respective successors.

          "Register" has the meaning specified in Section 2.3(e).

          "Registration Rights Agreements" means (i) that certain Registration
Rights Agreement, dated as of January 18, 2002, by and among AWA Holdings, the
Initial Lender, and the Counter-Guarantors, and (ii) that certain Registration
Rights Agreement, dated as of January 18, 2002, by and between AWA Holdings and
the Board.

          "Regulations" means the regulations for Air Carrier Guarantee Loan
Program issued pursuant to the Act, 14 C.F.R. Part 1300, as the same may be
amended from time to time.

          "Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facilities, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.

          "Replacement Secured Financing" means any financing transaction,
whether structured as Indebtedness, sale-leaseback or otherwise, (a) which is
secured by any of the Obligors' (i) Slots, (ii)


                                       26



rotable, repairable and expendable spare parts, (iii) aircraft, or (iv) spare
engines, in each case which immediately prior to such transaction constituted
Collateral, and (b) the Net Issue Proceeds of which are at least equal to the
Collateral Release Value of the Collateral released in connection with such
transaction, other than a financing transaction referred to in the proviso to
Section 5.8(b) with respect to After-Acquired Section 1110 Equipment.

          "Reporting Obligor" means any Obligor which files or is required to
file reports with the SEC under Section 13(a) or 15(d) of the Exchange Act.

          "Requisite Lenders" means, collectively, Lenders holding not less than
a majority of the principal amount of the Loan then outstanding; provided that
if (i) the Board Guaranty is in full force and effect as of such date and has
not been terminated without payment having been made thereunder and (ii) the
outstanding amount of Tranche A guaranteed under the Board Guaranty as of such
date represents less than a majority of the principal amount of the Loan then
outstanding (such that the Board is not the Controlling Creditor at such time),
then for purposes of this definition, the Board shall be deemed to be the Lender
with respect to the outstanding amount of Tranche A then guaranteed under the
Board Guaranty.

          "Responsible Officer" means with respect to an Obligor, any of its
Chief Executive Officer, President, Chief Financial Officer, General Counsel,
Treasurer or Controller, but in any event, with respect to financial matters,
its Chief Financial Officer, Treasurer or Controller.

          "Restricted Payment" means, with respect to any Person (i) any
declaration or payment of dividends on or making of any distributions in respect
of the Capital Stock of such Person (other than dividends or distributions
payable solely in shares of Capital Stock (other than Redeemable Stock) or in
options, warrants, or other rights to purchase Capital Stock (other than
Redeemable Stock)) to holders of Capital Stock of such Person, (ii) any
purchase, redemption or other acquisition or retirement for value (other than
through the issuance solely of Capital Stock (other than Redeemable Stock) or
options, warrants or other rights to purchase Capital Stock (other than
Redeemable Stock)) of any Capital Stock or warrants, rights (other than
exchangeable or convertible Indebtedness of such Person not prohibited under
clause (iii) below) or options to acquire Capital Stock of such Person, and
(iii) any prepayment, redemption, repurchase, defeasance (including, but not
limited to, in substance or legal defeasance) or other acquisition or retirement
for value (other than through the issuance solely of Capital Stock (other than
Redeemable Stock) or warrants, rights or options to acquire Capital Stock (other
than Redeemable Stock)) of Indebtedness of such Person or any Subsidiary of such
Person, directly or indirectly (including by way of setoff or amendment of the
terms of any Indebtedness in connection with any retirement or acquisition of
such Indebtedness), which is made other than at any scheduled maturity thereof
or by any scheduled repayment or scheduled sinking fund payment (collectively, a
"prepayment"); provided that the following shall not constitute Restricted
Payments: (a) any declaration, payment, distribution, purchase, redemption,
acquisition or retirement for value, repurchase or defeasance referred to in
clauses (i) through (iii) above in each case solely among Obligors, (b)
repayment of the Loan, (c) repayment of the US Airways Loan, (d) repayment of
the loan outstanding under the GE Financings (and any replacements or
refinancings of any thereof) to cure a collateral value deficiency thereunder
and repayment of obligations secured by the GE Expendables Mortgage, (e)
payments made pursuant to the Plan of Reorganization, and (f) payments of cash
in lieu of fractional shares in connection with repurchases or conversions of
securities of an Obligor not prohibited hereunder.

          "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto that is a nationally
recognized rating agency.


                                       27



          "SEC" means the Securities and Exchange Commission of the United
States or any successor thereto.

          "Second Lien Guaranty" means the Second Lien Guaranty dated as of the
date hereof made by Group and the Subsidiary Guarantors, in substantially the
form of Exhibit J.

          "Secondary Slots" means (a) Air-21 slot exemptions, (b) the Essential
Air Services Slots identified on Schedule 1.1(a) hereto, (c) any other Slots
which, under the Slot Regulations, are not transferable among private parties,
(d) for so long as their aggregate Appraised Value does not exceed $5,000,000,
Slots at John F. Kennedy International Airport, (e) the Slots identified on
Schedule 1.1(a) hereto as "pool" Slots (within the meaning of 14 C.F.R. Section
93.226(e)), (f) all 6:00 a.m. arrival and departure Slots at LaGuardia Airport,
(g) all arrival and departure Slots at LaGuardia Airport commencing at or after
9:30 p.m. (2130), (h) all 6:00 a.m. Slots at Ronald Reagan Washington National
Airport, and (i) all Slots at Ronald Reagan Washington National Airport
commencing at or after 9:00 p.m. (2100).

          "Section 1110 Equipment" means airframes, aircraft, aircraft engines,
propellers and appliances which are not spare parts (as such terms are used in
Section 1110 of the Bankruptcy Code).

          "Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.

          "Security Agreement" has the meaning specified in clause (iv) of the
definition of Collateral Documents.

          "Slot Regulations" means 49 U.S.C. Section 40103 and 14 C.F.R.
Sections 93.211 - 93.227, and any amendment, supplement or other modification
thereto, or successor, replacement or substitute federal law or regulation
concerning the right or operational authority to conduct landing or takeoff
operations at any airports.

          "Slots" means all of the rights and operational authority granted
under the Slot Regulations and now or hereafter acquired or held by each Obligor
to conduct one instrument flight rule landing or takeoff operation in a
specified time period at DCA, John F. Kennedy International Airport, LGA, or any
other airport.

          "Solvent" means, with respect to any Person, that as of the date of
determination (a) the then fair saleable value of the business of such Person is
not less than the amount that will be required to pay the probable liabilities
on such Person's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and (c)
such Person does not intend to incur, or believes that it will not incur, debts
beyond its ability to pay such debts as they become due. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

          "Stock Offering" means the offering of common stock pursuant to the
registration statement on form S-1 (file no. 33-126226) of Group filed with the
SEC on June 29, 2005, as amended, including any overallotment option.


                                       28



          "Subsidiary" means, with respect to any Person, any corporation,
partnership, association, limited liability company, trust or estate, joint
venture or other business entity of which more than 50% of the issued and
outstanding shares of Voting Stock at the time of determination are owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.

          "Subsidiary Guarantor" means each Person that is a direct or indirect
Subsidiary of Group as of the Effective Date and after giving effect to the
Merger (other than the Borrower and the Excluded Subsidiaries) and each other
Subsidiary of Group that becomes a party to the Second Lien Guaranty pursuant to
Section 5.8(a), but with respect to any such Subsidiary, subject to the last
sentence of Section 8 of the Second Lien Guaranty and excluding in each case any
Subsidiary that is a CFC. As of the Effective Date the Subsidiary Guarantors are
AWA Holdings, US Airways, Piedmont, Material Services Company, Inc. and PSA
Airlines, Inc.

          "Substitute Basis" has the meaning specified in Section 2.9(b).

          "Supplemental Facility Fee" means the supplemental facility fee
payable to the Initial Lender on an Interest Payment Date in an amount equal to
the product of (x) the applicable Guarantee Rate set forth on Annex C for such
Interest Payment Date and (y) the outstanding amount of Tranche B-4 held by the
Initial Lender on such date (computed on the basis of a year of 360 days and
actual number of days elapsed) as determined by the Agent as of the date of
payment of such fee and after giving effect to any payment of principal of the
Loan made on such date.

          "Synthetic Lease" means (a) a so-called synthetic, off-balance sheet
lease or lease in which the lessee is contractually entitled to the tax benefits
of ownership of the leased assets, or (b) an agreement for the use or possession
of property creating obligations that do not appear on the balance sheet of such
Person but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).

          "Taxes" means any and all present or future taxes, levies, fees,
duties, imposts, deductions, charges or withholdings of any nature, and all
interest, penalties and other liabilities thereon or computed by reference
thereto imposed by any Governmental Authority.

          "Title 49" means Title 49 of the United States Code, as amended and in
effect from time to time, and the regulations promulgated pursuant thereto.

          "Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries and
arising in the ordinary course of business in connection with the acquisition of
goods or services but limited to current liabilities in accordance with GAAP.

          "Tranche" means each of Tranche A, Tranche B-1, Tranche B-2, Tranche
B-3 and Tranche B-4.

          "Tranche A" has the meaning specified in Section 2.1(a).

          "Tranche A Lender" means the Initial Lender and each other Person who
becomes the holder of Tranche A pursuant to the provisions of this Agreement,
including the Board if it acquires any interest in Tranche A as contemplated by
Section 2.8(f) and the Board Guaranty.

          "Tranche A Note" has the meaning specified in Section 2.3(d)(i).


                                       29



          "Tranche B" means, collectively, Tranche B-1, Tranche B-2, Tranche B-3
and Tranche B-4.

          "Tranche B Lenders" means, collectively, the Tranche B-1 Lender, the
Tranche B-2 Lender, the Tranche B-3 Lender and the Tranche B-4 Lender.

          "Tranche B-1" has the meaning specified in Section 2.1(b).

          "Tranche B-1 Lender" means the Initial Lender and each other Person
who is the holder of Tranche B-1.

          "Tranche B-1 Note" has the meaning specified in Section 2.3(d)(ii).

          "Tranche B-2" has the meaning specified in Section 2.1(c).

          "Tranche B-2 Lender" means the Initial Lender and each other Person
who is the holder of Tranche B-2.

          "Tranche B-2 Note" has the meaning specified in Section 2.3(d)(iii).

          "Tranche B-3" has the meaning specified in Section 2.1(d).

          "Tranche B-3 Lender" means the Initial Lender and each other Person
who is the holder of Tranche B-3.

          "Tranche B-3 Note" has the meaning specified in Section 2.3(d)(iv).

          "Tranche B-4" has the meaning specified in Section 2.1(e).

          "Tranche B-4 Lender" means the Initial Lender and each other Person
who is the holder of Tranche B-3.

          "Tranche B-4 Note" has the meaning specified in Section 2.3(d)(v).

          "Trust Agreements" means all special purpose trust funds established
by any Obligor to manage the collection and payment of amounts collected by the
Obligors for the express benefit of third-party beneficiaries relating to (a)
federal income tax withholding and backup withholding tax, employment taxes,
transportation excise taxes and security related charges, including (i) federal
payroll withholding taxes, as described in Sections 3101, 3111 and 3402 of the
Internal Revenue Code; (ii) federal Unemployment Tax Act taxes, as described in
Chapter 23 of Subtitle C of the Internal Revenue Code; (iii) federal air
transportation excise taxes, as described in Sections 4261 and 4271 of the
Internal Revenue Code; (iv) federal security charges, as described in Title 49
of the Code of Federal Regulations of 2002 (referred to in this definition as
the "CFR"), Chapter XII, Part 1510; (v) federal Animal and Plant Health
Inspection Service of the United States Department of Agriculture (APHIS) user
fees, as described in Title 21 United States Code (2002) (referred to in this
definition as "U.S.C.") Section 136a and 7 CFR Section 354.3; (vi) federal
Immigration and Naturalization Service (INS) fees, as described in 8 U.S.C.
Section 1356 and 8 CFR Part 286; (vii) federal customs fees as described in 19
U.S.C. Section 58c and 19 CFR Section 24.22; and (viii) federal jet fuel taxes
as described in Sections 4091 and 4092 of the Internal Revenue Code collected on
behalf of and owed to the federal government, (b) any and all state and local
income tax withholding, employment taxes and related charges and fees and
similar taxes, charges and fees, including, but not limited to, state and local
payroll withholding taxes,


                                       30



unemployment and supplemental unemployment taxes, disability taxes, workman's or
workers' compensation charges and related charges and fees that are analogous to
those described in Subtitle C of the Internal Revenue Code and that are
described in or are analogous to Chapter 23 of Title 19 Delaware Code Annotated
(2002) (referred to in this definition as "D.C.A.") collected on behalf of and
owed to state and local authorities, agencies and entities, (c) Passenger
Facility Charges as described in Title 49 United States Code Section 40117
(2004) and Title 14 of the Code of Federal Regulations, Subchapter 1, Part 158
collected on behalf of and owed to various administrators, institutions,
authorities, agencies and entities and (d) voluntary and/or other
non-statutorily required employee payroll deductions, whether authorized by the
employee, imposed by court order, agreed to pursuant to collective bargaining
arrangement or otherwise, including (i) employee contributions made for the
purpose of participating in any employer-sponsored retirement plan as described
and defined in Section 401(k) of the Internal Revenue Code (including repayment
of any 401(k) related loans made to the employee but excluding any funds matched
and/or contributed by the employer on behalf of any employee), (ii) employee
payments made for the purpose of participating in any employer-sponsored
medical, dental or related health plan, (iii) employee payments made for the
purpose of satisfying periodic union dues, (iv) employee payments made for the
purpose of purchasing United States Savings Bonds, (v) employee payments made
for the purpose of making deposits to an account at or making repayment of an
extension of credit from an employer-associated credit union, (vi) employee
payments made for the purpose of purchasing life, accident, disability or other
insurance, (vii) employee payments made for the purpose of participating in any
employer-sponsored cafeteria plan as described and defined in Section 125 of the
Internal Revenue Code, (viii) employee-directed donations to charitable
organizations and (ix) levys, garnishments and other attachments on employee
compensation (as described in Sections 6305 and 6331 of the Internal Revenue
Code, in Section 4913 of Title 10 of D.C.A. or in any analogous provision of
other applicable federal, state or local law) collected on behalf of any
Governmental Authority or any other Person authorized to receive funds of the
type described in this clause (d).

          "UCC" means the Uniform Commercial Code.

          "United States Citizen" has the meaning specified in Section 4.1(b).

          "US Airways" has the meaning specified in the recitals to this
Agreement.

          "US Airways Loan" means the "Loan" under and as defined in the US
Airways Loan Agreement.

          "US Airways Loan Agreement" means that certain Amended and Restated
Loan Agreement dated as of the date hereof among US Airways, as borrower
thereunder, Group, the other direct and indirect Subsidiaries of Group parties
thereto, the several lenders from time to time party thereto, Citibank, N.A., as
Agent, Citicorp North America, Inc., as Govco Administrative Agent, Wilmington
Trust Company, as Collateral Agent, and the Board.

          "US Airways Loan Prepayment Account" means the "Prepayment Account"
under and as defined in the US Airways Loan Agreement.

          "Variable Cash Amount" has the meaning specified in Section
6.4(a)(ii).

          "Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to vote for the election of directors, managers or trustees of any
Person (or Persons performing similar functions) irrespective of whether or not
at the time stock of any such class or classes will have or might have such
voting power by the reason of the happening of any contingency.


                                       31



          "Warrants" means (i) the Warrant to purchase up to 7,735,770 shares of
Groups' Common Stock issued by Group to the Board, which Warrant is being issued
in replacement for the Warrant to purchase up to 18,754,000 shares of AWA
Holdings' class B common stock issued by AWA Holdings to the Board on January
18, 2002 and (ii) the Warrant to purchase up to 386,925 shares of Groups' Common
Stock issued by Group to the Airbus Counter-Guarantor, which Warrant is being
issued in replacement for the Warrant to purchase up to 938,000 shares of AWA
Holdings' class B common stock issued by AWA Holdings to the Airbus
Counter-Guarantor on January 18, 2002, in each case in substantially the form of
Exhibit O.

          "Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

          "Working Capital" means, as of any date, (i) the current assets
(excluding cash and Cash Equivalents) of Group minus (ii) the current
liabilities of Group (other than the current portion of long term debt), in each
case, determined on a consolidated basis and otherwise, in accordance with GAAP
as of such date.

          SECTION 1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including".

          SECTION 1.3. ACCOUNTING TERMS AND PRINCIPLES.

          (a) Accounting Terms. All accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.

          (b) Change in GAAP. If any change in accounting principles used in the
preparation of the most recent financial statements referred to in Section 5.1
is hereafter required or permitted by the rules, regulations, pronouncements and
opinions of FASB or the American Institute of Certified Public Accountants (or
any successor thereto) and such change is adopted by an Obligor with the
agreement of its independent public accountants and results in a change in any
of the calculations required by Article VI had such accounting change not
occurred, the parties hereto agree to promptly enter into good faith
negotiations in order to amend such provisions so as to equitably reflect such
change with the desired result that the criteria for evaluating compliance with
such covenants by the Obligors shall be the same after such change as if such
change had not been made; provided, however, that no change in GAAP that would
affect a calculation that measures compliance with any covenant contained in
Article VI shall be given effect until such provisions are amended to reflect
such changes in GAAP.

          SECTION 1.4. CERTAIN TERMS.

          (a) Certain References. The words "herein," "hereof" and "hereunder"
and similar words refer to this Agreement as a whole, and not to any particular
Article, Section, subsection or clause in, this Agreement.

          (b) References to Exhibits, Schedules, etc. References in this
Agreement to an Exhibit, Schedule, Article, Section, subsection or clause refer
to the appropriate Exhibit or Schedule to, or Article, Section, subsection or
clause in this Agreement unless otherwise indicated.


                                       32



          (c) References to Agreements. Each agreement defined in this Article I
shall include all appendices, exhibits and schedules thereto. If the prior
written consent of any Person is required hereunder for an amendment,
restatement, supplement or other modification to any such agreement and the
consent of each such Person is obtained, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified. If no such consent is required, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified.

          (d) References to Statutes. References in this Agreement to any
statute shall be to such statute as amended or modified and in effect at the
time any such reference is operative.

          (e) Miscellaneous. The term "including" when used in any Loan Document
means "including without limitation" except when used in the computation of time
periods.

                                   ARTICLE II

                                    THE LOAN

          SECTION 2.1. THE LOAN. The aggregate principal amount of the Loan on
the date hereof is $300,300,000, comprised of the following Tranches:

          (a) a Tranche A portion of the Loan in the principal amount of
$265,685,000 ("Tranche A"), which as of the Effective Date is held by the
Initial Lender and guaranteed by the Board under the Board Guaranty;

          (b) a Tranche B-1 portion of the Loan in the principal amount of
$13,300,000 ("Tranche B-1"), which as of the Effective Date is held by the
Initial Lender and guaranteed by the Airbus Counter-Guarantor under its
Counter-Guarantee;

          (c) a Tranche B-2 portion of the Loan in the principal amount of
$9,100,000 ("Tranche B-2"), which as of the Effective Date is held by the
Initial Lender;

          (d) a Tranche B-3 portion of the Loan in the principal amount of
$9,100,000 ("Tranche B-3"), which as of the Effective Date is held by the
Initial Lender and guaranteed by the GECC Counter-Guarantor under its
Counter-Guarantee; and

          (e) a Tranche B-4 portion of the Loan in the principal amount of
$3,115,000 ("Tranche B-4"), which as of the Effective Date is held by the
Initial Lender.

          Any amount of the Loan repaid or prepaid may not be reborrowed.

          SECTION 2.2. SCHEDULED REPAYMENT OF THE LOAN.

          (a) Schedule Amortization. The Borrower shall repay principal amounts
with respect to the Loan on the dates and in the amounts set forth below:


                                       33





INTEREST PAYMENT DATE FALLING ON OR ABOUT   REPAYMENT AMOUNT
- -----------------------------------------   ----------------
                                         
September 30, 2005                             $42,900,000
March 31, 2006                                 $42,900,000
September 30, 2006                             $42,900,000
March 31, 2007                                 $42,900,000
September 30, 2007                             $42,900,000
March 31, 2008                                 $42,900,000
September 30, 2008                             $42,900,000


          Notwithstanding anything herein to the contrary, the Borrower shall
repay the entire unpaid principal amount of the Loan together with accrued and
unpaid interest thereon and all other amounts owing hereunder in respect thereof
on the Maturity Date (or, if earlier, the date the Loan is accelerated pursuant
to Section 7.2).

          (b) Reduction of Principal Amount upon Exercise of Warrants. Any
Lender holding Warrants shall be entitled to pay some or all of the Exercise
Price (as defined in the Warrants) for any of its Warrants by offsetting amounts
owed to such Lender (such Lender, an "Exercising Lender") in respect of its
interest in the Loan as provided in Section 2.1(b)(ii) of the Warrants (such
exercise, a "Loan Discharge Exercise"). In such event, the principal amount of
the Loan outstanding and owing to the Exercising Lender on the effective date of
such exercise shall be discharged on a dollar-for-dollar basis by the amount of
the Exercising Lender's interest in the Loan which was applied to pay such
Exercise Price. Any such reduction in the principal amount of the Loan shall be
applied to the then remaining installments of the outstanding principal amount
of the Loan owed to such Exercising Lender in the inverse order of maturity
thereof. For the avoidance of doubt, no discharge of the principal amount of the
Loan as provided herein shall discharge the principal amount of the Loan owed to
any other Lender or otherwise impair the Borrower's obligations with respect
thereto. An Exercising Lender shall give prompt written notice to the Agent
(with a copy to the Borrower) of any exercise of its Warrants in the manner
described in this subsection in order to enable the Agent to record such
transaction.

          (c) Principal Payments. Each payment of the principal amount of the
Loan due and owing on each date specified in Section 2.2(a) shall be made after
giving effect to all repayments and prepayments of the Loan and each Loan
Discharge Exercise effected on or prior to such date.

          SECTION 2.3. EVIDENCE OF DEBT.

          (a) Lenders' Accounts. Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing such Lender's portion of
the Loan outstanding from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.

          (b) Agent's Records of Loan. The Agent shall establish and maintain a
register for recording with respect to the Loan (i) the date and amount of each
payment on the Loan made by or on behalf of, or collected from, the Borrower,
(ii) the amount of each such payment applied in accordance with Section 2.8(d)
and (e) or other applicable terms hereof to scheduled principal of or interest
on the Loan and to each of the fees identified in Section 2.7(a) through Section
2.7(d), (iii) the amount by which the principal amount of the Loan owing to an
Exercising Lender is reduced in connection with the exercise by such Exercising
Lender of its Warrant as described in Section 2.2(b), (iv) the then outstanding
principal balance of the Loan (without reliance on the Lender's accounts), and
(v) the date and amount of each payment made by the Board under the Board
Guaranty.


                                       34



          (c) Entries Prima Facie Evidence. The entries made in the accounts
maintained pursuant to this Section 2.3 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligations of the Borrower to repay the Loan in accordance
with its terms.

          (d) Notes. The Borrower shall execute and deliver to the Agent on the
Effective Date the following promissory notes:

          (i) a promissory note substantially in the form of Exhibit B-1 in the
     principal amount of Tranche A of the Loan outstanding on the date hereof,
     dated the Effective Date and otherwise appropriately completed (such note,
     including any replacement note therefor issued in accordance with the
     provisions of this Section 2.3(d), the "Tranche A Note");

          (ii) a promissory note substantially in the form of Exhibit B-2 in the
     principal amount of Tranche B-1 of the Loan outstanding on the date hereof
     owing to the Tranche B-1 Lender, dated the Effective Date and otherwise
     appropriately completed, (each such note, including any replacement note
     therefor issued in accordance with the provisions of this Section 2.3(d), a
     "Tranche B-1 Note");

          (iii) a promissory note substantially in the form of Exhibit B-3 in
     the principal amount of Tranche B-2 of the Loan outstanding on the date
     hereof owing to the Tranche B-2 Lender, dated the Effective Date and
     otherwise appropriately completed, (each such note, including any
     replacement note therefor issued in accordance with the provisions of this
     Section 2.3(d), a "Tranche B-2 Note");

          (iv) a promissory note substantially in the form of Exhibit B-4 in the
     principal amount of Tranche B-3 of the Loan outstanding on the date hereof
     owing to the Tranche B-3 Lender, dated the Effective Date and otherwise
     appropriately completed, (each such note, including any replacement note
     therefor issued in accordance with the provisions of this Section 2.3(d), a
     "Tranche B-3 Note"); and

          (v) a promissory note substantially in the form of Exhibit B-5 in the
     principal amount of Tranche B-4 of the Loan outstanding on the date hereof
     owing to the Tranche B-4 Lender, dated the Effective Date and otherwise
     appropriately completed, (each such note, including any replacement note
     therefor issued in accordance with the provisions of this Section 2.3(d), a
     "Tranche B-4 Note," and collectively with the Tranche A Note, Tranche B-1
     Note, Tranche B-2 Note and Tranche B-3 Note, the "Notes").

          Each Note shall be made payable to the Agent at the office of the
Agent; provided that at the request of any Lender, the Borrower shall execute
and deliver a Note (or replacement thereof) payable directly to such Lender in
the amount of its interest in the Loan. If a Note is mutilated, lost, stolen or
destroyed, the Borrower shall issue a new Note of the same Tranche in the same
principal amount and having the same interest rate, date and maturity as the
Note so mutilated, lost, stolen or destroyed endorsed to indicate all payments
thereon. In the case of any lost, stolen or destroyed Note, there shall first be
furnished to the Borrower and the Board an instrument of indemnity from the
Agent (or Lender, as applicable) and evidence of such loss, theft or destruction
reasonably satisfactory to each of them. Upon the execution and delivery by the
Borrower of the Notes, the promissory notes executed and delivered by the
Borrower under the Original Loan Agreement shall be null and void and of no
further force and effect, and shall be contemporaneously returned to the
Borrower for cancellation.


                                       35



          (e) Register. A manually signed copy of this Agreement and the
original of a Note shall be evidence of (i) the rights of each Lender under this
Agreement and such Note and (ii) the rights of the Agent under this Agreement.
Neither this Agreement nor any of the Notes is a bearer instrument. The Agent
will establish and maintain a record of ownership (the "Register") in which the
Agent agrees to register by book entry the Agent's and each Lender's interest in
the Loan, the Notes and this Agreement, and in the right to receive any payments
hereunder or thereunder (including any adjustment pursuant to Section 2.2(b))
and any assignment of any such interest or rights. In connection with any
assignment pursuant to Section 9.2, the Agent shall maintain a copy of each
Assignment and Acceptance delivered to and accepted by it and shall record the
names and addresses of the Lenders and principal amount of the Loan owing to
each Lender from time to time. Solely for purposes of this Section 2.3(e), the
Agent shall be the Borrower's agent for purposes of establishing and maintaining
the Register. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, the Board, the Agent and
the Lenders shall treat each Person whose name is recorded in the Register as a
Lender for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower, the Agent, the Board (so long as the Board is either
a guarantor of Tranche A or a Lender hereunder), the Loan Administrator or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

          SECTION 2.4. OPTIONAL PREPAYMENTS.

          (a) Notice. Subject to subsection (e) below, the Borrower may, upon at
least fifteen (15) days' prior revocable notice to the Board, the
Counter-Guarantors, the Loan Administrator and the Agent stating the proposed
date and aggregate principal amount of the prepayment, elect to prepay the
outstanding principal amount of the Loan ratably as to Tranche A and Tranche B,
in whole or in part (but not less than a minimum amount of $2,500,000), together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that upon any prepayment of all or a portion of the
Loan by the Borrower, or if the Borrower revokes such notice at any time within
such fifteen (15) days, the Borrower shall also pay any amounts owing pursuant
to Section 2.9(e); provided, further, that if the Borrower prepays all or a
portion of the Loan, the Borrower shall also pay any Prepayment Premium owing
pursuant to subsection (d) below.

          (b) Amounts Due upon Notice. Upon the giving of any notice of
prepayment under Section 2.4(a), the principal amount of the Loan specified to
be prepaid together with accrued and unpaid interest thereon, and any Prepayment
Premium payable pursuant to subsection (d) below, shall (subject to the first
proviso below) become due and payable on the date specified for such prepayment;
provided, however, that any failure to make any such prepayment in full on such
date shall be deemed to be an automatic revocation of the notice of prepayment
given under Section 2.4(a) and such failure shall not constitute a Default or an
Event of Default hereunder; provided, further, however, that the Borrower shall
be obligated to pay on such date any amounts owing under Section 2.9(e) due to
such failure to prepay.

          (c) Application of Optional Prepayments. Any partial prepayment of the
Loan under this Section 2.4 (other than (i) a prepayment of Tranche B-2 as
provided under subsection (e) below and (ii) any Prepayment Premium payable
under subsection (d) below) shall be applied to the outstanding principal amount
of the Loan ratably as to each Lender and, with respect to each Lender, pro rata
across the remaining scheduled principal payments on the Loan owing to each such
Lender (and not in the inverse order of maturity). Any such prepayment shall be
paid to the Agent for application as provided in Section 2.8, other than any
Prepayment Premium which shall be paid by the Agent on a pro rata basis to the
holders of the portions of the Loan which respect to which such Prepayment
Premium was payable as provided in subsection (d) below. The Borrower shall have
no right to optionally prepay the principal amount of the Loan other than as
provided in this Section 2.4, Section 2.9(b) or Section 2.9(d).


                                       36



          (d) Prepayment Premium. In addition to amounts which the Borrower is
required to pay in connection with an optional prepayment of the Loan as
provided above, the Borrower shall also pay on the date of such prepayment a
premium (the "Prepayment Premium") on the prepaid portion of the Loan calculated
in the manner set forth below; provided, however, that the Borrower shall not be
required to pay a Prepayment Premium with respect to the amount of the
prepayment attributable to (i) such portion of the Loan which is then held by
the Initial Lender, (ii) such portion of Tranche A which is then held by the
Board in connection with a payment by the Board under the Board Guaranty, (iii)
such portion of Tranche B-1, Tranche B-2 or Tranche B-3 which is then held by
the applicable Counter-Guarantor in connection with a payment by such
Counter-Guarantor under its Counter-Guarantee, (iv) such portion of Tranche A,
Tranche B-1, Tranche B-2 or Tranche B-3 then held by a permitted assignee of the
Initial Lender (or a permitted assignee thereof) if and to the extent that such
assigned portion of the Loan continues to be guaranteed under the Board Guaranty
or the applicable Counter-Guarantee, as the case may be, following such
assignment, or (v) a prepayment, in whole or in part, of Tranche B-2 pursuant to
subsection (e) below. The Prepayment Premium on the portion of the Loan with
respect to which it is payable shall be calculated as follows:



DATE OF SUCH PREPAYMENT                         PREPAYMENT PREMIUM
- ---------------------------------------------   --------------------------------------
                                             
Effective Date through September 26, 2006       2% of the applicable prepayment amount
September 27, 2006 through September 26, 2007   1% of the applicable prepayment amount
Thereafter                                      None


          (e) Prepayment of Tranche B-2. Anything to the contrary contained
herein notwithstanding, the Borrower may elect to prepay the outstanding
principal amount of Tranche B-2 of the Loan, in whole or in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid
and any amounts owing pursuant to Section 2.9(e) (but without any prepayment
premium under subsection (d) above). For the avoidance of doubt, any such
prepayment shall be applied to prepay the outstanding principal amount of
Tranche B-2 only, shall not be applied to prepay the outstanding principal
amount of any other Tranches of the Loan, and shall be paid directly to the
Tranche B-2 Lender notwithstanding anything to the contrary contained herein.
Any prepayment of Tranche B-2 under this subsection (e) shall be applied to the
outstanding principal amount of Tranche B-2 pro rata across the remaining
scheduled principal payments on Tranche B-2.

          SECTION 2.5. MANDATORY PREPAYMENTS.

          (a) Certain Future Issuances within Six Months of Effective Date.
Subject to subsection (i) below, upon receipt by an Obligor of any Cash Proceeds
from any Future Issuance of Indebtedness convertible into Capital Stock (or
convertible into warrants, options or other rights to acquire Capital Stock)
which is consummated no later than six (6) months after the Effective Date, the
Borrower shall prepay the Loan in the manner provided below in an amount equal
to the product of (x) the Loan Prepayment Percentage and (y) an amount equal to
fifty percent (50%) of the Net Issue Proceeds of such Future Issuance; provided
that the Borrower shall not be obligated to so prepay the Loan if and to the
extent that the Future Issuance is of Permitted Refinancing Indebtedness. Any
prepayment of the Loan under this subsection shall be made on the Business Day
following the receipt by such Obligor of the proceeds of the applicable Future
Issuance.

          (b) Replacement Secured Financing. Upon receipt by an Obligor of any
Cash Proceeds from any Future Issuance constituting a Replacement Secured
Financing, the Borrower shall prepay the Loan from the proceeds thereof in the
manner provided below in an aggregate amount equal to the Collateral Release
Value for each item or category (as applicable) of Collateral subject to such
Replacement Secured Financing; provided, however, that the Borrower shall not be
obligated to so prepay the Loan if and to the extent that such Cash Proceeds are
required to be utilized to prepay the US Airways


                                       37



Loan pursuant to the US Airways Loan Agreement. Any prepayment of the Loan under
this subsection shall be made on the Business Day following the receipt by such
Obligor of the proceeds of the applicable Future Issuance.

          (c) Other Future Issuances. Subject to subsection (i) below, upon
receipt by an Obligor of any Cash Proceeds from any Future Issuances other than
a Future Issuance described in (or excluded from prepayment pursuant to)
subsections (a) and (b) above, the Borrower shall prepay the Loan in the manner
provided below in an amount equal to the product of (x) the Loan Prepayment
Percentage and (y) 100% of the Net Issue Proceeds of such transaction; provided
that:

          (i) with respect to Future Issuances of Capital Stock or warrants,
     options or other rights to acquire Capital Stock consummated after the
     Effective Date (excluding Indebtedness which is convertible into Capital
     Stock), the Borrower (A) shall not be obligated to prepay the Loan from the
     first $75,000,000 of Net Issue Proceeds therefrom, and (B) thereafter,
     shall be obligated to prepay the Loan in an amount equal to the product of
     (x) the Loan Prepayment Percentage and (y)(1) 25% on a dollar-for-dollar
     basis of Net Issue Proceeds from the next $75,000,000 of Net Issue Proceeds
     and (2) 50% on a dollar-for-dollar basis of Net Issue Proceeds in excess of
     $150,000,000, with all calculations of Net Issue Proceeds for the purpose
     of this clause (i) being made on a cumulative basis from the Effective Date
     through the life of the Loan;

          (ii) with respect to Net Issue Proceeds from a Future Issuance of
     Indebtedness incurred to refinance any Aircraft Related Equipment that is
     not (and is not required to be pursuant to the terms of the Loan Documents)
     Collateral, the Borrower shall only be required to pay an amount equal to
     the product of (x) the Loan Prepayment Percentage and (y) an amount equal
     to fifty percent (50%) of the Net Issue Proceeds from such Future Issuance;
     provided that the Obligors shall not be required to prepay the Loan as
     provided in this clause (ii) if such Future Issuance is a refinancing of
     Aircraft Related Equipment acquired by the Obligors within the twenty-four
     (24) months preceding the date of such Future Issuance; and

          (iii) the Borrower shall not be obligated to so prepay the Loan (A) if
     and to the extent that the Future Issuance is (x) Permitted Refinancing
     Indebtedness or (y) Permitted Acquisition Financing, (B) if and to the
     extent that an Obligor applies the proceeds of a Future Issuance of
     Indebtedness to make pre-delivery payments, deposits or progress payments
     (or other similar payments) with respect to the acquisition of Aircraft
     Related Equipment (or reimburses itself or any other Obligor for any such
     payment or deposit) (including After-Acquired Section 1110 Equipment), an
     Obligor applies such proceeds to purchase (or reimburse itself or any other
     Obligor for the purchase of) Aircraft Related Equipment (including
     After-Acquired Section 1110 Equipment), or an Obligor otherwise sets aside
     such proceeds (through an escrow account or otherwise) for a period not to
     exceed twelve (12) months for the express purpose of making any of the
     payments described above in this subclause (iii)(B) and the Obligor makes
     such payment within such period, or (C) with the Net Issue Proceeds of (x)
     the Juniper Financing or (y) the Airbus Financing, it being understood
     that, subject to subsection (c)(ii) above, the Loan Prepayment Percentage
     of all Net Issue Proceeds in excess of amounts otherwise applied in
     accordance with clause (iii)(A) or (iii)(B) above, as applicable, shall be
     applied to prepay the Loan.

Any prepayment of the Loan under this subsection (c) shall be made on the
Business Day following the receipt by such Obligor of the proceeds of the
applicable Future Issuance.


                                       38



          (d) Asset Sales. Subject to subsection (i) below, upon receipt by an
Obligor of any Cash Proceeds from an Asset Sale permitted under Section 6.13,
the Borrower shall prepay the Loan as follows:

          (i) with respect to Net Cash Proceeds from an Asset Sale in a
     sale-leaseback transaction of (A) Aircraft Related Equipment that is not
     (and is not required to be pursuant to the terms of the Loan Documents)
     Collateral or (B) After-Acquired Section 1110 Equipment which has been
     pledged as Collateral but is subject to release pursuant to Section 5.8(b),
     the Borrower shall prepay the Loan in an amount equal to the product of (x)
     the Loan Prepayment Percentage and (y) an amount equal to fifty percent
     (50%) of the Net Cash Proceeds of such sale-leaseback; provided that the
     Obligors shall not be required to prepay the Loan with the Net Cash
     Proceeds from any such sale-leaseback transaction entered into within
     twenty-four (24) months of the acquisition of such Aircraft Related
     Equipment or After-Acquired Section 1110 Equipment (as applicable);

          (ii) with respect to all other Asset Sales, the Borrower shall prepay
     the Loan in an aggregate amount equal to one hundred percent (100%) of the
     Net Cash Proceeds from such Asset Sales; provided, however, that the
     Borrower shall not be obligated to so prepay the Loan (A) if and to the
     extent that the Borrower furnishes to the Agent and the Board on or prior
     to the date such prepayment is otherwise required to be made an Officer's
     Certificate certifying that it or another Obligor intends to replace the
     assets from which such Net Cash Proceeds derived, and does so (or enters
     into a definitive agreement committing to do so) within one (1) year of
     receipt thereof (it being understood that any Net Cash Proceeds retained by
     the Borrower but not actually expended within such year or pursuant to such
     agreement to replace the assets from which such Net Cash Proceeds derived
     shall be used to prepay the Loan on the expiration of such year), (B) with
     Net Cash Proceeds from Asset Sales to the extent such Net Cash Proceeds do
     not exceed $1,000,000 in the aggregate per Fiscal Year, or (C) from the
     sale or disposition of Investments permitted to be made pursuant to Section
     6.2 hereof, other than the Investments permitted under clauses (viii), (x)
     and (xii) of Section 6.2, (D) with Net Cash Proceeds from Designated Asset
     Sales, or (E) if and to the extent that such Cash Proceeds are required to
     be utilized to prepay the US Airways Loan pursuant to the US Airways Loan
     Agreement.

Any prepayment of the Loan under this subsection (d) shall be made no later than
three (3) Business Days following the receipt by such Obligor of the proceeds of
such Asset Sale.

          (e) Insurance/Condemnation Proceeds. Subject to subsection (i) below,
no later than three (3) Business Days following (x) the date of receipt by an
Obligor of any Net Insurance Proceeds or Net Condemnation Proceeds, or (y) if
applicable, the end of the one (1) year period described in the proviso below or
in the case of the Collateral, such other time as provided in the applicable
Collateral Document (as contemplated in the proviso below), the Borrower shall
prepay the Loan in an amount equal to the amount by which the aggregate amount
of the sum of such Net Insurance Proceeds and Net Condemnation Proceeds in any
Fiscal Year (excluding any amounts used to repair, restore or replace assets in
accordance with the immediately following proviso or any Collateral Document)
exceeds $5,000,000; provided the Borrower shall not be obligated to so prepay
the Loan if and to the extent that (i) the Borrower furnishes to the Board and
the Agent on or prior to the date such prepayment is otherwise required to be
made an Officer's Certificate certifying that it or another Obligor intends to
repair, restore or replace the assets from which such Net Insurance Proceeds or
Net Condemnation Proceeds derived, and does so (or enters into a definitive
agreement committing to do so) within one (1) year of receipt thereof, (ii) in
the case of proceeds derived from Collateral, the Obligor uses such proceeds to
repair, replace or restore such Collateral in accordance with the applicable
provisions of the applicable Collateral Document, including any time frames
contemplated thereby (it being understood that any Net Insurance


                                       39



Proceeds or Net Condemnation Proceeds retained by an Obligor but not actually
expended within such year or such other time as provided in an applicable
Collateral Document or pursuant to such agreement to repair, restore or replace
the assets from which such Net Insurance Proceeds or Net Condemnation Proceeds
derived shall be used to prepay the Loan on the expiration of such year or such
other time as provided in an applicable Collateral Document), or (iii) such Cash
Proceeds are required to be utilized to prepay the US Airways Loan pursuant to
the US Airways Loan Agreement.

          (f) Change of Control. Upon the occurrence of a Change of Control, the
Borrower shall promptly give the Agent, the Lenders, the Board, each
Counter-Guarantor and the Loan Administrator written notice thereof, and the
Controlling Creditor shall have the right, by written notice to the Borrower
(with a copy to the Agent and each Lender) given not more than thirty (30) days
following its or their receipt of the notice of the Change of Control, to
require the Borrower to prepay the Loan in full, together with accrued interest
thereon to the date of such prepayment, on the date specified in such notice
(which date shall be a Business Day not less than ten (10) nor more than twenty
(20) Business Days after the date of such notice), and upon the specified
payment date, the Borrower shall so prepay the then outstanding principal amount
of the Loan together with such accrued interest thereon.

          (g) Gate Leases. In the event that the Obligors shall not have pledged
to the Collateral Agent the Gate Leases at both LGA and DCA (with the consent of
the lessors thereof) by January 1 of any year, the Borrower shall prepay the
Loan on such date in the amount of $10,000,000; provided that the Borrower shall
not be obligated to so prepay the Loan if and to the extent that US Airways is
required to prepay the US Airways Loan on such date pursuant to Section 2.8(g)
of the US Airways Loan Agreement.

          (h) Collateral Value Deficiency. Upon the occurrence and during the
continuance of a Collateral Value Deficiency under Section 5.8(d), the Borrower
shall prepay the Loan if and to the extent required thereunder; provided,
however, that the Borrower shall not be obligated to so prepay the Loan if and
to the extent that the Borrower or another Obligor is required to prepay the US
Airways Loan pursuant to Section 5.8(d) of the US Airways Loan Agreement to cure
a Collateral Value Deficiency thereunder (and as defined therein).

          (i) Option of Lenders to Decline Mandatory Prepayments. At least five
(5) Business Days prior to any date (for purposes of this subsection, a
"Mandatory Prepayment Date") on which any mandatory prepayment of the Loan
would, but for the provisions of this subsection (i), otherwise be required to
be made pursuant to subsections (a), (c), (d) or (e) of this Section 2.5, the
Borrower shall deliver a loan prepayment notice to the Agent and the Board
setting forth the amount of such mandatory prepayment (or a good faith estimate
thereof if such amount is not then known), and the date upon which the Borrower
expects to make such prepayment; provided, that the Borrower's obligation to
make such prepayment shall, in the case of a prepayment under subsections (a),
(c) or (d) of this Section 2.5, be subject to the consummation of the
transaction giving rise to such prepayment and the Borrower's timely receipt of
the Net Issue Proceeds or Net Cash Proceeds (as the case may be) therefrom. Upon
receipt of such notice, the Agent shall (i) promptly notify each Lender, the
Board and each Counter-Guarantor of the contents thereof and of the prepayment
that each Lender will be entitled to receive if it accepts prepayment of its
portion of the Loan in accordance with this subsection, (ii) request that each
such Lender notify the Agent in writing, no later than the third (3rd) Business
Day prior to the Mandatory Prepayment Date, whether such Lender will elect to
accept or not accept its pro rata share of such prepayment and (iii) inform such
Lender that the failure by such Lender to give such notice shall be deemed an
acceptance of such prepayment. No later than two (2) Business Day prior to the
Mandatory Prepayment Date, the Agent shall notify the Borrower of the Lenders'
elections and the aggregate amount of the prepayment required to be made as a
result thereof. The Borrower shall thereafter prepay the Loan on such Mandatory
Prepayment Date in the amount of such prepayment (after giving effect to the


                                       40



Lenders' elections), which the Agent shall apply as a prepayment of such
portions of the Loan held by each of the Lenders that shall have accepted (or
been deemed to have accepted) such prepayment. The foregoing notwithstanding, if
and to the extent that Tranche A, Tranche B-1, Tranche B-2 or Tranche B-3 is
then guaranteed under the Board Guaranty or a Counter-Guarantee (as applicable),
none of the Tranche A Lender, Tranche B-1 Lender, Tranche B-2 Lender or Tranche
B-3 Lender shall elect to decline its pro rata amount of any such prepayment of
the Loan without the consent of the Board (in the case of such portion of
Tranche A then guaranteed under the Board Guaranty) or the applicable
Counter-Guarantor (in the case of such portion of Tranche B-1, Tranche B-2 or
Tranche B-3 then guaranteed under such Counter-Guarantor's Counter-Guarantee).

          (j) Application of Prepayments. Any partial prepayments of the Loan
made by the Borrower in accordance with this Section 2.5 shall be applied to the
outstanding principal balance of the Loan ratably as to each Lender and, with
respect to each Lender, pro rata across the remaining scheduled principal
payments on the Loan owing to each such Lender (and not in the inverse order of
maturity). Subject to the Borrower's right to elect the Prepayment Breakage
Avoidance Procedure, the Borrower shall also pay any amounts owing pursuant to
Section 2.9(e) in connection with any prepayment under this Section 2.5. All
prepayments under this Section 2.5 shall be paid to the Agent for application as
provided in Section 2.8.

          SECTION 2.6. INTEREST.

          (a) Rate of Interest. Except as otherwise provided in Section 2.6(c)
and Section 2.9, the Loan shall bear interest on the unpaid principal amount
thereof from the first day of the initial Interest Period hereunder until paid
in full at the Applicable Interest Rate; provided, that interest on Tranche A
and Tranche B of the Loan from the first day of the initial Interest Period
hereunder until the Effective Date shall accrue at the Applicable Interest Rate
(including the default rates, as applicable), provided for in the Original Loan
Agreement.

          (b) Interest Payments. Interest accrued on the Loan shall be payable
in arrears on each Interest Payment Date, upon the payment or prepayment thereof
in whole or in part, and, if not previously paid in full, at maturity (whether
by acceleration or otherwise). Interest on the Loan shall be calculated on the
basis of a year of 360 days and actual number of days elapsed.

          (c) Default Interest. Notwithstanding the rate of interest specified
in Section 2.6(a), if any principal of or interest on the Loan is not paid when
due, whether at stated maturity, upon acceleration, by mandatory prepayment or
otherwise (but other than any voluntary prepayment), such overdue amount shall
bear interest at a rate which is two percent (2.0%) per annum in excess of the
then applicable interest rate(s) on the Loan (or portions thereof).

          (d) Assignment of Loan During an Interest Period. If some or all of
the Loan is assigned in compliance with Section 9.2 on a date which is not the
first day of an Interest Period and the Applicable Interest Rate on the portion
so assigned will be adjusted as a result thereof (as provided in the definition
of "Applicable Interest Rate"), then interest on the portion of the Loan so
assigned shall accrue at the adjusted Applicable Interest Rate from and
including the effective date of such assignment until paid in full.

          SECTION 2.7. FEES.

          (a) Agency Fees. The Borrower agrees to pay to the Agent on the
Interest Payment Date falling on or about December 31 of each year (beginning
with the Interest Payment Date falling on


                                       41



or about December 31, 2005) an agency fee in an amount equal to $25,000 per
annum for so long as the Loan shall remain outstanding.

          (b) Loan Administrator Fee. The Borrower agrees to pay the Loan
Administrator the fees provided for in the Loan Administration Agreement.

          (c) Guarantee Fees. The Borrower agrees to pay to the Agent for the
account of the Board quarterly in advance on each Interest Payment Date for so
long as the Board Guaranty shall remain in effect the Guarantee Fee set forth in
Section 2.06 of the Board Guaranty.

          (d) Counter-Guarantee Fees. The Borrower agrees to pay to the Agent
for the account of each Counter-Guarantor quarterly in advance on each Interest
Payment Date (beginning with the Interest Payment Date falling on or about
December 31, 2005) the Counter-Guarantee Fees for so long as, and to the extent
that, such Counter-Guarantor's Counter-Guarantee shall remain in effect;
provided, that the Counter-Guarantee Fees payable on the Interest Payment Date
falling on or about December 31, 2005 shall be reduced by a pro rata portion of
the Counter-Guarantee Fees which the Borrower paid on or about January 18, 2005
which relates to the period between the Interest Payment Date falling on or
about December 31, 2005 and the anniversary of the Closing Date.

          (e) Supplemental Facility Fees. The Borrower agrees to pay to the
Agent for the account of the Initial Lender quarterly in advance on each
Interest Payment Date (beginning with the Interest Payment Date falling on or
about December 31, 2005) the Supplemental Facility Fees for so long as, and to
the extent that, the Initial Lender shall be a Lender hereunder; provided, that
the Supplemental Facility Fees payable on the Interest Payment Date falling on
or about December 31, 2005 shall be reduced by a pro rata portion of the
Supplemental Facility Fees which the Borrower paid on or about January 18, 2005
which relates to the period between the Interest Payment Date falling on or
about December 31, 2005 and the anniversary of the Closing Date.

          (f) Collateral Agent Fee. The Borrower agrees to pay to the Agent for
the account of the Collateral Agent, (i) a setup fee on the Effective Date in
the amount of $7,500, and (ii) on the Effective Date and annually thereafter on
each Interest Payment Date occurring on or about September 30th of each year
(beginning September 30, 2006), a collateral agency fee in an amount equal to
$42,500 per annum for so long as the Loan shall remain outstanding.

          (g) Lazard Fee. The Borrower agrees to pay to Lazard Freres & Co. on
the Effective Date a fee in the amount of $1,000,000 for advisory services
provided to the Board in connection with the Merger and the restructuring of the
Loan.

          (h) Liquidity Fee. The Borrower agrees that if (i) at any time after
the Closing Date the Regulations are amended, modified or supplemented such that
the Board's consent shall be necessary in order for a Lender to sell a
participation in the Loan to any Person the sale of a participation to which
would not require the Board's consent if the Regulations were then as in effect
on the Closing Date and (ii) the Initial Lender seeks the Board's consent to
sell such a participation and such consent is not granted, then the Initial
Lender shall so notify the Borrower and the Agent and the Borrower shall
thereafter pay to the Agent for the account of the Initial Lender a liquidity
fee equal to 0.10% per annum of the principal amount of Tranche A of the Loan
then guaranteed under the Board Guaranty, such liquidity fee to accrue from the
date of such notice from the Initial Lender and to be payable on each Interest
Payment Date.

          (i) Distribution of Fees. On the Effective Date and upon the Agent's
receipt thereof, the Agent shall distribute to the Person entitled thereto each
of the fees referred to in this Section 2.7


                                       42



payable on such date. Thereafter, the Agent will distribute any and all fees
payable under this Section 2.7 in accordance with Section 2.8(d) or (e) hereof,
as applicable.

          (j) Fees Non-refundable. All fees paid under this Section 2.7 shall be
non-refundable.

          (k) Interest on Fees. If any fee or other amount payable by the
Borrower hereunder is not paid when due, such overdue amount shall bear interest
at a rate which is two percent (2.0%) per annum in excess of the Applicable
Interest Rate as in effect from time to time.

          SECTION 2.8. PAYMENTS AND COMPUTATIONS.

          (a) Payments. The Borrower shall make each payment hereunder
(including fees and expenses) not later than 12:00 noon (New York City time) on
the day when due, in Dollars, to the Agent at Citibank, N.A., ABA #021000089,
Account No. 3041-9849, Account Name: Project Finance, Ref: America West
Airlines, in immediately available funds without set-off, defense, recoupment or
counterclaim. All payments in respect of any Obligations shall at all times be
made to the Agent, whether or not a demand shall have been made or paid under
the Board Guaranty. The Agent will promptly cause all such payments received by
it to be distributed to the Person entitled thereto in accordance with the
priorities of payment set forth below in Section 2.8(d) or (e), or both, as
applicable. Payments received by the Agent after 12:00 noon (New York City time)
shall be deemed to be received on the next Business Day.

          (b) Computation. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

          (c) Payments on Business Days. Whenever any payment hereunder shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be.

          (d) Application of Payments - No Event of Default. So long as no Event
of Default under any of clauses (a) (including any failure to pay all amounts
hereunder upon acceleration as a result of any other Event of Default), (f) or
(g) of Section 7.1 has occurred and is continuing or would result therefrom, the
Agent shall apply all payments in respect of any Obligations (except with
respect to payments made pursuant to Section 2.4(d) and (e)) in the following
order:

          (i) first, to pay any fees then due and payable under Section 2.7(a),
     (b) and (f) to the Agent, the Collateral Agent and the Loan Administrator,
     as the case may be, on a pro rata basis;

          (ii) second, to pay interest then due and payable in respect of the
     Loan to the Lenders on a pro rata basis, provided that, so long as the
     Board Guaranty is in effect, to the extent that any amounts received by the
     Agent constitute interest accrued on any overdue principal of or interest
     on Tranche A in accordance with Section 2.6(c), such amounts shall be
     distributed to the Board under this clause (ii) as if it were a Lender (it
     being understood that following the Board's honoring of a demand for
     payment in accordance with the Board Guaranty and until the Board is
     reimbursed for the amount of all payments thereunder, all amounts paid in
     respect of Tranche A shall be distributed to the Board and amounts paid in
     respect of Tranche B shall be distributed to the Tranche B Lenders, all on
     a pro rata basis);


                                       43



          (iii) third, to pay principal then due and payable on the Loan to the
     Lenders, on a pro rata basis (it being understood that following the
     Board's honoring of a demand for payment in accordance with the Board
     Guaranty and until the Board is reimbursed for the amount of all payments
     thereunder, the amounts paid in respect of Tranche A shall be distributed
     to the Board and amounts paid in respect of Tranche B shall be distributed
     to the Tranche B Lenders, in each case on a pro rata basis);

          (iv) fourth, to pay any fees then due and payable under Section
     2.7(c), (d), (e) and (h) to the Board, the Counter-Guarantors and the
     Initial Lender, as the case may be, on a pro rata basis; and

          (v) fifth, to pay any other Obligations then due and payable to the
     Agent, the Collateral Agent, the Loan Administrator, the Board, the
     Counter-Guarantors and the Lenders, on a pro rata basis.

          (e) Application of Payments After Event of Default. After the
occurrence and during the continuance of an Event of Default under any of
clauses (a) (including any failure to pay all amounts hereunder upon
acceleration as a result of any other Event of Default), (f) or (g) of Section
7.1, the Agent shall apply all payments in respect of any Obligations (including
amounts received by the Collateral Agent upon the exercise of remedies under the
Collateral Documents) in the following order:

          (i) first, to pay Obligations in respect of any expenses, fees,
     indemnities or other sums owing hereunder then due to the Agent, the
     Collateral Agent and the Loan Administrator, on a pro rata basis;

          (ii) second, to pay Obligations in respect of any expenses, fees,
     indemnities or other sums owing hereunder not referred to in clauses (iii)
     through (v) below then due to the Board, the Lenders and the
     Counter-Guarantors, on a pro rata basis;

          (iii) third, to pay on a pro rata basis (A) interest then due and
     payable in respect of the Loan to the Lenders, provided that so long as the
     Board Guaranty is in effect, to the extent that any amounts received by the
     Agent constitute interest accrued on any overdue principal or interest on
     Tranche A in accordance with Section 2.6(c), such amounts shall be
     distributed to the Board under this clause (iii) as if it were a Lender and
     (B) in the event that any fees payable to the Board, the Counter-Guarantors
     and the Initial Lender, under Section 2.7(c), (d), (e) and (h) were not
     paid when due thereunder, the portion of such unpaid fees which is equal to
     the amount which such Person would have been then entitled to receive if
     the fee payable under Section 2.7(c), (d), (e) and (h) (as applicable) were
     payable daily in arrears (instead of quarterly or annually in advance, as
     the case may be) (including interest accrued thereon through the date of
     payment in accordance with Section 2.7(k), on a pro rata basis (it being
     understood that following the Board's honoring of a demand for payment in
     accordance with the Board Guaranty and until the Board is reimbursed for
     the amount of all payments thereunder, all amounts paid in respect of
     Tranche A shall be distributed to the Board and amounts paid in respect of
     Tranche B shall be distributed to the Tranche B Lenders, all on a pro rata
     basis);

          (iv) fourth, to pay or prepay principal payments on the Loan to the
     Lenders, on a pro rata basis (it being understood that following the
     Board's honoring of a demand for payment in accordance with the Board
     Guaranty and until the Board is reimbursed for the amount of all payments
     thereunder, amounts paid in respect of Tranche A shall be distributed to
     the Board and amounts paid in respect of Tranche B shall be distributed to
     the Tranche B Lenders, in each case on a pro rata basis); and


                                       44



          (v) fifth, to pay any fees due and payable under Section 2.7(c), (d),
     (e) and (h) hereof to the Board, the Counter-Guarantors and the Initial
     Lender, as the case may be, on a pro rata basis (including interest accrued
     thereon through the date of payment in accordance with Section 2.7(k) and
     not otherwise paid pursuant to clause (iii) above.

          (f) Assignment to Board of Lender's Interest in Loan. Upon the
assignment to the Board of any Tranche A Lender's right, title and interest in
and to its pro rata portion of the principal of and interest on Tranche A in
accordance with the Board Guaranty, the Board shall have the rights and
privileges of a Tranche A Lender with respect to such payment (to the extent of
the interests in Tranche A so assigned to the Board). No payment by the Board or
any Counter-Guarantor to the Agent or any Lender under the Board Guaranty or any
Counter-Guarantee, as the case may be, shall reduce, discharge, satisfy, modify
or terminate the corresponding payment or any other obligation of the Borrower
under this Agreement or the Notes, which obligations shall remain in full force
and effect.

          (g) Funding Defaults. Unless the Borrower has notified the Agent,
prior to the date any payment is required to be made by it to the Agent
hereunder, that the Borrower will not make such payment, the Agent may assume
that the Borrower has timely made such payment and may (but shall not be so
required to), in reliance thereon, make available a corresponding amount to the
Person entitled thereto. If and to the extent that such payment was not in fact
made to the Agent in immediately available funds, then each Lender (or the
Board, if applicable) shall forthwith on demand repay to the Agent the portion
of such assumed payment that was made available to such Lender (or the Board, if
applicable) in immediately available funds, together with interest thereon in
respect of each day from and including the date such amount was made available
by the Agent to such Lender (or the Board, if applicable) to the date such
amount is repaid to the Agent in immediately available funds, at the applicable
Federal Funds Rate (as defined in the definition of "Base Rate Loan") from time
to time in effect. A notice of the Agent to the Borrower with respect to any
amount owing under this subsection (g) shall be conclusive, absent manifest
error.

          SECTION 2.9. CERTAIN PROVISIONS GOVERNING THE LOAN.

          (a) Determination of Interest Rate. LIBOR for each Interest Period for
the Loan shall be determined by the Agent pursuant to the procedures set forth
in the definition of "LIBOR", and shall promptly thereafter be notified to the
Borrower and each Lender together with the Applicable Interest Rate for such
Interest Period.

          (b) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that: (i) the Agent determines that adequate and fair means do not exist for
ascertaining the applicable interest rates by reference to which the LIBOR then
being determined is to be fixed or (ii) the Requisite Lenders notify the Agent
that the LIBOR for any Interest Period will not adequately reflect the cost to
the relevant Lenders of making or maintaining the Loan for such Interest Period,
the Agent shall forthwith so notify the Borrower, the Board, the Loan
Administrator and the Lenders, whereupon during the thirty (30) days following
the date of any such notice the Borrower, the Agent and the Lenders shall
negotiate in good faith (subject to the consent of the Board) in order to arrive
at a mutually acceptable alternative basis for determining the interest rate
from time to time applicable to the Loan (the "Substitute Basis"). If within the
twenty (20) days following the date of any such notice the Borrower, the Agent
and the Lenders shall agree upon, and the Board shall consent to, a Substitute
Basis, such Substitute Basis shall be retroactive to and effective from the
first day of the then current Interest Period until and including the last day
of such Interest Period. If after twenty (20) days from the date of such notice,
the Borrower, the Agent and the Lenders shall have failed to agree upon, or the
Board shall have failed to consent to, a Substitute Basis, then the Agent (upon
instructions from the Requisite Lenders) shall certify in writing to the
Borrower (such certification to be conclusive and binding on all Lenders and all
other parties hereto absent manifest


                                       45



error) the interest rate at which such Lenders are prepared to maintain their
portion of the Loan for such Interest Period, it being understood that such
Lenders' interest rate shall be at a rate per annum equal to a rate which
adequately and fairly reflects the cost to such Lenders of obtaining the funds
necessary to maintain their portion of the Loan for such Interest Period. If no
Substitute Basis is established, upon receipt of notice of the interest rates at
which the Requisite Lenders are prepared to maintain their respective portion of
the Loan, the Borrower shall have the right exercisable upon ten (10) Business
Days' prior notice to the Lenders, the Board and the Loan Administrator through
the Agent (i) to continue to borrow the Loan at the interest rate so advised by
the Agent (as such rate may be modified, from time to time, at the outset of
each subsequent Interest Period), (ii) to convert the Loan to a Base Rate Loan,
or (iii) to prepay in full the Loan together with accrued but unpaid interest
thereon at the interest rate certified in writing by the Requisite Lenders as
provided above and all other amounts due under the Loan Documents, whereupon the
Loan shall become due and payable on the date specified by the Borrower in such
notice.

          (c) Increased Costs. If at any time any Lender or Counter-Guarantor
shall determine that as a result of the introduction of or any change after the
date hereof in or in the interpretation of any law, treaty or governmental rule,
regulation or order or the compliance by such Lender or Counter-Guarantor with
any guideline, request or directive after the date hereof from any central bank
or other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender or Counter-Guarantor of
agreeing to make or making, funding, guaranteeing or maintaining any portion of
the Loan or its Counter-Guarantee (except in respect of Taxes), then the
Borrower shall from time to time, within five (5) Business Days of a demand
(which demand shall be accompanied by a statement setting forth the basis for
such demand and a calculation of the amount thereof in reasonable detail) by
such Lender or Counter-Guarantor (with a copy of such demand to the Agent, the
Board and the Loan Administrator), pay to the Agent for the account of such
Lender or Counter-Guarantor additional amounts sufficient to compensate such
Lender or Counter-Guarantor for such increased cost; provided that no Lender or
Counter-Guarantor shall be entitled to claim any such additional amount for
amounts incurred more than six (6) months prior to the making of such demand. A
certificate as to the amount of such increased cost, submitted to the Borrower
(and the Agent and the Board) by such Lender or Counter-Guarantor shall be
conclusive and binding for all purposes, absent manifest error. Each Lender or
Counter-Guarantor shall promptly notify in writing the Borrower, the Agent and
the Board of any event of which such Lender or Counter-Guarantor has knowledge,
occurring after the date hereof, which would entitle such Lender or
Counter-Guarantor to compensation pursuant to this Section 2.9(c) and will
designate a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender or Counter-Guarantor, be otherwise materially disadvantageous to it.

          (d) Illegality. Notwithstanding any other provision of this Agreement,
if any Lender determines that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for such Lender
to maintain its portion of the Loan, then, on notice thereof by such Lender to
the Borrower through the Agent (with a copy to the Board and the Loan
Administrator), the obligation of such Lender to continue to fund or maintain
its portion of the Loan shall be terminated and the Borrower shall either (i)
convert the affected portion of the Loan of such Lender to a Base Rate Loan,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain its portion of the Loan based on LIBOR to such
day, or immediately, if such Lender may not lawfully continue to maintain such
portion of the Loan based on LIBOR or (ii) prepay such affected portion of the
Loan to such Lender together with accrued but unpaid interest thereon and all
other sums payable hereunder with respect thereto on the last day of the then
current Interest Period or earlier if necessary to avoid such illegality. Any
such partial prepayment


                                       46



of the Loan shall be applied ratably to the then unpaid installments thereof in
accordance with the amount of each such unpaid installment.

          (e) Breakage Costs. In addition to all amounts required to be paid by
the Borrower pursuant to Section 2.5, the Borrower shall compensate each Lender
or each Counter-Guarantor upon demand, for all losses, expenses and liabilities
(including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender or
Counter-Guarantor or the termination of any other financial arrangement it may
have entered into to fund or maintain or support such Lender's portion of the
Loan or its Counter-Guarantee, but excluding Taxes) which that Lender or
Counter-Guarantor may sustain (i) subject to the Borrower's right to utilize the
Prepayment Breakage Avoidance Procedure, if for any reason any portion of the
Loan is prepaid (including mandatorily pursuant to Section 2.5 or this Section
2.9) or a payment is made with respect to a Counter-Guarantee on a date which is
not the last day of the applicable Interest Period or (ii) as a consequence of
any failure by a Borrower to repay any portion of the Loan or make payment with
respect to a Counter-Guarantee when required by the terms hereof. The Lender or
Counter-Guarantor making demand for such compensation shall deliver to the
Borrower (with a copy to the Agent, the Board and the Loan Administrator)
concurrently with such demand a written statement as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender or Counter-Guarantor absent manifest error, and
such compensation shall be paid to the Agent for the account of such Lender.

          SECTION 2.10. CAPITAL ADEQUACY. If at any time any Lender or
Counter-Guarantor determines that (a) the adoption of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement regarding capital adequacy, (b) compliance with
any such law, treaty, rule, regulation, or order or (c) compliance with any
guideline or request or directive from any central bank or other Governmental
Authority or any accounting board or authority (whether or not a Governmental
Authority) which is responsible for the establishment or interpretation of
national or international accounting principles (in each case, whether or not
having the force of law) shall have the effect of reducing the rate of return on
such Lender's or Counter-Guarantor's (or any corporation controlling such
Lender's or Counter-Guarantor's) capital as a consequence of its obligations
hereunder (other than with respect to Taxes) to a level below that which such
Lender, Counter-Guarantor or corporation could have achieved but for such
adoption, change, compliance or interpretation, then, upon demand from time to
time by such Lender or Counter-Guarantor (with a copy of such demand to the
Agent and the Board), the Borrower shall within five (5) Business Days of such
demand pay to the Agent for the account of such Lender or Counter-Guarantor from
time to time as specified by such Lender or Counter-Guarantor additional amounts
sufficient to compensate such Lender or Counter-Guarantor for such reduction;
provided that the Borrower shall not be required to compensate a Lender or
Counter-Guarantor pursuant to this Section 2.10 for any amounts incurred more
than six (6) months prior to the date of such demand. A certificate as to such
amounts submitted to the Borrower (and the Agent and the Board) by such Lender
or Counter-Guarantor shall be conclusive and binding for all purposes absent
manifest error. Each Lender or Counter-Guarantor shall promptly notify the
Borrower, the Agent and the Board of any event of which such Lender or
Counter-Guarantor has knowledge, occurring after the date hereof, which would
entitle such Lender or Counter-Guarantor to compensation pursuant to this
Section 2.10 and, in the case of a Lender, will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. For the avoidance of doubt, any interpretation of
Accounting Research Bulletin No. 51 by FASB (including Interpretation No. 46 -
Consolidation of Variable Interest Entities) shall constitute an adoption,
change, request or directive, and any implementation thereof shall be, subject
to this Section 2.10.


                                       47



          SECTION 2.11. TAXES.

          (a) No Withholding, etc. Except as otherwise provided in the next
sentence and Section 9.2, any and all payments by the Obligors under each Loan
Document shall be made free and clear of and without deduction for any and all
Taxes, excluding (i) in the case of each Lender, the Loan Administrator, each
Counter-Guarantor, each Participant and the Agent, Taxes measured by its net
income and franchise Taxes, in each case if imposed on it as a result of such
Person being organized under the laws of the jurisdiction imposing such Taxes or
doing business in such jurisdiction unrelated to the transactions contemplated
by the Original Loan Agreement or any Loan Document, (ii) in the case of each
Lender and each Participant, Taxes measured by its net income and franchise
Taxes imposed on it by the jurisdiction in which its Lending Office is located
or in which it booked its participation for tax accounting purposes, (iii) in
the case of each Counter-Guarantor, net income and franchise taxes imposed by
the jurisdiction to which the Borrower is directed to make payments to the
Counter-Guarantor pursuant to the Loan Documents, (iv) in the case of each
Lender, the Loan Administrator, each Counter-Guarantor, each Participant and the
Agent, Taxes imposed on it as a result of its failure to comply with its
obligations under Section 2.11(g), Section 2.11(h) or Section 9.2, (v) in the
case of each Lender, the Loan Administrator, each Participant, each
Counter-Guarantor and the Agent (A) that is a party hereto or Participant, as
the case may be, on the Effective Date, United States federal withholding Taxes
except to the extent imposed as a result of a change in applicable law,
including income tax conventions, after the Effective Date and (B) that becomes
a party hereto or Participant, as the case may be, after the Effective Date,
United States federal withholding Taxes except to the extent imposed as a result
of a change in applicable law, including income tax conventions, after the date
of the Assignment and Acceptance pursuant to which it becomes a Lender or after
the date such Person becomes a Participant, the Loan Administrator or the Agent,
as applicable, and (vi) Taxes imposed as a result of such Person's gross
negligence or willful misconduct (all such non-excluded Taxes being hereinafter
referred to as "Indemnified Taxes"). If any Indemnified Taxes shall be required
by law to be deducted from or in respect of any sum payable under any Loan
Document to any Lender, the Loan Administrator, any Counter-Guarantor or the
Agent (1) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.11) such Lender, the Loan Administrator, such
Counter-Guarantor or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (2) the
Obligors shall make such deductions, and (3) the Obligors shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law.

          (b) Counter-Guarantee Taxes. If any Taxes (other than Taxes imposed as
a result of the failure of the Counter-Guarantor to comply with its obligations
under Section 2.11(g)) shall be required by law to be deducted from or in
respect of any sum payable under any Counter-Guarantee to any Counter-Guarantor
("Counter-Guarantee Taxes"), (i) the Agent shall make such deductions and shall
so notify the Borrower (such notice shall be accompanied by a statement setting
forth the basis for such deductions and a calculation of the amount thereof in
reasonable detail), (ii) the Agent shall pay the full amount deducted to the
relevant taxing authority or other authority in accordance with applicable law,
and (iii) the Borrower shall pay to such Counter-Guarantor such amounts as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.11) such
Counter-Guarantor receives an amount equal to the sum it would have received had
no such deductions been made. Further, if any Taxes are required by law to be
deducted from or in respect of any sum payable under any Counter-Guarantee by
any Counter-Guarantor to the Agent, any Lender or any Participant and such
Counter-Guarantor in accordance with the terms of its Counter-Guarantee pays
such amounts as may be necessary so that after making all required deductions
the Agent, such Lender or such Participant, as the case may be, receives an
amount equal to the sum it would have received had no such deduction been made,
the Borrower shall pay the amount thereof to the Agent for the account of


                                       48



such Counter-Guarantor (together with any additional amounts such that the
Counter-Guarantor receives, after deduction for all Taxes required to be
withheld, the amount so paid by the Counter-Guarantor).

          (c) Other Taxes. In addition, the Obligors agree to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction which arise from any payment made under any
Loan Document or Counter-Guarantee or from the execution, delivery or
registration of, or otherwise with respect to, any Loan Document or
Counter-Guarantee (collectively, "Other Taxes") to the Agent for the account of
the affected party.

          (d) Tax Indemnity. The Obligors will indemnify each Lender, the Agent,
each Counter-Guarantor and the Loan Administrator for the full amount of
Indemnified Taxes, Counter-Guarantee Taxes or Other Taxes (including any Taxes
imposed by any jurisdiction on amounts payable under this Section 2.11) paid by
such Lender, the Loan Administrator, each Counter-Guarantor or the Agent (as the
case may be) and any liability (including for penalties, interest and expenses)
arising therefrom or with respect thereto, other than any liability, including
for penalties, interest and expenses, arising from the gross negligence or
willful misconduct of the Lender, the Loan Administrator, each Counter-Guarantor
or the Agent, as the case may be. This indemnification shall be made to the
Agent for account of the relevant Lender, Counter-Guarantor, the Loan
Administrator or the Agent, as the case may be, within 30 days from the date
such Lender, the Loan Administrator, Counter-Guarantor or the Agent (as the case
may be) makes written demand therefor (with a copy to the Agent if made by a
Lender, Counter-Guarantor or the Loan Administrator and accompanied by a
statement setting forth the basis for such taxation and the calculation of the
amount thereof in reasonable detail).

          (e) Evidence of Payment. Within 30 days after the date of any payment
of Indemnified Taxes or Other Taxes, the Obligors will furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof or other
documentation reasonably satisfactory to the Agent.

          (f) Survival. Without prejudice to the survival of any other agreement
of the Obligors hereunder, the agreements and obligations of the parties
contained in this Section 2.11 shall survive the payment in full of the
Obligations.

          (g) Certain Withholding Tax Matters. Each Lender, each
Counter-Guarantor, each Participant, the Loan Administrator and the Agent that
is a Non-U.S. Person and that is entitled at such time to an exemption from
United States withholding tax, or that is subject to such tax at a reduced rate
under an applicable tax treaty, shall, on or prior to the Effective Date or on
or prior to the date of the Assignment and Acceptance pursuant to which it
becomes a Lender or on or prior to the date such Person becomes a
Counter-Guarantor, a Participant, the Loan Administrator or the Agent, as
applicable, and from time to time thereafter if requested by the Agent, a
Counter-Guarantor or the Obligors, provide the Agent and the Obligors, and, in
the case of each Lender, each Participant and the Agent, provide each
Counter-Guarantor, with two completed copies of either IRS Form W-8BEN or W-8ECI
or other applicable form, certificate or document prescribed by the IRS
certifying as to such Non-U.S. Person's entitlement to such exemption from
United States withholding tax or reduced rate with respect to all payments to be
made to such Non-U.S. Person under the Loan Documents. In addition, each Lender,
each Counter-Guarantor, each Participant, the Loan Administrator and the Agent
that is a Non-U.S. Person, as the case may be, shall deliver to the Obligors and
the Agent, and, in the case of each Lender, each Participant and the Agent,
deliver to each Counter-Guarantor, notice of any event (other than a change in
applicable law, including income tax conventions) requiring a change in the most
recent form previously delivered by such Person to the Obligors and the Agent or
the Counter-Guarantors, as the case may be. Each Lender, each Counter-Guarantor,
each Participant, the Loan Administrator and Agent (other than an entity treated
as a corporation for U.S. federal income tax purposes) that is a "United States
person" within the meaning


                                       49



of Section 7701(a)(30) of the Internal Revenue Code shall deliver two duly
signed and completed copies of IRS Form W-9 to the Agent and the Obligors, at
the times and in the manner described above with respect to IRS Forms W-8.
Unless the Agent and the Obligors have received forms or other documents
satisfactory to them indicating that payments under the Loan Documents or
Counter-Guarantee to or for a Non-U.S. Person are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Agent or the Obligors shall, notwithstanding the provisions of
Section 2.11(a), (b) and (d) and without impairing any obligation of the
Obligors under this Section 2.11 with respect to such tax, withhold such United
States withholding taxes from such payments at the appropriate rate; provided
that if such Person is a Lender, Counter-Guarantor, Participant, Agent or Loan
Administrator and shall have satisfied the requirement of this Section 2.11(g)
on the date it became a Lender, Counter-Guarantor, Participant, Agent or Loan
Administrator, nothing in this Section 2.11(g) shall relieve the Obligors of
their obligation to pay any amounts pursuant to this Section 2.11 in the event
that, as a result of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in governmental interpretation,
administration or application thereof, such Lender, Counter-Guarantor,
Participant, Agent or Loan Administrator is no longer properly entitled to
deliver forms, certificates or other evidence at a subsequent date establishing
that it is not subject to withholding or is subject to withholding at a reduced
rate. The obligation of the Obligors under this Section 2.11 shall survive the
repayment of all other Obligations hereunder and the resignation of the Agent.

          (h) Mitigation. Any Lender claiming any additional amounts payable
pursuant to this Section 2.11 shall use its reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which would
be payable or may thereafter accrue and would not, in the reasonable judgment of
such Lender, be otherwise materially disadvantageous to such Lender.

          (i) Participants. Each Participant will be entitled to the benefits
and subject to the requirements of this Section 2.11 to the same extent as if
such Person were a Lender.

                                  ARTICLE III

                      CONDITIONS PRECEDENT TO EFFECTIVENESS

          This Agreement shall become effective on the date hereof (the
"Effective Date") subject to the satisfaction (in the judgment of the Agent, the
Board, each Counter-Guarantor and the Initial Lender (except as otherwise
provided below in this Article III)) of all of the following conditions
precedent:

          (a) Certain Agreements and Documents. The Agent, the Collateral Agent,
the Initial Lender, each Counter-Guarantor and the Board shall have received on
or prior to the Effective Date each of the following (with only the Agent
receiving an original of the Notes), each dated as of the Effective Date, in
form and substance satisfactory to the Agent, the Collateral Agent, the Board,
the Initial Lender and each Counter-Guarantor:

          (i) this Agreement, duly executed and delivered by the parties hereto;

          (ii) the Notes, duly executed by the Borrower and conforming to the
     requirements set forth in Section 2.3(d);

          (iii) the Second Lien Guaranty, duly executed and delivered by the
     parties thereto;


                                       50



          (iv) the Board Guaranty, duly executed and delivered by the parties
     thereto;

          (v) the Counter-Guarantees, duly executed and delivered by the parties
     thereto;

          (vi) the Warrants, duly executed and delivered by Group;

          (vii) Collateral Documents specified in clauses (i) through (vii) of
     the definition thereof, duly executed and delivered by the parties thereto,
     together with (A) financing statements in form and substance reasonably
     acceptable to the Board, as may be required or advisable to grant, continue
     and maintain an enforceable security interest in the Collateral (subject to
     the terms hereof and of the other Loan Documents) in accordance with the
     UCC as enacted in all relevant jurisdictions; (B) such Collateral Documents
     (together with any other necessary documents, instruments, affidavits or
     certificates) as may be required in order to perfect and maintain the
     security interest in the Collateral, perfection of a security interest in
     which requires a filing for recordation with the FAA, in proper form for
     recordation with the FAA; (C) insurance certificates and brokers' reports
     evidencing the insurance coverages required under the Loan Documents,
     including with respect to the Collateral (in accordance with the
     requirements of the Collateral Documents) naming the Collateral Agent as
     loss payee and otherwise in form and substance reasonably acceptable to the
     Collateral Agent; (D) a Collateral Value Certificate, together with
     Appraisal Reports in respect of the Appraised Collateral in form and
     substance reasonably acceptable to the Board; (E) any other necessary
     documents, certificates, forms and filing fees as may be required in order
     to perfect and maintain the security interest in the Collateral in the
     records of the appropriate Governmental Authorities' offices of the various
     land records offices located in Pennsylvania; (F) Control Agreements with
     respect to the deposit accounts and securities accounts of the Obligors
     (except to the extent not required pursuant to Section 5.13 hereof); and
     (G) evidence that the original stock certificates representing the
     Obligors' interests in each of the entities listed on Schedule 3(a)(vii)
     (being all entities listed on Schedule 4.1(c) whose securities are
     certificated), together with undated stock powers executed in blank have
     been delivered to the Collateral Agent under the US Airways Loan Agreement;

          (viii) the Loan Administration Agreement, duly executed and delivered
     by the parties thereto;

          (ix) the favorable opinions of (A) Skadden, Arps, Slate, Meagher &
     Flom LLP and/or its affiliates, special counsel to the Obligors, (B) Arnold
     & Porter LLP, special counsel to the Obligors; (C) James E. Walsh III,
     Senior Vice President and General Counsel of the Borrower, (D) Janet
     Dhillon, Vice President - Deputy General Counsel of US Airways, (E) Kozloff
     Stoudt, special Pennsylvania real estate counsel to the Obligors, (F)
     Daugherty, Fowler, Peregrin & Haught, special FAA counsel; (G) O'Melveny &
     Myers LLP, special counsel to the Obligors; (H) Marguerite Owen, legal
     counsel to the Board (which need be addressed and delivered only to the
     Agent and Tranche A Lenders), and (I) Curtis, Mallet-Prevost, Colt & Mosle
     LLP, special New York counsel to the Board (which need be addressed and
     delivered only to the Agent and the Tranche A Lenders);

          (x) a copy of the certificate of incorporation of each Obligor,
     certified as of a recent date by the Secretary of State of the state of its
     incorporation or organization, together with a "long-form" certificate of
     such official attesting to the good standing of such Person;

          (xi) a certificate of each Obligor signed on behalf of such Person by
     its Secretary or an Assistant Secretary certifying (A) the names and true
     signatures of each officer of such Person who has been authorized to
     execute and deliver each Loan Document required to be executed and


                                       51



     delivered on or prior to the Effective Date by or on behalf of such Person
     hereunder or thereunder, (B) the by-laws of such Person as in effect on the
     date of such certification, (C) the resolutions of such Person's board of
     directors approving and authorizing the execution, delivery and performance
     of each Loan Document to which it is a party and (D) that there have been
     no changes in the certificate of incorporation of such Person from the
     certificate of incorporation delivered pursuant to the immediately
     preceding clause;

          (xii) an Officer's Certificate of the Borrower certifying (A) that all
     representations and warranties in Article IV hereof (other than the
     representation set forth in Section 4.3(b)(i) are true and correct in all
     material respects on and as of the Effective Date after giving effect to
     the Consummation of the Plan, as though made on and as of such date, (B)
     that no Default or Event of Default has occurred and is continuing and (C)
     as to the matters specified in subsection (r) of this Article III; and

          (xiii) an Officer's Certificate of the Borrower certifying that as of
     the Effective Date, the written information furnished to the Board by or on
     behalf of the Obligors for use in connection with negotiation and closing
     of the transaction contemplated by this Agreement is true and complete in
     all material respects; provided that with respect to pro forma and
     projected financial information and other forward-looking statements, the
     Borrower represents only that such information was prepared in good faith
     based upon assumptions believed to be reasonable at the time.

          (b) Other Agreements. The Agent, the Board, the Initial Lender and
each Counter-Guarantor shall have received on or before the Effective Date
evidence that the Obligors have consummated the transactions contemplated by the
following agreements (which agreements shall be in form and substance reasonably
satisfactory to the Board, the Initial Lender, each Counter-Guarantor and the
Agent): (i) the US Airways Loan Agreement and the other "Loan Documents" (under
and as defined therein) which are required to be executed and delivered by the
parties thereto on the effective date thereof, and (ii) the other agreements
listed on Schedule 3.1(b).

          (c) Fees and Expenses Paid. The Borrower shall have paid all fees due
and payable on the Effective Date (including, without limitation, the fees
referenced in Section 2.7), and all expenses of the Agent and its Affiliates,
the Initial Lender, the Board, each Counter-Guarantor, the Collateral Agent and
the Loan Administrator due and payable on or before the Effective Date.

          (d) Consents, Etc. The Obligors shall have received all consents and
authorizations required pursuant to any material Contractual Obligation with any
other Person in form and substance reasonably satisfactory to the Board and the
Initial Lender and shall have obtained all consents, waivers and authorizations
of, and effected all notices to and filings with, the New York Stock Exchange,
the SEC and any other Governmental Authority as may be necessary (i) in
connection with the effectiveness of the Plan of Reorganization and (ii) to
allow the Obligors lawfully to execute, deliver and perform, in all material
respects, their obligations under the Loan Documents to which they are, or shall
be, a party and each other agreement or instrument to be executed and delivered
by them, pursuant thereto or in connection therewith.

          (e) No Illegality. No law or regulation shall be applicable in the
judgment of the Agent or the Board that restrains, prevents or imposes
materially adverse conditions upon the transactions contemplated hereby.

          (f) Representations and Warranties of the Obligors. All
representations and warranties set forth in Article IV hereof shall be true and
correct in all material respects on and as of the


                                       52



Effective Date after giving effect to the Consummation of the Plan as though
made on and as of such date (except to the extent any such representation or
warranty by its terms is made as of a different specified date in which event
such representation or warranty shall be true and correct in all material
respects as of such specified date).

          (g) Representation and Warranties of Counter-Guarantors. All
representations and warranties of each Counter-Guarantor in its
Counter-Guarantee are true and correct on and as of the Effective Date.

          (h) No Event of Default. After giving effect to the Consummation of
the Plan, no Default or Event of Default shall have occurred and be continuing.

          (i) Corporate and Other Proceedings. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Agent, the Board, the Initial Lender
and each Counter-Guarantor.

          (j) Counter-Guarantees. Each Counter-Guarantee and any and all
Counter-Guarantor Letters of Credit and parent guarantees, to the extent
required thereby, shall be in full force and effect and no default in the
performance of any thereof shall have occurred and be continuing.

          (k) No Material Adverse Change. Since the August 9, 2005, no material
adverse change shall have occurred in the financial condition, assets,
liabilities, business or results of operations of the Obligors taken as a whole
(excluding any such changes resulting from (i) changes or conditions generally
affecting the U.S. economy or financial markets, (ii) changes or conditions
generally affecting any of the segments of the airline industry in which any of
the Obligors, operate to the extent such conditions or changes do not
disproportionately impact the Obligors, or (iii) the announcement or
consummation of the Merger) or in the Borrower's ability to repay the Loan or
perform its obligations under the Loan Documents.

          (l) Plan of Reorganization. (i) The Plan of Reorganization shall be
reasonably satisfactory to the Initial Lender, each Counter-Guarantor and the
Board, (ii) all conditions precedent to the occurrence of the effective date of
the Plan of Reorganization shall have been satisfied and the Plan of
Reorganization shall have become effective, subject only to consummation of the
transactions contemplated under the Loan Documents, and (iii) no Obligor shall
be in default with respect to any material obligation under the Plan of
Reorganization and the Consummation of the Plan shall have occurred, subject
only to consummation of the transactions under the Loan Documents.

          (m) Confirmation Order. (i) The Confirmation Order shall be in form
and substance reasonably satisfactory to the Initial Lender, each
Counter-Guarantor and the Board and shall not have been stayed by the Bankruptcy
Court (or by any court having jurisdiction to issue any such stay) or reversed,
vacated, amended, supplemented or modified, (ii) the time to appeal the
Confirmation Order shall have expired, (iii) no appeal or petition for review,
rehearing, or certiorari with respect to the Confirmation Order shall be
pending, and (iv) the Confirmation Order shall otherwise be in full force and
effect.

          (n) Projections. The Initial Lender, each Counter-Guarantor and the
Board shall have received satisfactory projections and pro forma financial
information for Group (on a consolidated basis) for the fiscal years 2005
through and including 2008, which projections shall be certified by the Chief
Executive Officer or the Chief Financial Officer of Group as being reasonable
estimates as of the


                                       53



Effective Date of future financial performance and based upon assumptions that
are reasonable in light of conditions and facts known to Group as of the
Effective Date.

          (o) Jurisdiction of Bankruptcy Court. The Initial Lender, each
Counter-Guarantor and the Board shall be satisfied that the Bankruptcy Court's
retention of jurisdiction under the Confirmation Order will not govern the
enforcement of the Loan Documents or any rights or remedies relating thereto,
except as may be otherwise consented to by them.

          (p) Certificates of Incorporation. The certificates of incorporation
or other applicable governing documents of the Obligors, as provided for in the
Plan or the Merger Agreement, shall be reasonably satisfactory to the Initial
Lender, each Counter-Guarantor and the Board, and shall have been filed with and
accepted by the Secretary of State or other appropriate Governmental Authority
in the applicable jurisdictions and shall have become effective.

          (q) Merger. The Effective Time (as defined in the Merger Agreement)
shall have occurred.

          (r) Unrestricted Cash and Cash Equivalents. After the Consummation of
the Plan, the Obligors shall have on a pro forma basis as of the Effective Date,
taking into account net cash proceeds of the Stock Offering, the Convertible
Note Offering, the Juniper Financing and the Airbus Financing expected to be
received within seven (7) days of the Effective Date, unrestricted cash and Cash
Equivalents (as determined in accordance with GAAP) of not less than
$1,250,000,000.

          (s) Equity Investment Agreements. The Obligors shall have consummated
the transactions contemplated by the Equity Investment Agreements and in
connection therewith shall have received Cash Proceeds of no less than
$565,000,000.

          (t) Warrants. The Warrants shall have been validly issued to the Board
and the Airbus Counter-Guarantor.

          (u) Other Documents and Information. The Agent, the Initial Lender,
each Counter-Guarantor and the Board shall have received such other
certificates, documents, agreements and information respecting the Obligors as
each of them may have reasonably requested.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

          To induce the other parties (excluding any other Obligors) to enter
into this Agreement and to induce the Counter-Guarantors to amend and restate
their respective Counter-Guarantees, each of the Obligors represents and
warrants to each other party hereto (excluding any other Obligors) and to each
Counter-Guarantor that, on and as of the Effective Date, after giving effect to
the Consummation of the Plan (references to "Obligors" contained in this Article
IV shall be limited to Obligors as of the Effective Date):

          SECTION 4.1. ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING,
BUSINESS, SUBSIDIARIES, THE ACT AND THE REGULATIONS.

          (a) Organization, Power and Authority. Each Obligor is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each Obligor has all requisite corporate power and
authority to own and operate its properties, to carry on its


                                       54



business as now conducted and as proposed to be conducted, to enter into the
Loan Documents to which it is a party and to carry out the transactions
contemplated hereby and thereby.

          (b) Foreign Qualification; "Air Carrier Status". Each Obligor is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing could not reasonably be expected to have a Material Adverse
Effect. The Borrower is an "air carrier" within the meaning of the Act and holds
a certificate under Section 41102 of Title 49. Each of the Borrower and any
other Obligor engaged in operations as an "air carrier" is a "citizen of the
United States" within the meaning of Section 40102(a)(15) of Title 49, as
interpreted by the United States Department of Transportation (a "United States
Citizen") and holds an air carrier operating certificate issued pursuant to
Chapter 447 of Title 49 for aircraft capable of carrying 10 or more individuals
or 6,000 pounds or more of cargo. Each Obligor possesses all necessary
certificates, franchises, licenses, permits, rights and concessions and consents
which are material to the conduct of its business and operations as currently
conducted (including in the case of each Obligor engaged in operations as an
"air carrier", the operation of the routes flown by it), a true and complete
list of which are set forth on Schedule 4.1(b).

          (c) Subsidiaries. All of the Subsidiaries of each Obligor and all
other Persons in which any Obligor owns any Capital Stock, in each case, as of
the Effective Date, are identified in Schedule 4.1(c). Schedule 4.1(c) correctly
sets forth as of the Effective Date the equity and voting interest of Group in
each of the Subsidiaries identified therein. There are no limitations on the
rights of Group to vote the Capital Stock it owns of any Person listed on
Schedule 4.1(c). Airways Assurance Limited, a Bermuda corporation, is a
wholly-owned Subsidiary of Group whose business is limited to securing insurance
for the Obligors. AWHQ LLC, an Arizona limited liability company, is a
wholly-owned Subsidiary of the Obligors, owned 99% by Holdings and 1% by the
Borrower, whose business is limited to acting as a real estate holding company.
America West Company Store LLC, an Arizona limited liability company, is a
wholly-owned Subsidiary of the Borrower whose business is limited to operation
of the America West company store.

          SECTION 4.2. AUTHORIZATION OF LOAN DOCUMENTS, ETC.

          (a) Authorization. Each Obligor has duly authorized by all necessary
corporate action the execution, delivery and performance of the Loan Documents
to which it is a party.

          (b) No Conflicts. After giving effect to the Consummation of the Plan,
the execution, delivery and performance by each Obligor of the Loan Documents
and the consummation of the transactions contemplated by the Loan Documents to
which it is a party do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to any Obligor, the certificate
or articles of incorporation or bylaws of any Obligor or any order, judgment or
decree of any court or other agency of government binding on any Obligor, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default or require any payment under (A) any Loan Document or
(B) any other Contractual Obligation of any Obligor, except that with respect to
clause (B), for any such conflict, breach, default or requirement of payment
which could not reasonably be expected to have a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of any Obligor (other than the Liens created under the
Collateral Documents) or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of any
Obligor, except for such approvals or consents (A) which will have been obtained
on or before the Effective Date and have been disclosed in writing to the Agent,
the Initial Lender, each Counter-Guarantor and the Board or (B) with respect to
any Contractual Obligation, which if not obtained, could not reasonably be
expected to have a Material Adverse Effect.


                                       55



          (c) No Consents, Approvals, etc. The execution, delivery and
performance by each Obligor of the Loan Documents to which it is a party and the
consummation of the transactions contemplated by the Loan Documents to which
such Obligor is a party do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other Governmental Authority or regulatory body or any other
Person which is required to be obtained or made on or prior to the Effective
Date and which has not been obtained or made, except as is disclosed on Schedule
4.2(c).

          (d) Execution, Delivery, Enforceability. Each Obligor has duly
executed and delivered each of the Loan Documents to which it is party and after
giving effect to the Consummation of the Plan, each such Loan Document is the
valid and binding obligation of such Obligor, enforceable against such Obligor
in accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws relating to or affecting the enforcement of creditors' rights generally,
including materiality, reasonableness, good faith and fair dealing, and by
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).

          SECTION 4.3. FINANCIAL CONDITION.

          (a) The Borrower has heretofore delivered to the Agent, the Board,
each Counter-Guarantor and the Loan Administrator (i) the audited consolidated
balance sheets of US Airways and Group as at December 31, 2004, and the related
consolidated statements of income, stockholders' equity and cash flows of US
Airways and Group for the Fiscal Year then ended, (ii) the unaudited
consolidated balance sheets of US Airways and Group as at June 30, 2005 and the
related unaudited consolidated statements of income, stockholders' equity and
cash flows of US Airways and Group for the six months then ended, and (iii)
audited consolidated balance sheets of AWA Holdings and the Borrower as at
December 31, 2004, and the related consolidated statements of income,
stockholders' equity and cash flows of AWA Holdings and the Borrower for the
Fiscal Year then ended, and (iv) the unaudited consolidated balance sheets of
AWA Holdings and the Borrower as at June 30, 2005 and the related unaudited
consolidated statements of income, stockholders' equity and cash flows of AWA
Holdings and the Borrower for the six months then ended. All such financial
statements were prepared in accordance with GAAP (except that any unaudited
financial statements are subject to normal year-end adjustments and may not be
accompanied by footnotes) and fairly present, in all material respects, the
consolidated financial position of such Persons as at the date thereof and the
consolidated results of operations and cash flows of such Person for the period
then ended.

          (b) After giving effect to the Consummation of the Plan, (i) the
Obligors taken as a whole are Solvent and (ii) no Obligor has any material
liability, including reasonably likely contingent liability or liability for
taxes, long-term lease or any unusual forward or long-term commitment of a type
required to be reflected in financial statements prepared in conformity with
GAAP, that is not reflected in the projections and pro forma financial
information delivered pursuant to clause (n) of Article III or, in the case of a
Reporting Obligor, taken into account in the preparation of the annual report on
Form 10-K for the fiscal year ended December 31, 2004 of such Reporting Obligor.

          (c) Each Reporting Obligor maintains disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the Obligors and has (i) caused such disclosure
controls and procedures to be designed to ensure that material information
relating to the Obligors is reported internally, (ii) caused such internal
controls over financial reporting to be designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP, (iii)
evaluated the effectiveness of such


                                       56



disclosure controls and procedures and presented as required in the Reporting
Obligors' Annual Report on Form 10-K for the Fiscal Year ended December 31,
2004, conclusions about the effectiveness of the disclosure controls and
procedures, and (iv) disclosed as required in such Annual Report any change in
such internal control over financial reporting that occurred during the relevant
reporting period that has materially affected, or is reasonably likely to
materially affect, their internal control over financial reporting.

          (d) Other than as disclosed on Schedule 4.3(d) or as disclosed in the
Annual Report on Form 10-K for the Fiscal Year ended December 31, 2004 of any
Obligor, no Obligor is a party to any "off-balance sheet arrangement" (within
the meaning of Item 303(a)(4) of Regulation S-K under the Securities Act and the
Exchange Act, as amended by SEC Release No. 33-8182 (January 28, 2003)).

          SECTION 4.4. NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS. Since
August 9, 2005, no material adverse change has occurred in the financial
condition, assets, liabilities, business or results of operations of the
Obligors, taken as a whole (excluding any such changes resulting from (i)
changes or conditions generally affecting the U.S. economy or financial markets,
(ii) changes or conditions generally affecting any of the segments of the
airline industry in which any of the Obligors operate, to the extent such
conditions or changes do not disproportionately impact the Obligors, or (iii)
the announcement or consummation of the Merger), or in the Borrower's ability to
repay the Loan or perform its obligations under the Loan Documents or with
respect to the matters included in the financial projections delivered to the
Board and the Agent on July 28, 2005. Since August 9, 2005, no Obligor has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Payment or agreed to do so except as would have
been permitted by Section 6.3, as if such section were in effect at all times
after such date. After giving effect to the Consummation of the Plan, no event
or occurrence which would constitute a Default or Event of Default has occurred
and is continuing.

          SECTION 4.5. TITLE TO PROPERTIES; LIENS. Each Obligor has (i) good and
insurable fee title to (in the case of fee interests in real property), (ii)
valid, and in the case of leasehold interests in real property, insurable,
leasehold interests in (in the case of leasehold interests in real or personal
property) or (iii) good title to (in the case of all other personal property)
all of the properties and assets necessary to the conduct of its business
including property and assets reflected in the financial statements referred to
in Section 4.3, except for assets disposed of since the date of such financial
statements in the ordinary course of business or pursuant to the restructuring
contemplated by the Plan of Reorganization. Except as otherwise permitted by
this Agreement and the Collateral Documents, all such properties and assets are
free and clear of Liens.

          SECTION 4.6. LITIGATION; ADVERSE FACTS. There are no actions, suits,
proceedings, arbitrations or investigations (whether or not purportedly on
behalf of Group, the Borrower or any other Obligor) at law or in equity or
before or by any Governmental Authority pending or, to the knowledge of any
Responsible Officer of any Principal Obligor, threatened against or affecting
(in either case, whether asserted or unasserted) any of the Obligors or any
property of the Obligors that, individually or in the aggregate, (a) except for
matters disclosed on Schedule 4.6, in the reasonable judgment of the Obligors
could be expected to have a Material Adverse Effect, or (ii) challenge the
legality, validity or binding effect of, or seeks to restrain or enjoin any
Obligor from entering into or performing under, any Loan Document including,
without limitation, this Agreement or any Collateral Document. No Obligor is
subject to any final judgments, writs, injunctions or decrees of any court or
any Governmental Authority, compliance with which could reasonably be expected
to have a Material Adverse Effect, or is in default with respect to any such
judgments, writs, injunctions or decrees, which default could reasonably be
expected to have a Material Adverse Effect.


                                       57



          SECTION 4.7. PAYMENT OF TAXES.

          (a) Except as otherwise set forth on Schedule 4.7(a): (i) the Obligors
have timely filed all material Tax returns and reports required to have been
filed, and have paid or made adequate provision for payment of all material
Taxes levied or imposed upon them or their properties (including the
Collateral), income or assets that have become due and payable, except (A) in
those instances in which such Taxes are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
have been made in accordance with GAAP and (B) that the Debtors' obligations to
pay Taxes that relate to a Tax period (or portion thereof) ending on or before
the commencement of the Bankruptcy Cases and which first became due and payable
after the time of the commencement of the Bankruptcy Cases, have been stayed or
enjoined pursuant to the Plan of Reorganization, the Confirmation Order or the
Bankruptcy Code, it being understood that the exception in this clause (B) does
not affect the Obligors' representation that they have made adequate provision
for such Taxes; (ii) there is no proposed Tax assessment against any Obligor
that relates to a material amount of Taxes, and neither Group nor the Borrower
knows of any basis for any such assessment; and (iii) no Obligor is party to any
Tax sharing agreement with any Person other than another Obligor, other than tax
indemnity agreements in leasing transactions entered into in the ordinary course
of business.

          (b) Schedule 4.7(b) is a true and complete list of each claim of a
governmental unit of the kind entitled to priority in payment, as specified in
section 502(i) and 507(a)(8) of the Bankruptcy Code, that the Debtors will or
expect to pay or to be required to pay during the six (6) years immediately
following the Effective Date.

          SECTION 4.8. PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.

          (a) No Default. After giving effect to the Consummation of the Plan,
no Obligor is in default in the performance, observance or fulfillment of any
Contractual Obligations other than defaults which are not reasonably expected to
have a Material Adverse Effect, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default; it being
understood that the existence on the Effective Date of any default under (i)
certain executory contracts and unexpired leases that the Obligors are entitled
to reject in accordance with the Plan of Reorganization or prior order of the
Bankruptcy Court and (ii) certain other contracts relating to property that any
Obligor has abandoned pursuant to an order of the Bankruptcy Court shall be
deemed not to be a breach of this Section 4.8(a).

          (b) No Adverse Agreements. No Obligor is a party to or is otherwise
subject to any agreements or instruments or any charter or other internal
restrictions which, individually or in the aggregate, could reasonably be
expected to impair the ability of the Obligors, taken as a whole, to perform
their payment or other material obligations under the Loan Documents.

          (c) Other Agreements. Except as disclosed on Schedule 4.8(c), no
Obligor is a party to or is otherwise subject to any agreement or arrangement,
including, but not limited to, agreements relating to Indebtedness, lease
agreements or Guarantees, that provide for early payment, additional collateral
support, changes in terms or acceleration of maturity, or the creation of an
additional financial obligation, as a result of any of (i) an adverse change in
the credit rating of an Obligor, (ii) an adverse change in the financial ratios,
earnings, cash flow or stock price of an Obligor or (iii) changes in the value
of underlying, linked or indexed assets, except to the extent that such
agreements or arrangements could not reasonably be expected to have a Material
Adverse Effect.

          SECTION 4.9. GOVERNMENTAL REGULATION. No Obligor is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act


                                       58



of 1940 or under any other federal or state statute or regulation (other than
the Bankruptcy Code) which may limit its ability to incur Indebtedness or which
may otherwise render all or any portion of its Obligations unenforceable.

          SECTION 4.10. SECURITIES ACTIVITIES. No Obligor owns or is engaged
principally in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock (as defined below), and no proceeds of the Loan were
used to purchase or carry Margin Stock or to extend credit to any Person for the
purpose of purchasing or carrying any Margin Stock in a manner that violated or
caused a violation of Regulations T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors. For
purposes of this Section 4.10, the term "Margin Stock" has the meaning assigned
to that term in Regulation T, U or X of the Board of Governors of the Federal
Reserve System as in effect from time to time.

          SECTION 4.11. EMPLOYEE BENEFIT PLANS.

          (a) Schedule 4.11(a) lists each Plan and each Multiemployer Plan
maintained or contributed to, or required to be contributed to, by Group or any
of its ERISA Affiliates as of the Effective Date. Each Plan has been operated
and administered in compliance with all applicable requirements of ERISA, and,
if intended to qualify under Section 401(a) or 403(a) of the Internal Revenue
Code, in compliance with all applicable requirements of such provisions except
where the failure to do so could not reasonably be expected to have, taking all
instances in the aggregate, a Material Adverse Effect.;

          (b) Full payment has been made by Group or any of its ERISA Affiliates
of all minimum amounts which such entities are required to pay under the terms
of each Plan and Multiemployer Plan except where the failure to so comply,
taking all instances in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.;

          (c) No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to have a Material
Adverse Effect.;

          (d) Neither Group nor any of its ERISA Affiliates maintains or
contributes to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee pension benefit
plan (as defined in Section 3(2) of ERISA), other than a Plan the obligations
with respect to which, when taken together with the projected contributions
thereto reflected in the projections and pro forma financial information
delivered pursuant to clause (n) of Article III, could not reasonably be
expected to have a Material Adverse Effect.;

          (e) After giving effect to the Consummation of the Plan, no Plan
maintained by Group or any ERISA Affiliate is underfunded (based on the present
value of all accumulated benefit obligations thereunder) except to the extent
that the aggregate amount of underfunding with respect to all such plans, when
taken together with the projected contributions thereto reflected in the
projections and pro forma financial information delivered pursuant to clause (n)
of Article III, could not reasonably be expected to have a Material Adverse
Effect during the scheduled term of the Loan.

          SECTION 4.12. ENVIRONMENTAL PROTECTION.

          (a) Compliance with Environmental Laws. All Facilities and operations
of each Obligor are, and have been to the knowledge of each Principal Obligor,
in compliance with all


                                       59



Environmental Laws except for any noncompliance which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

          (b) Hazardous Materials Activity. Except as disclosed on Schedule
4.12(b), there are no, and have been no, conditions, occurrences, or Hazardous
Materials Activity (i) arising at any Facilities or (ii) arising in connection
with the operations of the Obligors or of past or current Affiliates of any
Obligor (while under the control of a Principal Obligor or otherwise to the
knowledge of a Principal Obligor) (including the transportation of Hazardous
Materials in accordance with applicable regulations), which conditions,
occurrences or Hazardous Materials Activity could reasonably be expected to form
the basis of an Environmental Claim against any Obligor and which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

          (c) Environmental Claims. Except as disclosed on Schedule 4.12(c),
there are no pending or, to the knowledge of any Principal Obligor, threatened
Environmental Claims against any Obligor, and no Principal Obligor has received
any notices, inquiries, or requests for information with respect to any
Environmental Claims which could reasonably be expected to have a Material
Adverse Effect.

          (d) Orders, Decrees, etc. No Obligor is currently operating or
required to be operating under any compliance order, schedule, decree or
agreement, any consent decree, order or agreement, and/or any corrective action
decree, order or agreement issued or entered into under any Environmental Law
the failure to comply with which could reasonably be expected to have a Material
Adverse Effect.

          SECTION 4.13. DISCLOSURE.

          (a) No representation or warranty or certification of any Obligor or
of any Responsible Officer of the Borrower or Group or any other Officer of any
Obligor contained in this Agreement, any other Loan Document or in any other
document, certificate or written statement furnished to the Board, the Agent,
any Counter-Guarantor or the Lenders by or on behalf of any Obligor (as modified
or supplemented by other written information so furnished) for use in connection
with the negotiation and closing of the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein at the time, and in light
of the circumstances under which they were made, not misleading; provided that
with respect to projected financial information contained in any such document
or furnished to any party hereto by or on behalf of the Obligors, the Obligors
represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time, it being recognized that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered thereby may differ from the
projected results.

          (b) None of the Reporting Obligors' filings under the Exchange Act (as
amended or supplemented through the date hereof) nor the Disclosure Statement
(as amended or supplemented through the date hereof) contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

          SECTION 4.14. COMPLIANCE WITH LAWS. Each Obligor is in compliance with
all laws, statutes, rules, regulations and orders binding on or applicable to
such Obligor, and all of its properties,


                                       60



except to the extent failure to so comply (either individually or in the
aggregate) could not reasonably be expected to have a Material Adverse Effect.

          SECTION 4.15. INDEBTEDNESS. Schedule 4.15 correctly sets forth the
consolidated Indebtedness of Group and its Subsidiaries as of the Effective Date
and identifies each primary obligor and each guarantor or other secondary
obligor thereof, if any.

          SECTION 4.16. INSURANCE. The properties, business and operations of
the Obligors are insured or reinsured with financially sound and reputable
insurance companies or by the United States of America, in such amounts, with
such deductibles and covering such risks as are insured against (including, but
not limited to, war risk and third party liability) and carried in accordance
with applicable law and prudent industry practice by major U.S. commercial air
carriers similarly situated with the Obligors and owning or operating similar
properties, aircraft and engines.

          SECTION 4.17. PERFECTED SECURITY INTERESTS. The Collateral Agent, on
behalf of the Lenders, the Counter-Guarantors and the Board, has valid security
interests in the Collateral, with such priority and perfected to such extent as
is provided in the Collateral Documents.

          SECTION 4.18. COMPLIANCE WITH THE PLAN OF REORGANIZATION. No Obligor
is in default with respect to any material obligation under the Plan of the
Reorganization.

          SECTION 4.19. ABSENCE OF LABOR DISPUTES. No strikes, boycotts, work
stoppages or lockouts with respect to any of the Obligors exist, and no Obligor
has received written notice, sanctioned by any collective bargaining unit
representing employees of such Obligor, threatening a strike, boycott or work
stoppage.

          SECTION 4.20. COMPLIANCE WITH CERTAIN GATE LEASES. After giving effect
to the Consummation of the Plan, each Obligor is in compliance in all material
respects with all Gate Leases with respect to the airports listed on Schedule
4.20.

          SECTION 4.21. SLOT UTILIZATION. Each Obligor which holds or operates
Slots is utilizing its Slots in a manner consistent with the Slot Regulations in
order to avoid the withdrawal of any Slot (other than Slots of the type
referenced in clauses (f) through (i) of the definition of "Secondary Slots") by
the FAA, taking into account any waivers or other relief granted by the FAA in
connection with the failure to utilize Slots. None of the Obligors has received
any notice of withdrawal from the FAA, nor (other than with respect to Slots of
the type referenced in clauses (d) and (f) through (i) of the definition of
"Secondary Slots") is any Obligor aware of any other event or circumstance
(other than any proposed change of law, regulation or rule, including the
scheduled removal of slot restrictions at John F. Kennedy International Airport
and LGA on January 1, 2007), that could reasonably be expected to result in the
withdrawal of any Slot or otherwise impair any of the Slots or the value thereof
(it being understood, however, that the Slot Regulations provide for withdrawal
in certain circumstances other than for failure to utilize Slots, and the FAA
has asserted the right to withdraw and reallocate "pool" Slots (within the
meaning of 14 C.F.R. Section 93.226(e)), including those identified on Schedule
1.1(a) hereto, at its discretion). The Obligors maintain personnel, policies,
procedures and a computer database for the monitoring, utilization and
management of the Slots in compliance with the Slot Regulations so as to ensure,
to the greatest extent operationally feasible, that the Slot Regulations are
complied with and no Slot becomes subject to withdrawal by the FAA.

          SECTION 4.22. DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Schedule 4.22
contains a true, complete and correct list of all deposits accounts and
securities accounts of the Obligors, including, with respect to each account,
the name of such account, the account number, the bank or financial


                                       61



institution with which such account is maintained, and the balance therein as of
a specified date (which shall be no earlier than August 31, 2005), indicating
thereon whether each such account is subject to a Control Agreement in favor of
the Collateral Agent.

          SECTION 4.23. UNRESTRICTED CASH AND CASH EQUIVALENTS. After the
Consummation of the Plan, the Obligors have on a pro forma basis as of the
Effective Date, taking into account net cash proceeds of the Stock Offering, the
Convertible Note Offering, the Juniper Financing and the Airbus Financing
expected to be received within seven (7) days of the Effective Date,
unrestricted cash and Cash Equivalents (as determined in accordance with GAAP)
of not less than $1,250,000,000.

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

          To induce the other parties to enter into this Agreement (excluding
any other Obligor) and to induce the Counter-Guarantors to amend and restate
their respective Counter-Guarantees, the Obligors agree with each other party
hereto (excluding any other Obligor) and the Counter-Guarantors that, so long as
any of the Obligations (other than contingent indemnification obligations)
remain outstanding:

          SECTION 5.1. ACCOUNTING CONTROLS; FINANCIAL STATEMENTS AND OTHER
REPORTS.

          (a) Accounting Controls. Each Obligor will maintain a system of
accounting established and administered in accordance with sound business
practices and applicable law, rules and regulations issued by any Governmental
Authority to permit preparation of financial statements in conformity with GAAP
, including, without limitation, as set forth in Section 4.3(c).

          (b) Financial Certificates; Information. Group will deliver to the
Agent, the Loan Administrator and the Board:

          (i) Quarterly Financials: within two (2) Business Days after the date
     on which a Reporting Obligor files or is required to file its Form 10-Q
     under the Exchange Act (after giving effect to any extension pursuant to
     Rule 12b-25 under the Exchange Act (or any successor rule)), (A) the
     consolidated balance sheets of such Person as at the end of such fiscal
     quarter and the related consolidated statements of income of such Person
     for such fiscal quarter for the period from the beginning of the then
     current Fiscal Year to the end of such fiscal quarter and cash flows of
     such Person for the period from the beginning of the then current Fiscal
     Year to the end of such fiscal quarter, setting forth in each case in
     comparative form the corresponding figures from the corresponding dates and
     periods of the previous Fiscal Year, all prepared in accordance with GAAP
     (except that any unaudited financial statements are subject to normal
     year-end adjustments and may not be accompanied by footnotes) and in
     reasonable detail and certified by the Chief Financial Officer, Controller,
     Chief Executive Officer or Treasurer of such Person that they fairly
     present in all material respects the consolidated financial condition of
     such Person as at the dates indicated and the results of its operations and
     its cash flows for the periods indicated, and (B) a narrative report
     describing the operations of such Person in the form prepared for
     presentation to senior management for such fiscal quarter and for the
     period from the beginning of the then current Fiscal Year to the end of
     such fiscal quarter; provided that delivery of such Person's Form 10-Q for
     such fiscal quarter shall be deemed to satisfy all of the requirements of
     this clause (i); provided, further, that in lieu of delivering a hard copy
     of Form 10-Q hereunder, Group may transmit by e-mail an electronic copy of
     such document or a link to an electronic copy of such document on the EDGAR
     database (or a comparable service) or an Obligor's website;


                                       62



          (ii) Monthly Reporting: within 45 days after the end of each of the
     first twenty-four (24) calendar months following the Effective Date, the
     consolidated balance sheets of each Reporting Obligor as at the end of such
     month and the related consolidated statements of income of such Person for
     such calendar month and for the period from the beginning of the then
     current Fiscal Year to the end of such month and cash flows of each such
     Person for the period from the beginning of the then current Fiscal Year to
     the end of such calendar month, and together therewith, a statement of the
     Adjusted Cash Amount as of the last Business Day of such calendar month,
     all prepared in accordance with GAAP (except that any unaudited financial
     statements are subject to normal year-end adjustments and may not be
     accompanied by footnotes) and in reasonable detail and certified by the
     Chief Financial Officer, Chief Executive Officer, Controller or Treasurer
     of such Person that they fairly present in all material respects the
     consolidated financial condition of such Person as at the dates indicated
     and the results of its operations and its cash flows for the periods
     indicated;

          (iii) Year-End Financials: within two (2) Business Days after the date
     on which a Reporting Obligor files or is required to file its Form 10-K
     under the Exchange Act (after giving effect to any extension pursuant to
     Rule 12b-25 under the Exchange Act (or any successor rule)), (A) the
     consolidated balance sheets of such Person at the end of such Fiscal Year
     and the related consolidated statements of income, stockholders' equity and
     cash flows of such Person for such Fiscal Year, setting forth in each case
     in comparative form the corresponding figures for the previous Fiscal Year
     and the corresponding figures from the annual financial plan delivered
     pursuant to clause (ix) of this Section 5.1(b) for the Fiscal Year covered
     by such financial statements of such Person, all in reasonable detail, and
     certified by the Chief Financial Officer or the Chief Executive Officer of
     such Person that they fairly present in all material respects the
     consolidated financial condition of such Person as at the date indicated
     and the results of its operations and its cash flows for the periods
     indicated, (B) a narrative report describing the operations of such Person
     in the form prepared for presentation to senior management for such Fiscal
     Year, and (C) an accountant's report thereon of KPMG LLP or other
     independent certified public accountants of recognized national standing
     selected by the Borrower or Group, as the case may be, which report (1)
     shall be unqualified as to scope, (2) shall not, for each Fiscal Year
     commencing with the Fiscal Year ending December 31, 2006, contain a going
     concern qualification, and (3) shall state that such consolidated financial
     statements fairly present the consolidated financial position of such
     Person as at the dates indicated and the results of their operations and
     their cash flows for the periods indicated in conformity with GAAP applied
     on a basis consistent with prior years, and that the examination by such
     accountants in connection with such consolidated financial statements has
     been made in accordance with generally accepted auditing standards;
     provided that (x) references in such report to changes in GAAP, changes in
     accounting standards, highlighting contents of footnotes, limitations in
     the scope of the audit or exclusions from the audit information not
     required by GAAP that are, in each case, customary in industry practice and
     not prejudicial to the opinion stated therein shall not be deemed to be
     "qualifications" for the purpose of clause (C) of this Section 5.1(b)(iii)
     and (y) delivery of such Person's Form 10-K for such Fiscal Year, and which
     satisfy the requirements of clause (C) above, shall be deemed to satisfy
     the requirements of this Section 5.1(b)(iii); provided, further, that in
     lieu of delivering a hard copy of Form 10-K hereunder, Group may transmit
     by e-mail an electronic copy of such document or a link to an electronic
     copy of such document on the EDGAR database (or a comparable service) or an
     Obligor's website;

          (iv) Officers' Certificates: together with each delivery of financial
     statements pursuant to clauses (i) and (iii) above, an Officer's
     Certificate of the Borrower (which certificate may incorporate the
     Collateral Value Certificate and schedule of deposit accounts and
     securities accounts of the Obligors deliverable on such date pursuant to
     clauses (xix) and (xxii) of this


                                       63



     Section 5.1(b), respectively) (I) stating that the signer has made, or
     caused to be made under his or her supervision, a review of the terms of
     this Agreement and of the transactions and condition of the Obligors during
     the accounting period covered by such financial statements and that such
     review has not disclosed the existence, and that the signer does not have
     knowledge of the existence as at the date of such Officer's Certificate, of
     any condition or event that constitutes a Default or an Event of Default,
     or, if any such condition or event existed at the date of the certificate,
     specifying the nature and period of existence thereof and what action the
     Obligors have taken, are taking and propose to take with respect thereto,
     (II) demonstrating in reasonable detail compliance (or noncompliance)
     during and at the end of the applicable accounting periods with the
     restrictions contained in Section 6.3 and Section 6.4, and (III) with
     respect to the delivery of financial statements pursuant to clause (iii)
     above, stating whether any change in GAAP or in the application thereof has
     occurred since the date of delivery of the preceding year-end financial
     statements, and if any such change has occurred, describing the effect of
     such change on the financial statements of Group and the Borrower;

          (v) SEC Filings and Press Releases: promptly upon their filing, copies
     of (A) all financial statements, reports, notices and proxy statements sent
     or made available generally by a Reporting Obligor to its security holders
     and (B) all regular, periodic and current reports (including all Form 8-K
     reports) and all registration statements and prospectuses, if any, filed by
     any Reporting Obligor with any securities exchange or with the SEC or any
     Governmental Authority or private regulatory authority; provided that in
     lieu of delivering a hard copy of any such document, Group may transmit by
     e-mail an electronic copy of such document or a link to an electronic copy
     of such document on the EDGAR database (or a comparable service) or an
     Obligor's website;

          (vi) Notice of Events of Default, etc.: promptly upon any Responsible
     Officer of a Principal Obligor obtaining knowledge of (A) any condition or
     event that constitutes a Default or an Event of Default or (B) the
     occurrence of any event or change that has had, or is reasonably expected
     to have, a Material Adverse Effect (disregarding for purposes of this
     clause (vi) publicly known facts, circumstances, events or conditions
     applicable to the airline and travel industries generally), an Officer's
     Certificate of Group specifying the nature and period of existence of such
     Default or Event of Default or condition, event or change and what action
     the Obligors have taken, are taking and propose to take with respect
     thereto;

          (vii) Litigation or Other Proceedings: to the extent not otherwise
     disclosed pursuant to this Section 5.1, promptly upon any Responsible
     Officer of a Principal Obligor obtaining knowledge of (A) the institution
     of, or threat of, any action, suit, proceeding (whether administrative,
     judicial or otherwise), governmental investigation or arbitration against
     or affecting any Obligor or any property of any Obligor, unless Group's
     general counsel or outside legal counsel has determined that a favorable
     outcome to such Obligor is reasonably likely (collectively, "Proceedings")
     or (B) any material development in any Proceeding that, in either case:

               (1) if adversely determined, would be reasonably likely to have a
          Material Adverse Effect;

               (2) seeks to enjoin or otherwise prevent the consummation of, or
          to recover any damages or obtain relief as a result of, the
          transactions contemplated hereby; or

               (3) challenges or calls into question in any material respect the
          reliability or accuracy of a Reporting Obligor's SEC filings;


                                       64



     written notice thereof together with such other information as may be
     reasonably available to the Obligors to enable the Agent, the Lenders, the
     Counter-Guarantors and the Board, and their respective counsel to evaluate
     such matters;

          (viii) ERISA Reports: promptly after the receipt by the Borrower of a
     request therefor by the Agent, the Loan Administrator, any Lender, any
     Counter-Guarantor or the Board, copies of any annual and other reports
     (including Schedule B thereto) with respect to a Plan filed by an Obligor
     or any ERISA Affiliate with the United States Department of Labor, the IRS
     or the PBGC;

          (ix) Financial Plan and Projections: annually, as soon as practicable
     after preparation thereof in the ordinary course of business but in no
     event later than February 28 of each year, copies of the Principal
     Obligors' annual financial plans and projections, together with a
     reconciliation of actual results to projected results for such periods;

          (x) Environmental Audits and Assessments: as soon as practicable
     following receipt thereof by a Principal Obligor, copies of all
     environmental audits and assessments, whether prepared by personnel of an
     Obligor or by independent consultants (except to the extent protected by
     the "attorney work product" privilege or similar privilege expressly
     granted by statute with respect to the work product of environmental
     consultants), with respect to material environmental matters at any
     Facility or which relate to an Environmental Claim which could reasonably
     be expected to have a Material Adverse Effect;

          (xi) Ratings Change: promptly after any public release by S&P or
     Moody's raising or lowering (i) an Obligor's general unsecured credit
     rating or (ii) a credit rating on the Loan obtained pursuant to Section
     5.19 hereof, notice (which may be sent by e-mail) of such change;

          (xii) Insurance Reports: No later than January 30 of each year,
     insurance brokers reports with respect to all insurance maintained by the
     Obligors, together with schedules detailing the type and amount of coverage
     provided and the insurance carrier;

          (xiii) Insurance/Condemnation Proceeds: in addition to any similar
     reporting obligations under the Collateral Documents but without the
     duplication of any such obligation, upon (A) a Responsible Officer of a
     Principal Obligor obtaining knowledge of the occurrence of an event of loss
     or damage to, or any taking, condemnation or requisition by any
     Governmental Authority of, any property of any Obligor having fair market
     value in excess of $5,000,000 whether or not such loss or damage is
     expected to result in receipt of insurance or condemnation proceeds or of
     any other event of loss or damage that the Obligors reasonably expect to
     result in proceeds reasonably estimated by them to exceed $5,000,000 and
     (B) the receipt of insurance proceeds or condemnation proceeds from an
     event of loss or material damage to, or any taking, condemnation or
     requisition by any Governmental Authority of, any property of any Obligor
     giving rise to a mandatory prepayment obligation under Section 2.5, notice
     of such occurrence;

          (xiv) Future Issuance and Asset Sales: without prejudice to the
     Obligors' notice obligations under Section 2.5(i), prior to an Obligor
     consummating any Future Issuance or Asset Sale greater than $1,000,000 in
     an individual transaction or series of related transactions giving rise to
     a mandatory prepayment obligation under Section 2.5, notice of such event;
     provided that in the case of a Replacement Secured Financing, the
     applicable Obligor shall give no less than fifteen (15) Business Days'
     prior notice of such event and include therein (A) a specific
     identification of the Collateral proposed to be pledged, (B) the Collateral
     Release values therefor together with copies of the Appraisal Reports upon
     which such Collateral Release Values are


                                       65



     based, if applicable, and (C) a detailed summary of the terms and
     conditions of such Replacement Secured Financing;

          (xv) Plan Audits and Liabilities: promptly after (A) an Obligor or any
     ERISA Affiliate contacts the IRS or the PBGC for the purpose of
     participating in a closing agreement or any voluntary resolution program
     with respect to a Plan or Multiemployer Plan which could reasonably be
     expected to have a Material Adverse Effect, or (B) a Responsible Officer of
     a Principal Obligor knows or has reason to know that any event with respect
     to any Plan or Multiemployer Plan occurred that could reasonably be
     expected to have a Material Adverse Effect, notice of such contact or the
     occurrence of such event;

          (xvi) Funding Changes and New Plan Benefits: promptly after the
     change, a notification of any material increases in the benefits, or
     material change in funding method, with respect to which an Obligor may
     have any liability, under any Plan or Multiemployer Plan or the
     establishment of any material new Plan or Multiemployer Plan with respect
     to which an Obligor may have any liability or the commencement of
     contributions to any Plan or Multiemployer Plan to which an Obligor or any
     ERISA Affiliate was not previously contributing, except to the extent that
     such an event could not reasonably be expected to have a Material Adverse
     Effect;

          (xvii) Claims and Proceedings: promptly after receipt of written
     notice of commencement thereof, notification of all (A) claims made by
     participants or beneficiaries with respect to any Plan and (B) actions,
     suits and proceedings before any court or governmental department,
     commission, board, bureau, agency or instrumentality, domestic or foreign,
     affecting an Obligor or any ERISA Affiliate with respect to any Plan,
     except those which, in the aggregate, if adversely determined, could not
     reasonably be expected to have a Material Adverse Effect;

          (xviii) ERISA Event: promptly after the occurrence of any ERISA Event
     (A) that could reasonably be expected to have a Material Adverse Effect or
     (B) that relates to the occurrence or existence of an event or condition
     that could reasonably be expected to have a Material Adverse Effect, notice
     of such ERISA Event;

          (xix) Collateral Value Certificates: no later than the date upon which
     an Officer's Certificate is required to be delivered under clause (iv) of
     this Section 5.1(b) with respect to each of the four fiscal quarters of
     each Fiscal Year (and, in the case of the last fiscal quarter of each
     Fiscal Year, no later than the first Interest Payment Date occurring after
     the end of such Fiscal Year), a Collateral Value Certificate certifying the
     Collateral Value (based on the most recently completed Appraisal Report),
     in each case as of a date no earlier than the end of the fiscal quarter or
     the Fiscal Year to which such Officer's Certificate relates, together with
     the Appraisal Report upon which such Collateral Value Certificate is based;

          (xx) Slot Utilization Reports: as soon as available, but in any event
     no later than the date on which each report referred to in clause (A) below
     is submitted to the FAA, each of the following: (A) a true and complete
     copy of each Slot utilization report required to be delivered to the FAA
     under the Slot Regulations, (B) any related requests for waivers or other
     documentation provided to the FAA in connection therewith, and (C) a
     summary report, in the form of Exhibit L, of Slot utilization during the
     period covered by the report to the FAA referred to in (A) above;

          (xxi) Adjusted Cash Amount: within one Business Day following the end
     of each calendar week, by e-mail, the Adjusted Cash Amount as of the last
     Business Day of the prior calendar week and for each Business Day in such
     prior calendar week; provided that if the Obligors do not have current
     information regarding the Obligors' aggregate outstanding air traffic


                                       66



     liability for purposes of calculating the Adjusted Cash Amount,
     such weekly reports may be based on a good-faith estimate of the Obligors'
     aggregate then outstanding air traffic liability based on all available
     data;

          (xxii) Deposit Accounts and Securities Accounts: no later than the
     date upon which an Officer's Certificate is required to be delivered under
     clause (iv) of this Section 5.1(b) with respect to each Fiscal Year and
     each fiscal quarter of each Fiscal Year, a schedule of all deposits
     accounts and securities accounts of the Obligors, including, with respect
     to each account, the name of such account, the account number, the bank or
     financial institution with which such account is maintained and the balance
     therein as of the end of the accounting period covered by the financial
     statements deliverable with such Officer's Certificate, indicating thereon
     whether each such account is subject to a Control Agreement in favor of the
     Collateral Agent;

          (xxiii) Cash Forecast: if for a period of five (5) consecutive
     Business Days the Adjusted Cash Amount is less than 125% of the Minimum
     Adjusted Cash Amount required to be maintained at such time pursuant to
     Section 6.4(a), no later than Wednesday of each week thereafter, a rolling
     13-week cash forecast including reports, in form, detail and substance
     reasonably satisfactory to the Board (so long as the Board is either a
     guarantor of Tranche A or a Lender hereunder), or thereafter, the Agent,
     which show the Obligors' sources and uses of cash from the prior week, and
     material variances associated therewith; and

          (xxiv) Other Information: with reasonable promptness, such other
     information and data with respect to an Obligor as from time to time may be
     reasonably requested by the Agent, the Loan Administrator, any Lender, any
     Counter-Guarantor or the Board.

Promptly upon its receipt of any such notice, report, certificate or other
information from Group or any Obligor pursuant to this Section 5.1(b), the Agent
shall provide a copy of such notice, report, certificate or other information to
each Lender and Counter-Guarantor (which may be sent by e-mail), other than a
Lender or Counter-Guarantor who has notified the Agent that it does not wish to
receive any such notice, report, certificate or other information.

          SECTION 5.2. CORPORATE EXISTENCE. Except as permitted by Section 6.9,
each Obligor will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each Obligor and the material rights, permits,
licenses (charter and statutory) and franchises of each Obligor; provided that
subject to Section 5.10, no Obligor shall be required to preserve any such
right, permit, license or franchise, and, subject to compliance with Section
6.9, as applicable, no Obligor shall be required to preserve any such corporate,
partnership or other existence, if in each case, the Chief Executive Officer of
Group or the Borrower shall determine in the exercise of his or her business
judgment that the preservation thereof is no longer desirable in the conduct of
the business of the Obligors taken as a whole and that abandonment of any such
right, permit, license or franchise or failure to preserve such existence could
not reasonably be expected to have a Material Adverse Effect.

          SECTION 5.3. PAYMENT OF TAXES AND CLAIMS. Each Obligor will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material Taxes levied or imposed upon an Obligor or upon the
income, profits or property of an Obligor except (a) that this Section 5.3 shall
not require the Obligors who were debtors in the Bankruptcy Cases to pay Taxes
that relate to a Tax period (or portion thereof) ending on or before the
commencement of the Bankruptcy Cases and which first became due and payable
after the time of the commencement of the Bankruptcy Cases, to the extent that,
and for so long as, such Taxes are stayed or enjoined pursuant to the Plan of
Reorganization, the Confirmation Order or the Bankruptcy Code, it being
understood that


                                       67



notwithstanding the exception in this clause (a), such Obligors shall make
adequate reserves in accordance with GAAP for Taxes stayed or enjoined pursuant
to the Plan of Reorganization, the Confirmation Order or the Bankruptcy Code, or
(b) where the amount, applicability or validity of such Taxes are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been made in accordance with GAAP and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien on the
property of an Obligor. No Obligor will file or consent to the filing of, any
consolidated income tax return with any Person (other than any other Obligor or
any Subsidiary of any Obligor).

          SECTION 5.4. MAINTENANCE OF PROPERTIES; INSURANCE.

          (a) Maintenance of Properties. Each Obligor will maintain all
properties used or useful in the conduct of the business of the Obligors in good
condition, repair and working order (ordinary wear and tear excepted) and supply
such properties with all necessary equipment and make all necessary repairs,
renewals, replacements, betterments and improvements thereto, all as in the
reasonable judgment of an Obligor may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided, however, that no Obligor shall be restricted from discontinuing
the operation and maintenance of any such properties if such discontinuance is,
in the good faith judgment of Group, desirable in the conduct of the business of
such Obligor and could not reasonably be expected to have a Material Adverse
Effect, but subject in each case to all applicable provisions of the Collateral
Documents.

          (b) Insurance. Each Obligor will insure and keep insured or reinsured
with financially sound and reputable insurance companies that are not Affiliates
of the Obligors or by the United States of America, their businesses and
operations and such of their respective properties, in such amounts, with such
deductibles and covering such risks as are insured against (including, but not
limited to, war risk and third party liability) and carried in accordance with
applicable law and prudent industry practice by U.S. commercial air carriers
similarly situated with the Obligors and owning or operating similar properties,
aircraft and engines, including such insurance coverage as is required to be
maintained under the Collateral Documents, and providing for not less than
thirty (30) days' (or in the case of war risk coverage, the maximum time as is
available) prior notice to the Agent, the Board, the Loan Administrator and the
Collateral Agent of termination, lapse or cancellation of such insurance or
reinsurance; provided that this Section 5.4(b) shall not prohibit any Obligor
from procuring and maintaining all or any portion of its insurance through
Airways Assurance Limited LLC so long as Airways Assurance Limited LLC reinsures
100% of such risk as provided above in this Section 5.4(b) and such reinsurance
policies contain a cut-through endorsement.

          SECTION 5.5. INSPECTION. Each Obligor will permit any authorized
representatives designated by the Agent, any Lender, the Loan Administrator, any
Counter-Guarantor or the Board to visit and inspect any of the properties of the
Obligors, including their financial and accounting records, and to make copies
and take extracts therefrom, and to discuss their affairs, finances and accounts
with its and their officers and independent public accountants (it being
understood that a representative of an Obligor will be present), at the
Borrower's expense, all upon reasonable notice and at such reasonable times
during normal business hours and as often as may be reasonably requested;
provided that so long as the Controlling Creditor is not exercising material
remedies under the Loan Documents, such inspection shall not be disruptive to
the business of the Obligors. Without limiting the generality of the foregoing,
the Obligors will meet with the Loan Administrator on a quarterly basis (in
person or, if deemed appropriate by the Loan Administrator, telephonically) to
review the Obligors' financial and accounting records and will make their
officers and independent public accountants available to discuss with the Loan
Administrator the Obligors' affairs, financial condition, results of operations,
business plan, prospects, projections, accounts and other related matters
(including, without limitation, the integration of


                                       68



the Borrower and US Airways), and otherwise will cooperate with the Loan
Administrator and provide such information as it may reasonably request to
enable it to perform the services described in the Loan Administration
Agreement.

          SECTION 5.6. COMPLIANCE WITH LAWS, ETC. Each Obligor will comply with
all applicable statutes, rules, regulations, orders, restrictions and
Governmental Authorizations of any applicable Governmental Authority, in respect
of the conduct of the businesses of the Obligors and the ownership of their
respective properties (including, without limitation, Gate Leases and Slots),
except such as are being contested in good faith by appropriate proceedings and
except for such noncompliance as could not in any case or in the aggregate
reasonably be expected to have a Material Adverse Effect. None of the Obligors
shall conduct any Hazardous Materials Activity at any Facility or at any other
location in a manner that does not comply in all material respects with
Environmental Laws. Each Obligor will use commercially reasonable efforts to
cause all other Persons operating or occupying any of their properties to comply
in all material respects with Environmental Laws.

          SECTION 5.7. REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.

          (a) To the extent required by Environmental Laws, each Obligor will
take any and all necessary remedial action (except to the extent that such
remedial action is taken by other Persons responsible for such remedial action
through contractual arrangements with an Obligor) in connection with the
presence, storage, use, disposal, transportation, Release or threatened Release
of any Hazardous Materials on, under or about any Facility in order to comply
timely with all applicable Environmental Laws and Governmental Authorizations
except for such non-compliance as could not in any case or in the aggregate
reasonably be expected to have a Material Adverse Effect. In the event any
Obligor undertakes any remedial action with respect to any Hazardous Materials
on, under or about any Facility, Group, Borrower or such Obligor will conduct
and complete such remedial action (or will cause such action to be taken
pursuant to contractual rights of such Obligor against third parties) in
compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local Governmental
Authorities except when, and only to the extent that, such Obligor's liability
for such presence, storage, use, disposal, transportation or discharge of any
Hazardous Materials is being contested in good faith and by appropriate
proceedings diligently conducted by such Obligor or except for such
non-compliance as could not in any case or in the aggregate reasonably be
expected to have a Material Adverse Effect.

          (b) The Requisite Lenders or the Board may request (i) from time to
time, if and when such Person(s) have reason to believe that an Environmental
Claim or Release of Hazardous Materials which could reasonably be expected to
have a Material Adverse Effect may exist at or with respect to any Facility, and
(ii) not more than once during any twelve month period for the purpose of
determining whether there is belief that an Environmental Claim or Release of
Hazardous Materials which could reasonably be expected to have a Material
Adverse Effect exists at or with respect to any Facility, and in the case of any
such request, the Borrower will provide to the Lenders and the Board, within
sixty (60) days after such request, at the expense of the Borrower, an
environmental site assessment report for any of its, or any other Obligor's
properties described in such request, prepared by an environmental consulting
firm reasonably acceptable to the Board evaluating the Environmental Claim or
Release of Hazardous Materials and estimating the cost of any required
compliance, removal or remedial action in connection with the Environmental
Claim or Release of Hazardous Materials. Without limiting the generality of the
foregoing clause (b), if the Agent determines at any time that a material risk
exists that any such report will not be provided in the time referred to above,
the Agent may retain an environmental consulting firm to prepare such report at
the expense of the Borrower, and each Obligor hereby agrees to grant at the time
of such request, to the Agent, the Lenders, the Board, such firm and any


                                       69



agents or representatives thereof an irrevocable non-exclusive license, subject
to the rights of tenants, to enter into their respective properties to undertake
such an assessment.

          SECTION 5.8. ADDITIONAL OBLIGORS; COLLATERAL.

          (a) With reasonable promptness (and in any event within 30 days)
following the formation or acquisition by any Obligor of a Subsidiary or of any
Capital Stock of any other Person, the Borrower (i) shall provide the Agent, the
Loan Administrator, the Counter-Guarantors, and the Board the name, corporate
structure and allocation of Voting Stock and equity interests of such Subsidiary
or other Person, (ii) in the case of any such Subsidiary that is not a CFC,
shall cause such Subsidiary to execute and deliver to the Agent and the Board a
Subsidiary Joinder in the form of Exhibit M hereto, pursuant to which such
Subsidiary shall become a party to this Agreement, and a joinder to the Second
Lien Guaranty pursuant to which such Subsidiary shall become a guarantor
thereunder, and (iii) shall deliver to the Agent and the Board documents of the
types referred to in clauses (a)(x) and (a)(xi) of Article III, all in form,
content and scope reasonably satisfactory to the Agent and the Board.

          (b) Each Obligor (including, without limitation, each Subsidiary
created or acquired after the Effective Date that is required to be a Subsidiary
Guarantor) will cause all of its properties and assets as of the Effective Date
(or the date such Person was created or acquired) and all properties and assets
acquired thereafter (including, without limitation, the Capital Stock of each
Subsidiary created or acquired and the Capital Stock of each other Person
acquired after the Effective Date) other than Excluded Property to be pledged to
the Collateral Agent on a perfected first priority basis (subject to the
Intercreditor Agreement and the Liens permitted by Section 6.1, including the
prior Liens securing the First Lien Obligations (as defined in the Intercreditor
Agreement)) to secure the Obligations; provided that if the Borrower or another
Obligor enters into an agreement to finance any pledged After-Acquired Section
1110 Equipment, the Collateral Agent shall, and is hereby directed to, release
its Lien on such After-Acquired Section 1110 Equipment upon its receipt from the
Borrower (with a copy to the Agent and the Board) of an Officer's Certificate
describing in reasonable detail the Section 1110 Equipment proposed to be
financed and certifying that such transaction complies with this Section.

          (c) The Borrower shall obtain one or more Appraisal Reports
establishing the value of the Appraised Collateral as of (i) the last day of
each Fiscal Year beginning December 31, 2005, (ii) the date upon which any
additional property or assets that constitutes Appraised Collateral is pledged
as Collateral to the Collateral Agent pursuant to Section 5.8(d) to secure the
Obligations, but only with respect to such additional Collateral, (iii) in
connection with a Replacement Secured Financing of aircraft and spare engines,
and (iv) no more than once during any twelve (12) month period, a date which is
no later than 60 days after the Controlling Creditor has requested that the
Borrower obtain an Appraisal Report (it being understood that the obligation
herein of the Borrower to periodically obtain Appraisal Reports shall be in
addition to any rights or obligations under the Collateral Documents); provided
that no more than one Appraisal Report shall be required with respect to any
item of Appraised Collateral within any 60 day period. Such Appraisal Reports
may be based on desktop appraisals unless the Controlling Creditor shall have
requested that an Appraisal Report be based on physical inspection.

          (d) If as of the end of any fiscal quarter (each such date a
"Collateral Value Test Date") there exists a Collateral Value Deficiency, the
Borrower shall do one of the following to the extent (but only to the extent)
necessary to eliminate such Collateral Value Deficiency: (i) prepay the Loan in
an amount equal to Group's Adjusted Excess Cash Flow for the period commencing
on the Effective Date and ending on such Collateral Value Test Date (which
payment shall be made on the Interest Payment Date first occurring on or after
delivery of the Collateral Value Certificate that evidences such Collateral
Value Deficiency); (ii) pledge additional Eligible Collateral to the Collateral
Agent pursuant to a Collateral Document Supplement or other Collateral Document,
in each case on terms and conditions as


                                       70



are reasonably satisfactory to the Agent, the Board and the Collateral Agent, or
(iii) prepay the Loan as provided in clause (i) above and pledge additional
Eligible Collateral as provided in clause (ii) above; provided that if Group's
Adjusted Excess Cash Flow for such period, together with all Eligible Collateral
that is available to be pledged is not sufficient to eliminate such Collateral
Value Deficiency, the Borrower shall continue to prepay the Loan in an amount
equal to Group's Adjusted Excess Cash Flow for the period commencing on the
Effective Date and ending on the last day of each fiscal quarter following the
Collateral Value Test Date as of which the Collateral Value Deficiency was
established (which payments shall be made on the Interest Payment Dates
respectively relating to the Interest Periods first occurring after each such
fiscal quarter) and pledge all additional Eligible Collateral to the Collateral
Agent as it becomes available until the Collateral Value Deficiency no longer
exists (whether as a result of prepayments of the Loan, pledge of additional
collateral, or increase in Collateral Value or any combination of the
foregoing). The foregoing notwithstanding, the Borrower shall not be required to
prepay the Loan or pledge additional Eligible Collateral as provided above if
and to the extent that US Airways or any other Obligor is required to prepay the
US Airways Loan or pledge additional Eligible Collateral pursuant to the US
Airways Loan Agreement to cure a Collateral Value Deficiency thereunder (and as
defined therein).

          (e) If additional Collateral is being pledged in accordance with
Section 5.8(d), such additional Collateral shall be free and clear of any Liens
(other than as permitted under the applicable Collateral Document) and the
pledgor(s) shall execute and deliver to the Collateral Agent such applicable
Collateral Document Supplements or Collateral Documents (in form and substance
reasonably satisfactory to the Agent and the Board) necessary to grant a
security interest (subject to the Intercreditor Agreement) to the Collateral
Agent and shall take all other actions (as are in the reasonable judgment of the
Agent or the Controlling Creditor) necessary or desirable to cause the Liens
created thereby to be perfected first priority Liens under applicable law
(subject to the Intercreditor Agreement and except as otherwise provided under
the applicable Collateral Document), and, if requested by the Controlling
Creditor, furnish favorable legal opinions to the Collateral Agent with respect
to such additional Collateral, including the perfection and priority of the
Collateral Agent's Lien thereon and evidence of applicable filings to the Loan
Administrator, and shall otherwise comply with the provisions of the applicable
Collateral Documents that apply to a pledge of such Collateral.

          (f) In connection with each prepayment or pledge of additional
Eligible Collateral pursuant to subsection (d) of this Section 5.8, the Borrower
shall deliver to the Collateral Agent, the Loan Administrator and the Board
either (i) a Collateral Value Certificate which establishes that the applicable
Collateral Value Deficiency no longer exists, or (ii) an Officer's Certificate
of Group that certifies (A) the amount of Group's Excess Cash Flow since the
Effective Date, and (B) that Group has identified to the Collateral Agent and
the Board all of its material property (other than Excluded Property) that is
not subject to a Lien in favor of the Collateral Agent under a Collateral
Document.

          (g) Any partial prepayment of the Loan under subsection (d) of this
Section 5.8 shall be applied as provided in Section 2.5(j). Any such prepayment
shall be paid to the Agent for application as provided in Section 2.8.

          (h) No later than ninety (90) days after the Effective Date, the
Borrower shall cause the applicable Obligor to grant a first priority mortgage
(subject to the Intercreditor Agreement and the Liens permitted by Section 6.1,
including the prior Liens securing the First Lien Obligations (as defined in the
Intercreditor Agreement)) in the real property located at 250 W. Rio Salado
Parkway, Tempe, Arizona 85281 and known as the Penny Saver Building for the
benefit of the Collateral Agent. Such mortgage shall be substantially in the
form of Exhibit H hereto (with such other changes which result from the
application of Arizona law thereto and other changes necessary to reflect the
fee ownership thereof).


                                       71



          SECTION 5.9. EMPLOYEE BENEFIT PLANS. Each Obligor will ensure that the
Plans and Multiemployer Plans with respect to which the Obligors may have any
liability are operated in compliance with all applicable laws, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

          SECTION 5.10. FAA MATTERS; CITIZENSHIP. The Borrower shall at all
times hereunder be an "air carrier" within the meaning of the Act and hold a
certificate under 49 U.S.C. Section 41102(a)(1) as currently in effect or as may
be amended or recodified from time to time. The Borrower and each other Obligor
engaged in operations as an "air carrier" will at all times hereunder be a
United States Citizen holding an air carrier operating certificate issued
pursuant to Chapter 447 of Title 49 for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo.

          SECTION 5.11. BOARD GUARANTY. Each Obligor will comply with all of the
terms, requirements and conditions applicable to it under the Act and the
Regulations, or as may otherwise be imposed by, or agreed with, the Board in
connection with the issuance of the Board Guaranty, and shall promptly furnish
the Board, the Loan Administrator and the Agent (with a copy to the
Counter-Guarantors) all such information as may be reasonably requested by the
Board, the Loan Administrator or the Agent in connection with the Board
Guaranty. Each Obligor will execute such documents and take such actions in
furtherance of its obligations under the Act and the Regulations as the Board,
the Loan Administrator or the Agent may request.

          SECTION 5.12. AUDITS AND REVIEWS. Each Obligor will permit and
cooperate in the conduct of such audits and reviews during the period that both
(i) the Loan is outstanding and (ii) the Board is a guarantor of Tranche A or a
Lender hereunder, and for three (3) years thereafter, as the Board may deem
appropriate, by an independent auditor acceptable to the Board or the United
States Comptroller General. To the extent requested by the Board or the Loan
Administrator, each Obligor will provide reasonable access to the officers and
employees, books, records, accounts, documents, correspondence, and other
information of the Obligors, financial advisors, consultants and independent
certified accountants that the Board or the United States Comptroller General
considers necessary.

          SECTION 5.13. CONTROL OF DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS.
Except as otherwise provided in this Section 5.13, the Obligors shall maintain
deposit accounts and securities accounts (other than with respect to Excluded
Cash) only with banks or financial institutions with which they and the
Collateral Agent have entered into control agreements in form and substance
reasonably satisfactory to the Collateral Agent and the Controlling Creditor
(each, a "Control Agreement"), unless the Collateral Agent's security interest
in any such account is otherwise perfected; provided that until the US Airways
Loan has been paid in full, the Collateral Agent under the US Airways Loan
Agreement may also be a party thereto and have priority with respect to the
control of any such securities account or deposit account thereunder. In
furtherance thereof, with respect to any deposit account or securities account
listed on Schedule 5.13 in existence on the Effective Date, and thereafter prior
to establishing any other deposit account or securities account at any financial
institution (other than with respect to Excluded Cash), each Obligor shall enter
into a Control Agreement with such financial institution and the Collateral
Agent (subject to the proviso to the preceding sentence), except that the
Obligors shall not be obligated to enter into Control Agreements (or otherwise
provide for the perfection the Collateral Agent's security interest) with
respect to (i) payroll, trust, or fiduciary accounts, including the Trust
Accounts, (ii) zero balance cash management accounts through which disbursements
are made and settled on a daily basis with no balance remaining overnight, and
disbursement accounts for the clearing of drafts, holding only funds in respect
of drafts already made or issued, and (iii) deposit accounts and securities
accounts that have an average weekly aggregate balance of less than $2,000,000;
provided that the aggregate amount of all deposit accounts and securities
accounts not subject to Control Agreements (or otherwise perfected) in reliance
on clause (iii) above shall not, in the case of such accounts located outside
the United Sates,


                                       72



exceed $25,000,000 at any time in the aggregate, and in the case of all such
accounts (including accounts located outside the United Sates), exceed
$35,000,000 in the aggregate at any time.

          SECTION 5.14. LOWER-TIER COVERED TRANSACTION. If and for so long as
the Board is a guarantor of Tranche A or a Lender hereunder, in the event that
any Obligor enters into any "lower-tier covered transaction" (as such term is
defined in 31 C.F.R. Section 19.110, as amended or modified from time to time
and not excepted therefrom by 31 C.F.R. Section 19.200(c)) in respect of the
transactions contemplated hereunder, each Obligor will include the clause
entitled "Certificate Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion - Lower Tier Covered Transactions" as set forth in Appendix
B to Part 19 of title 31 of the C.F.R. in such lower-tier covered transaction
and each Obligor will obtain a certification from the other Person or Persons
party to such lower-tier covered transaction to the effect that each such other
Person (and each "principal" thereof, as such term is defined in 31 C.F.R.
Section 19.105, as amended or modified from time to time) is not presently
debarred, suspended, proposed for debarment, declared ineligible, or voluntarily
excluded from participation in such transaction by any Federal department or
agency, or an explanation why such Person is unable to so certify. Further, no
Obligor will enter into a lower-tier covered transaction with a Person who has
been proposed for debarment under 48 C.F.R. Section 9.4, debarred or suspended
unless granted an exception for such lower-tier covered transaction pursuant to
31 C.F.R. Section 19.215.

          SECTION 5.15. CONTRACTUAL OBLIGATIONS. Each Obligor will perform,
observe or fulfill the obligations, covenants and conditions contained in each
of its Contractual Obligations, provided that a failure to so perform, observe
or fulfill such obligations, covenants and conditions that (i) could not (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect or (ii) does not preclude continued operations by the Obligors at
any of the airport terminals listed on Schedule 4.20 shall not constitute a
breach of this Section 5.15.

          SECTION 5.16. SLOT UTILIZATION. Each Obligor holding or operating
Slots shall utilize its Slots in a manner consistent with the Slot Regulations
so as to avoid the withdrawal of any Slot by the FAA or other revocation or
termination for failure to comply with the Slot Regulations, taking into account
any waivers or other relief granted by the FAA or otherwise under the Slot
Regulations; provided, however, that the Obligors shall not be required to so
utilize Secondary Slots to the extent the Obligors determine that such Secondary
Slots are no longer commercially required. The Obligors shall maintain
personnel, policies, procedures and a computer database for the monitoring,
utilization and management of the Slots in compliance with the Slot Regulations
so as to ensure, to the greatest extent operationally feasible, that no Slot
becomes subject to withdrawal by the FAA or is otherwise revoked or terminated
based upon the failure to comply with the Slot Regulations.

          SECTION 5.17. STOCK EXCHANGE LISTING. Group (a) will use reasonable
efforts to list its common stock on the New York Stock Exchange or another
national securities exchange or for quotation on a national automated
interdealer quotation system, and (b) after the effectiveness of such listing,
will comply in all material respects with all applicable corporate governance
listing standards of such national securities exchange or national automated
interdealer quotation system, including standards relating to the composition,
duties and responsibilities, and functioning of boards of directors and board
committees.

          SECTION 5.18. FURTHER ASSURANCES. Promptly upon the request of the
Board, any Counter-Guarantor or the Agent, each Obligor will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as the Board, such Counter-Guarantor, the Loan
Administrator or the Agent may reasonably request in order to effect fully the
purposes of the Loan Documents and to maintain and ensure the validity,
effectiveness, priority and perfection of the Collateral Agent's Liens pursuant
to the Collateral Documents.


                                       73



          SECTION 5.19. CREDIT RATING OF LOAN. The Borrower agrees to obtain by
December 31, 2005, and maintain for the term of the Loan, if available, and at
the expense of the Borrower, credit and recovery ratings on the Loan from S&P or
Moody's, which ratings shall assess both (x) the risk of default and ultimate
recovery on the Loan and (y) the likely recovery or loss given a default on the
Loan (in each case, without regard to the Board Guaranty or any
Counter-Guaranty). The credit and recovery ratings shall be available to the
Agent, the Collateral Agent, the Loan Administrator, the Lenders and the Board.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

          To induce the other parties to enter into this Agreement (excluding
any other Obligor) and to induce the Counter-Guarantors to amend and restate
their respective Counter-Guarantees, the Obligors agree with each other party
hereto (excluding any other Obligor) and the Counter-Guarantors that, so long as
any of the Obligations (other than contingent indemnification obligations)
remain outstanding:

          SECTION 6.1. LIENS AND RELATED MATTERS.

          (a) Prohibition on Liens. No Obligor will, nor will it permit any
other Obligor to, directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of any Obligor, whether now owned or hereafter acquired, or any
income or profits therefrom, or file or consent to the filing of any financing
statement or other similar notice of any Lien with respect to any such property,
asset, income or profits under the UCC of any state or under any similar
recording or notice statute, except:

          (i) Permitted Encumbrances;

          (ii) (A) Liens existing on the Effective Date on Aircraft Related
     Equipment securing Indebtedness used to acquire such Aircraft Related
     Equipment, (B) Liens on Aircraft Related Equipment acquired after the
     Effective Date created or incurred in connection with the financing of such
     Aircraft Related Equipment (including a financing transaction referred to
     in the proviso to Section 5.8(b) with respect to After-Acquired Section
     1110 Equipment), (C) Liens on Aircraft Related Equipment and related
     property as contemplated under the Airbus Financings, the GE Financings,
     the GE 2001 Credit Agreement and the GE Expendables Mortgage, (D) leases
     and/or subleases of Aircraft Related Equipment to any Obligor or any US
     Airways Express affiliate that is not an Obligor and operates such Aircraft
     Related Equipment for the Borrower or another Obligor pursuant to a
     services agreement with the Borrower or such Obligor, which lease or
     sublease is entered into in connection with the debt financing or leasing
     of such Aircraft Related Equipment, as applicable, and the assignment of
     any such lease or sublease and the proceeds thereof, in the case of a
     lease, to any Person owed Indebtedness used to acquire such Aircraft
     Related Equipment or, in the case of a sublease, to any Person leasing such
     Aircraft Related Equipment to the Borrower or such Obligor, (E) Liens on
     Aircraft Related Equipment securing Permitted Refinancing Indebtedness in
     respect of Indebtedness previously secured by such Aircraft Related
     Equipment in accordance with subclause (A) or (B) above, including in each
     case, Liens securing special facility revenue bonds that finance Aircraft
     Related Facilities, (F) Liens on Aircraft Related Equipment securing
     refinancing Indebtedness of the type described in Section 2.5(c)(ii) so
     long as the Borrower shall have complied with its prepayment obligations
     thereunder, (G) Liens incurred or deposits made in the ordinary course of
     business to secure the


                                       74



     performance of contracts for the purchase of aircraft, (H) Liens in
     existence on the Effective Date (1) on aircraft and engines (other than
     Collateral covered by Aircraft Mortgages) and (2) securing special facility
     revenue bonds, and (I) Liens on an Obligor's interest as lessee or
     sublessor in respect of any Aircraft Related Equipment or interests related
     thereto (including without limitation subleases, refunds or rebates,
     security deposits, rent, supplemental rent, reserves, or return condition
     adjustment payments);

          (iii) other Liens on assets acquired after the Effective Date securing
     or relating to Indebtedness and other liabilities and obligations in each
     case not otherwise prohibited under this Agreement in an aggregate amount
     not to exceed $5,000,000 at any time outstanding;

          (iv) Liens described in Schedule 6.1(a);

          (v) judgment and attachment Liens not (A) giving rise to an Event of
     Default or (B) relating to an action or judgment giving rise to an Event of
     Default under Section 7.1(h);

          (vi) Liens on the assets of any entity or on any asset existing at the
     time such entity or asset is acquired by an Obligor, whether by merger,
     consolidation, purchase of assets or otherwise; provided that (A) such
     Liens are not created, incurred or assumed by such entity in contemplation
     of or in connection with the financing of such entity's being acquired by
     an Obligor, (B) such Liens were created to secure the financing of Aircraft
     Related Equipment or other specific assets, (C) such Liens do not extend to
     any other assets of any Obligor other than the assets acquired with such
     financing and (D) the Indebtedness secured by such Liens is permitted
     pursuant to this Agreement;

          (vii) leases or subleases of real or personal property granted by any
     Obligor to other Persons not interfering in any material respect with the
     ordinary conduct of the business of the Obligors, taken as a whole;

          (viii) Liens on cash and Cash Equivalents securing (A) reimbursement
     obligations in respect of letters of credit issued for the account of any
     Obligor in the ordinary course of business and consistent with past
     practice, so long as the aggregate amount of such cash and Cash Equivalents
     does not exceed 115% of the maximum available amount under the secured
     letters of credit, (B) reimbursement or other margin requirements in
     connection with, in the case of Liens contemplated in this clause (B),
     transactions contemplated by the proviso in Section 6.12, and (C) prepaid
     fuel and healthcare expenses in the ordinary course of business and
     consistent with past practice;

          (ix) Liens securing the First Lien Obligations (as defined in the
     Intercreditor Agreement) and any refinancing, refunding, or replacement
     thereof (but only if the collateral agent thereunder is party to the
     Intercreditor Agreement or a replacement intercreditor agreement in
     accordance with Section 8.19 of the Intercreditor Agreement);

          (x) Liens on assets pledged in connection with a Replacement Secured
     Financing; provided that the Borrower prepays the Loan with the Net Issue
     Proceeds of such Replacement Secured Financing to the extent provided in
     Section 2.5(b);

          (xi) Liens on assets pledged to secure a Permitted Acquisition
     Financing; provided, that the Liens attach only to assets acquired in
     connection with the acquisition financed by such Permitted Acquisition
     Financing; and


                                       75



          (xii) any renewal or substitution of any Lien for any of the preceding
     clauses (ii), (iv) or (vi); provided that any such Liens are not extended
     to additional assets;

provided that the Obligors will not create, incur, assume or permit to exist any
Lien permitted under any of clauses (ii) or (iii) above on any property of an
Obligor already constituting Collateral (which, for the avoidance of doubt, does
not apply to Liens permitted under clause (x) above).

          (b) No Restrictions on Subsidiary Distributions. Except (i) as
provided herein or in the other Loan Documents, (ii) as described on Schedule
6.1(b), (iii) for restrictions on the use of proceeds from a permitted financing
of Aircraft Related Equipment, or (iv) Payment Restrictions contained in
refinancings or replacements of the financings listed in clause (a)(ii) above
that are not more restrictive in a material respect than the corresponding
Payment Restrictions in the original financing, no Obligor will, nor will it
permit any other Obligor to, create or otherwise cause to exist any Payment
Restriction with respect to any Subsidiary of any Obligor.

          SECTION 6.2. INVESTMENTS. No Obligor will, nor will it permit any
other Obligor to, make any Investment other than (i) Investments consisting of
Cash Equivalents; (ii) accounts receivable if credited or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) payroll advances and advances for business and
travel expenses in the ordinary course of business; (iv) Investments made by way
of any endorsement of negotiable instruments received by any Obligor in the
ordinary course of its business and presented by it to any bank for collection
or deposit; (v) stock, obligations or securities received in settlement of
amounts owing to any Obligor in the ordinary course of business or in a
distribution received in respect of an Investment permitted hereunder; (vi)
Investments made in connection with the Trust Agreements; (vii) in addition to
any other permitted investments, any other Investments by the Obligors in an
aggregate outstanding amount not exceeding $25,000,000 at any time; (viii)
Investments pursuant to and in compliance with Section 6.5 or Section 6.9; (ix)
Investments made in Excluded Subsidiaries consistent with past practice; (x) the
Merger; (xi) Investments in travel or airline related businesses made in
connection with Marketing and Service Agreements, alliance agreements,
distribution agreements, agreements with respect to fuel consortium, agreements
relating to flight training, agreements relating to insurance arrangements,
agreements relating to spare parts management systems and other similar
agreements which Investments under this clause (xi) (excluding Investments
existing on the date hereof) shall not exceed $50,000,000 in the aggregate at
any time outstanding; and (xii) Investments constituting non-cash consideration
received in respect of a transaction pursuant to and in compliance with Section
6.13.

          SECTION 6.3. RESTRICTED PAYMENTS. No Obligor will, nor will it permit
any other Obligor to, directly or indirectly, declare, order, pay, make or set
apart, or be obligated to declare, order, pay, make or set apart, any sum for
any Restricted Payment; except that:

          (a) the Obligors may prepay (i) Indebtedness which is secured by a
Lien on property or assets sold in an Asset Sale which is permitted hereunder or
subject to a condemnation, taking, temporary or permanent requisition, or change
of grade, or a covered loss under a casualty insurance policy, in each case in
this clause (a)(i), to the extent that such Indebtedness is required by its
terms to be paid as a result of such Asset Sale, condemnation, taking, temporary
or permanent requisition, change of grade, or covered loss, as applicable, (ii)
Indebtedness with the proceeds of Permitted Refinancing Indebtedness, or (iii) a
Capital Lease of property which is obsolete, worn out or no longer required in
the businesses of the Obligors;

          (b) the Obligors may purchase or redeem (i) the Warrants held by the
Board or the Airbus Counter-Guarantor and (ii) Capital Stock (including options
on any such Capital Stock or related stock appreciation rights or similar
securities) that was issued as compensation from their officers,


                                       76



directors and employees (or their estates or beneficiaries under their estates)
upon death, disability, retirement, termination of employment or pursuant to the
terms of any plan or any other agreement under which such Capital Stock or
related rights were issued, in an amount not to exceed $1,000,000 per Fiscal
Year; and

          (c) the Obligors may pay after the date hereof $125,000,000 to General
Electric Capital Corporation or its Affiliates pursuant to the GE Merger MOU.

          SECTION 6.4. FINANCIAL COVENANTS.

          (a) Group shall not, at the close of any Business Day during the
periods set forth in the tables below, permit (i) the aggregate amount of
Pledged Cash less (ii) the sum of (A) the amount by which all outstanding
advances to the Obligors by credit card processors exceeds twenty percent (20%)
of the Obligors' aggregate outstanding air traffic liability (as determined in
accordance with GAAP, but excluding air traffic liability associated with the
Obligors' frequent flyer, affinity card and like programs) and (B) $285,000,000
less the Pre-Funded Amount (the amount, if any, by which (i) exceeds (ii) being
the "Adjusted Cash Amount") to be less than the lesser of (x) the Fixed Cash
Amount (as defined in clause (i) below) for such period and (y) the Variable
Cash Amount (as defined in clause (ii) below) at such time (such lesser amount,
the "Minimum Adjusted Cash Amount").

          (i) The term "Fixed Cash Amount" means, for each period, the amount
     set forth in the table below across from such period:



PERIOD                                     FIXED CASH AMOUNT
- ------                                     -----------------
                                        
Effective Date through March 31, 2006         $525,000,000
April 1, 2006 through September 30, 2006      $500,000,000
October 1, 2006 through March 31, 2007        $475,000,000
April 1, 2007 through September 30, 2007      $450,000,000
October 1, 2007 through March 31, 2008        $400,000,000
April 1, 2008 through September 30, 2008      $350,000,000


          (ii) The term "Variable Cash Amount" means:

               (x) with respect to the remainder of any period following a
     prepayment of the Loan and the US Airways Loan pursuant to Section 2.5(a)
     and (c) of this Agreement and of the US Airways Loan Agreement with the
     proceeds of any Future Issuance, an amount equal to the product of (A) the
     cash coverage percentage for such period set forth in the table below and
     (B) the difference of (I) the sum of the aggregate principal amounts of the
     Loan and the US Airways Loan scheduled to be outstanding at the start of
     such period as set forth in the table below less (II) the aggregate amount
     of mandatory prepayments of the Loan and the US Airways Loan made in all
     periods prior to such period pursuant to Section 2.5(a) and (c) of this
     Agreement and of the US Airways Loan Agreement with the proceeds of Future
     Issuances:



                                           SCHEDULED PRINCIPAL   CASH COVERAGE
PERIOD                                            AMOUNT           PERCENTAGE
- ------                                     -------------------   -------------
                                                           
Effective Date through March 31, 2006        $840,250,558.77         68.7%
April 1, 2006 through September 30, 2006     $771,500,000.00         71.3%
October 1, 2006 through March 31, 2007       $728,600,000.00         71.7%
April 1, 2007 through September 30, 2007     $685,700,000.00         72.2%
October 1, 2007 through March 31, 2008       $553,800,000.00         79.5%
April 1, 2008 through September 30, 2008     $446,900,000.00         86.1%



                                       77



               and (y) for each period subsequent to the period referred to in
     clause (x) above, the amount determined in accordance with paragraph (x)
     less the amount set forth in the table below across from such subsequent
     period:



PERIOD                                     REDUCTION AMOUNT
- ------                                     ----------------
                                        
April 1, 2006 through September 30, 2006     $ 25,000,000
October 1, 2006 through March 31, 2007       $ 50,000,000
April 1, 2007 through September 30, 2007     $ 75,000,000
October 1, 2007 through March 31, 2008       $125,000,000
April 1, 2008 through September 30, 2008     $175,000,000


          (b) Group shall not permit its ratio of Consolidated EBITDAR to
Consolidated Fixed Charges for the four consecutive fiscal quarters ending on
the dates specified below, to be less than the applicable ratio specified below:



PERIOD               APPLICABLE RATIO
- ------               ----------------
                  
December 31, 2006       0.900:1.00
March 31, 2007          0.929:1.00
June 30, 2007           0.958:1.00
September 30, 2007      0.986:1.00
December 31, 2007       1.015:1.00
March 31, 2008          1.061:1.00
June 30, 2008           1.108:1.00


          SECTION 6.5. RESTRICTION ON ACQUISITIONS; CHANGE IN FISCAL YEAR.

          (a) No Obligor will, nor will it permit any other Obligor to, acquire
by purchase or otherwise all or substantially all of the business, property or
assets of any Person or any division or line of business of any Person
(excluding purchases and acquisitions in the ordinary course of business by an
Obligor of property from any Person not constituting all or substantially all of
the property of such Person), or all or substantially all of the Capital Stock
or other evidence of beneficial ownership of any Person, or acquire any Person
as a new Subsidiary, other than the Merger, except that the Obligors may make
acquisitions of Capital Stock, the assets and/or the business of another Person
(including any division or line of business of such Person) or acquire any
Person as a new Subsidiary so long as (i) the acquisition primarily involves the
acquisition of assets to be used in the business of an Obligor as engaged in by
such Obligor on the date hereof, (ii) immediately before and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing,
(iii) immediately after giving effect to the acquisition, the Obligors shall be
in compliance on a Pro Forma Basis with Section 6.4 (in the case of Section
6.4(b), based on Consolidated EBITDAR for the four quarters ended as of the end
of the most recently ended fiscal quarter) and such compliance shall be
evidenced by an Officer's Certificate of the Borrower demonstrating such
compliance, (iv) prior to the consummation of such acquisition, neither S&P nor
Moody's shall have lowered the corporate credit rating of the Obligors by more
than one notch as a result of such acquisition (whether or not in combination
with other factors), (v) the aggregate purchase price in connection with all
such acquisitions (including therein any Indebtedness assumed in connection with
such acquisitions) consummated after the date hereof, together with all
Investments


                                       78



pursuant to clause (xi) of Section 6.2, does not exceed $50,000,000 during any
twelve (12) month period and $150,000,000 in the aggregate during the term of
the Loan, (vi) if the acquisition is structured as a consolidation or merger, it
complies with Section 6.9, and (vii) the Obligors comply with their obligations
under Section 5.8(a) and/or (b) with respect to the properties, assets or Person
so acquired (as applicable).

          (b) No Principal Obligor shall change its Fiscal Year.

          SECTION 6.6. SALES-LEASEBACKS. Except with respect to Aircraft Related
Equipment, no Obligor will, nor will it permit any other Obligor to, directly or
indirectly, become liable after the Effective Date as lessee or as a guarantor
or other surety with respect to any lease, whether an Operating Lease or a
Capital Lease, of any property (whether real, personal or mixed), whether now
owned or hereafter acquired, in each case which (i) an Obligor has sold or
transferred or is to sell or transfer to any other Person (other than another
Obligor) or (ii) an Obligor intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by such
Obligor to any Person (other than another Obligor) in connection with such
lease; provided that after the Effective Date the Obligors may become and remain
liable as lessee, guarantor or other surety with respect to any such lease if
and to the extent that (A) the annual aggregate rentals under all such leases
(other than leases with respect to Aircraft Related Equipment) shall not exceed
$20,000,000 and (B) the Obligors comply with any prepayment obligations under
Section 2.5(d); and provided, further, that the restrictions contained in this
Section 6.6 shall not apply to the transactions described on Schedule 6.6.

          SECTION 6.7. TRANSACTIONS WITH AFFILIATES.

          (a) No Obligor shall, directly or indirectly, (i) sell, lease,
transfer or otherwise dispose of any of its properties or assets, or issue
securities to, (ii) purchase any property, assets or securities from, (iii) make
any Investment in or (iv) enter into any contract or agreement with or for the
benefit of, any Affiliate or holder of 5% or more of any class of Capital Stock
(and any Affiliate of such holder) of any Obligor (an "Affiliate Transaction"),
other than (x) Affiliate Transactions permitted under Section 6.7(b) and (y)
Affiliate Transactions (including lease transactions) which are on fair and
reasonable terms no less favorable to such Obligor than those as might
reasonably have been obtainable at such time from an unaffiliated party;
provided that if an Affiliate Transaction or series of related Affiliate
Transactions involves or has a value in excess of $10,000,000, such Obligor
shall not enter into such Affiliate Transaction or series of Affiliate
Transactions unless a majority of the disinterested members of the board of
directors of Group shall reasonably and in good faith determine that such
Affiliate Transaction is fair and reasonable to such Obligor or is on terms no
less favorable to such Obligor than those that might reasonably have been
obtained at such time from an unaffiliated party. For purposes of this Section
6.7, Section 9.9 notwithstanding, the determination of whether a transaction is
"fair" shall be governed by the Delaware General Corporation Law, including
decisional law thereunder.

          (b) The provisions of Section 6.7(a) shall not apply to (i) the
agreements listed on Schedule 6.7(b) as in effect on the Effective Date or any
transaction contemplated thereby; (ii) any payments or other transactions
pursuant to any tax sharing agreement between any Obligor and any other Obligor
or Excluded Subsidiary and any other transaction solely between or among
Obligors (subject to Section 6.14(a), if applicable) and between or among any
Obligors and an Excluded Subsidiary (including the guaranty of obligations of
other Obligors, but not including the guaranty of obligations of Excluded
Subsidiaries) provided that such transactions are not otherwise prohibited by
this Agreement; (iii) reasonable and customary fees and compensation paid to,
and indemnity provided on behalf of, officers, directors and employees of any
Obligor or Excluded Subsidiary, as determined by the board of directors of such
Obligor or the senior management of the Borrower or Group in good faith; (iv)
any Restricted Payments permitted by Section 6.3; (v) transactions contemplated
by the Marketing and Service Agreements; (vi) transactions between any Obligor
with any employee labor unions or other


                                       79



employee groups of such Obligor provided such transactions are not otherwise
prohibited by this Agreement; (vii) the Loan Documents and the transactions
contemplated thereby; and (viii) transactions expressly contemplated by the Plan
of Reorganization, without giving affect to any subsequent amendments to the
terms governing such transactions. The Obligors rights under clause (ii) of this
subsection (b) notwithstanding, the Obligors expressly acknowledge and agree
that, in the case of any sale, transfer or other disposition of assets or
property which are Collateral from one Obligor to another Obligor (or to an
Excluded Subsidiary), whether pursuant to this Section 6.7, Section 6.9 or
otherwise, the Lien of the Collateral Agent in such assets or property
immediately prior to such sale, transfer or other disposition shall continue and
survive such transaction and remain attached to (and perfected in) such assets
or property following such transaction, and each Obligor which takes title to
such assets or property acknowledges and agrees that such title is subject to
the Lien of the Collateral Agent.

          SECTION 6.8. CONDUCT OF BUSINESS. From and after the date hereof, (a)
no Obligor shall engage in any principal line of business other than (i) the
businesses engaged in by the Obligors on the date hereof and related businesses
and (ii) such other lines of business as may be consented to by the Board and
the Requisite Lenders, and (b) each of the Excluded Subsidiaries shall not
engage in any business other than the business engaged in by it on the Effective
Date.

          SECTION 6.9. MERGER OR CONSOLIDATION. No Obligor will consolidate with
or merge with any other Person or convey, lease or transfer its properties and
assets substantially as an entirety to any Person, other than the Merger,
unless: (i) (a) in the case of a consolidation or merger involving the Borrower
or US Airways, the Borrower or US Airways (as applicable) is the surviving
entity or if the Borrower or US Airways (as applicable) is not the surviving
entity, such surviving entity or the Person that acquires by conveyance, lease
or transfer the properties and assets of the Borrower or US Airways (as
applicable) substantially as an entirety, shall be a corporation organized and
existing under the laws of the United States of America or any State thereof or
the District of Columbia and can make the representations contained in Section
4.1(b), and shall expressly assume, by an agreement executed and delivered to
the Agent and the Board in form and substance reasonably satisfactory to the
Agent and the Board, the Borrower's obligations to repay the Loan (in the case
of the Borrower) and all (other) obligations of the Borrower or US Airways (as
applicable) under the Loan Documents, or (b) in the case of a consolidation or
merger involving Group, Group is the surviving entity or if Group is not the
surviving entity, such surviving entity or the Person that acquires by
conveyance, lease or transfer the properties and assets of Group substantially
as an entirety, shall be a corporation organized and existing under the laws of
the United States of America or any State thereof or the District of Columbia,
and shall expressly assume, by an agreement executed and delivered to the Agent
and the Board, in form and substance reasonably satisfactory to the Agent and
the Board, all of Group's obligations under each Loan Document to which it is a
party; (ii) immediately before and after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing and
immediately after giving effect to such transaction, Group or if applicable, its
successor, shall be in compliance, on a Pro Forma Basis, with Section 6.4 (in
the case of Section 6.4(b), based on Consolidated EBITDAR for the four quarters
ended as of the end of the most recently ended fiscal quarter); (iii) if Section
6.14(b) is applicable to such transaction, the Obligors shall comply therewith;
and (iv) the Borrower has delivered to the Agent an Officer's Certificate and an
opinion of counsel from counsel reasonably satisfactory to the Agent, in form
and substance reasonably satisfactory to the Agent, stating that such
consolidation, merger, conveyance, lease or transfer and such agreement comply
with this Section 6.9 and that all conditions precedent herein provided for
relating to such transaction have been complied with and addressing such other
matters as may be reasonably requested by the Board and the Agent.
Notwithstanding anything to the contrary contained in this Section 6.9 but
subject to Section 6.14(a)(i) and (b) (in each case, if applicable), (A) any
Obligor may merge or consolidate with any other Obligor; provided that in the
case of each such merger or consolidation involving a Principal Obligor, if such
Principal Obligor shall not be the continuing or surviving Person, the surviving
Obligor shall comply with clauses (i)(a) or (i)(b) (as applicable) and (iii)


                                       80



above, and (B) any Obligor (other than a Principal Obligor, except in compliance
with the preceding clause (i)) may convey, lease or transfer its properties and
assets substantially as an entirety to any other Obligor.

          SECTION 6.10. LIMITATIONS ON AMENDMENTS.

          (a) No Obligor shall amend, waive or modify, nor shall it consent to
or request any amendment, waiver or modification, of any of the material terms,
conditions, representations and covenants contained in any Indebtedness for
borrowed money that (i) shortens the final maturity date of such Indebtedness
(without giving effect to any amendment, waiver or modification, the "Initial
Indebtedness") or (ii) requires the acceleration of the final scheduled maturity
date and/or any principal payments, including but not limited to scheduled
payments and mandatory prepayments, and/or increases the principal amount
payable on any date (including, without limitation, pursuant to mandatory
prepayments) prior to the dates of analogous payments of such Initial
Indebtedness; provided, however, that this Section 6.10(a) shall not prohibit
the incurrence of Permitted Refinancing Indebtedness, the repayment of the
Indebtedness being refinanced, or any amendment, waiver or modification of the
terms of the Indebtedness being refinanced necessary to effect such repayment.
No Obligor shall amend, waive or modify, nor shall it consent to or request any
amendment, waiver or modification, of the US Airways Loan Agreement unless such
amendment, waiver or modification is permitted by and in compliance with the
Intercreditor Agreement.

          (b) No Obligor will, nor will it permit any other Obligor to, amend,
adopt or terminate any Plan (i) unless such action could not reasonably be
expected to have a Material Adverse Effect, or (ii) in any manner that could
reasonably be expected to give the PBGC a sound and just basis to commence
Proceedings against the Obligors on the basis that such action constitutes a
subsequent change in connection with the Obligor's termination or replacement of
the defined benefit Retirement Income Plan for Pilots of US Airways, Inc. with
the 2003 Pilots Defined Contribution Plan.

          (c) No Obligor shall amend, restate, supplement or modify (or consent
to or permit any amendment, restatement, supplement or modification of) its
Investment Guidelines without the prior written consent of the Controlling
Creditor; provided that, for the avoidance of doubt, this Section 6.10(c) shall
not be deemed to prohibit the adoption of the Investment Guidelines by any
Obligor.

          SECTION 6.11. NO FURTHER NEGATIVE PLEDGES. Except with respect to (a)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to a permitted Asset Sale
(including sale-leaseback transactions not prohibited by this Agreement), (b)
restrictions by reason of customary provisions restricting pledges, Liens,
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be), (c) negative pledges contained in the Airbus
Financings and the GE Financings (and any replacements or refinancings of any
thereof), and (d) permitted refinancings or replacements of Indebtedness
outstanding on the Effective Date, after the date hereof, no Obligor will, nor
will it permit any other Obligor to, enter into any agreement prohibiting the
creation or assumption of any Lien to secure the Obligations upon any of its
properties or assets, whether now owned or hereafter acquired to the extent that
such properties or assets are required to be pledged to secure the Obligations.

          SECTION 6.12. SPECULATIVE TRANSACTIONS. No Obligor will, nor will it
permit any other Obligor to, become a general partner in any general or limited
partnership or joint venture engaged or involved in, nor will any Obligor engage
in any transaction involving, commodity options or future contracts or any
similar speculative transactions; provided, however, that the following
transactions shall


                                       81



not be prohibited by this Section 6.12: (i) transactions designed to hedge
against fluctuations in fuel costs, entered into in the ordinary course of
business, consistent with past business practice or then current industry
practice, and not entered into for speculative purposes, (ii) transactions
designed to hedge interest rates entered into with respect to notional amounts
not to exceed actual or anticipated Indebtedness and not entered into for
speculative purposes and (iii) transactions designed to hedge against risks
associated with fluctuations in currencies entered into in the ordinary course
of business.

          SECTION 6.13. ASSET SALES. No Obligor will, nor will it permit any
other Obligor to, directly or indirectly, consummate any Asset Sale unless (i)
the consideration received in respect of such Asset Sale is at least equal to
the Fair Market Value of the assets subject to such Asset Sale and (ii) at least
85% of the value of the consideration received by such Obligor in respect of
such Asset Sale (net of the amount of any Indebtedness secured by the assets
sold in such Asset Sale which is assumed by the purchaser thereof) is in the
form of cash or Cash Equivalents; provided that without the prior written
consent of the Controlling Creditor, the Obligors shall not consummate any Asset
Sales if and to the extent that the aggregate Net Cash Proceeds from all such
Asset Sales would exceed $10,000,000 per Fiscal Year, other than (x) Designated
Asset Sales and (y) sale-leasebacks not prohibited by Section 6.6 (subject to
compliance with Section 2.5(d), if applicable).

          SECTION 6.14. SPARE PARTS.

          (a) No Obligor shall (i) sell, lease, transfer or otherwise dispose of
its spare parts which are Collateral to another Obligor if such other Obligor
has pledged spare parts which are not Collateral to secure any other
Indebtedness or obligation, other than in the ordinary course of business as
though between unaffiliated air carriers (including pursuant to interchange,
pooling, exchange and other similar arrangements customary in the airline
industry and consistent with Section 3.4(f) of the Aircraft Mortgages (as
defined in clause (ii) of the definition of Collateral Documents) or (ii)
commingle at any location its spare parts which are Collateral with the spare
parts of another Obligor if such other Obligor has pledged spare parts which are
not Collateral to secure any other Indebtedness or obligation, unless the
ownership of each such commingled spare part can be definitively determined at
all times by reference to the Obligors' spare parts tracking numbers and system;
provided that spare parts that are segregated on a separate shelf or in a
separate storage bin or other storage unit shall not be considered as having
been commingled even though such spare parts are present at the same location so
long the Obligors install signs on each such shelf, bin or other storage unit
containing Collateral bearing the inscription: "Property of US Airways, Inc. (or
other applicable Obligor), Mortgaged to Wilmington Trust Company, as Collateral
Agent" (such sign to be replaced if there is a successor Collateral Agent).

          (b) No Obligor who has pledged spare parts as Collateral will
consolidate or merge with, or convey, lease or transfer its properties and
assets substantially as an entirety to, or liquidate into, or otherwise combine
with, any other Obligor if such other Obligor has pledged spare parts which are
not Collateral to secure any other Indebtedness or obligation, unless (i)
following such transaction the Lien of the Collateral Agent in such spare parts
Collateral will remain perfected with the same priority as existed immediately
prior to such transaction, (ii) the surviving Obligor has established adequate
tracking and other systems to ensure that the spare parts which are Collateral
are not commingled with the surviving Obligor's other spare parts which are not
Collateral, (iii) at all times following such transaction the surviving Obligor
will be required to maintain spare parts subject to the Lien of the Collateral
Agent having an aggregate Appraised Value of at least 75% of the Appraised Value
of the spare parts Collateral set forth in the Baseline Appraisal, (iv) the
Obligors have provided thirty (30) days' prior written notice of such
transaction to the Agent, Collateral Agent, Loan Administrator and the Board
describing in reasonable detail the actions the Obligors will take to ensure
compliance with clauses (i) and (ii) above, and (v) no later than thirty (30)
days following the consummation of such transaction, Group has provided


                                       82



an Officer's Certificate to the Agent (with a copy to the Collateral Agent, Loan
Administrator and the Board) certifying that such transaction complies with this
Section 6.14(b).

          (c) Notwithstanding the foregoing clauses (a) and (b), the Borrower
may, on behalf of the other Obligors, from time to time propose amendments to
this Section 6.14 designed to both adequately protect the Collateral Agent's
interest in the spare parts Collateral and, to the extent consistent therewith,
maximize the Obligors' operational flexibility, and the Obligors, the Agent, and
the Board (so long as the Board is either a guarantor of Tranche A or a Lender
hereunder) shall have the ability by written consent to adopt any such proposal
and amend this Agreement to reflect the same without the consent of any other
Person, without regard to the provisions of Section 9.1(a).

                                   ARTICLE VII

                                EVENTS OF DEFAULT

          SECTION 7.1. EVENTS OF DEFAULT. Each of the following events shall
constitute an "Event of Default":

          (a) (i) failure by the Borrower to pay any installment of principal of
the Loan when due, whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise or (ii) failure by the Borrower to pay any interest on
the Loan or any fee or any other amount due under this Agreement or any other
Loan Document within five (5) Business Days after the date due; or

          (b) any Obligor (i) fails to make when due (after giving effect to
applicable cure or grace periods, and whether as primary obligor or as guarantor
or other surety) payments in respect of rents, principal, interest or premium or
other payments, if any, under or in respect of one or more Capital Leases or
other Indebtedness or Operating Leases (other than Indebtedness referred to in
clause (a) of this Section 7.1) and the aggregate amount of all payment defaults
(after giving effect to applicable cure or grace periods) then existing in
respect of Indebtedness and aggregate amounts under Operating Leases shall equal
or exceed $25,000,000 (for clarification it shall be an Event of Default if the
applicable Obligor fails to pay when due the payment to General Electric Capital
Corporation or its applicable Affiliate referred to in Section 6.3(c)) or (ii)
fails to duly observe, perform or comply with any agreement with any Person or
any term or condition of any instrument, if such failure, either individually or
in the aggregate, shall have (A) resulted in the acceleration of, or entitles
any Person to accelerate, the payment of Indebtedness owed by such Obligor
which, together with all other accelerated Indebtedness and Indebtedness that is
entitled to be accelerated, has a principal amount that equals or exceeds
$25,000,000, (B) given rise under one or more Operating Leases to obligations
by, or rights of any other Person(s) to require, an Obligor to make payments
that equal or exceed, or to return assets leased by an Obligor and having a fair
market value that equals or exceeds, $25,000,000 or (C) resulted in the
termination of or given rise to rights of any other Person(s) to terminate one
or more Operating Leases under which the aggregate net present value of the
remaining basic rent payments (as determined in accordance with the formulas for
calculating "net present value" under the applicable leases or for leases
without such formulas, in accordance with formulas under leases for comparable
terms and comparable amounts) equals or exceeds $25,000,000; provided that the
failure by an Obligor to make one or more payments that are attributable to and
relate solely to return conditions under aircraft leases shall not constitute an
Event of Default under this Section 7.1(b) so long as the Obligor is, in good
faith, disputing the amount of such payments; or

          (c) failure by an Obligor to perform or comply with any term or
condition contained in Section 5.2, Section 5.10 or Article VI of this Agreement
(other than Section 6.4);


                                       83



          (d) any representation, warranty, certification or other statement
made by any Obligor in any Loan Document or in any statement or certificate at
any time given by any Obligor in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or

          (e) any default by any Obligor in the performance of or compliance
with any provision contained in this Agreement or any of the other Loan
Documents required to be performed or complied with by it (other than any such
provision referred to in any other clause of this Section 7.1), and (i) with
respect to a default under Section 6.4(a), such default shall not have been
waived within two (2) Business Days after the date of such default and (ii) with
respect to any other default, such default shall not have been remedied or
waived within thirty (30) days after the earliest of (A) a Responsible Officer
of a Principal Obligor obtaining knowledge of such default (which, in the case
of Section 6.4(b), will be presumed to have occurred no later than the date of
the delivery of financial statements pursuant to Section 5.1 for the end of the
accounting period as of which such default exists) or (B) receipt by the
Borrower of notice from the Agent or the Board of such default; or

          (f) (i) a court shall enter a decree or order for relief in respect of
any Obligor in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
any other relief described in clause (ii) below or other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against any Obligor seeking (A) relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, (B) the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
such Obligor, or over all or a substantial part of its property, or (C) the
appointment of an interim receiver, trustee or other custodian of any Obligor
for all or a substantial part of its property, and any such event described in
this clause (ii) against such Obligor shall continue for 60 days without being
dismissed or discharged; or (iii) a warrant of attachment, execution or similar
process shall have been issued against all or any substantial part of the
property of any Obligor; or

          (g) (i) any Obligor shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian of all or a substantial part of its
property; or (ii) any Obligor shall make any assignment for the benefit of
creditors; or (iii) the board of directors of any Obligor (or any committee
thereof) shall adopt any resolution to approve any of the actions referred to in
clauses (i) or (ii) above; or

          (h) (i) one or more final judgments or orders for the payment of money
in an aggregate amount in excess of $25,000,000 and which are not covered by
insurance (treating any deductibles, self-insurance (except to the extent
reinsured) or retention as not so covered) or (ii) one or more non-monetary
judgments or orders that could reasonably be expected to have a Material Adverse
Effect shall have been entered against one or more Obligors and shall remain
undischarged or unstayed, by reason of a pending appeal or otherwise, for a
period in excess of sixty (60) days; or

          (i) the Board Guaranty shall for any reason (other than by reason of
Sections 2.03, 2.04, 2.05 or 2.06 of the Board Guaranty) cease to be in full
force and effect or the Board shall assert that any of its obligations
thereunder are invalid or unenforceable; or

          (j) Any Counter-Guarantee shall for any reason cease to be in full
force and effect or any Counter-Guarantor shall fail to perform its obligations
under its Counter-Guarantee or shall, in


                                       84



writing, repudiate such Counter-Guarantee or deny that its obligations
thereunder are valid, binding and enforceable; or

          (k) Any Counter-Guarantor Letter of Credit shall for any reason cease
to be in full force and effect other than in accordance with its express terms
and the terms of the related Counter-Guarantee or the issuer of such
Counter-Guarantor Letter of Credit shall fail to perform its obligation
thereunder or shall, in writing, repudiate such Counter-Guarantor Letter of
Credit or deny that its obligations thereunder are valid, binding and
enforceable; or

          (l) any order, judgment or decree shall be entered against any Obligor
decreeing the dissolution of such Obligor and such order shall remain
undischarged or unstayed for a period in excess of thirty (30) days; or

          (m) (i)(A) any of the Loan Documents shall cease to be in full force
and effect or (B) any Obligor shall so assert or (ii) any Lien under the
Collateral Documents on any material portion of the Collateral shall cease to be
enforceable and of the same effect and priority purported to be created thereby,
and except in the case of clause (i)(A) of this subsection (m), such default
shall continue unremedied for a period of ten (10) days; or

          (n) any of the insurance coverages required to be maintained by the
Obligors pursuant hereto or under the Collateral Documents shall lapse,
terminate or otherwise cease to be in full force and effect, other than coverage
of losses and liabilities that in the aggregate are reasonably expected to be
immaterial to the operations or financial condition of the Obligors taken as a
whole; or

          (o) any Obligor shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or

          (p) (i) Slots, other than Secondary Slots which the Obligors have
determined are no longer commercially required, (x) shall have been withdrawn by
the FAA or otherwise revoked or terminated during the term of the Loan as the
result of failure to comply with the Slot Regulations and (y) the aggregate
Appraised Value of such Slots (in each case, as of the date of such withdrawal,
revocation or termination) shall have exceeded $10,000,000; or (ii) any Obligor
implements a cessation, cancellation or curtailment of flight operations or a
change in flight schedules which, assuming no subsequent further action (such as
the sale, lease or trade of the affected Slots or their allocation to new or
additional flights) is taken, could reasonably be expected to result in the
withdrawal by the FAA or other revocation or termination based upon failure to
comply with the Slot Regulations of Slots, other than Secondary Slots, the
aggregate Appraised Value of which (as of the date of such cessation,
cancellation or curtailment) exceeds $10,000,000; it being understood, however,
that an Event of Default shall not have occurred under this clause (ii) if the
Slots otherwise affected are sold, leased or traded in arm's length transactions
or allocated to new or additional flights prior to the implementation of such
cessation, cancellation or curtailment of flight operations or change in flight
schedules; or

          (q) any default by any Obligor in the performance of or compliance
with Section 5.14 of this Agreement and such default shall not have been
remedied or waived within 180 days after the earlier of (i) a Responsible
Officer of Group or the Borrower obtaining knowledge of such default or (ii)
receipt by the Borrower of notice from the Agent or the Board of such default.

          SECTION 7.2. REMEDIES. During the continuance of any Event of Default,
the Agent shall, solely at the request of the Controlling Creditor by notice to
the Borrower (with a copy to the Board and the Loan Administrator), declare that
the Loan, all interest thereon and all other amounts and Obligations payable
under this Agreement to be immediately due and payable, whereupon the Loan, all


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such interest and all such amounts and Obligations shall become and be
immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that upon the occurrence of an Event of Default specified in
clause (f) or (g) of Section 7.1, the Loan, all such interest and all such
amounts and Obligations shall automatically become and be immediately due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower. Remedies exercisable by the
Agent or the Collateral Agent hereunder or under any Collateral Document shall
be exercised solely upon instructions received by the Agent or the Collateral
Agent from the Controlling Creditor in writing.

                                  ARTICLE VIII

                       THE AGENT AND THE COLLATERAL AGENT

          The parties hereto agree as follows:

          SECTION 8.1. AUTHORIZATION AND ACTION. Each Lender and the Board
hereby appoints and authorizes each of the Agent and the Collateral Agent to
take such action as administrative agent and collateral agent, respectively, on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated by such Lender to it as Agent or Collateral Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto, and each of the Agent and the Collateral Agent hereby
accepts such authorization and appointment. The Agent and the Collateral Agent
shall be obligated to perform such duties and only such duties as are
specifically set forth in this Agreement and the other Loan Documents and no
implied covenants or obligations shall be read into this Agreement or any other
Loan Document against the Agent or the Collateral Agent. Except with respect to
any matter as to which the Agent or the Collateral Agent is expressly directed
to take any specific action (or refrain from taking any specific action) by the
terms of this Agreement or any other Loan Documents, neither the Agent nor the
Collateral Agent shall be required to take any action (including making any
determination) or refrain from taking any action except upon the written
instructions of the Controlling Creditor, and neither the Agent nor the
Collateral Agent shall be required to exercise any discretion vested in the
Agent or the Collateral Agent under this Agreement or any other Loan Document,
but each of the Agent and the Collateral Agent shall be required to act or to
refrain from acting with regard to any such action (and shall be fully protected
in, and shall have no liability for, so acting or refraining from action) upon
such written instructions of the Controlling Creditor (including, without
limitation, with respect to matters arising under the Collateral Documents and
the other Loan Documents), and such instructions shall be binding upon all
Lenders and the Board; provided, however, that neither the Agent nor the
Collateral Agent shall be required to take any action which could reasonably be
expected to expose either the Agent or the Collateral Agent to liability or
which is contrary to this Agreement, the Board Guaranty, any Counter-Guarantee,
any Counter-Guarantor Letter of Credit, the Notes any other Loan Document or
applicable law. As to any provisions of this Agreement or any other Loan
Document under which action may be taken or approval given by less than all of
the Lenders or the Board or both, as the case may be, the action taken or
approval given by the required Lenders or the Board or both, as the case may be,
shall be binding upon all Lenders and the Board to the same extent and with the
same effect as if each Lender and the Board had joined therein. Each of the
Agent and the Collateral Agent shall be entitled to rely upon any note, notice,
consent, certificate, affidavit, letter, telegram, teletype message, facsimile
transmission, statement, order or other document, instrument or writing believed
by it to be genuine and to have been signed or sent by the proper person or
persons and, in respect of legal matters, upon the opinion of counsel selected
by the Agent or the Collateral Agent. Each of the Agent and the Collateral Agent
may deem and treat the payee of the Notes as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
shall have been filed with the Agent and the Collateral Agent. Any request,
authority or consent of any Person who at the time of making such request or
giving such authority or consent is the holder of the Loan shall


                                       86



be conclusive and binding on any subsequent holder, transferee or assignee of
the Loan. Upon any delivery of any instructions to the Collateral Agent by the
Requisite Lenders pursuant to this Agreement, the Agent shall certify to the
Collateral Agent that the Lenders delivering such instructions constitute the
Requisite Lenders under the Agreement and (i) the Collateral Agent may but shall
be under no obligation to follow such instructions until the Agent shall certify
to the Collateral Agent that the Lenders delivering such instructions constitute
the Requisite Lenders under the Agreement and (ii) the Collateral Agent shall be
fully protected in, and shall have no liability for, following such instructions
whether or not the Agent shall have made the certification referred to in clause
(i) above or declining to follow such instructions until the Agent shall have
made the certification referred to in clause (i) above. Each Lender and the
Board hereby authorizes and directs the Collateral Agent to enter into the
Collateral Documents on its behalf, and acknowledges and agrees to all of the
terms and conditions thereof and agrees to be bound thereby. No provision of
this Agreement or any other Loan Document shall be deemed to impose any duty or
obligation on the Collateral Agent to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal or in which the Collateral Agent shall be
unqualified or incompetent to perform any such act or acts or to exercise any
such right, power, duty or obligation or if such performance or exercise would
constitute doing business by the Collateral Agent in such jurisdiction or impose
a tax on the Collateral Agent by reason thereof or to risk its own funds or
otherwise incur any financial liability in the performance of its duties
hereunder.

          SECTION 8.2. RELIANCE, ETC. Neither the Agent nor the Collateral Agent
nor any of their respective Affiliates, directors, officers, agents or employees
shall be liable to any Lender, the Loan Administrator or the Board for any
action taken or omitted to be taken by it or by such directors, officers, agents
or employees under or in connection with this Agreement, the Notes or any other
Loan Document, except for its or their own gross negligence or willful
misconduct as actually and finally determined by a final, non-appealable
judgment of a court of competent jurisdiction and only to the extent of direct
(as opposed to special, indirect, consequential or punitive) damages. Without
limitation of the generality of the foregoing, each of the Agent and the
Collateral Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Lender, the Loan Administrator or the Board for any action taken or omitted to
be taken in good faith by it in accordance with the advice of such experts; (ii)
makes no warranty or representation to any Lender, the Loan Administrator or,
except, with respect to the Agent as expressly provided in the Board Guaranty,
the Board, and shall not be responsible to any Lender, the Loan Administrator
or, except, with respect to the Agent as expressly provided in the Board
Guaranty, the Board, for any statements, warranties or representations (whether
oral or written) made in or in connection with this Agreement, the Notes or any
other Loan Document; (iii) shall not have any duty, and shall incur no liability
for its failure, to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement, the Notes or any
other Loan Document on the part of any Obligor or to inspect the property
(including the books and records) of any Obligor; (iv) shall not be responsible
to any Lender, the Loan Administrator or the Board for any recitals, statements,
representations or warranties in this Agreement, the Notes or any other Loan
Document, or any other instrument or document furnished pursuant thereto, or for
the validity, perfection, priority or enforceability of the liens or security
interests in any of the Collateral created or intended to be created by any Loan
Document, or for the validity or sufficiency of the Collateral or any Loan
Document, or for insuring the Collateral or for any payment of taxes, charges,
assessments, or liens upon the Collateral or otherwise as to the maintenance of
the Collateral, for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Notes or any other Loan
Document, or any other instrument or document furnished pursuant thereto; (v)
shall incur no liability under or in respect to this Agreement, the Notes or any
other Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, facsimile transmission, cable
or telex) believed by it to be genuine and signed or sent by the proper party or
parties; and (vi) may deem and treat each Lender which makes a loan hereunder as
the holder of the indebtedness resulting therefrom for all purposes hereof until
the Agent receives and accepts an


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Assignment and Acceptance entered into by such Lender, as assignor, and an
eligible assignee as provided in Section 9.2. The Collateral Agent shall be
under no obligation or duty to take any action under this Agreement or any other
Loan Document or otherwise if taking such action (i) would subject the
Collateral Agent to a tax in any jurisdiction where it is not then subject to a
tax or (ii) would require the Collateral Agent to qualify to do business in any
jurisdiction where it is not then so qualified, unless in each such case the
Collateral Agent shall receive security, or indemnity satisfactory to it against
such tax and any liability resulting from such qualification, in each case as
results from the taking of such action under this Agreement or any other Loan
Document. The Collateral Agent may execute any of the trusts or powers hereof
and perform any duty hereunder, or under any other Loan Document, either
directly or by or through agents or attorneys-in-fact. The Collateral Agent
shall be entitled to the advice of counsel concerning all matters pertaining to
such trusts, powers and duties and shall not be liable to any Lender, the Loan
Administrator or the Board for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel. The Collateral Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it without gross negligence or willful misconduct.
The Collateral Agent shall not be liable for interest on any money or assets
received by it except as the Collateral Agent may agree in writing. Assets held
by the Collateral Agent pursuant to this Agreement or any Collateral Document
need not be segregated from other assets except to the extent expressly required
hereunder or thereunder or required by law. Notwithstanding anything to the
contrary in this Agreement or any other Loan Document, (i) if any provision of
this Agreement or any other Loan Document provides that the Collateral Agent
shall act at the direction of the Agent, the Collateral Agent shall be fully
protected in, and shall have no liability for, taking any action pursuant to
such direction, and (ii) if the Collateral Agent shall request instructions from
the Controlling Creditor with respect any act or action (including the failure
to act) in connection with this Agreement or any other Loan Document, the
Collateral Agent shall be entitled to refrain from such act or taking such
action unless and until the Collateral Agent shall have received written
instructions from the Controlling Creditor and the Collateral Agent shall not
incur any liability to any Person by reason of so refraining and shall be fully
protected in following any such written instructions. Whenever in the
administration of this Agreement or any other Collateral Document, the
Collateral Agent shall deem it necessary or desirable that a factual matter be
proved or established in connection with the Collateral Agent taking, suffering
or omitting any action hereunder or thereunder, such matter (unless other
evidence in respect thereof is specifically prescribed) may be deemed to be
conclusively proved and established by a certificate of a Responsible Officer of
the Borrower (with a copy to the Agent), the Agent or the Controlling Creditor
delivered to the Collateral Agent, and such certificate shall be full warrant to
the Collateral Agent for any action taken, suffered or omitted in reliance
thereon and the Collateral Agent shall be fully protected in connection
therewith and shall have no liability therefor.

          SECTION 8.3. AFFILIATES. If and so long as the Agent or the Collateral
Agent shall remain a Lender, the Agent or the Collateral Agent, as applicable,
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent or the
Collateral Agent, and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include the Agent and the Collateral Agent, each in its
individual capacity. Unrelated to its role as Agent or Collateral Agent as set
forth herein, the Agent and the Collateral Agent and their respective Affiliates
may accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, any Obligor and any Person who
may do business with or own securities of any Obligor, all as if it were not the
Agent or the Collateral Agent, as applicable, hereunder and without any duty to
account therefor to the Lenders.

          SECTION 8.4. REPRESENTATIONS OF THE LENDERS AND THE BOARD. Each
Lender, the Loan Administrator and the Board's representatives have actively
engaged in the negotiation of all of the terms of this Agreement. The Board's
representatives have met with the Obligors to discuss the business,


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affairs, financial condition and prospects of the Obligors. Except as otherwise
expressly provided in this Agreement or any of the other Loan Documents, neither
the Agent nor the Collateral Agent shall have any duty or responsibility, either
initially or on a continuing basis, under this Agreement or any other Loan
Document, to provide any Lender, the Loan Administrator or the Board with any
credit or other information with respect to the Borrower whether coming into its
possession as of the date of this Agreement or at any time thereafter, or to
notify any Lender, the Loan Administrator or the Board of any Default or Event
of Default except as provided in Section 8.5. This Agreement and all instruments
or documents delivered in connection with this Agreement have been reviewed and
approved by each Lender, the Loan Administrator and the Board and none of the
Lenders, the Loan Administrator or the Board has relied on the Agent or the
Collateral Agent as to any legal or factual matter in connection therewith or in
connection with the transactions contemplated thereunder.

          SECTION 8.5. EVENTS OF DEFAULT; TERMINATION OF BOARD GUARANTY.

          (a) In the event of the occurrence of any Default or Event of Default,
any Lender, any Counter-Guarantor or the Board knowing of such event may (but
shall have no duty to), or any Principal Obligor pursuant to Section 5.1(b)(vi)
hereof shall, give the Agent and the Collateral Agent written notice specifying
such Default or Event of Default and expressly stating that such notice is a
"notice of default". Neither the Agent nor the Collateral Agent shall be deemed
to have knowledge of such events unless the Agent or the Collateral Agent, as
applicable, has received such notice or, with respect to the Agent only, unless
the Default or Event of Default consists of a failure of payment of principal or
interest on the Loan. In the event that the Agent or the Collateral Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Agent or the Collateral Agent, as applicable, shall give written notice thereof
to the Lenders, the Counter-Guarantors, the Board and the Loan Administrator. In
the event that such notice is a notice of an Event of Default or such Default
matures into an Event of Default, the Agent and the Collateral Agent shall take
such action with respect to such Default or Event of Default as shall be
directed in writing by the Controlling Creditor, as provided in Section 7.2;
provided, however, that, unless and until the Agent or the Collateral Agent
shall have received such directions, the Agent and the Collateral Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable and
in the best interest of the Lenders and the Board.

          (b) In the event the Agent or the Collateral Agent shall receive
written notice from the Board to the effect that (i) the Board has the right to
terminate the Board Guaranty under Sections 2.04 and 2.05 thereof, (ii) any
portion of the Board Guaranty has terminated under Section 2.03 thereof or
otherwise or (iii) the Board Guaranty shall for any reason have ceased to be in
full force and effect or the Board shall have asserted that any of its
obligations thereunder is invalid or unenforceable, the Agent or the Collateral
Agent, as applicable shall promptly give written notice thereof to the Lenders
and the Counter-Guarantors. Neither the Agent nor the Collateral Agent shall be
deemed to have knowledge of any such event unless the Agent or the Collateral
Agent, as applicable, has received such notice (except with respect to the Agent
if any such event results from the failure of the Agent to perform any of its
obligations under the Board Guaranty).

          SECTION 8.6. AGENT'S AND COLLATERAL AGENT'S RIGHT TO INDEMNITY. The
Agent and the Collateral Agent shall be fully justified in failing or refusing
to take any action hereunder on behalf of any Lender or the Board unless it
shall first be indemnified to its satisfaction by such Lender or the Board, as
the case may be, against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.

          SECTION 8.7. INDEMNIFICATION OF AGENT AND COLLATERAL AGENT. The
Lenders hereby agree to indemnify the Agent and the Collateral Agent and all of
their respective affiliates, directors,


                                       89



officers, employees, advisors and representatives thereof (to the extent not
reimbursed by the Borrower), ratably as most recently in effect prior to the
date indemnification is sought, from and against any and all costs, losses,
liabilities, claims, damages or expenses which may be incurred by or asserted or
awarded against the Agent or the Collateral Agent in any way relating to or
arising out of this Agreement and/or the other Loan Documents or any action
taken or omitted by the Agent or the Collateral Agent under this Agreement
and/or the other Loan Documents; provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's or the Collateral Agent's gross negligence or willful
misconduct as actually and finally determined by a final, non-appealable
judgment of a court of competent jurisdiction and only to the extent of direct
(as opposed to special, indirect, consequential or punitive) damages. Without
limiting the foregoing, each Lender agrees to reimburse the Agent and the
Collateral Agent promptly upon demand for its ratable share of any reasonable
out-of-pocket expenses (including reasonable counsel fees) incurred by the Agent
or the Collateral Agent in connection with the administration or enforcement of,
or the preservation of any rights under, this Agreement (including this Section
8.7) and/or the other Loan Documents, to the extent that the Agent or the
Collateral Agent is not reimbursed for such expenses by the Borrower. The
agreements in this Section 8.7 shall survive the termination of the other
provisions of this Agreement and the other Loan Documents and the resignation or
removal of the Collateral Agent hereunder.

          SECTION 8.8. SUCCESSOR AGENT AND COLLATERAL AGENT. Each of the Agent
and the Collateral Agent may resign at any time by giving written notice thereof
to the Lenders, the Board, the Counter-Guarantors, the Loan Administrator and
the Borrower and may be removed at any time with cause by the Controlling
Creditor and, so long as the Board is a guarantor of Tranche A or a Lender
hereunder, with or without cause by the Board. Any such resignation or removal
shall be effective upon appointment and acceptance of a successor Agent or
Collateral Agent, as applicable, in accordance with this Section 8.8. Upon any
such resignation or removal, the Borrower shall have the right to appoint a
successor agent, subject to confirmation by the Controlling Creditor. If no
successor agent shall have been appointed and accepted such appointment within
sixty (60) days after the retiring Agent's or Collateral Agent's, as applicable,
giving of notice of resignation or the Controlling Creditor's removal of the
Agent or the Collateral Agent, the Agent or the Collateral Agent, as applicable,
may, with the consent (not to be unreasonably withheld) of the Controlling
Creditor and, so long as no Event of Default shall have occurred and be
continuing, the Borrower, appoint a successor Agent or Collateral Agent, as
applicable, who shall be willing to accept such appointment. Each successor
agent appointed hereunder shall be a commercial bank organized under the laws of
the United States of America or of any State thereof and shall have a combined
capital and surplus of at least $1,000,000,000. Upon the acceptance of any
appointment as Agent or Collateral Agent hereunder by a successor Agent or
Collateral Agent, such successor Agent or the Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Agent or Collateral Agent, and the retiring or
removed Agent or Collateral Agent shall be discharged from its duties and
obligations as agent under this Agreement. After any Agent's or Collateral
Agent's resignation or removal hereunder as Agent or Collateral Agent, as
applicable, the provisions of this Article VIII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent or Collateral
Agent under this Agreement.

          SECTION 8.9. RELEASE OF LIENS ON COLLATERAL AND SUBSIDIARY GUARANTORS.
The Lenders and the Board irrevocably authorize and instruct the Collateral
Agent to release any Lien on any property granted to or held by the Collateral
Agent under any Collateral Document and to release any Subsidiary Guarantor from
its obligations under the Second Lien Guaranty and the other Loan Documents to
which such Subsidiary may be a party (i) upon payment in full of all Obligations
(other than contingent indemnification obligations), (ii) upon the transfer of
property as part of or in connection with any Asset Sale that complies with
Section 6.13 and with respect to which the relevant Obligor complies with
Section 2.5(d), as applicable, (iii) upon the pledge, sale, transfer or other
disposition of property as part of


                                       90



or in connection with any Replacement Secured Financing with respect to which
the relevant Obligor complies with Section 2.5(b), (iv) to the extent release of
any Lien is otherwise permitted under this Agreement or any Collateral Document
(including, without limitation, in the proviso to Section 5.8(b) hereof), or (v)
subject to Section 9.1, if approved, authorized or ratified in writing by the
Controlling Creditor; provided, that the Collateral Agent shall not be obligated
to release any Lien pursuant to this Section 8.9 until its receipt from the
Borrower of an Officer's Certificate certifying that such release complies with
this Section 8.9, and upon receipt of such Officer's Certificate the Collateral
Agent shall release such Lien in accordance with such Officer's Certificate and
shall be fully protected in connection therewith. The Borrower shall send a copy
of any such Officer's Certificate to the Agent, the Board and the Loan
Administrator at the same time that it sends such Officer's Certificate to the
Collateral Agent.

          SECTION 8.10. CO-COLLATERAL AGENT; SEPARATE COLLATERAL AGENT.

          (a) If at any time or times it shall be necessary or prudent in order
to conform to any law of any jurisdiction in which any of the Collateral shall
be located, or to avoid any violation of law or imposition on the Collateral
Agent of taxes by such jurisdiction not otherwise imposed on the Collateral
Agent, or the Collateral Agent shall be advised by legal counsel that it is
necessary or prudent in the interest of the Lenders, or the Collateral Agent
shall deem it desirable for its own protection in the performance of its duties
hereunder, the Collateral Agent and the Borrower shall promptly execute and
deliver all instruments and agreements necessary or proper to constitute another
bank or trust company, or one or more persons approved by the Collateral Agent
and the Borrower (with the consent, not to be unreasonably withheld, of the
Controlling Creditor), either to act as Collateral Agent or co-Collateral Agents
of all or any of the Collateral under this Agreement, jointly with the
Collateral Agent originally named herein or therein or any successor Collateral
Agent, or to act as separate Collateral Agent or Collateral Agents of any of the
Collateral.

          (b) Every separate Collateral Agent and every co-Collateral Agent,
other than any successor Collateral Agent appointed pursuant to Section 8.8,
shall, to the extent permitted by law, be appointed and act and be such, subject
to the following provisions and conditions:

          (i) all rights, powers, duties and obligations conferred upon such
     Collateral Agent in respect of the custody, control and management of
     moneys, papers or securities shall be exercised by such Collateral Agent or
     any agent appointed by such Collateral Agent;

          (ii) all rights, powers, duties and obligations conferred or imposed
     upon the Collateral Agent hereunder shall be conferred or imposed and
     exercised or performed by the Collateral Agent and such separate Collateral
     Agent or separate Collateral Agents or co-Collateral Agent or co-Collateral
     Agents, jointly, as shall be provided in the instrument appointing such
     separate Collateral Agent or separate Collateral Agents or co-Collateral
     Agent or co-Collateral Agents, except to the extent that under any law of
     any jurisdiction in which any particular act or acts are to be performed
     the Collateral Agent shall be incompetent or unqualified to perform such
     act or acts, or unless the performance of such act or acts would result in
     the imposition of any tax on the Collateral Agent which would not be
     imposed absent such joint act or acts, in which event such rights, powers,
     duties and obligations shall be exercised and performed by such separate
     Collateral Agent or separate Collateral Agents or co-Collateral Agent or
     co-Collateral Agents;

          (iii) except as provided in clause (ii) above, no power given hereby
     to, or which it is provided herein or therein may be exercised by, any such
     co-Collateral Agent or co-Collateral Agents or separate Collateral Agent or
     separate Collateral Agents shall be exercised hereunder or thereunder by
     such co-Collateral Agent or co-Collateral Agents or separate Collateral
     Agent or


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     separate Collateral Agents except jointly with, or with the consent in
     writing of, the Collateral Agent, anything contained herein to the contrary
     notwithstanding;

          (iv) no Collateral Agent hereunder shall be personally liable by
     reason of any act or omission of any other Collateral Agent hereunder; and

          (v) the Borrower and the Collateral Agent, at any time by an
     instrument in writing executed by them jointly (with the consent, not to be
     unreasonably withheld, of the Controlling Creditor), may accept the
     resignation of or remove (for any reason or no reason at all) any such
     separate Collateral Agent or co-Collateral Agent and, in that case by an
     instrument in writing executed by them jointly, may appoint a successor to
     such separate Collateral Agent or co-Collateral Agent, as the case may be,
     anything contained herein to the contrary notwithstanding.

          SECTION 8.11. COLLATERAL AGENTS' LIEN. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, as security for the
payment of its fee under Section 2.7(f) and all other amounts payable to the
Collateral Agent hereunder including, without limitation, any and all expenses
and any amounts for which the Collateral Agent is entitled to reimbursement or
indemnification, (i) the Collateral Agent is hereby granted a lien on all
Collateral and (ii) the Collateral Agent shall have the right to use and apply
any of the funds held by the Collateral Agent to cover all such fees and other
amounts.

                                   ARTICLE IX

                                  MISCELLANEOUS

          SECTION 9.1. AMENDMENTS, WAIVERS, ETC.

          (a) Amendments and Waivers. No amendment, modification or waiver of
any provision of this Agreement or any other Loan Document nor consent to any
departure by any Obligor therefrom shall in any event be effective unless the
same shall be in writing and (x) signed by the Controlling Creditor and (y)
permitted by Section 5.3 of the Intercreditor Agreement (if applicable), and
then any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that:

          (i) no amendment, modification, waiver or consent shall, unless in
     writing and signed by each Lender and Counter-Guarantor affected thereby
     and the Board (so long as the Board is either a guarantor of Tranche A or a
     Lender hereunder), do any of the following:

               (1) subject the Lenders, the Counter-Guarantors or the Board to
          any additional obligations;

               (2) change the scheduled final maturity of the Loan or change the
          amount of or any date fixed for payment of any principal of the Loan;

               (3) change the principal amount of the Loan (other than by
          payment or prepayment thereof or in connection with a Loan Discharge
          Exercise);

               (4) change the rate of interest on the Loan or any fee, indemnity
          or other amount payable to such Lender, Counter-Guarantor or the
          Board;


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               (5) change any date fixed for payment of such interest, indemnity
          or other amount or fees;

               (6) amend the definition of "Requisite Lenders," "Controlling
          Creditor" or this Section 9.1;

               (7) waive, amend, modify or release the Second Lien Guaranty
          except as provided herein; and

               (8) modify the application of payments to the Loan under Section
          2.8.

          (ii) no (A) amendment or modification of any material provision of
     Article II, Article III, Article IV, Article VIII, Section 5.1 (other than
     Section 5.1(b)(ii)), Section 5.2, Section 5.5, Section 6.1(a)(ii), Section
     6.3, Section 6.4, Section 7.1 (other than to add Events of Default),
     Section 9.2, Section 9.3, Section 9.4, Section 9.5, Section 9.6, Section
     9.7, Section 9.9, Section 9.10, Section 9.11, Section 9.12, Section 9.16,
     Section 9.17 or any of the definitions as relevant thereto, (B) release of
     all or substantially all of the Collateral, or any dilution or
     subordination of the Liens on any Collateral having a material value, or
     (C) waiver, amendment or modification of the Intercreditor Agreement in a
     manner adverse to the Second Lien Claimholders (under and as defined
     therein), in each case shall be effective unless in writing and signed by
     (I) the Initial Lender, so long as it continues to hold Tranche B-4, (II)
     each Counter-Guarantor so long as it is either a guarantor of Tranche B-1,
     Tranche B-2 or Tranche B-3, respectively, or a Lender hereunder, and (IV)
     the Board, so long as the Board is either a guarantor of Tranche A or a
     Lender hereunder; and

          (iii) no amendment, modification, waiver or consent shall, unless in
     writing and signed by the Agent, the Collateral Agent or the Loan
     Administrator, as applicable, in addition to the Persons required above to
     take such action, affect the rights or duties of the Agent, the Collateral
     Agent or the Loan Administrator, as the case may be, under this Agreement,
     the other Loan Documents, any Counter-Guarantee or the Board Guaranty.

          (b) Execution of Amendments and Waivers by the Agent. The Agent may,
but shall have no obligation to, with the written concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances.

          (c) Non-Consenting Lenders. In connection with any proposed amendment,
modification, waiver or termination requiring the consent of all affected
Lenders, if the consent of Requisite Lenders is obtained, but the consent of
other Lenders whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in this Section 9.1 being referred to as a
"Non-Consenting Lender"), then, so long as the Lender that is acting as the
Agent is not a Non-Consenting Lender, at the Borrower's request, the Agent or an
Eligible Lender that is acceptable to the Agent, the Board and, so long as no
Event of Default shall have occurred and be continuing, the Borrower, shall have
the right with the Agent's consent and in the Agent's sole discretion (but shall
have no obligation) to purchase from such Non-Consenting Lender, and such
Non-Consenting Lender agrees that it shall, upon the Agent's request, sell and
assign to the Lender that is acting as the Agent or such Eligible Lender, all of
the portion of the Loan of such Non-Consenting Lender for an amount equal to the
principal balance of such portion of the Loan held by the Non-Consenting Lender
and all accrued interest


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and fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment and Acceptance.

          SECTION 9.2. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS AND ASSIGNS.

          (a) Assignment. Each Lender may sell, transfer, negotiate or assign
either in whole or in part to one or more Eligible Lenders its rights and
obligations hereunder and under the Notes and the other Loan Documents; provided
that (i) the assigning Lender shall give prompt written notice to the Agent, the
Borrower, the Board and the Loan Administrator of the terms of and the parties
to any such assignment, (ii) the proposed assignee shall provide to the Agent,
the Borrower and the Board all documentation and certificates as required by the
Agent, the Borrower and the Board to confirm to the Agent's and the Board's
satisfaction that such proposed assignee is an Eligible Lender, (iii) the
Borrower will not be obligated to pay any greater amount under Section 2.9(c) or
Section 2.11 (in respect of increased costs or Indemnified Taxes or Other Taxes
imposed pursuant to applicable law in effect on the date of such assignment) to
the assignee than the Borrower is then obligated to pay to the assigning Lender
under such Sections, (iv) any sale, transfer or assignment of a Tranche A
Lender's rights, interests or obligations under the Board Guaranty shall be
subject to Sections 2.04 and 5.04 of the Board Guaranty, (v) any sale, transfer
or assignment of the rights, interests or obligations of the Tranche B-1 Lender,
Tranche B-2 Lender or Tranche B-3 Lender under the applicable Counter-Guarantee
shall be subject to the applicable provisions of such Counter-Guarantee, (vi)
without the consent of the Borrower (in its sole discretion), no right,
obligation or interest hereunder or under any Note or other Loan Document may be
sold, transferred, negotiated or assigned to (A) an airline, a commercial
aircraft operator, an air freight forwarder or an entity principally engaged in
the business of parcel transport by air (any such Person, a "Prohibited
Transferee"), (B) an Affiliate of a Prohibited Transferee or (C) a maintenance
provider for aircraft airframes, engines or related parts or a manufacturer of
engines or of parts related to airframes or engines, and (vii) no right,
obligation or interest hereunder or under any Note or other Loan Document may be
sold, transferred, negotiated or assigned to a manufacturer of aircraft
airframes.

          (b) Deliveries in Connection with Assignment. The parties to each
assignment under this Section 9.2 shall execute and deliver to the Agent, for
its acceptance and recording, an Assignment and Acceptance, and the assignee, if
a Non-U.S. Person, shall deliver to the Borrower, the Agent and each
Counter-Guarantor (if such assignment is of Tranche B), on or prior to the date
of the assignment, two completed copies of IRS Form W-9, W-8BEN or W-8ECI or
other applicable form, certificate or document required to satisfy the
requirements of Section 2.11. Upon such execution, delivery and acceptance and
the receipt by the Agent of an assignment fee in the amount of $3,500 (which fee
shall be payable by the assignor, or if the assignor is the Board, the
Borrower), the Agent shall record such Assignment and Acceptance and from and
after the effective date specified in such Assignment and Acceptance (i) the
assignee thereunder of all or any portion of the Loan shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender and (ii) the assignor thereunder
shall, to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except those rights with respect to indemnification which survive the payment
in full of the Obligations) and be released from its obligations under the Loan
Documents, other than those relating to events or circumstances occurring prior
to such assignment (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under the Loan Documents, such Lender shall cease to be a party hereto).

          (c) Agent's Duties Upon Assignment. Upon its receipt of an Assignment
and Acceptance executed by an assigning Lender and an assignee, the Agent shall,
if such Assignment and Acceptance has been completed, (i) accept such Assignment
and Acceptance, (ii) record the information


                                       94



contained therein in the Register, (iii) give prompt notice thereof to the
Borrower and (iv) shall give prompt written notice of the terms of and parties
to any such assignment to the Borrower, the Board, the Counter-Guarantors and
the Loan Administrator.

          (d) Assignments to Federal Reserve Bank. In addition to the other
assignment rights provided in this Section 9.2, each Lender may assign, without
the prior consent of the Borrower, the Agent or the Board as collateral or
otherwise, any of its rights under this Agreement to any Federal Reserve Bank
pursuant to Regulation A of the Federal Reserve Board, provided, however, that
no such assignment shall release the assigning Lender from any of its
obligations hereunder.

          (e) Participations. Each Lender may, without the prior consent of the
Borrower or any other Person, sell participations, to the extent permitted by
the Regulations, in or to all or a portion of its rights and obligations
hereunder and under the Notes and the other Loan Documents (any such purchaser
of a participation being referred to as a "Participant"); provided that (i)
neither the Notes nor the Board Guaranty nor any applicable Counter-Guarantee is
assigned, conveyed, sold or transferred in whole or in part, (ii) in the case of
an assignment of Tranche A, the Board's ability to assert any and all defenses
available to it under the Board Guaranty and the law is not adversely affected,
and in the case of an assignment of Tranche B (other than Tranche B-4), the
applicable Counter-Guarantor's ability to assert any and all defenses available
to it under the applicable Counter-Guarantee and the law is not adversely
affected, (iii) the Borrower will not be obligated to pay any greater amount
under Section 2.9(c) or Section 2.11 (in respect of increased costs, Indemnified
Taxes or Other Taxes) to the Participant than the Borrower is then obligated to
pay to the selling Lender under such Sections, (iv) any such participation with
respect to Tranche B-1, Tranche B-2 or Tranche B-3 shall be subject to the
applicable provisions of any applicable Counter-Guarantee, (v) no Participant
shall, without the consent of the Borrower (such consent to be in the Borrower's
sole discretion), be a (x) Prohibited Transferee, (y) an Affiliate of a
Prohibited Transferee or (z) a maintenance provider for aircraft airframes,
engines or related parts or a manufacturer of engines or of parts related to
airframes or engines, and (vi) no Participant shall be a manufacturer of
aircraft airframes. In the event of the sale of any participation by any Lender,
(A) such Lender's obligations under the Loan Documents shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties for the
performance of such obligations, (C) such Lender shall remain the holder of such
Obligations for all purposes of this Agreement, (D) the Borrower, the Agent, the
Board, the applicable Counter-Guarantor (as applicable) and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and (E) each
Participant, shall deliver to the Borrower, the Agent and each Counter-Guarantor
(if such participation is of Tranche B), on or prior to the date of the sale of
the participation, two completed copies of IRS Form W-9, W-8BEN or W-8ECI or
other applicable form, certificate or document required to satisfy the
requirements of Section 2.11. Any Participant will be entitled to the benefits
of Section 2.9(c), Section 2.9(e), Section 2.10 and Section 2.11 to the same
extent as if such Person were a Lender.

          (f) Assignment of Tranche A at the Direction of the Board. The Tranche
A Lender agrees that if and to the extent that the Board Guaranty remains in
effect, the Board shall have the right, upon ten (10) Business Days' prior
notice to the Tranche A Lender (with a copy to the Agent and the Borrower) to
require the Tranche A Lender to sell, transfer and assign Tranche A, in whole or
in part (but in no event in excess of the amount then guaranteed under the Board
Guaranty), and with or without the benefit of the Board Guaranty (which, if
without, shall be fully and irrevocably released upon the closing and to the
extent of such purchase), to a Person designated by the Board, for a purchase
price equal to 100% of the principal amount of such portion of Tranche A to be
sold, transferred and assigned, together with all accrued and unpaid interest
thereon through the date of purchase (which purchase price may include a payment
under the Board Guaranty) and payment of any losses, expenses and liabilities
under Section 2.9(e) hereof attributable to such sale, transfer and assignment
(it being acknowledged and agreed


                                       95



that any premium paid by such purchaser for such portion of the Loan shall be
for the benefit of the Board); provided, that the Tranche A Lender (to the
extent commercially reasonable) and the Borrower shall cooperate with the Board
to minimize any such losses, expenses and liabilities so long as any such action
would not result in the Tranche A Lender incurring any additional costs or
otherwise be disadvantageous to the Tranche A Lender in its sole judgment; and
provided, further that the Tranche A Lender shall also be entitled to payment of
all other unpaid Obligations owing to it through the date of purchase from the
Obligors, including, without limitation, fees, expenses, indemnities and other
amounts which are then due and payable pursuant to the terms of the Loan
Documents, which amounts the Obligors agree to pay to the Tranche A Lender on
the date of purchase. The closing of the Tranche A assignment shall be
consummated pursuant to an Assignment and Acceptance and such other
documentation as the Tranche A Lender, the Board and such assignee shall
mutually agree is reasonably necessary. Any such sale, transfer or assignment
under this subsection (f) shall be subject to the conditions specified in
clauses (i), (ii), (iii) and (vi) of the proviso in subsection (a) of this
Section 9.2.

          (g) Assignment of Tranche B at the Direction of a Counter-Guarantor.
Each of the Tranche B-1 Lender, Tranche B-2 Lender and Tranche B-3 Lender agrees
that if and to the extent that the applicable Counter-Guarantee is and remains
in effect, the applicable Counter-Guarantor shall have the right, upon ten (10)
Business Days' prior notice to such Tranche B-1 Lender, Tranche B-2 Lender and
Tranche B-3 Lender, as the case may be (with a copy to the Agent and the
Borrower), to require such Tranche B Lender to sell, transfer and assign such
portion of Tranche B-1, Tranche B-2 and Tranche B-3 (as the case may be), in
whole or in part (but in no event in excess of the amount then guaranteed under
the applicable Counter-Guarantee), and with or without the benefit of the
applicable Counter-Guarantee (which, if without, shall be fully and irrevocably
released upon the closing and to the extent of such purchase), to a Person
designated by such Counter-Guarantor, for a purchase price equal to 100% of the
principal amount of such portion of Tranche B-1, Tranche B-2 and Tranche B-3 (as
the case may be) to be sold, transferred and assigned, together with all accrued
and unpaid interest thereon through the date of purchase (which purchase price
may include a payment under the applicable Counter-Guarantee) and payment of any
losses, expenses and liabilities under Section 2.9(e) hereof attributable to
such sale, transfer and assignment (it being acknowledged and agreed that any
premium paid by such purchaser for such portion of the Loan shall be for the
benefit of the applicable Counter-Guarantor); provided, that such the Tranche B
Lender (to the extent commercially reasonable) and the Borrower shall cooperate
with the applicable Counter-Guarantor to minimize any such losses, expenses and
liabilities so long as any such action would not result in the Tranche B Lender
incurring any additional costs or otherwise be disadvantageous to such Tranche B
Lender in its sole judgment; and provided, further that the Tranche B-1 Lender,
Tranche B-2 Lender and Tranche B-3 Lender shall also be entitled to payment of
all other unpaid Obligations owing to it through the date of purchase from the
Obligors, including, without limitation, fees, expenses, indemnities and other
amounts which are then due and payable pursuant to the terms of the Loan
Documents, which amounts the Obligors agree to pay to such Tranche B Lender on
the date of purchase. The closing of the Tranche B-1, Tranche B-2 or Tranche B-3
assignment shall be consummated pursuant to an Assignment and Acceptance and
such other documentation as the Tranche B-1 Lender, Tranche B-2 Lender or
Tranche B-3 Lender (as the case may be) and such assignee shall mutually agree
is reasonably necessary. Any such sale, transfer or assignment under this
subsection (f) shall be subject to the conditions specified in clauses (i),
(ii), (iii) and (vi) of the proviso in subsection (a) of this Section 9.2.

          (h) Reimbursement of Fees upon Certain Assignments. If during any
Interest Period some or all of the Loan is assigned in compliance with this
Section 9.2 and as a result of such assignment the Applicable Interest Rate on
the portion of the Loan so assigned will accrue at the rate specified in the
proviso of the definition of "Applicable Interest Rate," then the Board (in the
case of an assignment of Tranche A), the applicable Counter-Guarantor (in the
case of an assignment of Tranche B-1, Tranche B-2 or Tranche B-3) or the Initial
Lender (in the case of an assignment of Tranche B-4) shall reimburse the


                                       96



Borrower on or prior to the first day of the next Interest Period for a pro rata
amount of the Guarantee Fee, Counter-Guarantee Fee or Supplemental Facility Fee,
as the case may be, paid by the Borrower to the Board, such Counter-Guarantor or
the Initial Lender for such Interest Period, which amount shall be equal to the
product of (x) the amount of the Guarantee Fee, Counter-Guarantee Fee or
Supplemental Facility Fee attributable to the portion of the Loan so assigned
and (y) a fraction, the numerator of which is the number of days in such
Interest Period during which the assignee held such assigned portion of the Loan
and the denominator of which is the total number of days in such Interest
Period.

          (i) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, provided that except as otherwise expressly provided herein,
no Obligor may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Board, the Lenders and the
Agent (and any attempted assignment or transfer by an Obligor without such
consent shall be null and void).

          SECTION 9.3. COSTS AND EXPENSES. Whether or not the transactions
contemplated hereby shall be consummated, the Obligors agree to pay promptly (i)
all reasonable costs and expenses incurred by the Loan Administrator, the Board,
the Initial Lender, each Counter-Guarantor, the Agent and the Collateral Agent
in connection with the negotiation, preparation, execution and delivery of the
Loan Documents, the Board Guaranty and all documents relating thereto (including
reasonable legal fees and expenses), (ii) all reasonable costs and expenses
incurred by the Loan Administrator, the Board, the Lenders, the
Counter-Guarantors, any Participant, the Agent and the Collateral Agent in
connection with any consents, amendments, waivers or other modifications hereto
(including reasonable legal fees and expenses) and (iii) all costs and expenses,
including reasonable legal fees and expenses incurred by the Agent, the
Collateral Agent, the Lenders, each Counter-Guarantor, any Participant, the Loan
Administrator and the Board in enforcing any Obligations of, or in collecting
any payments due from, the Obligors hereunder or under the other Loan Documents,
including any such costs and expenses incurred after the filing of a bankruptcy
or insolvency proceeding with respect to any Obligor.

          SECTION 9.4. INDEMNITIES. Whether or not the transactions contemplated
hereby shall be consummated, the Obligors agree to defend, indemnify, pay and
hold harmless the Board, the Agent, the Collateral Agent, the
Counter-Guarantors, the Lenders, the Loan Administrator and their respective
Affiliates, officers, directors, employees, agents and advisors (collectively
called the "Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including without limitation
the reasonable fees and disbursements of counsel for such Indemnitees, but
excluding Taxes), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
without limitation securities and commercial laws, statutes and rules or
regulations), on common law or equitable cause or on contract or otherwise, that
may be imposed on, incurred by, or asserted against any such Indemnitee, in any
manner arising out of this Agreement, the other Loan Documents, any
Counter-Guarantee or the transactions contemplated hereby or thereby (including,
without limitation, the use or intended use of the proceeds of the Loan) or any
breach or default by the Obligors of any provision of the Loan Documents
(collectively called the "Indemnified Liabilities"); provided that the Obligors
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise (i)
from the gross negligence or willful misconduct of that Indemnitee (as actually
and finally determined by a final and non-appealable judgment of a court of
competent jurisdiction) and only to the extent that such Indemnified Liabilities
constitute direct (as opposed to special, indirect, punitive or consequential)
damages or (ii) constitute ordinary and usual operating or overhead expenses of
an Indemnitee (excluding, without limitation, costs and expenses of any outside
counsel, consultant or agent). To the extent that the undertaking to defend,
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, each of the
Obligors


                                       97



shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them. No Indemnitee shall have
any liability (whether direct or indirect, in contract, tort or otherwise) to
any Obligor or any of its security holders or creditors for or in connection
with the transactions contemplated hereby, except to the extent such liability
is determined in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted primarily from such Indemnitee's gross negligence
or willful misconduct. In no event, however, shall any Indemnitee be liable on
any theory of liability for any special, indirect, consequential or punitive
damages (including, without limitation, any loss of profits, business or
anticipated savings). Without limitation of the generality of the foregoing,
each Indemnitee (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Obligor or any of its security holders or creditors for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
experts and (ii) shall incur no liability under or in respect to this Agreement,
the Notes or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, facsimile
transmission, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties. The agreements in this Section 9.4 shall survive
the termination of the other provisions of this Agreement and the other Loan
Documents and, in the case of the Collateral Agent, shall survive the
resignation or removal of the Collateral Agent hereunder.

          SECTION 9.5. RIGHT OF SET-OFF. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
to the fullest extent permitted by law, each Lender is hereby authorized by the
Obligors at any time or from time to time, with notice to the Obligors and to
each other Lender, the Board, the Agent, the Collateral Agent and the Loan
Administrator, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, Indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of any Obligor against and on account of the obligations and
liabilities of such Obligor to that Lender under this Agreement, the Second Lien
Guaranty, the Notes and the other Loan Documents, including, but not limited to,
all claims of any nature or description arising out of or connected with this
Agreement, the Second Lien Guaranty, the Notes, or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loan or any other
amounts due hereunder shall have become due and payable pursuant to Section 7.2
and although said obligations and liabilities, or any of them, may be contingent
or unmatured.

          SECTION 9.6. SHARING OF PAYMENTS, ETC. The Lenders and the Board
hereby agree among themselves that if any of them shall, whether by voluntary
payment, by realization upon security, through the exercise of any right of
set-off or banker's lien, by counterclaim or cross action or by the enforcement
of any right under the Loan Documents or otherwise, or as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code, receive payment
or reduction of a proportion of the aggregate amount of principal, interest,
fees and other amounts then due and owing to the Lenders and the Board hereunder
or under the other Loan Documents (collectively, the "Aggregate Amounts Due")
which is greater than the proportion received by any other Lender or the Board
in respect of the Aggregate Amounts Due to such other Lender or the Board, then
the Lender or the Board receiving such proportionately greater payment shall (i)
notify the Agent and each other Lender and the Board of the receipt of such
payment and (ii) (A) in the case of a Lender, (1) apply a portion of such
payment to purchase participations equal to the portion of the Aggregate Amounts
Due to the other Lenders and (2) pay to the Board the portion of the Aggregate
Amounts Due to it or (B) in the case of the Board, pay to each Lender the
portion of the Aggregate Amounts Due to it (which participations shall be deemed
to have been purchased and payments made simultaneously upon the receipt by the
seller or the Board of its portion of such payment, and which participations
will be permitted notwithstanding any prohibition) to


                                       98



the contrary in Section 9.2(e)) so that all such recoveries of Aggregate Amounts
Due shall be shared by all Lenders and the Board in proportion to the Aggregate
Amounts Due to them, provided that if all or part of such proportionately
greater payment received by such purchasing Lender or the Board is thereafter
recovered from such Lender or the Board upon the bankruptcy or reorganization of
the Borrower or otherwise, those purchases or other payments shall be rescinded
and the purchase prices paid for such participations or other payments shall be
returned to such purchasing Lender or the Board ratably to the extent of such
recovery, but without interest. The Borrower expressly consents to the foregoing
arrangement and agrees that any holder of a participation so purchased may
exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by the Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.

          SECTION 9.7. NOTICES, ETC. Unless otherwise specifically provided
herein, any notice, request or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or courier service and shall be deemed to have been given when
delivered in person or by courier service, or upon receipt of telefacsimile
(promptly confirmed in writing). For the purposes hereof, the address of each
party hereto and each Counter-Guarantor shall be as set forth under such party's
name on Annex A or such other address as shall be designated by such party in a
written notice delivered to the Agent. A copy of any and all notices, requests,
communications, demands, reports, documents or other materials (including,
without limitation, any of the materials delivered by the Obligors under Section
5.1(b)) delivered or sent by any party pursuant to the terms of this Agreement
shall also be given to the Loan Administrator. Anything to the contrary
contained herein notwithstanding, the Obligors shall not be required to provide
the Board with any notices or certificates required to be delivered to the Board
hereunder and under the other Loan Documents if, at the time such notice is
required to be delivered, the Board is neither a guarantor of Tranche A nor a
Lender hereunder.

          SECTION 9.8. NO WAIVER; REMEDIES. No failure on the part of the Board,
any Lender or the Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

          SECTION 9.9. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (AND, TO THE EXTENT
APPLICABLE, THE BANKRUPTCY CODE); PROVIDED THAT THE RIGHTS AND OBLIGATIONS OF
THE BOARD HEREUNDER (WHETHER AS GUARANTOR OR LENDER) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE FEDERAL LAW OF THE UNITED STATES OF AMERICA,
IF AND TO THE EXTENT SUCH FEDERAL LAW IS APPLICABLE, AND OTHERWISE IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.

          SECTION 9.10. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.

          (a) Submission to Jurisdiction. BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OBLIGOR HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT AGAINST IT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE PARTIES


                                       99



HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH ANY OF
THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
IN SUCH RESPECTIVE JURISDICTIONS.

          (b) Service of Process. EACH OF THE OBLIGORS HEREBY IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED STATES OF
AMERICA ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS BY THE MAILING (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID)
OR DELIVERING OF A COPY OF SUCH PROCESS TO IT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 9.7.

          (c) No Limitation. Nothing contained in this Section 9.10 shall affect
the right of the Agent or any Lender or other party hereto to serve process in
any other manner permitted by law or commence legal proceedings or otherwise
proceed against any Obligor in any other jurisdiction.

          SECTION 9.11. WAIVER OF JURY TRIAL. EACH OBLIGOR IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT.

          SECTION 9.12. MARSHALING; PAYMENTS SET ASIDE. Neither the Agent nor
any Lender shall be under any obligation to marshal any assets in favor of any
Obligor or any other party or against or in payment of any or all of the
Obligations. To the extent that any Obligor makes a payment or payments to the
Agent for the account of the Board, the Loan Administrator, any Lender or any
Counter-Guarantor (each, a "Payee") or any Payee receives payment from exercise
of their rights of setoff, and such payment or payments or the proceeds of such
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party, then (i) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all rights
and remedies therefor, shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred and (ii) each Payee shall pay and return such amount to the Agent as
the Agent may be required to disgorge or otherwise pay to a trustee, receiver or
any other party in respect of the portion of the payment from such Obligor
distributed by the Agent to such Payee hereunder.

          SECTION 9.13. SECTION TITLES. The Section titles and subtitles
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.

          SECTION 9.14. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrower and the Agent.

          SECTION 9.15. SEVERABILITY. In case any provision in or obligation
under this Agreement, the Notes or the other Loan Documents shall be invalid,
illegal or unenforceable in any


                                       100



jurisdiction the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          SECTION 9.16. CONFIDENTIALITY.

          (a) Each party hereto (other than the Board) and each
Counter-Guarantor shall, and shall procure that its respective officers,
employees and agents shall, keep confidential and shall not, without the prior
written consent of the other parties, disclose to any third party this
Agreement, any other Loan Document or any of the information, reports or
documents supplied by or on behalf of such other party not otherwise publicly
available, except that a party shall be entitled to disclose this Agreement, any
other Loan Document, and any such information, reports or documents:

          (i) in connection with any proceeding arising out of or in connection
     with this Agreement, any of the other Loan Documents, the Board Guaranty or
     any Counter-Guarantee to the extent that such party may reasonably consider
     necessary to protect its interest;

          (ii) to any potential assignee or transferee of any party's rights
     under this Agreement or any of the Loan Documents or any
     Counter-Guarantor's rights under its Counter-Guarantee or any other person
     proposing to enter into contractual arrangements with any party in relation
     to this Agreement, any of the other Loan Documents, the Board Guaranty or
     any Counter-Guarantee subject to the relevant party obtaining an
     undertaking from such potential assignee or transferee or other person in
     corresponding terms to this Section 9.16;

          (iii) pursuant to any applicable laws, ordinances, judgments, decrees,
     injunctions, writs, rules, regulations, orders, interpretations, licenses,
     permits and orders of any competent court, arbitrator or governmental
     agency or authority in any relevant jurisdiction;

          (iv) to bank examiners or any other regulatory authority or rating
     agencies or similar entities, if requested to do so;

          (v) to its auditors, legal, tax or to other professional advisers; or

          (vi) to its Affiliates and their respective directors, officers,
     employees and agents.

          (b) The provisions of this Section 9.16 shall survive any termination
of this Agreement or any other Loan Document or any assignment, transfer or
participation under this Agreement or any other Loan Document.

          SECTION 9.17. THIRD PARTY BENEFICIARY. Each Counter-Guarantor shall be
an express third party beneficiary of this Agreement to the extent the
provisions of this Agreement by their terms confer upon such Counter-Guarantor
any right or remedy and shall be entitled to rely on each representation and
warranty of the Borrower hereunder as fully and with the same force and effect
as if made expressly to such Counter-Guarantor, and the execution and delivery
of its Counter-Guarantee to the Agent shall constitute such Counter-Guarantor's
agreement to the provisions of Section 9.16 and further agreement to be bound by
the terms and conditions hereof applicable to the Counter-Guarantors (including,
without limitation, Section 2.4, Section 2.7, Section 2.8, Section 9.12, Section
9.16, Section 9.18 and Section 9.22 hereof) in asserting any right or remedy
hereunder.


                                       101



          SECTION 9.18. ACKNOWLEDGMENT REGARDING FEDERAL AUTHORITY.

          (a) Each of the parties hereto and each Counter-Guarantor acknowledges
and agrees that:

          (i) the operations and assets of the Obligors (including, without
     limitation, Aircraft Related Equipment and other assets that constitute
     Collateral) are subject, directly and indirectly, to the actions, inaction
     and policies of various Governmental Authorities, including, in particular
     but without limitation, the United States Department of Transportation (of
     which the FAA is a component) and the United States Department of Justice;

          (ii) Governmental Authorities, in discharging their current and future
     statutory or regulatory responsibilities, may act, decline to act, or adopt
     policies resulting in material adverse effects on (A) the business,
     condition (financial or otherwise), operations, performance, prospects,
     assets or properties of the Obligors, (B) the ability of the Obligors to
     perform their payment or other material obligations under the Loan
     Documents, and (C) the value of the Collateral or the practical ability of
     the Collateral Agent to realize such value in the event of a Default or an
     Event of Default;

          (iii) no Governmental Authority, in discharging its statutory or
     regulatory responsibilities, has or shall have any obligation whatsoever to
     the Obligors, or to any secured party by reason of such Governmental
     Authority's representation on the Board, the Board's issuance of the Board
     Guaranty, or the Board's participation as a party to the other Loan
     Documents, to consider the potential that any of the material adverse
     effects referred to in clause (ii) above may result from such Governmental
     Authority's discharge of its statutory or regulatory responsibilities; and

          (iv) neither the Board, in discharging its rights and
     responsibilities, or in exercising its discretion, under the Act, the
     Regulations, the Board Guaranty or the other Loan Documents, nor any of the
     Board's members, acting in their capacities as such, has or shall have any
     obligation whatsoever to the Obligors or to any of the secured parties to
     take any action in connection with a Governmental Authority's discharge of
     its statutory or regulatory responsibilities which may have any of the
     material adverse effects referred to in clause (ii) above, and the Board
     may not take any action depriving a Governmental Authority of its rights
     and powers to discharge its statutory and regulatory responsibilities in
     any manner that may have any of the material adverse effects referred to in
     clause (ii) above.

          (b) Without limiting the generality of the foregoing, the parties
acknowledge and agree that (i) the Department of Transportation, through the
FAA, has broad authority under Title 49 of the United States Code to regulate
the use of the navigable airspace of the United States so as to ensure its safe
and efficient utilization, (ii) the exercise of such authority may substantially
impair or eliminate altogether the utility to the Obligors and value to the
secured parties of Aircraft Related Equipment pledged as Collateral and other
assets of the Obligors such as Gate Leases and Slots utilized at airports, (iii)
nothing in this Agreement or in the Slot Security Agreement (as defined in
clause (iii) of the definition of "Collateral Documents") shall be construed or
asserted by any of the parties to impede or interfere with the FAA's exercise of
its authority under the Slot Regulations, and (iv) no assurance, express or
implied, has been given by any Governmental Authority, including the Board, to
the Obligors or to any secured party, nor has any of the Obligors or any secured
party relied upon any such assurance, with respect to any future action,
inaction or policy of the FAA or any other Governmental Authority relating to
any such Collateral or other assets.


                                       102



          SECTION 9.19. INDEPENDENCE OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations and warranties made in and covenants under this
Agreement shall be given independent effect so that (a) if a particular
representation and warranty is unqualified, the fact that another representation
and warranty is qualified shall not affect the operation of the former
provision; and (b) if a particular action or condition is not permitted by any
of such covenants, the fact that it would be permitted by an exception to, or
would otherwise be within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.

          SECTION 9.20. ACKNOWLEDGMENT REGARDING SECOND LIEN. Each of the
Lenders, the Counter-Guarantors and the Board (i) acknowledges and agrees that
the Liens of the Collateral Agent in the Collateral pursuant to the Collateral
Documents are junior and subordinate to the Liens for the benefit of the First
Lien Claimholders in such Collateral to the extent provided in the Intercreditor
Agreement, (ii) agrees and consents to the terms of the Intercreditor Agreement
and (iii) agrees to be bound the terms of the Intercreditor Agreement as if it
were a party thereto.

          SECTION 9.21. BOARD ACKNOWLEDGMENT. The Board acknowledges and agrees
for the benefit of the Initial Lender that as of the date hereof the Board
Guaranty remains in full force and effect and is hereby ratified and confirmed.

          SECTION 9.22. COUNTER-GUARANTOR ACKNOWLEDGMENT. Each Counter-Guarantor
by execution and delivery of its Counter-Guarantee acknowledges and agrees for
the benefit of the Initial Lender that as of the date hereof such
Counter-Guarantor's Counter-Guarantee remains in full force and effect and is
hereby ratified and confirmed.

          SECTION 9.23. GE ACKNOWLEDGEMENT. Nothing in this Agreement or in any
other Loan Document shall be construed as preventing any party from performing
any of the transactions contemplated by the GE Merger MOU, and the transactions
contemplated by the "Original MOU" as defined therein, as such GE Merger MOU and
Original MOU have been amended, supplemented or otherwise modified to the date
hereof, regardless of whether such transactions occur on, before or after the
Effective Date.

                           [SIGNATURE PAGES TO FOLLOW]


                                       103



          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                        AMERICA WEST AIRLINES, INC.

                                        US AIRWAYS GROUP, INC.

                                        AMERICA WEST HOLDINGS CORPORATION

                                        US AIRWAYS, INC.


                                        By: /s/ Derek J. Kerr
                                            ------------------------------------
                                        Name: Derek J. Kerr
                                        Title: Chief Financial Officer of each
                                               person listed above


                                        MATERIAL SERVICES COMPANY, INC.


                                        By: /s/ Derek J. Kerr
                                            ------------------------------------
                                        Name: Derek J. Kerr
                                        Title: President and Chief Executive
                                               Officer

                                        PSA AIRLINES, INC.


                                        By: /s/ Keith D. Houk
                                            ------------------------------------
                                        Name: Keith D. Houk
                                        Title: President and Chief Executive
                                               Officer

                       [Signature page to Loan Agreement]



                                        PIEDMONT AIRLINES, INC.


                                        By: /s/ Stephen R. Farrow
                                            ------------------------------------
                                        Name: Stephen R. Farrow
                                        Title: President and Chief Executive
                                               Officer

                       [Signature page to Loan Agreement]



                                       CITIBANK, N.A.
                                       as Initial Lender


                                       By: /s/ Barbara Kobelt
                                           ------------------------------------
                                       Name: Barbara Kobelt
                                       Title: Senior Vice President - Structured
                                              Portfolio Management


                                       CITIBANK, N.A.,
                                       as Agent


                                       By: /s/ Barbara Kobelt
                                           ------------------------------------
                                       Name: Barbara Kobelt
                                       Title: Senior Vice President - Structured
                                              Portfolio Management


                                       WILMINGTON TRUST COMPANY,
                                       as Collateral Agent


                                       By: /s/ Sandra R. Ortiz
                                           ------------------------------------
                                       Name: Sandra R. Ortiz
                                       Title: Senior Financial Services Officer


                                       AIR TRANSPORTATION STABILIZATION BOARD


                                       By: /s/ Mark R. Dayton
                                           ------------------------------------
                                       Name: Mark R. Dayton
                                       Title: Executive Director

                      [Signature page to Loan Agreement]



                                     ANNEX A

                     NOTICE ADDRESSES; PAYMENT INSTRUCTIONS

If to the Borrower, Group or the other Obligors:

US Airways Group, Inc.
111 West Rio Salado Parkway
Tempe, AZ 85281
Attention: Thomas T. Weir, Vice President and Treasurer
Phone: (480) 693-0800
Fax: (480) 693-5155
E-mail: tom.weir@americawest.com

with a copy to:

US Airways Group, Inc.
111 West Rio Salado Parkway
Tempe, AZ 85281
Attention: James E. Walsh III, Senior Vice President and General Counsel
Phone: (480) 693-0800
Fax: (480) 693-5155
E-mail: james.walsh@americawest.com

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive
Chicago, IL 60606
Attention: Seth E. Jacobson, Esq.
Phone: (312) 407-0889
Fax: (312) 407-0411
E-mail: sejacobs@skadden.com

If to the Initial Lender:

Citibank, N.A.
2 Penns Way Suite 100
New Castle, DE 19720
Attention: Kathleen Racer
Phone: (302) 894-6002
Fax: (212) 994-0849
E-mail: kathleen.c.racer@citigroup.com

If to the Agent:

Citibank, N.A.
2 Penns Way Suite 100
New Castle, DE 19720
Attention: Kathleen Racer
Phone: (302) 894-6002
Fax: (212) 994-0849
E-mail: kathleen.c.racer@citigroup.com


                                    Annex A-1



If to the Loan Administrator:

Capstone Advisory Group, LLC
1065 Avenue of the Americas
New York, NY 10018
Attention: Jay Borow
Phone: (212) 782-1411
Fax: (212) 782-1478
E-mail: jborow@capstoneag.com

If to the Collateral Agent:

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-1615
Attention: Sandra R. Ortiz
Phone: (302) 636-6056
Fax: (302) 636-4145
E-mail: sortiz@wilmingtontrust.com

If to the Board:

Air Transportation Stabilization Board
1120 Vermont Avenue
Suite 970
Washington, D.C. 20005
Attention: Executive Director
Phone: (202) 622-3550
Fax: (202) 622-3420
E-mail: mark.dayton@do.treas.gov

with a copy to:

United States Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220
Attention: Deputy Assistant Secretary for Government Financial Policy
Phone: (202) 622-7073
Fax: (202) 622-0387
E-mail: roger.kodat@do.treas.gov

If to the Airbus Counter-Guarantor:

AFS Cayman Limited
c/o M&C Corporate Services Limited
Ugland House, South Church Street
P.O. Box 309
George Town, Grand Cayman, Cayman Islands
with a

copy to:

Airbus Financial Services


                                    Annex A-2



6 Georges Dock
IFSC, Dublin 1
Ireland
Attention: Managing Director
Phone: +353 1 790 5508
Fax: +353 1 670 2020
E-mail:

If to the GECC Counter-Guarantor:

General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927-9400
Attention: Senior - Vice President -
Corporate Treasury and Global Funding Operation
Phone:
Fax: (203) 357-4995
E-mail:

with a copy to:

General Electric Capital Corporation
c/o GE Commercial Aviation Services
201 High Ridge Road
Stamford, CT 06927
Attention: Contracts Leader
Phone: (203) 357-3776
Fax: (203) 357-4585
E-mail:


                                    Annex A-3



                                     ANNEX B

                                 LENDING OFFICE

                                 Citibank, N.A.
                                399 Park Avenue,
                            New York, New York 10043


                                    Annex B-1



                                     ANNEX C

                             GUARANTEE RATE SCHEDULE



          INTEREST PAYMENT            GUARANTEE RATE
     DATE FALLING IN THE PERIOD         (PER ANNUM)
     --------------------------       --------------
                                   
Effective Date - January 17, 2006          8.00%
January 18, 2006 - January 17, 2007        8.05%
January 18, 2007 - January 17, 2008        8.10%
January 18, 2008 - Maturity Date           8.15%



                                    Annex C-1



                                    EXHIBIT A

                            ASSIGNMENT AND ACCEPTANCE

          ASSIGNMENT AND ACCEPTANCE dated as of _________, ____, between
______________ (the "Assignor") and ______________ (the "Assignee"). Reference
is made to the Loan Agreement, dated as of September 27, 2005 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the
"Loan Agreement"), among America West Airlines, Inc., US Airways Group, Inc.,
the other Obligors from time to time party thereto, Citibank, N.A., as Initial
Lender, Citibank, N.A., as Agent, Wilmington Trust Company, as Collateral Agent
and Air Transportation Stabilization Board. Capitalized terms used herein and
not otherwise defined herein are used herein as defined in the Loan Agreement.

          The Assignor and the Assignee hereby agree as follows:

          (i) The Assignor hereby sells and assigns to the Assignee, and the
     Assignee hereby purchases and assumes from the Assignor, [all of] [a __%
     interest in] the Assignor's rights and obligations under the Loan Agreement
     as a Tranche [A][B][-1][-2][-3][-4] Lender. The principal amount of Tranche
     [A][B][-1][-2][-3][-4] of the Loan assigned to the Assignee are set forth
     in Section 1 of Schedule I [and the principal amount of Tranche
     [A][B][-1][-2][-3][-4] of the Loan retained by the Assignor after giving
     effect to such sale and assignment are set forth in Section 2 of Schedule
     I]. [The Tranche A interest being assigned to the Assignor hereunder [is/is
     not] being assigned together with a corresponding interest under the Board
     Guaranty.] Such sale and assignment is without recourse to the Assignor or
     any of its representatives or agents (including any placement agent), and,
     except for those representations and warranties by the Assignor expressly
     set forth in this Assignment and Acceptance, without representation or
     warranty by any such Person.

          (ii) The Assignor (i) represents and warrants that it is the legal and
     beneficial owner of the interest being assigned by it hereunder and that
     such interest is free and clear of any lien, encumbrance or any adverse
     claim; (ii) makes no representation or warranty and assumes no
     responsibility with respect to any statements, warranties or
     representations made in or in connection with the Loan Agreement or any
     other Loan Document or any other instrument or document furnished pursuant
     thereto or the execution, legality, validity, enforceability, genuineness,
     sufficiency or value of the Loan Agreement or any other Loan Document or
     any other instrument or document furnished pursuant thereto or any
     collateral thereunder; and (iii) makes no representation or warranty and
     assumes no responsibility with respect to (A) the financial condition of
     the Borrower, any other Obligor or any other Person obligated under any
     Loan Document or any other instrument or document furnished pursuant
     thereto or (B) the performance or observance by the Borrower, any other
     Obligor or any other Person obligated under any Loan Document or any other
     instrument or document furnished pursuant thereto of any of their
     respective obligations under any Loan Document or any other instrument or
     document furnished pursuant thereto.

          (iii) The Assignee (i) agrees that it will, independently and without
     reliance upon the Agent, the Collateral Agent, the Assignor, the Board or
     any other Lender, or any of their respective representatives or agents
     (including any placement agent), and based on such documents and
     information as it shall deem appropriate at the time, continue to make its
     own credit decisions in taking or not taking action under the Loan
     Agreement; (ii) appoints and authorizes the Agent and the Collateral to
     take such action as administrative agent or collateral agent, respectively,
     on its behalf and to exercise such powers under the Loan Agreement and the
     other Loan Documents as are delegated to the Agent or the Collateral Agent
     by the terms thereof, together with such powers as are reasonably
     incidental thereto; (iii) agrees that it will perform in


                                  Exhibit A-1



     accordance with their terms all of the obligations which by the terms of
     the Loan Agreement are required to be performed by it as a Lender; (iv)
     represents and warrants that it is an Eligible Lender; (v) confirms it has
     received and had an opportunity to review a copy of the Loan Agreement and
     the other Loan Documents, together with copies of the most recent financial
     statements delivered pursuant to Article 5.1(b) thereof, and such other
     documents and information as it has deemed appropriate to make its own
     credit analysis and decision to enter into this Assignment and Acceptance
     and to purchase the interest being assigned hereunder on the basis of which
     it has made such analysis and decision independently and without reliance
     on the Agent, the Collateral Agent, the Assignor, the Board or any other
     Lender, or any of their respective representatives or agents (including any
     placement agent); (vi) specifies as its Lending Office (and address for
     notices) the office set forth beneath its name on the signature pages
     hereof; and (vii) acknowledges and agrees to the terms of the Loan
     Documents, including, without limitation, the terms of the Intercreditor
     Agreement.

          (iv) Following the execution of this Assignment and Acceptance by the
     Assignor and the Assignee, it will be delivered to the Agent (with a copy
     to the Board) for acceptance and recording by the Agent, together with an
     assignment fee of $3,500 payable by the [Assignor]. The effective date of
     this Assignment and Acceptance shall be __________ [or such later date as
     of which the Board shall have consented to the sale and assignment of [all
     of] [a __% interest in] the Assignor's rights and obligations under the
     Loan Agreement and the other Loan Documents to the Assignee as provided
     herein and as evidenced by its signed confirmation thereof set forth on the
     signature pages hereof] (the "Effective Date").

          (v) Upon such acceptance and recording by the Agent, then, as of the
     Effective Date, (i) the Assignee shall be a party to the Loan Agreement
     and, to the extent provided in this Assignment and Acceptance, have the
     rights and obligations under the Loan Agreement of a Lender and (ii) the
     Assignor shall, to the extent provided in this Assignment and Acceptance,
     relinquish its rights (except those which survive the payment in full of
     the Obligations) other than those relating to events or circumstances
     occurring prior to the Effective Date and be released from its obligations
     under the Loan Documents.

          (vi) Upon such acceptance and recording by the Agent, from and after
     the Effective Date, the Agent shall make all payments under the Loan
     Documents in respect of the interest assigned hereby (i) to or for the
     account of the Assignee, in the case of amounts accrued with respect to any
     period on or after the Effective Date and (ii) to or for the account of the
     Assignor, in the case of amounts accrued with respect to any period prior
     to the Effective Date.

          (vii) This Assignment and Acceptance shall be governed by, and be
     construed in accordance with, the law of the State of New York.

          (viii) This Assignment and Acceptance may be executed in any number of
     counterparts and by different parties on separate counterparts, each of
     which when so executed shall be deemed to be an original and all of which
     taken together shall constitute but one and the same agreement. Delivery of
     an executed counterpart of this Assignment and Acceptance by telecopier
     shall be effective as delivery of a manually executed counterpart of this
     Assignment and Acceptance.

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written.


                                  Exhibit A-2



                                                     [Assignor]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        [Assignee]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        Lending Office (and address for
                                        notices): [Address]

                                        ----------------------------------------

Accepted this _____________ day

of ________________________, ____

CITIBANK, N.A.,
as Agent


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

[The Board hereby confirms its consent to this Assignment and Acceptance in
accordance with the provisions of Section 9.2 of the Loan Agreement

AIR TRANSPORTATION STABILIZATION BOARD


By:
    ---------------------------------
Name:
      -------------------------------
Title:]
        -----------------------------


[The Borrower hereby confirms its consent to this Assignment and Acceptance in
accordance with the provisions of Section 9.2 of the Loan Agreement.

AMERICA WEST AIRLINES, INC.


By:
    ---------------------------------
Name:
      -------------------------------
Title:]
        -----------------------------


                                  Exhibit A-3



                                   SCHEDULE I

                                       TO

                            ASSIGNMENT AND ACCEPTANCE

SECTION 1.

Aggregate Outstanding Principal
Amount of Tranche [A][B][-1][-2][-3]
[-4] Assigned to Assignee:              $_______________________________________

SECTION 2.

Aggregate Outstanding Principal
Amount of Tranche [A][B][-1][-2][-3]
[-4] retained by Assignor:              $_______________________________________


                                       I-1



                                   EXHIBIT B-1

                             FORM OF TRANCHE A NOTE

$ [_]                                                         September 27, 2005

     FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche A Lender,
the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche A, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche A from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.

     This Tranche A Note shall be payable at the principal office of the Agent
presently located at 399 Park Avenue in New York, New York 10022.

     This Tranche A Note is the "Tranche A Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.

     Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche A Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.

     This Tranche A Note shall be governed by, and construed in accordance with,
the law of the State of New York (and to the extent applicable, the Bankruptcy
Code); provided that the rights and obligations of the Board hereunder shall be
governed by, and construed in accordance with, the Federal law of the United
States of America, if and to the extent such Federal law is applicable, and
otherwise in accordance with the law of the State of New York.

     IN WITNESS WHEREOF, the Borrower has caused this Tranche A Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.

                                        AMERICA WEST AIRLINES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      B1-1



                                   EXHIBIT B-2

                            FORM OF TRANCHE B-1 NOTE

$[_]                                                          September 27, 2005

     FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche B-1
Lender, the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche B-1, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche B-1 from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.

     This Tranche B-1 Note shall be payable at the principal office of the Agent
presently located at 399 Park Avenue in New York, New York 10022.

     This Tranche B-1 Note is the "Tranche B-1 Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.

     Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche B-1 Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.

     This Tranche B-1 Note shall be governed by, and construed in accordance
with, the law of the State of New York (and to the extent applicable, the
Bankruptcy Code); provided that the rights and obligations of the Board
hereunder shall be governed by, and construed in accordance with, the Federal
law of the United States of America, if and to the extent such Federal law is
applicable, and otherwise in accordance with the law of the State of New York.

     IN WITNESS WHEREOF, the Borrower has caused this Tranche B-1 Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.

                                        AMERICA WEST AIRLINES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      B2-1



                                   EXHIBIT B-3

                            FORM OF TRANCHE B-2 NOTE

$[_]                                                          September 27, 2005

     FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche B-2
Lender, the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche B-2, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche B-2 from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.

     This Tranche B-2 Note shall be payable at the principal office of the Agent
presently located at 399 Park Avenue in New York, New York 10022.

     This Tranche B-2 Note is the "Tranche B-2 Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.

     Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche B-2 Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.

     This Tranche B-2 Note shall be governed by, and construed in accordance
with, the law of the State of New York (and to the extent applicable, the
Bankruptcy Code); provided that the rights and obligations of the Board
hereunder shall be governed by, and construed in accordance with, the Federal
law of the United States of America, if and to the extent such Federal law is
applicable, and otherwise in accordance with the law of the State of New York.

     IN WITNESS WHEREOF, the Borrower has caused this Tranche B-2 Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.

                                        AMERICA WEST AIRLINES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      B3-1



                                   EXHIBIT B-4

                            FORM OF TRANCHE B-3 NOTE

$[_]                                                          September 27, 2005

     FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche B-3
Lender, the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche B-3, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche B-3 from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.

     This Tranche B-3 Note shall be payable at the principal office of the Agent
presently located at 399 Park Avenue in New York, New York 10022.

     This Tranche B-3 Note is the "Tranche B-3 Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.

     Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche B-3 Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.

     This Tranche B-3 Note shall be governed by, and construed in accordance
with, the law of the State of New York (and to the extent applicable, the
Bankruptcy Code); provided that the rights and obligations of the Board
hereunder shall be governed by, and construed in accordance with, the Federal
law of the United States of America, if and to the extent such Federal law is
applicable, and otherwise in accordance with the law of the State of New York.

     IN WITNESS WHEREOF, the Borrower has caused this Tranche B-3 Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.

                                        AMERICA WEST AIRLINES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      B4-1



                                   EXHIBIT B-5

                            FORM OF TRANCHE B-4 NOTE

$[_]                                                          September 27, 2005

     FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche B-4
Lender, the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche B-4, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche B-4 from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.

     This Tranche B-4 Note shall be payable at the principal office of the Agent
presently located at 399 Park Avenue in New York, New York 10022.

     This Tranche B-4 Note is the "Tranche B-4 Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.

     Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche B-4 Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.

     This Tranche B-4 Note shall be governed by, and construed in accordance
with, the law of the State of New York (and to the extent applicable, the
Bankruptcy Code); provided that the rights and obligations of the Board
hereunder shall be governed by, and construed in accordance with, the Federal
law of the United States of America, if and to the extent such Federal law is
applicable, and otherwise in accordance with the law of the State of New York.

     IN WITNESS WHEREOF, the Borrower has caused this Tranche B-4 Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.

                                        AMERICA WEST AIRLINES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      B5-1



                                    EXHIBIT I

                      FORM OF COLLATERAL VALUE CERTIFICATE

          Reference is made to the Loan Agreement dated as of September 27, 2005
by and among America West Airlines, Inc. (the "Borrower"), US Airways Group,
Inc. ("Group"), the Subsidiaries of Group parties thereto from time to time,
Citibank, N.A., as Initial Lender, Citibank, N.A., as Agent, Wilmington Trust
Company, as Collateral Agent and Air Transportation Stabilization Board (as the
same may be amended, restated or supplemented or otherwise modified from time to
time, the "Loan Agreement"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Loan
Agreement.

          The undersigned, being a Responsible Officer of the Borrower, does
hereby certify as of the date hereof that the Collateral Value is as follows:

                                                                                 
APPRAISED COLLATERAL (A - B)                                                        $______________

     A = Appraised Value based on the Appraisal Report(s) attached hereto as
     Schedule I: $_______________, of which $_____________ is the Appraised Value
     of spare parts

     B = Ineligible Assets (as identified and described on Schedule II attached
     hereto): $_______________

ELIGIBLE ACCOUNTS (A * B)                                                           $______________

     A = Eligible Accounts: $_______________

     B = 85%

TOTAL COLLATERAL VALUE (Appraised Collateral + Eligible Accounts)                   $______________

COLLATERAL VALUE DEFICIENCY ((135% of the sum of ((A +B) - C) - Total Collateral
Value)
                                                                                    $______________
     A = Outstanding principal and accrued interest on the Loan:
     $_______________

     B = Outstanding principal and accrued interest on the US Airways Loan:
     $_______________

     C = required Minimum Adjusted Cash Amount: $_______________





          In addition, the undersigned hereby certifies as of the date hereof as
          follows:

     1.   None of the Collateral included in the calculation of the Collateral
          Value is subject to any event of loss, damage or other casualty that
          (i) has materially and adversely affected the value of such
          Collateral, whether insured or not, or (ii) is not disclosed in a
          schedule referenced above and attached hereto.

     2.   The Appraised Value of spare parts counted in the computation of
          Collateral Value [is] [is not] less than $_______, which amount is
          equal to 75% of the Appraised Value of the spare parts set forth in
          the Baseline Appraisal.

     3.   [No Collateral Value Deficiency exists/A Collateral Value Deficiency
          exists].

               The undersigned hereby certifies that all statements made in this
Collateral Value Certificate are true and correct as of the date hereof.

Date:
      -------------------------------

                                        AMERICA WEST AIRLINES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------



                                    EXHIBIT K

                                   [RESERVED]


                                      -4-



                                    EXHIBIT L

                         FORM OF SLOT UTILIZATION REPORT

               Reference is made to the Loan Agreement dated as of September 27,
2005 by and among America West Airlines, Inc., US Airways Group, Inc., the
Subsidiaries of Group parties thereto from time to time, Citibank, N.A., as
Initial Lender, Citibank, N.A., as Agent, Wilmington Trust Company, as
Collateral Agent and Air Transportation Stabilization Board (as the same may be
amended, restated or supplemented or otherwise modified from time to time, the
"Loan Agreement"). This Slot Utilization Report is being delivered pursuant to
Section 5.1(b)(xx) of the Loan Agreement. Capitalized terms used but not defined
herein have the meanings assigned to them in the Loan Agreement.

REPORTING PERIOD: _____________________

I.   SLOT USAGE*

Airport: ________________________



Slot Time   Total Held   Total Used   Pct. Usage (%)   Departure/Arrival
- ---------   ----------   ----------   --------------   -----------------
                                           



II.  RECALLED SLOTS

(a)  Slots recalled by the FAA or otherwise revoked or terminated during the
     current reporting period for failure to comply with Slot Regulations:



Slot Time   Slot ID   Date Recalled   Appraised Value
- ---------   -------   -------------   ---------------
                             



(b)  Slots recalled by the FAA or otherwise revoked or terminated in all prior
     reporting periods during the term of the Loan for failure to comply with
     Slot Regulations:



Slot Time   Slot ID   Date Recalled   Appraised Value
- ---------   -------   -------------   ---------------
                             



(c)  If any Slot identified in II(a) above is a Secondary Slot, establish in
     reasonable detail why the applicable Obligor determined that maintaining
     such Slot was no longer commercially required (within the meaning of
     Section 7.1(p)(i) of the Loan Agreement).

III. ATTACHMENTS

- ----------
*    A separate chart should be provided for each airport at which any of the
     Obligors holds or utilizes Slots.


                                      -5-



     Attached to this report is a true and complete copy of each Slot
     utilization report required to be delivered to the FAA under the Slot
     Regulations for the two month reporting period summarized herein [together
     with any requests for waivers or other documentation provided to the FAA in
     connection therewith].

IV.  CERTIFICATION**

     The undersigned Responsible Officer of Group hereby certifies that the
     foregoing is true and correct in all material respects.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

- ----------
**   Certification required to be made by a Responsible Officer of Group.


                                      -6-



                                    EXHIBIT M

                           FORM OF SUBSIDIARY JOINDER

          JOINDER AGREEMENT, dated as of ___________ ___, 200___ (this
"Joinder") by ______________________ (the "New Subsidiary") to the Loan
Agreement dated as of September 27, 2005 (as the same may be amended, restated
or supplemented or otherwise modified from time to time, the "Loan Agreement")
among America West Airlines, Inc., as Borrower, US Airways Group, Inc., the
other Obligors from time to time party thereto, Citibank, N.A., as Initial
Lender, Citibank, N.A., as Agent, Wilmington Trust Company, as Collateral Agent
and Air Transportation Stabilization Board. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Loan Agreement.

                                    RECITALS

          WHEREAS, Section 5.8(a) of the Loan Agreement provides that, following
the formation or acquisition by any Obligor of a Subsidiary that is not a CFC,
such Obligor shall cause such Subsidiary to execute and deliver to the Agent and
the Board a Subsidiary Joinder, pursuant to which such Subsidiary shall become a
party to the Loan Agreement.

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the New Subsidiary, the New Subsidiary, intending legally to be
bound, hereby agrees as follows:

          1. Joinder. By the execution of this Joinder, the New Subsidiary
hereby agrees that it is, and shall be deemed for all purposes to be, a
Subsidiary Guarantor under the Loan Agreement, and agrees that it is bound by
the terms, conditions and obligations set forth therein, with the same force and
effect as if the New Subsidiary had been an original signatory thereto.

          2. Notice. The address of the New Subsidiary set forth below its
signature hereto shall be its address for all purposes of the Loan Agreement as
if set forth on Annex A thereto.

          3. Governing Law. This Joinder shall be construed in accordance with,
and shall be governed by, the laws of the State of New York.

          4. Further Assurances. The New Subsidiary agrees to perform any
further acts and execute and deliver any additional documents and instruments
that may be necessary or reasonably requested by the Agent or the Board (so long
as the Board is either guarantor of Tranche A or a Lender under the Loan
Agreement) to carry out the provisions of this Joinder.


                                      -7-



          IN WITNESS WHEREOF, the New Subsidiary has executed this Joinder
Agreement as of the date first above written.

                                        [NEW SUBSIDIARY]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        Address and Contact Information:

                                        Attn:
                                              ----------------------------------
                                        Tel:
                                             -----------------------------------
                                        Fax:
                                             -----------------------------------

ACKNOWLEDGED:

CITIBANK, N.A.,
as Agent


By:
    ----------------------------------
Name:
      --------------------------------
Title:
       -------------------------------


AIR TRANSPORTATION STABILIZATION BOARD


By:
    ----------------------------------
Name:
      --------------------------------
Title:
       -------------------------------


                                      -8-

EX-10.3

                                                                    Exhibit 10.3

                                                                  EXECUTION COPY

           *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
               FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                  SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                                  $161,000,000

                                 LOAN AGREEMENT

                         DATED AS OF SEPTEMBER 27, 2005

                                      AMONG

                                US AIRWAYS, INC.
                                       AND
                          AMERICA WEST AIRLINES, INC.,
                                  AS BORROWERS,

                             US AIRWAYS GROUP, INC.,
                                  AS GUARANTOR,

                           AIRBUS FINANCIAL SERVICES,
                        AS INITIAL LENDER AND LOAN AGENT

                                       AND

                           WELLS FARGO BANK NORTHWEST,
                              NATIONAL ASSOCIATION
                               AS COLLATERAL AGENT



                                TABLE OF CONTENTS



                                                                                   PAGE
                                                                                   ----
                                                                                
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS......................     1
   SECTION 1.1    DEFINED TERMS.................................................     1
   SECTION 1.2    COMPUTATION OF TIME PERIODS...................................    21
   SECTION 1.3    ACCOUNTING TERMS AND PRINCIPLES...............................    21
   SECTION 1.4    CERTAIN TERMS.................................................    22

ARTICLE II THE LOANS............................................................    22
   SECTION 2.1    THE LOANS.....................................................    22
   SECTION 2.2    BORROWING PROCEDURES..........................................    24
   SECTION 2.3    SCHEDULED REPAYMENT OF THE LOANS..............................    24
   SECTION 2.4    EVIDENCE OF DEBT; USE OF PROCEEDS.............................    25
   SECTION 2.5    OPTIONAL PREPAYMENTS..........................................    27
   SECTION 2.6    MANDATORY PREPAYMENTS.........................................    28
   SECTION 2.7    INTEREST......................................................    29
   SECTION 2.8    FEES..........................................................    30
   SECTION 2.9    PAYMENTS AND COMPUTATIONS.....................................    30
   SECTION 2.10   CERTAIN PROVISIONS GOVERNING THE LOANS........................    32
   SECTION 2.11   CAPITAL ADEQUACY..............................................    34
   SECTION 2.12   SUBSTITUTION OF LENDERS.......................................    35
   SECTION 2.13   TAXES.........................................................    36
   SECTION 2.14   PRO RATA TREATMENT AND PAYMENTS...............................    40

ARTICLE III CONDITIONS TO CLOSING AND FUTURE FUNDINGS...........................    40
   SECTION 3.1    CONDITIONS PRECEDENT..........................................    40

ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................................    45
   SECTION 4.1    ORGANIZATION, POWERS, QUALIFICATION; AIR CARRIER  LICENSES,
                  FRANCHISES AND PERMITS........................................    45
   SECTION 4.2    AUTHORIZATION OF BORROWING, ETC...............................    46
   SECTION 4.3    FINANCIAL CONDITION...........................................    47
   SECTION 4.4    NO MATERIAL ADVERSE EFFECT....................................    48
   SECTION 4.5    TITLE TO PROPERTIES; LIENS....................................    48
   SECTION 4.6    LITIGATION; ADVERSE FACTS.....................................    48
   SECTION 4.7    TAX RETURNS...................................................    49
   SECTION 4.8    NO DEFAULT OR EVENT OF DEFAULT................................    49
   SECTION 4.9    GOVERNMENTAL REGULATION.......................................    49
   SECTION 4.10   EMPLOYEE BENEFIT PLANS........................................    49
   SECTION 4.11   COMPLIANCE WITH LAWS..........................................    49
   SECTION 4.12   SECURITY DOCUMENTS............................................    49
   SECTION 4.13   CONCERNING THE COLLATERAL.....................................    50
   SECTION 4.14   REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT........    51




                                                                                
ARTICLE V COVENANTS.............................................................    52
   SECTION 5.1    FINANCIAL STATEMENTS AND OTHER INFORMATION....................    52
   SECTION 5.2    CORPORATE EXISTENCE...........................................    55
   SECTION 5.3    PAYMENT OF TAXES..............................................    55
   SECTION 5.4    MAINTENANCE OF PROPERTIES; INSURANCE..........................    55
   SECTION 5.5    INSPECTION....................................................    56
   SECTION 5.6    COMPLIANCE WITH LAWS, ETC.....................................    56
   SECTION 5.7    FURTHER ASSURANCES............................................    56
   SECTION 5.8    EMPLOYEE BENEFIT PLANS........................................    56
   SECTION 5.9    FAA MATTERS; CITIZENSHIP......................................    56
   SECTION 5.10   DELIVERY OF POST-RECORDING FAA OPINION........................    56
   SECTION 5.11   SOFTWARE......................................................    57
   SECTION 5.12   COMPLIANCE WITH MORTGAGE......................................    57
   SECTION 5.13   PROHIBITION ON LIENS..........................................    57
   SECTION 5.14   MERGER OR CONSOLIDATION.......................................    59
   SECTION 5.15   CERTAIN APPROVALS UNDER THE ATSB LOAN AGREEMENT...............    60

ARTICLE VI EVENTS OF DEFAULT....................................................    60
   SECTION 6.1    EVENTS OF DEFAULT.............................................    60
   SECTION 6.2    REMEDIES......................................................    62

ARTICLE VII THE LOAN AGENT AND THE COLLATERAL AGENT.............................    62
   SECTION 7.1    AUTHORIZATION AND ACTION......................................    62
   SECTION 7.2    AGENT'S RELIANCE, ETC.........................................    63
   SECTION 7.3    AGENT AND AFFILIATES..........................................    64
   SECTION 7.4    REPRESENTATIONS OF THE LENDERS................................    64
   SECTION 7.5    EVENTS OF DEFAULT.............................................    64
   SECTION 7.6    LOAN AGENT'S AND COLLATERAL AGENT'S RIGHT TO INDEMNITY........    65
   SECTION 7.7    INDEMNIFICATION OF LOAN AGENT AND COLLATERAL AGENT............    65
   SECTION 7.8    SUCCESSOR LOAN AGENT AND COLLATERAL AGENT.....................    65
   SECTION 7.9    COLLATERAL AND GUARANTEE MATTERS..............................    66

ARTICLE VIII GUARANTEE..........................................................    66
   SECTION 8.1    GUARANTEE.....................................................    66
   SECTION 8.2    NO SUBROGATION................................................    67
   SECTION 8.3    AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS..............    67
   SECTION 8.4    GUARANTEE ABSOLUTE AND UNCONDITIONAL..........................    68
   SECTION 8.5    REINSTATEMENT.................................................    69
   SECTION 8.6    PAYMENTS......................................................    69

ARTICLE IX MISCELLANEOUS........................................................    69
   SECTION 9.1    AMENDMENTS, WAIVERS, ETC......................................    69
   SECTION 9.2    SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS........    70
   SECTION 9.3    COSTS AND EXPENSES............................................    73
   SECTION 9.4    INDEMNITIES...................................................    73
   SECTION 9.5    RIGHT OF SET-OFF..............................................    74





                                                                                
   SECTION 9.6    JOINT AND SEVERAL LIABILITY; MAXIMUM LIABILITY; WAIVER OF
                  SUBROGATION...................................................    74
   SECTION 9.7    SHARING OF PAYMENTS, ETC......................................    76
   SECTION 9.8    NOTICES, ETC..................................................    77
   SECTION 9.9    NO WAIVER; REMEDIES...........................................    77
   SECTION 9.10   GOVERNING LAW.................................................    78
   SECTION 9.11   SUBMISSION TO JURISDICTION; SERVICE OF PROCESS................    78
   SECTION 9.12   WAIVER OF JURY TRIAL..........................................    78
   SECTION 9.13   MARSHALING; PAYMENTS SET ASIDE................................    78
   SECTION 9.14   SECTION TITLES................................................    79
   SECTION 9.15   EXECUTION IN COUNTERPARTS.....................................    79
   SECTION 9.16   SEVERABILITY..................................................    79
   SECTION 9.17   CONFIDENTIALITY...............................................    79
   SECTION 9.18   APPOINTMENT OF INDENTURE TRUSTEE..............................    80



Annexes

Annex A - Notice Addresses
Annex B - Lending Office
Annex C - Lender Commitments

Schedules

Schedule 1.1(a) - Existing Pass Through Certificates
Schedule 1.1 (b) - Specified Engines
Schedule 4.12 - Financing Statements, Filings and Recordings
Schedule 5.13 - Liens

Exhibits

Exhibit A - Form of Assignment and Assumption
Exhibit B - Form of Note
Exhibit C - Form of Notice of Borrowing



          LOAN AGREEMENT, dated as of September 27, 2005, among US AIRWAYS,
INC., a Delaware corporation ("US Airways"), AMERICA WEST AIRLINES, INC., a
Delaware corporation ("America West", and together with US Airways, the
"Borrowers", and each, a "Borrower"); US AIRWAYS GROUP, INC., a Delaware
corporation, as guarantor (the "Guarantor"); AIRBUS FINANCIAL SERVICES as the
initial lender (together with its successors and permitted assigns, the "Initial
Lender"), as loan agent for the Lenders (in such capacity, together with its
successors and permitted assigns, the "Loan Agent"), and WELLS FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, as collateral agent (in such capacity, together
with its successors and permitted assigns, the "Collateral Agent").

                                   WITNESSETH:

          WHEREAS, on September 12, 2004 (the "Petition Date"), the Guarantor
and each of its domestic subsidiaries as of such date, including US Airways
(collectively, the "Debtors") filed voluntary petitions (the "Cases") for relief
under the Bankruptcy Code with the United States Bankruptcy Court for the
Eastern District of Virginia, Alexandria Division (the "Bankruptcy Court") and
continued in possession of their property and in the management of their
businesses pursuant to Bankruptcy Code Sections 1107 and 1108;

          WHEREAS, on May 19, 2005, the Guarantor, Barbell Acquisition Corp., a
Delaware corporation and Wholly-Owned Subsidiary of the Guarantor (the "Merger
Sub"), and America West Holdings, Corporation entered into an Agreement and Plan
of Merger (the "Merger Agreement");

          WHEREAS, (x) the Bankruptcy Court has entered an order (the
"Confirmation Order") confirming the Plan of Reorganization under Chapter 11 of
the Bankruptcy Code (as in effect on the date of confirmation thereof pursuant
to the Confirmation Order, the "Plan of Reorganization") and (y) the Effective
Time (as defined in the Merger Agreement) has occurred, and the Borrowers have
requested that the Lenders make available to the Borrowers the Loans for the
purposes specified herein; and

          WHEREAS, the Lenders are willing to make available to the Borrowers
the Loans upon the terms and subject to the conditions set forth herein;

          NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:

                                    ARTICLE I

                DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

          SECTION 1.1 DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):



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          "A319/A320/A321 Purchase Agreement" means the A319/A320/A321 Purchase
Agreement, dated as of October 31, 1997, as amended, between AVSA, S.A.R.L. and
the Guarantor.

          "A319/A320 Purchase Agreement" means the A319/A320 Purchase Agreement,
dated as of September 12, 1997, as amended, between AVSA, S.A.R.L. and America
West.

          "A330/A340 Purchase Agreement" means the A330/A340 Purchase Agreement
dated as of November 24, 1998, as amended, between AVSA, S.A.R.L. and the
Guarantor.

          "A321 Airbus Financings" mean the note purchase agreements, trust
indenture and mortgages, secured notes and related loan documents entered into
between Aviateur International Limited, as initial lender, and certain
Affiliates, on the one hand, US Airways Inc., on the other hand, and U.S. Bank
National Association (as successor in interest to State Street Bank and Trust
Company of Connecticut, N.A.), as Indenture Trustee, as amended or supplemented
from time to time, providing for the mortgage loan financing of five (5) Airbus
A321 model aircraft bearing FAA registration numbers N184US, N185UW, N186US,
N187US and N188US, respectively.

          "A321 Aircraft" means, individually or collectively as the context may
require, the Airbus A321 aircraft having FAA registration numbers N184US,
N185UW, N186US, N187US, and N188US.

          "A350/A340 Financing Letter Agreement" means the A350/A330 Financing
Letter Agreement dated as of September 27, 2005, as amended, among AVSA,
S.A.R.L. and the Obligors.

          "Actual Knowledge" means, with respect to any Person, actual knowledge
of a vice president or more senior officer of such Person or any other officer
of such Person having responsibility for the transactions contemplated by the
Loan Documents.

          "Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

          "Agreement" means this Loan Agreement.

          "Aggregate Original Principal Amount" means the aggregate outstanding
principal amount of the Loans on the earliest of (x) the close of business on
December 31, 2007, (y) the date the Commitments are fully utilized and (z) the
date when the Commitments are terminated.

          "Airbus" means Airbus S.A.S.



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          "Aircraft Mortgage" means the five (5) Trust Indenture and Mortgages
dated the date hereof between US Airways and US Bank National Association, as
Indenture Trustee, providing for second mortgages on the A321 Aircraft, as
supplemented or amended from time to time.

          "Aircraft Related Equipment" means aircraft (including aircraft
engines installed thereon) in the fleet of any Obligor or any of their
Subsidiaries, spare aircraft engines and propellers, spare parts, aircraft
parts, simulators and other training devices, and passenger loading bridges or
other flight or ground equipment and Aircraft Related Facilities.

          "Aircraft Related Facilities" means (i) airport terminal facilities,
including without limitation, baggage systems, loading bridges and related
equipment, building, infrastructure and maintenance, club rooms, apron, fueling
systems or facilities, signage/image systems, administrative offices,
information technology systems and security systems, (ii) airline support
facilities, including without limitation, cargo, catering, mail, ground service
equipment, ramp control, deicing, hangars, aircraft parts/storage, training and
reservations facilities and (iii) all equipment used in connection with the
foregoing.

          "Applicable Interest Rate" means, for each Loan and for each Interest
Period, a rate per annum equal to LIBOR for such Interest Period plus the
Applicable Margin.

          "Applicable Margin" means [...***...]% per annum; provided, however,
that on each of (A) the [...***...] anniversary of the Closing Date, and (B) on
the [...***...] anniversary of the Closing Date (each an "Applicable Margin
Determination Date"), the Applicable Margin shall be reviewed and adjusted or
not adjusted based on the most recently published corporate credit rating
assigned by S&P to the Guarantor and its consolidated subsidiaries, taken
together, as follows: for each grade (for illustration purposes, the change from
B to B+ or to B- being a single grade) by which such credit rating is lower
than, or higher than, B, the Applicable Margin shall be increased or decreased,
respectively, by [...***...]%; provided, further, that, notwithstanding the
foregoing, the Applicable Margin shall not be higher than [...***...]% per annum
or lower than [...***...]% per annum.

          "Asset Sale" means, with respect to any property, any sale, transfer
or other disposition (including by way of merger, consolidation, exchange of
assets or sale leaseback transactions or by reason of any condemnation or other
taking or permanent requisition) of such property, in one transaction or a
series of related transactions, by any Obligor or any of its Subsidiaries to any
Person other than such Obligor or any of its Subsidiaries; provided that sales
of spare parts subject to the Lien of the Spare Parts Mortgage which are made
pursuant to Section 3.02(b)(4) thereof shall not constitute Asset Sales.

*** CONFIDENTIAL TREATMENT REQUESTED


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          "Assignment and Assumption" means an Assignment and Assumption entered
into by a Lender and an Assignee, in substantially the form of Exhibit A or any
other form approved by the Loan Agent.

          "ATSB" means the Air Transportation Stabilization Board, or any
successor thereto.

          "ATSB Loan Agreements" means (i) the Amended and Restated Loan
Agreement, dated as of September 27, 2005, among US Airways, the Guarantor, the
other subsidiaries of the Guarantor party thereto, the lenders from time to time
party thereto, the Loan Administrator and agents party thereto, and the ATSB,
and (ii) the Amended and Restated Loan Agreement, dated as of September 27,
2005, among America West, the Guarantor, the other subsidiaries of the Guarantor
party thereto, the lenders from time to time party thereto, the Loan
Administrator and agents party thereto, and the ATSB, each as in effect on the
Closing Date.

          "AWA Holdings" means America West Holdings Corporation.

          "Bankruptcy Code" means Title 11 of the United States Code as now and
hereafter in effect, or any successor statute.

          "Bankruptcy Court" has the meaning specified in the recitals hereto.

          "Borrower" has the meaning specified in the preamble to this
Agreement.

          "Borrowing" means the borrowing of a Loan on the Closing Date or on
another Funding Date.

          "Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks in New York, New York, Dublin, Ireland, or
Phoenix, Arizona are authorized or required by law to remain closed; provided
that when used in connection with LIBOR, the term "Business Day" shall mean any
day on which banks in London, England are open for dealings in dollar deposits
in the interbank market.

          "Business Plan" means the business plan of the Borrowers dated as of
July 7, 2005, provided to the Loan Agent.

          "Cape Town Convention" means the Convention on International Interests
in Mobile Equipment and the Protocol to the Convention on Matters Specific to
Aircraft Equipment signed in Cape Town on 16 November 2001.

          "Capital Lease," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person, and the amount of Indebtedness represented by such
lease shall be the capitalized amount of the obligations evidenced thereby
determined in accordance with GAAP.



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          "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock, whether now outstanding or
issued after the date of this Agreement.

          "Cases" has the meaning specified in the recitals hereto.

          "Cash" means money, currency or a credit balance.

          "Cash Equivalents" has the meaning given in the ATSB Loan Agreements.

          "Closing Date" means the date of this Agreement.

          "Code" means the Internal Revenue Code of 1986.

          "Collateral" means the property comprising the collateral security
provided by the Collateral Documents.

          "Collateral Documents" means, collectively, (i) the Aircraft
Mortgages, as amended or supplemented from time to time, (ii) the Spare Parts
Mortgage and Security Agreement, (iii) the Engine Mortgage and Security
Agreement, (iv) the Purchase Agreement Security Agreement, and (v) such other
security documents as may be executed and delivered by the Obligors pursuant to
the terms of Section 5.6.

          "Commitments" is a collective reference to the Tranche A Commitments,
the Tranche B Commitments, the Tranche C Commitments, the Tranche D Commitments
and the Tranche E Commitments. The initial aggregate amount of the Commitments
is $250,000,000.

          "Commodity Agreement" means any agreement or arrangement designed to
protect any Obligor or any of their Subsidiaries against fluctuations in the
prices of commodities used by any Obligor or any of their Subsidiaries in the
ordinary course of its business.

          "Confirmation Order" has the meaning specified in the recitals hereto.

          "Consummation of the Plan" means substantial consummation of the Plan
of Reorganization within the meaning of Section 1101(2) of the Bankruptcy Code.

          "Contractual Obligation," as applied to any Person, means any
provision of any equity security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
material instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.

          "Cross-Collateral" shall mean (i) all collateral security supporting
payment of the Cross-Default Obligations, and (ii) all right, title and
interest, if any, of any Obligor in, to or with respect to predelivery payments
or deposits made under any



                                                                               6


aircraft purchase agreement between any Obligor or any of its Affiliates, on the
one hand, and Airbus or any of its Affiliates, on the other hand.

          "Cross-Default Obligations" means all Obligations of any Obligor (i)
held, directly or indirectly (through a trustee or otherwise) by Airbus or any
Affiliate under or with respect to (A) the A321 Airbus Financings, or (B) the
Other Loan Agreement or any other lease, loan, trade receivable, or other
extension of credit between Airbus or any of its Affiliates, on the one hand,
any Obligor or any of its Affiliates, on the other hand, whether such lease,
loan, trade receivable, or other extension of credit is direct or is indirect
through a lease, structured financing or otherwise, including without
limitation, any Pass Through Certificates listed on Schedule 1.1(a) or acquired
in an original issuance after the Closing Date, or (C) any aircraft purchase
agreement between any Obligor, on the one hand, and Airbus or any of its
Affiliates, on the other hand, or (ii) under any Principal Credit Facility. For
purposes of this definition, the term "Obligations" shall mean with respect to
any of the agreements referred to in clauses (A), (B) or (C) of the preceding
sentence, the unpaid principal of and interest thereon (including interest
accruing after the maturity thereof and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Obligor, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
and all other obligations and liabilities of the Obligors thereunder, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
therewith, or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise.

          "Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect any Obligor or any of its
Subsidiaries against fluctuations in currency values.

          "Debtors" has the meaning specified in the recitals thereto.

          "Default" means any event which with the passing of time or the giving
of notice or both would, unless cured or waived, become an Event of Default.

          "Designated Locations" has the meaning specified in the Spare Parts
Security Agreement.

          "Dollars" and the sign "$" each mean the lawful money of the United
States of America.

          "Effective Date" means the date on which the conditions precedent set
forth in Section 3.1(a), (j) and (p) have been satisfied, but not later than
December 2, 2005.



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          "Engine Mortgage and Security Agreement" means the Engine Mortgage and
Security Agreement dated as of the date hereof between America West and the
Collateral Agent.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

          "ERISA Affiliate" means, as applied to either Borrower, (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code of which such
Borrower is a member; (ii) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Code of which such Borrower is a member;
and (iii) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Code of which such Borrower, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member.

          "ERISA Event" means (a) any "reportable event," as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which reporting is waived); (b) the existence with respect to
any Plan of an "accumulated funding deficiency" (as defined in Section 412 of
the Code or Section 302 of ERISA); (c) the filing pursuant to Section 412(d) of
the Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (d) the incurrence by
Guarantor or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (e)(i) the receipt by
Guarantor or any ERISA Affiliate from the PBGC of a notice of determination that
PBGC intends to seek termination of any Plan or to have a trustee appointed for
any Plan, or (ii) the filing by Guarantor or any ERISA Affiliate of a notice of
intent to terminate any Plan; (f) the incurrence by Guarantor or any of its
ERISA Affiliates of any liability (i) with respect to the withdrawal from a
Multiemployer Plan pursuant to Sections 4063 and 4064 of ERISA, (ii) with
respect to a facility closing pursuant to Section 4062(e) of ERISA, or (iii)
with respect to the withdrawal or partial withdrawal from any Multiemployer
Plan; or (g) the receipt by Guarantor or any ERISA Affiliate of any notice
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

          "Event of Default" has the meaning specified in Section 6.1.

          "Event of Loss" has the meaning specified in the Engine Mortgage and
Security Agreement or in the Aircraft Mortgages.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

          "Excluded Taxes" has the meaning specified in Section 2.13(a).

          "FAA" means the Federal Aviation Administration.



                                                                               8


          "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.

          "Final Order" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket in the Cases or
the docket of any other court of competent jurisdiction, that has not been
reversed, stayed, modified or amended, and as to which the time to appeal or
seek reargument, reconsideration, or certiorari has expired and no appeal,
motion for reconsideration or reargument or petition for certiorari has been
timely taken, or as to which any appeal that has been taken or any petition for
certiorari, motion for reconsideration or reargument that has been or may be
filed has been resolved by the highest court to which the order or judgment was
appealed or from which reargument, reconsideration, or certiorari was sought and
the time to take any further appeal, petition for certiorari or move for
reargument shall have expired.

          "Fiscal Year" means the Borrowers' fiscal year referenced in the
financial statements to be delivered by the Borrowers pursuant to Section 5.1.

          "Funding Date" means each date on which one or more Borrowings of
Loans is made in accordance with Sections 2.1 and 2.2.

          "GAAP" means generally accepted accounting principles in the United
States of America.

          "GECC" means General Electric Capital Corporation.

          "Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government.

          "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such first Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), including any pledge of assets to secure
indebtedness of another or (iii) to maintain working capital, equity capital or
any other financial statement condition or liquidity or level of income or cash
flow of such other Person so as to enable such Person to pay such Indebtedness.
The term "Guarantee" used as a verb has a corresponding meaning.

          "Guarantor" has the meaning specified in the preamble to this
Agreement.



                                                                               9


          "Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all obligations of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto); (iv) all obligations of such
Person to pay the deferred purchase price of property or services, which
purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion of
such services, except (x) Trade Payables and similar obligations incurred in the
ordinary course of business and (y) earn-outs and other contingent payouts in
respect of acquisitions; (v) all Capital Lease obligations of such Person (the
amount of the Indebtedness in respect of Capital Lease obligations to be
determined as provided in the definition of Capital Lease in this Section 1.1);
(vi) all Indebtedness of other Persons secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person; provided
that in the case of Indebtedness issued without recourse to such Persons, the
amount of such Indebtedness shall be the lesser of (A) the fair market value of
such asset at such date of determination and (B) the stated principal amount of
such Indebtedness, provided, however, that if such Indebtedness is assumed by
such Person or provides for recourse against such Person, the amount of such
Indebtedness shall be the greater of (A) and (B) above; (vii) all Indebtedness
of other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person; (viii) to the extent not otherwise included in this
definition and to the extent treated as a liability under GAAP, obligations
under Currency Agreements, Interest Rate Agreements and Commodity Agreements
(ix) the capitalized amount of remaining lease payments owing by such Person
under Synthetic Leases that would appear on the balance sheet of such Person if
such lease were treated as a Capital Lease; (x) the aggregate amount of
uncollected accounts receivable of such Person subject at such time to a sale of
receivables (or similar transaction) to the extent such transaction is effected
with recourse to such Person (whether or not such transaction would be reflected
on the balance sheet of such Person in accordance with GAAP); (xi) the
Indebtedness of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer to the extent such Indebtedness
is recourse to such Person; and (xii) all prepaid forward sales in bulk of
dividend miles or available seat miles or like transactions other than in the
ordinary course of business. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date; provided that the amount outstanding at any time of any Indebtedness
issued with original issue discount is the face amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP.

          "Indemnified Liabilities" has the meaning specified in Section 9.4.

          "Indemnified Taxes" has the meaning specified in Section 2.13(a).

          "Indemnitees" has the meaning specified in Section 9.4.



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          "Indenture Trustee" means U.S. Bank National Association, Indenture
Trustee under the Aircraft Mortgages, and its successors.

          "Initial Lender" has the meaning specified in the preamble to this
Agreement.

          "Intercreditor Agreement" means the intercreditor agreement with GECC
as described in Section 3.1(c)(3).

          "Interest Payment Date" has the meaning specified in Section 2.7(b).

          "Interest Period" means, for each Loan, (a) made on the first Funding
Date, the period commencing on September 26, 2005 and ending three months
thereafter, (b) with respect to any other initial funding of a Loan, the period
commencing on the initial Funding Date for such Loan and ending on the last day
of the current Interest Period for any other Tranche then outstanding, or if no
other Tranche is then outstanding, ending three months after the initial Funding
Date, and (c) thereafter, a period commencing on the last day of the immediately
preceding Interest Period therefor and ending three months thereafter; provided,
however, that:

                    (i) the final scheduled Interest Period shall end on the
     Loan Maturity Date;

                    (ii) if any Interest Period would otherwise end on a day
     which is not a Business Day, such Interest Period shall be extended to the
     next succeeding Business Day, unless the result of such extension would be
     to extend such Interest Period into another calendar month, in which event
     such Interest Period shall end on the immediately preceding Business Day
     and for the avoidance of doubt, interest computation shall be adjusted
     accordingly;

                    (iii) any Interest Period that begins on the last Business
     Day of a calendar month (or on a day for which there is no numerically
     corresponding day in the calendar month at the end of such Interest Period)
     shall end on the last Business Day of a calendar month; and

                    (iv) each "Interest Period" beginning after the occurrence
     and during the continuance of an Event of Default shall be for a period
     duration of one month.

          "Interest Rate Agreement" means any interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement designed to protect any Obligor or any of
their Subsidiaries against fluctuations in interest rates or under which any
Obligor or any of their Subsidiaries is a party or a beneficiary on the date of
this Agreement or becomes a party or a beneficiary thereafter.



                                                                              11


          "IRS" means the Internal Revenue Service of the United States or any
successor thereto.

          "Lenders" mean (i) the Initial Lender, and (ii) each financial
institution or other entity that from time to time becomes a party hereto as a
lender hereunder pursuant to an Assignment and Assumption, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and Assumption
or otherwise.

          "Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Lending Office" opposite its name on Annex B or on the
Assignment and Assumption by which it became a Lender or such other office of
such Lender as such Lender may from time to time specify to the Borrowers and
the Loan Agent.

          "LIBOR" means the rate per annum (rounded to the nearest 1/100 of 1%)
equal to the quotation that appears on page 3750 of the Telerate Screen (or
otherwise on such screen or on such other screen, page or service as may replace
the Telerate Screen) as of 11:00 A.M., London time, two Business Days prior to
the beginning of the applicable Interest Period as the rate for dollar deposits
to be delivered on the first day of such Interest Period and maintained for such
Interest Period (or, in the case of the initial Interest Period, for three
months) in an amount comparable to the principal amount of the Loan. In the
event that such rate does not so appear on the Telerate Screen (or otherwise as
aforesaid), the "LIBOR" for purposes of this definition shall be the arithmetic
average (rounded to the nearest 1/100 of 1%) of the offered quotation to
first-class banks in the interbank Eurodollar market by each Reference Bank in
London for dollar deposits of amounts in same day funds comparable to the
principal amount of the Loan, with maturities comparable to the applicable
Interest Period (or, in the case of the initial Interest Period, for three
months) determined as of 11:00 A.M. (London time) on the date which is two
Business Days prior to the commencement of such Interest Period. If any one or
more of the Reference Banks shall not furnish such timely information to the
Loan Agent for the purpose of determining any such interest rate, the Loan Agent
shall determine such interest rate on the basis of timely information furnished
by the remaining Reference Bank or Reference Banks.

          "Lien" means, with respect to any asset, any lien, mortgage, pledge,
assignment for security purposes, security interest, charge, hypothecation,
lease or encumbrance of any kind on or of such asset (including any conditional
sale or other title retention agreement and any lease in the nature thereof, any
easement, right of way or other encumbrance on title to real property and any
agreement to give any security interest).

          "Loan" means any loan made by a Lender pursuant to this Agreement.

          "Loan Agent" has the meaning specified in the preamble to this
Agreement.



                                                                              12


          "Loan Documents" means, collectively, this Agreement, the Notes, the
Other Loan Agreement, the Other Loan Agreement Notes, the Collateral Documents,
the Intercreditor Agreement and each certificate, agreement or document executed
by the Borrowers and delivered to the Loan Agent or the Lenders in connection
with or pursuant to this Agreement.

          "Loan Maturity Date" means December 31, 2010, except that if such date
is not a Business Day, then the Loan Maturity Date shall be the immediately
succeeding Business Day.

          "Material Adverse Change" means a material adverse change in the
financial condition of any Obligor between the Effective Date and the date of
provision of the relevant Loan which would materially and adversely affect such
Obligor's ability to perform any of its payment or other material obligations
under any Loan Document.

          "Merger Agreement" has the meaning specified in the recitals hereto.

          "Merger Sub" has the meaning specified in the recitals hereto.

          "Material Adverse Effect" means, with respect to the Obligors, (a) an
event of the type described in Section 6.1(f) or 6.1(g), or (b) the cessation of
commercial passenger service by either Borrower for a period of ten Business
Days, other than as a result of the action of any Governmental Authority, or (c)
a material adverse effect on (i) the validity or enforceability of any material
provision of this Agreement or any of the other Loan Documents or any of the
material rights or remedies of the Loan Agent, the Collateral Agent or the
Lenders hereunder or thereunder, or (ii) the Lien of the Collateral Documents.

          "MOU" means that certain Memorandum of Understanding between AVSA,
S.A.R.L., the Guarantor, and the Borrowers, dated as of May 18, 2005.

          "Multiemployer Plan" means a multiemployer plan as defined Section
4001(a)(3) of ERISA, and in respect of which Guarantor or any ERISA Affiliate is
(or with the application of Section 4212(c) of ERISA would be) (a) an "employer"
as defined in Section 3(5) of ERISA or (b) a "seller" as defined in Section 4204
of ERISA.

          "Net Cash Proceeds" means, with respect to any Asset Sale, the cash
proceeds of such Asset Sale, net of (i) reasonable and customary brokerage
commissions and other reasonable and customary fees and expenses (including
reasonable fees and expenses of counsel, investment bankers, accountants and
other professionals, consultants and advisors) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale without regard
to the consolidated results of operations of Guarantor, the Borrowers and their
respective Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
(or any related expenses required to be paid to third parties pursuant to
documentation related to the financing of the assets subject to such Asset Sale)
that (A) is secured by a Lien on the property or assets sold and (B) is required
by its terms to be paid as a result of such Asset Sale and (iv) appropriate
amounts to be provided by any Obligor as a reserve



                                                                              13


against any liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in conformity
with GAAP, but limited to the period of the required reserve.

          "Net Insurance Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor under any casualty insurance policy
in respect of a covered loss thereunder with respect to tangible, real or
personal property, minus (ii) (a) any actual and reasonable costs incurred by an
Obligor in connection with the adjustment or settlement of any claims of an
Obligor in respect thereof (including reasonable fees and expenses of counsel),
(b) provisions for all taxes payable as a result of such event without regard to
the consolidated results of operations of Guarantor, the Borrowers and their
respective Subsidiaries, taken as a whole, (c) the amount of any Indebtedness
secured by a Lien on any property subject to such covered loss and any related
expenses of third parties, in each case, required by the documentation related
to such Indebtedness to be discharged or paid from the proceeds thereof and (d)
any amounts required to be paid to any Person (other than an Obligor) owning a
beneficial interest in the property subject to such loss.

          "Non-Consenting Lender" has the meaning specified in Section 9.1(c).

          "Non-U.S. Person" means a Person that is not a United States person as
defined in section 7701(a)(30) of the Code.

          "Note" has the meaning specified in Section 2.4(d).

          "Notice of Borrowing" has the meaning specified in Section 2.2(a).

          "Obligations" means the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Obligor, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Obligors to the Loan
Agent, the Collateral Agent, the Indenture Trustee or to any Lender, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement or any other Loan Document, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees, charges and disbursements of counsel to the Loan
Agent, the Collateral Agent or to any Lender that are required to be paid by any
Obligor pursuant hereto) or otherwise.

          "Obligor" means Guarantor or either Borrower.

          "Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer), president, one of its vice presidents, chief financial officer,
controller, treasurer or assistant treasurer or an assistant secretary.



                                                                              14


          "Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) under which such
Person is Lessee, that is not a Capital Lease.

          "Other Loan Agreement" means, the Loan Agreement, dated as the date
hereof, among the parties hereto, providing for secured loans in the maximum
amount of $89,000,000.

          "Other Loan Agreement Notes" means the "Notes" (as defined in the
Other Loan Agreement).

          "Other Obligations" means the "Obligations" (as defined in the Other
Loan Agreement).

          "Other Taxes" has the meaning specified in Section 2.13(b).

          "Participant" has the meaning specified in Section 9.2(c)(i).

          "Pass Through Certificates" means the US Airways 2001-1C Trust
Certificates and any other certificates issued under a similarly structured
financing sponsored by an Obligor or an Affiliate thereof. References to amounts
"due and payable" on a given date, when used with respect to Pass Through
Certificates shall refer to amounts legally due and payable thereunder or to
amounts expected to be distributed on or before such date to the holders
thereof, and "default" when used with respect to Pass Through Certificates shall
have a correlative meaning.

          "Permitted Acquisition Financing" means Indebtedness incurred by an
Obligor in connection with an acquisition, merger or consolidation which is
permitted under Section 6.5 and/or 6.9 (as applicable) of the ATSB Loan
Agreements if and to the extent used (i) to refinance existing Indebtedness of
the Person acquired or Indebtedness secured by the assets acquired or (ii) to
pay consideration or related expenses in connection with such transaction.

          "Permitted Encumbrances" means the following types of Liens (other
than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Code
or by ERISA) as applied to property

                    (i) Liens for taxes, assessments or governmental charges or
     claims the payment of which is either (a) not delinquent for a period of
     more than 30 days or (b) being contested in good faith by appropriate
     proceedings, if such reserve or other appropriate provision, if any, as
     shall be required by GAAP shall have been made therefor, as set forth in
     Section 5.3;

                    (ii) statutory Liens of landlords and Liens of carriers,
     vendors, warehousemen, repairmen, mechanics and materialmen and other Liens
     imposed by law incurred in the ordinary course of



                                                                              15


     business for sums either (a) not delinquent for a period of more than
     thirty (30) days or (b) being contested in good faith by appropriate
     proceedings, if such reserve or other appropriate provision, if any, as
     shall be required by GAAP shall have been made therefor;

                    (iii) (A) Liens incurred or deposits (other than with
     respect to the Plans described in Section 4.10) made in the ordinary course
     of business in connection with workers' compensation, unemployment
     insurance and other types of social security, or to secure the performance
     of tenders, statutory obligations, surety and appeal bonds, bids, leases,
     government contracts, trade contracts, performance and return-of-money
     bonds, reimbursement obligations and chargeback rights of Persons
     performing services for an Obligor or a Subsidiary of an Obligor (including
     Liens securing Trade Payables arising from the Obligors' and their
     Subsidiaries' use in the ordinary course of business, consistent with past
     practice, of credit advance facilities to purchase goods and services) and
     other similar obligations (exclusive of obligations for the payment of
     borrowed money) and (B) Liens arising or granted in the ordinary course of
     business in favor of Persons performing credit card processing services,
     travel charge processing services or clearinghouse services for any Obligor
     or any of their Subsidiaries, including IATA, Diners Club, Discover Card,
     NPC, ARC and American Express, so long as such Liens are on cash and Cash
     Equivalents that are subject to holdbacks by, or are pledged (in lieu of
     such holdbacks) to, such Persons to secure amounts that may be owed to such
     Persons under the Obligors' or their Subsidiaries' agreements with them in
     connection with their provision of credit card processing, travel charge
     processing or clearinghouse services to the Obligors or any of their
     Subsidiaries;

                    (iv) with respect to real property, easements,
     rights-of-way, restrictions, minor defects, encroachments or irregularities
     in title and other similar charges or encumbrances not interfering in any
     material respect with the ordinary conduct of the business of an Obligor or
     any of its Subsidiaries;

                    (v) Liens in favor of customs and revenue authorities
     arising as a matter of law to secure payment of customs duties in
     connection with the importation of goods in the ordinary course of
     business;

                    (vi) any interest or title of a lessor in property leased by
     an Obligor or any of their Subsidiaries under any Capital Lease obligation
     or Operating Lease which, in each case, is not prohibited under this
     Agreement;

                    (vii) Liens in favor of collecting or payor banks and other
     banks providing cash management services, in each case, having



                                                                              16


     a right of setoff, revocation, refund or chargeback against money or
     instruments of any Obligor or any of their Subsidiaries on deposit with or
     in possession of such bank arising for the payments of bank fees and other
     similar amounts owed in the ordinary course of business;

                    (viii) Liens of creditors of any Person to whom any
     Obligor's or any of their Subsidiaries' assets are consigned for sale in
     the ordinary course of business;

                    (ix) Liens incurred or deposits made in connection with the
     Trust Agreements;

                    (x) any renewal of or substitution for any Lien permitted by
     any of the preceding clauses,; provided that the Indebtedness secured is
     not increased nor the Lien extended to any additional assets;

                    (xi) licensing or sublicensing of intellectual property in
     the ordinary course of business of the Obligors or their Subsidiaries;

                    (xii) Liens arising from precautionary UCC and similar
     financing statements relating to Operating Leases not otherwise prohibited
     under any Loan Document; and

                    (xiii) Liens created under the Collateral Documents.

          "Permitted Invoice" means invoices for amounts due in respect of goods
and services purchased by the Guarantor or any of its Affiliates from Airbus or
any of its Affiliates.

          "Permitted Refinancing Indebtedness" has the meaning given in the ATSB
Loan Agreements.

          "Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.

          "Petition Date" has the meaning specified in the recitals hereto.

          "Plan" means any "employee benefit plan" as defined in section 3(3) of
ERISA which is, or was at any time, maintained or contributed to or required to
be contributed to by the Borrowers or any of their ERISA Affiliates, other than
a multiemployer plan, within the meaning of section 4001(a)(3) of ERISA.

          "Plan Effective Date" means the date on which the Plan of
Reorganization became effective as provided therein.



                                                                              17


          "Plan of Reorganization" has the meaning specified in the recitals
hereto.

          "Pledged Engines" means the "Engines" (as defined in the Engine
Mortgage and Security Agreement).

          "Pledged Spare Parts" has the meaning specified in the Spare Parts
Mortgage and Security Agreement.

          "Principal Credit Facility" shall mean, for any Obligor, (i) any
credit agreement to which it is a party guaranteed (or otherwise supported) in
whole or in part by the ATSB, and (ii) from and after the date on which any such
ATSB credit facility of a Borrower is repaid, refinanced or replaced, the
refinancing or replacing credit, note, bond or other loan facility (or, in the
absence of, or after the repayment, refinancing or replacement of, any such
refinancing or replacing facility, then the largest recourse credit, note or
other loan or note facility or issuance of the relevant Obligor from time to
time), other than any such facility or issuance which is secured by and is for
the purpose of financing or refinancing Aircraft Related Equipment and other
than any such facility or issuance which cannot be accelerated or terminated
upon nonperformance or default thereunder.

          "Pro Forma Balance Sheet" has the meaning given in Section 4.3(a).

          "Proposed Change" has the meaning specified in Section 9.1(c).

          "Purchase Agreement Security Agreement" means the Purchase Agreement
Security Agreement, dated as of the date hereof, between the Borrower and the
Collateral Agent.

          "Reference Banks" means Citibank, N.A., Calyon and JPMorgan Chase
Bank, and each of their respective successors.

          "Register" has the meaning specified in Section 2.4(e).

          "Replacement Secured Financing" means any financing transaction,
whether structured as Indebtedness, sale-leaseback or otherwise, (a) which is
secured by any of the Obligors' (i) Slots, (ii) rotable, repairable and
expendable spare parts, (iii) aircraft, or (iv) spare engines, in each case
which immediately prior to such transaction constituted Collateral for purposes
of the ATSB Loan Agreements and (b) which satisfies the further definitional
requirements set forth in the ATSB Loan Agreements.

          "Requisite Lenders" means, collectively, Lenders having greater than
fifty percent (50%) of (i) the aggregate principal amount of Loans then
outstanding plus the aggregate unused Commitments then in effect or, (ii) prior
to the making of the initial Loan, the aggregate Commitments in effect.

          "Responsible Officer" means, with respect to any Person, any of the
Chief Executive Officer, Executive Vice Presidents and Chief Financial Officer
of such Person,



                                                                              18


but in any event, with respect to financial matters, the Chief Financial
Officer, Treasurer or Controller of such Person.

          "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto that is a nationally
recognized rating agency.

          "SEC" means the United States Securities and Exchange Commission, or
any United States Governmental Authority succeeding to the functions of such
Securities and Exchange Commission.

          "Senior Mortgages" shall mean each of the "Senior Engine Mortgage" and
the "Senior Spare Parts Mortgage," each as defined in the Spare Parts Mortgage
and Security Agreement or the Engine Mortgage and Security Agreement

          "Slot Regulations" means 49 U.S.C. Section 40103 and 14 C.F.R.
Sections 93.211 - 93.227, and any amendment, supplement or other modification
thereto, or successor, replacement or substitute federal law or regulation
concerning the right or operational authority to conduct landing or takeoff
operations at any airports.

          "Slots" means all of the rights and operational authority granted
under the Slot Regulations and now or hereafter acquired or held by each Obligor
to conduct one instrument flight rule landing or takeoff operation in a
specified time period at Ronald Reagan Washington National Airport, John F.
Kennedy International Airport, LaGuardia Airport, or any other airport.

          "Software" has the meaning specified in the Spare Parts Security
Agreement.

          "Solvent" means, with respect to any Person, that as of the date of
determination (a) the then fair saleable value of the business of such Person is
not less than the amount that will be required to pay the probable liabilities
on such Person's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and (c)
such Person does not intend to incur, or believes that it will not incur, debts
beyond its ability to pay such debts as they become due. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

          "Spare Parts Mortgage and Security Agreement" means the Spare Parts
Mortgage and Security Agreement dated as of the date hereof between America West
and the Collateral Agent.

          "Specified Engines" means the Pledged Engines listed on Schedule
1.1(b), each of which is eligible for the benefits of Section 1110 of the
Bankruptcy Code.



                                                                              19


          "Subsidiary" means, with respect to any Person, any corporation,
partnership, association, limited liability company, trust or estate, joint
venture or other business entity of which more than 50% of the issued and
outstanding shares of Voting Stock at the time of determination are owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.

          "Taxes" means any and all present or future taxes, levies, fees,
duties, imposts, deductions, charges or withholdings of any nature, and all
interest, penalties and other liabilities thereon or computed by reference
thereto imposed, levied, collected, withheld or assessed by any Governmental
Authority.

          "Title 49" shall mean Title 49 of the United States Code, as amended
and in effect from time to time, and the regulations promulgated pursuant
thereto.

          "Trade Payables" means, with respect to any Person, any accounts
payable or any other Indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries and
arising in the ordinary course of business in connection with the acquisition of
goods or services.

          "Tranche" means a Tranche of the Loans, consisting of Tranche A Loans,
Tranche B Loans, Tranche C Loans, Tranche D Loans and Tranche E Loans.

          "Tranche A Loan" has the meaning specified in Section 2.1(a).

          "Tranche A Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche A Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C, subject to the
provisions of Section 2.14. The aggregate amount of the Tranche A Commitments is
initially $50,000,000; provided that when and if the aggregate amount of
Borrowings is $161,000,000, the aggregate amount of the Tranche A Commitments
shall be reduced by the aggregate unused amount of the Tranche A Commitment of
the Lenders at such time.

          "Tranche A Commitment Reduction Amount" means the aggregate amount by
which the Tranche A Commitments of the Lenders are reduced pursuant to the
proviso to the definition of the term "Tranche A Commitment", as set forth in
the notice of the Loan Agent delivered pursuant to Section 2.10(a).

          "Tranche A Note" means a promissory note evidencing Tranche A Loans,
substantially in the form of Exhibit B hereto.

          "Tranche B Loan" has the meaning specified in Section 2.1(b).

          "Tranche B Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche B Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C, subject to the
provisions of Section 2.14. The aggregate amount of the Tranche B Commitments is
initially $27,000,000; provided that when and if the aggregate amount of
Borrowings is



                                                                              20


$161,000,000, the aggregate amount of the Tranche B Commitments shall be reduced
by the aggregate unused amount of the Tranche B Commitment of the Lenders at
such time.

          "Tranche B Commitment Reduction Amount" means the aggregate amount by
which the Tranche B Commitments of the Lenders are reduced pursuant to the
proviso to the definition of the term "Tranche B Commitment", as set forth in
the notice of the Loan Agent delivered pursuant to Section 2.10(a).

          "Tranche B Note" means a promissory note evidencing Tranche B Loans,
substantially in the form of Exhibit B hereto.

          "Tranche C Loan" has the meaning specified in Section 2.1(c).

          "Tranche C Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche C Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C, subject to the
provisions of Section 2.14. The aggregate amount of the Tranche C Commitments is
initially $10,000,000; provided that when and if the aggregate amount of
Borrowings is $161,000,000, the aggregate amount of the Tranche C Commitments
shall be reduced by the aggregate unused amount of the Tranche C Commitment of
the Lenders at such time.

          "Tranche C Commitment Reduction Amount" means the aggregate amount by
which the Tranche C Commitments of the Lenders are reduced pursuant to the
proviso to the definition of the term "Tranche C Commitment", as set forth in
the notice of the Loan Agent delivered pursuant to Section 2.10(a).

          "Tranche C Note" means a promissory note evidencing Tranche C Loans,
substantially in the form of Exhibit B hereto.

          "Tranche D Loan" has the meaning specified in Section 2.1(d).

          "Tranche D Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche D Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C, subject to the
provisions of Section 2.14. The aggregate amount of the Tranche D Commitments is
initially $10,000,000; provided that when and if the aggregate amount of
Borrowings is $161,000,000, the aggregate amount of the Tranche D Commitments
shall be reduced by the aggregate unused amount of the Tranche D Commitment of
the Lenders at such time.

          "Tranche D Commitment Reduction Amount" means the aggregate amount by
which the Tranche D Commitments of the Lenders are reduced pursuant to the
proviso to the definition of the term "Tranche D Commitment", as set forth in
the notice of the Loan Agent delivered pursuant to Section 2.10(a).

          "Tranche D Note" means a promissory note evidencing Tranche D Loans,
substantially in the form of Exhibit B hereto.

          "Tranche E Loan" has the meaning specified in Section 2.1(e).



                                                                              21


          "Tranche E Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche E Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C, subject to the
provisions of Section 2.14. The aggregate amount of the Tranche E Commitments is
initially $153,000,000; provided that when and if the aggregate amount of
Borrowings is $161,000,000, the aggregate amount of the Tranche E Commitments
shall be reduced by the aggregate unused amount of the Tranche E Commitment of
the Lenders at such time.

          "Tranche E Commitment Reduction Amount" means the aggregate amount by
which the Tranche E Commitments of the Lenders are reduced pursuant to the
proviso to the definition of the term "Tranche E Commitment", as set forth in
the notice of the Loan Agent delivered pursuant to Section 2.10(a).

          "Tranche E Note" means a promissory note evidencing Tranche E Loans,
substantially in the form of Exhibit B hereto.

          "Trust Agreements" means all special purpose trust funds established
by any Obligor to manage the collection and payment of amounts collected by the
Obligors for the express benefit of third-party beneficiaries identified as such
in the ATSB Loan Agreements.

          "United States Citizen" has the meaning specified in Section 4.1(b).

          "Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to vote for the election of directors, managers or trustees of any
Person (or Persons performing similar functions) irrespective of whether or not
at the time stock of any such class or classes will have or might have such
voting power by the reason of the happening of any contingency.

          "Wholly-Owned" denotes a Subsidiary all of the Voting Stock of which
(other than any director's qualifying shares or investments by foreign nationals
mandated by applicable law) is owned directly or indirectly by the Person named.

          "Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

          SECTION 1.2 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including."

          SECTION 1.3 ACCOUNTING TERMS AND PRINCIPLES. All accounting terms not
specifically defined herein shall be construed in conformity with GAAP and all
accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.



                                                                              22


          SECTION 1.4 CERTAIN TERMS.

               (a) The words "herein," "hereof" and "hereunder" and similar
words refer to this Agreement as a whole, and not to any particular Article,
Section, subsection or clause in, this Agreement.

               (b) Except as otherwise expressly provided, references in this
Agreement to an Exhibit, Schedule, Article, Section, subsection or clause refer
to the appropriate Exhibit or Schedule to, or Article, Section, subsection or
clause in this Agreement.

               (c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. If the prior written consent of any
Person is required hereunder for an amendment, restatement, supplement or other
modification to any such agreement and the consent of each such Person is
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified. If no such consent
is required, references in this Agreement shall be to such agreement as so
amended, restated, supplemented, or modified.

               (d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.

               (e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.

                                   ARTICLE II

                                    THE LOANS

          SECTION 2.1 THE LOANS.

               (a) Tranche A Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and
warranties of the Obligors set forth herein, each Lender agrees to make one or
more Loans to the Borrowers (each, a "Tranche A Loan") on Funding Dates
occurring on or after the date of delivery of the last A319/A320 Aircraft
currently on order by America West and not rescheduled in accordance with
paragraph 5 of the MOU, as requested by a Borrower in a Notice of Borrowing
given in accordance with Section 2.2 in an amount not to exceed, in the
aggregate for all Tranche A Loans made by such Lender on all Funding Dates, the
Tranche A Commitment of such Lender. No Tranche A Loan shall be made prior to
the date of delivery of the last A319/A320 aircraft on order by America West on
the date hereof and not rescheduled in accordance with paragraph 5 of the MOU.
The last such aircraft is currently scheduled to be delivered in February 2006.
There may be multiple Borrowings of Tranche A Loans. Tranche A Loans repaid or
prepaid may not be reborrowed hereunder.



                                                                              23


               (b) Tranche B Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and
warranties of the Obligors set forth herein, each Lender further agrees to make
one or more Loans to the Borrowers (each, a "Tranche B Loan") on the Closing
Date and on each other Funding Date requested by a Borrower in a Notice of
Borrowing given in accordance with Section 2.2 in an amount not to exceed, in
the aggregate for all Tranche B Loans made by such Lender on all Funding Dates,
the Tranche B Commitment of such Lender. No Tranche B Loan, when combined with
the aggregate amount of prior Tranche B Loans, shall exceed the principal and
interest amount paid or prepaid under the Airbus A321 Financings from and after
the date of the MOU (May 18, 2005) to and including the Funding Date for such
Tranche B Loan (including, for the avoidance of doubt, principal and interest to
be paid with the proceeds of the proposed Tranche B Loan). No Tranche B Loan
shall be made unless all amounts which are due and payable on the Funding Date
for such Tranche B Loan under the A321 Airbus Financings have been, or
immediately following the application of the proceeds of such Tranche B Loan
will have been, paid in full. There may be multiple Borrowings of Tranche B
Loans. Tranche B Loans repaid or prepaid may not be reborrowed hereunder.

               (c) Tranche C Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and
warranties of the Obligors set forth herein, each Lender further agrees to make
one or more Loans to the Borrowers (each, a "Tranche C Loan") on the Closing
Date and each other Funding Date requested by a Borrower in a Notice of
Borrowing given in accordance with Section 2.2 in an amount not to exceed, in
the aggregate for all Tranche C Loans made by such Lender on all Funding Dates,
the Tranche C Commitment of such Lender. No Tranche C Loan shall be made prior
to the due date for the payment of the Permitted Invoices with respect to which
such Tranche C Loan is being made. Each Tranche C Loan shall be in an amount not
to exceed the aggregate amount of all Permitted Invoices not used to support
prior Borrowings of Tranche C Loans. No Tranche C Loan shall be made until at
least thirty (30) days after all issued and outstanding Permitted Invoices
relating to such Tranche C Loan have been paid in full. Copies of the Permitted
Invoices supporting each Tranche C Loan shall be attached to the applicable
Notice of Borrowing. There may be multiple Borrowings of Tranche C Loans.
Tranche C Loans repaid or prepaid may not be reborrowed hereunder.

               (d) Tranche D Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and
warranties of the Obligors set forth herein, each Lender further agrees to make
one or more Loans to the Borrowers (each, a "Tranche D Loan") on any Funding
Date, as requested by a Borrower in a Notice of Borrowing given in accordance
with Section 2.2 in an amount not to exceed, in the aggregate for all Tranche D
Loans made by such Lender on all Funding Dates, the Tranche D Commitment of such
Lender. There may be multiple Borrowings of Tranche D Loans. Tranche D Loans
repaid or prepaid may not be reborrowed hereunder.

               (e) Tranche E Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and



                                                                              24


warranties of the Obligors set forth herein, each Lender further agrees to make
one or more Loans to the Borrowers (each, a "Tranche E Loan") on the Closing
Date and on each other Funding Date requested by a Borrowing in a Notice of
Borrowing given in accordance with Section 2.2 in an amount not to exceed, in
the aggregate for all Tranche E Loans made by such Lender on all Funding Dates,
the Tranche E Commitment of such Lender. There may be multiple Borrowings of
Tranche E Loans. Tranche E Loans repaid or prepaid may not be reborrowed
hereunder.

               (f) Final Funding Date. No Funding Date shall occur after
December 31, 2007.

          SECTION 2.2 BORROWING PROCEDURES.

               (a) Each Borrowing shall be made on notice given by a Borrower to
the Loan Agent not later than 11:00 a.m. (New York City time) at least two
Business Days prior to the applicable Funding Date. Each such notice shall be in
substantially the form of Exhibit C (a "Notice of Borrowing") or be given by
telephone and confirmed in writing within one Business Day following such
notice, in each case, specifying (A) the proposed Funding Date, (B) the
aggregate amount of the proposed Borrowing (which must be in a minimum amount of
$1,000,000 or a whole multiple of $100,000 above that amount), or if less, the
remaining undrawn amount of the Loan, (C) the Tranche designations of the
various Loans to be made on the proposed Funding Date, and (D) the corporate
credit rating of the Guarantor and its consolidated Subsidiaries then most
recently published by S&P. The Notice of Borrowing shall be irrevocable. A
Notice of Borrowing with respect to a Tranche C Loan shall be accompanied by
copies of Permitted Invoices. Each Notice of Borrowing shall be accompanied by a
copy of any Notice of Borrowing (as defined therein) given under the Other Loan
Agreement for Borrowings on the same date.

               (b) The Loan Agent shall give to the Lenders prompt notice of the
Loan Agent's receipt of a Notice of Borrowing and the Applicable Interest Rate
with respect thereto. Each Lender shall, subject to the terms of any mutually
agreed funding agreement, severally, before 11:00 a.m. (New York City time) on
the date of the proposed Borrowing, make available to the Loan Agent at the
account referenced in Section 2.9(a), in immediately available funds, an amount
equal to its ratable portion of each Tranche of the proposed Borrowing. After
the Loan Agent's receipt of such funds, the Loan Agent will make such funds
available to the particular Borrower which is actually to apply such funds in
accordance with Section 2.4(f). The failure of any Lender to make its ratable
portion of any Loan as required hereunder shall not relieve any other Lender of
its obligations to make its ratable portion of such Loan or any other Loan as
required hereunder.

          SECTION 2.3 SCHEDULED REPAYMENT OF THE LOANS. The Borrowers shall
repay the Loans on the dates and in the amounts set forth below by paying such
amounts to the Loan Agent in accordance with Section 2.9 and such payments shall
be allocated among the Lenders and the Loan Agent as set forth in Section 2.9:



                                                                              25




                      PERCENTAGE OF AGGREGATE
       DATE:         ORIGINAL PRINCIPAL AMOUNT
- ------------------   -------------------------
                  
March 31, 2008          One Twelfth (1/12th)
June 30, 2008           One Twelfth (1/12th)
September 30, 2008      One Twelfth (1/12th)
December 31, 2008       One Twelfth (1/12th)
March 31, 2009          One Twelfth (1/12th)
June 30, 2009           One Twelfth (1/12th)
September 30, 2009      One Twelfth (1/12th)
December 31, 2009       One Twelfth (1/12th)
March 31, 2010          One Twelfth (1/12th)
June 30, 2010           One Twelfth (1/12th)
September 30, 2010      One Twelfth (1/12th)
December 31, 2010       One Twelfth (1/12th)


          SECTION 2.4 EVIDENCE OF DEBT; USE OF PROCEEDS.

               (a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing such Lender's portion of the Loans
outstanding from time to time, including, by Tranche, the amounts of principal
and interest payable and paid to such Lender from time to time under this
Agreement.

               (b) The Loan Agent shall establish and maintain a Register on
behalf of the Borrowers pursuant to Section 2.4(e), and a subaccount for each
Lender therein, in which shall be recorded (i) the amount of each Loan hereunder
and each Interest Period applicable thereto; (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder; (iii) the date and amount of each payment on the Loans, by
Tranche, made by or on behalf of, or collected from, the Borrowers and (iv) the
amount of each such payment applied in accordance with each clause of Section
2.9(d) and (e) or other applicable terms hereof to scheduled principal of or
interest on the Loans.

               (c) The entries made in the accounts maintained pursuant to
clauses (a) and (b) of this Section 2.4 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Loan Agent to maintain such accounts or any error therein shall not in
any manner affect the obligations of the Borrowers to repay the Loans in
accordance with the terms hereof.

               (d) The Borrowers shall execute and deliver to the Loan Agent on
the Closing Date a single promissory note for each Tranche, each substantially
in the forms of Exhibit B, in the principal amount of the aggregate Commitments
for such Tranche dated the Closing Date and otherwise appropriately completed
(each such note, including any replacement note therefor issued in accordance
with the provisions of this Section 2.4(d) but excluding any note so replaced, a
"Note"). Promptly following each Loan on each Funding Date, each Lender shall
update the grid attached to its Note and



                                                                              26


deliver a certified copy thereof to the Borrowers. If a Note is mutilated, lost,
stolen or destroyed, the Borrowers shall, at the cost and expense of the Lender,
issue a new Note in the same principal amount and having the same interest rate,
date, maturity and Tranche as the Note so mutilated, lost, stolen or destroyed,
endorsed to indicate all payments thereon, together with an Officer's
Certificate of the Borrowers certifying and warranting as to the due
authorization, execution and delivery of the new Note. In the case of any lost,
stolen or destroyed Note, there shall first be furnished (i) to the Borrowers,
at Borrowers' option, either adequate security to hold Borrowers harmless with
respect to such lost, mutilated, stolen or destroyed Note or an instrument of
indemnity from the relevant Lender and (ii) to the Borrowers and the Loan Agent
evidence of such loss, theft or destruction reasonably satisfactory to each of
them.

               (e) The Notes are registered instruments. The original of each
Note shall be evidence of the rights of each Lender under this Agreement and
such Note. Neither this Agreement nor any Note is a bearer instrument. The Loan
Agent will establish and maintain on behalf of the Borrowers a record of
ownership (the "Register") in which the Loan Agent agrees to register by book
entry the Loan Agent's and each Lender's interest in the Loans, the Notes and
this Agreement, and in the right to receive any payments hereunder or thereunder
and any assignment of any such interest or rights. In connection with any
assignment pursuant to Section 9.2, the Loan Agent shall maintain a copy of each
Assignment and Assumption delivered to and accepted by it and shall record the
names and addresses of the Lenders and principal amount of the Loans, by
Tranche, owing to each Lender from time to time. The Borrowers, upon request and
at the expense of the relevant Lender and the return of the Note to be replaced
to the Borrowers marked "cancelled" (or, if the Note to be replaced has been
mutilated, lost, stolen or destroyed, adequate security or an instrument of
indemnity as described in the last sentence of Section 2.4(d)), agree to issue
replacement Notes upon any assignment or participation made pursuant to Section
9.2. The identities of the Note holders entered in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Obligors, the Loan Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of the Obligations as indicated in the
Register for all purposes of this Agreement. The Register shall be available for
inspection by the Borrowers, the Loan Agent, or any Lender at any reasonable
time and from time to time upon reasonable prior notice.

               (f) Use of Proceeds.

                    (i) The Borrowers shall use the proceeds of the Loans as
     follows:

                         (1) The proceeds of Tranche A Loans, Tranche D Loans,
     and Tranche E Loans shall be used by the Borrowers for working capital and
     general corporate purposes of either of them, including, without
     limitation, capital expenditures and acquisitions.

                         (2) The proceeds of Tranche B Loans shall be used by
     the Borrowers solely to make debt service payments due through June,



                                                                              27


     2006 under the A321 Airbus Financings or to reimburse US Airways for any
     such payments made on or after the date of the MOU (May 18, 2005) but prior
     to the date of such Loan.

                         (3) The proceeds of Tranche C Loans shall be used by
     the Borrowers solely to pay, or to reimburse either of them for the payment
     on or after the date of the MOU (May 18, 2005) of, Permitted Invoices.

                    (ii) No portion of the proceeds of any Loans shall be used
     by the Borrowers or any of their Subsidiaries in any manner that would
     cause the borrowing or the application of such proceeds to violate
     Regulation U, Regulation T or Regulation X of the Board of Governors of the
     Federal Reserve System or any other regulation of such Board of Governors
     or to violate Section 7(c) of the Exchange Act, in each case as in effect
     on the date or dates of such borrowing and such use of proceeds.

          SECTION 2.5 OPTIONAL PREPAYMENTS.

               (a) The Borrowers may on any Business Day, upon revocable notice
to the Loan Agent not less than ten (10) Business Days prior thereto, prepay all
or any portion of the outstanding principal amount of such Loans held directly
or indirectly by Airbus or its Affiliates, in whole or in part (but, with
respect to any partial prepayment, not less than a minimum amount of $1,000,000,
plus any whole multiple of $100,000, or such lesser amount as results in a
prepayment of such Loans in full), together with accrued interest to the date of
such prepayment on the principal amount prepaid; provided, however, that if any
prepayment of all or a portion of such Loans is made by the Borrowers other than
on an Interest Payment Date, the Borrowers shall also pay any amounts owing
pursuant to Section 2.10(e). Except for any such amounts owing pursuant to
Section 2.10(e), prepayments pursuant to this Section 2.5(a) shall be without
premium or penalty.

               (b) Upon the giving of any notice of prepayment under clause (a)
of this Section 2.5, the principal amount of the Loans specified to be prepaid
together with accrued and unpaid interest thereon and other amounts, if any, due
with respect thereto as provided in Section 2.5(a), shall become due and payable
on the date specified for such prepayment; provided, however, that any failure
to make any such prepayment in full on such date shall be deemed to be an
automatic revocation of the notice of prepayment given under Section 2.5(a) and
such failure shall not constitute a Default or an Event of Default hereunder;
provided, further, however, that the Borrowers shall be obligated to pay on such
date any amounts owing under Section 2.10(e) due to such failure to prepay.

               (c) Any partial prepayment of the Loans under Section 2.5(a)
shall be applied pro rata as among the outstanding Tranches of the Loans held
directly or indirectly by Airbus or its Affiliates and pro rata among the Loans
in each such Tranche, and to the then remaining installments of the outstanding
principal amount of the Loans



                                                                              28


held, directly or indirectly, by Airbus or its Affiliates on a pro rata basis.
Any such prepayment shall be paid to the Loan Agent for application as provided
in Section 2.9. The Borrowers shall have no right to optionally prepay the
principal amount of the Loans held, directly or indirectly, by Airbus or its
Affiliates other than as provided in this Section 2.5 and Section 2.10, 2.12 or
9.1.

               (d) The Borrowers shall have the same prepayment rights with
respect to Loans not held, directly or indirectly, by Airbus or its Affiliates
as set forth above in this Section 2.5; provided, however, that if requested by
the Initial Lender in connection with a transfer or sell down transaction into
the capital markets as envisioned in Section 9.2(e), the Borrowers shall have
such prepayment rights as are determined as provided in Section 9.2(c).

          SECTION 2.6 MANDATORY PREPAYMENTS.

               (a) Collateral Sales. Upon receipt by any Borrower or any
Subsidiary of Net Cash Proceeds of an Asset Sale of any Collateral (including
without limitation, any Airbus A321 model aircraft then subject to an A321
Airbus Financing). The Borrowers shall prepay the Loans and any other
Obligations then due in an aggregate amount equal to the Net Cash Proceeds of
such sale, provided that no such prepayment shall be required for Asset Sales of
Spare Parts until the aggregate amount thereof (not applied to prior
prepayments) exceeds $100,000. In the event that any such Asset Sale results in
a note payable to any Borrower or any Subsidiary, such note shall be pledged by
such Borrower or Subsidiary, as the case may be, as collateral security for the
obligations and the Cross-Default Obligations in a manner reasonably
satisfactory to the Loan Agent. Any partial prepayments of the Loans made by the
Borrowers in accordance with this Section 2.6(a) shall be applied pro rata as
among the outstanding Tranches of the Loans and pro rata among the Loans in each
such Tranche and to the then remaining installments of the outstanding principal
balance of the Loan on a pro rata basis. If any such prepayment is made by the
Borrowers other than on an Interest Payment Date, subject to clause (c) below,
the Borrowers shall also pay any amounts owing pursuant to Section 2.10(e). Any
such prepayment of the Loan shall be paid to the Loan Agent for application as
provided in Section 2.9.

               (b) Insurance/Condemnation Proceeds. No later than three Business
Days following the date of receipt by the Borrowers or any of their Subsidiaries
of any Net Insurance Proceeds of any Collateral, except as provided in Section
3.04(a) of the Engine Mortgage and Security Agreement if an Engine (as defined
therein) is being replaced, in Section 6.01(a) of any Aircraft Mortgage, if an
Aircraft or Airframe is being replaced, and in Section 3.05(d)(1) of the Spare
Parts Mortgage and Security Agreement, if a Spare Part is being replaced, the
Borrower shall prepay the Loans and any other Obligations then due in an amount
equal to the amount of such Net Insurance Proceeds; provided that no such
prepayment shall be required until the aggregate amount thereof (not applied to
prior prepayments) exceeds $100,000; and provided, further that in the case of a
prepayment required by Section 3.04(a) of the Engine Mortgage and Security
Agreement or Section 6.01(a) of any Aircraft Mortgage on a date before the date
on which Net Insurance Proceeds has been received, such prepayment of the Loans
in the



                                                                              29


amount specified in the next sentence hereof, and on the date specified in such
Senior Mortgage, shall be made in lieu of the prepayment out of the Net
Insurance Proceeds required by this sentence. The amount to be prepaid pursuant
to the proviso to the preceding sentence shall be the Agreed Value (as defined
in the applicable Senior Mortgage) minus the applicable prepayment amount under
such applicable Senior Mortgage. Any partial prepayments of the Loans made by
the Borrowers in accordance with this Section 2.6(b) shall be applied pro rata
as among the outstanding Tranches of the Loans and pro rata among the Loans in
each such Tranche and to the then remaining installments of the outstanding
principal balance of the Loan on a pro rata basis. If any such prepayment is
made by the Borrowers other than on an Interest Payment Date, subject to clause
(c) below the Borrowers shall also pay any amounts owing pursuant to Sections
2.5(d) and 2.10(e). Any such prepayment of the Loans shall be paid to the Loan
Agent for application as provided in Section 2.9.

               (c) Notwithstanding the foregoing, if no Default or Event of
Default has occurred and is continuing, the Borrower shall be entitled to
postpone the date of prepayment under Section 2.6(a) or (b) as follows. At least
one (1) Business Day prior to the required date of such prepayment, Borrower
shall notify the Loan Agent and each Lender of its election to postpone the date
of such prepayment to the next succeeding Interest Payment Date and on the date
required for such prepayment the Borrower shall pay to the Loan Agent, for
deposit in a collateral account established with the Loan Agent and under its
name and sole dominion and control, as security for the Obligations and the
Cross-Default Obligations, an amount equal to the amounts the Borrower would
have paid under Section 2.6(a) or (b), as the case may be, as a prepayment of
the Loans and any other Obligations on such date. The Loan shall remain
outstanding and on the next succeeding Interest Payment Date the Borrower shall
pay the installment of interest and principal and any other amounts then due,
plus the amount required to prepay the Loan in whole or in part on such Interest
Payment Date (calculated as provided in Section 2.6(a) or (b), as the case may
be, less the amount available to the Loan Agent (out of the funds held by it as
aforesaid as collateral security) which shall be applied in reduction of the
Borrower's obligations on such Interest Payment Date. Notwithstanding the
foregoing, if an Event of Default shall occur and be continuing, funds on
deposit in the aforesaid collateral account shall be subject to distribution
under Section 2.9(d) and the provisions of Section 6.2 shall not be prejudiced
by the foregoing prepayment arrangement.

          SECTION 2.7 INTEREST.

               (a) Rate of Interest. Except as otherwise provided in Section
2.7(c) and Section 2.10, each Loan shall bear interest on the unpaid principal
amount thereof for each day such Loan is outstanding during any Interest Period
at the Applicable Interest Rate for such Interest Period. Notwithstanding any
other provision hereof, interest on the Loans shall not exceed the maximum
allowable under applicable law.

               (b) Interest Payments. Interest accrued on each Loan and each
Note shall be payable in arrears on the last day of each applicable Interest
Period (an "Interest Payment Date"), upon the payment or prepayment thereof in
whole or in part



                                                                              30


(solely to the extent of the portion paid or prepaid), and, if not previously
paid in full, at maturity (whether by acceleration or otherwise). Interest on
each Loan shall be calculated on the basis of a year of 360 days and actual
number of days elapsed.

               (c) Default Interest. Notwithstanding the rate of interest
specified in Section 2.7(a) or elsewhere herein, if any principal of or interest
on a Loan or any fee or other amount payable by the Borrowers hereunder is not
paid when due, whether at stated maturity, upon acceleration, by mandatory
prepayment or otherwise (but other than any voluntary prepayment), such overdue
amount shall bear interest at a rate which is two percent per annum in excess of
the Applicable Interest Rate as in effect from time to time.

          SECTION 2.8 FEES. No up-front, commitment or other fees are payable on
or with respect to the Commitments or the Loans.

          SECTION 2.9 PAYMENTS AND COMPUTATIONS.

               (a) The Borrowers shall make each payment hereunder (including
fees and expenses) not later than 12 noon (New York City time) on the day when
due, in Dollars, to the Loan Agent in immediately available funds without
set-off, counterclaim, claim of recoupment or other defense (except for any
required withholding taxes not subject to indemnification hereunder) to the
following account (unless otherwise advised):

          ACCOUNT OF : AIRBUS FINANCIAL SERVICES
          ACCOUNT AT : CALYON, NEW YORK
          SWIFT CODE : CRLYUS33
          CHIPS ID   : 807
          ABA REF    : 026 008 073
          ACCOUNT NO : 01 22456 0001 00

All payments in respect of any Obligations shall at all times be made to the
Loan Agent. The Loan Agent will promptly cause all such payments received by it
to be distributed to the Person entitled thereto in accordance with the
priorities of payment set forth below in clause (d) or (e) of this Section 2.9
or both, as applicable. Payments received by the Loan Agent after 2:00 p.m. (New
York City time) shall, solely for the calculation and accrual of interest
pursuant to the provisions hereof, be deemed to be received on the next Business
Day.

               (b) Each determination by the Loan Agent of an interest rate
hereunder shall be presumed correct, absent manifest error.

               (c) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be due on the next succeeding
Business Day, unless the result of such extension would be to extend such
payment date into another calendar month, in which event such payment date shall
end on the immediately preceding Business Day and for the avoidance of doubt,
interest computation shall be adjusted accordingly.



                                                                              31


               (d) So long as no Event of Default under any of Sections 6.1(a)
(including any failure to pay all amounts hereunder upon acceleration as a
result of any other Event of Default), (f) and (g) has occurred and is
continuing or would result therefrom, the Loan Agent shall promptly apply all
payments received by it in respect of any Obligations in the following order:

                    (i) first, to pay interest then due and payable in respect
     of the Loans to the Lenders, on a pro rata basis;

                    (ii) second, to pay principal then due and payable on the
     Loans to the Lenders, on a pro rata basis;

                    (iii) third, to pay any other Obligations then due and
     payable to the Loan Agent, the Collateral Agent and the Lenders, on a pro
     rata basis; and

                    (iv) fourth, to the Borrowers or their respective designees.

               (e) After the occurrence and during the continuance of an Event
of Default under any of Sections 6.1(a) (including any failure to pay all
amounts hereunder upon acceleration as a result of any other Event of Default),
(f) or (g), the Loan Agent shall promptly apply all payments in respect of any
Obligations or Cross-Default Obligations (including amounts received by the
Collateral Agent upon the exercise of remedies with respect to the Collateral or
the Cross-Collateral) in the following order:

                    (i) first, to pay Obligations in respect of any expenses,
     indemnities or other amounts owing hereunder not referred to in clauses
     (ii) through (v) below then due and payable to the Lenders, the Loan Agent
     or the Collateral Agent, on a pro rata basis;

                    (ii) second, to pay interest then due and payable in respect
     of the Loans to the Lenders, on a pro rata basis;

                    (iii) third, to pay or prepay principal payments on the
     Loans to the Lenders or other Obligations to the respective parties
     entitled thereto, on a pro rata basis, or to be held by, the Loan Agent as
     additional collateral for any Obligations which are not at the time due and
     payable;

                    (iv) fourth, to pay any Cross-Default Obligations then due
     and payable to the respective parties entitled thereto, on a pro rata
     basis, or to be held by the Loan Agent as Collateral for any Cross-Default
     Obligations which are not at the time due and payable; and

                    (v) fifth, after payment in full of the Cross-Default
     Obligations, to the Borrowers or their respective designees.



                                                                              32


          SECTION 2.10 CERTAIN PROVISIONS GOVERNING THE LOANS.

               (a) Certain Determinations. LIBOR for each Interest Period for
each Loan shall be determined by the Loan Agent pursuant to the procedures set
forth in the definition of "LIBOR"; the Applicable Margin shall be adjusted as
provided in the definition of "Applicable Margin"; and shall promptly thereafter
be notified to the Borrowers and each Lender together, in the case of a
determination of "LIBOR", with the Applicable Margin and the Applicable Interest
Rate for such Interest Period (in writing or by email or by telephone confirmed
in writing or by email). The Tranche A, Tranche B, Tranche C, Tranche D and
Tranche E Commitment Reduction Amounts for the Lenders (and for each Lender)
shall be determined by the Loan Agent as provided in the respective definitions
of those terms and, together with the amount of the reduced Tranche A, Tranche
B, Tranche C, Tranche D and Tranche E Commitments of the Lenders (and of each
Lender), promptly notified to each Lender, the Borrower, and the Collateral
Agent and the Loan Agent (as defined in the Other Loan Agreement). The aggregate
amount of the Tranche A, Tranche B, Tranche C, Tranche D and Tranche E
Commitment Reduction Amounts for the Lenders shall not exceed $89,000,000. A
certificate of the Loan Agent setting forth the applicable LIBOR, the Applicable
Margin and the adjusted Applicable Interest Rate, or the Tranche A, Tranche B,
Tranche C, Tranche D or Tranche E Commitment Reduction Amounts, shall be
presumed correct absent manifest error. The Loan Agent shall, at the request of
either Borrower, deliver to the Borrowers a statement showing the quotations
used by the Loan Agent to determine LIBOR, the Applicable Margin and the
Applicable Interest Rate, such statement to be in sufficient detail for the
Borrowers to reasonably determine whether any such manifest error has occurred.

               (b) Interest Rate Unascertainable. In the event that the Loan
Agent determines that, at the time the Loan Agent is to determine the Applicable
Interest Rate for an Interest Period, by reason of circumstances affecting the
London interbank market for U.S. Dollar deposits, adequate and fair means do not
exist for ascertaining the applicable interest rates by reference to which the
LIBOR then being determined is to be fixed, the Loan Agent shall forthwith so
notify the Borrowers and the Lenders, whereupon during the 30 days following the
date of any such notice given to the Borrowers, the Loan Agent and the Borrowers
shall negotiate in good faith in order to arrive at a mutually acceptable
alternative basis for determining the interest rate from time to time applicable
to the Loans (the "Substitute Basis"). If within the 30 days following the date
of any such notice to the Borrowers, the Loan Agent and the Borrowers shall
agree upon a Substitute Basis, such Substitute Basis shall be retroactive to and
effective from the first day of the then current Interest Period until and
including the last day of such Interest Period. If after 30 days from the date
of such notice, the Loan Agent and the Borrowers shall have failed to agree upon
a Substitute Basis, then the Loan Agent (upon instructions from the Requisite
Lenders) shall certify in writing to the Borrowers the interest rate at which
such Lenders are prepared to maintain their portion of the Loans for such
Interest Period, it being understood that such Lenders' interest rate shall be
not more than a rate per annum equal to a rate which adequately and fairly
reflects the cost to such Lenders of obtaining the funds necessary to maintain
their portion of the Loans for such Interest Period. If no Substitute Basis is
established, upon



                                                                              33


receipt of notice of the interest rates at which the Requisite Lenders are
prepared to maintain their respective portion of the Loans, and on the last day
of each Interest Period thereafter, the Borrowers shall have the right
exercisable upon ten Business Days' prior notice to the Loan Agent (i) to
continue to borrow the Loans at the interest rate so advised by the Loan Agent
(as such rate may be modified, from time to time, at the outset of each
subsequent Interest Period) or (ii) to prepay in full the Loans together with
accrued but unpaid interest thereon at the Applicable Interest Rate most
recently in effect, whereupon the Loans shall become due and payable on the date
specified by the Borrowers in such notice.

               (c) Increased Costs. If at any time (i) the introduction after
the date hereof of or any change after the date hereof in or in the
interpretation of any law, treaty or governmental rule, regulation or order
binding on any Lender or (ii) the compliance by any Lender with any guideline,
request or directive enacted or imposed or made after the date hereof from any
central bank or other Governmental Authority (whether or not having the force of
law) shall (A) impose, modify, or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender, or (ii) impose on any Lender any other
condition, and the result of any of the foregoing shall be to materially
increase the cost to such Lender of agreeing to make or making, funding, or
maintaining any portion of the Loans (except with respect to Excluded Taxes),
then the Borrowers shall from time to time, within ten Business Days of written
demand (which demand shall be accompanied by a certificate setting forth the
basis for such demand and a calculation of the amount thereof in reasonable
detail) by such Lender (with a copy of such demand and certificate to the Loan
Agent), pay to the Loan Agent for the account of such Lender, additional amounts
sufficient to compensate such Lender for such increased cost. Such a certificate
submitted to the Borrowers and the Loan Agent by such Lender shall be
presumptively correct absent manifest error. Notwithstanding the provisions of
this paragraph, (x) the Borrowers shall not be obligated to pay any amounts
pursuant to this paragraph for periods occurring prior to the 60th day before
the giving of such certificate, provided that if the circumstances giving rise
to such claim have a retroactive effect then such 60 day period shall be
extended to then include such period of retroactive effect, and (y) the
Borrowers shall not be required to make any payment otherwise required hereby to
any Lender unless such Lender states in its written demand that such claim is
not being made on a basis that discriminates against the Borrower as compared to
comparable extensions of credit with similarly situated borrowers.

               (d) Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law, treaty or governmental rule, regulation or order, in each case after
the date of this Agreement, shall make it unlawful for any Lender to continue to
fund or maintain its portion of the Loans as contemplated hereby, then, on
notice thereof by such Lender to the Borrowers through the Loan Agent, the
obligation of such Lender to continue to fund or maintain its portion of the
Loan shall be terminated and the Borrowers shall prepay such affected portion of
the Loan to such Lender together with accrued but unpaid interest thereon and
all other sums payable hereunder with respect thereto on the last day of the
then current Interest Period or earlier if necessary to avoid such illegality.
Any



                                                                              34


such partial prepayment of the Loan shall be applied ratably to the then unpaid
installments thereof in accordance with the amount of each such unpaid
installment.

               (e) Breakage Costs. In addition to all amounts required to be
paid by the Borrowers pursuant to Section 2.7, the Borrowers shall compensate
each Lender, at the time specified herein, or if no such time is specified,
within ten Business Days of written demand (with a copy of such demand to the
Loan Agent), for all net losses, expenses and liabilities (including any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender or the termination of any other financial
arrangement it may have entered into to fund or maintain or support such
Lender's portion of the Loan, including any net loss of interest but excluding
any other lost profit or any Taxes based on the overall net income of such
Lender) which such Lender actually sustains as a consequence of (i) any proposed
Borrowing not occurring on a date specified therefor in any Notice of Borrowing
given by any Borrower, (ii) any portion of the Loans being prepaid (including,
subject to Section 2.6(c), mandatorily pursuant to Section 2.6 or this Section
2.10) on a date which is not the last day of the applicable Interest Period, or
(iii) any failure by any Borrower to repay any portion of the Loans when
required by the terms hereof (after giving effect to any grace periods). Any
written demand by a Lender under this Section 2.10(e) shall be accompanied by a
certificate setting forth the basis for such demand and a calculation of the
amount thereof in reasonable detail by such Lender. Such a certificate submitted
to the Borrowers and the Loan Agent by a Lender shall be presumptively correct
absent manifest error. Amounts paid under this Section 2.10(e) shall be paid to
the Loan Agent for the account of the applicable Lender. Notwithstanding the
provisions of this paragraph, the Borrowers shall not be obligated to pay any
amounts pursuant to this paragraph for periods occurring prior to the 60th day
before the giving of such certificate, provided that if the circumstances giving
rise to such claim have a retroactive effect then such 60 day period shall be
extended to then include such period of retroactive effect.

          SECTION 2.11 CAPITAL ADEQUACY. If at any time (a) the adoption of or
any change in or in the interpretation of any law, treaty or governmental rule,
regulation or order after the date of this Agreement regarding capital adequacy,
(b) compliance with any such law, treaty, rule, regulation, or order, or (c)
compliance with any guideline or request or directive made after the date hereof
from any central bank or other Governmental Authority (whether or not having the
force of law) shall have the effect of reducing the rate of return on such
Lender's (or any corporation controlling such Lender's) capital as a consequence
of its obligations hereunder (other than for changes in the rate of tax on the
overall net income of such Lender) to a level below that which such Lender or
such corporation could have achieved but for such adoption, change, compliance
or interpretation by an amount deemed by such Lender to be material, then,
within ten Business Days following written demand from time to time by such
Lender (with a copy of such demand to the Loan Agent), the Borrowers shall pay
to the Loan Agent for the account of such Lender from time to time as specified
by such Lender additional amounts sufficient to compensate such Lender for such
reduction. Any written demand by a Lender under this Section 2.11 shall be
accompanied by a certificate setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail by such Lender. Such a
certificate submitted to the Borrowers and the Loan Agent



                                                                              35


by a Lender shall be presumptively correct absent manifest error.
Notwithstanding the provisions of this paragraph, (x) the Borrowers shall not be
obligated to pay any amounts pursuant to this paragraph for periods occurring
prior to the 60th day before the giving of such certificate, provided that if
the circumstances giving rise to such claim have a retroactive effect then such
60 day period shall be extended to then include such period of retroactive
effect, and (y) the Borrowers shall not be required to make any payment
otherwise required hereby to any Lender unless such Lender is generally
demanding payment under comparable provisions of its agreements with similarly
situated borrowers.

          SECTION 2.12 SUBSTITUTION OF LENDERS.

               (a) In the event that no Event of Default has occurred and is
continuing and (i) any Lender makes a claim under Section 2.10(c) or (e) or
Section 2.11, (ii) it becomes unlawful for any Lender to continue to fund or
maintain its portion of the Loans as contemplated hereby and such Lender
notifies the Borrowers pursuant to Section 2.10(d), (iii) any Obligor is
required to make any payment pursuant to Section 2.13 that is attributable to a
particular Lender, (iv) any Lender fails to fund any Loans as required hereby or
(v) there shall exist a Non-Consenting Lender in respect of a Proposed Change to
which the Loan Agent consents (any such Lender, an "Affected Lender"), the
Borrowers may substitute any other Lender or any other financial institution
which will eliminate the continued need to make such payments and which is
reasonably acceptable to the Loan Agent (a "Substitute Institution") for such
Affected Lender hereunder, after delivery of a written notice (a "Substitution
Notice") by the Borrowers to the Loan Agent and the Affected Lender following
the occurrence of any of the events described in clauses (i) through (v) above
that the Borrowers intend to make such substitution.

               (b) If the Substitution Notice was properly issued under this
Section 2.12, the Affected Lender shall sell, and the Substitute Institution
shall purchase, in accordance with Section 9.2, all rights and obligations
(except with respect to prior periods) of such Affected Lender under the Loan
Documents. Such purchase and sale (and the corresponding assignment of all
rights and obligations (except with respect to prior periods) hereunder) shall
be effective on the later of (i) the receipt by the Affected Lender of an amount
equal to the unpaid principal amount, accrued interest on, and other amounts due
in respect of, its outstanding Loans, together with any other Obligations owing
to it, (ii) the receipt by the Loan Agent of an Assignment and Assumption
whereby the Substitute Institution shall agree to be bound by the terms hereof
and (iii) without duplication, the payment in full to the Affected Lender in
cash of all unreimbursed costs and expenses and indemnities accrued and unpaid
through such effective date.

               (c) If any Lender requests compensation under Section 2.10(c) or
(e), 2.11 or 2.13, or if any Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.13, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or Affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.10(c) or (e), 2.11 or 2.13, as the case may be, in the future



                                                                              36


and (ii) would not subject such Lender to any material unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender.

          SECTION 2.13 TAXES.

               (a) Except as otherwise provided in Section 9.2 or as required by
applicable law, any and all payments by the Borrowers under each Loan Document
shall be made free and clear of and without deduction for any and all Taxes,
excluding (i) in the case of each Lender, each Participant and the Loan Agent
taxes measured by its net income, and franchise taxes (imposed in lieu of net
income taxes) imposed on it, by the jurisdiction under the laws of which such
Lender, such Participant or the Loan Agent (as the case may be) is organized or
is otherwise treated as doing business (other than a jurisdiction in which such
Person is treated as doing business as a result of its execution and delivery of
any Loan Document or its exercise of its rights or performance of its
obligations or the receipt of income thereunder), (ii) in the case of each
Lender and each Participant, taxes measured by its net income, and franchise
taxes (imposed in lieu of net income taxes) imposed on it, by the jurisdiction
in which such Lender's Lending Office is located or in which such Participant
booked its participation for tax accounting purposes, (iii) in the case of each
Lender, each Participant, and the Loan Agent, Taxes imposed as a result of such
Person or the Loan Agent failing to comply with its obligations under Section
2.13(g), (iv) in the case of each Lender, each Participant, and the Loan Agent,
as the case may be, United States federal withholding taxes except to the extent
imposed as a result of a change in applicable law, including income tax
conventions, after the Closing Date or, with respect to an assignment,
acquisition, participation, designation of a different office or jurisdiction
for purposes of receiving or paying amounts hereunder, or the appointment of a
Loan Agent, the effective date thereof, except (x) to the extent that such
Person's predecessor was entitled to such amounts (or in the case of a
designation of a new jurisdiction, to the extent such Person was entitled to
such amounts with respect to its prior jurisdiction) or (y) in the case of an
assignment or change of lending office pursuant to Section 2.13(g), and (v)
Taxes to the extent imposed as a result of the gross negligence or willful
misconduct of the Loan Agent, such Lender or any of their Affiliates (all such
non-excluded Taxes being referred to as "Indemnified Taxes" and all Taxes listed
in clauses (i) through (v) of this clause (a) being referred to as "Excluded
Taxes"). If any Indemnified Taxes shall be required by law to be deducted from
or in respect of any sum payable under any Loan Document to any Lender or the
Loan Agent (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.13) such Lender, or the Loan Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrowers shall make such deductions,
and (iii) the Borrowers shall pay the full amount deducted to the relevant
taxing authority or other authority in accordance with applicable law.

               (b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, which
arise from any payment



                                                                              37


made under any Loan Document or from the execution, delivery or registration of,
or otherwise with respect to, any Loan Document excluding, in each case, such
amounts that result from an assignment, grant of a participation, transfer or
designation of a new Lending Office or other office for receiving payments under
any Loan Document unless (x) the same takes place in connection with an Event of
Default (so long as such Event of Default is continuing) or at Borrower's
written request (collectively, "Other Taxes") to the Loan Agent for the account
of the affected party or (y) in the case of an assignment or change of lending
office pursuant to Section 2.13(g).

               (c) The Borrowers will indemnify each Lender and the Loan Agent
for the full amount of Indemnified Taxes or Other Taxes, without duplication,
(including any Taxes imposed by any jurisdiction on amounts payable under this
Section 2.13) paid by such Lender or the Loan Agent (as the case may be) and any
liability (including for penalties, interest and expenses) arising therefrom or
with respect thereto. This indemnification shall be made to the Loan Agent for
account of the relevant Lender or the Loan Agent, as the case may be, within 30
days from the date such Lender or the Loan Agent (as the case may be) makes
written demand therefor (with a copy to the Loan Agent if made by a Lender, and
accompanied by a statement setting forth the basis for such taxation and the
calculation of the amount thereof in reasonable detail).

               (d) Within 30 days after the date of any payment of Indemnified
Taxes or Other Taxes, the Borrowers will furnish to the Loan Agent the original
or a certified copy of a receipt evidencing payment thereof or other
documentation reasonably satisfactory to the Loan Agent.

               (e) Without prejudice to the survival of any other agreement of
the Borrowers hereunder, the agreements and obligations of the parties contained
in this Section 2.13 shall survive the payment in full of the Obligations.

               (f) Each Lender, each Participant and the Loan Agent shall, on or
prior to the Closing Date or on or prior to the date of the Assignment and
Assumption pursuant to which it becomes a Lender or on or prior to the date such
Person becomes a Participant or the Loan Agent, as applicable, and from time to
time thereafter if reasonably requested by the Loan Agent or the Borrowers,
provide the Loan Agent and the Borrowers, with two completed copies of IRS Form
W-8BEN, W-8ECI, W-8IMY, W-9 and/or other applicable forms, certificates and
documents prescribed by the IRS with respect to United States withholding and/or
backup withholding tax with respect to all payments to be made to such Person
under the Loan Documents. In addition, each Lender, each Participant and the
Loan Agent, as the case may be, shall deliver to the Borrowers and the Loan
Agent, notice of any event (other than a change in applicable law, including
income tax conventions) requiring a change in the most recent form certificates
and/or documents previously delivered by such Person to the Borrowers and the
Loan Agent and any additional, updated or changed forms, certificates or
documents. Unless the Loan Agent and the Borrowers have received forms,
certificates, and/or other documents reasonably satisfactory to them indicating
that payments under the Loan Documents to or for a Non-U.S. Person are not
subject to United States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Loan Agent or



                                                                              38


the Borrowers shall, notwithstanding the provisions of Section 2.13(a), (b) and
(d) and without impairing any obligation of the Borrowers under this Section
2.13 with respect to such tax, withhold such United States withholding taxes
from such payments at the appropriate rate.

               (g) Any Lender claiming any additional amounts payable pursuant
to this Section 2.13 shall use its reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which would
be payable or may thereafter accrue and would not, in the sole determination of
such Lender, be otherwise disadvantageous to such Lender.

               (h) If the Borrower or Guarantor pays any amount under this
Section 2.13 to a Lender, Participant or the Loan Agent (each, a "Tax
Indemnitee") and such Tax Indemnitee determines in its sole discretion that it
has actually realized in connection therewith a net cash benefit (including a
net cash benefit which the relevant taxing authority applies to satisfy any
liability of such Tax Indemnitee for Taxes) due to any refund or any reduction
of, or credit against, its liabilities for Taxes in any taxable year, provided
that no Event of Default shall have occurred and be continuing, such Tax
Indemnitee shall, to the extent it can do so without prejudice to the retention
of such benefit, pay to the Borrower or Guarantor (as the case may be) an amount
that the Tax Indemnitee shall, in its sole discretion, determine (subject to
confirmation as provided below) is equal to such net cash benefit which was
obtained by Tax Indemnitee in such year as a consequence of such refund,
reduction or credit realized in connection with the payment of such amount. A
Tax Indemnitee shall, upon written request from the Borrower, provide to the
Borrower a letter from independent accountants selected by the Tax Indemnitee
and reasonably acceptable to the Borrower confirming the accuracy of the
Lender's calculations of the amount of any net benefit determined by the Tax
Indemnitee pursuant to the preceding sentence, provided that the interpretation
of this Agreement or any other Loan Document shall not be within the scope of
the accountants' confirmation. Nothing contained in this Section 2.13(h) shall
be construed as requiring any Tax Indemnitee to conduct its business or arrange
or alter in any respect its Tax or financial affairs so that it is entitled to
receive a refund, reduction or credit or shall require any Tax Indemnitee to
provide to the Borrower or its agents copies of any Tax returns or other
information with respect to the income, assets or operations attesting to such
Tax Indemnitee's determination. The Borrower shall reimburse such Tax Indemnitee
for all costs and expenses incurred by such Tax Indemnitee in obtaining such
accountants' letter, provided that the accountants' letter confirms, in all
material respects, such Tax Indemnitee's determination.

               (i) Borrower shall have no obligation to pay, or indemnify any
Tax Indemnitee for, any amount under this Section 2.13 or for any United States
federal income tax or withholding tax which was required by law to be deducted
or withheld by the Borrower or the Loan Agent from any payment to or for the
benefit of such Tax Indemnitee but which was not deducted or withheld due to the
Borrower's or the Loan Agent's reasonable reliance the withholding forms,
certificates and/or documents



                                                                              39


theretofore delivered by such Tax Indemnitee or the Loan Agent pursuant to
Section 2.13(f) if such form, certificate and/or document was inaccurate in any
material respect when delivered by such Tax Indemnitee and/or the Loan Agent and
such Tax Indemnitee or the Loan Agent had Actual Knowledge of such inaccuracy at
the time such Tax Indemnitee or the Loan Agent delivered such form.

               (j) If a Tax Indemnitee receives a written claim from any taxing
authority for any Tax for which the Borrower is liable pursuant to Section 2.13
(a "Tax Claim"), such Tax Indemnitee shall promptly notify the Borrower in
writing. If requested by the Borrower in writing within 30 days after receipt of
such Tax Indemnitee's written notice (provided that if a response to such Tax
Claim is due less than 40 days after the Borrower's receipt of such Tax
Indemnitee's notice, the Borrower's request must be made within 15 days or, if
longer, the period ending not later than the 10th day before the day on which
the response to such Tax Claim is due), such Tax Indemnitee shall in good faith
contest or, at such Tax Indemnitee's election, permit the Borrower to contest
(unless such contest involves Taxes not indemnified or paid by the Borrower or
Guarantor or, in such Tax Indemnitee's reasonable, good faith judgment,
permitting the Borrower to contest may have a material adverse effect on such
Tax Indemnitee), in each case in accordance with and to the extent permitted by
applicable law and at the Borrower's expense, such Tax Claim, provided that no
Tax Indemnitee shall have any obligation to commence or continue the contest of
any such Tax Claim unless the following conditions are satisfied at the time the
contest is to be commenced and at all times during the contest:

                    (i) no Event of Default shall have occurred and be
     continuing,

                    (ii) contesting such Tax Claim would not result in (A) any
     risk of sale, forfeiture, confiscation, seizure or loss of, or the
     imposition of a Lien (other than a Lien for the Tax that is the subject of
     such contest provided that enforcement of such Lien is stayed until the
     final determination of such contest and the Borrower maintains adequate
     reserves with respect to such Lien) or (B) any risk of imposition of
     criminal liability,

                    (iii) the aggregate amount of the Taxes that are to be
     contested exceeds Twenty-Five Thousand Dollars ($25,000),

                    (iv) such Tax Indemnitee shall have received a written
     confirmation of the Borrower that the Taxes that are the subject of such
     Tax Claim are Tax for which the Borrower is liable pursuant to Section
     2.13, provided that the Borrower shall not be bound by such confirmation to
     the extent that the final determination of the contest articulates
     conclusions of law and fact that clearly demonstrate that the Taxes that
     are the subject of such Tax Claim are not Taxes for which the Borrower is
     liable pursuant to Section 2.13,



                                                                              40


                    (v) the Borrower, upon the written request of such Tax
     Indemnitee, shall have provided such Tax Indemnitee, at the expense of the
     Borrower, with an opinion of counsel selected by such Tax Indemnitee and
     reasonably acceptable to the Borrower to the effect that there is a
     substantial basis in law and fact to contest such Tax Claim and a realistic
     expectation that a contest of such Tax Claim would be successful,

                    (vi) if such Tax Indemnitee decides to contest such Tax
     Claim by paying the Taxes that are the subject of such Tax Claim and taking
     action to obtain a refund thereof, the Borrower shall have made an
     interest-free advance to such Tax Indemnitee in an amount equal to the
     amount of those Taxes and shall have delivered to such Tax Indemnitee a
     written undertaking to indemnify such Tax Indemnitee and its Affiliates on
     an after-tax basis for any adverse Tax consequences (taking into account
     all relevant Tax benefits and Tax detriments) to such Tax Indemnitee or any
     of its Affiliates resulting from such interest-free advance, and

                    (vii) the Borrower shall be paying, on demand and on an
     after-tax basis, all reasonable costs and expenses incurred by such Tax
     Indemnitee or the Loan Agent with the conduct of such contest (including,
     without limitation, reasonable attorneys' and accountants' fees and
     disbursements).

               (k) Subject to Section 9.2(c)(2), a Participant will be entitled
to the benefits and subject to the requirements of this Section 2.13 to the same
extent as if such Person were a Lender.

          SECTION 2.14 PRO RATA TREATMENT AND PAYMENTS. Each Borrowing by either
Borrower from the Lenders hereunder, and each payment by either Borrower on
account of any reduction of the Commitments of the Lenders shall be made pro
rata according to the respective Commitments of the relevant Lenders. Each
payment (including each prepayment) by either Borrower on account of principal
of and interest on or other amounts in respect of the Loans shall be made pro
rata according to the respective outstanding principal amounts of the Loans then
held by the Lenders (except as otherwise provided in Section 2.10, 2.11, 2.13 or
9.4).

                                   ARTICLE III

                    CONDITIONS TO CLOSING AND FUTURE FUNDINGS

          SECTION 3.1 CONDITIONS PRECEDENT. The effectiveness of this Agreement
and the several obligations of the Lenders to make the Loans requested to be
made on each Funding Date are subject to the satisfaction or waiver of all of
the following conditions precedent on or before such Funding Date:



                                                                              41


               (a) Certain Documents. On or before the first Funding Date, the
Loan Agent and the Initial Lender shall have received each of the following,
each dated appropriately:

                    (i) this Agreement, duly executed and delivered by the
     parties hereto;

                    (ii) the Notes duly executed by the Borrowers and conforming
     to the requirements set forth in Section 2.4(d) hereof;

                    (iii) the documents described in clauses (i), (ii), and
     (iii) of the definition of "Collateral Documents", duly executed and
     delivered by the parties thereto;

                    (iv) the favorable opinions of (A) Skadden, Arps, Slate,
     Meagher & Flom LLP and Vedder, Price, Kaufman & Kammholz, P.C., counsel to
     America West, (B) Arnold & Porter, counsel to US Airways and the Guarantor,
     (C) General Counsel of America West in form and substance satisfactory to
     the Loan Agent and each Lender and (D) General Counsel of US Airways and
     the Guarantor;

                    (v) a copy of the articles or certificate of incorporation
     of each of the Borrowers and the Guarantor, certified as of a recent date
     by the Secretary of State of the state of organization of such Person,
     together with a "long-form" certificate of such official attesting to the
     good standing of such Person;

                    (vi) a certificate of each of the Borrowers and the
     Guarantor signed on behalf of such Person by its Secretary or an Assistant
     Secretary certifying (A) the names and true signatures of each officer of
     such Person who has been authorized to execute and deliver each Loan
     Document required to be executed and delivered by or on behalf of such
     Person hereunder or thereunder, (B) the by-laws of such Person as in effect
     on the date of such certification, (C) the resolutions of such Person's
     board of directors approving and authorizing the execution, delivery and
     performance of each Loan Document to which it is a party and (D) that there
     have been no changes in the certificate of incorporation of such Person
     from the certificate of incorporation delivered pursuant to the immediately
     preceding clause;

                    (vii) a certificate of each of the Borrowers and the
     Guarantor, signed by its duly authorized officer, certifying (i) that all
     representations and warranties of such Person contained in Article IV
     hereof are true and correct in all material respects on and as of the
     Closing Date, before and after giving effect to any Borrowing to be made on
     such date and to the application of the proceeds therefrom, and (ii) that
     no Default or Event of Default has occurred and is continuing, or would



                                                                              42


     result from any Borrowing to be made on such date and the application of
     the proceeds therefrom; and

                    (viii) a copy of the ATSB Loan Agreements and of each
     counter-guarantee or guarantee delivered thereunder, all in form and
     substance satisfactory to the Loan Agent and each Lender.

               (b) No Material Adverse Change. On each Funding Date, since the
Effective Date, there shall have been no Material Adverse Change.

               (c) Amendments; New Aircraft Transaction. Before the first
Funding Date:

                    (i) the relevant security agreements for the Cross-Default
     Obligations shall have been amended in a manner reasonably satisfactory to
     the Loan Agent to provide for cross-collateralization to the Obligations;

                    (ii) the America West ATSB loan documents shall have been
     amended in a manner reasonably satisfactory to the Loan Agent to provide
     for the release of any prepayment obligation thereunder to the extent
     conflicting with any mandatory prepayment obligation of the Borrowers under
     Section 2.6;

                    (iii) an intercreditor agreement (and any necessary
     amendments to the GECC loan and security agreements) consistent with the
     MOU and otherwise reasonably satisfactory to the Loan Agent shall have been
     entered into with GECC with respect to spare parts and any other Collateral
     held in common with GECC (and any necessary amendments to the GECC loan and
     security agreements);

                    (iv) each of the A319/A320/A321 Purchase Agreement and the
     A330/A340 Purchase Agreement shall have been amended as contemplated in the
     MOU and the other transactions provided for therein shall have been
     consummated as set forth therein and Guarantor shall have obtained
     Bankruptcy Court approval to assume by Final Order, and shall have assumed,
     the A319/A330/A321 Purchase Agreement and the A330/A340 Purchase Agreement,
     each as so amended; all of the foregoing to the reasonable satisfaction of
     the Loan Agent;

                    (v) definitive documentation with respect to the new
     aircraft transaction for twenty (20) A350 aircraft shall have been entered
     into by all relevant parties, as contemplated in paragraph 4 of the MOU;

                    (vi) with respect to the Pass-Through Trust Certificates,
     Series 2001-1 transactions, all aircraft leases and other assumable
     agreements included therein or comprising such transactions



                                                                              43


     shall have been assumed following Bankruptcy Court approval by Final Order,
     all to the satisfaction of the Loan Agent;

                    (vii) the Co-Branded Card and Merchant Services Agreement,
     dated May 20, 2003, as amended, between US Airways and Bank of America,
     shall have been assumed following Bankruptcy Court approval by Final Order;

                    (viii) all other assumable contracts of US Airways or its
     Affiliates which are Debtors with Airbus or its Affiliates shall have been
     assumed with Bankruptcy Court Approval by Final Order; and

                    (ix) on the first Funding Date, the Loan Agent and the
     Initial Lender shall have received a certificate of US Airways and the
     Guarantor signed by its duly authorized officer as to the assumptions of
     contracts referred to in the preceding clauses (iv), (vi), (vii) and
     (viii).

               (d) Expenses Paid. On each Funding Date, the Obligors shall have
paid all legal fees and expenses of the Loan Agent, the Initial Lender and the
Collateral Agent due and payable on or before such Funding Date if the Borrowers
are responsible therefor under Section 9.3 and have received reasonably detailed
invoices therefor promptly following the relevant Notice of Borrowing.

               (e) Consents, Etc. On each Funding Date, the Borrowers and the
Guarantor shall have received all consents and authorizations required to be
received by them to be able to execute, deliver and perform, in all material
respects, their obligations under the Loan Documents to which any of them is, or
shall be, a party.

               (f) No Illegality. On each Funding Date, no law or regulation
shall be applicable that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.

               (g) Representations and Warranties of Obligors. On each Funding
Date, all representations and warranties of each Borrower and of the Guarantor
set forth in Article IV hereof shall be true and correct in all material
respects on and as of such Funding Date, both before and after giving effect to
any Borrowing to be made on such date and to the application of the proceeds
therefrom as though made on and as of such date (except to the extent such
representations and warranties by their terms expressly relate to an earlier
date, in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date).

               (h) No Event of Default. On each Funding Date, no Event of
Default or Default shall have occurred and be continuing, or would result from
the Borrowing to be made on such date and the application of the proceeds
therefrom.

               (i) Corporate and Other Proceedings. On the first Funding Date,
all corporate and other proceedings, and all documents, instruments and other
legal



                                                                              44


matters in connection with the transactions contemplated hereby shall be
satisfactory in form and substance to the Loan Agent.

               (j) Chief Executive Officer. On the first Funding Date, W.
Douglas Parker shall be the Chief Executive Officer of the Guarantor.

               (k) Additional Investments. On the first Funding Date, Guarantor
shall have received one or more unrestricted equity investments in an aggregate
amount equal to not less than $375 million and a cash payment of not less than
$125 million from one or more sources in addition to the liquidity amounts
described in the Business Plan.

               (l) Effective Date. On or before the first Funding Date, the
Effective Date shall have occurred.

               (m) Pro Forma Balance Sheet; Financial Statements. On the first
Funding Date, the Lenders shall have received (i) the Pro Forma Balance Sheet
and (ii) the financial statements referred to in Section 4.3(b).

               (n) Lien Searches. On each Funding Date, the Loan Agent shall
have received, if it desires, the results of a recent UCC lien search in each
appropriate jurisdiction and FAA liens search, and in each case, such search
shall reveal (1) no Liens other than those listed in Section 5.13 or otherwise
permitted by Section 5.13 and (2) no Liens on any material portion of the
Collateral except in respect of Liens permitted on the Collateral by Section
5.13 and not otherwise prohibited under the Collateral Documents.

               (o) Filings, Registrations and Recordings. On each Funding Date,
each document (including any Uniform Commercial Code financing statement)
required by the Collateral Documents or under law or reasonably requested by the
Loan Agent to be filed, registered or recorded in order to create in favor of
the Loan Agent, for the benefit of the Lenders, a perfected Lien on the
Collateral described therein, prior and superior in right to any other Person
(other than with respect to Liens expressly permitted by Section 5.13), shall
have been delivered to the Loan Agent in proper form for filing, registration or
recordation.

               (p) Plan of Reorganization; Confirmation Order; Effective Date of
Merger. On the first Funding Date, the Confirmation Order confirming the Plan of
Reorganization (i) shall have been provided to the Loan Agent and (ii) shall be
in full force and effect and shall not have been reversed or modified and shall
not be stayed or subject to a motion to stay, and the Confirmation Order shall
have become a Final Order. The Plan Effective Date and the Effective Time (as
defined in the Merger Agreement) shall have occurred. On the First Funding Date,
the Loan Agent and the Initial Lender shall have received a certificate of each
of the Borrowers and the Guarantor, signed by its duly authorized officer,
certifying to the effect of the preceding sentence and clause (ii) of the second
preceding sentence. All claims arising under or with respect to the A321 Airbus
Financings and all claims arising under or with respect to the Pass-Through
Trust



                                                                              45


Certificates, Series 2001-1 transactions shall have been allowed under the
Plan and shall be unimpaired and reinstated thereunder, in form and substance
reasonably acceptable to the Loan Agent.

               (q) Concerning the Collateral.

                    (i) On each Funding Date, Collateral Agent shall have
     received (or shall hold from prior closings) a broker's report and current
     insurance certificate confirming the insurance coverages on the Collateral
     which are required by the terms of the Collateral Documents.

                    (ii) On the first Funding Date, Borrower shall have obtained
     from each Person with any interest in the real property and/or the
     improvements thereon at each Designated Location (whether as fee owner,
     landlord, tenant, ground lessor, mortgagee, leasehold mortgagee,
     beneficiary of deed of trust, beneficiary of leasehold deed of trust or
     otherwise), a waiver of any and all right or interest that such Person may
     otherwise have in the Pledged Spare Parts and such Person's consent, if
     applicable, to access by the Collateral Agent, and/or any Lender or any
     representative of any of them to the premises in connection with the
     exercise of any rights or remedies under or pursuant to the Spare Parts
     Mortgage and Security Agreement (in each case, in form and substance
     satisfactory to the Collateral Agent).

               (r) Concerning the ATSB Loan Agreements. On or before the First
Funding Date, the warrant for the purchase of 386,925 shares of common stock of
the Guarantor shall have been delivered to AFS Cayman Limited.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

          To induce the Loan Agent and the Lenders to enter into this Agreement,
each of the Obligors jointly and severally represents and warrants to the Loan
Agent and the Lenders, on and as of the Closing Date and on and as of each date
as required by Section 3.1, as provided below in Sections 4.1 through 4.13,
that:

          SECTION 4.1 ORGANIZATION, POWERS, QUALIFICATION; AIR CARRIER LICENSES,
FRANCHISES AND PERMITS.

               (a) Each Obligor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. As of the
Closing Date, each Borrower is Wholly-Owned by the Guarantor. Each Obligor has
all requisite corporate power and authority (i) to carry on its business as now
conducted, and (ii) to enter into the Loan Documents to which it is a party and
to carry out the transactions contemplated hereby and thereby.



                                                                              46


               (b) Each Obligor is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, except in jurisdictions where the failure
to be so qualified or in good standing could reasonably be expected to result in
a Material Adverse Effect.

               (c) Each Borrower is an "air carrier" within the meaning of Title
49 and holds a certificate under Sections 41102 of Title 49.

               (d) Each of the Borrower and any other Obligor engaged in
operations as an "air carrier" is a "citizen of the United States" within the
meaning of Section 40102(a)(15) of Title 49, as interpreted by the United States
Department of Transportation (a "United States Citizen") and holds an air
carrier operating certificate issued pursuant to Chapter 447 of Title 49 for
aircraft capable of carrying 10 or more individuals or 6,000 pounds or more of
cargo. Each Obligor possesses all necessary certificates, franchises, licenses,
permits, rights and concessions and consents which are material to the conduct
of its business and operations as currently conducted (including in the case of
each Obligor engaged in operations as an "air carrier", the operation of the
routes flown by it), a true and complete list of which are set forth on Schedule
4.1(b) to the ATSB Loan Agreements.

               (e) The Borrowers possess all necessary franchises, licenses, and
permits necessary to authorize the Borrowers to lawfully engage in air
transportation and to carry on scheduled commercial passenger service as
currently conducted, except where the failure to so hold any such franchise,
license, or permit could not reasonably be expected to have a Material Adverse
Effect.

          SECTION 4.2 AUTHORIZATION OF BORROWING, ETC.(a)Each Obligor has duly
authorized by all necessary corporate action the execution, delivery and
performance of the Loan Documents to which it is a party. The execution,
delivery and performance by each Obligor of the Loan Documents to which it is a
party and the consummation of the transactions contemplated by the Loan
Documents to which it is a party do not and will not (i) (A) violate any
provision of any law or any governmental rule or regulation or order applicable
to or binding on such Obligor, (B) violate any provision of the Certificate or
Articles of Incorporation or Bylaws of such Obligor, (C) conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of such Obligor or any of its
Subsidiaries except to the extent of any such violation, conflict, breach,
default, or imposition of Lien (of which no Obligor has Actual Knowledge) which
could not reasonably be expected to have a Material Adverse Effect, or (D)
result in or require the creation or imposition of any Lien on any of the
Collateral (except as permitted in the applicable Collateral Document) or on any
other property (except as permitted under Section 5.13 hereof), or (ii) require
any approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of such Obligor or any of its Subsidiaries, except for
such approvals or consents which will have been obtained on or before the
Closing Date, except for any such approval or consent under a Contractual
Obligation and the failure to obtain which could not reasonably be expected to
result in a Material Adverse Effect.



                                                                              47


               (b) The execution, delivery and performance by each Obligor of
the Loan Documents to which it is a party and the consummation of the
transactions contemplated by the Loan Documents to which it is a party and the
use of the proceeds of the Loans do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other Governmental Authority or regulatory body or any other
Person which is required to be obtained or made on or prior to the Closing Date
and which has not previously been obtained or made.

               (c) Each Obligor has duly executed and delivered each of the Loan
Documents to which it is party and each such Loan Document is the legally valid
and binding obligation of such Obligor, enforceable against such Obligor in
accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws relating to or affecting the enforcement of creditors' rights generally,
including materiality, reasonableness, good faith and fair dealing, and by
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).

               (d) No part of the proceeds of the Loans will be used, directly
or indirectly, for any purpose that entails a violation of Regulations U or X of
the Federal Reserve Board.

          SECTION 4.3 FINANCIAL CONDITION. Each Obligor has heretofore delivered
to the Lenders the following financial statements and information:

               (a) The unaudited pro forma consolidated balance sheet of the
Guarantor and its consolidated Subsidiaries for the Fiscal Years 2005 through
2008 (including the notes thereto) (the "Pro Forma Balance Sheet"), which has
been prepared giving effect (as if such events had occurred on such date) to (i)
the occurrence of the Effective Time (as defined in the Merger Agreement), (ii)
the Loans to be made on the Closing Date and the use of proceeds thereof and
(iii) the payment of fees and expenses in connection with the foregoing. The Pro
Forma Balance Sheet was prepared in good faith based upon assumptions believed
to be reasonable at the time made, assuming that the events specified in the
preceding sentence had actually occurred at such date.

               (b) (i) The audited consolidated balance sheets of US Airways and
Guarantor as at December 31, 2004 and the related consolidated statements of
income, stockholders' equity and cash flows of US Airways and Guarantor for the
Fiscal Year then ended, (ii) the unaudited consolidated balance sheets of US
Airways and Guarantor as at June 30, 2005 and the related unaudited consolidated
statements of income, stockholders' equity and cash flows of US Airways and
Guarantor for the six months then ended, and (iii) audited consolidated balance
sheets of AWA Holdings and America West as at December 31, 2004, and the related
consolidated statements of income, stockholders' equity and cash flows of AWA
Holdings and America West for the Fiscal Year then ended, and (iv) the unaudited
consolidated balance sheets of AWA Holdings and America West as at June 30, 2005
and the related unaudited consolidated statements of income, stockholders'
equity and cash flows of AWA Holdings and America West for the six months then
ended. All such consolidated statements were



                                                                              48


prepared in conformity with GAAP and fairly present the consolidated financial
position of the applicable Obligor as at the respective dates thereof and the
consolidated results of operations and cash flows of such Obligor for each of
the periods then ended subject, in the case of the unaudited consolidated
statements, to year-end audit and adjustments. Except as disclosed in writing to
the Loan Agent prior to the date of this Agreement, neither Obligor has any
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment (A) that is not reflected in the foregoing consolidated
financial statements (or, in the case of the Borrowers, in the most recently
delivered consolidated financial statements delivered pursuant to Section 5.1)
or the notes thereto and (B) which in any such case would result in a Material
Adverse Effect.

               (c) After giving effect to the Consummation of the Plan, (i) the
Obligors taken as a whole are or were Solvent on the First Funding Date after
giving effect to the Borrowings on such date, and (ii) no Obligor has any
material liability, including reasonably likely contingent liability or
liability for taxes, long-term lease or any unusual forward or long-term
commitment of a type required to be reflected in financial statements prepared
in conformity with GAAP, that is not taken into account in the preparation of
the annual report on Form 10-K for the fiscal year ended December 31, 2004 of
such Reporting Obligor.

          SECTION 4.4 NO MATERIAL ADVERSE EFFECT. Since the Effective Date there
has not been a Material Adverse Change.

          SECTION 4.5 TITLE TO PROPERTIES; LIENS. Each Obligor and its
Subsidiaries have (i) good, sufficient and legal title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of the properties and assets
reflected in the financial statements referred to in Section 4.3 or, in the most
recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.5. Except
as otherwise permitted by this Agreement, all such properties and assets are
free and clear of Liens.

          SECTION 4.6 LITIGATION; ADVERSE FACTS. Except as set forth in either
Borrowers' or Guarantors Annual Reports on Form 10-K for 2004, as amended
through the Closing Date, or in any Quarterly Report on Form 10-Q or Current
Report on Form 8-K filed by such Borrower or Guarantor with the SEC subsequent
to such Form 10-K (in each case, as amended through the Closing Date) and except
as disclosed in other publicly available filings of either of the Borrowers or
the Guarantor with the SEC or as disclosed in any publicly available filing with
the Bankruptcy Court in the Cases, there are no actions, suits, proceedings,
arbitrations or governmental investigations (whether or not purportedly on
behalf of any Obligor or any of its Subsidiaries) at law or in equity or before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
pending or, to the knowledge of the Obligors, threatened against any Obligor or
any of its Subsidiaries or any property of any Obligor or any of its
Subsidiaries that, if adversely determined,



                                                                              49


would have a Material Adverse Effect or seeks to restrain or enjoin any Obligor
from entering into or performing under any Loan Document.

          SECTION 4.7 TAX RETURNS. Each Obligor and each of their respective
Subsidiaries have timely filed all Federal income tax returns and all other
material tax returns that are required to be filed by them (or extensions have
been obtained with respect thereto) and have paid all material Taxes shown to be
due pursuant to such returns or pursuant to any assessment received by such
Person, other than (i) any such assessment being contested in good faith through
appropriate proceedings and with respect to which an adequate reserve has been
established by the Obligors or their Subsidiaries to the extent required by GAAP
and (ii) that the Debtors' obligations to pay taxes that relate to a tax period
(or portion thereof) ending on or before the commencement of the Cases and which
first became due and payable after the time of the commencement of the Cases,
have been stayed or enjoined pursuant to the Plan of Reorganization, the
Confirmation Order or the Bankruptcy Code, it being understood that the
exception in clause (ii) above does not affect the Debtors' representation that
they have made adequate provision for such Taxes.

          SECTION 4.8 NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default has occurred and is continuing.

          SECTION 4.9 GOVERNMENTAL REGULATION. None of the Obligors is (i) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, or (ii) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.

          SECTION 4.10 EMPLOYEE BENEFIT PLANS. Within the last 6 years, each
Plan maintained, contributed to, or required to be contributed to by the
Borrowers or an ERISA Affiliate is in compliance with all applicable laws,
except to the extent failure to so comply could not be reasonably expected,
individually or in the aggregate, to have a Material Adverse Effect. Neither the
Borrowers nor any ERISA Affiliate have incurred any liability under Title IV of
ERISA within the last 6 years which remains unsatisfied nor, to the best of
their knowledge, do the Borrowers reasonably expect to incur any liability under
Title IV of ERISA, which in either event, could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.

          SECTION 4.11 COMPLIANCE WITH LAWS. Each Obligor and each of its
Subsidiaries is in compliance with all laws, statutes, rules, regulations and
orders binding on or applicable to such Obligor, its Subsidiaries and all of
their respective properties, except to the extent failure to so comply could not
reasonably be expected to have a Material Adverse Effect.

          SECTION 4.12 SECURITY DOCUMENTS. Each of the Borrowers has good title
to the Collateral free and clear of Liens other than Liens permitted Section
5.13 and not prohibited by the applicable Collateral Document. No Person holds
any right or interest in any of the Pledged Spare Parts under the Spare Parts
Security Agreement by virtue of any interest that such person may have in real
property or improvements at any of the



                                                                              50


Designated Locations (as defined therein). The Collateral Documents are
effective to create in favor of the Collateral Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. When appropriate financing statements,
filings and recordings with the FAA, and other filings and recordings specified
on Schedule 4.12, in appropriate form are filed in the offices specified on
Schedule 4.12, the Collateral Documents shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Borrowers in
such Collateral and the proceeds thereof, as security for the Obligations and
the Cross-Default Obligations, in each case prior and superior in right to any
other Person (except Liens permitted by Section 5.13 and not prohibited by the
applicable Collateral Document, none of which are of record except for the Liens
of the Senior Mortgages).

          SECTION 4.13 CONCERNING THE COLLATERAL.

               (a) Section 1110. The Collateral Agent is entitled to the
benefits of Section 1110 of the Bankruptcy Code with respect to the Specified
Engines as provided in the Engine Mortgage and Security Agreement and to not
less than the Minimum 1110 Percentage (determined on the basis of Appraisal
Value as of the Closing Date) of the Rotables included within the Pledged Spare
Parts as provided in the Spare Parts Security Agreement in the event of a case
under Chapter 11 of the Bankruptcy Code in which a Borrower is a debtor. Defined
terms in this paragraph not otherwise defined herein shall have the respective
meanings specified in the Spare Parts Security Agreement.

               (b) Condition. All Pledged Spare Parts are in the condition and
state of repair required under the FAA-approved maintenance program of the
applicable Borrower relating to such Pledged Spare Parts, and no appliances,
parts, interests, appurtenances, accessories or other equipment of whatever
nature which are incorporated or installed in or attached to such Pledged Spare
Parts are leased by the Borrower. Each Pledged Engine is in the condition and
state of repair required under the FAA-approved maintenance program of Borrower
relating to such Engine, and no appliances, parts, interests, appurtenances,
accessories or other equipment of whatever nature which are incorporated or
installed in or attached to any Pledged Engine are leased by the Borrower.

               (c) Location, Identification and Release of Pledged Spare Parts.
All of the Pledged Spare Parts are or will (upon becoming subject to the Lien of
the Mortgage) be maintained by or on behalf of the Borrower at the Designated
Locations, subject to Section 3.02 of the Spare Parts Mortgage and Security
Agreement.

               (d) Software. (i) Each Borrower owns the Software currently used
by such Borrower to track the location, use and maintenance status of its spare
parts, including the source code and user interfaces associated therewith, free
and clear of any Liens other than Liens permitted under the Spare Parts Security
Agreement, (ii) such Borrower pays no license fees in respect of such Software
to any Person, (iii) no approval or consent by any Person is required in respect
of such Borrower's right to use such Software or in order to recognize or give
effect to the rights granted in the Spare Parts



                                                                              51


Mortgage and Security Agreement by the Borrower to the Collateral Agent in
respect of such Software in the Spare Parts Mortgage and Security Agreement, and
(iv) no Person has any contractual right, whether contingent or otherwise, to
terminate such Borrower's right to use such Software.

               (e) Records. America West shall maintain its records with respect
to Pledged Spare Parts at Sky Harbor Airport in Phoenix, Arizona, or at an
applicable Designated Location.

               (f) Spare Parts. It is the intention of the parties to this
Agreement that all Pledged Spare Parts be "spare parts" as defined in Section
40102(a)(38) of Title 49 of the United States Code. Each Borrower represents
that it maintains the Pledged Spare Parts for the purpose of installing the
Spare Parts on aircraft, aircraft engines or appliances as defined in Sections
40102(a)(6), (7) and (11) of the United States Code.

               (g) No Event of Loss. To the Borrowers' knowledge, on the First
Funding Date, no Event of Loss has occurred with respect to any Pledged Engine,
or A321 Aircraft subject to an A321 Airbus Financing, and no circumstance,
condition, act or event has then occurred that, with the giving of notice or
lapse of time or both gives rise to or constitutes an Event of Loss with respect
to any Pledged Engine, unless arrangements satisfactory to the Loan Agent have
been made for the Loan Agent to receive, out of Net Insurance Proceeds or
otherwise, the prepayment envisioned under Section 3.04(a) of the Engine
Mortgage and Security Agreement for Pledged Engines which have suffered an Event
of Loss. On each subsequent Funding Date, No Event of Loss has occurred with
respect to any Pledged Engine, or A321 Aircraft subject to an A321 Airbus
Financing, with respect to which any Obligor or any of its Subsidiaries has not
complied in all material respects with its applicable obligations under the
Collateral Documents and the documents related to the A321 Airbus Financings;
and no circumstance, condition, act or event has occurred that, with the giving
of notice or lapse of time or both gives rise to or constitutes an Event of Loss
with respect to any Pledged Engine, of which the Loan Agent has not been
notified by the Borrowers.

               (h) Outstanding Amount. On the first Funding Date, the
outstanding principal amount of Indebtedness secured by the Senior Mortgages is
$110,563,891 ($75,563,891 for the Senior Spare Parts Mortgage and $35,000,000
for the Senior Engine Mortgage).

          SECTION 4.14 REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT.
The Collateral Agent represents and warrants to the other parties hereto, in its
individual capacity, on and as of the Closing Date and on each date as required
by Section 3.1, that:

               (a) Powers and Authorizations. It is a national banking
association duly organized and validly existing in good standing under the laws
of the United States and has full power and authority, in its individual
capacity, to execute and deliver this Agreement and the Collateral Documents to
which it is a party and (assuming the due authorization, execution and delivery
of this Agreement by the other parties



                                                                              52


hereto) perform its obligations thereunder. The execution, delivery and
performance by the Collateral Agent of the Loan Documents to which it is or will
be a party have been duly authorized by all necessary action on its part and do
not contravene the Charter or By-laws of the Collateral Agent; and the Loan
Documents to which the Collateral Agent is or will be a party have been duly
authorized, executed and delivered by the Collateral Agent and constitute the
legal, valid and binding obligations, enforceable against it in accordance with
its terms. This Agreement and the other Loan Documents to which the Collateral
Agent is or will be a party, upon the due execution and delivery hereof, will
constitute the legal, valid and binding obligations of the Collateral Agent in
its individual capacity, and the performance by the Collateral Agent (in its
individual or trust capacity, as the case may be) of any of its obligations
hereunder and thereunder does not contravene any federal law or regulation or
contractual restriction binding on or governing the banking or trust powers of
the Collateral Agent (in its individual or trust capacity, as the case may be);

               (b) Litigation. There are no pending (or, to the Collateral
Agent's knowledge, threatened) actions, suits, investigations or proceedings
against or affecting it before any court, arbitrator, or administrative or
governmental body which, individually or in the aggregate, if decided adversely
to the interests of the Collateral Agent would materially and adversely affect
the ability of the Collateral Agent, either in its individual capacity or as
Collateral Agent, as the case may be, to perform its obligations under this
Agreement or any other Loan Document or which questions or would affect the
legality or validity of this Agreement or such Loan Document;

               (c) No Legal Bar. Neither the execution and delivery by the
Collateral Agent of this Agreement or any other Loan Document nor the
consummation by the Collateral Agent of any of the transactions contemplated
hereby or thereby requires or will require the consent or approval of or the
giving of notice to, the registration with, or the taking of any other action in
respect of, any federal governmental authority or agency governing its banking
or trust powers.

                                    ARTICLE V

                                    COVENANTS

          To induce the other parties to enter into this Agreement, each of the
Obligors jointly and severally agrees with the Loan Agent and each Lender that,
as long as any of the Obligations remain outstanding:

          SECTION 5.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Obligors
will maintain, and cause each of their respective Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. The Obligors will deliver to the Loan Agent:

               (a) Financial Statements.



                                                                              53


                    (i) Quarterly Financials: within 60 days after the end of
     each fiscal quarter of each Fiscal Year (other than the last quarter of
     each Fiscal Year), (a) the unaudited consolidated balance sheets of each of
     the Obligors as at the end of such fiscal quarter and the related
     consolidated statements of income and stockholders' equity of each such
     company for such fiscal quarter and consolidated cash flows of each such
     company for the period from the beginning of then current Fiscal Year to
     the end of such fiscal quarter, all such financial statements to be in the
     form prepared for the management of the Borrowers and certified by the
     chief financial officer, controller or treasurer of such company being
     fairly stated in all material respects (subject to normal year-end audit
     adjustments); provided that delivery of such company's Form 10-Q for such
     fiscal quarter shall be deemed to satisfy all of the requirements of this
     Section 5.1(a)(i) and in lieu of actual delivery of such Form 10-Q, the
     Borrowers may notify the Loan Agent that such report has been filed with
     the SEC and that such report is publicly available; and

                    (ii) Year-End Financials: within 105 days after the end of
     each Fiscal Year, (a) the consolidated balance sheets of each of the
     Obligors at the end of such Fiscal Year and the related consolidated
     statements of income, stockholders' equity and cash flows of such company
     for such Fiscal Year, setting forth in each case in comparative form the
     corresponding figures for the previous Fiscal Year, all in reasonable
     detail, and (b) an accountant's report thereon of KPMG LLP or other
     independent certified public accountants of recognized national standing
     selected by such company, which report shall state that such consolidated
     financial statements fairly present the consolidated financial position of
     such company as at the dates indicated and the results of their operations
     and their cash flows for the periods indicated in conformity with GAAP
     applied on a basis consistent with prior years and that the examination by
     such accountants in connection with such consolidated financial statements
     has been made in accordance with generally accepted auditing standards;
     provided that delivery of such company's Form 10-K for such Fiscal Year
     shall be deemed to satisfy all of the requirements of this Section
     5.1(a)(ii) and in lieu of actual delivery of such Form 10-K, the Borrowers
     may notify the Loan Agent that such report has been filed with the SEC and
     that such report is publicly available.

               (b) Officer's Certificate: together with each delivery of
financial statements of the Obligors pursuant to Section 5.1(a) (or SEC reports
in lieu thereof), an Officer's Certificate of each of the Obligors stating
whether the signer has Actual Knowledge of the existence as at the date of such
Officer's Certificate of any Event of Default or Default, and, if so, specifying
the nature and period of existence thereof and what action the Obligors have
taken, are taking and proposes to take with respect thereto; and

               (c) Certain Notices. The Obligors will:



                                                                              54


                    (i) promptly notify the Loan Agent, the Collateral Agent and
     each Lender, upon a Responsible Officer of any Obligor obtaining Actual
     Knowledge of the occurrence of an event of loss or damage to any equipment
     owned or operated by either Borrower that is reasonably expected to result
     in receipt of insurance proceeds to be received by a Borrower which are
     expected to result in a prepayment under Section 2.6;

                    (ii) prior to either Borrower consummating any Asset Sale
     expected to result in a prepayment under Section 2.6; and

                    (iii) promptly notify the Loan Agent of any proposed
     amendment, waiver or consent with respect to an ATSB Loan Agreement or the
     GECC spare parts financing facility of either Borrower, with details of any
     such amendment, waiver or consent.

               (d) Plan Audits and Liabilities: promptly after (A) an Obligor or
any ERISA Affiliate contacts the IRS or the PBGC for the purpose of
participating in a closing agreement or any voluntary resolution program with
respect to a Plan or Multiemployer Plan which could reasonably be expected to
have a Material Adverse Effect, or (B) a Responsible Officer knows or has reason
to know that any event with respect to any Plan or Multiemployer Plan occurred
that could reasonably be expected to have a Material Adverse Effect, notice of
such contact or the occurrence of such event;

               (e) Funding Changes and New Plan Benefits: promptly after the
change, a notification of any increases in the benefits, or change in funding
method, with respect to which an Obligor may have any liability, under any Plan
or Multiemployer Plan or the establishment of any material new Plan or
Multiemployer Plan with respect to which an Obligor may have any liability or
the commencement of contributions to any Plan or Multiemployer Plan to which an
Obligor or any ERISA Affiliate was not previously contributing, except to the
extent that such an event could not reasonably be expected to have a Material
Adverse Effect;

               (f) Claims and Proceedings: promptly after receipt of written
notice of commencement thereof, notification of all (A) claims made by
participants or beneficiaries with respect to any Plan and (B) actions, suits
and proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting an Obligor or
any ERISA Affiliate with respect to any Plan, except those which, in the
aggregate, if adversely determined, could not reasonably be expected to have a
Material Adverse Effect;

               (g) ERISA Event: promptly after the occurrence of any ERISA Event
(A) that could reasonably be expected to have a Material Adverse Effect or (B)
that relates to the occurrence or existence of an event or condition that could
reasonably be expected to have a Material Adverse Effect, notice of such ERISA
Event; and



                                                                              55


               (h) Other Information: promptly following request therefor, such
other nonconfidential information regarding the Collateral or the operations,
business affairs, and financial condition of any Obligor, or compliance with the
terms of the Loan Documents, as the Loan Agent or any Lender shall reasonably
request.

          SECTION 5.2 CORPORATE EXISTENCE. Except as permitted under Section
5.8, each of the Obligors will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each Subsidiary of each Obligor and
the material rights (charter and statutory) and franchises of any of them;
provided, that, subject to Section 5.14, neither the Guarantor nor either
Borrower shall be required to preserve any such corporate, partnership or other
existence of any Subsidiary or any such right or franchise, if the chief
executive officer or the board of directors of the Guarantor shall determine in
the exercise of its business judgment that the preservation thereof is no longer
desirable in the conduct of the business of the Obligors and their respective
Subsidiaries taken as a whole.

          SECTION 5.3 PAYMENT OF TAXES. The Guarantor and the Borrowers will,
and will cause its Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, all taxes, assessments and
governmental charges levied or imposed upon the Guarantor, either Borrower or
any Subsidiary or upon the income profits or property of the Guarantor, either
Borrower or any Subsidiary; provided, however, that the Guarantor and each
Borrower shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment or governmental charge the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and with respect to which an adequate reserve has been
established by the Guarantor or the Borrowers to the extent required by GAAP.

          SECTION 5.4 MAINTENANCE OF PROPERTIES; INSURANCE. The Guarantor and
the Borrowers will, and will cause each of its Subsidiaries to, maintain all
properties used or useful in the conduct of its business in good condition,
repair and working order and supply such properties with all necessary equipment
and make all necessary repairs, renewals, replacements, betterments and
improvements thereto, all as in the judgment of the Guarantor and the Borrowers
may be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Guarantor, either Borrower or any
Subsidiary from discontinuing the operation and maintenance of any such
properties if such discontinuance is, in the good faith judgment of the
Guarantor, the Borrowers or such Subsidiary, as the case may be, desirable in
the conduct of its respective business and shall not impair the ability of the
Guarantor or either Borrower to perform their payment or other material
obligations under the Loan Documents. The Guarantor and each Borrower will
insure and keep insured, and will cause each of its Subsidiaries to insure and
keep insured, with reputable insurance companies, such of their respective
properties, to such an extent and against such risks, and will maintain
liability insurance, to the extent (i) that property of a similar character is
usually so insured by companies engaged in a similar business and owning similar
properties in accordance with good business practice and (ii) with respect to
the Collateral or Cross Collateral,



                                                                              56


required by any of the Collateral Documents or those relevant to a Cross-Default
Obligation, respectively.

          SECTION 5.5 INSPECTION. The Guarantor and each Borrower will, and will
cause its Subsidiaries to, permit any authorized representatives designated by
the Loan Agent to discuss its and their affairs, finances and accounts with its
and their officers upon reasonable notice and at such reasonable times during
normal business hours and as often as may be reasonably requested; provided that
such access to officers shall not be disruptive to the Guarantor or either
Borrower's business, as reasonably determined by the Guarantor and the
Borrowers.

          SECTION 5.6 COMPLIANCE WITH LAWS, ETC. Each Obligor will, and will
cause each of its Subsidiaries to, comply with all applicable statutes, rules,
regulations, orders and restrictions of the United States of America, all states
and municipalities thereof, and of any governmental department, commission,
board, regulatory authority, bureau, agency and instrumentality of the
foregoing, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except such as are being contested in
good faith by appropriate proceedings and except for such noncompliance as could
not reasonably be expected to result in a Material Adverse Effect.

          SECTION 5.7 FURTHER ASSURANCES. At any time or from time to time
following the request of the Loan Agent, the Obligors will, at their expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as the Loan Agent may reasonably request in order to
effect fully the purposes of the Loan Documents. From the date on which the Cape
Town Convention becomes effective, each of the Obligors, at no cost to the
Lenders, shall enter into such documentation, as reasonably requested by the
Loan Agent and is necessary (i) to establish "international interest(s)" under
the Cape Town Convention, (ii) to enhance the enforceability of the agreements
of the parties established under the Loan Documents under the Cape Town
Convention and shall take, any and all steps as reasonably requested by the Loan
Agent and necessary to register such interest(s) in the International Registry
relating thereto.

          SECTION 5.8 EMPLOYEE BENEFIT PLANS. Each Obligor will ensure that the
Plans and Multiemployer Plans with respect to which the Obligors may have any
liability are operated in compliance with all applicable laws, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

          SECTION 5.9 FAA MATTERS; CITIZENSHIP. Each Borrower will at all times
hereunder be an "air carrier" within the meaning of Title 49 and hold a
certificate under 49 U.S.C. Section 41102(a)(1) as currently in effect or as
amended or recodified from time to time. Each Borrower will at all times
hereunder hold an air carrier operating certificate issued pursuant to Chapter
447 of Title 49 for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo.

          SECTION 5.10 DELIVERY OF POST-RECORDING FAA OPINION. Promptly upon the
recording of the Spare Parts Mortgage and Security Agreement and the Engine



                                                                              57


Security Agreement with the FAA, the Borrowers will cause Daugherty, Fowler,
Peregrin & Haught, FAA counsel in Oklahoma City, Oklahoma, to deliver to the
Loan Agent and the Borrowers a favorable opinion addressed to each of them as to
such recordation and the lack of filing of any intervening documents creating a
Lien with respect to the Collateral.

          SECTION 5.11 SOFTWARE. Each Borrower will maintain a spare parts
inventory tracking system at all times prior to payment in full of the
Obligations.

          SECTION 5.12 COMPLIANCE WITH MORTGAGE. The Borrowers will comply with
the terms and provisions of the Collateral Documents.

          SECTION 5.13 PROHIBITION ON LIENS. Neither Borrower shall, nor shall
it permit any of its Subsidiaries (other than Airways Assurance Limited LLC or
FTCHP LLC) to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any property or asset of any kind (including any
document or instrument in respect of goods or accounts receivable) of any
Borrower or any of its Subsidiaries (other than Airways Assurance Limited LLC or
FTCHP LLC), whether now owned or hereafter acquired, or any income or profits
therefrom, or file or consent to the filing of any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any state or under any similar recording or notice
statute, except:

               (a) Permitted Encumbrances;

               (b) (A) Liens existing on the Closing Date on Aircraft Related
Equipment securing Indebtedness used to acquire such Aircraft Related Equipment,
(B) Liens on Aircraft Related Equipment acquired after the Effective Date
created or incurred in connection with the financing of such Aircraft Related
Equipment, (C) Liens on Aircraft Related Equipment and related property created
or incurred in connection with debt financings of such Aircraft Related
Equipment, as contemplated under the A350/A330 Financing Letter Agreement (or
any financing pursuant thereto), the Senior Mortgages, the GE 2001 Credit
Agreement (as defined in the ATSB Loan Agreements), and the GECC RJ Agreement
(as defined in the ATSB Loan Agreements), (D) leases and/or subleases of
Aircraft Related Equipment to any Obligor or any Subsidiary of an Obligor or any
US Airways Express affiliate that is not an Obligor (or a Subsidiary of an
Obligor) and operates such Aircraft Related Equipment for an Obligor or a
Subsidiary of an Obligor pursuant to a services agreement with such Obligor or
Subsidiary, which lease or sublease is entered into in connection with the debt
financing or leasing of such Aircraft Related Equipment, as applicable, and the
assignment of any such lease or sublease and the proceeds thereof, in the case
of a lease, to any Person owed Indebtedness used to acquire such Aircraft
Related Equipment or, in the case of a sublease, to any Person leasing such
Aircraft Related Equipment to such Obligor or Subsidiary, (E) Liens on Aircraft
Related Equipment securing Permitted Refinancing Indebtedness in respect of
Indebtedness previously secured by such Aircraft Related Equipment in accordance
with subclause (A) or (B) above, including in each case, Liens securing special
facility revenue bonds that finance Aircraft Related Facilities, (F) Liens



                                                                              58


incurred or deposits made in the ordinary course of business to secure the
performance of contracts for the purchase of aircraft, (G) Liens in existence on
the Closing Date (1) on aircraft and engines (other than Pledged Engines) and
(2) securing special facility revenue bonds, and (H) Liens on an Obligor's
interest as lessee or sublessor in respect of any Aircraft Related Equipment or
interests related thereto (including without limitation subleases, refunds or
rebates, security deposits, supplemental rent, reserves, or return condition
adjustment payments);

               (c) other Liens on assets acquired after the Closing Date
securing or relating to Indebtedness and other liabilities and obligations in
each case not otherwise prohibited under this Agreement in an aggregate amount
not to exceed $5,000,000 at any time outstanding;

               (d) Liens described in Schedule 5.13, except to the extent such
Liens cover any of the Collateral;

               (e) judgment and attachment Liens not giving rise to an Event of
Default;

               (f) Liens on the assets of any entity or on any asset existing at
the time such entity or asset is acquired by an Obligor or a Subsidiary of an
Obligor, whether by merger, consolidation, purchase of assets or otherwise;
provided that such Liens (A) are not created, incurred or assumed by such entity
in contemplation of or in connection with the financing of such entity's being
acquired by an Obligor or a Subsidiary of an Obligor, (B) were created to secure
the financing of Aircraft Related Equipment or other specific assets, (C) do not
extend to any other assets of any Obligor or Subsidiary of an Obligor other than
the assets acquired with such financing and (D) the Indebtedness secured by such
Lien is permitted pursuant to this Agreement;

               (g) leases or subleases of real or personal property granted by
any Obligor or Subsidiary of an Obligor to other Persons not interfering in any
material respect with the ordinary conduct of the business of the Obligors or
their Subsidiaries, taken as a whole;

               (h) Liens on cash and Cash Equivalents securing (A) reimbursement
obligations in respect of letters of credit issued for the account of any
Obligor or Subsidiary of an Obligor in the ordinary course of business and
consistent with past practice, so long as the aggregate amount of such cash and
Cash Equivalents does not exceed 115% of the maximum available amount under the
secured letters of credit, and (B) reimbursement or other margin requirements in
connection with, in the case of Liens contemplated in this clause (B), (1)
transactions designed to hedge against fluctuations in fuel costs, entered into
in the ordinary course of business, consistent with past business practice or
then current industry practice, and not entered into for speculative purposes,
(2) transactions designed to hedge interest rates entered into with respect to
notional amounts not to exceed actual or anticipated Indebtedness and not
entered into for speculative purposes and (3) transactions designed to hedge
against risks associated with fluctuations in currencies entered into in the
ordinary course of business,



                                                                              59


and (C) prepaid fuel and healthcare expenses in the ordinary course of business
and consistent with past practice;

               (i) Liens securing the obligations of the Obligors with respect
to or relating to the Indebtedness as provided for in the ATSB Loan Agreements;

               (j) Liens on assets pledged in connection with a Replacement
Secured Financing permitted under the ATSB Loan Agreements;

               (k) Liens on assets pledged to secure a Permitted Acquisition
Financing; provided that the Liens attach only to assets acquired in connection
with the acquisition financed by such Permitted Acquisition Financing;

               (l) any renewal or substitution of any Lien for any of the
preceding clauses (b), (d) or (f); provided that any such Liens are not extended
to additional assets; and

               (m) any renewal or substitution of any Lien (it being agreed that
under a lien under any amended, modified, supplemented or restated version of
the ATSB Loan Agreements shall be treated as renewal or substitution of a Lien)
for any of the preceding clauses (b), (d), (f), (h), (i), (j) or (k), provided
that (i) the Indebtedness secured is not increased beyond the outstanding amount
of such Indebtedness on the Closing Date, if such Indebtedness was outstanding
on the Closing Date and (ii) any such Lien securing any such Indebtedness
outstanding on the Closing Date is not extended to assets in addition to those
subject to such Lien on the Closing Date, or required on the Closing Date under
the security agreement for such Lien to be subject thereto thereafter;

provided that the Obligors will not create, incur, assume or permit to exist any
Lien permitted under any of clauses (b) through (e) above on any property of an
Obligor already constituting Collateral, other than pursuant to the Senior
Mortgages and the Aircraft Mortgages (and the Senior Mortgages referenced
therein).

          SECTION 5.14 MERGER OR CONSOLIDATION. No Obligor shall consolidate
with or into or merge with or into, or enter into another form of corporate
combination with or into, any Person, or, in one or a series of transactions,
convey, lease or transfer all or substantially all its properties and assets to
any Person, unless: (i) either (A) such Obligor, or, if the transaction involves
more than one Obligor, an Obligor, is the surviving entity, or (B) an Obligor is
not the surviving entity and such surviving entity or the Person that acquires
by conveyance, lease or transfer all or substantially all the properties and
assets of an Obligor, shall be a corporation organized and existing under the
laws of the United States of America or any State or the District of Columbia,
and shall expressly assume, by an agreement executed and delivered to the Loan
Agent, in form and substance reasonably satisfactory to the Loan Agent, all of
such Obligor's obligations under the Loan Documents; (ii) immediately before and
after giving effect to such transaction, no Event of Default or Default shall
have occurred and be continuing; and (iii) the Obligors have delivered to the
Loan Agent an Officer's Certificate and an opinion of counsel from counsel
satisfactory to the Loan Agent, in form and substance



                                                                              60


satisfactory to the Loan Agent, stating that such transaction and such agreement
comply with this Section and that all conditions precedent herein provided for
relating to such transaction have been complied with and addressing such other
matters as may be reasonably requested by the Loan Agent; provided, however,
that no such transaction or merger, consolidation, corporate combination,
conveyance, lease or transfer shall involve a manufacturer of aircraft or
airframes, or an Affiliate thereof, other than Airbus.

          SECTION 5.15 CERTAIN APPROVALS UNDER THE ATSB LOAN AGREEMENT. Neither
Borrower will give its approval or consent to a sale of any right, obligation or
interest under an ATSB Loan Agreement, or any note or loan document referred to
therein (i) pursuant to clause (c) of the last sentence of Section 9.2(a)
thereof, or (ii) involving Tranche B-1.

                                   ARTICLE VI

                                EVENTS OF DEFAULT

          SECTION 6.1 EVENTS OF DEFAULT. Each of the following events shall be
an Event of Default:

               (a) Failure by the Borrowers to pay any installment of principal
of the Loans when due, or in the case of interest, within five Business Days
after the date due, whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise; or (ii) failure by the Borrowers to pay any other
amount due under this Agreement or any other Loan Document within ten Business
Days after the receipt by the Borrowers of written notice from the Loan Agent
that such payment is due or overdue; or

               (b) Any representation or warranty by any Obligor in any Loan
Document or in any statement or certificate at any time given by either Obligor
in writing pursuant hereto or thereto or in connection herewith or therewith
shall be false in any material respect on the date as of which made, such false
representation or warranty is material at the time in question, and, if curable,
the same shall remain uncured for a period in excess of 30 days (or in the case
of any representation or warranty as to the existence of a Default, 60 days)
after the date of written notice thereof from the Loan Agent to the Borrowers;
or

               (c) Failure by any Obligor to perform or comply in any material
respect with any term or condition contained in Sections 2.4(f), 5.2 and 5.9 of
this Agreement; or

               (d) Failure by any Obligor to perform or comply in any material
respect with any term contained in this Agreement or any of the other Loan
Documents (other than any such term referred to in any other subsection of this
Section 6.1), such failure to comply is material at the time in question, and
such failure to comply shall not have been remedied or waived within 30 days
after receipt by the Borrowers of notice from the Loan Agent of such failure to
comply; provided that if such failure to comply is capable of being corrected
and the Borrowers are diligently proceeding to



                                                                              61


correct such failure, then there shall be no Event of Default under this clause
(c) unless such failure to comply shall not have been remedied or waived within
90 days after receipt by the Borrowers of such notice; or

               (e) (i) With respect to any Cross-Default Obligation identified
in clause (i) of the definition therein, any of the Obligors shall default
(after the expiration of any applicable grace period) under or in the
performance of any material term, provision or condition contained in any
agreement under which any such Cross-Default Obligation was created or is
governed; or (ii) with respect to any Cross-Default Obligation identified in
clause (ii) of the definition thereof, any material "event of default" (however
described) shall occur and be continuing (after the expiration of any applicable
grace period), and shall not thereafter have been waived, remedied or cured,
under any agreement (as amended or modified from time to time) under which any
such Cross-Default Obligation was created or is governed; provided, however,
that this Section 6.1(e) shall cease to be of any further force and effect if at
any time prior to payment in full of the Obligations, Airbus or its Affiliates
cease to hold at least 51% of the outstanding principal amount of the Loans.

               (f) (i) A court shall enter a decree or order for relief in
respect of any Obligor or any of its Subsidiaries in an involuntary case under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or any other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against any Obligor or any of its Subsidiaries under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect; or a decree or order of a court for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over any Obligor or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of any Obligor or any of its Subsidiaries for all or
a substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of any Obligor or any of its Subsidiaries, and any such event described
in clause (i) above or this clause (ii) shall continue for 90 days unless
dismissed, bonded or discharged; or

               (g) (i) Any Obligor or any of its Subsidiaries shall have an
order for relief entered with respect to it or commence a voluntary case under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian of
all or a substantial part of its property; or any Obligor or any of its
Subsidiaries shall make any assignment for the benefit of creditors; or (ii) any
Obligor or any of its Subsidiaries shall be unable, or shall fail generally, or
shall admit in writing its inability, to pay its debts as such debts become due;
or the board of directors of any Obligor or any of its Subsidiaries (or any
committee thereof) shall adopt any



                                                                              62


resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or

               (h) Any order, judgment or decree shall be entered against any
Obligor decreeing the dissolution or split up of such Obligor and such order
shall remain undischarged or unstayed for a period in excess of 60 days; or

               (i) Any of the Collateral Documents shall cease, for any reason,
other than discharge of the Lien thereof in accordance with its terms, to be in
full force and effect, or any Borrower or any Affiliate of any Borrower shall so
assert, or any Lien created by any of the Collateral Documents shall cease, for
any reason other than discharge of the Lien thereof in accordance with its
terms, to be in full force and effect, to be enforceable and of the same effect
and priority purported to be created thereby; or

               (j) Any Borrower shall cease to carry and maintain, or cause to
be carried and maintained, insurance on and in respect of the Collateral in
accordance with the requirements of any applicable Collateral Document.

          SECTION 6.2 REMEDIES. During the continuance of any Event of Default,
the Loan Agent shall, solely at the request of the Requisite Lenders, by notice
to the Borrowers declare that the Loans, all interest accrued thereon and all
other amounts and Obligations payable under this Agreement and the Loan
Documents to be immediately due and payable, whereupon the Loans, all such
interest and all such amounts and Obligations shall become and be immediately
due and payable, and/or declare the Commitments to be terminated, whereupon the
Commitment of each Lender shall be terminated, all without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrowers; provided, however, that upon the occurrence of the Event of
Default specified in Section 6.1(f) or 6.1(g), the Loans, all such interest and
all such amounts and Obligations shall automatically become and be immediately
due and payable, and the Commitments shall terminate, all without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Obligors.

                                  ARTICLE VII

          THE LOAN AGENT AND THE COLLATERAL AGENT

          The parties hereto agree as follows:

          SECTION 7.1 AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes each of the Loan Agent and the Collateral Agent to take such action
as administrative agent and collateral agent, respectively, on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated by such Lender to it as Loan Agent or Collateral Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto, and each of the Loan Agent and the Collateral Agent hereby accepts such
authorization and appointment. As to any matters not expressly provided for by
this Agreement and the other Loan Documents or



                                                                              63


provided for with specific reference to this Section 7.1 (including, without
limitation, enforcement or collection of any Note), neither the Loan Agent nor
the Collateral Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from action) upon the instructions of
the Requisite Lenders and such instructions shall be binding upon all Lenders;
provided, however, that neither the Loan Agent nor the Collateral Agent shall be
required to take any action which exposes either the Loan Agent or the
Collateral Agent to liability or which is contrary to this Agreement, any other
Loan Document or applicable law. As to any provisions of this Agreement under
which action may be taken or approval given by the Requisite Lenders, the action
taken or approval given by the Requisite Lenders, shall be binding upon all
Lenders to the same extent and with the same effect as if each Lender had joined
therein. Each of the Loan Agent and the Collateral Agent shall be entitled to
rely upon any note, notice, consent, certificate, affidavit, letter, telegram,
teletype message, facsimile transmission, statement, order or other document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons and, in respect of legal matters, upon the opinion of
counsel selected by the Loan Agent or the Collateral Agent. Each of the Loan
Agent and the Collateral Agent may deem and treat the payee of the Notes as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Loan Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note. The Lenders agree and acknowledge that the Collateral Agent, in addition
to being appointed by and acting on behalf of the Lenders hereto, is also (as of
the date hereof) being appointed by and acting on behalf of the lenders party to
the Other Loan Agreement. Therefore, the Collateral Agent is an agent of and is
acting for and on behalf of all of the Lenders party hereto and, in addition,
all of the lenders party to the Other Loan Agreement.

          SECTION 7.2 AGENT'S RELIANCE, ETC. Neither the Loan Agent nor the
Collateral Agent nor any of their respective Affiliates, directors, officers,
agents or employees shall be liable to any Lender for any action taken or
omitted to be taken by it or by such directors, officers, agents or employees
under or in connection with this Agreement, the Notes or any other Loan
Document, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each of the Loan Agent
and the Collateral Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Lender for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such experts; (ii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether oral or written) made in or
in connection with this Agreement, the Notes or any other Loan Document; (iii)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement, the
Notes or any other Loan Document on the part of Guarantor or the Borrowers or to
inspect the property (including the books and records) of Guarantor, the
Borrowers or any of their respective Subsidiaries; (iv) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency



                                                                              64


or value of this Agreement, the Notes or any other Loan Document, or any other
instrument or document furnished pursuant thereto; (v) shall incur no liability
under or in respect to this Agreement, the Notes or any other Loan Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, facsimile transmission, cable or telex) believed by
it to be genuine and signed or sent by the proper party or parties; and (vi) may
deem and treat each Lender which makes a loan hereunder as the holder of the
indebtedness resulting therefrom for all purposes hereof until the Loan Agent
receives and accepts an Assignment and Assumption entered into by such Lender,
as assignor, and an eligible assignee as provided in Section 9.2 hereof.

          SECTION 7.3 AGENT AND AFFILIATES. If and so long as the Loan Agent or
the Collateral Agent shall remain a Lender, the Loan Agent or the Collateral
Agent, as applicable, shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Loan Agent or the Collateral Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include the Loan Agent and the
Collateral Agent, each in its individual capacity. Unrelated to its role as Loan
Agent or Collateral Agent as set forth herein, the Loan Agent and the Collateral
Agent and their respective Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business
with, the Borrowers, Guarantor, any of their respective Subsidiaries and any
Person who may do business with or own securities of the Borrowers, Guarantor,
or any of their respective Subsidiaries, all as if it were not the Loan Agent or
the Collateral Agent, as applicable, hereunder and without any duty to account
therefor to the Lenders.

          SECTION 7.4 REPRESENTATIONS OF THE LENDERS. Each Lender has actively
engaged in the negotiation of all of the terms of this Agreement. Each of the
Loan Agent and the Collateral Agent has no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect to the Borrowers whether coming into its
possession as of the date of this Agreement or at any time thereafter, or to
notify any Lender of any Event of Default except as provided in Section 7.5
hereof. This Agreement and all instruments or documents delivered in connection
with this Agreement have been reviewed and approved by each Lender and none of
the Lenders have relied on the Loan Agent or the Collateral Agent as to any
legal or factual matter in connection therewith or in connection with the
transactions contemplated thereunder.

          SECTION 7.5 EVENTS OF DEFAULT. In the event of the occurrence of any
Default or Event of Default, any Lender knowing of such event may (but shall
have no duty to) give the Loan Agent and the Collateral Agent written notice
specifying such Event of Default or other event and expressly stating that such
notice is a "notice of default". Neither the Loan Agent nor the Collateral Agent
shall be deemed to have knowledge of such events unless the Loan Agent or the
Collateral Agent, as applicable, has received such notice, or unless the Event
of Default consists of a failure of payment of principal or interest on the
Note. In the event that the Loan Agent or the Collateral Agent receives such a
notice of the occurrence of an Event of Default, the Loan Agent or the
Collateral Agent, as applicable, shall give written notice thereof to the
Lenders. The



                                                                              65


Loan Agent and the Collateral Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed in writing by the
Requisite Lenders, provided, however, that, unless and until the Loan Agent or
the Collateral Agent shall have received such direction, the Loan Agent and the
Collateral Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable and in the best interest of the Lenders.

          SECTION 7.6 LOAN AGENT'S AND COLLATERAL AGENT'S RIGHT TO INDEMNITY.
Except for action expressly required of the Loan Agent or the Collateral Agent
hereunder without instructions from any Person, the Loan Agent and the
Collateral Agent shall be fully justified in failing or refusing to take any
action hereunder on behalf of any Lender unless it shall first be indemnified to
its satisfaction by such Lender against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.

          SECTION 7.7 INDEMNIFICATION OF LOAN AGENT AND COLLATERAL AGENT. The
Lenders hereby agree to indemnify the Loan Agent and the Collateral Agent and
all of their respective affiliates, directors, officers, employees, advisors and
representatives thereof (to the extent not reimbursed by the Borrowers), ratably
as most recently in effect prior to the date indemnification is sought, from and
against any and all costs, losses, liabilities, claims, damages or expenses
which may be incurred by or asserted or awarded against the Loan Agent or the
Collateral Agent in any way relating to or arising out of this Agreement and/or
the other Loan Documents or any action taken or omitted by the Loan Agent or the
Collateral Agent under this Agreement and/or the other Loan Documents; provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Loan Agent's or the Collateral
Agent's gross negligence or willful misconduct. Without limiting the foregoing,
each Lender agrees to reimburse the Loan Agent and the Collateral Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
counsel fees) incurred by the Loan Agent or the Collateral Agent in connection
with the administration, or enforcement of, or the preservation of any rights
under, this Agreement and/or the other Loan Documents, to the extent that the
Loan Agent or the Collateral Agent is not reimbursed for such expenses by the
Borrowers.

          SECTION 7.8 SUCCESSOR LOAN AGENT AND COLLATERAL AGENT. Each of the
Loan Agent and the Collateral Agent may with the consent (not to be unreasonably
withheld) of the Lenders and, if no Event of Default has occurred and is
continuing, the Borrowers (or, if an Event of Default has occurred and is
continuing and if legally permissible, upon notice to the Borrowers), resign at
any time by giving written notice thereof to the Lenders and may, at any time,
with or without cause, be removed by the Requisite Lenders acting through the
Loan Agent with, if no Event of Default has occurred and is continuing and if
the Collateral Agent is not in default of any Obligation under the Loan
Documents and if no representation or warranty of the Collateral Agent under the
Loan Documents has proven to be incorrect in any material respect, the consent
(not to be unreasonably withheld) of the Borrowers (or, if an Event of Default
has occurred and is continuing, upon notice to the Borrowers). Upon any such
resignation or



                                                                              66


removal, the Borrowers shall have the right to appoint a successor agent,
subject to consent of the Lenders. If no successor agent shall have accepted
such appointment within 30 days after (i) the retiring Loan Agent's or
Collateral Agent's, as applicable, giving of notice of resignation or (ii) the
Loan Agent giving notice, if legally permissible, of such removal, the Loan
Agent or the Collateral Agent, as applicable, may, with the consent (not to be
unreasonably withheld) of the Requisite Lenders and, if no Event of Default has
occurred and is continuing, the Borrowers, appoint a successor Loan Agent or
Collateral Agent, as applicable, who shall be willing to accept such
appointment. Upon the acceptance of any appointment as Loan Agent or Collateral
Agent hereunder by a successor Loan Agent or Collateral Agent, such successor
Loan Agent or Collateral Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed Loan
Agent or Collateral Agent, and the retiring or removed Loan Agent or Collateral
Agent shall be discharged from its duties and obligations as agent under this
Agreement. After any Loan Agent's or Collateral Agent's resignation or removal
hereunder as Loan Agent or Collateral Agent, as applicable, the provisions of
this Article 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Loan Agent or Collateral Agent under this Agreement.

          SECTION 7.9 COLLATERAL AND GUARANTEE MATTERS. The Lenders irrevocably
authorize and direct the Collateral Agent to release any Lien on the Collateral
as provided for in the Collateral Documents.

                                  ARTICLE VIII

                                    GUARANTEE

          SECTION 8.1 GUARANTEE.

               (a) The Guarantor hereby unconditionally and irrevocably
guarantees to the Loan Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrowers when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.

               (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of the Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by the Guarantor under applicable federal and state laws relating to the
insolvency of debtors.

               (c) The Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of the Guarantor hereunder
without impairing the guarantee contained in this Article VIII or affecting the
rights and remedies of the Loan Agent or any Lender hereunder.



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               (d) The guarantee contained in this Article VIII shall remain in
full force and effect until all the Obligations (including contingent
Obligations contained in any Loan Document that survive the termination thereof)
shall have been satisfied by payment in full and the Commitments shall be
terminated.

               (e) No payment made by either Borrower or the Guarantor, any
other guarantor or any other Person or received or collected by the Loan Agent
or any Lender from either Borrower, the Guarantor, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by the Guarantor
in respect of the Obligations or any payment received or collected from such
Guarantor in respect of the Obligations), remain liable for the Obligations up
to the maximum liability of the Guarantor hereunder until the Obligations are
paid in full and the Commitments are terminated.

          SECTION 8.2 NO SUBROGATION. Notwithstanding any payment made by the
Guarantor hereunder or any set-off or application of funds of the Guarantor by
the Loan Agent or any Lender, the Guarantor shall not be entitled to be
subrogated to any of the rights of the Loan Agent or any Lender against either
Borrower or any other guarantor or any collateral security or guarantee or right
of offset held by the Loan Agent, the Collateral Agent or any Lender for the
payment of the Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from either Borrower or any other guarantor in
respect of payments made by such guarantor hereunder, until all amounts owing to
the Loan Agent and the Lenders by the Borrower on account of the Obligations
(other than contingent obligations contained in any Loan Document that survive
the termination thereof) are paid in full and the Commitments are terminated. If
any amount shall be paid to the Guarantor on account of such subrogation rights
at any time when all of the Obligations (other than contingent obligations
contained in any Loan Document that survive the termination thereof) shall not
have been paid in full, such amount shall be held by the Guarantor in trust for
the Loan Agent and the Lenders, segregated from other funds of the Guarantor,
and shall, forthwith upon receipt by the Guarantor, be turned over to the Loan
Agent in the exact form received by the Guarantor (duly indorsed by the
Guarantor to the Loan Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Loan Agent may
determine.

          SECTION 8.3 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS. The
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment of any of the Obligations made
by the Loan Agent or any Lender may be rescinded by the Loan Agent or such
Lender and any of the Obligations continued, and the Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Loan Agent



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or any Lender, and the Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Loan Agent (or the Requisite Lenders or
all Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the Loan
Agent or any Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Loan Agent nor any Lender shall
have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Obligations or for the guarantee contained in
this Section 8.3 or any property subject thereto.

          SECTION 8.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Loan Agent or any Lender
upon the guarantee contained in this Article VIII or acceptance of the guarantee
contained in this Article VIII; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Article VIII; and all dealings between the Borrower and the Guarantor, on the
one hand, and the Loan Agent, the Collateral Agent and the Lenders, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Article VIII. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that the guarantee contained
in this Article VIII shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of any other provisions of this Agreement or any other Loan
Document, any of the Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Loan Agent, the Collateral Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against the Loan Agent, the Collateral Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of a Borrower or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of the Guarantor under the guarantee contained in this Article
VIII, in bankruptcy or in any other instance. When making any demand hereunder
or otherwise pursuing its rights and remedies hereunder against the Guarantor,
the Loan Agent, the Collateral Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against either Borrower, any other guarantor or any
other Person or against any collateral security or guarantee for the Obligations
or any right of offset with respect thereto, and any failure by the Loan Agent,
the Collateral Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve the Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express,



                                                                              69


implied or available as a matter of law, of the Loan Agent, the Collateral Agent
or any Lender against the Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.

          SECTION 8.5 REINSTATEMENT. The guarantee contained in this Article
VIII shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Loan Agent, the Collateral Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of either Borrower or the Guarantor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, either Borrower or the Guarantor or any substantial part of
its property, or otherwise, all as though such payments had not been made.

          SECTION 8.6 PAYMENTS. The Guarantor hereby guarantees that payments
hereunder will be paid to the Loan Agent without set-off, counterclaim, claim of
recoupment or other defense in Dollars at the office specified in Section
2.9(a).

                                   ARTICLE IX

                                  MISCELLANEOUS

          SECTION 9.1 AMENDMENTS, WAIVERS, ETC.

               (a) No amendment, modification or waiver of any provision of this
Agreement or any other Loan Document nor consent to any departure by any Obligor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Requisite Lenders, and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no amendment, modification, waiver or
consent shall, unless in writing and signed by each Lender, do any of the
following:

                    (i) subject the Lenders to any additional obligations;

                    (ii) change the scheduled final maturity of the Loans, or
     change the amount or date for payment of any date fixed for the payment or
     reduction of principal;

                    (iii) change the principal amount of any Loan (other than by
     the payment or prepayment thereof);

                    (iv) change the rate of interest on any Loan or any fee,
     indemnity or other amount payable to any Lender;

                    (v) change any date fixed for payment of such interest,
     indemnity or other amount or fees;



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                    (vi) amend the definition of "Requisite Lenders" or this
     Section 9.1(a);

                    (vii) modify the application of payments to the Loan under
     Section 2.9; or

                    (viii) release all or substantially all of the Collateral or
     release the Guarantor from the guarantee contained in Article VIII;

and provided, further, that no amendment, modification, waiver or consent shall,
unless in writing and signed by the Loan Agent in addition to the Persons
required above to take such action, affect the rights or duties of the Loan
Agent under this Agreement or the other Loan Documents.

               (b) The Loan Agent may, but shall have no obligation to, with the
written concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Borrowers in any case shall entitle the Borrowers to
any other or further notice or demand in similar or other circumstances.

               (c) In connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change") requiring the consent of all
affected Lenders, if the consent of the Loan Agent and of the Requisite Lenders
is obtained, but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained as described in this
Section 9.1 being referred to as a "Non-Consenting Lender"), then (i) at the
Borrowers' request, the Loan Agent shall have the right in the Loan Agent's sole
discretion (but shall have no obligation) to purchase from such Non-Consenting
Lender, and such Non-Consenting Lender agrees that it shall, upon the Loan
Agent's request, sell and assign to the Lender that is acting as the Loan Agent,
all of the portion of the Loan of such Non-Consenting Lender for an amount equal
to the principal balance of such portion of the Loan held by the Non-Consenting
Lender and all accrued interest and fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an executed
Assignment and Assumption, and (ii) the Borrowers may effect a substitution of
the Non-Consenting Lender pursuant to Section 2.12.

          SECTION 9.2 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.

               (a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that (i) the Borrowers may not assign or
otherwise transfer any of their rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by the Borrowers without such consent shall be null and void) and (ii) no Lender
may assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section.



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               (b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more entities (each, an "Assignee"),
including by means of a capital markets, private placement or securitization
transaction, all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it) and subject to the following additional conditions:

                         (A) such Assignee shall not be an airline, a commercial
          aircraft operator, an air freight forwarder, an entity engaged in the
          business of parcel transport by air, other similar Person, or a
          holding company Affiliate of any of the foregoing; and

                         (B) prior written notice of any such assignment shall
          be provided to the Borrowers unless an Event of Default has occurred
          and is continuing;

                         (C) in the event of an assignment involving a
          widespread syndication or offering, if the Guarantor or any Borrower
          indicates that the proposed transaction would interfere with its own
          debt financing efforts, such Lender agrees to cooperate in good faith
          with the Guarantor or such Borrower in order not to hinder the
          Guarantor's or such Borrower's attempt to finalize its financing; and

                         (D) an assignee or participant that acquires its
          interest in the Obligations pursuant to or in connection with a
          capital markets, private placement, or securitization transaction
          pursuant to which ten or more persons acquire interests in the
          Obligations shall not be entitled to the benefits of Section 2.13.

                    (ii) Assignments shall be subject to the additional
     condition that the parties to each assignment shall execute and deliver to
     the Loan Agent an Assignment and Assumption.

                    (iii) Subject to acceptance and recording thereof pursuant
     to paragraph (b)(iv) below, from and after the effective date specified in
     each Assignment and Assumption the Assignee thereunder shall be a party
     hereto and, to the extent of the interest assigned by such Assignment and
     Assumption, have the rights and obligations of a Lender under this
     Agreement, and the assigning Lender thereunder shall, to the extent of the
     interest assigned by such Assignment and Assumption, be released from its
     obligations under this Agreement (and, in the case of an Assignment and
     Assumption covering all of the assigning Lender's rights and obligations
     under this Agreement, such Lender shall cease to be a party hereto but
     shall continue to be entitled to the benefits of Sections 2.10, 2.11, 2.13,
     9.3 and 9.4). Any assignment or transfer by a Lender of rights or
     obligations under this Agreement that does not comply with this Section
     10.2 shall be treated for purposes of this Agreement as a sale by



                                                                              72


     such Lender of a participation in such rights and obligations in accordance
     with paragraph (c) of this Section.

                    (iv) Upon its receipt of a duly completed Assignment and
     Assumption executed by an assigning Lender and an Assignee, the Loan Agent
     shall accept such Assignment and Assumption and record the information
     contained therein in the Register. No assignment shall be effective for
     purposes of this Agreement unless it has been recorded in the Register as
     provided in this paragraph.

                    (v) The Initial Lender agrees to notify the Borrowers
     promptly following the date on which it or its Affiliate has fully or
     partially assigned or sold all or a portion of its rights and obligations
     under this Agreement.

               (c) (i) Any Lender may, without the consent of the Borrowers or
the Loan Agent, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Commitments and the Loans
owing to it); provided that (A) such Participant shall not be an airline, a
commercial aircraft operator, an air freight forwarder, an entity engaged in the
business of parcel transport by air, other similar Person, or a holding company
Affiliate of any of the foregoing, (B) such Lender's obligations under this
Agreement shall remain unchanged, (C) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (D) the Obligors, the Loan Agent, and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement. Subject to paragraph (c)(ii) of this Section, the
Borrowers agree that, if its interest is entered in the Register, each
Participant shall be entitled to the benefits of Sections 2.10, 2.11, 2.13, 9.3
and 9.4 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 9.5
as though it were a Lender, provided such Participant shall be subject to
Section 9.7 as though it were a Lender.

                    (ii) Borrowers shall not be required to provide, and a
     Participant shall not be entitled to receive any greater payment under
     Section 2.10, 2.11 or 2.13 than the Borrowers would have been required to
     pay and the applicable Lender would have been entitled to receive with
     respect to the participation sold to such Participant, unless the sale of
     the participation to such Participant is made with the Borrowers' prior
     written consent. Any Participant shall not be entitled to the benefits of
     Section 2.13 unless such Participant complies with Section 2.13(f).

               (d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of



                                                                              73


such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.

               (e) The Obligors agree to cooperate with the efforts of the
Initial Lender to engage in a transfer or sell-down transaction as envisioned in
this Section 9.2, including by means of restructuring the Loan Documents into
tranches (not all of which need to be secured by the Collateral), restructuring
the Loan Documents into a capital markets style indenture, cooperating in
reasonable due diligence meetings and investor phone calls, providing accountant
comfort letters and legal opinion reliance letters, and assisting with the
reasonable requests of rating agencies and investors, all at the cost of the
Initial Lender for the reasonable out-of-pocket expenses of Borrower in
cooperating as provided in this subparagraph. Without limiting the generality of
the foregoing, as part of the cooperation of the Obligors, if requested by the
Initial Lender in connection with a transfer or sell down transaction as
envisioned in this Section 9.2, the Loan Documents shall be "marked-to-market"
and amended accordingly, solely to reflect any prepayment premiums or make-whole
amounts or other prepayment terms and conditions which are at the time customary
for comparable financings in the relevant markets, as determined in the opinion
of two investment banks, one selected by the Borrowers and the other by the Loan
Agent, and if such banks fail to agree on such prepayment premiums or make-whole
amounts or other prepayment terms and conditions, then a third investment bank
mutually selected by the Borrowers and the Loan Agent shall make such
determination.

          SECTION 9.3 COSTS AND EXPENSES. Whether or not the first Funding Date
occurs, the Obligors agree to pay within ten Business Days (or as provided in
Section 3.1(d)) following receipt of a reasonably detailed invoice therefor (i)
all reasonable out-of-pocket costs and expenses (including reasonable legal fees
and expenses of one primary outside counsel and one special FAA counsel)
incurred by the Initial Lender, the Loan Agent and the Collateral Agent in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents, and all documents relating thereto, (ii) all reasonable out-of-pocket
costs and expenses (including reasonable legal fees and expenses of one primary
outside counsel and one special FAA counsel) incurred by the Loan Agent in
connection with any consents, amendments, waivers or other modifications hereto
or thereto, (iii) all reasonable out-of-pocket costs and expenses incurred by
the Loan Agent in connection with the syndication of the Loans (if any), and
(iv) all reasonable out-of-pocket costs and expenses (including reasonable legal
fees and expenses) incurred by the Loan Agent and the Lenders in enforcing any
Obligations of, or in collecting any payments due from, the Borrowers hereunder
or under the other Loan Documents.

          SECTION 9.4 INDEMNITIES. Whether or not the transactions contemplated
hereby shall be consummated, the Obligors agree to defend, indemnify, pay and
hold harmless the Loan Agent, the Lenders, and their respective Affiliates,
officers, directors, employees, agents and controlling Persons (collectively
called the "Indemnitees") from



                                                                              74


and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including without limitation the reasonable fees and
disbursements of outside counsel for such Indemnitees, but excluding Taxes) that
may be imposed on, incurred by, or asserted against any such Indemnitee, in any
manner arising out of this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including, without limitation, the
use or intended use of the proceeds of the Loan) or any breach or default by the
Borrowers of any provision of the Loan Documents (collectively called the
"Indemnified Liabilities"); provided that the Obligors shall not have any
obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities (i) arise from the gross
negligence or willful misconduct of an Indemnitee, (ii) are specifically
addressed elsewhere in this Agreement (including, without limitation, Section
2.10, (iii) arise from breaches by an Indemnitee of any Loan Document to which
it is a party, or (iv) constitute ordinary and usual operating or overhead
expenses of an Indemnitee (excluding, without limitation, costs and expenses of
any outside counsel, consultant or agent). To the extent that the undertaking to
defend, indemnify, pay and hold harmless set forth in the preceding sentence may
be unenforceable because it is violative of any law or public policy, the
Obligors shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them.

          SECTION 9.5 RIGHT OF SET-OFF. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
to the fullest extent permitted by law, each Lender is hereby authorized by the
Obligors at any time or from time to time, without notice to the Obligors or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other Indebtedness at any time held or owing by
that Lender to or for the credit or the account of any Obligor against and on
account of the Obligations then due.

          SECTION 9.6 JOINT AND SEVERAL LIABILITY; MAXIMUM LIABILITY; WAIVER OF
SUBROGATION.

               (a) Each Borrower shall be liable for all amounts due to the
Lenders under this Agreement, regardless of which Borrowers actually receives
the Loans or other extensions of credit hereunder, or the amount of such Loans
received or the manner in which any Lender accounts for such Loans or other
extensions of credit on its books and records. Each Borrower's liabilities with
respect to Loans and extensions of credit made to it, and each Borrower's
liabilities arising as a result of the joint and several liability of the
Borrowers hereunder and under the other Loan Documents with respect to Loans or
other extensions of credit made to any other Borrowers hereunder, shall be
separate and distinct obligations, but all such liabilities shall be primary
obligations of each Borrower. The joint and several liability of each Borrower
shall in all respects be continuing, absolute, unconditional and irrevocable, in
all events and



                                                                              75


circumstances, and shall continue in full force and effect until all Obligations
have been paid in full and all Commitments shall have terminated, and will be
paid strictly in accordance with the terms of this Agreement and each other Loan
Document under which they arise, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of Lender or any holder of any Loan or Note with respect thereto.

               (b) Notwithstanding any payment made by either Borrower or the
Guarantor hereunder or any set-off or application of funds of either Borrower or
the Guarantor by the Loan Agent or any Lender, neither Borrower shall be
entitled to be subrogated to any of the rights of the Loan Agent, the Collateral
Agent or any Lender against either Borrower or the Guarantor or any collateral
security or guarantee or right of offset held by the Loan Agent, the Collateral
Agent or any Lender for the payment of the Obligations, nor shall either
Borrower seek or be entitled to seek any contribution or reimbursement from the
other Borrower or the Guarantor in respect of payments made by the Guarantor
hereunder, until all amounts owing to the Loan Agent, the Collateral Agent and
the Lenders by the Borrowers on account of the Obligations are paid in full and
the Commitments are terminated. If any amount shall be paid to either Borrower
on account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by such Borrower in
trust for the Loan Agent, the Collateral Agent and the Lenders, segregated from
other funds of such Borrower, and shall, forthwith upon receipt by such
Borrower, be turned over to the Loan Agent in the exact form received by such
Borrower (duly indorsed by such Borrower to the Loan Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Loan Agent may determine.

               (c) Each Borrower shall remain obligated hereunder
notwithstanding that, without any reservation of rights against the other
Borrower or the Guarantor and without notice to or further assent by the other
Borrower or the Guarantor, any demand for payment of any of the Obligations made
by the Loan Agent, the Collateral Agent or any Lender may be rescinded by the
Loan Agent, the Collateral Agent or such Lender and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Loan Agent, the Collateral Agent or any Lender,
and this Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Loan Agent (or the Requisite Lenders or
all Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the Loan
Agent, the Collateral Agent or any Lender for the payment of the Obligations may
be sold, exchanged, waived, surrendered or released. Neither the Loan Agent, the
Collateral Agent nor any Lender shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the
Obligations or for the guarantee contained in Article VIII or any property
subject thereto.



                                                                              76


               (d) Each Borrower waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice of or proof
of reliance by the Loan Agent, the Collateral Agent or any Lender upon the joint
and several liability of the Borrowers and the guarantee contained in Article
VIII or acceptance thereof; the Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the joint and several liability of the
Borrowers and the guarantee contained in Article VIII; and all dealings between
the Borrowers and the Guarantor, on the one hand, and the Loan Agent, the
Collateral Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance thereupon.
Each Borrower waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the other Borrower or the Guarantor
with respect to the Obligations. Each Borrower understands and agrees that its
joint and several liability hereunder for and with respect to the Obligations of
the other Borrower is continuing, absolute and unconditional without regard to
any circumstance whatsoever which constitutes, or might be construed to
constitute, an equitable or legal discharge of such Borrower for and with
respect to the Obligations of the other Borrower (or of the Guarantor), in
bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against either Borrower,
the Loan Agent, the Collateral Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the other Borrower, the Guarantor or any other
Person or against any collateral security or guarantee for the Obligations or
any right of offset with respect thereto, and any failure by the Loan Agent, the
Collateral Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from the other Borrower, the
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the other
Borrower, the Guarantor or any other Person or any such collateral security,
guarantee or right of offset, shall not relieve a Borrower of any obligation or
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Loan Agent, the
Collateral Agent or any Lender against either Borrower. For the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.

               (e) The joint liability of the Borrowers shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Loan Agent, the Collateral Agent or any Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of a
Borrower or the Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, a
Borrower or the Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.

          SECTION 9.7 SHARING OF PAYMENTS, ETC. The Lenders hereby agree among
themselves that if any of them shall, whether by voluntary payment, by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
right under the Loan



                                                                              77


Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to that Lender hereunder or under the other Loan
Documents (collectively, except as provided in the immediately following
exception clause, the "Aggregate Amounts Due" to each Lender) which is greater
than the proportion received by any other Lender in respect of the Aggregate
Amounts Due to such other Lender, except by reason of payments that are
individual to a particular Lender under Sections 2.10(c), 2.10(e), 2.11, 2.13,
9.3 and 9.4, then the Lender receiving such proportionately greater payment
shall (i) notify the Loan Agent and each other Lender of the receipt of such
payment and (ii) apply a portion of such payment to purchase participations
(which it shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them, provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of the
Borrowers or otherwise, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest. The Obligors
expressly consent to the foregoing arrangement and agrees that any holder of a
participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by the Obligors
to that holder with respect thereto as fully as if that holder were owed the
amount of the participation held by that holder.

          SECTION 9.8 NOTICES, ETC. Unless otherwise specifically provided
herein, any notice, request or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, or upon receipt
of telefacsimile, or five Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices shall
not be effective until received. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on Annex A, or (i) as
to the Borrowers and the Loan Agent and the Collateral Agent, such other address
as shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party hereto, such other address as
shall be designated by such party in a written notice delivered to the Loan
Agent and the Collateral Agent.

          SECTION 9.9 NO WAIVER; REMEDIES. No failure on the part of any Lender
or the Loan Agent or the Collateral Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.



                                                                              78


          SECTION 9.10 GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereto shall be governed by, and construed in
accordance with, the law of the State of New York.

          SECTION 9.11 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.

               (a) Any legal action or proceeding with respect to this Agreement
or any other Loan Document may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York, and,
by execution and delivery of this Agreement, each of the parties hereto hereby
accept for itself and in respect of its property, generally and unconditionally,
the jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including any objection to the laying of venue or based on
the grounds of forum non conveniens, which any of them may now or hereafter have
to the bringing of any such action or proceeding in such respective
jurisdictions.

               (b) Each of the parties hereto hereby irrevocably consent to the
service of any and all legal process, summons, notices and documents in any
suit, action or proceeding brought in the United States of America arising out
of or in connection with this Agreement or any of the other Loan Documents by
the mailing (by registered or certified mail, postage prepaid) or delivering of
a copy of such process to such Person in accordance with the provisions of
Section 9.8. Each Obligor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.

               (c) Nothing contained in this Section 9.12 shall affect the right
of any party hereto to serve process in any other manner permitted by law or
commence legal proceedings or otherwise proceed against any other party hereto
in any other jurisdiction.

          SECTION 9.12 WAIVER OF JURY TRIAL. Each of the parties hereto
irrevocably waives trial by jury in any action or proceeding with respect to
this Agreement or any other Loan Document.

          SECTION 9.13 MARSHALING; PAYMENTS SET ASIDE. Neither the Loan Agent,
the Collateral Agent nor any Lender shall be under any obligation to marshal any
assets in favor of the Obligors or any other party or against or in payment of
any or all of the Obligations. To the extent that an Obligor makes a payment or
payments to the Loan Agent for the account of any Lender (each, a "Payee") or
any Payee receives payment from exercise of their rights of setoff, and such
payment or payments or the proceeds of such setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party, then (i) to
the extent of such recovery, the obligation or part thereof originally intended
to be satisfied, and all rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred, and (ii) each Payee shall pay and return
such amount to the Loan Agent as the Loan Agent may be required to disgorge or
otherwise pay to a trustee, receiver or any




                                                                              79


other party in respect of the portion of the payment from the Borrowers
distributed by the Loan Agent to such Payee hereunder.

          SECTION 9.14 SECTION TITLES. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

          SECTION 9.15 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrowers, the Loan Agent and the Collateral Agent.

          SECTION 9.16 SEVERABILITY. In case any provision in or obligation
under this Agreement or any Note shall be invalid, illegal or unenforceable in
any jurisdiction the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          SECTION 9.17 CONFIDENTIALITY. Each party hereto shall, and shall
procure that its respective officers, employees and agents shall, keep
confidential and shall not, without the prior written consent of the other
parties, disclose to any third party this Agreement, any other Loan Document or
any of the information, reports or documents supplied by or on behalf of such
other party not otherwise publicly available, except that a party shall be
entitled to disclose this Agreement, any other Loan Document, and any such
information, reports or documents:

                    (i) in connection with any proceeding arising out of or in
     connection with this Agreement or any of the other Loan Documents, to the
     extent that such party may reasonable consider necessary to protect its
     interest; or

                    (ii) to any potential assignee or transferee of any party's
     rights under this Agreement or any of the Loan Documents (and to rating
     agencies, underwriters, investors, lenders, placement agents, and other
     parties, and their respective counsel, auditors, agents and advisers)
     participating in an assignment or participation transaction under Section
     10.2 or any other person proposing to enter into contractual arrangements
     with any party in relation to this Agreement, any of the other Loan
     Documents subject to the relevant party obtaining, in each case to the
     extent reasonable and customary, an undertaking from such potential
     assignee or transferee or other person in corresponding terms to this
     Section 10.18; or



                                                                              80


                    (iii) pursuant to any applicable laws, ordinances,
     judgments, decrees, injunctions, writs, rules, regulations, orders,
     interpretations, licenses, permits and orders of any competent court,
     arbitrator or governmental agency or authority in any relevant
     jurisdiction; or

                    (iv) to bank examiners or any other regulatory authority or
     rating agencies or similar entities, if requested to do so; or

                    (v) to its auditors, legal, tax or to other professional
     advisers; or

                    (vi) to its Affiliates and their respective directors,
     officers, employees and agents.

          SECTION 9.18 APPOINTMENT OF INDENTURE TRUSTEE. The Loan Agent and the
Initial Lender hereby appoint U.S. Bank National Association as Indenture
Trustee under the Aircraft Mortgages. Such appointment to be effected by
delivery of an authorization and direction to the Indenture Trustee.



                                                                              81


          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                        AMERICA WEST AIRLINES, INC.
                                        US AIRWAYS, INC
                                        US AIRWAYS GROUP, INC.


                                        By:
                                            ------------------------------------
                                        Name: Derek J. Kerr
                                        Title: Chief Financial Officer of each
                                               Person listed above


                                        AIRBUS FINANCIAL SERVICES,
                                        as Initial Lender and Loan Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        WELLS FARGO BANK NORTHWEST,
                                        NATIONAL ASSOCIATION,
                                        as Collateral Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------



                                     ANNEX A

                                NOTICE ADDRESSES

If to the Borrowers:

America West Airlines, Inc.
400 E. Sky Harbor Blvd.
Phoenix, AZ 85034
Main Telephone: (480) 693-0800
Fax: (480) 693-5155
Attention: Derek J. Kerr

America West Holdings Corporation
111 West Rio Salado Parkway
Tempe, AZ 85281
Main Telephone: (480) 693-0800
Fax: (480) 693-5155
Attention: Derek J. Kerr

US Airways, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
Main Telephone: (703) 872-5050
Fax: (703) 872-5960
Attention: Derek J. Kerr

If to the Initial Lender:

Airbus Financial Services
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1, Ireland
Attention: Managing Director
Telephone: 011 3531 790 5500
Facsimile: 011 3531 670 2020

With a copy to:

Airbus North America Holdings, Inc.
198 Van Buren St. Suite 300
Hendon, Virginia 20170

Attn: Vice President - Sales Finance
Telephone: (703) 834-3400
Facsimile: (703) 834-3547



If to the Loan Agent:

Airbus Financial Services
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1, Ireland
Attention: Managing Director
Telephone: 011 3531 790 5500
Facsimile: 011 3531 670 2020

With a copy to:

Airbus North America Holdings, Inc.
198 Van Buren St. Suite 300
Hendon, Virginia 20170

Attn: Vice President - Sales Finance
Telephone: (703) 834-3400
Facsimile: (703) 834-3547

If to the Collateral Agent:

Wells Fargo Bank Northwest, National Association
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, Utah 84111
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
Attention: Corporate Trust Services



                                     ANNEX B

                                 LENDING OFFICE

Airbus Financial Services
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1
Ireland



                                     ANNEX C

                               LENDER COMMITMENTS

                                 INITIAL AMOUNTS



     NAME OF           TOTAL       TRANCHE A     TRANCHE B     TRANCHE C     TRANCHE D      TRANCHE E
     LENDER         COMMITMENT     COMMITMENT    COMMITMENT    COMMITMENT    COMMITMENT    COMMITMENT
- ----------------   ------------   -----------   -----------   -----------   -----------   ------------
                                                                        
AIRBUS FINANCIAL   $250,000,000   $50,000,000   $27,000,000   $10,000,000   $10,000,000   $153,000,000
    SERVICES




                                    EXHIBIT A

                            ASSIGNMENT AND ASSUMPTION

          Reference is made to the Loan Agreement, dated as of September 27,
2005 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Loan Agreement"), among the Borrowers, the Guarantor,
Airbus Financial Services, as Initial Lender and Loan Agent, and Wells Fargo
Bank Northwest, National Association, as Collateral Agent. Unless otherwise
defined herein, terms defined in the Loan Agreement and used herein shall have
the meanings given to them in the Loan Agreement.

          The Assignor identified on Schedule l hereto (the "Assignor") and the
Assignee identified on Schedule l hereto (the "Assignee") agree as follows:

1. The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Effective
Date (as defined below), the interest described in Schedule 1 hereto (the
"Assigned Interest") in and to the Assignor's rights and obligations under the
Loan Agreement with respect to those credit facilities contained in the Loan
Agreement as are set forth on Schedule 1 hereto (individually, an "Assigned
Facility"; collectively, the "Assigned Facilities"), in a principal amount for
each Assigned Facility as set forth on Schedule 1 hereto.

2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Guarantor, the Borrower, any of its Affiliates or any
other obligor or the performance or observance by the Guarantor, the Borrower,
any of its Affiliates or any other obligor of any of their respective
obligations under the Loan Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto.

3. The Assignee (a) represents and warrants that it is legally authorized to
enter into this Assignment and Assumption; (b) confirms that it has received a
copy of the Loan Agreement, together with copies of the financial statements
delivered pursuant to Section 4.3 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption; (c) agrees that it will,
independently and without reliance upon the Assignor, the Loan Agents, the
Collateral Agent or any Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Agreement, the other Loan



Documents or any other instrument or document furnished pursuant hereto or
thereto; (d) appoints and authorizes the Loan Agent or the Collateral Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Loan Agent and the Collateral Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Loan Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender including its obligations pursuant to Section
2.13(f) of the Loan Agreement.

4. The effective date of this Assignment and Assumption shall be the Effective
Date of Assignment described in Schedule 1 hereto (the "Effective Date").
Following the execution of this Assignment and Assumption, it will be delivered
to the Loan Agent for acceptance by it and recording by the Loan Agent pursuant
to the Credit Agreement, effective as of the Effective Date (which shall not,
unless otherwise agreed to by the Loan Agent, be earlier than five Business Days
after the date of such acceptance and recording by the Loan Agent).

5. Upon such acceptance and recording, from and after the Effective Date, the
Loan Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date.

6. From and after the Effective Date, (a) the Assignee shall be a party to the
Loan Agreement and, to the extent provided in this Assignment and Assumption,
have the rights and obligations of a Lender thereunder and under the other Loan
Documents and shall be bound by the provisions thereof and (b) the Assignor
shall, to the extent provided in this Assignment and Assumption, relinquish its
rights and be released from its obligations under the Loan Agreement.

7. This Assignment and Assumption shall be governed by and construed in
accordance with the laws of the State of New York.

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.



                                   Schedule 1

                  to Assignment and Assumption with respect to
               the Loan Agreement, dated as of September 27, 2005,
    among the US Airways, Inc. and America West Airlines, Inc., as Borrowers,
    the Guarantor, and Airbus Financial Services, as Initial Lender and Loan
          Agent, and Wells Fargo Bank Northwest, National Association,
                               as Collateral Agent

Name of Assignor: _____________________________

Name of Assignee: _____________________________

Effective Date of Assignment: _________________



                              Principal
Credit Facility Assigned   Amount Assigned   Commitment Percentage Assigned
- ------------------------   ---------------   ------------------------------
                                       
                           $______________          ______________%


[Name of Assignee]                      [Name of Assignor]


By:                                     By:
   ---------------------------------        ------------------------------------
Title:                                  Title:
       -----------------------------           ---------------------------------
Accepted for Recordation in the         Required Consents (if any):
Register:

________________________________, as    US Airways, Inc.
Loan Agent


By:                                     By:
   ---------------------------------        ------------------------------------
Title:                                  Title:
       -----------------------------           ---------------------------------


                                        America West Airlines, Inc.


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------



                                    EXHIBIT B

                             FORM OF PROMISSORY NOTE
                                  [TRANCHE __]

U.S. $__________                                           Dated: ________, 2005
Tranche ___

          FOR VALUE RECEIVED, the undersigned, US Airways, Inc., a Delaware
corporation, and America West Airlines, Inc., a Delaware corporation
(collectively, the "Borrowers"), HEREBY, JOINTLY AND SEVERALLY, PROMISE TO PAY
to Airbus Financial Services, Inc., as Loan Agent under the Loan Agreement
referred to below, for the account of the Lenders as defined in the Loan
Agreement referred to below) the principal sum of U.S.$_________ or, if less,
the aggregate outstanding principal amount of all Tranche [___] Loans made by
the Lender to the Borrowers pursuant to the $161,000,000 Loan Agreement dated as
of September 27, 2005 among the Borrowers, Guarantor and Airbus Financial
Services, as the Initial Lender and Loan Agent, and Wells Fargo Bank Northwest,
National Association, as Collateral Agent (as amended or modified from time to
time, the "Loan Agreement"; the terms defined therein being used herein as
therein defined). The principal amount of this Note shall be payable in
installments in the amounts and on the dates specified in Section 2.3 of the
Loan Agreement. The final payment made on this Promissory Note shall be in an
amount sufficient to discharge in full the unpaid principal hereof and accrued
and unpaid interest herein.

          The Borrowers, jointly and severally, promise to pay interest on the
unpaid principal amount hereof from the date hereof until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Loan Agreement.

          Both principal and interest are payable in lawful money of the United
States of America to the Loan Agent, to the account specified in Section 2.9(a)
of the Loan Agreement, in same day funds.

          This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Loan Agreement. The Loan Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The obligations of the Borrower under this Promissory Note
and the Loan Agreement are secured by collateral as provided in the Loan
Agreement and in the Collateral Documents.

          This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.



          IN WITNESS WHEREOF, the Borrowers, jointly and severally, have caused
this Promissory Note to be executed and delivered by its duly authorized officer
as of the date and at the place set forth above.

                                        AMERICA WEST AIRLINES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        US AIRWAYS, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------



                           TRANCHE ___ PROMISSORY NOTE



                                                                                Aggregate Outstanding
                                                                               Principal Amount After
                                                                               Giving Effect to Loans
               Payment   Principal Amount   Principal Amount   S&P Rating at     Made or Payments of
Funding Date     Date      of Loan Made      of Loan Repaid      Funding         Principal Received
- ------------   -------   ----------------   ----------------   -------------   ----------------------
                                                                





                                    EXHIBIT C

                               NOTICE OF BORROWING

Airbus Financial Services,
   as Loan Agent under the
   Loan Agreement referred to below
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1
Ireland
Telephone: ________+353 1 790 5500
Facsimile: ________+353 1 670 2020
Attention: Managing Director

                                                                __________, 2005

          Re:  AMERICA WEST AIRLINES, INC. AND US AIRWAYS, INC. (the
               "Borrowers")

     Reference is made to the $161,000,000 Loan Agreement, dated as of September
27, 2005 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "Loan Agreement"), among the Borrowers, the
Guarantor, Airbus Financial Services, as Initial Lender and Loan Agent, and
Wells Fargo Bank Northwest, National Association, as Collateral Agent, and
entitled to the benefits thereof. Capitalized terms used herein and not
otherwise defined herein are used herein as therein defined.

     The Borrowers hereby give you irrevocable notice, pursuant to Section 2.2
of the Loan Agreement, that the undersigned hereby requests a Borrowing under
the Loan Agreement and, in that connection, sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section 2.2
of the Loan Agreement:

          (i) The date of the Proposed Borrowing is ________, 200__ (the
     "Funding Date"), a date permitted under the applicable provisions of
     Section 2.1 of the Loan Agreement.

          (ii) The aggregate amount of the Proposed Borrowing is $________.

          (iii) The Proposed Borrowing is for Tranche ___ Loans and such
     proceeds shall be used in accordance with Section 2.4(f) of the Loan
     Agreement.

          (iv) As of the date hereof, the corporate credit rating assigned by
     S&P to the Guarantor and its consolidated subsidiaries, taken together, is
     ____.



          (v) [For Tranche B Borrowings] [All amounts due and payable under the
     A321 Airbus Financings have been paid in full.]

          (v) [For Tranche B Borrowings] [All amounts due and payable on the
     Funding Date under the A321 Airbus Financings have been, or immediately
     following the application of the proceeds of the Proposed Borrowing will
     have been, paid in full.]

          [(v) [For Tranche C Borrowings] Copies of the invoices for goods and
     services referred to in Section 2.1(c) paid 30 or more days before the date
     of this Proposed Borrowing not used to support prior Borrowings of Tranche
     C Loans, are attached hereto.]

          [(v) [For Tranche D Borrowings] All amounts due and payable on or
     before September 20, 2005, under the Trust 2001 1C Certificates of US
     Airways have been paid in full and received by the holders thereof.]

     The undersigned hereby certifies that the following statements shall be
true on the Funding Date:

          (i) the representations and warranties of each Borrower and the
     Guarantor set forth in Article IV of the Loan Agreement are true and
     correct in all material respects on and as of the Funding Date, before and
     after giving effect to the Proposed Borrowing and to the application of the
     proceeds therefrom as though made on and as of such date, (except to the
     extent such representations and warranties by their terms expressly relate
     to an earlier date, in which case the representations and warranties shall
     have been true and correct in all material respects on and as of such
     earlier date); and

          (ii) no Event of Default or Default has occurred and is, or would
     result from the Proposed Borrowing and the application of the proceeds
     therefrom.

                                       AMERICA WEST AIRLINES, INC.


                                       By:
                                           ------------------------------------
                                       Name:
                                             ----------------------------------
                                       Title: Chief Financial
                                              Officer/President/Executive
                                              Officer


                                       US AIRWAYS, INC.


                                       By:
                                           ------------------------------------
                                       Name:
                                             ----------------------------------
                                       Title: Chief Financial Officer/President/
                                              Executive Officer

EX-10.4

                                                                    Exhibit 10.4

                                                                  EXECUTION COPY

           *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
               FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                  SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                                   $89,000,000

                                 LOAN AGREEMENT

                         DATED AS OF SEPTEMBER 27, 2005

                                      AMONG

                                US AIRWAYS, INC.
                                       AND
                          AMERICA WEST AIRLINES, INC.,
                                  AS BORROWERS,

                             US AIRWAYS GROUP, INC.,
                                  AS GUARANTOR,

                           AIRBUS FINANCIAL SERVICES,
                        AS INITIAL LENDER AND LOAN AGENT

                                       AND

                           WELLS FARGO BANK NORTHWEST,
                              NATIONAL ASSOCIATION
                               AS COLLATERAL AGENT



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS ..............     1
   SECTION 1.1    DEFINED TERMS .........................................    22
   SECTION 1.2    COMPUTATION OF TIME PERIODS ...........................    22
   SECTION 1.3    ACCOUNTING TERMS AND PRINCIPLES .......................    22
   SECTION 1.4    CERTAIN TERMS .........................................    22

ARTICLE II THE LOANS ....................................................    22
   SECTION 2.1    THE LOANS .............................................    22
   SECTION 2.2    BORROWING PROCEDURES ..................................    24
   SECTION 2.3    SCHEDULED REPAYMENT OF THE LOANS ......................    25
   SECTION 2.4    EVIDENCE OF DEBT; USE OF PROCEEDS .....................    25
   SECTION 2.5    OPTIONAL PREPAYMENTS ..................................    27
   SECTION 2.6    MANDATORY PREPAYMENTS .................................    28
   SECTION 2.7    INTEREST ..............................................    30
   SECTION 2.8    FEES ..................................................    30
   SECTION 2.9    PAYMENTS AND COMPUTATIONS .............................    31
   SECTION 2.10   CERTAIN PROVISIONS GOVERNING THE LOANS ................    32
   SECTION 2.11   CAPITAL ADEQUACY ......................................    35
   SECTION 2.12   SUBSTITUTION OF LENDERS ...............................    36
   SECTION 2.13   TAXES .................................................    37
   SECTION 2.14   PRO RATA TREATMENT AND PAYMENTS .......................    41

ARTICLE III CONDITIONS TO CLOSING AND FUTURE FUNDINGS ...................    41
   SECTION 3.1    CONDITIONS PRECEDENT ..................................    41

ARTICLE IV REPRESENTATIONS AND WARRANTIES ...............................    46
   SECTION 4.1    ORGANIZATION, POWERS, QUALIFICATION; AIR CARRIER
                  LICENSES, FRANCHISES AND PERMITS ......................    46
   SECTION 4.2    AUTHORIZATION OF BORROWING, ETC. ......................    47
   SECTION 4.3    FINANCIAL CONDITION ...................................    48
   SECTION 4.4    NO MATERIAL ADVERSE EFFECT ............................    49
   SECTION 4.5    TITLE TO PROPERTIES; LIENS ............................    49
   SECTION 4.6    LITIGATION: ADVERSE FACTS .............................    49
   SECTION 4.7    TAX RETURNS ...........................................    50
   SECTION 4.8    NO DEFAULT OR EVENT OF DEFAULT ........................    50
   SECTION 4.9    GOVERNMENTAL REGULATION ...............................    50
   SECTION 4.10   EMPLOYEE BENEFIT PLANS ................................    50
   SECTION 4.11   COMPLIANCE WITH LAWS ..................................    50
   SECTION 4.12   SECURITY DOCUMENTS ....................................    51
   SECTION 4.13   CONCERNING THE COLLATERAL .............................    51
   SECTION 4.14   REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL
                  AGENT .................................................    53




                                                                          
ARTICLE V COVENANTS .....................................................    54
   SECTION 5.1    FINANCIAL STATEMENTS AND OTHER INFORMATION ............    54
   SECTION 5.2    CORPORATE EXISTENCE ...................................    56
   SECTION 5.3    PAYMENT OF TAXES ......................................    56
   SECTION 5.4    MAINTENANCE OF PROPERTIES; INSURANCE ..................    56
   SECTION 5.5    INSPECTION ............................................    57
   SECTION 5.6    COMPLIANCE WITH LAWS, ETC .............................    57
   SECTION 5.7    FURTHER ASSURANCES ....................................    57
   SECTION 5.8    EMPLOYEE BENEFIT PLANS ................................    58
   SECTION 5.9    FAA MATTERS; CITIZENSHIP ..............................    58
   SECTION 5.10   DELIVERY OF POST-RECORDING FAA OPINION ................    58
   SECTION 5.11   SOFTWARE ..............................................    58
   SECTION 5.12   COMPLIANCE WITH MORTGAGE ..............................    58
   SECTION 5.13   PROHIBITION ON LIENS ..................................    58
   SECTION 5.14   MERGER OR CONSOLIDATION ...............................    61
   SECTION 5.15   CERTAIN APPROVALS UNDER THE ATSB LOAN AGREEMENT .......    61

ARTICLE VI EVENTS OF DEFAULT ............................................    61
   SECTION 6.1    EVENTS OF DEFAULT .....................................    61
   SECTION 6.2    REMEDIES ..............................................    63

ARTICLE VII THE LOAN AGENT AND THE COLLATERAL AGENT .....................    64
   SECTION 7.1    AUTHORIZATION AND ACTION ..............................    64
   SECTION 7.2    AGENT'S RELIANCE, ETC .................................    65
   SECTION 7.3    AGENT AND AFFILIATES ..................................    65
   SECTION 7.4    REPRESENTATIONS OF THE LENDERS ........................    66
   SECTION 7.5    EVENTS OF DEFAULT .....................................    66
   SECTION 7.6    LOAN AGENT'S AND COLLATERAL AGENT'S RIGHT TO
                  INDEMNITY .............................................    66
   SECTION 7.7    INDEMNIFICATION OF LOAN AGENT AND COLLATERAL AGENT ....    66
   SECTION 7.8    SUCCESSOR LOAN AGENT AND COLLATERAL AGENT .............    67
   SECTION 7.9    COLLATERAL AND GUARANTEE MATTERS ......................    67

ARTICLE VIII GUARANTEE ..................................................    68
   SECTION 8.1    GUARANTEE .............................................    68
   SECTION 8.2    NO SUBROGATION ........................................    68
   SECTION 8.3    AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS ......    69
   SECTION 8.4    GUARANTEE ABSOLUTE AND UNCONDITIONAL ..................    69
   SECTION 8.5    REINSTATEMENT .........................................    70
   SECTION 8.6    PAYMENTS ..............................................    70

ARTICLE IX MISCELLANEOUS ................................................    71
   SECTION 9.1    AMENDMENTS, WAIVERS, ETC ..............................    71
   SECTION 9.2    SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND
                  ASSIGNMENTS ...........................................    72
   SECTION 9.3    COSTS AND EXPENSES ....................................    75
   SECTION 9.4    INDEMNITIES ...........................................    75
   SECTION 9.5    RIGHT OF SET-OFF ......................................    76




                                       ii



                                                                          
   SECTION 9.6    JOINT AND SEVERAL LIABILITY; MAXIMUM LIABILITY;
                  WAIVER OF SUBROGATION .................................    76
   SECTION 9.7    SHARING OF PAYMENTS, ETC ..............................    78
   SECTION 9.8    NOTICES, ETC ..........................................    79
   SECTION 9.9    NO WAIVER; REMEDIES ...................................    79
   SECTION 9.10   GOVERNING LAW .........................................    79
   SECTION 9.11   SUBMISSION TO JURISDICTION; SERVICE OF PROCESS ........    79
   SECTION 9.12   WAIVER OF JURY TRIAL ..................................    80
   SECTION 9.13   MARSHALING; PAYMENTS SET ASIDE ........................    80
   SECTION 9.14   SECTION TITLES ........................................    80
   SECTION 9.15   EXECUTION IN COUNTERPARTS .............................    81
   SECTION 9.16   SEVERABILITY ..........................................    81
   SECTION 9.17   CONFIDENTIALITY .......................................    81
   SECTION 9.18   APPOINTMENT OF INDENTURE TRUSTEE ......................    82



Annexes

Annex A - Notice Addresses
Annex B - Lending Office
Annex C - Lender Commitments

Schedules

Schedule 1.1(a)  - Existing Pass Through Certificates
Schedule 1.1 (b) - Specified Engines
Schedule 4.12    - Financing Statements, Filings and Recordings
Schedule 5.13    - Liens

Exhibits

Exhibit A - Form of Assignment and Assumption
Exhibit B - Form of Note
Exhibit C - Form of Notice of Borrowing


                                      iii



          LOAN AGREEMENT, dated as of September 27, 2005, among US AIRWAYS,
INC., a Delaware corporation ("US Airways"), AMERICA WEST AIRLINES, INC., a
Delaware corporation ("America West", and together with US Airways, the
"Borrowers", and each, a "Borrower"); US AIRWAYS GROUP, INC., a Delaware
corporation, as guarantor (the "Guarantor"); AIRBUS FINANCIAL SERVICES as the
initial lender (together with its successors and permitted assigns, the "Initial
Lender"), as loan agent for the Lenders (in such capacity, together with its
successors and permitted assigns, the "Loan Agent"), and WELLS FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, as collateral agent (in such capacity, together
with its successors and permitted assigns, the "Collateral Agent").

                                  WITNESSETH:

          WHEREAS, on September 12, 2004 (the "Petition Date"), the Guarantor
and each of its domestic subsidiaries as of such date, including US Airways
(collectively, the "Debtors") filed voluntary petitions (the "Cases") for relief
under the Bankruptcy Code with the United States Bankruptcy Court for the
Eastern District of Virginia, Alexandria Division (the "Bankruptcy Court") and
continued in possession of their property and in the management of their
businesses pursuant to Bankruptcy Code Sections 1107 and 1108;

          WHEREAS, on May 19, 2005, the Guarantor, Barbell Acquisition Corp., a
Delaware corporation and Wholly-Owned Subsidiary of the Guarantor (the "Merger
Sub"), and America West Holdings, Corporation entered into an Agreement and Plan
of Merger (the "Merger Agreement");

          WHEREAS, (x) the Bankruptcy Court has entered an order (the
"Confirmation Order") confirming the Plan of Reorganization under Chapter 11 of
the Bankruptcy Code (as in effect on the date of confirmation thereof pursuant
to the Confirmation Order, the "Plan of Reorganization") and (y) the Effective
Time (as defined in the Merger Agreement) has occurred, and the Borrowers have
requested that the Lenders make available to the Borrowers the Loans for the
purposes specified herein; and

          WHEREAS, the Lenders are willing to make available to the Borrowers
the Loans upon the terms and subject to the conditions set forth herein;

          NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:

                                    ARTICLE I

                DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

          SECTION 1.1 DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):



          "A319/A320/A321 Purchase Agreement" means the A319/A320/A321 Purchase
Agreement, dated as of October 31, 1997, as amended, between AVSA, S.A.R.L. and
the Guarantor.

          "A319/A320 Purchase Agreement" means the A319/A320 Purchase Agreement,
dated as of September 12, 1997, as amended, between AVSA, S.A.R.L. and America
West.

          "A330/A340 Purchase Agreement" means the A330/A340 Purchase Agreement
dated as of November 24, 1998, as amended, between AVSA, S.A.R.L. and the
Guarantor.

          "A321 Airbus Financings" mean the note purchase agreements, trust
indenture and mortgages, secured notes and related loan documents entered into
between Aviateur International Limited, as initial lender, and certain
Affiliates, on the one hand, US Airways Inc., on the other hand, and U.S. Bank
National Association (as successor in interest to State Street Bank and Trust
Company of Connecticut, N.A.), as Indenture Trustee, as amended or supplemented
from time to time, providing for the mortgage loan financing of five (5) Airbus
A321 model aircraft bearing FAA registration numbers N184US, N185UW, N186US,
N187US and N188US, respectively.

          "A321 Aircraft" means, individually or collectively as the context may
require, the Airbus A321 aircraft having FAA registration numbers N184US,
N185UW, N186US, N187US, and N188US.

          "A350/A340 Financing Letter Agreement" means the A350/A330 Financing
Letter Agreement dated as of September 27, 2005 as amended, among AVSA, S.A.R.L.
and the Obligors.

          "Actual Knowledge" means, with respect to any Person, actual knowledge
of a vice president or more senior officer of such Person or any other officer
of such Person having responsibility for the transactions contemplated by the
Loan Documents.

          "Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

          "Aggregate Original Principal Amount" means the aggregate outstanding
principal amount of the Loans on the earliest of (x) the close of business on
December 31, 2007, (y) the date the Commitments are fully utilized and (z) the
date when the Commitments are terminated.

          "Agreement" means this Loan Agreement.

          "Airbus" means Airbus S.A.S.


                                       2



          "Aircraft Mortgage" means the five (5) Trust Indenture and Mortgages
dated the date hereof between US Airways and US Bank National Association, as
Indenture Trustee, providing for second mortgages on the A321 Aircraft, as
supplemented or amended from time to time.

          "Aircraft Related Equipment" means aircraft (including aircraft
engines installed thereon) in the fleet of any Obligor or any of their
Subsidiaries, spare aircraft engines and propellers, spare parts, aircraft
parts, simulators and other training devices, and passenger loading bridges or
other flight or ground equipment and Aircraft Related Facilities.

          "Aircraft Related Facilities" means (i) airport terminal facilities,
including without limitation, baggage systems, loading bridges and related
equipment, building, infrastructure and maintenance, club rooms, apron, fueling
systems or facilities, signage/image systems, administrative offices,
information technology systems and security systems, (ii) airline support
facilities, including without limitation, cargo, catering, mail, ground service
equipment, ramp control, deicing, hangars, aircraft parts/storage, training and
reservations facilities and (iii) all equipment used in connection with the
foregoing.

          "Applicable Interest Rate" means, for each Loan and for each Interest
Period, a rate per annum equal to LIBOR for such Interest Period plus the
Applicable Margin.

          "Applicable Margin" means [...***...]% per annum; provided, however,
that on each of (A) the [...***...] anniversary of the Closing Date, and (B) on
the [...***...] anniversary of the Closing Date (each an "Applicable Margin
Determination Date"), the Applicable Margin shall be reviewed and adjusted or
not adjusted based on the most recently published corporate credit rating
assigned by S&P to the Guarantor and its consolidated subsidiaries, taken
together, as follows: for each grade (for illustration purposes, the change from
B to B+ or to B- being a single grade) by which such credit rating is lower
than, or higher than, B, the Applicable Margin shall be increased or decreased,
respectively, by [...***...]%; provided, further, that, notwithstanding the
foregoing, the Applicable Margin shall not be higher than [...***...]% per annum
or lower than [...***...]% per annum.

          "Asset Sale" means, with respect to any property, any sale, transfer
or other disposition (including by way of merger, consolidation, exchange of
assets or sale leaseback transactions or by reason of any condemnation or other
taking or permanent requisition) of such property, in one transaction or a
series of related transactions, by any Obligor or any of its Subsidiaries to any
Person other than such Obligor or any of its Subsidiaries; provided that sales
of spare parts subject to the Lien of the Spare Parts Mortgage which are made
pursuant to Section 3.02(b)(4) thereof shall not constitute Asset Sales.

*** CONFIDENTIAL TREATMENT REQUESTED

                                       3




          "Assignment and Assumption" means an Assignment and Assumption entered
into by a Lender and an Assignee, in substantially the form of Exhibit A or any
other form approved by the Loan Agent.

          "ATSB" means the Air Transportation Stabilization Board, or any
successor thereto.

          "ATSB Loan Agreements" means (i) the Amended and Restated Loan
Agreement, dated as of September 27, 2005, among US Airways, the Guarantor, the
other subsidiaries of the Guarantor party thereto, the lenders from time to time
party thereto, the Loan Administrator and agents party thereto, and the ATSB,
and (ii) the Amended and Restated Loan Agreement, dated as of September 27,
2005, among America West, the Guarantor, the other subsidiaries of the Guarantor
party thereto, the lenders from time to time party thereto, the Loan
Administrator and agents party thereto, and the ATSB, each as in effect on the
Closing Date.

          "AWA Holdings" means America West Holdings Corporation.

          "Bankruptcy Code" means Title 11 of the United States Code as now and
hereafter in effect, or any successor statute.

          "Bankruptcy Court" has the meaning specified in the recitals hereto.

          "Borrower" has the meaning specified in the preamble to this
Agreement.

          "Borrowing" means the borrowing of a Loan on the Closing Date or on
another Funding Date.

          "Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks in New York, New York, Dublin, Ireland, or
Phoenix, Arizona are authorized or required by law to remain closed; provided
that when used in connection with LIBOR, the term "Business Day" shall mean any
day on which banks in London, England are open for dealings in dollar deposits
in the interbank market.

          "Business Plan" means the business plan of the Borrowers dated as of
July 7, 2005, provided to the Loan Agent.

          "Cape Town Convention" means the Convention on International Interests
in Mobile Equipment and the Protocol to the Convention on Matters Specific to
Aircraft Equipment signed in Cape Town on 16 November 2001.

          "Capital Lease," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person, and the amount of Indebtedness represented by such
lease shall be the capitalized amount of the obligations evidenced thereby
determined in accordance with GAAP.


                                       4



          "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock, whether now outstanding or
issued after the date of this Agreement.

          "Cases" has the meaning specified in the recitals hereto.

          "Cash" means money, currency or a credit balance.

          "Cash Equivalents" has the meaning given in the ATSB Loan Agreements.

          "Closing Date" means the date of this Agreement.

          "Code" means the Internal Revenue Code of 1986, as amended to the date
hereof and from time to time hereafter.

          "Collateral" means the property comprising the collateral security
provided by the Collateral Documents.

          "Collateral Documents" means, collectively, (i) the Aircraft
Mortgages, as amended or supplemented from time to time, (ii) the Spare Parts
Mortgage and Security Agreement, (iii) the Engine Mortgage and Security
Agreement, (iv) the Purchase Agreement Security Agreement, and (v) such other
security documents as may be executed and delivered by the Obligors pursuant to
the terms of Section 5.6.

          "Commitments" is a collective reference to the Tranche A Commitments,
the Tranche B Commitments, the Tranche C Commitments, the Tranche D Commitments
and the Tranche E Commitments. The initial aggregate amount of the Commitments
is $0,000,000.

          "Commodity Agreement" means any agreement or arrangement designed to
protect any Obligor or any of their Subsidiaries against fluctuations in the
prices of commodities used by any Obligor or any of their Subsidiaries in the
ordinary course of its business.

          "Confirmation Order" has the meaning specified in the recitals hereto.

          "Consummation of the Plan" means substantial consummation of the Plan
of Reorganization within the meaning of Section 1101(2) of the Bankruptcy Code.

          "Contractual Obligation," as applied to any Person, means any
provision of any equity security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
material instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.

          "Cross-Collateral" shall mean (i) all collateral security supporting
payment of the Cross-Default Obligations, and (ii) all right, title and
interest, if any, of


                                        5



any Obligor in, to or with respect to predelivery payments or deposits made
under any aircraft purchase agreement between any Obligor or any of its
Affiliates, on the one hand, and Airbus or any of its Affiliates, on the other
hand.

          "Cross-Default Obligations" means all Obligations of any Obligor (i)
held, directly or indirectly (through a trustee or otherwise) by Airbus or any
Affiliate under or with respect to (A) the A321 Airbus Financings, or (B) the
Other Loan Agreement or any other lease, loan, trade receivable, or other
extension of credit between Airbus or any of its Affiliates, on the one hand,
any Obligor or any of its Affiliates, on the other hand, whether such lease,
loan, trade receivable, or other extension of credit is direct or is indirect
through a lease, structured financing or otherwise, including without
limitation, any Pass Through Certificates listed on Schedule 1.1(a) or acquired
in an original issuance after the Closing Date, or (C) any aircraft purchase
agreement between any Obligor, on the one hand, and Airbus or any of its
Affiliates, on the other hand, or (ii) under any Principal Credit Facility. For
purposes of this definition, the term "Obligations" shall mean with respect to
any of the agreements referred to in clauses (A), (B) or (C) of the preceding
sentence, the unpaid principal of and interest thereon (including interest
accruing after the maturity thereof and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Obligor, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
and all other obligations and liabilities of the Obligors thereunder, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
therewith, or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise.

          "Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect any Obligor or any of its
Subsidiaries against fluctuations in currency values.

          "Debtors" has the meaning specified in the recitals thereto.

          "Default" means any event which with the passing of time or the giving
of notice or both would, unless cured or waived, become an Event of Default.

          "Designated Locations" has the meaning specified in the Spare Parts
Security Agreement.

          "Dollars" and the sign "$" each mean the lawful money of the United
States of America.

          "Effective Date" means the date on which the conditions precedent set
forth in Section 3.1(a), (j) and (p) have been satisfied, but not later than
December 2, 2005.


                                       6



          "Engine Mortgage and Security Agreement" means the Engine Mortgage and
Security Agreement dated as of the date hereof between America West and the
Collateral Agent.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

          "ERISA Affiliate" means, as applied to either Borrower, (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code of which such
Borrower is a member; (ii) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Code of which such Borrower is a member;
and (iii) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Code of which such Borrower, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member.

          "ERISA Event" means (a) any "reportable event," as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which reporting is waived); (b) the existence with respect to
any Plan of an "accumulated funding deficiency" (as defined in Section 412 of
the Code or Section 302 of ERISA); (c) the filing pursuant to Section 412(d) of
the Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (d) the incurrence by
Guarantor or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (e)(i) the receipt by
Guarantor or any ERISA Affiliate from the PBGC of a notice of determination that
PBGC intends to seek termination of any Plan or to have a trustee appointed for
any Plan, or (ii) the filing by Guarantor or any ERISA Affiliate of a notice of
intent to terminate any Plan; (f) the incurrence by Guarantor or any of its
ERISA Affiliates of any liability (i) with respect to the withdrawal from a
Multiemployer Plan pursuant to Sections 4063 and 4064 of ERISA, (ii) with
respect to a facility closing pursuant to Section 4062(e) of ERISA, or (iii)
with respect to the withdrawal or partial withdrawal from any Multiemployer
Plan; or (g) the receipt by Guarantor or any ERISA Affiliate of any notice
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

          "Event of Default" has the meaning specified in Section 6.1.

          "Event of Loss" has the meaning specified in the Engine Mortgage and
Security Agreement or in the Aircraft Mortgages.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

          "Excluded Taxes" has the meaning specified in Section 2.13(a).

          "FAA" means the Federal Aviation Administration.


                                       7



          "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.

          "Final Order" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket in the Cases or
the docket of any other court of competent jurisdiction, that has not been
reversed, stayed, modified or amended, and as to which the time to appeal or
seek reargument, reconsideration, or certiorari has expired and no appeal,
motion for reconsideration or reargument or petition for certiorari has been
timely taken, or as to which any appeal that has been taken or any petition for
certiorari, motion for reconsideration or reargument that has been or may be
filed has been resolved by the highest court to which the order or judgment was
appealed or from which reargument, reconsideration, or certiorari was sought and
the time to take any further appeal, petition for certiorari or move for
reargument shall have expired.

          "Fiscal Year" means the Borrowers' fiscal year referenced in the
financial statements to be delivered by the Borrowers pursuant to Section 5.1.

          "Funding Date" means each date on which one or more Borrowings of
Loans is made in accordance with Sections 2.1 and 2.2.

          "GAAP" means generally accepted accounting principles in the United
States of America.

          "GECC" means General Electric Capital Corporation.

          "Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government.

          "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such first Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), including any pledge of assets to secure
indebtedness of another or (iii) to maintain working capital, equity capital or
any other financial statement condition or liquidity or level of income or cash
flow of such other Person so as to enable such Person to pay such Indebtedness.
The term "Guarantee" used as a verb has a corresponding meaning.

          "Guarantor" has the meaning specified in the preamble to this
Agreement.


                                       8



          "Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all obligations of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto); (iv) all obligations of such
Person to pay the deferred purchase price of property or services, which
purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion of
such services, except (x) Trade Payables and similar obligations incurred in the
ordinary course of business and (y) earn-outs and other contingent payouts in
respect of acquisitions; (v) all Capital Lease obligations of such Person (the
amount of the Indebtedness in respect of Capital Lease obligations to be
determined as provided in the definition of Capital Lease in this Section 1.1);
(vi) all Indebtedness of other Persons secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person; provided
that in the case of Indebtedness issued without recourse to such Persons, the
amount of such Indebtedness shall be the lesser of (A) the fair market value of
such asset at such date of determination and (B) the stated principal amount of
such Indebtedness, provided, however, that if such Indebtedness is assumed by
such Person or provides for recourse against such Person, the amount of such
Indebtedness shall be the greater of (A) and (B) above; (vii) all Indebtedness
of other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person; (viii) to the extent not otherwise included in this
definition and to the extent treated as a liability under GAAP, obligations
under Currency Agreements, Interest Rate Agreements and Commodity Agreements
(ix) the capitalized amount of remaining lease payments owing by such Person
under Synthetic Leases that would appear on the balance sheet of such Person if
such lease were treated as a Capital Lease; (x) the aggregate amount of
uncollected accounts receivable of such Person subject at such time to a sale of
receivables (or similar transaction) to the extent such transaction is effected
with recourse to such Person (whether or not such transaction would be reflected
on the balance sheet of such Person in accordance with GAAP); (xi) the
Indebtedness of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer to the extent such Indebtedness
is recourse to such Person; and (xii) all prepaid forward sales in bulk of
dividend miles or available seat miles or like transactions other than in the
ordinary course of business. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date; provided that the amount outstanding at any time of any Indebtedness
issued with original issue discount is the face amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP. "Indemnified
Liabilities" has the meaning specified in Section 9.4.

          "Indemnified Taxes" has the meaning specified in Section 2.13(a).

          "Indemnitees" has the meaning specified in Section 9.4.


                                       9



          "Indenture Trustee" means U.S. Bank National Association, Indenture
Trustee under the Aircraft Mortgages, and its successors.

          "Initial Lender" has the meaning specified in the preamble to this
Agreement.

          "Intercreditor Agreement" means the intercreditor agreement with GECC
as described in Section 3.1(c)(3).

          "Interest Payment Date" has the meaning specified in Section 2.7(b).

          "Interest Period" means, for each Loan, (a) made on the first Funding
Date, the period commencing on September 26, 2005 and ending three months
thereafter, (b) with respect to any other initial funding of a Loan, the period
commencing on the initial Funding Date for such Loan and ending on the last day
of the current Interest Period for any other Tranche then outstanding, or if no
other Tranche is then outstanding, ending three months after the initial Funding
Date, and (c) thereafter, a period commencing on the last day of the immediately
preceding Interest Period therefor and ending three months thereafter; provided,
however, that:

               (i) the final scheduled Interest Period shall end on the Loan
     Maturity Date;

               (ii) if any Interest Period would otherwise end on a day which is
     not a Business Day, such Interest Period shall be extended to the next
     succeeding Business Day, unless the result of such extension would be to
     extend such Interest Period into another calendar month, in which event
     such Interest Period shall end on the immediately preceding Business Day
     and for the avoidance of doubt, interest computation shall be adjusted
     accordingly;

               (iii) any Interest Period that begins on the last Business Day of
     a calendar month (or on a day for which there is no numerically
     corresponding day in the calendar month at the end of such Interest Period)
     shall end on the last Business Day of a calendar month; and

               (iv) each "Interest Period" beginning after the occurrence and
     during the continuance of an Event of Default shall be for a period
     duration of one month.

          "Interest Rate Agreement" means any interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement designed to protect any Obligor or any of
their Subsidiaries against fluctuations in interest rates or under which any
Obligor or any of their Subsidiaries is a party or a beneficiary on the date of
this Agreement or becomes a party or a beneficiary thereafter.


                                       10



          "IRS" means the Internal Revenue Service of the United States or any
successor thereto.

          "Lenders" mean (i) the Initial Lender, and (ii) each financial
institution or other entity that from time to time becomes a party hereto as a
lender hereunder pursuant to an Assignment and Assumption, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and Assumption
or otherwise.

          "Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Lending Office" opposite its name on Annex B or on the
Assignment and Assumption by which it became a Lender or such other office of
such Lender as such Lender may from time to time specify to the Borrowers and
the Loan Agent.

          "LIBOR" means the rate per annum (rounded to the nearest 1/100 of 1%)
equal to the quotation that appears on page 3750 of the Telerate Screen (or
otherwise on such screen or on such other screen, page or service as may replace
the Telerate Screen) as of 11:00 A.M., London time, two Business Days prior to
the beginning of the applicable Interest Period as the rate for dollar deposits
to be delivered on the first day of such Interest Period and maintained for such
Interest Period (or, in the case of the initial Interest Period, for three
months) in an amount comparable to the principal amount of the Loan. In the
event that such rate does not so appear on the Telerate Screen (or otherwise as
aforesaid), the "LIBOR" for purposes of this definition shall be the arithmetic
average (rounded to the nearest 1/100 of 1%) of the offered quotation to
first-class banks in the interbank Eurodollar market by each Reference Bank in
London for dollar deposits of amounts in same day funds comparable to the
principal amount of the Loan, with maturities comparable to the applicable
Interest Period (or, in the case of the initial Interest Period, for three
months) determined as of 11:00 A.M. (London time) on the date which is two
Business Days prior to the commencement of such Interest Period. If any one or
more of the Reference Banks shall not furnish such timely information to the
Loan Agent for the purpose of determining any such interest rate, the Loan Agent
shall determine such interest rate on the basis of timely information furnished
by the remaining Reference Bank or Reference Banks.

          "Lien" means, with respect to any asset, any lien, mortgage, pledge,
assignment for security purposes, security interest, charge, hypothecation,
lease or encumbrance of any kind on or of such asset (including any conditional
sale or other title retention agreement and any lease in the nature thereof, any
easement, right of way or other encumbrance on title to real property and any
agreement to give any security interest). "Loan" means any loan made by a Lender
pursuant to this Agreement.

          "Loan Agent" has the meaning specified in the preamble to this
Agreement.

          "Loan Documents" means, collectively, this Agreement, the Notes, the
Other Loan Agreement, the Other Loan Agreement Notes, the Collateral Documents,
the Intercreditor Agreement and each certificate, agreement or document executed
by the


                                       11



Borrowers and delivered to the Loan Agent or the Lenders in connection with or
pursuant to this Agreement.

          "Loan Maturity Date" means December 31, 2010, except that if such date
is not a Business Day, then the Loan Maturity Date shall be the immediately
succeeding Business Day.

          "Material Adverse Change" means a material adverse change in the
financial condition of any Obligor between the Effective Date and the date of
provision of the relevant Loan which would materially and adversely affect such
Obligor's ability to perform any of its payment or other material obligations
under any Loan Document.

          "Merger Agreement" has the meaning specified in the recitals hereto.

          "Merger Sub" has the meaning specified in the recitals hereto.

          "Material Adverse Effect" means, with respect to the Obligors, (a) an
event of the type described in Section 6.1(f) or 6.1(g), or (b) the cessation of
commercial passenger service by either Borrower for a period of ten Business
Days, other than as a result of the action of any Governmental Authority, or (c)
a material adverse effect on (i) the validity or enforceability of any material
provision of this Agreement or any of the other Loan Documents or any of the
material rights or remedies of the Loan Agent, the Collateral Agent or the
Lenders hereunder or thereunder, or (ii) the Lien of the Collateral Documents.

          "MOU" means that certain Memorandum of Understanding between AVSA,
S.A.R.L., the Guarantor, and the Borrowers, dated as of May 18, 2005.

          "Multiemployer Plan" means a multiemployer plan as defined Section
4001(a)(3) of ERISA, and in respect of which Guarantor or any ERISA Affiliate is
(or with the application of Section 4212(c) of ERISA would be) (a) an "employer"
as defined in Section 3(5) of ERISA or (b) a "seller" as defined in Section 4204
of ERISA.

          "Net Cash Proceeds" means, with respect to any Asset Sale, the cash
proceeds of such Asset Sale, net of (i) reasonable and customary brokerage
commissions and other reasonable and customary fees and expenses (including
reasonable fees and expenses of counsel, investment bankers, accountants and
other professionals, consultants and advisors) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale without regard
to the consolidated results of operations of Guarantor, the Borrowers and their
respective Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
(or any related expenses required to be paid to third parties pursuant to
documentation related to the financing of the assets subject to such Asset Sale)
that (A) is secured by a Lien on the property or assets sold and (B) is required
by its terms to be paid as a result of such Asset Sale and (iv) appropriate
amounts to be provided by any Obligor as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset


                                       12



Sale, all as determined in conformity with GAAP, but limited to the period of
the required reserve.

          "Net Insurance Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor under any casualty insurance policy
in respect of a covered loss thereunder with respect to tangible, real or
personal property, minus (ii) (a) any actual and reasonable costs incurred by an
Obligor in connection with the adjustment or settlement of any claims of an
Obligor in respect thereof (including reasonable fees and expenses of counsel),
(b) provisions for all taxes payable as a result of such event without regard to
the consolidated results of operations of Guarantor, the Borrowers and their
respective Subsidiaries, taken as a whole, (c) the amount of any Indebtedness
secured by a Lien on any property subject to such covered loss and any related
expenses of third parties, in each case, required by the documentation related
to such Indebtedness to be discharged or paid from the proceeds thereof and (d)
any amounts required to be paid to any Person (other than an Obligor) owning a
beneficial interest in the property subject to such loss.

          "Non-Consenting Lender" has the meaning specified in Section 9.1(c).

          "Non-U.S. Person" means a Person that is not a United States person as
defined in section 7701(a)(30) of the Code.

          "Note" has the meaning specified in Section 2.4(d).

          "Notice of Borrowing" has the meaning specified in Section 2.2(a).

          "Obligations" means the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Obligor, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Obligors to the Loan
Agent, the Collateral Agent, the Indenture Trustee or to any Lender, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement or any other Loan Document, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees, charges and disbursements of counsel to the Loan
Agent, the Collateral Agent or to any Lender that are required to be paid by any
Obligor pursuant hereto) or otherwise.

          "Obligor" means Guarantor or either Borrower.

          "Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer), president, one of its vice presidents, chief financial officer,
controller, treasurer or assistant treasurer or an assistant secretary.

          "Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any


                                       13



property (whether real, personal or mixed) under which such Person is Lessee,
that is not a Capital Lease.

          "Other Loan Agreement" means, the Loan Agreement, dated as the date
hereof, among the parties hereto, providing for secured loans in the maximum
amount of $161,000,000.

          "Other Loan Agreement Loans" means the "Loans" (as defined in the
Other Loan Agreement).

          "Other Loan Agreement Loan Agent" means the "Loan Agent" (as defined
in the Other Loan Agreement).

          "Other Loan Agreement Notes" means the "Notes" (as defined in the
Other Loan Agreement).

          "Other Loan Agreement Tranche A Commitment Reduction Amount" shall
mean the "Tranche A Commitment Reduction Amount", as defined in the Other Loan
Agreement.

          "Other Loan Agreement Tranche B Commitment Reduction Amount" shall
mean the "Tranche B Commitment Reduction Amount", as defined in the Other Loan
Agreement.

          "Other Loan Agreement Tranche C Commitment Reduction Amount" shall
mean the "Tranche C Commitment Reduction Amount", as defined in the Other Loan
Agreement.

          "Other Loan Agreement Tranche D Commitment Reduction Amount" shall
mean the "Tranche D Commitment Reduction Amount", as defined in the Other Loan
Agreement.

          "Other Loan Agreement Tranche E Commitment Reduction Amount" shall
mean the "Tranche E Commitment Reduction Amount", as defined in the Other Loan
Agreement.

          "Other Obligations" means the "Obligations" (as defined in the Other
Loan Agreement).

          "Other Taxes" has the meaning specified in Section 2.13(b).

          "Participant" has the meaning specified in Section 9.2(c)(i).

          "Pass Through Certificates" means the US Airways 2001-1C Trust
Certificates and any other certificates issued under a similarly structured
financing sponsored by an Obligor or an Affiliate thereof. References to amounts
"due and payable" on a given date, when used with respect to Pass Through
Certificates shall refer to amounts legally due and payable thereunder or to
amounts expected to be distributed


                                       14



on or before such date to the holders thereof, and "default" when used with
respect to Pass Through Certificates shall have a correlative meaning.

          "Permitted Acquisition Financing" means Indebtedness incurred by an
Obligor in connection with an acquisition, merger or consolidation which is
permitted under Section 6.5 and/or 6.9 (as applicable) of the ATSB Loan
Agreements if and to the extent used (i) to refinance existing Indebtedness of
the Person acquired or Indebtedness secured by the assets acquired or (ii) to
pay consideration or related expenses in connection with such transaction.

          "Permitted Encumbrances" means the following types of Liens (other
than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Code
or by ERISA) as applied to property

               (i) Liens for taxes, assessments or governmental charges or
     claims the payment of which is either (a) not delinquent for a period of
     more than 30 days or (b) being contested in good faith by appropriate
     proceedings, if such reserve or other appropriate provision, if any, as
     shall be required by GAAP shall have been made therefor, as set forth in
     Section 5.3;

               (ii) statutory Liens of landlords and Liens of carriers, vendors,
     warehousemen, repairmen, mechanics and materialmen and other Liens imposed
     by law incurred in the ordinary course of business for sums either (a) not
     delinquent for a period of more than thirty (30) days or (b) being
     contested in good faith by appropriate proceedings, if such reserve or
     other appropriate provision, if any, as shall be required by GAAP shall
     have been made therefor;

               (iii) (A) Liens incurred or deposits (other than with respect to
     the Plans described in Section 4.10) made in the ordinary course of
     business in connection with workers' compensation, unemployment insurance
     and other types of social security, or to secure the performance of
     tenders, statutory obligations, surety and appeal bonds, bids, leases,
     government contracts, trade contracts, performance and return-of-money
     bonds, reimbursement obligations and chargeback rights of Persons
     performing services for an Obligor or a Subsidiary of an Obligor (including
     Liens securing Trade Payables arising from the Obligors' and their
     Subsidiaries' use in the ordinary course of business, consistent with past
     practice, of credit advance facilities to purchase goods and services) and
     other similar obligations (exclusive of obligations for the payment of
     borrowed money) and (B) Liens arising or granted in the ordinary course of
     business in favor of Persons performing credit card processing services,
     travel charge processing services or clearinghouse services for any Obligor
     or any of their Subsidiaries, including IATA, Diners Club, Discover Card,
     NPC, ARC and American Express, so long as such Liens are on cash and Cash
     Equivalents that are subject to holdbacks


                                       15



     by, or are pledged (in lieu of such holdbacks) to, such Persons to secure
     amounts that may be owed to such Persons under the Obligors' or their
     Subsidiaries' agreements with them in connection with their provision of
     credit card processing, travel charge processing or clearinghouse services
     to the Obligors or any of their Subsidiaries;

               (iv) with respect to real property, easements, rights-of-way,
     restrictions, minor defects, encroachments or irregularities in title and
     other similar charges or encumbrances not interfering in any material
     respect with the ordinary conduct of the business of an Obligor or any of
     its Subsidiaries;

               (v) Liens in favor of customs and revenue authorities arising as
     a matter of law to secure payment of customs duties in connection with the
     importation of goods in the ordinary course of business;

               (vi) any interest or title of a lessor in property leased by an
     Obligor or any of their Subsidiaries under any Capital Lease obligation or
     Operating Lease which, in each case, is not prohibited under this
     Agreement;

               (vii) Liens in favor of collecting or payor banks and other banks
     providing cash management services, in each case, having a right of setoff,
     revocation, refund or chargeback against money or instruments of any
     Obligor or any of their Subsidiaries on deposit with or in possession of
     such bank arising for the payments of bank fees and other similar amounts
     owed in the ordinary course of business;

               (viii) Liens of creditors of any Person to whom any Obligor's or
     any of their Subsidiaries' assets are consigned for sale in the ordinary
     course of business;

               (ix) Liens incurred or deposits made in connection with the Trust
     Agreements;

               (x) any renewal of or substitution for any Lien permitted by any
     of the preceding clauses,; provided that the Indebtedness secured is not
     increased nor the Lien extended to any additional assets;

               (xi) licensing or sublicensing of intellectual property in the
     ordinary course of business of the Obligors or their Subsidiaries;

               (xii) Liens arising from precautionary UCC and similar financing
     statements relating to Operating Leases not otherwise prohibited under any
     Loan Document; and


                                       16



               (xiii) Liens created under the Collateral Documents.

          "Permitted Invoice" means invoices for amounts due in respect of goods
and services purchased by the Guarantor or any of its Affiliates from Airbus or
any of its Affiliates.

          "Permitted Refinancing Indebtedness" has the meaning given in the ATSB
Loan Agreements.

          "Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.

          "Petition Date" has the meaning specified in the recitals hereto.

          "Plan" means any "employee benefit plan" as defined in section 3(3) of
ERISA which is, or was at any time, maintained or contributed to or required to
be contributed to by the Borrowers or any of their ERISA Affiliates, other than
a multiemployer plan, within the meaning of section 4001(a)(3) of ERISA.

          "Plan Effective Date" means the date on which the Plan of
Reorganization became effective as provided therein.

          "Plan of Reorganization" has the meaning specified in the recitals
hereto.

          "Pledged Engines" means the "Engines" (as defined in the Engine
Mortgage and Security Agreement).

          "Pledged Spare Parts" has the meaning specified in the Spare Parts
Mortgage and Security Agreement.

          "Principal Credit Facility" shall mean, for any Obligor, (i) any
credit agreement to which it is a party guaranteed (or otherwise supported) in
whole or in part by the ATSB, and (ii) from and after the date on which any such
ATSB credit facility of a Borrower is repaid, refinanced or replaced, the
refinancing or replacing credit, note, bond or other loan facility (or, in the
absence of, or after the repayment, refinancing or replacement of, any such
refinancing or replacing facility, then the largest recourse credit, note or
other loan or note facility or issuance of the relevant Obligor from time to
time), other than any such facility or issuance which is secured by and is for
the purpose of financing or refinancing Aircraft Related Equipment and other
than any such facility or issuance which cannot be accelerated or terminated
upon nonperformance or default thereunder.

          "Pro Forma Balance Sheet" has the meaning given in Section 4.3(a).

          "Proposed Change" has the meaning specified in Section 9.1(c).


                                       17



          "Purchase Agreement Security Agreement" means the Purchase Agreement
Security Agreement, dated as of the date hereof, between the Borrower and the
Collateral Agent.

          "Reference Banks" means Citibank, N.A., Calyon and JPMorgan Chase
Bank, and each of their respective successors.

          "Register" has the meaning specified in Section 2.4(e).

          "Replacement Secured Financing" means any financing transaction,
whether structured as Indebtedness, sale-leaseback or otherwise, (a) which is
secured by any of the Obligors' (i) Slots, (ii) rotable, repairable and
expendable spare parts, (iii) aircraft, or (iv) spare engines, in each case
which immediately prior to such transaction constituted Collateral for purposes
of the ATSB Loan Agreements and (b) which satisfies the further definitional
requirements set forth in the ATSB Loan Agreements.

          "Requisite Lenders" means, collectively, Lenders having greater than
fifty percent (50%) of (i) the aggregate principal amount of Loans then
outstanding plus the aggregate unused Commitments then in effect or, (ii) prior
to the making of the initial Loan, the aggregate Commitments in effect.

          "Responsible Officer" means, with respect to any Person, any of the
Chief Executive Officer, Executive Vice Presidents and Chief Financial Officer
of such Person, but in any event, with respect to financial matters, the Chief
Financial Officer, Treasurer or Controller of such Person.

          "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto that is a nationally
recognized rating agency.

          "SEC" means the United States Securities and Exchange Commission, or
any United States Governmental Authority succeeding to the functions of such
Securities and Exchange Commission.

          "Senior Mortgages" shall mean each of the "Senior Engine Mortgage" and
the "Senior Spare Parts Mortgage," each as defined in the Spare Parts Mortgage
and Security Agreement or the Engine Mortgage and Security Agreement

          "Slot Regulations" means 49 U.S.C. Section 40103 and 14 C.F.R.
Sections 93.211 - 93.227, and any amendment, supplement or other modification
thereto, or successor, replacement or substitute federal law or regulation
concerning the right or operational authority to conduct landing or takeoff
operations at any airports.

          "Slots" means all of the rights and operational authority granted
under the Slot Regulations and now or hereafter acquired or held by each Obligor
to conduct one instrument flight rule landing or takeoff operation in a
specified time period at Ronald


                                       18



Reagan Washington National Airport, John F. Kennedy International Airport,
LaGuardia Airport, or any other airport.

          "Software" has the meaning specified in the Spare Parts Security
Agreement.

          "Solvent" means, with respect to any Person, that as of the date of
determination (a) the then fair saleable value of the business of such Person is
not less than the amount that will be required to pay the probable liabilities
on such Person's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and (c)
such Person does not intend to incur, or believes that it will not incur, debts
beyond its ability to pay such debts as they become due. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

          "Spare Parts Mortgage and Security Agreement" means the Spare Parts
Mortgage and Security Agreement dated as of the date hereof between America West
and the Collateral Agent.

          "Specified Engines" means the Pledged Engines listed on Schedule
1.1(b), each of which is eligible for the benefits of Section 1110 of the
Bankruptcy Code.

          "Subsidiary" means, with respect to any Person, any corporation,
partnership, association, limited liability company, trust or estate, joint
venture or other business entity of which more than 50% of the issued and
outstanding shares of Voting Stock at the time of determination are owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.

          "Taxes" means any and all present or future taxes, levies, fees,
duties, imposts, deductions, charges or withholdings of any nature, and all
interest, penalties and other liabilities thereon or computed by reference
thereto imposed, levied, collected, withheld or assessed by any Governmental
Authority.

          "Title 49" shall mean Title 49 of the United States Code, as amended
and in effect from time to time, and the regulations promulgated pursuant
thereto.

          "Trade Payables" means, with respect to any Person, any accounts
payable or any other Indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries and
arising in the ordinary course of business in connection with the acquisition of
goods or services.

          "Tranche" means a Tranche of the Loans, consisting of Tranche A Loans,
Tranche B Loans, Tranche C Loans, Tranche D Loans and Tranche E Loans.

          "Tranche A Loan" has the meaning specified in Section 2.1(a).


                                       19



          "Tranche A Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche A Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the Tranche A Commitments is initially zero; provided that the aggregate amount
of the Tranche A Commitments of the Lenders shall be automatically increased by
the Tranche A Commitment Increase Amount of the Lenders.

          "Tranche A Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche A Commitment Reduction Amount of the Lenders.

          "Tranche A Note" means a promissory note evidencing Tranche A Loans,
substantially in the form of Exhibit B hereto.

          "Tranche B Loan" has the meaning specified in Section 2.1(b).

          "Tranche B Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche B Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the Tranche B Commitments is initially zero; provided that the aggregate amount
of the Tranche B Commitments of the Lenders shall be automatically increased by
the Tranche B Commitment Increase Amount of the Lenders.

          "Tranche B Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche B Commitment Reduction Amount of the Lenders.

          "Tranche B Note" means a promissory note evidencing Tranche B Loans,
substantially in the form of Exhibit B hereto.

          "Tranche C Loan" has the meaning specified in Section 2.1(c).

          "Tranche C Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche C Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the Tranche C Commitments is initially zero; provided that the aggregate amount
of the Tranche C Commitments of the Lenders shall be automatically increased by
the Tranche C Commitment Increase Amount of the Lenders.

          "Tranche C Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche C Commitment Reduction Amount of the Lenders.

          "Tranche C Note" means a promissory note evidencing Tranche C Loans,
substantially in the form of Exhibit B hereto.

          "Tranche D Loan" has the meaning specified in Section 2.1(d).

          "Tranche D Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche D Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the


                                       20



Tranche D Commitments is initially zero; provided that the aggregate amount
of the Tranche D Commitments of the Lenders shall be automatically increased by
the Tranche D Commitment Increase Amount of the Lenders.

          "Tranche D Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche D Commitment Reduction Amount of the Lenders.

          "Tranche D Note" means a promissory note evidencing Tranche D Loans,
substantially in the form of Exhibit B hereto.

          "Tranche E Loan" has the meaning specified in Section 2.1(e).

          "Tranche E Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche E Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the Tranche E Commitments is initially zero; provided that the aggregate amount
of the Tranche E Commitments of the Lenders shall be automatically increased by
the Tranche E Commitment Increase Amount of the Lenders.

          "Tranche E Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche E Commitment Reduction Amount of the Lenders.

          "Tranche E Note" means a promissory note evidencing Tranche E Loans,
substantially in the form of Exhibit B hereto.

          "Trust Agreements" means all special purpose trust funds established
by any Obligor to manage the collection and payment of amounts collected by the
Obligors for the express benefit of third-party beneficiaries identified as such
in the ATSB Loan Agreements.

          "United States Citizen" has the meaning specified in Section 4.1(b).

          "Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to vote for the election of directors, managers or trustees of any
Person (or Persons performing similar functions) irrespective of whether or not
at the time stock of any such class or classes will have or might have such
voting power by the reason of the happening of any contingency.

          "Wholly-Owned" denotes a Subsidiary all of the Voting Stock of which
(other than any director's qualifying shares or investments by foreign nationals
mandated by applicable law) is owned directly or indirectly by the Person named.

          "Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.


                                       21



          SECTION 1.2 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including."

          SECTION 1.3 ACCOUNTING TERMS AND PRINCIPLES. All accounting terms not
specifically defined herein shall be construed in conformity with GAAP and all
accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.

          SECTION 1.4 CERTAIN TERMS.

               (a) The words "herein," "hereof" and "hereunder" and similar
     words refer to this Agreement as a whole, and not to any particular
     Article, Section, subsection or clause in, this Agreement.

               (b) Except as otherwise expressly provided, references in this
     Agreement to an Exhibit, Schedule, Article, Section, subsection or clause
     refer to the appropriate Exhibit or Schedule to, or Article, Section,
     subsection or clause in this Agreement.

               (c) Each agreement defined in this Article I shall include all
     appendices, exhibits and schedules thereto. If the prior written consent of
     any Person is required hereunder for an amendment, restatement, supplement
     or other modification to any such agreement and the consent of each such
     Person is obtained, references in this Agreement to such agreement shall be
     to such agreement as so amended, restated, supplemented or modified. If no
     such consent is required, references in this Agreement shall be to such
     agreement as so amended, restated, supplemented, or modified.

               (d) References in this Agreement to any statute shall be to such
     statute as amended or modified and in effect at the time any such reference
     is operative.

               (e) The term "including" when used in any Loan Document means
     "including without limitation" except when used in the computation of time
     periods.

                                   ARTICLE II

                                    THE LOANS

          SECTION 2.1 THE LOANS.

               (a) Tranche A Loans. On the terms and subject to the conditions
     contained in this Agreement and in reliance upon the representations and
     warranties of the Obligors set forth herein, each Lender agrees to make one
     or more Loans to the Borrowers (each, a "Tranche A Loan") on Funding Dates
     occurring on


                                       22



     or after the date of delivery of the last A319/A320 Aircraft currently on
     order by America West and not rescheduled in accordance with paragraph 5 of
     the MOU, as requested by a Borrower in a Notice of Borrowing given in
     accordance with Section 2.2 in an amount not to exceed, in the aggregate
     for all Tranche A Loans made by such Lender on all Funding Dates, the
     Tranche A Commitment of such Lender. No Tranche A Loan shall be made prior
     to the date of delivery of the last A319/A320 aircraft on order by America
     West on the date hereof and not rescheduled in accordance with paragraph 5
     of the MOU. The last such aircraft is currently scheduled to be delivered
     in February 2006. There may be multiple Borrowings of Tranche A Loans.
     Tranche A Loans repaid or prepaid may not be reborrowed hereunder.

               (b) Tranche B Loans. On the terms and subject to the conditions
     contained in this Agreement and in reliance upon the representations and
     warranties of the Obligors set forth herein, each Lender further agrees to
     make one or more Loans to the Borrowers (each, a "Tranche B Loan") on the
     Closing Date and on each other Funding Date requested by a Borrower in a
     Notice of Borrowing given in accordance with Section 2.2 in an amount not
     to exceed, in the aggregate for all Tranche B Loans made by such Lender on
     all Funding Dates, the Tranche B Commitment of such Lender. No Tranche B
     Loan, when combined with the aggregate amount of prior Tranche B Loans,
     shall exceed the principal and interest amount paid or prepaid under the
     Airbus A321 Financings from and after the date of the MOU (May 18, 2005) to
     and including the Funding Date for such Tranche B Loan (including, for the
     avoidance of doubt, principal and interest to be paid with the proceeds of
     the proposed Tranche B Loan). No Tranche B Loan shall be made unless all
     amounts which are due and payable on the Funding Date for such Tranche B
     Loan under the A321 Airbus Financings have been, or immediately following
     the application of the proceeds of such Tranche B Loan will have been, paid
     in full. There may be multiple Borrowings of Tranche B Loans. Tranche B
     Loans repaid or prepaid may not be reborrowed hereunder.

               (c) Tranche C Loans. On the terms and subject to the conditions
     contained in this Agreement and in reliance upon the representations and
     warranties of the Obligors set forth herein, each Lender further agrees to
     make one or more Loans to the Borrowers (each, a "Tranche C Loan") on the
     Closing Date and each other Funding Date requested by a Borrower in a
     Notice of Borrowing given in accordance with Section 2.2 in an amount not
     to exceed, in the aggregate for all Tranche C Loans made by such Lender on
     all Funding Dates, the Tranche C Commitment of such Lender. No Tranche C
     Loan shall be made prior to the due date for the payment of the Permitted
     Invoices with respect to which such Tranche C Loan is being made. Each
     Tranche C Loan shall be in an amount not to exceed the aggregate amount of
     all Permitted Invoices not used to support prior Borrowings of Tranche C
     Loans. No Tranche C Loan shall be made until at least thirty (30) days
     after all issued and outstanding Permitted Invoices relating to such
     Tranche C Loan have been paid in full. Copies of the Permitted Invoices
     supporting each Tranche C Loan shall be attached to the applicable Notice
     of Borrowing. There may be multiple


                                       23



     Borrowings of Tranche C Loans. Tranche C Loans repaid or prepaid may not be
     reborrowed hereunder.

               (d) Tranche D Loans. On the terms and subject to the conditions
     contained in this Agreement and in reliance upon the representations and
     warranties of the Obligors set forth herein, each Lender further agrees to
     make one or more Loans to the Borrowers (each, a "Tranche D Loan") on any
     Funding Date, as requested by a Borrower in a Notice of Borrowing given in
     accordance with Section 2.2 in an amount not to exceed, in the aggregate
     for all Tranche D Loans made by such Lender on all Funding Dates, the
     Tranche D Commitment of such Lender. There may be multiple Borrowings of
     Tranche D Loans. Tranche D Loans repaid or prepaid may not be reborrowed
     hereunder.

               (e) Tranche E Loans. On the terms and subject to the conditions
     contained in this Agreement and in reliance upon the representations and
     warranties of the Obligors set forth herein, each Lender further agrees to
     make one or more Loans to the Borrowers (each, a "Tranche E Loan") on the
     Closing Date and on each other Funding Date requested by a Borrowing in a
     Notice of Borrowing given in accordance with Section 2.2 in an amount not
     to exceed, in the aggregate for all Tranche E Loans made by such Lender on
     all Funding Dates, the Tranche E Commitment of such Lender. There may be
     multiple Borrowings of Tranche E Loans. Tranche E Loans repaid or prepaid
     may not be reborrowed hereunder.

               (f) Final Funding Date. No Funding Date shall occur after
     December 31, 2007.

               (g) Commitment Reduction. The aggregate Commitments of the
     Lenders shall be reduced by $9,187,764.19 if but only for so long as the
     Tranche B-2 of the America West ATSB loan is guaranteed by AFS Cayman
     Limited pursuant to the letter agreement dated as of September 27, 2005,
     among America West, Airbus, Citibank, N.A., and ATSB.

          SECTION 2.2 BORROWING PROCEDURES.

               (a) Each Borrowing shall be made on notice given by a Borrower to
     the Loan Agent not later than 11:00 a.m. (New York City time) at least two
     Business Days prior to the applicable Funding Date. Each such notice shall
     be in substantially the form of Exhibit C (a "Notice of Borrowing") or be
     given by telephone and confirmed in writing within one Business Day
     following such notice, in each case, specifying (A) the proposed Funding
     Date, (B) the aggregate amount of the proposed Borrowing (which must be in
     a minimum amount of $1,000,000 or a whole multiple of $100,000 above that
     amount), or if less, the remaining undrawn amount of the Loan, (C) the
     Tranche designations of the various Loans to be made on the proposed
     Funding Date, and (D) the corporate credit rating of the Guarantor and its
     consolidated Subsidiaries then most recently published by S&P. The Notice
     of Borrowing shall be irrevocable. A Notice of Borrowing with respect to a
     Tranche C Loan shall be accompanied by copies of Permitted Invoices. Each
     Notice of


                                       24



     Borrowing shall be accompanied by a copy of any Notice of Borrowing (as
     defined therein) given under the Other Loan Agreement for Borrowings on the
     same date.

               (b) The Loan Agent shall give to the Lenders prompt notice of the
     Loan Agent's receipt of a Notice of Borrowing and the Applicable Interest
     Rate with respect thereto. Each Lender shall, subject to the terms of any
     mutually agreed funding agreement, severally, before 11:00 a.m. (New York
     City time) on the date of the proposed Borrowing, make available to the
     Loan Agent at the account referenced in Section 2.9(a), in immediately
     available funds, an amount equal to its ratable portion of each Tranche of
     the proposed Borrowing. After the Loan Agent's receipt of such funds, the
     Loan Agent will make such funds available to the particular Borrower which
     is actually to apply such funds in accordance with Section 2.4(f). The
     failure of any Lender to make its ratable portion of any Loan as required
     hereunder shall not relieve any other Lender of its obligations to make its
     ratable portion of such Loan or any other Loan as required hereunder.

          SECTION 2.3 SCHEDULED REPAYMENT OF THE LOANS.

               (a) Accrued Interest due on the Loans on each Interest Payment
     Date shall be capitalized and added to the outstanding principal amount of
     the Loans.

               (b) The outstanding principal amount of the Loans shall be due
     and payable on the Loan Maturity Date.

               (c) Notwithstanding any other provision of the Loan Documents,
     the outstanding principal amount of the Loans will be forgiven in writing
     by the Loan Agent on the Loan Maturity Date (as defined in the Other Loan
     Agreement) or an earlier date, if on that date the outstanding principal
     amount of, accrued interest on, and all other amounts due under the Other
     Loan Agreement Loans and the Other Loan Agreement Notes have been paid in
     full and the Other Obligations, if any, then due have been indefeasibly
     paid in full.

          SECTION 2.4 EVIDENCE OF DEBT; USE OF PROCEEDS.

               (a) Each Lender shall maintain in accordance with its usual
     practice an account or accounts evidencing such Lender's portion of the
     Loans outstanding from time to time, including, by Tranche, the amounts of
     principal and interest payable and paid to such Lender from time to time
     under this Agreement.

               (b) The Loan Agent shall establish and maintain a Register on
     behalf of the Borrowers pursuant to Section 2.4(e), and a subaccount for
     each Lender therein, in which shall be recorded (i) the amount of each Loan
     hereunder and each Interest Period applicable thereto; (ii) the amount of
     any principal or interest due and payable or to become due and payable from
     the Borrowers to each Lender hereunder; (iii) the date and amount of each
     payment on the Loans, by Tranche, made


                                       25



     by or on behalf of, or collected from, the Borrowers and (iv) the amount of
     each such payment applied in accordance with each clause of Section 2.9(d)
     and (e) or other applicable terms hereof to scheduled principal of or
     interest on the Loans.

               (c) The entries made in the accounts maintained pursuant to
     clauses (a) and (b) of this Section 2.4 shall, to the extent permitted by
     applicable law, be prima facie evidence of the existence and amounts of the
     obligations recorded therein; provided, however, that the failure of any
     Lender or the Loan Agent to maintain such accounts or any error therein
     shall not in any manner affect the obligations of the Borrowers to repay
     the Loans in accordance with the terms hereof.

               (d) The Borrowers shall execute and deliver to the Loan Agent on
     the Closing Date a single promissory note for each Tranche, each
     substantially in the forms of Exhibit B, in the principal amount of the
     aggregate Commitments for such Tranche dated the Closing Date and otherwise
     appropriately completed (each such note, including any replacement note
     therefor issued in accordance with the provisions of this Section 2.4(d)
     but excluding any note so replaced, a "Note"). Promptly following each Loan
     on each Funding Date, each Lender shall update the grid attached to its
     Note and deliver a certified copy thereof to the Borrowers. If a Note is
     mutilated, lost, stolen or destroyed, the Borrowers shall, at the cost and
     expense of the Lender, issue a new Note in the same principal amount and
     having the same interest rate, date, maturity and Tranche as the Note so
     mutilated, lost, stolen or destroyed, endorsed to indicate all payments
     thereon, together with an Officer's Certificate of the Borrowers certifying
     and warranting as to the due authorization, execution and delivery of the
     new Note. In the case of any lost, stolen or destroyed Note, there shall
     first be furnished (i) to the Borrowers, at Borrowers' option, either
     adequate security to hold Borrowers harmless with respect to such lost,
     mutilated, stolen or destroyed Note or an instrument of indemnity from the
     relevant Lender and (ii) to the Borrowers and the Loan Agent evidence of
     such loss, theft or destruction reasonably satisfactory to each of them.

               (e) The Notes are registered instruments. The original of each
     Note shall be evidence of the rights of each Lender under this Agreement
     and such Note. Neither this Agreement nor any Note is a bearer instrument.
     The Loan Agent will establish and maintain on behalf of the Borrowers a
     record of ownership (the "Register") in which the Loan Agent agrees to
     register by book entry the Loan Agent's and each Lender's interest in the
     Loans, the Notes and this Agreement, and in the right to receive any
     payments hereunder or thereunder and any assignment of any such interest or
     rights. In connection with any assignment pursuant to Section 9.2, the Loan
     Agent shall maintain a copy of each Assignment and Assumption delivered to
     and accepted by it and shall record the names and addresses of the Lenders
     and principal amount of the Loans, by Tranche, owing to each Lender from
     time to time. The Borrowers, upon request and at the expense of the
     relevant Lender and the return of the Note to be replaced to the Borrowers
     marked "cancelled" (or, if the Note to be replaced has been mutilated,
     lost, stolen or destroyed, adequate security or an instrument of indemnity
     as described in the last sentence of Section 2.4(d)), agree to issue
     replacement Notes upon any assignment or participation made pursuant to


                                       26



     Section 9.2. The identities of the Note holders entered in the Register
     shall be conclusive and binding for all purposes, absent manifest error,
     and the Obligors, the Loan Agent and the Lenders shall treat each Person
     whose name is recorded in the Register as the owner of the Obligations as
     indicated in the Register for all purposes of this Agreement. The Register
     shall be available for inspection by the Borrowers, the Loan Agent, or any
     Lender at any reasonable time and from time to time upon reasonable prior
     notice.

               (f) Use of Proceeds.

                    (i) The Borrowers shall use the proceeds of the Loans as
     follows:

                         (1) The proceeds of Tranche A Loans, Tranche D Loans,
     and Tranche E Loans shall be used by the Borrowers for working capital and
     general corporate purposes of either of them, including, without
     limitation, capital expenditures and acquisitions.

                         (2) The proceeds of Tranche B Loans shall be used by
     the Borrowers solely to make debt service payments due through June, 2006
     under the A321 Airbus Financings or to reimburse US Airways for any such
     payments made on or after the date of the MOU (May 18, 2005) but prior to
     the date of such Loan.

                         (3) The proceeds of Tranche C Loans shall be used by
     the Borrowers solely to pay, or to reimburse either of them for the payment
     on or after the date of the MOU (May 18, 2005) of, Permitted Invoices.

                    (ii) No portion of the proceeds of any Loans shall be used
     by the Borrowers or any of their Subsidiaries in any manner that would
     cause the borrowing or the application of such proceeds to violate
     Regulation U, Regulation T or Regulation X of the Board of Governors of the
     Federal Reserve System or any other regulation of such Board of Governors
     or to violate Section 7(c) of the Exchange Act, in each case as in effect
     on the date or dates of such borrowing and such use of proceeds.

          SECTION 2.5 OPTIONAL PREPAYMENTS.

               (a) The Borrowers may on any Business Day, upon revocable notice
     to the Loan Agent not less than ten (10) Business Days prior thereto,
     prepay all or any portion of the outstanding principal amount of such Loans
     held directly or indirectly by Airbus or its Affiliates, in whole or in
     part (but, with respect to any partial prepayment, not less than a minimum
     amount of $1,000,000, plus any whole multiple of $100,000, or such lesser
     amount as results in a prepayment of such Loans in full), together with
     accrued interest to the date of such prepayment on the principal amount
     prepaid; provided, however, that if any prepayment of all or a portion of
     such Loans is made by the Borrowers other than on an Interest Payment


                                       27



     Date, the Borrowers shall also pay any amounts owing pursuant to Section
     2.10(e). Except for any such amounts owing pursuant to Section 2.10(e),
     prepayments pursuant to this Section 2.5(a) shall be without premium or
     penalty.

               (b) Upon the giving of any notice of prepayment under clause (a)
     of this Section 2.5, the principal amount of the Loans specified to be
     prepaid together with accrued and unpaid interest thereon and other
     amounts, if any, due with respect thereto as provided in Section 2.5(a),
     shall become due and payable on the date specified for such prepayment;
     provided, however, that any failure to make any such prepayment in full on
     such date shall be deemed to be an automatic revocation of the notice of
     prepayment given under Section 2.5(a) and such failure shall not constitute
     a Default or an Event of Default hereunder; provided, further, however,
     that the Borrowers shall be obligated to pay on such date any amounts owing
     under Section 2.10(e) due to such failure to prepay.

               (c) Any partial prepayment of the Loans under Section 2.5(a)
     shall be applied pro rata as among the outstanding Tranches of the Loans
     held directly or indirectly by Airbus or its Affiliates and pro rata among
     the Loans in each such Tranche, and to the then remaining installments of
     the outstanding principal amount of the Loans held, directly or indirectly,
     by Airbus or its Affiliates on a pro rata basis. Any such prepayment shall
     be paid to the Loan Agent for application as provided in Section 2.9. The
     Borrowers shall have no right to optionally prepay the principal amount of
     the Loans held, directly or indirectly, by Airbus or its Affiliates other
     than as provided in this Section 2.5 and Section 2.10, 2.12 or 9.1.

               (d) The Borrowers shall have the same prepayment rights with
     respect to Loans not held, directly or indirectly, by Airbus or its
     Affiliates as set forth above in this Section 2.5; provided, however, that
     if requested by the Initial Lender in connection with a transfer or sell
     down transaction into the capital markets as envisioned in Section 9.2(e),
     the Borrowers shall have such prepayment rights as are determined as
     provided in Section 9.2(c).

          SECTION 2.6 MANDATORY PREPAYMENTS.

               (a) Collateral Sales. Upon receipt by any Borrower or any
     Subsidiary of Net Cash Proceeds of an Asset Sale of any Collateral
     (including without limitation, any Airbus A321 model aircraft then subject
     to an A321 Airbus Financing). The Borrowers shall prepay the Loans and the
     other Obligations then due in an aggregate amount equal to the Net Cash
     Proceeds of such sale, which have not been applied to payment of the Other
     Loan Agreement Loans under Section 2.6(a) of the Other Loan Agreement,
     provided that no such prepayment shall be required for Asset Sales of Spare
     Parts until the aggregate amount thereof (not applied to prior prepayments)
     exceeds $100,000. In the event that any such Asset Sale results in a note
     payable to any Borrower or any Subsidiary, such note shall be pledged by
     such Borrower or Subsidiary, as the case may be, as collateral security for
     the obligations and the Cross-Default Obligations in a manner reasonably
     satisfactory to the Loan Agent. Any partial prepayments of the Loans made
     by the Borrowers in accordance


                                       28



     prepayments of the Loans made by the Borrowers in accordance with this
     Section 2.6(a) shall be applied pro rata as among the outstanding Tranches
     of the Loans and pro rata among the Loans in each such Tranche and to the
     then remaining installments of the outstanding principal balance of the
     Loan on a pro rata basis. If any such prepayment is made by the Borrowers
     other than on an Interest Payment Date, subject to clause (c) below, the
     Borrowers shall also pay any amounts owing pursuant to Section 2.10(e). Any
     such prepayment of the Loan shall be paid to the Loan Agent for application
     as provided in Section 2.9.

               (b) Insurance/Condemnation Proceeds. No later than three Business
     Days following the date of receipt by the Borrowers or any of their
     Subsidiaries of any Net Insurance Proceeds of any Collateral, except as
     provided in Section 3.04(a) of the Engine Mortgage and Security Agreement
     if an Engine (as defined therein) is being replaced, in Section 6.01(a) of
     any Aircraft Mortgage, if an Aircraft or Airframe is being replaced, and in
     Section 3.05(d)(1) of the Spare Parts Mortgage and Security Agreement, if a
     Spare Part is being replaced, the Borrower shall prepay the Loans and any
     other Obligations then due in an amount equal to the amount of such Net
     Insurance Proceeds; provided that no such prepayment shall be required
     until the aggregate amount thereof (not applied to prior prepayments)
     exceeds $100,000; and provided, further that in the case of a prepayment
     required by Section 3.04(a) of the Engine Mortgage and Security Agreement
     or Section 6.01(a) of any Aircraft Mortgage on a date before the date on
     which Net Insurance Proceeds has been received, such prepayment of the
     Loans in the amount specified in the next sentence hereof, and on the date
     specified in such Senior Mortgage, shall be made in lieu of the prepayment
     out of the Net Insurance Proceeds required by this sentence. The amount to
     be prepaid pursuant to the proviso to the preceding sentence shall be the
     Agreed Value (as defined in the applicable Senior Mortgage) minus the
     applicable prepayment amount under such applicable Senior Mortgage. Any
     partial prepayments of the Loans made by the Borrowers in accordance with
     this Section 2.6(b) shall be applied pro rata as among the outstanding
     Tranches of the Loans and pro rata among the Loans in each such Tranche and
     to the then remaining installments of the outstanding principal balance of
     the Loan on a pro rata basis. If any such prepayment is made by the
     Borrowers other than on an Interest Payment Date, subject to clause (c)
     below the Borrowers shall also pay any amounts owing pursuant to Sections
     2.5(d) and 2.10(e). Any such prepayment of the Loans shall be paid to the
     Loan Agent for application as provided in Section 2.9.

               (c) Notwithstanding the foregoing, if no Default or Event of
     Default has occurred and is continuing, the Borrower shall be entitled to
     postpone the date of prepayment under Section 2.6(a) or (b) as follows. At
     least one (1) Business Day prior to the required date of such prepayment,
     Borrower shall notify the Loan Agent and each Lender of its election to
     postpone the date of such prepayment to the next succeeding Interest
     Payment Date and on the date required for such prepayment the Borrower
     shall pay to the Loan Agent, for deposit in a collateral account
     established with the Loan Agent and under its name and sole dominion and
     control, as security for the Obligations and the Cross-Default Obligations,
     an amount equal to the amounts the Borrower would have paid under Section
     2.6(a) or (b), as the case may be, as a prepayment of the Loans on such
     date. The Loan shall remain


                                       29



     outstanding and on the next succeeding Interest Payment Date the Borrower
     shall pay the installment of interest and principal and any other amounts
     then due, plus the amount required to prepay the Loan in whole or in part
     on such Interest Payment Date (calculated as provided in Section 2.6(a) or
     (b), as the case may be, less the amount available to the Loan Agent (out
     of the funds held by it as aforesaid as collateral security) which shall be
     applied in reduction of the Borrower's obligations on such Interest Payment
     Date. Notwithstanding the foregoing, if an Event of Default shall occur and
     be continuing, funds on deposit in the aforesaid collateral account shall
     be subject to distribution under Section 2.9(d) and the provisions of
     Section 6.2 shall not be prejudiced by the foregoing prepayment
     arrangement.

               (d) Notwithstanding any other provision hereof or of the
     Collateral Documents, no mandatory prepayment of the loans under this
     Section 2.6 shall be required before the date on which any amount of
     principal of, or accrued interest on, the Loans becomes due (at maturity,
     by reason of acceleration or otherwise).

          SECTION 2.7 INTEREST.

               (a) Rate of Interest. Except as otherwise provided in Section
     2.7(c) and Section 2.10, each Loan shall bear interest on the unpaid
     principal amount thereof for each day such Loan is outstanding during any
     Interest Period at the Applicable Interest Rate for such Interest Period.
     Notwithstanding any other provision hereof, interest on the Loans shall not
     exceed the maximum allowable under applicable law.

               (b) Interest Payments. Interest accrued on each Loan and each
     Note shall be payable in arrears on the last day of each applicable
     Interest Period (an "Interest Payment Date"), upon the payment or
     prepayment thereof in whole or in part (solely to the extent of the portion
     paid or prepaid), and, if not previously paid in full, at maturity (whether
     by acceleration or otherwise), subject to the provisions of Section 2.3(c).
     Interest on each Loan shall be calculated on the basis of a year of 360
     days and actual number of days elapsed.

               (c) Default Interest. Notwithstanding the rate of interest
     specified in Section 2.7(a) or elsewhere herein, if any principal of or
     interest on a Loan or any fee or other amount payable by the Borrowers
     hereunder is not paid when due, whether at stated maturity, upon
     acceleration, by mandatory prepayment or otherwise (but other than any
     voluntary prepayment), such overdue amount shall bear interest at a rate
     which is two percent per annum in excess of the Applicable Interest Rate as
     in effect from time to time.

          SECTION 2.8 FEES. No up-front, commitment or other fees are payable on
or with respect to the Commitments or the Loans.


                                       30



          SECTION 2.9 PAYMENTS AND COMPUTATIONS.

               (a) The Borrowers shall make each payment hereunder (including
     fees and expenses) not later than 12 noon (New York City time) on the day
     when due, in Dollars, to the Loan Agent in immediately available funds
     without set-off, counterclaim, claim of recoupment or other defense (except
     for any required withholding taxes not subject to indemnification
     hereunder) to the following account (unless otherwise advised):

          ACCOUNT OF : AIRBUS FINANCIAL SERVICES
          ACCOUNT AT : CALYON, NEW YORK
          SWIFT CODE : CRLYUS33
          CHIPS ID   : 807
          ABA REF    : 026 008 073
          ACCOUNT NO : 01 22456 0001 00

All payments in respect of any Obligations shall at all times be made to the
Loan Agent. The Loan Agent will promptly cause all such payments received by it
to be distributed to the Person entitled thereto in accordance with the
priorities of payment set forth below in clause (d) or (e) of this Section 2.9
or both, as applicable. Payments received by the Loan Agent after 2:00 p.m. (New
York City time) shall, solely for the calculation and accrual of interest
pursuant to the provisions hereof, be deemed to be received on the next Business
Day.

               (b) Each determination by the Loan Agent of an interest rate
     hereunder shall be presumed correct, absent manifest error.

               (c) Whenever any payment hereunder shall be stated to be due on a
     day other than a Business Day, such payment shall be due on the next
     succeeding Business Day, unless the result of such extension would be to
     extend such payment date into another calendar month, in which event such
     payment date shall end on the immediately preceding Business Day and for
     the avoidance of doubt, interest computation shall be adjusted accordingly.

               (d) So long as no Event of Default under any of Sections 6.1(a)
     (including any failure to pay all amounts hereunder upon acceleration as a
     result of any other Event of Default), (f) and (g) has occurred and is
     continuing or would result therefrom, the Loan Agent shall promptly apply
     all payments received by it in respect of any Obligations in the following
     order:

                    (i) first, to pay interest then due and payable in respect
     of the Loans to the Lenders, on a pro rata basis;

                    (ii) second, to pay principal then due and payable on the
     Loans to the Lenders, on a pro rata basis;


                                       31



                    (iii) third, to pay any other Obligations then due and
     payable to the Loan Agent, the Collateral Agent and the Lenders, on a pro
     rata basis; and

                    (iv) fourth, to the Borrowers or their respective designees.

               (e) After the occurrence and during the continuance of an Event
     of Default under any of Sections 6.1(a) (including any failure to pay all
     amounts hereunder upon acceleration as a result of any other Event of
     Default), (f) or (g), the Loan Agent shall promptly apply all payments in
     respect of any Obligations or Cross-Default Obligations (including amounts
     received by the Collateral Agent upon the exercise of remedies with respect
     to the Collateral or the Cross-Collateral) in the following order:

                    (i) first, to pay Obligations in respect of any expenses,
     indemnities or other amounts owing hereunder not referred to in clauses
     (ii) through (v) below then due and payable to the Lenders, the Loan Agent
     or the Collateral Agent, on a pro rata basis;

                    (ii) second, to pay interest then due and payable in respect
     of the Loans to the Lenders, on a pro rata basis;

                    (iii) third, to pay or prepay principal payments on the
     Loans to the Lenders or other Obligations to the respective parties
     entitled thereto, on a pro rata basis, or to be held by, the Loan Agent as
     additional collateral for any Obligations which are not at the time due and
     payable;

                    (iv) fourth, to pay any Cross-Default Obligations then due
     and payable to the respective parties entitled thereto, on a pro rata
     basis, or to be held by the Loan Agent as Collateral for any Cross-Default
     Obligations which are not at the time due and payable; and

                    (v) fifth, after payment in full of the Cross-Default
     Obligations, to the Borrowers or their respective designees.

          SECTION 2.10 CERTAIN PROVISIONS GOVERNING THE LOANS.

               (a) Certain Determinations. LIBOR for each Interest Period for
     each Loan shall be determined by the Loan Agent pursuant to the procedures
     set forth in the definition of "LIBOR", and shall promptly thereafter be
     notified to the Borrowers and each Lender together with the Applicable
     Margin and the Applicable Interest Rate for such Interest Period (in
     writing or by email or by telephone confirmed in writing or by email). The
     Tranche A, Tranche B, Tranche C, Tranche D and Tranche E Commitment
     Increase Amount for the Lenders (and for each Lender) shall be determined
     by the Loan Agent as provided in the respective definitions of those terms,
     and promptly upon receipt of notice thereof from the Other Loan


                                       32



     Agreement Loan Agent shall be notified by the Loan Agent to each Lender,
     the Borrower and the Collateral Agent. The Tranche A, Tranche B, Tranche C,
     Tranche D and Tranche E Commitment Increase Amounts for the Lenders shall
     not exceed $89,000,000. A certificate of the Loan Agent setting forth the
     applicable LIBOR, the Applicable Margin and the adjusted Applicable
     Interest Rate, or the Tranche A, Tranche B, Tranche C, Tranche D or Tranche
     E Commitment Increase Amounts, shall be presumed correct absent manifest
     error. The Loan Agent shall, at the request of either Borrower, deliver to
     the Borrowers a statement showing the quotations used by the Loan Agent to
     determine LIBOR, the Applicable Margin and the Applicable Interest Rate,
     such statement to be in sufficient detail for the Borrowers to reasonably
     determine whether any such manifest error has occurred.

               (b) Interest Rate Unascertainable. In the event that the Loan
     Agent determines that, at the time the Loan Agent is to determine the
     Applicable Interest Rate for an Interest Period, by reason of circumstances
     affecting the London interbank market for U.S. Dollar deposits, adequate
     and fair means do not exist for ascertaining the applicable interest rates
     by reference to which the LIBOR then being determined is to be fixed, the
     Loan Agent shall forthwith so notify the Borrowers and the Lenders,
     whereupon during the 30 days following the date of any such notice given to
     the Borrowers, the Loan Agent and the Borrowers shall negotiate in good
     faith in order to arrive at a mutually acceptable alternative basis for
     determining the interest rate from time to time applicable to the Loans
     (the "Substitute Basis"). If within the 30 days following the date of any
     such notice to the Borrowers, the Loan Agent and the Borrowers shall agree
     upon a Substitute Basis, such Substitute Basis shall be retroactive to and
     effective from the first day of the then current Interest Period until and
     including the last day of such Interest Period. If after 30 days from the
     date of such notice, the Loan Agent and the Borrowers shall have failed to
     agree upon a Substitute Basis, then the Loan Agent (upon instructions from
     the Requisite Lenders) shall certify in writing to the Borrowers the
     interest rate at which such Lenders are prepared to maintain their portion
     of the Loans for such Interest Period, it being understood that such
     Lenders' interest rate shall be not more than a rate per annum equal to a
     rate which adequately and fairly reflects the cost to such Lenders of
     obtaining the funds necessary to maintain their portion of the Loans for
     such Interest Period. If no Substitute Basis is established, upon receipt
     of notice of the interest rates at which the Requisite Lenders are prepared
     to maintain their respective portion of the Loans, and on the last day of
     each Interest Period thereafter, the Borrowers shall have the right
     exercisable upon ten Business Days' prior notice to the Loan Agent (i) to
     continue to borrow the Loans at the interest rate so advised by the Loan
     Agent (as such rate may be modified, from time to time, at the outset of
     each subsequent Interest Period) or (ii) to prepay in full the Loans
     together with accrued but unpaid interest thereon at the Applicable
     Interest Rate most recently in effect, whereupon the Loans shall become due
     and payable on the date specified by the Borrowers in such notice.

               (c) Increased Costs. If at any time (i) the introduction after
     the date hereof of or any change after the date hereof in or in the
     interpretation of any law, treaty or governmental rule, regulation or order
     binding on any Lender or (ii) the


                                       33



     compliance by any Lender with any guideline, request or directive enacted
     or imposed or made after the date hereof from any central bank or other
     Governmental Authority (whether or not having the force of law) shall (A)
     impose, modify, or deem applicable any reserve, special deposit or similar
     requirement against assets of, deposits with or for the account of, or
     credit extended by, any Lender, or (ii) impose on any Lender any other
     condition, and the result of any of the foregoing shall be to materially
     increase the cost to such Lender of agreeing to make or making, funding, or
     maintaining any portion of the Loans (except with respect to Excluded
     Taxes), then the Borrowers shall from time to time, within ten Business
     Days of written demand (which demand shall be accompanied by a certificate
     setting forth the basis for such demand and a calculation of the amount
     thereof in reasonable detail) by such Lender (with a copy of such demand
     and certificate to the Loan Agent), pay to the Loan Agent for the account
     of such Lender, additional amounts sufficient to compensate such Lender for
     such increased cost. Such a certificate submitted to the Borrowers and the
     Loan Agent by such Lender shall be presumptively correct absent manifest
     error. Notwithstanding the provisions of this paragraph, (x) the Borrowers
     shall not be obligated to pay any amounts pursuant to this paragraph for
     periods occurring prior to the 60th day before the giving of such
     certificate, provided that if the circumstances giving rise to such claim
     have a retroactive effect then such 60 day period shall be extended to then
     include such period of retroactive effect, and (y) the Borrowers shall not
     be required to make any payment otherwise required hereby to any Lender
     unless such Lender states in its written demand that such claim is not
     being made on a basis that discriminates against the Borrower as compared
     to comparable extensions of credit with similarly situated borrowers.

               (d) Illegality. Notwithstanding any other provision of this
     Agreement, if the introduction of or any change in or in the interpretation
     of any law, treaty or governmental rule, regulation or order, in each case
     after the date of this Agreement, shall make it unlawful for any Lender to
     continue to fund or maintain its portion of the Loans as contemplated
     hereby, then, on notice thereof by such Lender to the Borrowers through the
     Loan Agent, the obligation of such Lender to continue to fund or maintain
     its portion of the Loan shall be terminated and the Borrowers shall prepay
     such affected portion of the Loan to such Lender together with accrued but
     unpaid interest thereon and all other sums payable hereunder with respect
     thereto on the last day of the then current Interest Period or earlier if
     necessary to avoid such illegality. Any such partial prepayment of the Loan
     shall be applied ratably to the then unpaid installments thereof in
     accordance with the amount of each such unpaid installment.

               (e) Breakage Costs. In addition to all amounts required to be
     paid by the Borrowers pursuant to Section 2.7, the Borrowers shall
     compensate each Lender, at the time specified herein, or if no such time is
     specified, within ten Business Days of written demand (with a copy of such
     demand to the Loan Agent), for all net losses, expenses and liabilities
     (including any loss or expense incurred by reason of the liquidation or
     reemployment of deposits or other funds acquired by such Lender or the
     termination of any other financial arrangement it may have entered into to
     fund or maintain or support such Lender's portion of the Loan, including
     any net


                                       34



     loss of interest but excluding any other lost profit or any Taxes based on
     the overall net income of such Lender) which such Lender actually sustains
     as a consequence of (i) any proposed Borrowing not occurring on a date
     specified therefor in any Notice of Borrowing given by any Borrower, (ii)
     any portion of the Loans being prepaid (including, subject to Section
     2.6(c), mandatorily pursuant to Section 2.6 or this Section 2.10) on a date
     which is not the last day of the applicable Interest Period, or (iii) any
     failure by any Borrower to repay any portion of the Loans when required by
     the terms hereof (after giving effect to any grace periods). Any written
     demand by a Lender under this Section 2.10(e) shall be accompanied by a
     certificate setting forth the basis for such demand and a calculation of
     the amount thereof in reasonable detail by such Lender. Such a certificate
     submitted to the Borrowers and the Loan Agent by a Lender shall be
     presumptively correct absent manifest error. Amounts paid under this
     Section 2.10(e) shall be paid to the Loan Agent for the account of the
     applicable Lender. Notwithstanding the provisions of this paragraph, the
     Borrowers shall not be obligated to pay any amounts pursuant to this
     paragraph for periods occurring prior to the 60th day before the giving of
     such certificate, provided that if the circumstances giving rise to such
     claim have a retroactive effect then such 60 day period shall be extended
     to then include such period of retroactive effect.

          SECTION 2.11 CAPITAL ADEQUACY. If at any time (a) the adoption of or
any change in or in the interpretation of any law, treaty or governmental rule,
regulation or order after the date of this Agreement regarding capital adequacy,
(b) compliance with any such law, treaty, rule, regulation, or order, or (c)
compliance with any guideline or request or directive made after the date hereof
from any central bank or other Governmental Authority (whether or not having the
force of law) shall have the effect of reducing the rate of return on such
Lender's (or any corporation controlling such Lender's) capital as a consequence
of its obligations hereunder (other than for changes in the rate of tax on the
overall net income of such Lender) to a level below that which such Lender or
such corporation could have achieved but for such adoption, change, compliance
or interpretation by an amount deemed by such Lender to be material, then,
within ten Business Days following written demand from time to time by such
Lender (with a copy of such demand to the Loan Agent), the Borrowers shall pay
to the Loan Agent for the account of such Lender from time to time as specified
by such Lender additional amounts sufficient to compensate such Lender for such
reduction. Any written demand by a Lender under this Section 2.11 shall be
accompanied by a certificate setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail by such Lender. Such a
certificate submitted to the Borrowers and the Loan Agent by a Lender shall be
presumptively correct absent manifest error. Notwithstanding the provisions of
this paragraph, (x) the Borrowers shall not be obligated to pay any amounts
pursuant to this paragraph for periods occurring prior to the 60th day before
the giving of such certificate, provided that if the circumstances giving rise
to such claim have a retroactive effect then such 60 day period shall be
extended to then include such period of retroactive effect, and (y) the
Borrowers shall not be required to make any payment otherwise required hereby to
any Lender unless such Lender is generally demanding payment under comparable
provisions of its agreements with similarly situated borrowers.


                                       35



          SECTION 2.12 SUBSTITUTION OF LENDERS.

               (a) In the event that no Event of Default has occurred and is
     continuing and (i) any Lender makes a claim under Section 2.10(c) or (e) or
     Section 2.11, (ii) it becomes unlawful for any Lender to continue to fund
     or maintain its portion of the Loans as contemplated hereby and such Lender
     notifies the Borrowers pursuant to Section 2.10(d), (iii) any Obligor is
     required to make any payment pursuant to Section 2.13 that is attributable
     to a particular Lender, (iv) any Lender fails to fund any Loans as required
     hereby or (v) there shall exist a Non-Consenting Lender in respect of a
     Proposed Change to which the Loan Agent consents (any such Lender, an
     "Affected Lender"), the Borrowers may substitute any other Lender or any
     other financial institution which will eliminate the continued need to make
     such payments and which is reasonably acceptable to the Loan Agent (a
     "Substitute Institution") for such Affected Lender hereunder, after
     delivery of a written notice (a "Substitution Notice") by the Borrowers to
     the Loan Agent and the Affected Lender following the occurrence of any of
     the events described in clauses (i) through (v) above that the Borrowers
     intend to make such substitution.

               (b) If the Substitution Notice was properly issued under this
     Section 2.12, the Affected Lender shall sell, and the Substitute
     Institution shall purchase, in accordance with Section 9.2, all rights and
     obligations (except with respect to prior periods) of such Affected Lender
     under the Loan Documents. Such purchase and sale (and the corresponding
     assignment of all rights and obligations (except with respect to prior
     periods) hereunder) shall be effective on the later of (i) the receipt by
     the Affected Lender of an amount equal to the unpaid principal amount,
     accrued interest on, and other amounts due in respect of, its outstanding
     Loans, together with any other Obligations owing to it, (ii) the receipt by
     the Loan Agent of an Assignment and Assumption whereby the Substitute
     Institution shall agree to be bound by the terms hereof and (iii) without
     duplication, the payment in full to the Affected Lender in cash of all
     unreimbursed costs and expenses and indemnities accrued and unpaid through
     such effective date.

               (c) If any Lender requests compensation under Section 2.10(c) or
     (e), 2.11 or 2.13, or if any Borrower is required to pay any additional
     amount to any Lender or any Governmental Authority for the account of any
     Lender pursuant to Section 2.13, then such Lender shall use reasonable
     efforts to designate a different lending office for funding or booking its
     Loans hereunder or to assign its rights and obligations hereunder to
     another of its offices, branches or Affiliates, if, in the judgment of such
     Lender, such designation or assignment (i) would eliminate or reduce
     amounts payable pursuant to Section 2.10(c) or (e), 2.11 or 2.13, as the
     case may be, in the future and (ii) would not subject such Lender to any
     material unreimbursed cost or expense and would not otherwise be
     disadvantageous to such Lender.


                                       36



          SECTION 2.13 TAXES.

               (a) Except as otherwise provided in Section 9.2 or as required by
     applicable law, any and all payments by the Borrowers under each Loan
     Document shall be made free and clear of and without deduction for any and
     all Taxes, excluding (i) in the case of each Lender, each Participant and
     the Loan Agent taxes measured by its net income, and franchise taxes
     (imposed in lieu of net income taxes) imposed on it, by the jurisdiction
     under the laws of which such Lender, such Participant or the Loan Agent (as
     the case may be) is organized or is otherwise treated as doing business
     (other than a jurisdiction in which such Person is treated as doing
     business as a result of its execution and delivery of any Loan Document or
     its exercise of its rights or performance of its obligations or the receipt
     of income thereunder), (ii) in the case of each Lender and each
     Participant, taxes measured by its net income, and franchise taxes (imposed
     in lieu of net income taxes) imposed on it, by the jurisdiction in which
     such Lender's Lending Office is located or in which such Participant booked
     its participation for tax accounting purposes, (iii) in the case of each
     Lender, each Participant, and the Loan Agent, Taxes imposed as a result of
     such Person or the Loan Agent failing to comply with its obligations under
     Section 2.13(g), (iv) in the case of each Lender, each Participant, and the
     Loan Agent, as the case may be, United States federal withholding taxes
     except to the extent imposed as a result of a change in applicable law,
     including income tax conventions, after the Closing Date or, with respect
     to an assignment, acquisition, participation, designation of a different
     office or jurisdiction for purposes of receiving or paying amounts
     hereunder, or the appointment of a Loan Agent, the effective date thereof,
     except (x) to the extent that such Person's predecessor was entitled to
     such amounts (or in the case of a designation of a new jurisdiction, to the
     extent such Person was entitled to such amounts with respect to its prior
     jurisdiction) or (y) in the case of an assignment or change of lending
     office pursuant to Section 2.13(g), and (v) Taxes to the extent imposed as
     a result of the gross negligence or willful misconduct of the Loan Agent,
     such Lender or any of their Affiliates (all such non-excluded Taxes being
     referred to as "Indemnified Taxes" and all Taxes listed in clauses (i)
     through (v) of this clause (a) being referred to as "Excluded Taxes"). If
     any Indemnified Taxes shall be required by law to be deducted from or in
     respect of any sum payable under any Loan Document to any Lender or the
     Loan Agent (i) the sum payable shall be increased as may be necessary so
     that after making all required deductions (including deductions applicable
     to additional sums payable under this Section 2.13) such Lender, or the
     Loan Agent (as the case may be) receives an amount equal to the sum it
     would have received had no such deductions been made, (ii) the Borrowers
     shall make such deductions, and (iii) the Borrowers shall pay the full
     amount deducted to the relevant taxing authority or other authority in
     accordance with applicable law.

               (b) In addition, the Borrowers agree to pay any present or future
     stamp or documentary taxes or any other excise or property taxes, charges
     or similar levies of the United States or any political subdivision thereof
     or any applicable foreign jurisdiction, and all liabilities with respect
     thereto, which arise from any payment made under any Loan Document or from
     the execution, delivery or registration of, or otherwise with respect to,
     any Loan Document excluding, in each


                                       37



     case, such amounts that result from an assignment, grant of a
     participation, transfer or designation of a new Lending Office or other
     office for receiving payments under any Loan Document unless (x) the same
     takes place in connection with an Event of Default (so long as such Event
     of Default is continuing) or at Borrower's written request (collectively,
     "Other Taxes") to the Loan Agent for the account of the affected party or
     (y) in the case of an assignment or change of lending office pursuant to
     Section 2.13(g).

               (c) The Borrowers will indemnify each Lender and the Loan Agent
     for the full amount of Indemnified Taxes or Other Taxes, without
     duplication, (including any Taxes imposed by any jurisdiction on amounts
     payable under this Section 2.13) paid by such Lender or the Loan Agent (as
     the case may be) and any liability (including for penalties, interest and
     expenses) arising therefrom or with respect thereto. This indemnification
     shall be made to the Loan Agent for account of the relevant Lender or the
     Loan Agent, as the case may be, within 30 days from the date such Lender or
     the Loan Agent (as the case may be) makes written demand therefor (with a
     copy to the Loan Agent if made by a Lender, and accompanied by a statement
     setting forth the basis for such taxation and the calculation of the amount
     thereof in reasonable detail).

               (d) Within 30 days after the date of any payment of Indemnified
     Taxes or Other Taxes, the Borrowers will furnish to the Loan Agent the
     original or a certified copy of a receipt evidencing payment thereof or
     other documentation reasonably satisfactory to the Loan Agent.

               (e) Without prejudice to the survival of any other agreement of
     the Borrowers hereunder, the agreements and obligations of the parties
     contained in this Section 2.13 shall survive the payment in full of the
     Obligations.

               (f) Each Lender, each Participant and the Loan Agent shall, on or
     prior to the Closing Date or on or prior to the date of the Assignment and
     Assumption pursuant to which it becomes a Lender or on or prior to the date
     such Person becomes a Participant or the Loan Agent, as applicable, and
     from time to time thereafter if reasonably requested by the Loan Agent or
     the Borrowers, provide the Loan Agent and the Borrowers, with two completed
     copies of IRS Form W-8BEN, W-8ECI, W-8IMY, W-9 and/or other applicable
     forms, certificates and documents prescribed by the IRS with respect to
     United States withholding and/or backup withholding tax with respect to all
     payments to be made to such Person under the Loan Documents. In addition,
     each Lender, each Participant and the Loan Agent, as the case may be, shall
     deliver to the Borrowers and the Loan Agent, notice of any event (other
     than a change in applicable law, including income tax conventions)
     requiring a change in the most recent form certificates and/or documents
     previously delivered by such Person to the Borrowers and the Loan Agent and
     any additional, updated or changed forms, certificates or documents. Unless
     the Loan Agent and the Borrowers have received forms, certificates, and/or
     other documents reasonably satisfactory to them indicating that payments
     under the Loan Documents to or for a Non-U.S. Person are not subject to
     United States withholding tax or are subject to


                                       38



     such tax at a rate reduced by an applicable tax treaty, the Loan Agent or
     the Borrowers shall, notwithstanding the provisions of Section 2.13(a), (b)
     and (d) and without impairing any obligation of the Borrowers under this
     Section 2.13 with respect to such tax, withhold such United States
     withholding taxes from such payments at the appropriate rate.

               (g) Any Lender claiming any additional amounts payable pursuant
     to this Section 2.13 shall use its reasonable efforts (consistent with its
     internal policy and legal and regulatory restrictions) to change the
     jurisdiction of its Lending Office if the making of such a change would
     avoid the need for, or reduce the amount of, any such additional amounts
     which would be payable or may thereafter accrue and would not, in the sole
     determination of such Lender, be otherwise disadvantageous to such Lender.

               (h) If the Borrower or Guarantor pays any amount under this
     Section 2.13 to a Lender, Participant or the Loan Agent (each, a "Tax
     Indemnitee") and such Tax Indemnitee determines in its sole discretion that
     it has actually realized in connection therewith a net cash benefit
     (including a net cash benefit which the relevant taxing authority applies
     to satisfy any liability of such Tax Indemnitee for Taxes) due to any
     refund or any reduction of, or credit against, its liabilities for Taxes in
     any taxable year, provided that no Event of Default shall have occurred and
     be continuing, such Tax Indemnitee shall, to the extent it can do so
     without prejudice to the retention of such benefit, pay to the Borrower or
     Guarantor (as the case may be) an amount that the Tax Indemnitee shall, in
     its sole discretion, determine (subject to confirmation as provided below)
     is equal to such net cash benefit which was obtained by Tax Indemnitee in
     such year as a consequence of such refund, reduction or credit realized in
     connection with the payment of such amount. A Tax Indemnitee shall, upon
     written request from the Borrower, provide to the Borrower a letter from
     independent accountants selected by the Tax Indemnitee and reasonably
     acceptable to the Borrower confirming the accuracy of the Lender's
     calculations of the amount of any net benefit determined by the Tax
     Indemnitee pursuant to the preceding sentence, provided that the
     interpretation of this Agreement or any other Loan Document shall not be
     within the scope of the accountants' confirmation. Nothing contained in
     this Section 2.13(h) shall be construed as requiring any Tax Indemnitee to
     conduct its business or arrange or alter in any respect its Tax or
     financial affairs so that it is entitled to receive a refund, reduction or
     credit or shall require any Tax Indemnitee to provide to the Borrower or
     its agents copies of any Tax returns or other information with respect to
     the income, assets or operations attesting to such Tax Indemnitee's
     determination. The Borrower shall reimburse such Tax Indemnitee for all
     costs and expenses incurred by such Tax Indemnitee in obtaining such
     accountants' letter, provided that the accountants' letter confirms, in all
     material respects, such Tax Indemnitee's determination.

               (i) Borrower shall have no obligation to pay, or indemnify any
     Tax Indemnitee for, any amount under this Section 2.13 or for any United
     States federal income tax or withholding tax which was required by law to
     be deducted or withheld by the Borrower or the Loan Agent from any payment
     to or for the benefit


                                       39



     of such Tax Indemnitee but which was not deducted or withheld due to the
     Borrower's or the Loan Agent's reasonable reliance the withholding forms,
     certificates and/or documents theretofore delivered by such Tax Indemnitee
     or the Loan Agent pursuant to Section 2.13(f) if such form, certificate
     and/or document was inaccurate in any material respect when delivered by
     such Tax Indemnitee and/or the Loan Agent and such Tax Indemnitee or the
     Loan Agent had Actual Knowledge of such inaccuracy at the time such Tax
     Indemnitee or the Loan Agent delivered such form.

               (j) If a Tax Indemnitee receives a written claim from any taxing
     authority for any Tax for which the Borrower is liable pursuant to Section
     2.13 (a "Tax Claim"), such Tax Indemnitee shall promptly notify the
     Borrower in writing. If requested by the Borrower in writing within 30 days
     after receipt of such Tax Indemnitee's written notice (provided that if a
     response to such Tax Claim is due less than 40 days after the Borrower's
     receipt of such Tax Indemnitee's notice, the Borrower's request must be
     made within 15 days or, if longer, the period ending not later than the
     10th day before the day on which the response to such Tax Claim is due),
     such Tax Indemnitee shall in good faith contest or, at such Tax
     Indemnitee's election, permit the Borrower to contest (unless such contest
     involves Taxes not indemnified or paid by the Borrower or Guarantor or, in
     such Tax Indemnitee's reasonable, good faith judgment, permitting the
     Borrower to contest may have a material adverse effect on such Tax
     Indemnitee), in each case in accordance with and to the extent permitted by
     applicable law and at the Borrower's expense, such Tax Claim, provided that
     no Tax Indemnitee shall have any obligation to commence or continue the
     contest of any such Tax Claim unless the following conditions are satisfied
     at the time the contest is to be commenced and at all times during the
     contest:

                    (i) no Event of Default shall have occurred and be
     continuing,

                    (ii) contesting such Tax Claim would not result in (A) any
     risk of sale, forfeiture, confiscation, seizure or loss of, or the
     imposition of a Lien (other than a Lien for the Tax that is the subject of
     such contest provided that enforcement of such Lien is stayed until the
     final determination of such contest and the Borrower maintains adequate
     reserves with respect to such Lien) or (B) any risk of imposition of
     criminal liability,

                    (iii) the aggregate amount of the Taxes that are to be
     contested exceeds Twenty-Five Thousand Dollars ($25,000),

                    (iv) such Tax Indemnitee shall have received a written
     confirmation of the Borrower that the Taxes that are the subject of such
     Tax Claim are Tax for which the Borrower is liable pursuant to Section
     2.13, provided that the Borrower shall not be bound by such confirmation to
     the extent that the final determination of the contest articulates
     conclusions of law and fact that clearly demonstrate that the


                                       40



     Taxes that are the subject of such Tax Claim are not Taxes for which the
     Borrower is liable pursuant to Section 2.13,

                    (v) the Borrower, upon the written request of such Tax
     Indemnitee, shall have provided such Tax Indemnitee, at the expense of the
     Borrower, with an opinion of counsel selected by such Tax Indemnitee and
     reasonably acceptable to the Borrower to the effect that there is a
     substantial basis in law and fact to contest such Tax Claim and a realistic
     expectation that a contest of such Tax Claim would be successful,

                    (vi) if such Tax Indemnitee decides to contest such Tax
     Claim by paying the Taxes that are the subject of such Tax Claim and taking
     action to obtain a refund thereof, the Borrower shall have made an
     interest-free advance to such Tax Indemnitee in an amount equal to the
     amount of those Taxes and shall have delivered to such Tax Indemnitee a
     written undertaking to indemnify such Tax Indemnitee and its Affiliates on
     an after-tax basis for any adverse Tax consequences (taking into account
     all relevant Tax benefits and Tax detriments) to such Tax Indemnitee or any
     of its Affiliates resulting from such interest-free advance, and

                    (vii) the Borrower shall be paying, on demand and on an
     after-tax basis, all reasonable costs and expenses incurred by such Tax
     Indemnitee or the Loan Agent with the conduct of such contest (including,
     without limitation, reasonable attorneys' and accountants' fees and
     disbursements).

               (k) Subject to Section 9.2(c)(2), a Participant will be entitled
     to the benefits and subject to the requirements of this Section 2.13 to the
     same extent as if such Person were a Lender.

          SECTION 2.14 PRO RATA TREATMENT AND PAYMENTS. Each Borrowing by either
Borrower from the Lenders hereunder, and each payment by either Borrower on
account of any reduction of the Commitments of the Lenders shall be made pro
rata according to the respective Commitments of the relevant Lenders. Each
payment (including each prepayment) by either Borrower on account of principal
of and interest on or other amounts in respect of the Loans shall be made pro
rata according to the respective outstanding principal amounts of the Loans then
held by the Lenders (except as otherwise provided in Section 2.10, 2.11, 2.13 or
9.4).

                                   ARTICLE III

                    CONDITIONS TO CLOSING AND FUTURE FUNDINGS

          SECTION 3.1 CONDITIONS PRECEDENT. The effectiveness of this Agreement
and the several obligations of the Lenders to make the Loans requested to be
made on each Funding Date are subject to the satisfaction or waiver of all of
the following conditions precedent on or before such Funding Date:


                                       41



               (a) Certain Documents. On or before the first Funding Date, the
     Loan Agent and the Initial Lender shall have received each of the
     following, each dated appropriately:

                    (i) this Agreement, duly executed and delivered by the
     parties hereto;

                    (ii) the Notes duly executed by the Borrowers and conforming
     to the requirements set forth in Section 2.4(d) hereof;

                    (iii)the documents described in clauses (i), (ii), and (iii)
     of the definition of "Collateral Documents", duly executed and delivered by
     the parties thereto;

                    (iv) the favorable opinions of (A) Skadden, Arps, Slate,
     Meagher & Flom LLP and Vedder, Price, Kaufman & Kammholz, P.C., counsel to
     America West, (B) Arnold & Porter, counsel to US Airways and the Guarantor,
     (C) General Counsel of America West in form and substance satisfactory to
     the Loan Agent and each Lender and (D) General Counsel of US Airways and
     the Guarantor;

                    (v) a copy of the articles or certificate of incorporation
     of each of the Borrowers and the Guarantor, certified as of a recent date
     by the Secretary of State of the state of organization of such Person,
     together with a "long-form" certificate of such official attesting to the
     good standing of such Person;

                    (vi) a certificate of each of the Borrowers and the
     Guarantor signed on behalf of such Person by its Secretary or an Assistant
     Secretary certifying (A) the names and true signatures of each officer of
     such Person who has been authorized to execute and deliver each Loan
     Document required to be executed and delivered by or on behalf of such
     Person hereunder or thereunder, (B) the by-laws of such Person as in effect
     on the date of such certification, (C) the resolutions of such Person's
     board of directors approving and authorizing the execution, delivery and
     performance of each Loan Document to which it is a party and (D) that there
     have been no changes in the certificate of incorporation of such Person
     from the certificate of incorporation delivered pursuant to the immediately
     preceding clause;

                    (vii) a certificate of each of the Borrowers and the
     Guarantor, signed by its duly authorized officer, certifying (i) that all
     representations and warranties of such Person contained in Article IV
     hereof are true and correct in all material respects on and as of the
     Closing Date, before and after giving effect to any Borrowing to be made on
     such date and to the application of the proceeds therefrom, and (ii) that
     no Default or Event of Default has occurred and is continuing, or would
     result


                                       42



     from any Borrowing to be made on such date and the application of the
     proceeds therefrom; and

                    (viii) a copy of the ATSB Loan Agreements and of each
     counter-guarantee or guarantee delivered thereunder, all in form and
     substance satisfactory to the Loan Agent and each Lender.

               (b) No Material Adverse Change. On each Funding Date, since the
     Effective Date, there shall have been no Material Adverse Change.

               (c) Amendments; New Aircraft Transaction. Before the first
     Funding Date:

                    (i) the relevant security agreements for the Cross-Default
     Obligations shall have been amended in a manner reasonably satisfactory to
     the Loan Agent to provide for cross-collateralization to the Obligations;

                    (ii) the America West ATSB loan documents shall have been
     amended in a manner reasonably satisfactory to the Loan Agent to provide
     for the release of any prepayment obligation thereunder to the extent
     conflicting with any mandatory prepayment obligation of the Borrowers under
     Section 2.6;

                    (iii) an intercreditor agreement (and any necessary
     amendments to the GECC loan and security agreements) consistent with the
     MOU and otherwise reasonably satisfactory to the Loan Agent shall have been
     entered into with GECC with respect to spare parts and any other Collateral
     held in common with GECC (and any necessary amendments to the GECC loan and
     security agreements);

                    (iv) each of the A319/A320/A321 Purchase Agreement and the
     A330/A340 Purchase Agreement shall have been amended as contemplated in the
     MOU and the other transactions provided for therein shall have been
     consummated as set forth therein and Guarantor shall have obtained
     Bankruptcy Court approval to assume by Final Order, and shall have assumed,
     the A319/A330/A321 Purchase Agreement and the A330/A340 Purchase Agreement,
     each, as so amended; all of the foregoing to the reasonable satisfaction of
     the Loan Agent;

                    (v) definitive documentation with respect to the new
     aircraft transaction for twenty (20) A350 aircraft shall have been entered
     into by all relevant parties, as contemplated in paragraph 4 of the MOU;

                    (vi) with respect to the Pass-Through Trust Certificates,
     Series 2001-1 transactions, all aircraft leases and other assumable
     agreements included therein or comprising such transactions


                                       43



     shall have been assumed following Bankruptcy Court approval by Final Order,
     all to the satisfaction of the Loan Agent;

                    (vii) the Co-Branded Card and Merchant Services Agreement,
     dated May 20, 2003, as amended, between US Airways and Bank of America,
     shall have been assumed following Bankruptcy Court approval by Final Order;

                    (viii) all other assumable contracts of US Airways or its
     Affiliates which are Debtors with Airbus or its Affiliates shall have been
     assumed with Bankruptcy Court Approval by Final Order; and

                    (ix) on the first Funding Date, the Loan Agent and the
     Initial Lender shall have received a certificate of US Airways and the
     Guarantor signed by its duly authorized officer as to the assumptions of
     contracts referred to in the preceding clauses (iv), (vi), (vii) and
     (viii).

               (d) Expenses Paid. On each Funding Date, the Obligors shall have
     paid all legal fees and expenses of the Loan Agent, the Initial Lender and
     the Collateral Agent due and payable on or before such Funding Date if the
     Borrowers are responsible therefor under Section 9.3 and have received
     reasonably detailed invoices therefor promptly following the relevant
     Notice of Borrowing.

               (e) Consents, Etc. On each Funding Date, the Borrowers and the
     Guarantor shall have received all consents and authorizations required to
     be received by them to be able to execute, deliver and perform, in all
     material respects, their obligations under the Loan Documents to which any
     of them is, or shall be, a party.

               (f) No Illegality. On each Funding Date, no law or regulation
     shall be applicable that restrains, prevents or imposes materially adverse
     conditions upon the transactions contemplated hereby.

               (g) Representations and Warranties of Obligors. On each Funding
     Date, all representations and warranties of each Borrower and of the
     Guarantor set forth in Article IV hereof shall be true and correct in all
     material respects on and as of such Funding Date, both before and after
     giving effect to any Borrowing to be made on such date and to the
     application of the proceeds therefrom as though made on and as of such date
     (except to the extent such representations and warranties by their terms
     expressly relate to an earlier date, in which case such representations and
     warranties shall have been true and correct in all material respects on and
     as of such earlier date).

               (h) No Event of Default. On each Funding Date, no Event of
     Default or Default shall have occurred and be continuing, or would result
     from the Borrowing to be made on such date and the application of the
     proceeds therefrom.


                                       44



               (i) Corporate and Other Proceedings. On the first Funding Date,
     all corporate and other proceedings, and all documents, instruments and
     other legal matters in connection with the transactions contemplated hereby
     shall be satisfactory in form and substance to the Loan Agent.

               (j) Chief Executive Officer. On the first Funding Date, W.
     Douglas Parker shall be the Chief Executive Officer of the Guarantor.

               (k) Additional Investments. On the first Funding Date, Guarantor
     shall have received one or more unrestricted equity investments in an
     aggregate amount equal to not less than $375 million and a cash payment of
     not less than $125 million from one or more sources in addition to the
     liquidity amounts described in the Business Plan.

               (l) Effective Date. On or before the first Funding Date, the
     Effective Date shall have occurred.

               (m) Pro Forma Balance Sheet; Financial Statements. On the first
     Funding Date, the Lenders shall have received (i) the Pro Forma Balance
     Sheet and (ii) the financial statements referred to in Section 4.3(b).

               (n) Lien Searches. On each Funding Date, the Loan Agent shall
     have received, if it desires, the results of a recent UCC lien search in
     each appropriate jurisdiction and FAA liens search, and in each case, such
     search shall reveal (1) no Liens other than those listed in Section 5.13 or
     otherwise permitted by Section 5.13 and (2) no Liens on any material
     portion of the Collateral except in respect of Liens permitted on the
     Collateral by Section 5.13 and not otherwise prohibited under the
     Collateral Documents.

               (o) Filings, Registrations and Recordings. On each Funding Date,
     each document (including any Uniform Commercial Code financing statement)
     required by the Collateral Documents or under law or reasonably requested
     by the Loan Agent to be filed, registered or recorded in order to create in
     favor of the Loan Agent, for the benefit of the Lenders, a perfected Lien
     on the Collateral described therein, prior and superior in right to any
     other Person (other than with respect to Liens expressly permitted by
     Section 5.13), shall have been delivered to the Loan Agent in proper form
     for filing, registration or recordation.

               (p) Plan of Reorganization; Confirmation Order; Effective Date of
     Merger. On the first Funding Date, the Confirmation Order confirming the
     Plan of Reorganization (i) shall have been provided to the Loan Agent and
     (ii) shall be in full force and effect and shall not have been reversed or
     modified and shall not be stayed or subject to a motion to stay, and the
     Confirmation Order shall have become a Final Order. The Plan Effective Date
     and the Effective Time (as defined in the Merger Agreement) shall have
     occurred. On the First Funding Date, the Loan Agent and the Initial Lender
     shall have received a certificate of each of the Borrowers and the
     Guarantor, signed by its duly authorized officer, certifying to the effect
     of the


                                       45



     preceding sentence and clause (ii) of the second preceding sentence. All
     claims arising under or with respect to the A321 Airbus Financings and all
     claims arising under or with respect to the Pass-Through Trust
     Certificates, Series 2001-1 transactions shall have been allowed under the
     Plan and shall be unimpaired and reinstated thereunder, in form and
     substance reasonably acceptable to the Loan Agent.

               (q) Concerning the Collateral.

                    (i) On each Funding Date, Collateral Agent shall have
     received (or shall hold from prior closings) a broker's report and current
     insurance certificate confirming the insurance coverages on the Collateral
     which are required by the terms of the Collateral Documents.

                    (ii) On the first Funding Date, Borrower shall have obtained
     from each Person with any interest in the real property and/or the
     improvements thereon at each Designated Location (whether as fee owner,
     landlord, tenant, ground lessor, mortgagee, leasehold mortgagee,
     beneficiary of deed of trust, beneficiary of leasehold deed of trust or
     otherwise), a waiver of any and all right or interest that such Person may
     otherwise have in the Pledged Spare Parts and such Person's consent, if
     applicable, to access by the Collateral Agent, and/or any Lender or any
     representative of any of them to the premises in connection with the
     exercise of any rights or remedies under or pursuant to the Spare Parts
     Mortgage and Security Agreement (in each case, in form and substance
     satisfactory to the Collateral Agent).

               (r) Concerning the ATSB Loan Agreements. On or before the First
     Funding Date, the warrant for the purchase of 386,925 shares of common
     stock of the Guarantor shall have been delivered to AFS Cayman Limited.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

          To induce the Loan Agent and the Lenders to enter into this Agreement,
each of the Obligors jointly and severally represents and warrants to the Loan
Agent and the Lenders, on and as of the Closing Date and on and as of each date
as required by Section 3.1, as provided below in Sections 4.1 through 4.13,
that:

          SECTION 4.1 ORGANIZATION, POWERS, QUALIFICATION; AIR CARRIER LICENSES,
FRANCHISES AND PERMITS.

               (a) Each Obligor is a corporation duly organized, validly
     existing and in good standing under the laws of the State of Delaware. As
     of the Closing Date, each Borrower is Wholly-Owned by the Guarantor. Each
     Obligor has all requisite corporate power and authority (i) to carry on its
     business as now conducted, and (ii) to enter into the Loan Documents to
     which it is a party and to carry out the transactions contemplated hereby
     and thereby.


                                       46



               (b) Each Obligor is qualified to do business and in good standing
     in every jurisdiction where its assets are located and wherever necessary
     to carry out its business and operations, except in jurisdictions where the
     failure to be so qualified or in good standing could reasonably be expected
     to result in a Material Adverse Effect.

               (c) Each Borrower is an "air carrier" within the meaning of Title
     49 and holds a certificate under Sections 41102 of Title 49.

               (d) Each of the Borrower and any other Obligor engaged in
     operations as an "air carrier" is a "citizen of the United States" within
     the meaning of Section 40102(a)(15) of Title 49, as interpreted by the
     United States Department of Transportation (a "United States Citizen") and
     holds an air carrier operating certificate issued pursuant to Chapter 447
     of Title 49 for aircraft capable of carrying 10 or more individuals or
     6,000 pounds or more of cargo. Each Obligor possesses all necessary
     certificates, franchises, licenses, permits, rights and concessions and
     consents which are material to the conduct of its business and operations
     as currently conducted (including in the case of each Obligor engaged in
     operations as an "air carrier", the operation of the routes flown by it), a
     true and complete list of which are set forth on Schedule 4.1(b) to the
     ATSB Loan Agreements.

               (e) The Borrowers possess all necessary franchises, licenses, and
     permits necessary to authorize the Borrowers to lawfully engage in air
     transportation and to carry on scheduled commercial passenger service as
     currently conducted, except where the failure to so hold any such
     franchise, license, or permit could not reasonably be expected to have a
     Material Adverse Effect.

          SECTION 4.2 AUTHORIZATION OF BORROWING, ETC.

               (a) Each Obligor has duly authorized by all necessary corporate
     action the execution, delivery and performance of the Loan Documents to
     which it is a party. The execution, delivery and performance by each
     Obligor of the Loan Documents to which it is a party and the consummation
     of the transactions contemplated by the Loan Documents to which it is a
     party do not and will not (i) (A) violate any provision of any law or any
     governmental rule or regulation or order applicable to or binding on such
     Obligor, (B) violate any provision of the Certificate or Articles of
     Incorporation or Bylaws of such Obligor, (C) conflict with, result in a
     breach of or constitute (with due notice or lapse of time or both) a
     default under any Contractual Obligation of such Obligor or any of its
     Subsidiaries except to the extent of any such violation, conflict, breach,
     default, or imposition of Lien (of which no Obligor has Actual Knowledge)
     which could not reasonably be expected to have a Material Adverse Effect,
     or (D) result in or require the creation or imposition of any Lien on any
     of the Collateral (except as permitted in the applicable Collateral
     Document) or on any other property (except as permitted under Section 5.13
     hereof), or (ii) require any approval of stockholders or any approval or
     consent of any Person under any Contractual Obligation of such Obligor or
     any of its Subsidiaries, except for such approvals or consents which will
     have been obtained on or before the


                                       47



     Closing Date, except for any such approval or consent under a Contractual
     Obligation and the failure to obtain which could not reasonably be expected
     to result in a Material Adverse Effect.

               (b) The execution, delivery and performance by each Obligor of
     the Loan Documents to which it is a party and the consummation of the
     transactions contemplated by the Loan Documents to which it is a party and
     the use of the proceeds of the Loans do not and will not require any
     registration with, consent or approval of, or notice to, or other action
     to, with or by, any federal, state or other Governmental Authority or
     regulatory body or any other Person which is required to be obtained or
     made on or prior to the Closing Date and which has not previously been
     obtained or made.

               (c) Each Obligor has duly executed and delivered each of the Loan
     Documents to which it is party and each such Loan Document is the legally
     valid and binding obligation of such Obligor, enforceable against such
     Obligor in accordance with its respective terms, except as may be limited
     by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
     or other similar laws relating to or affecting the enforcement of
     creditors' rights generally, including materiality, reasonableness, good
     faith and fair dealing, and by general principles of equity (regardless of
     whether considered in a proceeding in equity or at law).

               (d) No part of the proceeds of the Loans will be used, directly
     or indirectly, for any purpose that entails a violation of Regulations U or
     X of the Federal Reserve Board.

          SECTION 4.3 FINANCIAL CONDITION. Each Obligor has heretofore delivered
to the Lenders the following financial statements and information:

               (a) The unaudited pro forma consolidated balance sheet of the
     Guarantor and its consolidated Subsidiaries for the Fiscal Years 2005
     through 2008 (including the notes thereto) (the "Pro Forma Balance Sheet"),
     which has been prepared giving effect (as if such events had occurred on
     such date) to (i) the occurrence of the Effective Time (as defined in the
     Merger Agreement), (ii) the Loans to be made on the Closing Date and the
     use of proceeds thereof and (iii) the payment of fees and expenses in
     connection with the foregoing. The Pro Forma Balance Sheet was prepared in
     good faith based upon assumptions believed to be reasonable at the time
     made, assuming that the events specified in the preceding sentence had
     actually occurred at such date.

               (b) (i) The audited consolidated balance sheets of US Airways and
     Guarantor as at December 31, 2004 and the related consolidated statements
     of income, stockholders' equity and cash flows of US Airways and Guarantor
     for the Fiscal Year then ended, (ii) the unaudited consolidated balance
     sheets of US Airways and Guarantor as at June 30, 2005 and the related
     unaudited consolidated statements of income, stockholders' equity and cash
     flows of US Airways and Guarantor for the six months then ended, and (iii)
     audited consolidated


                                       48



     balance sheets of AWA Holdings and America West as at December 31, 2004,
     and the related consolidated statements of income, stockholders' equity and
     cash flows of AWA Holdings and America West for the Fiscal Year then ended,
     and (iv) the unaudited consolidated balance sheets of AWA Holdings and
     America West as at June 30, 2005 and the related unaudited consolidated
     statements of income, stockholders' equity and cash flows of AWA Holdings
     and America West for the six months then ended. All such consolidated
     statements were prepared in conformity with GAAP and fairly present the
     consolidated financial position of the applicable Obligor as at the
     respective dates thereof and the consolidated results of operations and
     cash flows of such Obligor for each of the periods then ended subject, in
     the case of the unaudited consolidated statements, to year-end audit and
     adjustments. Except as disclosed in writing to the Loan Agent prior to the
     date of this Agreement, neither Obligor has any contingent liability or
     liability for taxes, long-term lease or unusual forward or long-term
     commitment (A) that is not reflected in the foregoing consolidated
     financial statements (or, in the case of the Borrowers, in the most
     recently delivered consolidated financial statements delivered pursuant to
     Section 5.1) or the notes thereto and (B) which in any such case would
     result in a Material Adverse Effect.

               (c) After giving effect to the Consummation of the Plan, (i) the
     Obligors taken as a whole are or were Solvent on the First Funding Date
     after giving effect to the Borrowings on such date, and (ii) no Obligor has
     any material liability, including reasonably likely contingent liability or
     liability for taxes, long-term lease or any unusual forward or long-term
     commitment of a type required to be reflected in financial statements
     prepared in conformity with GAAP, that is not taken into account in the
     preparation of the annual report on Form 10-K for the fiscal year ended
     December 31, 2004 of such Reporting Obligor.

          SECTION 4.4 NO MATERIAL ADVERSE EFFECT. Since the Effective Date there
has not been a Material Adverse Change.

          SECTION 4.5 TITLE TO PROPERTIES; LIENS. Each Obligor and its
Subsidiaries have (i) good, sufficient and legal title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of the properties and assets
reflected in the financial statements referred to in Section 4.3 or, in the most
recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.5. Except
as otherwise permitted by this Agreement, all such properties and assets are
free and clear of Liens.

          SECTION 4.6 LITIGATION; ADVERSE FACTS. Except as set forth in either
Borrowers' or Guarantors Annual Reports on Form 10-K for 2004, as amended
through the Closing Date, or in any Quarterly Report on Form 10-Q or Current
Report on Form 8-K filed by such Borrower or Guarantor with the SEC subsequent
to such Form 10-K (in each case, as amended through the Closing Date) and except
as disclosed in other publicly available filings of either of the Borrowers or
the Guarantor with the SEC


                                       49



or as disclosed in any publicly available filing with the Bankruptcy Court in
the Cases, there are no actions, suits, proceedings, arbitrations or
governmental investigations (whether or not purportedly on behalf of any Obligor
or any of its Subsidiaries) at law or in equity or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, pending or, to the knowledge of
the Obligors, threatened against any Obligor or any of its Subsidiaries or any
property of any Obligor or any of its Subsidiaries that, if adversely
determined, would have a Material Adverse Effect or seeks to restrain or enjoin
any Obligor from entering into or performing under any Loan Document.

          SECTION 4.7 TAX RETURNS. Each Obligor and each of their respective
Subsidiaries have timely filed all Federal income tax returns and all other
material tax returns that are required to be filed by them (or extensions have
been obtained with respect thereto) and have paid all material Taxes shown to be
due pursuant to such returns or pursuant to any assessment received by such
Person, other than (i) any such assessment being contested in good faith through
appropriate proceedings and with respect to which an adequate reserve has been
established by the Obligors or their Subsidiaries to the extent required by GAAP
and (ii) that the Debtors' obligations to pay taxes that relate to a tax period
(or portion thereof) ending on or before the commencement of the Cases and which
first became due and payable after the time of the commencement of the Cases,
have been stayed or enjoined pursuant to the Plan of Reorganization, the
Confirmation Order or the Bankruptcy Code, it being understood that the
exception in clause (ii) above does not affect the Debtors' representation that
they have made adequate provision for such Taxes.

          SECTION 4.8 NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default has occurred and is continuing.

          SECTION 4.9 GOVERNMENTAL REGULATION. None of the Obligors is (i) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, or (ii) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.

          SECTION 4.10 EMPLOYEE BENEFIT PLANS. Within the last 6 years, each
Plan maintained, contributed to, or required to be contributed to by the
Borrowers or an ERISA Affiliate is in compliance with all applicable laws,
except to the extent failure to so comply could not be reasonably expected,
individually or in the aggregate, to have a Material Adverse Effect. Neither the
Borrowers nor any ERISA Affiliate have incurred any liability under Title IV of
ERISA within the last 6 years which remains unsatisfied nor, to the best of
their knowledge, do the Borrowers reasonably expect to incur any liability under
Title IV of ERISA, which in either event, could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.

          SECTION 4.11 COMPLIANCE WITH LAWS. Each Obligor and each of its
Subsidiaries is in compliance with all laws, statutes, rules, regulations and
orders binding on or applicable to such Obligor, its Subsidiaries and all of
their respective properties,


                                       50



except to the extent failure to so comply could not reasonably be expected to
have a Material Adverse Effect.

          SECTION 4.12 SECURITY DOCUMENTS. Each of the Borrowers has good title
to the Collateral free and clear of Liens other than Liens permitted by Section
5.13 and not prohibited by the applicable Collateral Document. No Person holds
any right or interest in any of the Pledged Spare Parts under the Spare Parts
Security Agreement by virtue of any interest that such person may have in real
property or improvements at any of the Designated Locations (as defined
therein). The Collateral Documents are effective to create in favor of the
Collateral Agent, for the benefit of the Lenders, a legal, valid and enforceable
security interest in the Collateral described therein and proceeds thereof. When
appropriate financing statements, filings and recordings with the FAA, and other
filings and recordings specified on Schedule 4.12, in appropriate form are filed
in the offices specified on Schedule 4.12, the Collateral Documents shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Borrowers in such Collateral and the proceeds thereof, as
security for the Obligations and the Cross-Default Obligations, in each case
prior and superior in right to any other Person (except Liens permitted by
Section 5.13 and not prohibited by the applicable Collateral Document, none of
which are of record except for the Liens of the Senior Mortgages).

          SECTION 4.13 CONCERNING THE COLLATERAL.

               (a) Section 1110. The Collateral Agent is entitled to the
     benefits of Section 1110 of the Bankruptcy Code with respect to the
     Specified Engines as provided in the Engine Mortgage and Security Agreement
     and to not less than the Minimum 1110 Percentage (determined on the basis
     of Appraisal Value as of the Closing Date) of the Rotables included within
     the Pledged Spare Parts as provided in the Spare Parts Security Agreement
     in the event of a case under Chapter 11 of the Bankruptcy Code in which a
     Borrower is a debtor. Defined terms in this paragraph not otherwise defined
     herein shall have the respective meanings specified in the Spare Parts
     Security Agreement.

               (b) Condition. All Pledged Spare Parts are in the condition and
     state of repair required under the FAA-approved maintenance program of the
     applicable Borrower relating to such Pledged Spare Parts, and no
     appliances, parts, interests, appurtenances, accessories or other equipment
     of whatever nature which are incorporated or installed in or attached to
     such Pledged Spare Parts are leased by the Borrower. Each Pledged Engine is
     in the condition and state of repair required under the FAA-approved
     maintenance program of Borrower relating to such Engine, and no appliances,
     parts, interests, appurtenances, accessories or other equipment of whatever
     nature which are incorporated or installed in or attached to any Pledged
     Engine are leased by the Borrower.

               (c) Location, Identification and Release of Pledged Spare Parts.
     All of the Pledged Spare Parts are or will (upon becoming subject to the
     Lien of the Mortgage) be maintained by or on behalf of the Borrower at the
     Designated


                                       51



     Locations, subject to Section 3.02 of the Spare Parts Mortgage and Security
     Agreement.

               (d) Software. (i) Each Borrower owns the Software currently used
     by such Borrower to track the location, use and maintenance status of its
     spare parts, including the source code and user interfaces associated
     therewith, free and clear of any Liens other than Liens permitted under the
     Spare Parts Security Agreement, (ii) such Borrower pays no license fees in
     respect of such Software to any Person, (iii) no approval or consent by any
     Person is required in respect of such Borrower's right to use such Software
     or in order to recognize or give effect to the rights granted in the Spare
     Parts Mortgage and Security Agreement by the Borrower to the Collateral
     Agent in respect of such Software in the Spare Parts Mortgage and Security
     Agreement, and (iv) no Person has any contractual right, whether contingent
     or otherwise, to terminate such Borrower's right to use such Software.

               (e) Records. America West shall maintain its records with respect
     to Pledged Spare Parts at Sky Harbor Airport in Phoenix, Arizona, or at an
     applicable Designated Location.

               (f) Spare Parts. It is the intention of the parties to this
     Agreement that all Pledged Spare Parts be "spare parts" as defined in
     Section 40102(a)(38) of Title 49 of the United States Code. Each Borrower
     represents that it maintains the Pledged Spare Parts for the purpose of
     installing the Spare Parts on aircraft, aircraft engines or appliances as
     defined in Sections 40102(a)(6), (7) and (11) of the United States Code.

               (g) No Event of Loss. To the Borrowers' knowledge, on the First
     Funding Date, no Event of Loss has occurred with respect to any Pledged
     Engine, or A321 Aircraft subject to an A321 Airbus Financing, and no
     circumstance, condition, act or event has then occurred that, with the
     giving of notice or lapse of time or both gives rise to or constitutes an
     Event of Loss with respect to any Pledged Engine, unless arrangements
     satisfactory to the Loan Agent have been made for the Loan Agent to
     receive, out of Net Insurance Proceeds or otherwise, the prepayment
     envisioned under Section 3.04(a) of the Engine Mortgage and Security
     Agreement for Pledged Engines which have suffered an Event of Loss. On each
     subsequent Funding Date, No Event of Loss has occurred with respect to any
     Pledged Engine, or A321 Aircraft subject to an A321 Airbus Financing, with
     respect to which any Obligor or any of its Subsidiaries has not complied in
     all material respects with its applicable obligations under the Collateral
     Documents and the documents related to the A321 Airbus Financings; and no
     circumstance, condition, act or event has occurred that, with the giving of
     notice or lapse of time or both gives rise to or constitutes an Event of
     Loss with respect to any Pledged Engine, of which the Loan Agent has not
     been notified by the Borrowers.

               (h) Outstanding Amount. The outstanding principal amount of
     Indebtedness secured by the Senior Mortgages is $110,563,891 ($75,563,891
     for the Senior Spare Parts Mortgage and $35,000,000 for the Senior Engine
     Mortgage).


                                       52



          SECTION 4.14 REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT.
The Collateral Agent represents and warrants to the other parties hereto, in its
individual capacity, on and as of the Closing Date and on each date as required
by Section 3.1, that:

               (a) Powers and Authorizations. It is a national banking
     association duly organized and validly existing in good standing under the
     laws of the United States and has full power and authority, in its
     individual capacity, to execute and deliver this Agreement and the
     Collateral Documents to which it is a party and (assuming the due
     authorization, execution and delivery of this Agreement by the other
     parties hereto) perform its obligations thereunder. The execution, delivery
     and performance by the Collateral Agent of the Loan Documents to which it
     is or will be a party have been duly authorized by all necessary action on
     its part and do not contravene the Charter or By-laws of the Collateral
     Agent; and the Loan Documents to which the Collateral Agent is or will be a
     party have been duly authorized, executed and delivered by the Collateral
     Agent and constitute the legal, valid and binding obligations, enforceable
     against it in accordance with its terms. This Agreement and the other Loan
     Documents to which the Collateral Agent is or will be a party, upon the due
     execution and delivery hereof, will constitute the legal, valid and binding
     obligations of the Collateral Agent in its individual capacity, and the
     performance by the Collateral Agent (in its individual or trust capacity,
     as the case may be) of any of its obligations hereunder and thereunder does
     not contravene any federal law or regulation or contractual restriction
     binding on or governing the banking or trust powers of the Collateral Agent
     (in its individual or trust capacity, as the case may be);

               (b) Litigation. There are no pending (or, to the Collateral
     Agent's knowledge, threatened) actions, suits, investigations or
     proceedings against or affecting it before any court, arbitrator, or
     administrative or governmental body which, individually or in the
     aggregate, if decided adversely to the interests of the Collateral Agent
     would materially and adversely affect the ability of the Collateral Agent,
     either in its individual capacity or as Collateral Agent, as the case may
     be, to perform its obligations under this Agreement or any other Loan
     Document or which questions or would affect the legality or validity of
     this Agreement or such Loan Document;

               (c) No Legal Bar. Neither the execution and delivery by the
     Collateral Agent of this Agreement or any other Loan Document nor the
     consummation by the Collateral Agent of any of the transactions
     contemplated hereby or thereby requires or will require the consent or
     approval of or the giving of notice to, the registration with, or the
     taking of any other action in respect of, any federal governmental
     authority or agency governing its banking or trust powers.


                                       53



                                    ARTICLE V

                                    COVENANTS

          To induce the other parties to enter into this Agreement, each of the
Obligors jointly and severally agrees with the Loan Agent and each Lender that,
as long as any of the Obligations remain outstanding:

          SECTION 5.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Obligors
will maintain, and cause each of their respective Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. The Obligors will deliver to the Loan Agent:

               (a) Financial Statements.

                    (i) Quarterly Financials: within 60 days after the end of
     each fiscal quarter of each Fiscal Year (other than the last quarter of
     each Fiscal Year), (a) the unaudited consolidated balance sheets of each of
     the Obligors as at the end of such fiscal quarter and the related
     consolidated statements of income and stockholders' equity of each such
     company for such fiscal quarter and consolidated cash flows of each such
     company for the period from the beginning of then current Fiscal Year to
     the end of such fiscal quarter, all such financial statements to be in the
     form prepared for the management of the Borrowers and certified by the
     chief financial officer, controller or treasurer of such company being
     fairly stated in all material respects (subject to normal year-end audit
     adjustments); provided that delivery of such company's Form 10-Q for such
     fiscal quarter shall be deemed to satisfy all of the requirements of this
     Section 5.1(a)(i) and in lieu of actual delivery of such Form 10-Q, the
     Borrowers may notify the Loan Agent that such report has been filed with
     the SEC and that such report is publicly available; and

                    (ii) Year-End Financials: within 105 days after the end of
     each Fiscal Year, (a) the consolidated balance sheets of each of the
     Obligors at the end of such Fiscal Year and the related consolidated
     statements of income, stockholders' equity and cash flows of such company
     for such Fiscal Year, setting forth in each case in comparative form the
     corresponding figures for the previous Fiscal Year, all in reasonable
     detail, and (b) an accountant's report thereon of KPMG LLP or other
     independent certified public accountants of recognized national standing
     selected by such company, which report shall state that such consolidated
     financial statements fairly present the consolidated financial position of
     such company as at the dates indicated and the results of their operations
     and their cash flows for the periods indicated in conformity with GAAP
     applied on a basis consistent with prior years and that the examination by
     such accountants in connection with such consolidated financial statements
     has


                                       54



     been made in accordance with generally accepted auditing standards;
     provided that delivery of such company's Form 10-K for such Fiscal Year
     shall be deemed to satisfy all of the requirements of this Section
     5.1(a)(ii) and in lieu of actual delivery of such Form 10-K, the Borrowers
     may notify the Loan Agent that such report has been filed with the SEC and
     that such report is publicly available.

               (b) Officer's Certificate: together with each delivery of
financial statements of the Obligors pursuant to Section 5.1(a) (or SEC reports
in lieu thereof), an Officer's Certificate of each of the Obligors stating
whether the signer has Actual Knowledge of the existence as at the date of such
Officer's Certificate of any Event of Default or Default, and, if so, specifying
the nature and period of existence thereof and what action the Obligors have
taken, are taking and proposes to take with respect thereto; and

               (c) Certain Notices. The Obligors will:

                    (i) promptly notify the Loan Agent, the Collateral Agent and
     each Lender, upon a Responsible Officer of any Obligor obtaining Actual
     Knowledge of the occurrence of an event of loss or damage to any equipment
     owned or operated by either Borrower that is reasonably expected to result
     in receipt of insurance proceeds to be received by a Borrower which are
     expected to result in a prepayment under Section 2.6;

                    (ii) prior to either Borrower consummating any Asset Sale
     expected to result in a prepayment under Section 2.6; and

                    (iii) promptly notify the Loan Agent of any proposed
     amendment, waiver or consent with respect to an ATSB Loan Agreement or the
     GECC spare parts financing facility of either Borrower, with details of any
     such amendment, waiver or consent.

               (d) Plan Audits and Liabilities: promptly after (A) an Obligor or
any ERISA Affiliate contacts the IRS or the PBGC for the purpose of
participating in a closing agreement or any voluntary resolution program with
respect to a Plan or Multiemployer Plan which could reasonably be expected to
have a Material Adverse Effect, or (B) a Responsible Officer knows or has reason
to know that any event with respect to any Plan or Multiemployer Plan occurred
that could reasonably be expected to have a Material Adverse Effect, notice of
such contact or the occurrence of such event;

               (e) Funding Changes and New Plan Benefits: promptly after the
change, a notification of any increases in the benefits, or change in funding
method, with respect to which an Obligor may have any liability, under any Plan
or Multiemployer Plan or the establishment of any material new Plan or
Multiemployer Plan with respect to which an Obligor may have any liability or
the commencement of contributions to any Plan or Multiemployer Plan to which an
Obligor or any ERISA Affiliate was not


                                       55



previously contributing, except to the extent that such an event could not
reasonably be expected to have a Material Adverse Effect;

               (f) Claims and Proceedings: promptly after receipt of written
notice of commencement thereof, notification of all (A) claims made by
participants or beneficiaries with respect to any Plan and (B) actions, suits
and proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting an Obligor or
any ERISA Affiliate with respect to any Plan, except those which, in the
aggregate, if adversely determined, could not reasonably be expected to have a
Material Adverse Effect;

               (g) ERISA Event: promptly after the occurrence of any ERISA Event
(A) that could reasonably be expected to have a Material Adverse Effect or (B)
that relates to the occurrence or existence of an event or condition that could
reasonably be expected to have a Material Adverse Effect, notice of such ERISA
Event; and

               (h) Other Information: promptly following request therefor, such
other nonconfidential information regarding the Collateral or the operations,
business affairs, and financial condition of any Obligor, or compliance with the
terms of the Loan Documents, as the Loan Agent or any Lender shall reasonably
request.

          SECTION 5.2 CORPORATE EXISTENCE. Except as permitted under Section
5.8, each of the Obligors will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each Subsidiary of each Obligor and
the material rights (charter and statutory) and franchises of any of them;
provided, that, subject to Section 5.14, neither the Guarantor nor either
Borrower shall be required to preserve any such corporate, partnership or other
existence of any Subsidiary or any such right or franchise, if the chief
executive officer or the board of directors of the Guarantor shall determine in
the exercise of its business judgment that the preservation thereof is no longer
desirable in the conduct of the business of the Obligors and their respective
Subsidiaries taken as a whole.

          SECTION 5.3 PAYMENT OF TAXES. The Guarantor and the Borrowers will,
and will cause its Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, all taxes, assessments and
governmental charges levied or imposed upon the Guarantor, either Borrower or
any Subsidiary or upon the income profits or property of the Guarantor, either
Borrower or any Subsidiary; provided, however, that the Guarantor and each
Borrower shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment or governmental charge the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and with respect to which an adequate reserve has been
established by the Guarantor or the Borrowers to the extent required by GAAP.

          SECTION 5.4 MAINTENANCE OF PROPERTIES; INSURANCE. The Guarantor and
the Borrowers will, and will cause each of its Subsidiaries to, maintain all
properties used or useful in the conduct of its business in good condition,
repair and


                                       56



working order and supply such properties with all necessary equipment and make
all necessary repairs, renewals, replacements, betterments and improvements
thereto, all as in the judgment of the Guarantor and the Borrowers may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Guarantor, either Borrower or any
Subsidiary from discontinuing the operation and maintenance of any such
properties if such discontinuance is, in the good faith judgment of the
Guarantor, the Borrowers or such Subsidiary, as the case may be, desirable in
the conduct of its respective business and shall not impair the ability of the
Guarantor or either Borrower to perform their payment or other material
obligations under the Loan Documents. The Guarantor and each Borrower will
insure and keep insured, and will cause each of its Subsidiaries to insure and
keep insured, with reputable insurance companies, such of their respective
properties, to such an extent and against such risks, and will maintain
liability insurance, to the extent (i) that property of a similar character is
usually so insured by companies engaged in a similar business and owning similar
properties in accordance with good business practice and (ii) with respect to
the Collateral or Cross Collateral, required by any of the Collateral Documents
or those relevant to a Cross-Default Obligation, respectively.

          SECTION 5.5 INSPECTION. The Guarantor and each Borrower will, and will
cause its Subsidiaries to, permit any authorized representatives designated by
the Loan Agent to discuss its and their affairs, finances and accounts with its
and their officers upon reasonable notice and at such reasonable times during
normal business hours and as often as may be reasonably requested; provided that
such access to officers shall not be disruptive to the Guarantor or either
Borrower's business, as reasonably determined by the Guarantor and the
Borrowers.

          SECTION 5.6 COMPLIANCE WITH LAWS, ETC. Each Obligor will, and will
cause each of its Subsidiaries to, comply with all applicable statutes, rules,
regulations, orders and restrictions of the United States of America, all states
and municipalities thereof, and of any governmental department, commission,
board, regulatory authority, bureau, agency and instrumentality of the
foregoing, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except such as are being contested in
good faith by appropriate proceedings and except for such noncompliance as could
not reasonably be expected to result in a Material Adverse Effect.

          SECTION 5.7 FURTHER ASSURANCES. At any time or from time to time
following the request of the Loan Agent, the Obligors will, at their expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as the Loan Agent may reasonably request in order to
effect fully the purposes of the Loan Documents. From the date on which the Cape
Town Convention becomes effective, each of the Obligors, at no cost to the
Lenders, shall enter into such documentation, as reasonably requested by the
Loan Agent and is necessary (i) to establish "international interest(s)" under
the Cape Town Convention, (ii) to enhance the enforceability of the agreements
of the parties established under the Loan Documents under the Cape Town
Convention and shall take, any and all steps as reasonably


                                       57



requested by the Loan Agent and necessary to register such interest(s) in the
International Registry relating thereto.

          SECTION 5.8 EMPLOYEE BENEFIT PLANS. Each Obligor will ensure that the
Plans and Multiemployer Plans with respect to which the Obligors may have any
liability are operated in compliance with all applicable laws, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

          SECTION 5.9 FAA MATTERS; CITIZENSHIP. Each Borrower will at all times
hereunder be an "air carrier" within the meaning of Title 49 and hold a
certificate under 49 U.S.C. Section 41102(a)(1) as currently in effect or as
amended or recodified from time to time. Each Borrower will at all times
hereunder hold an air carrier operating certificate issued pursuant to Chapter
447 of Title 49 for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo.

          SECTION 5.10 DELIVERY OF POST-RECORDING FAA OPINION. Promptly upon the
recording of the Spare Parts Mortgage and Security Agreement and the Engine
Security Agreement with the FAA, the Borrowers will cause Daugherty, Fowler,
Peregrin & Haught, FAA counsel in Oklahoma City, Oklahoma, to deliver to the
Loan Agent and the Borrowers a favorable opinion addressed to each of them as to
such recordation and the lack of filing of any intervening documents creating a
Lien with respect to the Collateral.

          SECTION 5.11 SOFTWARE. Each Borrower will maintain a spare parts
inventory tracking system at all times prior to payment in full of the
Obligations.

          SECTION 5.12 COMPLIANCE WITH MORTGAGE. The Borrowers will comply with
the terms and provisions of the Collateral Documents.

          SECTION 5.13 PROHIBITION ON LIENS. Neither Borrower shall, nor shall
it permit any of its Subsidiaries (other than Airways Assurance Limited LLC or
FTCHP LLC) to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any property or asset of any kind (including any
document or instrument in respect of goods or accounts receivable) of any
Borrower or any of its Subsidiaries (other than Airways Assurance Limited LLC or
FTCHP LLC), whether now owned or hereafter acquired, or any income or profits
therefrom, or file or consent to the filing of any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any state or under any similar recording or notice
statute, except:

               (a) Permitted Encumbrances;

               (b) (A) Liens existing on the Closing Date on Aircraft Related
     Equipment securing Indebtedness used to acquire such Aircraft Related
     Equipment, (B) Liens on Aircraft Related Equipment acquired after the
     Effective Date created or incurred in connection with the financing of such
     Aircraft Related Equipment, (C) Liens on Aircraft Related Equipment and
     related property created or incurred in connection with debt financings of
     such Aircraft Related Equipment, as


                                       58



     contemplated under the A350/A330 Financing Letter Agreement (or any
     financing pursuant thereto), the Senior Mortgages, the GE 2001 Credit
     Agreement (as defined in the ATSB Loan Agreements), and the GECC RJ
     Agreement (as defined in the ATSB Loan Agreements), (D) leases and/or
     subleases of Aircraft Related Equipment to any Obligor or any Subsidiary of
     an Obligor or any US Airways Express affiliate that is not an Obligor (or a
     Subsidiary of an Obligor) and operates such Aircraft Related Equipment for
     an Obligor or a Subsidiary of an Obligor pursuant to a services agreement
     with such Obligor or Subsidiary, which lease or sublease is entered into in
     connection with the debt financing or leasing of such Aircraft Related
     Equipment, as applicable, and the assignment of any such lease or sublease
     and the proceeds thereof, in the case of a lease, to any Person owed
     Indebtedness used to acquire such Aircraft Related Equipment or, in the
     case of a sublease, to any Person leasing such Aircraft Related Equipment
     to such Obligor or Subsidiary, (E) Liens on Aircraft Related Equipment
     securing Permitted Refinancing Indebtedness in respect of Indebtedness
     previously secured by such Aircraft Related Equipment in accordance with
     subclause (A) or (B) above, including in each case, Liens securing special
     facility revenue bonds that finance Aircraft Related Facilities, (F) Liens
     incurred or deposits made in the ordinary course of business to secure the
     performance of contracts for the purchase of aircraft, (G) Liens in
     existence on the Closing Date (1) on aircraft and engines (other than
     Pledged Engines) and (2) securing special facility revenue bonds, and (H)
     Liens on an Obligor's interest as lessee or sublessor in respect of any
     Aircraft Related Equipment or interests related thereto (including without
     limitation subleases, refunds or rebates, security deposits, supplemental
     rent, reserves, or return condition adjustment payments);

               (c) other Liens on assets acquired after the Closing Date
     securing or relating to Indebtedness and other liabilities and obligations
     in each case not otherwise prohibited under this Agreement in an aggregate
     amount not to exceed $5,000,000 at any time outstanding;

               (d) Liens described in Schedule 5.13, except to the extent such
     Liens cover any of the Collateral;

               (e) judgment and attachment Liens not giving rise to an Event of
     Default;

               (f) Liens on the assets of any entity or on any asset existing at
     the time such entity or asset is acquired by an Obligor or a Subsidiary of
     an Obligor, whether by merger, consolidation, purchase of assets or
     otherwise; provided that such Liens (A) are not created, incurred or
     assumed by such entity in contemplation of or in connection with the
     financing of such entity's being acquired by an Obligor or a Subsidiary of
     an Obligor, (B) were created to secure the financing of Aircraft Related
     Equipment or other specific assets, (C) do not extend to any other assets
     of any Obligor or Subsidiary of an Obligor other than the assets acquired
     with such financing and (D) the Indebtedness secured by such Lien is
     permitted pursuant to this Agreement;


                                       59



               (g) leases or subleases of real or personal property granted by
     any Obligor or Subsidiary of an Obligor to other Persons not interfering in
     any material respect with the ordinary conduct of the business of the
     Obligors or their Subsidiaries, taken as a whole;

               (h) Liens on cash and Cash Equivalents securing (A) reimbursement
     obligations in respect of letters of credit issued for the account of any
     Obligor or Subsidiary of an Obligor in the ordinary course of business and
     consistent with past practice, so long as the aggregate amount of such cash
     and Cash Equivalents does not exceed 115% of the maximum available amount
     under the secured letters of credit, and (B) reimbursement or other margin
     requirements in connection with, in the case of Liens contemplated in this
     clause (B), (1) transactions designed to hedge against fluctuations in fuel
     costs, entered into in the ordinary course of business, consistent with
     past business practice or then current industry practice, and not entered
     into for speculative purposes, (2) transactions designed to hedge interest
     rates entered into with respect to notional amounts not to exceed actual or
     anticipated Indebtedness and not entered into for speculative purposes and
     (3) transactions designed to hedge against risks associated with
     fluctuations in currencies entered into in the ordinary course of business,
     and (C) prepaid fuel and healthcare expenses in the ordinary course of
     business and consistent with past practice;

               (i) Liens securing the obligations of the Obligors with respect
     to or relating to the Indebtedness as provided for in the ATSB Loan
     Agreements;

               (j) Liens on assets pledged in connection with a Replacement
     Secured Financing permitted under the ATSB Loan Agreements;

               (k) Liens on assets pledged to secure a Permitted Acquisition
     Financing; provided that the Liens attach only to assets acquired in
     connection with the acquisition financed by such Permitted Acquisition
     Financing;

               (l) any renewal or substitution of any Lien for any of the
     preceding clauses (b), (d) or (f); provided that any such Liens are not
     extended to additional assets; and

               (m) any renewal or substitution or (in the case of Clause (i))
     amendment of any Lien for any of the preceding clauses (b), (d), (f), (h),
     (i), (j) or (k), provided that (i) the Indebtedness secured is not
     increased beyond the outstanding amount of such Indebtedness on the Closing
     Date, if such Indebtedness was outstanding on the Closing Date and (ii) any
     such Lien securing any such Indebtedness outstanding on the Closing Date
     are not extended to assets in addition to those subject to such Lien on the
     Closing Date, or required on the Closing Date under the security agreement
     for such Lien to be subject thereto thereafter, to such Lien;

provided that the Obligors will not create, incur, assume or permit to exist any
Lien permitted under any of clauses (b) through (e) above on any property of an
Obligor


                                       60



already constituting Collateral, other than pursuant to the Senior Mortgages and
the Aircraft Mortgages.

          SECTION 5.14 MERGER OR CONSOLIDATION. No Obligor shall consolidate
with or into or merge with or into, or enter into another form of corporate
combination with or into, any Person, or, in one or a series of transactions,
convey, lease or transfer all or substantially all its properties and assets to
any Person, unless: (i) either (A) such Obligor, or, if the transaction involves
more than one Obligor, an Obligor, is the surviving entity, or (B) an Obligor is
not the surviving entity and such surviving entity or the Person that acquires
by conveyance, lease or transfer all or substantially all the properties and
assets of an Obligor, shall be a corporation organized and existing under the
laws of the United States of America or any State or the District of Columbia,
and shall expressly assume, by an agreement executed and delivered to the Loan
Agent, in form and substance reasonably satisfactory to the Loan Agent, all of
such Obligor's obligations under the Loan Documents; (ii) immediately before and
after giving effect to such transaction, no Event of Default or Default shall
have occurred and be continuing; and (iii) the Obligors have delivered to the
Loan Agent an Officer's Certificate and an opinion of counsel from counsel
satisfactory to the Loan Agent, in form and substance satisfactory to the Loan
Agent, stating that such transaction and such agreement comply with this Section
and that all conditions precedent herein provided for relating to such
transaction have been complied with and addressing such other matters as may be
reasonably requested by the Loan Agent; provided, however, that no such
transaction or merger, consolidation, corporate combination, conveyance, lease
or transfer shall involve a manufacturer of aircraft or airframes, or an
Affiliate thereof, other than Airbus.

          SECTION 5.15 CERTAIN APPROVALS UNDER THE ATSB LOAN AGREEMENT. Neither
Borrower will give its approval or consent to a sale of any right, obligation or
interest under an ATSB Loan Agreement, or any note or loan document referred to
therein (i) pursuant to clause (c) of the last sentence of Section 9.2(a)
thereof, or (ii) involving Tranche B-1.

                                   ARTICLE VI

                                EVENTS OF DEFAULT

          SECTION 6.1 EVENTS OF DEFAULT. Each of the following events shall be
an Event of Default:

               (a) Failure by the Borrowers to pay any installment of principal
     of the Loans when due, or in the case of interest, within five Business
     Days after the date due, whether at stated maturity, by acceleration, by
     mandatory prepayment or otherwise; or (ii) failure by the Borrowers to pay
     any other amount due under this Agreement or any other Loan Document within
     ten Business Days after the


                                       61



     receipt by the Borrowers of written notice from the Loan Agent that such
     payment is due or overdue; or

               (b) Any representation or warranty by any Obligor in any Loan
     Document or in any statement or certificate at any time given by either
     Obligor in writing pursuant hereto or thereto or in connection herewith or
     therewith shall be false in any material respect on the date as of which
     made, such false representation or warranty is material at the time in
     question, and, if curable, the same shall remain uncured for a period in
     excess of 30 days (or in the case of any representation or warranty as to
     the existence of a Default, 60 days) after the date of written notice
     thereof from the Loan Agent to the Borrowers; or

               (c) Failure by any Obligor to perform or comply in any material
     respect with any term or condition contained in Sections 2.4(f), 5.2 and
     5.9 of this Agreement; or

               (d) Failure by any Obligor to perform or comply in any material
     respect with any term contained in this Agreement or any of the other Loan
     Documents (other than any such term referred to in any other subsection of
     this Section 6.1), such failure to comply is material at the time in
     question, and such failure to comply shall not have been remedied or waived
     within 30 days after receipt by the Borrowers of notice from the Loan Agent
     of such failure to comply; provided that if such failure to comply is
     capable of being corrected and the Borrowers are diligently proceeding to
     correct such failure, then there shall be no Event of Default under this
     clause (c) unless such failure to comply shall not have been remedied or
     waived within 90 days after receipt by the Borrowers of such notice; or

               (e) (i) With respect to any Cross-Default Obligation identified
     in clause (i) of the definition therein, any of the Obligors shall default
     (after the expiration of any applicable grace period) under or in the
     performance of any material term, provision or condition contained in any
     agreement under which any such Cross-Default Obligation was created or is
     governed; or (ii) with respect to any Cross-Default Obligation identified
     in clause (ii) of the definition thereof, any material "event of default"
     (however described) shall occur and be continuing (after the expiration of
     any applicable grace period), and shall not thereafter have been waived,
     remedied or cured, under any agreement (as amended or modified from time to
     time) under which any such Cross-Default Obligation was created or is
     governed; provided, however, that this Section 6.1(e) shall cease to be of
     any further force and effect if at any time prior to payment in full of the
     Obligations, Airbus or its Affiliates cease to hold at least 51% of the
     outstanding principal amount of the Loans.

               (f) (i) A court shall enter a decree or order for relief in
     respect of any Obligor or any of its Subsidiaries in an involuntary case
     under the Bankruptcy Code or under any other applicable bankruptcy,
     insolvency or similar law now or hereafter in effect; or any other similar
     relief shall be granted under any applicable federal or state law; or (ii)
     an involuntary case shall be commenced against any Obligor or any of its
     Subsidiaries under the Bankruptcy Code or under any other


                                       62



     applicable bankruptcy, insolvency or similar law now or hereafter in
     effect; or a decree or order of a court for the appointment of a receiver,
     liquidator, sequestrator, trustee, custodian or other officer having
     similar powers over any Obligor or any of its Subsidiaries, or over all or
     a substantial part of its property, shall have been entered; or there shall
     have occurred the involuntary appointment of an interim receiver, trustee
     or other custodian of any Obligor or any of its Subsidiaries for all or a
     substantial part of its property; or a warrant of attachment, execution or
     similar process shall have been issued against any substantial part of the
     property of any Obligor or any of its Subsidiaries, and any such event
     described in clause (i) above or this clause (ii) shall continue for 90
     days unless dismissed, bonded or discharged; or

               (g) (i) Any Obligor or any of its Subsidiaries shall have an
     order for relief entered with respect to it or commence a voluntary case
     under the Bankruptcy Code or under any other applicable bankruptcy,
     insolvency or similar law now or hereafter in effect, or shall consent to
     the entry of an order for relief in an involuntary case, or to the
     conversion of an involuntary case to a voluntary case, under any such law,
     or shall consent to the appointment of or taking possession by a receiver,
     trustee or other custodian of all or a substantial part of its property; or
     any Obligor or any of its Subsidiaries shall make any assignment for the
     benefit of creditors; or (ii) any Obligor or any of its Subsidiaries shall
     be unable, or shall fail generally, or shall admit in writing its
     inability, to pay its debts as such debts become due; or the board of
     directors of any Obligor or any of its Subsidiaries (or any committee
     thereof) shall adopt any resolution or otherwise authorize any action to
     approve any of the actions referred to in clause (i) above or this clause
     (ii); or

               (h) Any order, judgment or decree shall be entered against any
     Obligor decreeing the dissolution or split up of such Obligor and such
     order shall remain undischarged or unstayed for a period in excess of 60
     days; or

               (i) Any of the Collateral Documents shall cease, for any reason,
     other than discharge of the Lien thereof in accordance with its terms, to
     be in full force and effect, or any Borrower or any Affiliate of any
     Borrower shall so assert, or any Lien created by any of the Collateral
     Documents shall cease, for any reason other than discharge of the Lien
     thereof in accordance with its terms, to be in full force and effect, to be
     enforceable and of the same effect and priority purported to be created
     thereby; or

               (j) Any Borrower shall cease to carry and maintain, or cause to
     be carried and maintained, insurance on and in respect of the Collateral in
     accordance with the requirements of any applicable Collateral Document.

          SECTION 6.2 REMEDIES. During the continuance of any Event of Default,
the Loan Agent shall, solely at the request of the Requisite Lenders, by notice
to the Borrowers declare that the Loans, all interest accrued thereon and all
other amounts and Obligations payable under this Agreement and the Loan
Documents to be immediately due and payable, whereupon the Loans, all such
interest and all such amounts and Obligations shall become and be immediately
due and payable, and/or


                                       63



declare the Commitments to be terminated, whereupon the Commitment of each
Lender shall be terminated, all without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrowers;
provided, however, that upon the occurrence of the Event of Default specified in
Section 6.1(f) or 6.1(g), the Loans, all such interest and all such amounts and
Obligations shall automatically become and be immediately due and payable, and
the Commitments shall terminate, all without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by the Obligors.

                                   ARTICLE VII

                     THE LOAN AGENT AND THE COLLATERAL AGENT

          The parties hereto agree as follows:

          SECTION 7.1 AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes each of the Loan Agent and the Collateral Agent to take such action
as administrative agent and collateral agent, respectively, on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated by such Lender to it as Loan Agent or Collateral Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto, and each of the Loan Agent and the Collateral Agent hereby accepts such
authorization and appointment. As to any matters not expressly provided for by
this Agreement and the other Loan Documents or provided for with specific
reference to this Section 7.1 (including, without limitation, enforcement or
collection of any Note), neither the Loan Agent nor the Collateral Agent shall
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from action) upon the instructions of the Requisite Lenders and such
instructions shall be binding upon all Lenders; provided, however, that neither
the Loan Agent nor the Collateral Agent shall be required to take any action
which exposes either the Loan Agent or the Collateral Agent to liability or
which is contrary to this Agreement, any other Loan Document or applicable law.
As to any provisions of this Agreement under which action may be taken or
approval given by the Requisite Lenders, the action taken or approval given by
the Requisite Lenders, shall be binding upon all Lenders to the same extent and
with the same effect as if each Lender had joined therein. Each of the Loan
Agent and the Collateral Agent shall be entitled to rely upon any note, notice,
consent, certificate, affidavit, letter, telegram, teletype message, facsimile
transmission, statement, order or other document believed by it to be genuine
and correct and to have been signed or sent by the proper person or persons and,
in respect of legal matters, upon the opinion of counsel selected by the Loan
Agent or the Collateral Agent. Each of the Loan Agent and the Collateral Agent
may deem and treat the payee of the Notes as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
shall have been filed with the Loan Agent. Any request, authority or consent of
any Person who at the time of making such request or giving such authority or
consent is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note. The Lenders agree and
acknowledge that the Collateral Agent, in addition to being appointed by and
acting on behalf of the Lenders


                                       64



hereto, is also (as of the date hereof) being appointed by and acting on behalf
of the lenders party to the Other Loan Agreement. Therefore, the Collateral
Agent is an agent of and is acting for and on behalf of all of the Lenders party
hereto and, in addition, all of the lenders party to the Other Loan Agreement.

          SECTION 7.2 AGENT'S RELIANCE, ETC. Neither the Loan Agent nor the
Collateral Agent nor any of their respective Affiliates, directors, officers,
agents or employees shall be liable to any Lender for any action taken or
omitted to be taken by it or by such directors, officers, agents or employees
under or in connection with this Agreement, the Notes or any other Loan
Document, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each of the Loan Agent
and the Collateral Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Lender for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such experts; (ii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether oral or written) made in or
in connection with this Agreement, the Notes or any other Loan Document; (iii)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement, the
Notes or any other Loan Document on the part of Guarantor or the Borrowers or to
inspect the property (including the books and records) of Guarantor, the
Borrowers or any of their respective Subsidiaries; (iv) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Notes or any other Loan
Document, or any other instrument or document furnished pursuant thereto; (v)
shall incur no liability under or in respect to this Agreement, the Notes or any
other Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, facsimile transmission, cable
or telex) believed by it to be genuine and signed or sent by the proper party or
parties; and (vi) may deem and treat each Lender which makes a loan hereunder as
the holder of the indebtedness resulting therefrom for all purposes hereof until
the Loan Agent receives and accepts an Assignment and Assumption entered into by
such Lender, as assignor, and an eligible assignee as provided in Section 9.2
hereof.

          SECTION 7.3 AGENT AND AFFILIATES. If and so long as the Loan Agent or
the Collateral Agent shall remain a Lender, the Loan Agent or the Collateral
Agent, as applicable, shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Loan Agent or the Collateral Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include the Loan Agent and the
Collateral Agent, each in its individual capacity. Unrelated to its role as Loan
Agent or Collateral Agent as set forth herein, the Loan Agent and the Collateral
Agent and their respective Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business
with, the Borrowers, Guarantor, any of their respective Subsidiaries and any
Person who may do business with or own securities of the Borrowers, Guarantor,
or any of their respective Subsidiaries, all as if it were not the Loan Agent or
the Collateral Agent, as applicable, hereunder and without any duty to account
therefor to the Lenders.


                                       65



          SECTION 7.4 REPRESENTATIONS OF THE LENDERS. Each Lender has actively
engaged in the negotiation of all of the terms of this Agreement. Each of the
Loan Agent and the Collateral Agent has no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect to the Borrowers whether coming into its
possession as of the date of this Agreement or at any time thereafter, or to
notify any Lender of any Event of Default except as provided in Section 7.5
hereof. This Agreement and all instruments or documents delivered in connection
with this Agreement have been reviewed and approved by each Lender and none of
the Lenders have relied on the Loan Agent or the Collateral Agent as to any
legal or factual matter in connection therewith or in connection with the
transactions contemplated thereunder.

          SECTION 7.5 EVENTS OF DEFAULT. In the event of the occurrence of any
Default or Event of Default, any Lender knowing of such event may (but shall
have no duty to) give the Loan Agent and the Collateral Agent written notice
specifying such Event of Default or other event and expressly stating that such
notice is a "notice of default". Neither the Loan Agent nor the Collateral Agent
shall be deemed to have knowledge of such events unless the Loan Agent or the
Collateral Agent, as applicable, has received such notice, or unless the Event
of Default consists of a failure of payment of principal or interest on the
Note. In the event that the Loan Agent or the Collateral Agent receives such a
notice of the occurrence of an Event of Default, the Loan Agent or the
Collateral Agent, as applicable, shall give written notice thereof to the
Lenders. The Loan Agent and the Collateral Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed in
writing by the Requisite Lenders, provided, however, that, unless and until the
Loan Agent or the Collateral Agent shall have received such direction, the Loan
Agent and the Collateral Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Event of
Default as it shall deem advisable and in the best interest of the Lenders.

          SECTION 7.6 LOAN AGENT'S AND COLLATERAL AGENT'S RIGHT TO INDEMNITY.
Except for action expressly required of the Loan Agent or the Collateral Agent
hereunder without instructions from any Person, the Loan Agent and the
Collateral Agent shall be fully justified in failing or refusing to take any
action hereunder on behalf of any Lender unless it shall first be indemnified to
its satisfaction by such Lender against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.

          SECTION 7.7 INDEMNIFICATION OF LOAN AGENT AND COLLATERAL AGENT. The
Lenders hereby agree to indemnify the Loan Agent and the Collateral Agent and
all of their respective affiliates, directors, officers, employees, advisors and
representatives thereof (to the extent not reimbursed by the Borrowers), ratably
as most recently in effect prior to the date indemnification is sought, from and
against any and all costs, losses, liabilities, claims, damages or expenses
which may be incurred by or asserted or awarded against the Loan Agent or the
Collateral Agent in any way relating to or arising out of this Agreement and/or
the other Loan Documents or any action taken or omitted by the Loan Agent or the
Collateral Agent under this Agreement and/or the other Loan Documents; provided,
however, that no Lender shall be liable for any portion of such


                                       66



liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Loan Agent's or the
Collateral Agent's gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse the Loan Agent and the Collateral
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Loan Agent or the Collateral Agent in
connection with the administration, or enforcement of, or the preservation of
any rights under, this Agreement and/or the other Loan Documents, to the extent
that the Loan Agent or the Collateral Agent is not reimbursed for such expenses
by the Borrowers.

          SECTION 7.8 SUCCESSOR LOAN AGENT AND COLLATERAL AGENT. Each of the
Loan Agent and the Collateral Agent may with the consent (not to be unreasonably
withheld) of the Lenders and, if no Event of Default has occurred and is
continuing, the Borrowers (or, if an Event of Default has occurred and is
continuing and if legally permissible, upon notice to the Borrowers), resign at
any time by giving written notice thereof to the Lenders and may, at any time,
with or without cause, be removed by the Requisite Lenders acting through the
Loan Agent with, if no Event of Default has occurred and is continuing and if
the Collateral Agent is not in default of any Obligation under the Loan
Documents and if no representation or warranty of the Collateral Agent under the
Loan Documents has proven to be incorrect in any material respect, the consent
(not to be unreasonably withheld) of the Borrowers (or, if an Event of Default
has occurred and is continuing, upon notice to the Borrowers). Upon any such
resignation or removal, the Borrowers shall have the right to appoint a
successor agent, subject to consent of the Lenders. If no successor agent shall
have accepted such appointment within 30 days after (i) the retiring Loan
Agent's or Collateral Agent's, as applicable, giving of notice of resignation or
(ii) the Loan Agent giving notice, if legally permissible, of such removal, the
Loan Agent or the Collateral Agent, as applicable, may, with the consent (not to
be unreasonably withheld) of the Requisite Lenders and, if no Event of Default
has occurred and is continuing, the Borrowers, appoint a successor Loan Agent or
Collateral Agent, as applicable, who shall be willing to accept such
appointment. Upon the acceptance of any appointment as Loan Agent or Collateral
Agent hereunder by a successor Loan Agent or Collateral Agent, such successor
Loan Agent or Collateral Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed Loan
Agent or Collateral Agent, and the retiring or removed Loan Agent or Collateral
Agent shall be discharged from its duties and obligations as agent under this
Agreement. After any Loan Agent's or Collateral Agent's resignation or removal
hereunder as Loan Agent or Collateral Agent, as applicable, the provisions of
this Article 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Loan Agent or Collateral Agent under this Agreement.

          SECTION 7.9 COLLATERAL AND GUARANTEE MATTERS. The Lenders irrevocably
authorize and direct the Collateral Agent to release any Lien on the Collateral
as provided for in the Collateral Documents.


                                       67



                                  ARTICLE VIII

                                    GUARANTEE

          SECTION 8.1 GUARANTEE.

               (a) The Guarantor hereby unconditionally and irrevocably
     guarantees to the Loan Agent, for the ratable benefit of the Lenders and
     their respective successors, indorsees, transferees and assigns, the prompt
     and complete payment and performance by the Borrowers when due (whether at
     the stated maturity, by acceleration or otherwise) of the Obligations.

               (b) Anything herein or in any other Loan Document to the contrary
     notwithstanding, the maximum liability of the Guarantor hereunder and under
     the other Loan Documents shall in no event exceed the amount which can be
     guaranteed by the Guarantor under applicable federal and state laws
     relating to the insolvency of debtors.

               (c) The Guarantor agrees that the Obligations may at any time and
     from time to time exceed the amount of the liability of the Guarantor
     hereunder without impairing the guarantee contained in this Article VIII or
     affecting the rights and remedies of the Loan Agent or any Lender
     hereunder.

               (d) The guarantee contained in this Article VIII shall remain in
     full force and effect until all the Obligations (including contingent
     Obligations contained in any Loan Document that survive the termination
     thereof) shall have been satisfied by payment in full and the Commitments
     shall be terminated.

               (e) No payment made by either Borrower or the Guarantor, any
     other guarantor or any other Person or received or collected by the Loan
     Agent or any Lender from either Borrower, the Guarantor, any other
     guarantor or any other Person by virtue of any action or proceeding or any
     set-off or appropriation or application at any time or from time to time in
     reduction of or in payment of the Obligations shall be deemed to modify,
     reduce, release or otherwise affect the liability of the Guarantor
     hereunder which shall, notwithstanding any such payment (other than any
     payment made by the Guarantor in respect of the Obligations or any payment
     received or collected from such Guarantor in respect of the Obligations),
     remain liable for the Obligations up to the maximum liability of the
     Guarantor hereunder until the Obligations are paid in full and the
     Commitments are terminated.

          SECTION 8.2 NO SUBROGATION. Notwithstanding any payment made by the
Guarantor hereunder or any set-off or application of funds of the Guarantor by
the Loan Agent or any Lender, the Guarantor shall not be entitled to be
subrogated to any of the rights of the Loan Agent or any Lender against either
Borrower or any other guarantor or any collateral security or guarantee or right
of offset held by the Loan Agent, the Collateral Agent or any Lender for the
payment of the Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from either


                                       68



Borrower or any other guarantor in respect of payments made by such guarantor
hereunder, until all amounts owing to the Loan Agent and the Lenders by the
Borrower on account of the Obligations (other than contingent obligations
contained in any Loan Document that survive the termination thereof) are paid in
full and the Commitments are terminated. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all of the
Obligations (other than contingent obligations contained in any Loan Document
that survive the termination thereof) shall not have been paid in full, such
amount shall be held by the Guarantor in trust for the Loan Agent and the
Lenders, segregated from other funds of the Guarantor, and shall, forthwith upon
receipt by the Guarantor, be turned over to the Loan Agent in the exact form
received by the Guarantor (duly indorsed by the Guarantor to the Loan Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Loan Agent may determine.

          SECTION 8.3 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS. The
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment of any of the Obligations made
by the Loan Agent or any Lender may be rescinded by the Loan Agent or such
Lender and any of the Obligations continued, and the Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Loan Agent or
any Lender, and the Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Loan Agent (or the Requisite Lenders or
all Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the Loan
Agent or any Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Loan Agent nor any Lender shall
have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Obligations or for the guarantee contained in
this Section 8.3 or any property subject thereto.

          SECTION 8.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Loan Agent or any Lender
upon the guarantee contained in this Article VIII or acceptance of the guarantee
contained in this Article VIII; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Article VIII; and all dealings between the Borrower and the Guarantor, on the
one hand, and the Loan Agent, the Collateral Agent and the Lenders, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Article VIII. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that the guarantee contained
in this Article VIII shall be construed as a continuing, absolute and


                                       69



unconditional guarantee of payment without regard to (a) the validity or
enforceability of any other provisions of this Agreement or any other Loan
Document, any of the Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Loan Agent, the Collateral Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against the Loan Agent, the Collateral Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of a Borrower or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of the Guarantor under the guarantee contained in this Article
VIII, in bankruptcy or in any other instance. When making any demand hereunder
or otherwise pursuing its rights and remedies hereunder against the Guarantor,
the Loan Agent, the Collateral Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against either Borrower, any other guarantor or any
other Person or against any collateral security or guarantee for the Obligations
or any right of offset with respect thereto, and any failure by the Loan Agent,
the Collateral Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve the Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the Loan
Agent, the Collateral Agent or any Lender against the Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.

          SECTION 8.5 REINSTATEMENT. The guarantee contained in this Article
VIII shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Loan Agent, the Collateral Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of either Borrower or the Guarantor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, either Borrower or the Guarantor or any substantial part of
its property, or otherwise, all as though such payments had not been made.

          SECTION 8.6 PAYMENTS. The Guarantor hereby guarantees that payments
hereunder will be paid to the Loan Agent without set-off, counterclaim, claim of
recoupment or other defense in Dollars at the office specified in Section
2.9(a).


                                       70



                                   ARTICLE IX

                                  MISCELLANEOUS

          SECTION 9.1 AMENDMENTS, WAIVERS, ETC.

               (a) No amendment, modification or waiver of any provision of this
     Agreement or any other Loan Document nor consent to any departure by any
     Obligor therefrom shall in any event be effective unless the same shall be
     in writing and signed by the Requisite Lenders, and then any such waiver or
     consent shall be effective only in the specific instance and for the
     specific purpose for which given; provided, however, that no amendment,
     modification, waiver or consent shall, unless in writing and signed by each
     Lender, do any of the following:

                    (i) subject the Lenders to any additional obligations;

                    (ii) change the scheduled final maturity of the Loans, or
     change the amount or date for payment of any date fixed for the payment or
     reduction of principal;

                    (iii) change the principal amount of any Loan (other than by
     the payment or prepayment thereof);

                    (iv) change the rate of interest on any Loan or any fee,
     indemnity or other amount payable to any Lender;

                    (v) change any date fixed for payment of such interest,
     indemnity or other amount or fees;

                    (vi) amend the definition of "Requisite Lenders" or this
     Section 9.1(a);

                    (vii) modify the application of payments to the Loan under
     Section 2.9; or

                    (viii) release all or substantially all of the Collateral or
     release the Guarantor from the guarantee contained in Article VIII;

and provided, further, that no amendment, modification, waiver or consent shall,
unless in writing and signed by the Loan Agent in addition to the Persons
required above to take such action, affect the rights or duties of the Loan
Agent under this Agreement or the other Loan Documents.

               (b) The Loan Agent may, but shall have no obligation to, with the
     written concurrence of any Lender, execute amendments, modifications,
     waivers or consents on behalf of that Lender. Any waiver or consent shall
     be effective only in the specific instance and for the specific purpose for
     which it was


                                       71



     given. No notice to or demand on the Borrowers in any case shall entitle
     the Borrowers to any other or further notice or demand in similar or other
     circumstances.

               (c) In connection with any proposed amendment, modification,
     waiver or termination (a "Proposed Change") requiring the consent of all
     affected Lenders, if the consent of the Loan Agent and of the Requisite
     Lenders is obtained, but the consent of other Lenders whose consent is
     required is not obtained (any such Lender whose consent is not obtained as
     described in this Section 9.1 being referred to as a "Non-Consenting
     Lender"), then (i) at the Borrowers' request, the Loan Agent shall have the
     right in the Loan Agent's sole discretion (but shall have no obligation) to
     purchase from such Non-Consenting Lender, and such Non-Consenting Lender
     agrees that it shall, upon the Loan Agent's request, sell and assign to the
     Lender that is acting as the Loan Agent, all of the portion of the Loan of
     such Non-Consenting Lender for an amount equal to the principal balance of
     such portion of the Loan held by the Non-Consenting Lender and all accrued
     interest and fees with respect thereto through the date of sale, such
     purchase and sale to be consummated pursuant to an executed Assignment and
     Assumption, and (ii) the Borrowers may effect a substitution of the
     Non-Consenting Lender pursuant to Section 2.12.

          SECTION 9.2 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.

               (a) The provisions of this Agreement shall be binding upon and
     inure to the benefit of the parties hereto and their respective successors
     and assigns permitted hereby, except that (i) the Borrowers may not assign
     or otherwise transfer any of their rights or obligations hereunder without
     the prior written consent of each Lender (and any attempted assignment or
     transfer by the Borrowers without such consent shall be null and void) and
     (ii) no Lender may assign or otherwise transfer its rights or obligations
     hereunder except in accordance with this Section.

               (b) (i) Subject to the conditions set forth in paragraph (b)(ii)
     below, any Lender may assign to one or more entities (each, an "Assignee"),
     including by means of a capital markets, private placement or
     securitization transaction, all or a portion of its rights and obligations
     under this Agreement (including all or a portion of its Commitments and the
     Loans at the time owing to it) and subject to the following additional
     conditions:

                         (A) such Assignee shall not be an airline, a commercial
          aircraft operator, an air freight forwarder, an entity engaged in the
          business of parcel transport by air, other similar Person, or a
          holding company Affiliate of any of the foregoing; and

                         (B) prior written notice of any such assignment shall
          be provided to the Borrowers unless an Event of Default has occurred
          and is continuing;


                                       72



                         (C) in the event of an assignment involving a
          widespread syndication or offering, if the Guarantor or any Borrower
          indicates that the proposed transaction would interfere with its own
          debt financing efforts, such Lender agrees to cooperate in good faith
          with the Guarantor or such Borrower in order not to hinder the
          Guarantor's or such Borrower's attempt to finalize its financing; and

                         (D) an assignee or participant that acquires its
          interest in the Obligations pursuant to or in connection with a
          capital markets, private placement, or securitization transaction
          pursuant to which ten or more persons acquire interests in the
          Obligations shall not be entitled to the benefits of Section 2.13.

                    (ii) Assignments shall be subject to the additional
     condition that the parties to each assignment shall execute and deliver to
     the Loan Agent an Assignment and Assumption.

                    (iii) Subject to acceptance and recording thereof pursuant
     to paragraph (b)(iv) below, from and after the effective date specified in
     each Assignment and Assumption the Assignee thereunder shall be a party
     hereto and, to the extent of the interest assigned by such Assignment and
     Assumption, have the rights and obligations of a Lender under this
     Agreement, and the assigning Lender thereunder shall, to the extent of the
     interest assigned by such Assignment and Assumption, be released from its
     obligations under this Agreement (and, in the case of an Assignment and
     Assumption covering all of the assigning Lender's rights and obligations
     under this Agreement, such Lender shall cease to be a party hereto but
     shall continue to be entitled to the benefits of Sections 2.10, 2.11, 2.13,
     9.3 and 9.4). Any assignment or transfer by a Lender of rights or
     obligations under this Agreement that does not comply with this Section
     10.2 shall be treated for purposes of this Agreement as a sale by such
     Lender of a participation in such rights and obligations in accordance with
     paragraph (c) of this Section.

                    (iv) Upon its receipt of a duly completed Assignment and
     Assumption executed by an assigning Lender and an Assignee, the Loan Agent
     shall accept such Assignment and Assumption and record the information
     contained therein in the Register. No assignment shall be effective for
     purposes of this Agreement unless it has been recorded in the Register as
     provided in this paragraph.

                    (v) The Initial Lender agrees to notify the Borrowers
     promptly following the date on which it or its Affiliate has fully


                                       73



     or partially assigned or sold all or a portion of its rights and
     obligations under this Agreement.

               (c) (i) Any Lender may, without the consent of the Borrowers or
     the Loan Agent, sell participations to one or more banks or other entities
     (a "Participant") in all or a portion of such Lender's rights and
     obligations under this Agreement (including all or a portion of its
     Commitments and the Loans owing to it); provided that (A) such Participant
     shall not be an airline, a commercial aircraft operator, an air freight
     forwarder, an entity engaged in the business of parcel transport by air,
     other similar Person, or a holding company Affiliate of any of the
     foregoing, (B) such Lender's obligations under this Agreement shall remain
     unchanged, (C) such Lender shall remain solely responsible to the other
     parties hereto for the performance of such obligations and (D) the
     Obligors, the Loan Agent, and the Lenders shall continue to deal solely and
     directly with such Lender in connection with such Lender's rights and
     obligations under this Agreement. Any agreement pursuant to which a Lender
     sells such a participation shall provide that such Lender shall retain the
     sole right to enforce this Agreement. Subject to paragraph (c)(ii) of this
     Section, the Borrowers agree that, if its interest is entered in the
     Register, each Participant shall be entitled to the benefits of Sections
     2.10, 2.11, 2.13, 9.3 and 9.4 to the same extent as if it were a Lender and
     had acquired its interest by assignment pursuant to paragraph (b) of this
     Section. To the extent permitted by law, each Participant also shall be
     entitled to the benefits of Section 9.5 as though it were a Lender,
     provided such Participant shall be subject to Section 9.7 as though it were
     a Lender.

                    (ii) Borrowers shall not be required to provide, and a
     Participant shall not be entitled to receive any greater payment under
     Section 2.10, 2.11 or 2.13 than the Borrowers would have been required to
     pay and the applicable Lender would have been entitled to receive with
     respect to the participation sold to such Participant, unless the sale of
     the participation to such Participant is made with the Borrowers' prior
     written consent. Any Participant shall not be entitled to the benefits of
     Section 2.13 unless such Participant complies with Section 2.13(f).

               (d) Any Lender may at any time pledge or assign a security
     interest in all or any portion of its rights under this Agreement to secure
     obligations of such Lender, including any pledge or assignment to secure
     obligations to a Federal Reserve Bank, and this Section shall not apply to
     any such pledge or assignment of a security interest; provided that no such
     pledge or assignment of a security interest shall release a Lender from any
     of its obligations hereunder or substitute any such pledgee or Assignee for
     such Lender as a party hereto.

               (e) The Obligors agree to cooperate with the efforts of the
     Initial Lender to engage in a transfer or sell-down transaction as
     envisioned in this Section 9.2, including by means of restructuring the
     Loan Documents into tranches (not all of which need to be secured by the
     Collateral), restructuring the Loan Documents into a capital markets style
     indenture, cooperating in reasonable due


                                       74



     diligence meetings and investor phone calls, providing accountant comfort
     letters and legal opinion reliance letters, and assisting with the
     reasonable requests of rating agencies and investors, all at the cost of
     the Initial Lender for the reasonable out-of-pocket expenses of Borrower in
     cooperating as provided in this subparagraph. Without limiting the
     generality of the foregoing, as part of the cooperation of the Obligors, if
     requested by the Initial Lender in connection with a transfer or sell down
     transaction as envisioned in this Section 9.2, the Loan Documents shall be
     "marked-to-market" and amended accordingly, solely to reflect any
     prepayment premiums or make-whole amounts or other prepayment terms and
     conditions which are at the time customary for comparable financings in the
     relevant markets, as determined in the opinion of two investment banks, one
     selected by the Borrowers and the other by the Loan Agent, and if such
     banks fail to agree on such prepayment premiums or make-whole amounts or
     other prepayment terms and conditions, then a third investment bank
     mutually selected by the Borrowers and the Loan Agent shall make such
     determination.

          SECTION 9.3 COSTS AND EXPENSES. Whether or not the first Funding Date
occurs, the Obligors agree to pay within ten Business Days (or as provided in
Section 3.1(d)) following receipt of a reasonably detailed invoice therefor (i)
all reasonable out-of-pocket costs and expenses (including reasonable legal fees
and expenses of one primary outside counsel and one special FAA counsel)
incurred by the Initial Lender, the Loan Agent and the Collateral Agent in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents, and all documents relating thereto, (ii) all reasonable out-of-pocket
costs and expenses (including reasonable legal fees and expenses of one primary
outside counsel and one special FAA counsel) incurred by the Loan Agent in
connection with any consents, amendments, waivers or other modifications hereto
or thereto, (iii) all reasonable out-of-pocket costs and expenses incurred by
the Loan Agent in connection with the syndication of the Loans (if any), and
(iv) all reasonable out-of-pocket costs and expenses (including reasonable legal
fees and expenses) incurred by the Loan Agent and the Lenders in enforcing any
Obligations of, or in collecting any payments due from, the Borrowers hereunder
or under the other Loan Documents.

          SECTION 9.4 INDEMNITIES. Whether or not the transactions contemplated
hereby shall be consummated, the Obligors agree to defend, indemnify, pay and
hold harmless the Loan Agent, the Lenders, and their respective Affiliates,
officers, directors, employees, agents and controlling Persons (collectively
called the "Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including without limitation
the reasonable fees and disbursements of outside counsel for such Indemnitees,
but excluding Taxes) that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner arising out of this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby (including,
without limitation, the use or intended use of the proceeds of the Loan) or any
breach or default by the Borrowers of any provision of the Loan Documents
(collectively called the "Indemnified Liabilities"); provided that the Obligors
shall not have any obligation to any Indemnitee hereunder with respect to any


                                       75



Indemnified Liabilities to the extent such Indemnified Liabilities (i) arise
from the gross negligence or willful misconduct of an Indemnitee, (ii) are
specifically addressed elsewhere in this Agreement (including, without
limitation, Section 2.10, (iii) arise from breaches by an Indemnitee of any Loan
Document to which it is a party, or (iv) constitute ordinary and usual operating
or overhead expenses of an Indemnitee (excluding, without limitation, costs and
expenses of any outside counsel, consultant or agent). To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Obligors shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.

          SECTION 9.5 RIGHT OF SET-OFF. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
to the fullest extent permitted by law, each Lender is hereby authorized by the
Obligors at any time or from time to time, without notice to the Obligors or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other Indebtedness at any time held or owing by
that Lender to or for the credit or the account of any Obligor against and on
account of the Obligations then due.

          SECTION 9.6 JOINT AND SEVERAL LIABILITY; MAXIMUM LIABILITY; WAIVER OF
SUBROGATION.

               (a) Each Borrower shall be liable for all amounts due to the
     Lenders under this Agreement, regardless of which Borrowers actually
     receives the Loans or other extensions of credit hereunder, or the amount
     of such Loans received or the manner in which any Lender accounts for such
     Loans or other extensions of credit on its books and records. Each
     Borrower's liabilities with respect to Loans and extensions of credit made
     to it, and each Borrower's liabilities arising as a result of the joint and
     several liability of the Borrowers hereunder and under the other Loan
     Documents with respect to Loans or other extensions of credit made to any
     other Borrowers hereunder, shall be separate and distinct obligations, but
     all such liabilities shall be primary obligations of each Borrower. The
     joint and several liability of each Borrower shall in all respects be
     continuing, absolute, unconditional and irrevocable, in all events and
     circumstances, and shall continue in full force and effect until all
     Obligations have been paid in full and all Commitments shall have
     terminated, and will be paid strictly in accordance with the terms of this
     Agreement and each other Loan Document under which they arise, regardless
     of any law, regulation or order now or hereafter in effect in any
     jurisdiction affecting any of such terms or the rights of Lender or any
     holder of any Loan or Note with respect thereto.

               (b) Notwithstanding any payment made by either Borrower or the
     Guarantor hereunder or any set-off or application of funds of either
     Borrower or the Guarantor by the Loan Agent or any Lender, neither Borrower
     shall be entitled


                                       76



     to be subrogated to any of the rights of the Loan Agent, the Collateral
     Agent or any Lender against either Borrower or the Guarantor or any
     collateral security or guarantee or right of offset held by the Loan Agent,
     the Collateral Agent or any Lender for the payment of the Obligations, nor
     shall either Borrower seek or be entitled to seek any contribution or
     reimbursement from the other Borrower or the Guarantor in respect of
     payments made by the Guarantor hereunder, until all amounts owing to the
     Loan Agent, the Collateral Agent and the Lenders by the Borrowers on
     account of the Obligations are paid in full and the Commitments are
     terminated. If any amount shall be paid to either Borrower on account of
     such subrogation rights at any time when all of the Obligations shall not
     have been paid in full, such amount shall be held by such Borrower in trust
     for the Loan Agent, the Collateral Agent and the Lenders, segregated from
     other funds of such Borrower, and shall, forthwith upon receipt by such
     Borrower, be turned over to the Loan Agent in the exact form received by
     such Borrower (duly indorsed by such Borrower to the Loan Agent, if
     required), to be applied against the Obligations, whether matured or
     unmatured, in such order as the Loan Agent may determine.

               (c) Each Borrower shall remain obligated hereunder
     notwithstanding that, without any reservation of rights against the other
     Borrower or the Guarantor and without notice to or further assent by the
     other Borrower or the Guarantor, any demand for payment of any of the
     Obligations made by the Loan Agent, the Collateral Agent or any Lender may
     be rescinded by the Loan Agent, the Collateral Agent or such Lender and any
     of the Obligations continued, and the Obligations, or the liability of any
     other Person upon or for any part thereof, or any collateral security or
     guarantee therefor or right of offset with respect thereto, may, from time
     to time, in whole or in part, be renewed, extended, amended, modified,
     accelerated, compromised, waived, surrendered or released by the Loan
     Agent, the Collateral Agent or any Lender, and this Agreement and the other
     Loan Documents and any other documents executed and delivered in connection
     therewith may be amended, modified, supplemented or terminated, in whole or
     in part, as the Loan Agent (or the Requisite Lenders or all Lenders, as the
     case may be) may deem advisable from time to time, and any collateral
     security, guarantee or right of offset at any time held by the Loan Agent,
     the Collateral Agent or any Lender for the payment of the Obligations may
     be sold, exchanged, waived, surrendered or released. Neither the Loan
     Agent, the Collateral Agent nor any Lender shall have any obligation to
     protect, secure, perfect or insure any Lien at any time held by it as
     security for the Obligations or for the guarantee contained in Article VIII
     or any property subject thereto.

               (d) Each Borrower waives any and all notice of the creation,
     renewal, extension or accrual of any of the Obligations and notice of or
     proof of reliance by the Loan Agent, the Collateral Agent or any Lender
     upon the joint and several liability of the Borrowers and the guarantee
     contained in Article VIII or acceptance thereof; the Obligations, and any
     of them, shall conclusively be deemed to have been created, contracted or
     incurred, or renewed, extended, amended or waived, in reliance upon the
     joint and several liability of the Borrowers and the guarantee contained in
     Article VIII; and all dealings between the Borrowers and the Guarantor,


                                       77



     on the one hand, and the Loan Agent, the Collateral Agent and the Lenders,
     on the other hand, likewise shall be conclusively presumed to have been had
     or consummated in reliance thereupon. Each Borrower waives diligence,
     presentment, protest, demand for payment and notice of default or
     nonpayment to or upon the other Borrower or the Guarantor with respect to
     the Obligations. Each Borrower understands and agrees that its joint and
     several liability hereunder for and with respect to the Obligations of the
     other Borrower is continuing, absolute and unconditional without regard to
     any circumstance whatsoever which constitutes, or might be construed to
     constitute, an equitable or legal discharge of such Borrower for and with
     respect to the Obligations of the other Borrower (or of the Guarantor), in
     bankruptcy or in any other instance. When making any demand hereunder or
     otherwise pursuing its rights and remedies hereunder against either
     Borrower, the Loan Agent, the Collateral Agent or any Lender may, but shall
     be under no obligation to, make a similar demand on or otherwise pursue
     such rights and remedies as it may have against the other Borrower, the
     Guarantor or any other Person or against any collateral security or
     guarantee for the Obligations or any right of offset with respect thereto,
     and any failure by the Loan Agent, the Collateral Agent or any Lender to
     make any such demand, to pursue such other rights or remedies or to collect
     any payments from the other Borrower, the Guarantor or any other Person or
     to realize upon any such collateral security or guarantee or to exercise
     any such right of offset, or any release of the other Borrower, the
     Guarantor or any other Person or any such collateral security, guarantee or
     right of offset, shall not relieve a Borrower of any obligation or
     liability hereunder, and shall not impair or affect the rights and
     remedies, whether express, implied or available as a matter of law, of the
     Loan Agent, the Collateral Agent or any Lender against either Borrower. For
     the purposes hereof "demand" shall include the commencement and continuance
     of any legal proceedings.

               (e) The joint liability of the Borrowers shall continue to be
     effective, or be reinstated, as the case may be, if at any time payment, or
     any part thereof, of any of the Obligations is rescinded or must otherwise
     be restored or returned by the Loan Agent, the Collateral Agent or any
     Lender upon the insolvency, bankruptcy, dissolution, liquidation or
     reorganization of a Borrower or the Guarantor, or upon or as a result of
     the appointment of a receiver, intervenor or conservator of, or trustee or
     similar officer for, a Borrower or the Guarantor or any substantial part of
     its property, or otherwise, all as though such payments had not been made.

          SECTION 9.7 SHARING OF PAYMENTS, ETC. The Lenders hereby agree among
themselves that if any of them shall, whether by voluntary payment, by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and other amounts then due and owing to that Lender hereunder or under the other
Loan Documents (collectively, except as provided in the immediately following
exception clause, the "Aggregate Amounts Due" to each Lender) which is greater
than the proportion received by any other Lender in respect of the Aggregate
Amounts Due to such other Lender, except by reason of


                                       78



payments that are individual to a particular Lender under Sections 2.10(c),
2.10(e), 2.11, 2.13, 9.3 and 9.4, then the Lender receiving such proportionately
greater payment shall (i) notify the Loan Agent and each other Lender of the
receipt of such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them, provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of the
Borrowers or otherwise, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest. The Obligors
expressly consent to the foregoing arrangement and agrees that any holder of a
participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by the Obligors
to that holder with respect thereto as fully as if that holder were owed the
amount of the participation held by that holder.

          SECTION 9.8 NOTICES, ETC. Unless otherwise specifically provided
herein, any notice, request or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, or upon receipt
of telefacsimile, or five Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices shall
not be effective until received. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on Annex A, or (i) as
to the Borrowers and the Loan Agent and the Collateral Agent, such other address
as shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party hereto, such other address as
shall be designated by such party in a written notice delivered to the Loan
Agent and the Collateral Agent.

          SECTION 9.9 NO WAIVER; REMEDIES. No failure on the part of any Lender
or the Loan Agent or the Collateral Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

          SECTION 9.10 GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereto shall be governed by, and construed in
accordance with, the law of the State of New York.

          SECTION 9.11 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.

               (a) Any legal action or proceeding with respect to this Agreement
     or any other Loan Document may be brought in the courts of the State of New
     York or of the United States of America for the Southern District of New
     York,


                                       79



     and, by execution and delivery of this Agreement, each of the parties
     hereto hereby accept for itself and in respect of its property, generally
     and unconditionally, the jurisdiction of the aforesaid courts. The parties
     hereto hereby irrevocably waive any objection, including any objection to
     the laying of venue or based on the grounds of forum non conveniens, which
     any of them may now or hereafter have to the bringing of any such action or
     proceeding in such respective jurisdictions.

               (b) Each of the parties hereto hereby irrevocably consent to the
     service of any and all legal process, summons, notices and documents in any
     suit, action or proceeding brought in the United States of America arising
     out of or in connection with this Agreement or any of the other Loan
     Documents by the mailing (by registered or certified mail, postage prepaid)
     or delivering of a copy of such process to such Person in accordance with
     the provisions of Section 9.8. Each Obligor agrees that a final judgment in
     any such action or proceeding shall be conclusive and may be enforced in
     other jurisdictions by suit on the judgment or in any other manner provided
     by law.

               (c) Nothing contained in this Section 9.12 shall affect the right
     of any party hereto to serve process in any other manner permitted by law
     or commence legal proceedings or otherwise proceed against any other party
     hereto in any other jurisdiction.

          SECTION 9.12 WAIVER OF JURY TRIAL. Each of the parties hereto
irrevocably waives trial by jury in any action or proceeding with respect to
this Agreement or any other Loan Document.

          SECTION 9.13 MARSHALING; PAYMENTS SET ASIDE. Neither the Loan Agent,
the Collateral Agent nor any Lender shall be under any obligation to marshal any
assets in favor of the Obligors or any other party or against or in payment of
any or all of the Obligations. To the extent that an Obligor makes a payment or
payments to the Loan Agent for the account of any Lender (each, a "Payee") or
any Payee receives payment from exercise of their rights of setoff, and such
payment or payments or the proceeds of such setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party, then (i) to
the extent of such recovery, the obligation or part thereof originally intended
to be satisfied, and all rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred, and (ii) each Payee shall pay and return
such amount to the Loan Agent as the Loan Agent may be required to disgorge or
otherwise pay to a trustee, receiver or any other party in respect of the
portion of the payment from the Borrowers distributed by the Loan Agent to such
Payee hereunder.

          SECTION 9.14 SECTION TITLES. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.


                                       80



          SECTION 9.15 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrowers, the Loan Agent and the Collateral Agent.

          SECTION 9.16 SEVERABILITY. In case any provision in or obligation
under this Agreement or any Note shall be invalid, illegal or unenforceable in
any jurisdiction the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          SECTION 9.17 CONFIDENTIALITY. Each party hereto shall, and shall
procure that its respective officers, employees and agents shall, keep
confidential and shall not, without the prior written consent of the other
parties, disclose to any third party this Agreement, any other Loan Document or
any of the information, reports or documents supplied by or on behalf of such
other party not otherwise publicly available, except that a party shall be
entitled to disclose this Agreement, any other Loan Document, and any such
information, reports or documents:

                    (i) in connection with any proceeding arising out of or in
     connection with this Agreement or any of the other Loan Documents, to the
     extent that such party may reasonable consider necessary to protect its
     interest; or

                    (ii) to any potential assignee or transferee of any party's
     rights under this Agreement or any of the Loan Documents (and to rating
     agencies, underwriters, investors, lenders, placement agents, and other
     parties, and their respective counsel, auditors, agents and advisers)
     participating in an assignment or participation transaction under Section
     10.2 or any other person proposing to enter into contractual arrangements
     with any party in relation to this Agreement, any of the other Loan
     Documents subject to the relevant party obtaining, in each case to the
     extent reasonable and customary, an undertaking from such potential
     assignee or transferee or other person in corresponding terms to this
     Section 10.18; or

                    (iii) pursuant to any applicable laws, ordinances,
     judgments, decrees, injunctions, writs, rules, regulations, orders,
     interpretations, licenses, permits and orders of any competent court,
     arbitrator or governmental agency or authority in any relevant
     jurisdiction; or


                                       81



                    (iv) to bank examiners or any other regulatory authority or
     rating agencies or similar entities, if requested to do so; or

                    (v) to its auditors, legal, tax or to other professional
     advisers; or

                    (vi) to its Affiliates and their respective directors,
     officers, employees and agents.

          SECTION 9.18 APPOINTMENT OF INDENTURE TRUSTEE. The Loan Agent and the
Initial Lender hereby appoint U.S. Bank National Association as Indenture
Trustee under the Aircraft Mortgages. Such appointment to be effected by
delivery of an authorization and direction to the Indenture Trustee.


                                       82



          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                        AMERICA WEST AIRLINES, INC.
                                        US AIRWAYS, INC
                                        US AIRWAYS GROUP, INC.


                                        By:
                                            ------------------------------------
                                        Name: Derek J. Kerr
                                        Title: Chief Financial Officer of
                                               each Person listed above


                                        AIRBUS FINANCIAL SERVICES,
                                        as Initial Lender and Loan Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        WELLS FARGO BANK NORTHWEST,
                                        NATIONAL ASSOCIATION,
                                        as Collateral Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                       83



                                     ANNEX A

                                NOTICE ADDRESSES

If to the Borrowers:

America West Airlines, Inc.
400 E. Sky Harbor Blvd.
Phoenix, AZ 85034
Main Telephone: (480) 693-0800
Fax: (480) 693-5155
Attention: Derek J. Kerr

America West Holdings Corporation
111 West Rio Salado Parkway
Tempe, AZ 85281
Main Telephone: (480) 693-0800
Fax: (480) 693-5155
Attention: Derek J. Kerr

US Airways, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
Main Telephone: (703) 872-5050
Fax: (703) 872-5960
Attention: Derek J. Kerr

If to the Initial Lender:

Airbus Financial Services
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1, Ireland
Attention: Managing Director
Telephone: 011 3531 790 5500
Facsimile: 011 3531 670 2020

With a copy to:

Airbus North America Holdings, Inc.
198 Van Buren St. Suite 300
Hendon, Virginia 20170

Attn: Vice President - Sales Finance
Telephone: (703) 834-3400
Facsimile: (703) 834-3547



If to the Loan Agent:

Airbus Financial Services
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1, Ireland
Attention: Managing Director
Telephone: 011 3531 790 5500
Facsimile: 011 3531 670 2020

With a copy to:

Airbus North America Holdings, Inc.
198 Van Buren St. Suite 300
Hendon, Virginia 20170

Attn: Vice President - Sales Finance
Telephone: (703) 834-3400
Facsimile: (703) 834-3547

If to the Collateral Agent:

Wells Fargo Bank Northwest, National Association
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, Utah 84111
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
Attention: Corporate Trust Services


                                       85



                                     ANNEX B

                                 LENDING OFFICE

Airbus Financial Services
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1
Ireland



                                     ANNEX C

                               LENDER COMMITMENTS
                                 INITIAL AMOUNTS



                      TOTAL      TRANCHE A    TRANCHE B    TRANCHE C    TRANCHE D    TRANCHE E
 NAME OF LENDER    COMMITMENT   COMMITMENT   COMMITMENT   COMMITMENT   COMMITMENT   COMMITMENT
- ----------------   ----------   ----------   ----------   ----------   ----------   ----------
                                                                  
AIRBUS FINANCIAL       $0           $0           $0           $0           $0           $0
    SERVICES





                                    EXHIBIT A

                            ASSIGNMENT AND ASSUMPTION

          Reference is made to the Loan Agreement, dated as of September 27,
2005 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Loan Agreement"), among the Borrowers, the Guarantor,
Airbus Financial Services, as Initial Lender and Loan Agent, and Wells Fargo
Bank Northwest, National Association, as Collateral Agent. Unless otherwise
defined herein, terms defined in the Loan Agreement and used herein shall have
the meanings given to them in the Loan Agreement.

          The Assignor identified on Schedule l hereto (the "Assignor") and the
Assignee identified on Schedule l hereto (the "Assignee") agree as follows:

1. The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Effective
Date (as defined below), the interest described in Schedule 1 hereto (the
"Assigned Interest") in and to the Assignor's rights and obligations under the
Loan Agreement with respect to those credit facilities contained in the Loan
Agreement as are set forth on Schedule 1 hereto (individually, an "Assigned
Facility"; collectively, the "Assigned Facilities"), in a principal amount for
each Assigned Facility as set forth on Schedule 1 hereto.

2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Guarantor, the Borrower, any of its Affiliates or any
other obligor or the performance or observance by the Guarantor, the Borrower,
any of its Affiliates or any other obligor of any of their respective
obligations under the Loan Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto.

3. The Assignee (a) represents and warrants that it is legally authorized to
enter into this Assignment and Assumption; (b) confirms that it has received a
copy of the Loan Agreement, together with copies of the financial statements
delivered pursuant to Section 4.3 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption; (c) agrees that it will,
independently and without reliance upon the Assignor, the Loan Agents, the
Collateral Agent or any Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Agreement, the other Loan



Documents or any other instrument or document furnished pursuant hereto or
thereto; (d) appoints and authorizes the Loan Agent or the Collateral Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Loan Agent and the Collateral Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Loan Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender including its obligations pursuant to Section
2.13(f) of the Loan Agreement.

4. The effective date of this Assignment and Assumption shall be the Effective
Date of Assignment described in Schedule 1 hereto (the "Effective Date").
Following the execution of this Assignment and Assumption, it will be delivered
to the Loan Agent for acceptance by it and recording by the Loan Agent pursuant
to the Credit Agreement, effective as of the Effective Date (which shall not,
unless otherwise agreed to by the Loan Agent, be earlier than five Business Days
after the date of such acceptance and recording by the Loan Agent).

5. Upon such acceptance and recording, from and after the Effective Date, the
Loan Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date.

6. From and after the Effective Date, (a) the Assignee shall be a party to the
Loan Agreement and, to the extent provided in this Assignment and Assumption,
have the rights and obligations of a Lender thereunder and under the other Loan
Documents and shall be bound by the provisions thereof and (b) the Assignor
shall, to the extent provided in this Assignment and Assumption, relinquish its
rights and be released from its obligations under the Loan Agreement.

7. This Assignment and Assumption shall be governed by and construed in
accordance with the laws of the State of New York.

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.



                                   Schedule 1
                  to Assignment and Assumption with respect to
               the Loan Agreement, dated as of September 27, 2005,
    among the US Airways, Inc. and America West Airlines, Inc., as Borrowers,
the Guarantor, and Airbus Financial Services, as Initial Lender and Loan Agent,
    and Wells Fargo Bank Northwest, National Association, as Collateral Agent

Name of Assignor: ______________________

Name of Assignee: ______________________

Effective Date of Assignment: _________________



Credit Facility       Principal          Commitment
   Assigned       Amount Assigned   Percentage Assigned
- ---------------   ---------------   -------------------
                              
                  $______________   __________________%


[Name of Assignee]                      [Name of Assignor]


By:                                     By:
   ----------------------------------       ------------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------

Accepted for Recordation in the
Register:                               Required Consents (if any):

_____________________________________, as US Airways, Inc.
Loan Agent


By:                                     By:
    ---------------------------------       ------------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------


                                        America West Airlines, Inc.


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------



                                    EXHIBIT B

                             FORM OF PROMISSORY NOTE
                                  [TRANCHE __]

U.S.$_____________                                            Dated: _____, 2005
Tranche ___

          FOR VALUE RECEIVED, the undersigned, US Airways, Inc., a Delaware
corporation, and America West Airlines, Inc., a Delaware corporation
(collectively, the "Borrowers"), HEREBY, JOINTLY AND SEVERALLY, PROMISE TO PAY
to Airbus Financial Services, Inc., as Loan Agent under the Loan Agreement
referred to below ____________ for the account of the Lenders as defined in the
Loan Agreement referred to below), subject to the provisions of Section 2.3(c)
of the Loan Agreement, the principal sum of U.S.$_________ or, if less, the
aggregate outstanding principal amount of all Tranche [___] Loans made by the
Lender to the Borrowers pursuant to the Loan Agreement dated as of September 27,
2005 among the Borrowers, Guarantor and Airbus Financial Services, as the
Initial Lender and Loan Agent, and Wells Fargo Bank Northwest, National
Association, as Collateral Agent (as amended or modified from time to time, the
"Loan Agreement"; the terms defined therein being used herein as therein
defined), plus the amount of accrued interest hereon capitalized and added to
the principal of the Loans pursuant to Section 2.3(a) of the Loan Agreement. The
outstanding principal amount of this Note shall be payable on the date specified
in Section 2.3(b) of the Loan Agreement, subject to the provisions of Section
2.3(c) of the Loan Agreement. The final payment required to be made on this
Promissory Note, after taking into account Section 2.3(c) of the Loan Agreement,
shall be in an amount sufficient to pay in full the accrued and unpaid interest
hereon.

          The Borrowers, jointly and severally, subject to the provisions of
Section 2.3 of the Loan Agreement, promise to pay interest on the unpaid
principal amount hereof from the date hereof until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Loan Agreement.

          Both principal and interest are payable in lawful money of the United
States of America to the Loan Agent, to the account specified in Section 2.9(a)
of the Loan Agreement, in same day funds.

          This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Loan Agreement. The Loan Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The obligations of the Borrower under this Promissory Note
and the Loan Agreement are secured by collateral as provided in the Loan
Agreement and in the Collateral Documents.



          This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.


                                       3



          IN WITNESS WHEREOF, the Borrowers, jointly and severally, have caused
this Promissory Note to be executed and delivered by its duly authorized officer
as of the date and at the place set forth above.

                                        AMERICA WEST AIRLINES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        US AIRWAYS, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                       4



                           TRANCHE ___ PROMISSORY NOTE



                                                                                   Aggregate Outstanding
                                                                                  Principal Amount After
                                                                                  Giving Effect to Loans
               Payment   Principal Amount   Principal Amount of   S&P Rating at     Made or Payments of
Funding Date     Date      of Loan Made         Loan Repaid          Funding        Principal Received
- ------------   -------   ----------------   -------------------   -------------   ----------------------
                                                                   





                                    EXHIBIT C

                               NOTICE OF BORROWING

Airbus Financial Services,
   as Loan Agent under the
   Loan Agreement referred to below
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1
Ireland
Telephone: +353 1 790 5500
Facsimile: +353 1 670 2020
Attention: Managing Director

                                                                __________, 2005

          Re:  AMERICA WEST AIRLINES, INC. AND US AIRWAYS, INC. (the
               "Borrowers")

     Reference is made to the $89,000,000 Loan Agreement, dated as of September
27, 2005 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "Loan Agreement"), among the Borrowers, the
Guarantor, Airbus Financial Services, as Initial Lender and Loan Agent, and
Wells Fargo Bank Northwest, National Association, as Collateral Agent, and
entitled to the benefits thereof. Capitalized terms used herein and not
otherwise defined herein are used herein as therein defined.

     The Borrowers hereby give you irrevocable notice, pursuant to Section 2.2
of the Loan Agreement, that the undersigned hereby requests a Borrowing under
the Loan Agreement and, in that connection, sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section 2.2
of the Loan Agreement:

          (i) The date of the Proposed Borrowing is ________, 200__ (the
     "Funding Date"), a date permitted under the applicable provisions of
     Section 2.1 of the Loan Agreement.

          (ii) The aggregate amount of the Proposed Borrowing is $________.

          (iii) The Proposed Borrowing is for Tranche ___ Loans and such
     proceeds shall be used in accordance with Section 2.4(f) of the Loan
     Agreement.

          (iv) As of the date hereof, the corporate credit rating assigned by
     S&P to the Guarantor and its consolidated subsidiaries, taken together, is
     ____.



          (v) [For Tranche B Borrowings] [All amounts due and payable under the
     A321 Airbus Financings have been paid in full.]

          (v) [For Tranche B Borrowings] [All amounts due and payable on the
     Funding Date under the A321 Airbus Financings have been, or immediately
     following the application of the proceeds of the Proposed Borrowing will
     have been, paid in full.]

          [(v) [For Tranche C Borrowings] Copies of the invoices for goods and
     services referred to in Section 2.1(c) paid 30 or more days before the date
     of this Proposed Borrowing not used to support prior Borrowings of Tranche
     C Loans, are attached hereto.]

          [(v) [For Tranche D Borrowings] All amounts due and payable on or
     before September 20, 2005, under the Trust 2001 1C Certificates of US
     Airways have been paid in full and received by the holders thereof.]

     The undersigned hereby certifies that the following statements shall be
true on the Funding Date:

          (i) the representations and warranties of each Borrower and the
     Guarantor set forth in Article IV of the Loan Agreement are true and
     correct in all material respects on and as of the Funding Date, before and
     after giving effect to the Proposed Borrowing and to the application of the
     proceeds therefrom as though made on and as of such date, (except to the
     extent such representations and warranties by their terms expressly relate
     to an earlier date, in which case the representations and warranties shall
     have been true and correct in all material respects on and as of such
     earlier date); and

          (ii) no Event of Default or Default has occurred and is, or would
     result from the Proposed Borrowing and the application of the proceeds
     therefrom.

                                        AMERICA WEST AIRLINES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title: Chief Financial Officer/
                                               President/ Executive Officer


                                        US AIRWAYS, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title: Chief Financial Officer/
                                               President/ Executive Officer

EX-10.5

                                                                    Exhibit 10.5

            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24B-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                         AIRBUS A350 PURCHASE AGREEMENT

                         Dated as of September 27, 2005

                                     between

                                 AVSA, S.A.R.L.,

                                                                          Seller

                                       and

                US AIRWAYS, INC., AMERICA WEST AIRLINES, INC. and
                             US AIRWAYS GROUP, INC.

                                                                          Buyers

AWE/USA - A350 - PA                                                            i
                           PRIVILEGED AND CONFIDENTIAL



                                    CONTENTS



CLAUSES       TITLE
- -------       -----
           
   0          DEFINITIONS

   1          SALE AND PURCHASE

   2          SPECIFICATION

   3          PRICE

   4          PRICE REVISION

   5          PAYMENT TERMS

   6          INSPECTION

   7          CERTIFICATION

   8          TECHNICAL ACCEPTANCE

   9          DELIVERY

  10          EXCUSABLE DELAY AND TOTAL LOSS

  11          INEXCUSABLE DELAY

  12          WARRANTIES AND SERVICE LIFE POLICY

  13          PATENT AND COPYRIGHT INDEMNITY

  14          TECHNICAL DATA

  15          SELLER REPRESENTATIVES

  16          TRAINING AND TRAINING AIDS

  17          SUPPLIER PRODUCT SUPPORT

  18          BUYER FURNISHED EQUIPMENT


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CLAUSES       TITLE
- -------       -----
           
  19          INDEMNITIES AND INSURANCE

  20          ASSIGNMENTS AND TRANSFERS

  21          TERMINATION EVENTS

  22          MISCELLANEOUS PROVISIONS

  23          CERTAIN REPRESENTATIONS OF THE PARTIES




EXHIBITS
- --------
           
EXHIBIT A-1   A350-800 STANDARD SPECIFICATION

EXHIBIT A-2   A350-900 STANDARD SPECIFICATION

EXHIBIT B-1   SCN FORM

EXHIBIT B-2   MSCN FORM

EXHIBIT C     SELLER SERVICE LIFE POLICY

EXHIBIT D     CERTIFICATE OF ACCEPTANCE

EXHIBIT E     BILL OF SALE

EXHIBIT F     TECHNICAL DATA AND SOFTWARE SERVICES

EXHIBIT G     SELLER PRICE REVISION FORMULA

EXHIBIT H     TERMS AND CONDITIONS FOR LICENSE FOR USE OF SOFTWARE


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                               PURCHASE AGREEMENT

This Agreement is made this 27th day of September 2005

between

            AVSA, S.A.R.L, a societe a responsabilite limitee organized and
            existing under the laws of the Republic of France, having its
            registered office located at

            2, rond-point Maurice Bellonte
            31700 Blagnac, France

            (hereinafter referred to as the "SELLER")

and

            US Airways, Inc., America West Airlines, Inc. and US Airways Group,
            Inc., each a corporation organized and existing under the laws of
            the State of Delaware, United States of America, and each having its
            principal corporate offices located at 4000 East Sky Harbor
            Boulevard, Phoenix, AZ 85034 (each hereinafter referred to as a
            "BUYER" and, collectively, the "BUYERS").

WHEREAS, the Buyers wish to purchase and the Seller is willing to sell twenty
(20) Airbus A350 model aircraft, on the terms and conditions herein provided;
and

WHEREAS, the Seller is a sales subsidiary of Airbus S.A.S. and will purchase
such aircraft from Airbus S.A.S. for resale to the Buyers,

NOW THEREFORE IT IS AGREED AS FOLLOWS:

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0     DEFINITIONS

      For all purposes of this Agreement, except as otherwise expressly provided
      or unless the context otherwise requires, the following terms will have
      the following meanings:

      A350 Aircraft - any or all of the Airbus A350-800 Aircraft or A350-900
      Aircraft.

      A350-800 Aircraft - any or all of the Airbus A350-800 model aircraft to be
      purchased by the Seller and sold to the Buyers pursuant to this Agreement,
      together with all components, equipment, parts and accessories installed
      in or on such aircraft and the Propulsion Systems installed thereon.

      A350-900 Aircraft - any or all of the Airbus A350-900 model aircraft to be
      purchased by the Seller and sold to the Buyers pursuant to this Agreement,
      together with all components, equipment, parts and accessories installed
      in or on such aircraft and the Propulsion Systems installed thereon.

      A350-800 Specification - the A350-800 Standard Specification, as amended
      from time to time in accordance with this Agreement.

      A350-800 Standard Specification - the A350-800 standard specification
      document number G.000.08000, Issue B, dated June 30, 2005, published by
      the Manufacturer, which includes a maximum take-off weight ("MTOW") of 245
      metric tons, a copy of which is annexed as Exhibit A-1.

      A350-900 Specification - the A350-900 Standard Specification, as amended
      from time to time in accordance with this Agreement.

      A350-900 Standard Specification - the A350-900 standard specification
      document number G.000.09000, Issue B, dated June 30, 2005, published by
      the Manufacturer, which includes an MTOW of 245 metric tons, a copy of
      which is annexed as Exhibit A-2.

      Affiliate - with respect to any person or entity, any other person or
      entity directly or indirectly controlling, controlled by or under common
      control with such person or entity, but not, in the case of AVSA or the
      Manufacturer, any of the Associated Contractors.

      Agreement - this Airbus A350 purchase agreement dated as of the date
      hereof, including exhibits and appendices attached hereto as the same may
      be amended or modified and in effect from time to time.

      Aircraft - any or all of the A350 Aircraft for which the delivery schedule
      is set forth in Clause 9.1.1 hereof and any or all of any other aircraft
      to be firmly sold by the Seller and firmly purchased by the Buyers
      pursuant to this Agreement, together with all components, equipment, parts
      and accessories installed in or on such aircraft and the Propulsion
      Systems installed thereon upon Delivery.

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      Airframe- any Aircraft, excluding the Propulsion Systems therefor.

      ANACS - Airbus North America Customer Services, Inc., a corporation
      organized and existing under the laws of Delaware, having an office
      located at 198 Van Buren Street, Suite 300, Herndon, VA 20170, or any
      successor thereto.

      Associated Contractors - collectively, the following:

      (1)   Airbus France S.A.S., whose principal office is at
            316, route de Bayonne
            31060 Toulouse, France

      (2)   Airbus UK Ltd, whose principal office is at
            New Filton House, Filton
            Bristol, BS 997AR, Great Britain

      (3)   Airbus Espana S.L., whose principal office is at
            Plaza de John Lennon N degrees 2,
            s/n Getafe
            28096 Madrid, Spain

      (4)   Airbus Deutschland GmbH, whose principal office is at
            Kreetslag 10
            21129 Hamburg, Germany

      ATA Specification 100 - the specification issued by the Air Transport
      Association of America relating to manufacturers' technical data.

      ATA Specification 101 - the specification issued by the Air Transport
      Association of America relating to ground equipment technical data.

      ATA Specification 102 - the specification issued by the Air Transport
      Association of America relating to software programs.

      ATA Specification 200 - the specification issued by the Air Transport
      Association of America relating to integrated data processing.

      ATA Specification 300 - the specification issued by the Air Transport
      Association of America relating to the packaging of spare parts shipments.

      ATA Specification 2000 - the specification issued by the Air Transport
      Association of America relating to an industry-wide communication system
      linking suppliers and users for the purposes of spares provisioning,
      purchasing, order administration, invoicing and information or data
      exchange.

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      ATA Specification 2100 - the specification issued by the Air Transport
      Association of America relating to the standards for the presentation of
      technical information prepared as digital media (magnetic tape or CD ROM).

      ATA Specification 2200 - the specification issued by the Air Transport
      Association of America relating to the preparation of technical
      documentation in support of aircraft maintenance.

      ATSB - The Air Transportation Stabilization Board.

      Aviation Authority - when used with respect to any jurisdiction, the
      government entity that, under the laws of such jurisdiction, has control
      over civil aviation or the registration, airworthiness or operation of
      civil aircraft in such jurisdiction.

      Balance of the Final Contract Price - means the amount payable by the
      Buyers to the Seller on the Delivery Date for an Aircraft after deducting
      from the Final Contract Price for such Aircraft the amount of all
      Predelivery Payments received by the Seller from the Buyers, or any of
      them, in respect of such Aircraft on or before the Delivery Date for such
      Aircraft.

      Base Price - as defined in Clause 3.1.

      Buyer Furnished Equipment or BFE - for any Aircraft, all the items of
      equipment that will be furnished by the Buyers and installed in the
      Aircraft by the Seller pursuant to Clause 18, as listed in the
      Specification.

      Certificate of Acceptance - as defined in Clause 8.3.

      Change in Law - as defined in Clause 7.3.1.

      Customer Originated Changes or COC - data originating from the Buyers, or
      any of them, that are introduced into Seller's Technical Data and
      Documentation, as more completely set forth in Clause 14.9.

      Delivery - the transfer of title to the Aircraft from the Seller to the
      Designated Buyers.

      Delivery Date - the date on which Delivery occurs.

      Delivery Location - the facilities of the Manufacturer at the location of
      final assembly of the Aircraft, which is currently at the works of Airbus
      France S.A.S. works in Toulouse, France.

      Designated Buyer - as defined in Clause 9.

      Development Changes - as defined in Clause 2.1.4.

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      DGAC - the Direction Generale de l'Aviation Civile of France, or any
      successor agency thereto.

      EASA-European Aviation Safety Agency or any successor agency thereto.

      Excusable Delay - as defined in Clause 10.1.

      Export Certificate of Airworthiness - an export certificate of
      airworthiness issued by the Aviation Authority of the Delivery Location.

      FAA - the U.S. Federal Aviation Administration, or any successor agency
      thereto.

      Final Contract Price - as defined in Clause 3.2.

      Free Carrier or FCA - as defined in Incoterms 2000: ICC Official Rules for
      the Interpretation of Trade Terms, published by the International Chamber
      of Commerce.

      In-house Warranty Labor Rate - as defined in Clause 12.1.8(v).

      In-house Warranty Repair - as referred to in Clause 12.1.8.

      Initial Payment- each of the initial payment amounts described in Clause
      5.3.

      Interface Problem - as defined in Clause 12.4.1.

      LIBOR - the London Interbank Offered Rate determined on the basis of the
      offered rates for deposits in US dollars for each stated interest period
      (or for six-month deposits in US dollars if no interest period is stated),
      which appears on the Reuters Screen LIBO Page as of 11:00 a.m., London
      time, on the second Working Day prior to the start of the relevant
      interest period. If at least two (2) such offered rates appear on the
      Reuters Screen LIBO Page, the rate for that interest period will be the
      arithmetic mean of such offered rates rounded to the nearest one-hundred
      thousandth of a basis point. If fewer than two (2) offered rates appear,
      the rate for that interest period will be "LIBOR" as quoted by National
      Westminster Bank, plc or any successor thereto. "Reuters Screen LIBO Page"
      means the display designated as page "LIBO" on the Reuters Monitor Money
      Rates Service (or any successor to such page or service).

      Manufacturer - Airbus S.A.S., societe par actions simplifiee, of the
      Republic of France.

      Manufacturer Specification Change Notice or MSCN -as defined in Clause
      2.1.3.

      Predelivery Payment - any of the payments made in accordance with Clause
      5.2.

      Predelivery Payment Reference Price - as defined in Clause 5.2.2.

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                           PRIVILEGED AND CONFIDENTIAL



      Propulsion Systems - the two (2) General Electric GEnx-1A72 powerplants
      installed on an Aircraft or to be installed on an Aircraft at Delivery,
      each composed of the powerplant (as such term is defined in Chapters 70-80
      of ATA Specification 100 (Revision 21), but limited to the equipment,
      components, parts and accessories included in the powerplant, as so
      defined) that have been sold to the Manufacturer by General Electric.

      Ready for Delivery - with respect to any Aircraft, the term applicable to
      such Aircraft when (i) the Technical Acceptance Process has been
      successfully completed for such Aircraft and (ii) the Export Certificate
      of Airworthiness has been issued therefor.

      Resident Customer Support Representative - as set forth in Clause 15.2.1.

      Scheduled Delivery Month - as defined in Clause 9.1.1.

      SCN - as set forth in Clause 2.1.2

      Seller Price Revision Formula - as set forth in Exhibit G.

      Service Life Policy - as set forth to in Clause 12.2.

      Software Products - software, whether bundled with data or not,
      specifically designed to provide the Buyers with certain maintenance and
      operation capabilities further detailed in the ANACS Customer Support
      Catalog.

      Specification - collectively or individually, as applicable, the A350-800
      Specification or A350-900 Specification.

      Specification Change Notice or SCN - as defined in Clause 2.1.2.

      Supplier - any supplier of Supplier Parts.

      Supplier Part - any component, equipment, accessory or part installed in
      an Aircraft at the time of Delivery thereof, not including the Propulsion
      Systems or Buyer Furnished Equipment, for which there exists a Supplier
      Product Support Agreement.

      Supplier Product Support Agreement - an agreement between the Manufacturer
      and a Supplier containing enforceable and transferable warranties (and in
      the case of landing gear suppliers, service life policies for selected
      structural landing gear elements).

      Technical Data - as set forth in Exhibit F.

      Technical Acceptance Process - as defined in Clause 8.1.1.

      Termination Event - as defined in Clause 21.1.

      Training Conference - as defined in Clause 16.4.1.

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                           PRIVILEGED AND CONFIDENTIAL



      Type Certificate - as defined in Clause 7.1.

      Warranted Part - as defined in Clause 12.1.1.

      Warranty Claim - as defined in Clause 12.1.7(v).

      Working Day - with respect to any action to be taken hereunder, a day
      other than a Saturday, Sunday or other day designated as a holiday in the
      jurisdiction in which such action is required to be taken.

      The terms "herein," "hereof" and "hereunder" and other words of similar
      import refer to this Agreement, and not a particular Clause thereof. The
      definition of a singular in this Clause will apply to plurals of the same
      words.

      Except for the purposes of and as provided in Clause 22.10, references in
      this Agreement to an exhibit, schedule, article, section, subsection or
      clause refer to the appropriate exhibit or schedule to, or article,
      section, subsection or clause in this Agreement.

      Except for the preceding sentence, each agreement defined in this Clause 0
      will include all appendices, exhibits and schedules to such agreement. If
      the prior written consent of any person is required hereunder for an
      amendment, restatement, supplement or other modification to any such
      agreement and the consent of each such person is obtained, references in
      this Agreement to such agreement will be to such agreement as so amended,
      restated, supplemented or modified.

      References in this Agreement to any statute will be to such statute as
      amended or modified and in effect at the time any such reference is
      operative.

      Technical and trade terms used but not defined herein will be defined as
      generally accepted in the airline and/or aircraft manufacturing industries
      or as otherwise described.

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1     SALE AND PURCHASE

      The Seller will cause to be manufactured and will sell and deliver, and
      the Buyer will purchase (from the Seller) and take delivery of the
      Aircraft, subject to the terms and conditions in this Agreement.

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2     SPECIFICATION

2.1   Specification Documents

2.1.1 The Aircraft will be manufactured in accordance with the applicable
      Specification.

2.1.2 Specification Change Notice

      The Specification may be amended in writing by the Buyers and the Seller
      by a Specification Change Notice in substantially the form set out in
      Exhibit B-1 (each, an "SCN"). An SCN will set out the SCN's effectivity
      and the particular change to be made to the Specification and the effect,
      if any, of such change on design, performance, weight, Scheduled Delivery
      Month of the Aircraft affected thereby, interchangeability or
      replaceability requirements of the Specification and text of the
      Specification. An SCN may result in an adjustment of the Base Price of the
      Aircraft, which adjustment, if any, will be specified in the SCN. SCNs
      will not be binding on either party until signed by persons duly
      authorized by each of the Buyers and the Seller, but upon being so signed,
      will constitute amendments to this Agreement.

2.1.3 [...***...]

2.1.4 Development Changes

      As stated in Clause 2.1.3, changes may be made by the Seller without the
      Buyers' consent when changes to the Aircraft that do not adversely affect
      price, Scheduled Delivery Month, weight of the Aircraft affected thereby,
      performance, interchangeability requirements or replaceability
      requirements of the Specifications of the Aircraft affected thereby are
      deemed by the Seller to be necessary to improve the Aircraft affected
      thereby, prevent delay or ensure compliance with this Agreement
      ("DEVELOPMENT Changes"). Development Changes will be made by either an
      MSCN or a manufacturer's information document prior to Delivery of the
      relevant Aircraft.

***   Confidential Treatment Requested

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2.2   Customization Milestones Chart

      Within a reasonable period after signature of this Agreement, the Seller
      will provide the Buyers with a chart called the "Customization Milestones
      Chart," defining the lead times before Delivery needed for agreeing on
      items requested by the Buyers from the Standard Specifications and
      Configuration Guides CD-ROM.

2.3   Propulsion Systems

      Each Airframe will be equipped with a set of Propulsion Systems. Each
      Airframe will be equipped with nacelles and thrust reversers.

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                           PRIVILEGED AND CONFIDENTIAL



3     PRICE

3.1   Base Price of the Aircraft

3.1.1 Aircraft

3.1.1. The Base Price of each A350-800 Aircraft is the sum of

      (i)   [...***...]

      (ii)  [...***...]

3.1.2 The Base Price of each A350-900 Aircraft is the sum of

      (i)   [...***...]

      (ii)  [...***...]

3.2   The Final Contract Price of an Aircraft will be the sum of:

      (i)   the Base Price of the applicable Aircraft, adjusted to the Delivery
            Date of such Aircraft in accordance with the Seller Price Revision
            Formula, [...***...];

      (ii)  the price of any SCNs for the Aircraft entered into after the date
            of signature of this Agreement, as adjusted to the Delivery Date in
            accordance with the Seller Price Revision Formula; and

      (iii) any other amount resulting from any other provisions of this
            Agreement and/or any other written agreement between the Buyers and
            the Seller relating to the Aircraft.

***  Confidential Treatment Requested

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                           PRIVILEGED AND CONFIDENTIAL



3.3   Taxes, Duties and Imposts

3.3.1 [...***...]

3.3.2 [...***...]


*** Confidential Treatment Requested

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3.3.3 [...***...]

3.3.4 [...***...]

*** Confidential Treatment Requested

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                           PRIVILEGED AND CONFIDENTIAL



4     PRICE REVISION

      [...***...], the Base Price of the Aircraft is subject to revision up to
      and including the Delivery Date, in accordance with the Seller Price
      Revision Formula.

***  Confidential Treatment Requested

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                           PRIVILEGED AND CONFIDENTIAL



5     PAYMENT TERMS

5.1   The Buyers will, jointly and severally, pay the Predelivery Payments, the
      Balance of the Final Contract Price and any other amount due hereunder in
      immediately available funds in United States dollars to the Seller's
      account with CALYON New York, 1301 Avenue of the Americas, New York, or to
      such other account within the United States as may be designated by the
      Seller.

5.2   Predelivery Payments

5.2.1 Predelivery Payments are nonrefundable and will be paid by the Buyers,
      jointly and severally, to the Seller for each Aircraft. [...***...] The
      aggregate Predelivery Payment amount is thirty percent (30%) of the
      Predelivery Payment Reference Price.

5.2.2 The Predelivery Payment Reference Price is:

           A =    Pb (1 + 0.04N)

           where

           A =    the Predelivery Payment Reference Price
                  for an Aircraft to be delivered in calendar
                  year T.

           Pb =   the Base Price of the Aircraft.

           N  =   (T - 2005).

           T  =   the year of delivery of the relevant Aircraft.

5.2.3 Predelivery Payments will be paid according to the following schedule.



                                                                            Percentage of Predelivery
                                                                                     Payment
Payment Date                                                                     Reference Price
- ------------                                                                -------------------------
                                                                      
1st Payment   On signature of this Agreement                                        [...***...]

              No later than the first Working Day of the
              following months:

2d Payment    The thirty-sixth (36th) month before the                              [...***...]
              Scheduled Delivery Month of each Aircraft as set
              forth in this Agreement



*** Confidential Treatment Requested

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3d Payment    The twenty-fourth (24th) month before the
              Scheduled Delivery Month of each Aircraft as set                5%
              forth in this Agreement

4th Payment   The eighteenth (18th) month before the Scheduled                5%
              Delivery Month of each Aircraft as set forth in
              this Agreement

5th Payment   The twelfth (12th) month before the Scheduled                   5%
              Delivery Month of each Aircraft as set forth in
              this Agreement

6th Payment   The sixth (6th) month before the Scheduled                      5%
              Delivery Month of each Aircraft as set forth in
              this Agreement

TOTAL PAYMENT PRIOR TO DELIVERY                                              30%



      All Predelivery Payments that are past due on signature of this Agreement
      will be paid at signature of this Agreement.

5.2.4 The Seller will be entitled to hold and use any Predelivery Payment as
      absolute owner thereof, subject only to the obligation to deduct
      Predelivery Payments from the Final Contract Price when calculating the
      Balance of the Final Contract Price. The Seller will be under no
      obligation to segregate any Predelivery Payment, or any amount equal
      thereto, from the Seller's funds.

5.2.5 SCN Predelivery Payment

      [...***...]

      (i)   For each such SCN executed before the first day of the eighteenth
            (18th) month before the Scheduled Delivery Month, the Buyers will,
            jointly and severally, make a Predelivery Payment equal to fifteen
            percent (15%) of the SCN price. This Predelivery Payment will be
            paid on the first day of the twelfth (12th) month before the
            Scheduled Delivery Month.

      (ii)  For each such SCN executed after the first day of the eighteenth
            month (18th) and before the first day of the twelfth (12th) month
            before the Scheduled Delivery Month, this Predelivery Payment will
            amount to thirty percent (30%) of the SCN price, and for each SCN
            executed after the first day of the twelfth (12th) month and before
            the first day of the ninth (9th) month before the Scheduled Delivery
            Month

*** Confidential Treatment Requested

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                           PRIVILEGED AND CONFIDENTIAL



            this payment will amount to fifty percent (50%) of the SCN price.
            These payments will be paid on the first day of the sixth (6th)
            month before the Scheduled Delivery Month.

5.3   Initial Payment

      [...***...]



5.4   Payment of Balance of the Final Contract Price

      Concurrent with each Delivery, the Buyers will, jointly and severally, pay
      to the Seller the Balance of the Final Contract Price for the applicable
      Aircraft. The Seller's receipt of the full amount of all Predelivery
      Payments and of the Balance of the Final Contract Price, including any
      amounts due under Clause 5.6, will be a condition precedent to the
      Seller's obligation to deliver such Aircraft to the Designated Buyer.

5.5   Payment Setoff

      Notwithstanding any other rights the Seller may have at contract or at
      law, the Buyers and the Seller hereby agree that should any amount
      (whether under this Agreement or under any other agreement between any
      Buyer or any of their respective Affiliates and the Seller or any of its
      Affiliates and whether at the stated maturity of such amount, by
      acceleration or otherwise) become due and payable by such Buyer or its
      Affiliates, and not be paid in full in immediately available funds on the
      date due, then the Seller will have the right to debit and apply, in whole
      or in part, the Predelivery Payments paid to the Seller by the Buyers
      hereunder against such unpaid amount. The Seller will promptly notify the
      Buyers in writing after such debiting and application.

5.6   Overdue Payments

      If any payment due the Seller is not received by the Seller on the date or
      dates agreed on between the Buyers and the Seller, the Seller will have
      the right to claim from the Buyers and the Buyers will promptly pay to the
      Seller on receipt of such claim [...***...] per annum on the amount of
      such overdue payment, to be calculated from and including the due date of
      such payment to (but excluding) the date such payment is received by the
      Seller, on the basis of a 360-day year and the actual number of days
      elapsed. The Seller's right to receive such interest will be in addition
      to any other rights of the Seller hereunder or at law.

*** Confidential Treatment Requested

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                           PRIVILEGED AND CONFIDENTIAL



5.7   Proprietary Interest

      Notwithstanding any provision of law to the contrary, none of the Buyers
      will, by virtue of anything contained in this Agreement (including,
      without limitation, the making of any Predelivery Payments hereunder, or
      any designation or identification by the Seller of a particular Aircraft
      as an Aircraft to which any of the provisions of this Agreement refer)
      acquire any proprietary, insurable or other interest whatsoever in any
      Aircraft before Delivery of and payment for such Aircraft, as provided in
      this Agreement.

5.8   Payment in Full

      The Buyers' obligation to make payments to the Seller hereunder will not
      be affected by and will be determined without regard to any setoff,
      counterclaim, recoupment, defense or other right that any Buyer may have
      against the Seller or any other person and all such payments will be made
      without deduction or withholding of any kind. Each Buyer will ensure that
      the sums received by the Seller under this Agreement will be equal to the
      full amounts expressed to be due the Seller hereunder, without deduction
      or withholding on account of and free from any and all taxes, levies,
      imposts, duties or charges of whatever nature, except that if any Buyer is
      compelled by law to make any such deduction or withholding, the Buyers
      will, jointly and severally, pay such additional amounts to the Seller as
      may be necessary so that the net amount received by the Seller after such
      deduction or withholding will equal the amounts that would have been
      received in the absence of such deduction or withholding.

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6     INSPECTION

6.1   Inspection Procedures

6.1.1 All work to be carried out on the Aircraft and all materials and parts
      thereof will be open to inspection during business hours by duly
      authorized representatives of the Buyers or their designee at the
      respective works of the Associated Contractors and, if possible, at the
      works of their respective subcontractors. These representatives will have
      access to such relevant technical data as are reasonably necessary for
      this purpose (except that, if access to any part of the respective works
      where construction is in progress or materials or parts are stored is
      restricted for security reasons, the Associated Contractors will be
      allowed a reasonable time to make the items available for inspection
      elsewhere). The actual detailed inspection of the Aircraft, materials and
      parts thereof will take place only in the presence of the respective
      inspection department personnel of the Associated Contractors or their
      subcontractors. The procedures for such inspections will be agreed on with
      the Buyers before any inspection. The Seller will ensure that such
      personnel will be available at all reasonable times during business hours
      as described above.

6.1.2 All inspections, examinations and discussions with the Seller's, the
      Associated Contractors' or their respective subcontractors' engineering or
      other personnel by the Buyers and their representatives will be performed
      in such a manner as not to delay or hinder either the work to be carried
      out on the Aircraft or the proper performance of this Agreement. In no
      event will any of the Buyers or the representatives of any of them be
      permitted to inspect any aircraft other than the Aircraft. The Seller will
      not permit and will cause the Manufacturer not to permit, any
      representatives, employees, agents or personnel of any airline or customer
      of the Seller other than the Buyers to inspect, or to have access to the
      Aircraft or any designs or specifications relating thereto, without the
      prior written consent of the Buyers.

6.2   Representatives

      For the purposes of Clause 6.1, starting at a mutually agreed date until
      Delivery of the last Aircraft, the Seller will furnish free-of-charge
      secretarial assistance and suitable space, office equipment and facilities
      in or conveniently located with respect to the Delivery Location for the
      use of not more than four (4) representatives of the Buyers during the
      aforementioned period. The Seller will provide internet access, electronic
      mail, facsimile and a telephone at the Buyers' cost to be invoiced on a
      monthly basis.

6.3   The Seller will or will cause the Manufacturer to correct or otherwise
      resolve any deviations from the Specification discovered during any
      inspection or examination conducted under this Clause 6.

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7     CERTIFICATION

      Except as set forth in this Clause 7, the Seller will not be required to
      obtain any certificate or approval with respect to the Aircraft.

7.1   Type Certification

      A type certificate will have been issued by each of EASA and the FAA in
      the transport category (each, a "TYPE CERTIFICATE") prior to Delivery of
      the first Aircraft.

7.2   Export Certificate of Airworthiness

      Subject to the provisions of Clause 7.3, each Aircraft will be delivered
      to the Buyers with an Export Certificate of Airworthiness issued by the
      DGAC or EASA, as applicable, and in a condition enabling the Buyers (or an
      eligible person under then applicable law) to obtain at the time of
      Delivery a Standard Airworthiness Certificate issued pursuant to Part 21
      of the US Federal Aviation Regulations and a Certificate of Sanitary
      Construction issued by the U.S. Public Health Service Food and Drug
      Administration. However, the Seller will have no obligation to make and
      will not be responsible for any costs of alterations or modifications to
      any Aircraft to enable such Aircraft to meet FAA or U.S. Department of
      Transportation requirements for specific operation on the Buyers' routes,
      except as may be provided pursuant to Clause 7.3, whether before, at or
      after Delivery of any Aircraft.

7.3   Additional FAA Requirements

      [...***...]

7.4   Additional EASA Requirements

7.4.1 [...***...]

7.4.2 [...***...]

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7.4.3 [...***...]

7.4.4 Notwithstanding the provisions of Clauses 7.4.3, if a Change in Law
      relates to an item of BFE or to the Propulsion Systems (including to
      engine accessories, quick engine change units or thrust reversers) the
      costs relating thereto will be borne in accordance with such arrangements
      as may be made separately between the Buyers and the manufacturer of the
      BFE or the Propulsion Systems, as applicable, and the Seller will have no
      obligation with respect thereto.

7.5   Specification Changes After Delivery

      Nothing in Clause 7.4 will require the Seller to make any changes or
      modifications to, or to make any payments or take any other action with
      respect to, any Aircraft that is Ready for Delivery before the compliance
      date of any law or regulation referred to in Clause 7.4. Any such changes
      or modifications made to an Aircraft after it is Ready for Delivery will
      be at the Buyers' expense.

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8     BUYER'S TECHNICAL ACCEPTANCE

8.1   Technical Acceptance Process

8.1.1 Prior to Delivery, the Aircraft will undergo a technical acceptance
      process developed by the Seller, [...***...] (the "TECHNICAL ACCEPTANCE
      PROCESS"). Completion of the Technical Acceptance Process will demonstrate
      the satisfactory functioning of the Aircraft and will be deemed to
      demonstrate compliance with the applicable Specification. Should it be
      established that the Aircraft fails to complete the Technical Acceptance
      Process satisfactorily, the Seller will without hindrance from the Buyers
      be entitled to and will carry out any necessary changes to correct the
      reason for such failure and, as soon as practicable thereafter, resubmit
      the Aircraft in order to complete the Technical Acceptance Process.

8.1.2 The Technical Acceptance Process will

      (i)   start on a date notified by the Seller to the Buyers at least ten
            (10) days in advance,

      (ii)  take place at the Delivery Location,

      (iii) be carried out by the personnel of the Seller,

      (iv)  include a technical acceptance flight that will not exceed three (3)
            hours, and

      (v)   conclude in nine (9) Working Days.

8.2   Buyers' Attendance

8.2.1 The Buyers are entitled to attend and observe the Technical Acceptance
      Process.

8.2.2 If any of the Buyers attend the Technical Acceptance Process, each of them

      (i)   will comply with the reasonable requirements of the Seller, with the
            intention of completing the Technical Acceptance Process within nine
            (9) Working Days, and

      (ii)  may, collectively, have a maximum of four (4) representatives (no
            more than three (3) of whom will have access to the cockpit at any
            one time) accompany the Seller's representatives on the technical
            acceptance flight, during which such Buyers' representatives will
            comply with the instructions of the Seller's representatives.

8.2.3 If none of the Buyers attends or any of them fails to cooperate in the
      Technical Acceptance Process, the Seller will be entitled to complete the
      Technical Acceptance Process in compliance with Clause 8.1.1, without such
      Buyer's attendance, and each of

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      the Buyers will be deemed to have accepted that the Aircraft is
      functioning satisfactorily and is in compliance with the Specification, in
      all respects.

8.3   Certificate of Acceptance

      Upon successful completion of the Technical Acceptance Process, each of
      the Buyers will, on or before the Delivery Date, sign and deliver to the
      Seller a certificate of acceptance in respect of the Aircraft in the form
      of Exhibit D (the "CERTIFICATE OF ACCEPTANCE"). [...***...]

8.4   Finality of Acceptance

      The Buyers' signature of the Certificate of Acceptance for the Aircraft
      will constitute waiver by each of the Buyers of any right any of them may
      have under the Uniform Commercial Code as adopted by the State of New York
      or otherwise to revoke acceptance of the Aircraft for any reason, whether
      known or unknown to any of the Buyers at the time of acceptance.

8.5   Aircraft Utilization

      The Seller will, without payment or other liability, be entitled to use
      the Aircraft [...***...] before Delivery to obtain
      the certificates required under Clause 7. Such use will not limit the
      Buyers' obligation to accept Delivery.

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9         DELIVERY

9.1       Delivery Schedule

9.1.1     Subject to any delay contemplated by Clauses 2, 7, 8, 10 and 18, the
          Seller will have the Aircraft Ready for Delivery at the Delivery
          Location within the following months (each a "SCHEDULED DELIVERY
          MONTH").



Scheduled Delivery Month                  Year                 Quantity
- ------------------------                  ----                 --------
                                                         

[...***...]
         Total


9.1.2
9.1.2.1   [...***...]

9.1.2.2   [...***...]
9.1.2.3   [...***...]

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9.1.2.4   [...***...]

9.2.      The Buyers will send their representatives to the Delivery Location to
          take Delivery within seven (7) days after the date on which the
          Aircraft is Ready for Delivery.

9.2.1     The Seller will transfer title to the Aircraft to [...***...] free and
          clear of all encumbrances, provided that the Balance of the Final
          Contract Price has been paid by the Buyers, or any of them, pursuant
          to Clause 5.4 and that the Certificate of Acceptance has been signed
          and delivered to the Seller pursuant to Clause 8.3. [...***...]

9.2.2     If (i) any Buyer fails to deliver the signed Certificate of Acceptance
          to the Seller on or before the Delivery Date, or (ii) the Buyers fail
          pay the Balance of the Final Contract Price for the Aircraft to the
          Seller on the Delivery Date, then each of the Buyers will be deemed to
          have rejected Delivery wrongfully when the Aircraft was duly tendered
          pursuant to this Agreement. If such a deemed rejection arises, the
          Seller will retain title to the applicable Aircraft and the Buyers
          will, jointly and severally, indemnify and hold the Seller harmless
          against any and all costs (including but not limited to any parking,
          storage, and insurance costs) and consequences resulting from the
          Buyers' rejection, it being understood that the Seller will be under
          no duty to store, park, or otherwise protect the Aircraft. These
          rights of the Seller will be in addition to the Seller's other rights
          and remedies in this Agreement.

9.3       Flyaway

9.3.1     The Buyers and the Seller will cooperate to obtain any licenses that
          may be required by the relevant Aviation Authority for the purpose of
          exporting the Aircraft.

9.3.2     All expenses of, or connected with, flying the Aircraft from the
          Delivery Location after Delivery will be borne by the Buyers. The
          Buyers will make direct arrangements with the supplying companies for
          the fuel and oil required for all delivery flights.


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10        EXCUSABLE DELAY AND TOTAL LOSS

10.1      Scope of Excusable Delay

          Neither the Seller, the Manufacturer, the Associated Contractors, nor
          any Affiliate of any of the foregoing, will be responsible for or be
          deemed to be in default on account of delays in delivery or failure to
          deliver or otherwise in the performance of this Agreement or any part
          hereof due to causes reasonably beyond the Seller's, the
          Manufacturer's or any Associated Contractor's control or not
          occasioned by the Seller's, the Manufacturer's or any Associated
          Contractor's fault or negligence ("EXCUSABLE DELAY"), including, but
          not limited to: (i) acts of God or the public enemy, natural
          disasters, fires, floods, storms beyond ordinary strength, explosions
          or earthquakes; epidemics or quarantine restrictions; serious
          accidents; total or constructive total loss; any law, decision,
          regulation, directive or other act (whether or not having the force of
          law) of any government or of the Council of the European Union or the
          Commission of the European Union or of any national, Federal, State,
          municipal or other governmental department, commission, board, bureau,
          agency, court or instrumentality, domestic or foreign; governmental
          priorities, regulations or orders affecting allocation of materials,
          facilities or a completed Aircraft; war, civil war or warlike
          operations, terrorism, insurrection or riots; failure of
          transportation; strikes or labor troubles causing cessation, slow down
          or interruption of work; inability after due and timely diligence to
          procure materials, accessories, equipment or parts or to cause a
          subcontractor or Supplier to furnish materials, components,
          accessories, equipment or parts; general hindrance in transportation;
          (ii) [...***...]; and
          (iii) any delay caused directly or indirectly by the action or
          inaction of any Buyer.

10.2      Consequences of Excusable Delay

10.2.1    If an Excusable Delay occurs,

         (a)   the Seller will

                  (i)   notify the Buyers of such Excusable Delay as soon as
                        practicable after becoming aware of the same;

                  (ii)  not be deemed to be in default in the performance of its
                        obligations hereunder as a result of such Excusable
                        Delay;

                  (iii) not be responsible for any damages arising from or in
                        connection with such Excusable Delay suffered or
                        incurred by any of the Buyers; and

                  (iv)  subject to the provisions of Subclause 10.3 below, as
                        soon as practicable after the removal of the cause of
                        such Excusable Delay, resume performance of its
                        obligations under this Agreement and notify the Buyers
                        of the revised Scheduled Delivery Month; and


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          (b)     [...***...]

10.3      Termination on Excusable Delay

10.3.1    If any Delivery is delayed as a result of an Excusable Delay for a
          period of [...***...] after the last day of the Scheduled Delivery
          Month, then either party may terminate this Agreement with respect to
          the affected Aircraft, by giving written notice the other party
          [...***...] after the expiration of such [...***...] period.

10.3.2    If the Seller has not exercised its right to terminate pursuant to
          Subclause 10.3.1 herein and if the Seller notifies the Buyers of a
          revised Scheduled Delivery Month pursuant to Clause 10.2.1(iv), in
          respect of a delay in Delivery of an Aircraft of [...***...], then the
          Buyers may terminate this Agreement with respect to the affected
          Aircraft. Termination will be made by giving written notice to the
          other party [...***...] after the Buyers' receipt of the notice of a
          revised Scheduled Delivery Month. Any termination pursuant to this
          Clause 10.3.2 as to an Aircraft will discharge the obligations and
          liabilities of the parties hereunder with respect to such Aircraft,
          except that the Seller will [...***...] of such termination pay to an
          account designated by each of the Buyers in writing an amount equal to
          all Predelivery Payments made by the Buyers, or any of them, in
          respect of such Aircraft, provided that none of the Buyers is in
          default under this Agreement or any other agreement with the Seller
          and/or its Affiliates.

10.3.3    If this Agreement is not terminated under the terms of Clause 10.3.1
          or 10.3.2, then the Seller and the Buyers will mutually agree upon a
          new Scheduled Delivery Month after the [...***...] period referred to
          in Clause 10.3.1 or 10.3.2, and this new Scheduled Delivery Month will
          be deemed to be an amendment to the applicable Scheduled Delivery
          Month in Clause 9.1.1.

10.4      Total Loss, Destruction or Damage

          If prior to Delivery, any Aircraft is lost, destroyed or in the
          reasonable opinion of the Seller is damaged beyond economic repair
          ("TOTAL LOSS"), the Seller will notify the Buyers to this effect
          within [...***...] of such occurrence. The Seller will include in said
          notification (or as soon after the issue of the notice as such
          information becomes available to the Seller) the earliest date
          consistent with the Seller's other commitments and production
          capabilities that an aircraft to replace the Aircraft may be delivered
          to the Buyers and the Scheduled Delivery Month will be extended as
          specified in the Seller's notice to accommodate the delivery of the
          replacement aircraft. However, if the Scheduled Delivery Month is
          extended to a month [...***...], then this Agreement will terminate
          with respect to said Aircraft unless:

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          (i)       each of the Buyers notifies the Seller within [...***...]
                    of the date of receipt of the Seller's notice that it
                    desires the Seller to provide a replacement aircraft during
                    the month quoted in the Seller's notice; and

          (ii)      the parties execute an amendment to this Agreement recording
                    the variation in the Scheduled Delivery Month.

          Nothing herein will require the Seller to manufacture and deliver a
          replacement aircraft if such manufacture would require the
          reactivation of its production line for the model or series of
          aircraft that includes the Aircraft. Any termination pursuant to this
          Clause 10.4 as to a particular Aircraft will discharge the obligations
          and liabilities of the parties hereunder with respect to such
          Aircraft, except that the Seller will [...***...] of such
          termination pay to an account designated by each of the Buyers in
          writing an amount equal to all Predelivery Payments made by the
          Buyers, or any of them, in respect of such Aircraft, provided that
          none of the Buyers is in default under this Agreement or any other
          agreement with the Seller and/or its Affiliates.

10.5      REMEDIES

          THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYERS
          FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS
          AS ARE COVERED BY CLAUSE 11, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO
          WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING,
          WITHOUT LIMITATION, ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES
          OR SPECIFIC PERFORMANCE. NONE OF THE BUYERS WILL BE ENTITLED TO CLAIM
          THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN THIS CLAUSE 10 WHERE
          THE DELAY REFERRED TO IN THIS CLAUSE 10 IS CAUSED DIRECTLY OR
          INDIRECTLY BY THE NEGLIGENCE OR FAULT OF ANY BUYER OR ITS
          REPRESENTATIVES.


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11        INEXCUSABLE DELAY

11.1      Liquidated Damages

11.1.1    If

          [...***...]

          then such delay will be termed an "INEXCUSABLE DELAY." In the event of
          an Inexcusable Delay, [...***...]

11.1.2    If

          (i)       an Aircraft is not Ready for Delivery [...***...]

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11.2      Renegotiation

          If, as a result of an Inexcusable Delay, Delivery does not occur
          [...***...] after the last day of the Scheduled Delivery Month, the
          Buyers will have the right, exercisable by written notice given by
          each of them to the Seller [...***...] to require from the Seller a
          renegotiation of the Scheduled Delivery Month for the affected
          Aircraft. Unless otherwise agreed between the Seller and the Buyers
          during such renegotiation, the said renegotiation will not prejudice
          the Buyers' right to receive liquidated damages in accordance with
          Clause 11.1.

11.3      Termination

          If, as a result of an Inexcusable Delay, Delivery does not or cannot
          occur [...***...] and the parties have not renegotiated the Delivery
          Date pursuant to Clause 11.2, then the Buyers collectively, on the one
          hand, and the Seller, on the other, will have the right, exercisable
          by written notice to the other party, given [...***...] to terminate
          this Agreement in respect of the affected Aircraft. In the event of
          termination, neither party will have any claim against the other,
          except that the Seller will pay to an account designated in a writing
          signed by each of the Buyers any amounts due pursuant to Clause 11.1
          and will pay such account [...***...]

11.4      Setoff Payments

          Notwithstanding anything to the contrary contained herein, before
          being required to make any payments under Clauses 11.1 or 11.3 above,
          the Seller will have the right to apply any and all sums previously
          paid by the Buyers, or any of them, to the Seller with respect to an
          Aircraft as to which this Agreement has been terminated to the payment
          of any other amounts that any Buyer or any Affiliate of a Buyer owes
          to the Seller or any Affiliate thereof under any agreement between
          them.

11.5      REMEDIES

          THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYERS
          FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS
          AS ARE COVERED BY CLAUSE 10, AND EACH OF THE BUYERS HEREBY WAIVES ALL
          RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF,
          INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND
          CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. NONE OF THE BUYERS WILL
          BE ENTITLED TO CLAIM THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN
          THIS

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          CLAUSE 11 WHERE THE DELAY REFERRED TO IN THIS CLAUSE 11 IS CAUSED BY,
          DIRECTLY OR INDIRECTLY, THE NEGLIGENCE OR FAULT OF ANY BUYER OR ITS
          REPRESENTATIVES.

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12        WARRANTIES AND SERVICE LIFE POLICY

          The Seller represents and warrants that the Manufacturer has provided
          to the Seller the Warranty, Service Life Policy, Supplier Warranties
          and Interface Commitment with respect to the Aircraft that are
          reproduced below between the words QUOTE and UNQUOTE, subject to the
          terms, conditions, limitations and restrictions (including, but not
          limited to, the Exclusivity of Warranties and General Limitations of
          Liability and Duplicate Remedies provisions) set forth below. The
          Seller hereby assigns to the Buyers, and each of the Buyers hereby
          accepts, all of the Seller's rights and obligations as the "Buyer"
          under the said Warranty, Service Life Policy, Supplier Warranties and
          Interface Commitment, and the Seller subrogates the Buyers to all such
          rights and obligations in respect of the Aircraft. The Seller hereby
          warrants to the Buyers that (i) it has all requisite authority to make
          the foregoing assignment to and to effect the foregoing subrogation in
          favor of the Buyers, (ii) such assignment and subrogation are
          effective to confer on the Buyers all of the foregoing rights and
          obligations of the Seller, (iii) the provisions so assigned are in
          full force and effect and have not been amended prior to the date
          hereof, and (iv) the Seller will not enter into any amendment of the
          provisions so assigned without the prior written consent of each of
          the Buyers.

QUOTE

12.1      WARRANTY

12.1.1    Nature of Warranty

          Subject to the limitations and conditions hereinafter provided, and
          except as provided in Clause 12.1.2, the Seller warrants to the Buyers
          that each Aircraft and each Warranted Part will at the time of
          Delivery hereunder be free from defects:

          (i)       in material,

          (ii)      in workmanship, including, without limitation, processes of
                    manufacture,

          (iii)     in design (including, without limitation, selection of
                    materials parts and components) having regard to the state
                    of the art at the date of such design, and

          (iv)      arising from failure to conform to the Specification, except
                    as to immaterial deviations from those portions of the
                    Specification that are expressly stated in the Specification
                    to be estimates or approximations or design aims.

          For the purposes of this Agreement, the term "WARRANTED PART" will
          mean any Seller proprietary component, equipment, accessory or part
          that (a) is installed on or incorporated into an Aircraft at Delivery,
          (b) is manufactured to the detail

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          design of the Seller or a subcontractor of the Seller and (c) bears a
          part number of the Seller at the time of Delivery.

12.1.2    Exceptions

          The warranties set forth in Clause 12.1.1 will not apply to Buyer
          Furnished Equipment, Propulsion Systems, or to any component,
          accessory, equipment or part purchased by any Buyer or the Seller
          [...***...] that is not a Warranted Part, provided, however, that:

     (i)  any defect in the Seller's workmanship in respect of the installation
          of such items in or on the Aircraft, including any failure by the
          Seller to conform to the installation instructions of the
          manufacturers of such items that invalidates any applicable warranty
          from such manufacturers, will constitute a defect in workmanship for
          the purpose of this Clause 12.1 and be covered by the warranty set
          forth in Clause 12.1.1(ii), and

     (ii) any defect inherent in the Seller's design of the installation,
          considering the state of the art at the date of such design, that
          impairs the use or function of such items will constitute a defect in
          design for the purposes of this Clause 12.1 and be covered by the
          warranty set forth in Clause 12.1.1(iii).

12.1.3    Warranty Periods

          The warranties described in Clauses 12.1.1 and 12.1.2 hereinabove will
          be limited to those defects that become apparent within [...***...]
          after Delivery of the affected Aircraft, (the "WARRANTY PERIOD").

12.1.4.1  Limitations of Warranty

          (i)  The Buyers' remedy and the Seller's obligation and liability
               under Clauses 12.1.1 and 12.1.2 are limited to, at the Seller's
               expense and option, the repair, replacement or correction of, or
               the supply of modification kits rectifying the defect to any
               defective Warranted Part, [...***...] However, the Seller may
               furnish a credit to the Buyers, jointly, for the future purchase
               of goods and services (not including Aircraft) equal to the price
               at which the Buyers are then entitled to acquire a replacement
               for the defective Warranted Part.

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            (ii)  [...***...]

            (iii) [...***...]

12.1.5      Cost of Inspection

            (i)   In addition to the remedies set forth in Clauses 12.1.4(i) and
                  12.1.4(ii), the Seller will reimburse the direct labor costs
                  spent by the Buyers in performing inspections of the Aircraft
                  that are conducted:

                  (a)   to determine whether a defect exists in any Warranted
                        Part within the Warranty Period; or

                  (b)   pending the Seller's provision of a corrective technical
                        solution.

            (ii)  The Seller's liability under Clause 12.1.5(i) is subject to
                  the following conditions:

                  (a)   such inspections are recommended by a Seller Service
                        Bulletin to be performed within the Warranty Period;

                  (b)   the inspections are not performed during a scheduled
                        maintenance check recommended by the Seller's
                        Maintenance Planning Document; the labor rate for the
                        reimbursements will be the In-House Warranty Labor Rate,
                        and

            (iii) [...***...]

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12.1.5      Warranty Claim Requirements

            The Buyers' remedy and the Seller's obligation and liability under
            this Clause 12.1, with respect to each claimed defect, are subject
            to the following conditions precedent:

            (i)   the existence of a defect covered by the provisions of this
                  Clause 12.1,

            (ii)  the defect becomes apparent within the Warranty Period, except
                  as provided in Clause 12.1.4(iii),

            (iii) a Buyer submits to the Seller evidence reasonably satisfactory
                  to the Seller that the claimed defect is due to a matter
                  covered under the provisions of this Clause 12, and that such
                  defect did not result from any act or omission of any of the
                  Buyers, including but not limited to, any failure to operate
                  and maintain the affected Aircraft or part thereof in
                  accordance with the standards set forth in Clause 12.1.11 or
                  from any act or omission of any third party,

            (iv)  a Buyer returns as soon as practicable the Warranted Part
                  claimed to be defective to the repair facilities designated by
                  the Seller, unless the Buyers elect to repair a defective
                  Warranted Part in accordance with the provisions of Clause
                  12.1.8,

            (v)   the Seller receives a "WARRANTY CLAIM" complying with the
                  provisions of Clause 12.1.7(v).

12.1.7      Warranty Administration

            The warranties set forth in Clause 12.1 will be administered as
            hereinafter provided:

            (i)   Claim Determination. Determination as to whether any claimed
                  defect in any Warranted Part entitles the Buyers to a remedy
                  under this Clause 12.1 will be made by the Seller, in
                  consultation with the Buyers, and will be based on claim
                  details, reports from the Seller's regional representative,
                  historical data logs, inspections, tests, findings during
                  repair, defect analysis and other relevant documents and
                  information.

            (ii)  Transportation Costs. [...***...]

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                  [...***...]

            (iii) [...***...]

                  [...***...]

            (iv)  [...***...]

                  [...***...]

            (v)   [...***...]

                  (a)   Description of the defect and any action taken

                  (b)   Date of incident and/or removal

                  (c)   Description of the Warranted Part claimed to be
                        defective

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                  (d)   Part number

                  (e)   Serial number (if applicable)

                  (f)   Position on Aircraft, according to Catalog Sequence
                        Number of the Illustrated Parts Catalog, Aircraft
                        Maintenance Manual, Component Maintenance Manual or
                        Structural Repair Manual, as applicable

                  (g)   Total flying hours or calendar times, as applicable, at
                        the date of appearance of a defect

                  (h)   Time since last shop visit at the date of appearance of
                        defect

                  (i)   Manufacturer's serial number (MSN) of the Aircraft
                        and/or its registration number

                  (j)   Aircraft total flying hours and/or number of landings at
                        the date of appearance of defect

                  (k)   Claim number

                  (l)   Date of claim

                  (m)   Date of delivery of an Aircraft or Warranted Part to the
                        Buyer

            Warranty Claims are to be addressed as follows:

            Airbus
            Customer Services Directorate
            Warranty Administration
            Rond-Point Maurice Bellonte
            B.P. 33
            F-31707 Blagnac Cedex, France

      (vi)  Replacements. Replacements made pursuant to this Clause 12.1 will be
            made within the lead time defined in the Seller's Spare Parts Price
            Catalog. [...***...]. Replaced components, equipment,
            accessories or parts will become the Seller's property.

            Title to and risk of loss of any Aircraft, component, accessory,
            equipment or part returned by any of the Buyers to the Seller will
            at all times remain with such Buyer, except that (i) when the Seller
            has possession of a returned Aircraft, component, accessory,
            equipment or part to which any of the Buyers has title, the Seller
            will have such responsibility therefor as is chargeable by law to a
            bailee for hire, but the Seller will not be liable for loss of use,
            and (ii) title to and risk of loss of a returned component,
            accessory, equipment or part will pass to the Seller on shipment by
            the Seller to a Buyer of any item furnished by the Seller to such
            Buyer as a replacement therefor or on the Seller's issuance of a
            credit with respect thereto. Upon the Seller's shipment to a Buyer
            of any replacement component, accessory, equipment or part provided
            by the Seller pursuant to this Clause 12.1,


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        title to and risk of loss of such component, accessory, equipment or
        part will pass to such Buyer.

        (vii)   Seller's Acceptance and Rejection. [...***...] The Seller will
                provide reasonable written substantiation in case of rejection
                of a Warranty Claim. The Buyers will pay the Seller (a)
                reasonable inspection and test charges incurred by the Seller in
                connection with the investigation and processing of a rejected
                Warranty Claim, [...***...] and (b) all costs incurred by the
                Seller including transportation to the ANACS Spares Center in
                Ashburn, VA, insurance, and any other associated costs.
                [...***...]

        (viii)  Inspection. The Seller will have the right to inspect the
                affected Aircraft and documents and other records relating
                thereto in the event of any claim under this Clause 12.1 on
                reasonable prior written notice to the Buyers and such
                inspection will not unreasonably interfere with the Buyers'
                operation and personnel.

12.1.8  In-house Warranty

        (i)     Authorization. Each of the Buyers is hereby authorized to repair
                Warranted Parts, subject to the terms of this Clause 12.1.8
                ("IN-HOUSE WARRANTY REPAIR"). [...***...], such Buyer will
                notify the Resident Customer Support Representative of its
                decision to perform any In-house Warranty Repairs before such
                repairs are commenced. Such Buyer's notice will include
                sufficient detail regarding the defect, estimated or actual
                labor hours and material, as applicable, to allow the Seller to
                ascertain the reasonableness of the estimate. [...***...] The
                Seller will use reasonable efforts to ensure a prompt response
                and will not unreasonably withhold authorization.

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        (ii)    Conditions of Authorization. The Buyers will be entitled to the
                benefits under this Clause 12.1.8 for repair of Warranted Parts:

                [...***...]

        (iii)   Seller's Rights. The Seller will have the right to require the
                delivery to it of any Warranted Part, or any part removed
                therefrom that is claimed to be defective, if, in the Seller's
                judgment, the nature of the claimed defect requires technical
                investigation. Such delivery will be subject to the provisions
                of Clause 12.1.7(ii).

        Subject to applicable safety rules, the Seller will have the right to
        have a representative present as an observer during the disassembly,
        inspection and testing of any Warranted Part claimed to be defective.
        Such representatives will not unreasonably interfere with the Buyers'
        operation and personnel.

        (iv)    In-house Warranty Claim Substantiation. Claims for In-house
                Warranty Repair credit will comply with the requirements in
                Warranty Claims under Clause 12.1.6(v) and in addition, to the
                extent ascertainable, will include:

                (a)     A report of technical findings with respect to the
                        defect

                (b)     For parts required to remedy the defect

                        -       part numbers,

                        -       serial numbers (if applicable),

                        -       description of the parts,

                        -       quantity of parts,

                        -       unit price of parts,

                        -       related Seller's or third party's invoices (if
                                applicable),

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                        -       total price of parts

                (c)     Detailed number of labor hours

                (d)     In-house Warranty Labor Rate

                (e)     Total claim amount

        (v)     Credit. The Buyers' sole remedy, and the Seller's sole
                obligation and liability, in respect of In-house Warranty Repair
                claims, will be a credit to the Buyers' account. Such credit
                will be equal to the sum of the direct labor cost expended in
                performing such repair and the direct cost of materials
                incorporated in the repair. Such costs will be determined as set
                forth below.

                (a)     To determine direct labor costs, only the labor hours
                        spent on access, disassembly, inspection, repair,
                        reassembly, and final inspection and test (including
                        flight tests necessary to complete such repair) of the
                        Warranted Part alone will be counted. The hours required
                        for maintenance work concurrently being carried out on
                        the Aircraft or Warranted Part will not be included.

                (b)     [...***...]

                        The In-house Warranty Labor Rate is subject to
                        adjustment annually by multiplying the same by the ratio
                        ECIn/ECIb. For the purposes of this Clause 12.1.8(v)
                        only, ECIn is equal to the Labor Index defined in the
                        Seller Price Revision Formula for January of the year in
                        which the hours are spent and ECIb is equal to such
                        Labor Index for January 2005.

                (c)     Direct material costs are determined by the prices at
                        which the Buyers, or any of them, acquired such
                        replacement material, excluding any parts and materials
                        used for overhaul furnished free of charge by the
                        Seller.

        (vi)    Limitation on Credit. The Buyers will in no event be credited
                for repair costs (including labor and material) for any
                Warranted Part if such repair


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                costs exceed, in the aggregate, (x) [...***...] of
                the Seller's then current catalog price for a replacement of
                such Warranted Part or (y) those costs that would have resulted
                if repairs had been carried out at the Seller's facilities.

        The Seller will substantiate the costs referred to in Clause
        12.1.8(vi)(y) in writing on reasonable request by the Buyers.

        (vii)   Scrapped Material. Each of the Buyers may, with the agreement of
                the Resident Customer Support Representative, scrap any
                defective Warranted Parts that are beyond economic repair and
                not required for technical evaluation. If such Buyer does not
                obtain the written agreement of the Resident Customer Support
                Representative to scrap a Warranted Part, then such Buyer will
                retain such Warranted Part and any defective part removed from a
                Warranted Part during repair for a period of either one hundred
                and [...***...] after the date of completion of repair or
                [...***...] after submission of a claim for In-house Warranty
                Repair credit relating thereto, whichever is longer. Such parts
                will be returned to the Seller within [...***...] of receipt of
                the Seller's request therefor, at the Seller's expense
                (including costs relating to the fabrication of a shipping
                container specifically required for this shipment only.)

        (viii)  DISCLAIMER OF SELLER LIABILITY FOR BUYER'S REPAIR

                THE SELLER WILL NOT BE LIABLE FOR, AND EACH OF THE BUYERS WILL,
                JOINTLY AND SEVERALLY, INDEMNIFY THE SELLER AGAINST, CLAIMS OF
                ANY THIRD PARTIES FOR LOSSES DUE TO ANY DEFECT, NONCONFORMANCE
                OR PROBLEM OF ANY KIND, ARISING OUT OF OR IN CONNECTION WITH ANY
                REPAIR OF WARRANTED PARTS UNDERTAKEN BY ANY OF THE BUYERS UNDER
                THIS CLAUSE 12.1.8 OR ANY OTHER ACTIONS UNDERTAKEN BY ANY OF THE
                BUYERS UNDER THIS CLAUSE 12.1.8, WHETHER SUCH CLAIM IS ASSERTED
                IN CONTRACT OR IN TORT, OR IS PREMISED ON ALLEGED, ACTUAL,
                IMPUTED, ORDINARY OR INTENTIONAL ACTS OR OMISSIONS OF ANY BUYER
                OR THE SELLER.

12.1.9  Warranty Transferability

        The warranties provided for in this Clause 12.1 for any Warranted Part
        will accrue to the benefit of any operator other than a Buyer if the
        Warranted Part enters into the possession of such operator as a result
        of a pooling agreement between such operator and a Buyer, in accordance
        with the terms and subject to the limitations and exclusions of the
        foregoing warranties and to applicable laws or regulations.


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12.1.10 Warranty for Corrected, Replacement or Repaired Warranted Parts

        Whenever any Warranted Part that contains a defect for which the Seller
        is liable under this Clause 12.1 has been corrected, repaired or
        replaced pursuant to the terms of this Clause 12, the period of the
        Seller's warranty with respect to such corrected, repaired or
        replacement Warranted Part, will be the remaining portion of the
        original Warranty Period in respect of such corrected, repaired or
        replaced Warranted Part. If a defect is attributable to a defective
        repair or replacement by any of the Buyers, a Warranty Claim with
        respect to such defect will be rejected, notwithstanding any subsequent
        correction or repair, and will immediately terminate the remaining
        warranties under this Clause 12.1 in respect of the affected Warranted
        Part.

12.1.11 Standard Airline Operation - Normal Wear and Tear

        The Buyers' rights under this Clause 12.1 are subject to the Aircraft
        and each component, equipment, accessory and part thereof being
        maintained, overhauled, repaired and operated in accordance with FAA
        regulations and the Buyers' FAA-approved maintenance program and
        operating procedures.

        The Seller's liability under this Clause 12.1 will not extend to normal
        wear and tear nor, to the extent caused by any of the following, to:

        (i)     any Aircraft or component, equipment, accessory or part thereof
                that has been repaired, altered or modified after Delivery in a
                manner inconsistent with the requirements of the applicable
                Aviation Authority or the aircraft repair manuals, as
                applicable;

        (ii)    any Aircraft or component, equipment, accessory or part thereof
                that has been operated in a damaged state; or

        (iii)   any component, equipment, accessory or part from which the
                trademark, trade name, part or serial number or other
                identification marks have been removed.

        The limitations of the Seller's liability under this Clause 12.1.11
        resulting from causes described in Clauses 12.1.11(i) and 12.1.11(ii)
        will apply only to the extent the Seller submits reasonable evidence
        that the defect arose from or was contributed to by such causes.

12.2    SELLER SERVICE LIFE POLICY

12.2.1  Scope and Definitions

        In addition to the warranties set forth in Clause 12.1, the Seller
        agrees that, should a Failure occur in any Item (as such terms are
        defined below), then, subject to the

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        general conditions and limitations set forth in Clause 12.2.4, the
        provisions of this Clause 12.2 will apply.

        For the purposes of this Clause 12.2,

        (i)     "ITEM" means any of the Seller components, equipment,
                accessories or parts listed in Exhibit C that are installed on
                an Aircraft at any time during the period of effectiveness of
                the Service Life Policy as defined below in Clause 12.2.2;

        (ii)    "FAILURE" means any breakage of, or defect in, an Item that

                (x)     materially impairs the utility or safety of the Item,

                (y)     did not result from any breakage or defect in any other
                        Aircraft part or component or from any other extrinsic
                        force, and

                (z)     has occurred or can reasonably be expected to occur, but
                        does not necessarily occur, on a repetitive or fleetwide
                        basis.

        The Seller's obligations under this Clause 12.2 are referred to as the
        ("SERVICE LIFE POLICY")

12.2.2  Periods and Seller's Undertaking

        Subject to the general conditions and limitations set forth in Clause
        12.2.4, the Seller agrees that if a Failure occurs in an Item within
        [...***...] after the Delivery of the Aircraft on which such Item
        is installed, the Seller will, at its discretion, as promptly as
        practicable and for a price that reflects the Seller's financial
        participation as hereinafter provided:

        (i)     design and furnish to the Buyers a terminating correction for
                such Item and provide any parts required for such correction
                (including Seller designed standard parts but excluding industry
                standard parts), or

        (ii)    replace such Item.

12.2.3  Seller's Participation in the Cost

        Any part or Item that the Seller is required to furnish to the Buyers
        under this Service Life Policy will be furnished at the Seller's current
        sales price therefor, less the Seller's financial participation, which
        will be determined in accordance with the following formula:

        P =      C ( N - T ) /  N

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          where

          P:  financial participation of the Seller,

          C:  the Seller's then current sales price for the required Item or
              required Seller designed parts,

          T:  total time in months since Delivery of the Aircraft in which the
              Item subject to a Failure was originally installed, and

          N:  [...***...]

12.2.4    General Conditions and Limitations

12.2.4.1  Notwithstanding any provision of this Clause 12.2, during the Warranty
          Period, all Items will be covered by the provisions of Clause 12.1 and
          not by the provisions of this Clause 12.2.

12.2.4.2  The Buyers' remedies and the Seller's obligations and liabilities
          under this Service Life Policy are subject to compliance by the Buyers
          with the following conditions:

          (i)       The Buyers will generate maintain log books and other
                    historical records as required by the FAA, and will retain
                    the same for the duration of this Service Life Policy, with
                    respect to each Item adequate to enable the determination as
                    to whether the alleged Failure is covered by this Service
                    Life Policy and, if so, to allocate the portion of the cost
                    to be borne by the Seller in accordance with Clause 12.2.3.

          (ii)      The Buyers will keep the Seller informed, by making
                    available any relevant records upon request, of any
                    significant incidents relating to an Aircraft, howsoever
                    occurring or recorded.

          (iii)     The conditions of Clause 12.1.11 will have been complied
                    with.

          (iv)      The Buyers will implement specific structural inspection
                    programs for monitoring purposes as may be established from
                    time to time by the Seller and the Buyers. Such programs
                    will be, to the extent possible, compatible with the Buyers'
                    operational requirements and will be carried out at the
                    Buyers' expense. Reports relating thereto will be regularly
                    furnished to the Seller on a reasonable request.

          (v)       The Buyers will report in writing any breakage or defect
                    that may be covered by the Service Life Policy to the Seller
                    within [...***...] after such breakage or defect
                    becomes apparent, whether or not the same can reasonably be
                    expected to occur in any other Aircraft, and the Buyers

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                    will inform the Seller in sufficient detail about such
                    breakage or defect to enable the Seller to determine whether
                    the same is subject to this Service Life Policy.

12.2.4.3  Except as otherwise provided in this Clause 12.2, any claim under this
          Service Life Policy will be administered as provided in, and will be
          subject to the terms and conditions of, Clause 12.1.6.

12.2.4.4  If the Seller has issued a service bulletin modification applicable to
          an Aircraft, the purpose of which is to avoid a Failure, the Seller
          will offer the necessary modification kit free of charge or under a
          pro rata formula established by the Seller. If such a kit is so
          offered to the Buyers, then, in respect of such Failure and any
          Failures that could ensue therefrom, the Seller's commitment under
          this Clause 12.2 will be subject to the Buyers' incorporating such
          modification in the relevant Aircraft, within a reasonable time, as
          promulgated by the Seller and in accordance with the Seller's
          instructions.

12.2.4.5  THIS SERVICE LIFE POLICY IS NEITHER A WARRANTY, PERFORMANCE GUARANTEE,
          NOR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME COMPONENTS TO
          CONFORM TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF AIRFRAME DESIGN
          AND MANUFACTURING ART. THE SELLER'S OBLIGATION UNDER THIS CLAUSE 12.2
          IS TO MAKE ONLY THOSE CORRECTIONS TO THE ITEMS OR FURNISH REPLACEMENTS
          THEREFOR AS PROVIDED IN THIS CLAUSE 12.2. THE BUYERS' SOLE REMEDY AND
          RELIEF FOR THE NONPERFORMANCE OF ANY OBLIGATION OR LIABILITY OF THE
          SELLER ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY WILL BE
          IN MONETARY DAMAGES, LIMITED TO THE AMOUNT THE BUYERS REASONABLY
          EXPEND IN PROCURING A CORRECTION OR REPLACEMENT FOR ANY ITEM THAT IS
          THE SUBJECT OF A FAILURE COVERED BY THIS SERVICE LIFE POLICY AND TO
          WHICH SUCH NONPERFORMANCE IS RELATED, LESS THE AMOUNT THAT THE BUYERS
          OTHERWISE WOULD HAVE BEEN REQUIRED TO PAY UNDER THIS CLAUSE 12.2 IN
          RESPECT OF SUCH CORRECTED OR REPLACEMENT ITEM. WITHOUT LIMITING THE
          EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY
          PROVISIONS SET FORTH IN CLAUSE 12.5, EACH OF THE BUYERS HEREBY WAIVES,
          RELEASES AND RENOUNCES ALL CLAIMS TO ANY FURTHER DIRECT, INCIDENTAL OR
          CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS AND ALL OTHER RIGHTS,
          CLAIMS AND REMEDIES, ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE
          POLICY.

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12.2.5    Transferability

          The Buyers' rights under this Clause 12.2 will not be assigned, sold,
          transferred or otherwise alienated by operation of law or otherwise,
          without the Seller's prior written consent.

          Any unauthorized assignment, sale, transfer or other alienation of any
          Buyer's rights under this Service Life Policy will, as to the Aircraft
          involved, immediately void this Service Life Policy in its entirety.

12.3      SUPPLIER WARRANTIES AND SERVICE LIFE POLICIES

12.3.1    Seller's Support

          Before Delivery of the first Aircraft, the Seller will provide the
          Buyers with the warranties and service life policies that the Seller
          has obtained pursuant to the Supplier Product Support Agreements.

12.3.2.1  Supplier's Default

12.3.2.1  If any Supplier under any warranty referred to in Clause 12.3.1
          defaults in the performance of any material obligation under such
          warranty with respect to a Supplier Part, each Buyer has used its best
          efforts to enforce its rights under such warranty, and the Buyers
          submit reasonable evidence, within a reasonable time, that such
          default has occurred, then Clause 12.1 of this Agreement will apply to
          the extent it would have applied had such Supplier Part been a
          Warranted Part, to the extent the Seller can reasonably perform said
          Supplier's obligations, except that the Supplier's warranty period
          indicated in the applicable Supplier Product Support Agreement will
          apply.

12.3.2.2  If any Supplier under any service life policy referred to in Clause
          12.3.1 defaults in the performance of any material obligation under
          such service life policy with respect to a Supplier Part, each Buyer
          has used best efforts to enforce its rights under such service life
          policy, and such Buyer submits within reasonable time to the Seller
          reasonable evidence that such default has occurred, then Clause 12.2
          will apply to the extent the same would have applied had such Supplier
          Part been listed in Exhibit C, to the extent that the Seller can
          reasonably perform said Supplier's service life policy.

12.3.2.3  At the Seller's request, each Buyer will assign to the Seller, and the
          Seller will be subrogated to, all of the Buyers' rights against the
          relevant Supplier with respect to, and arising by reason of, such
          default and the Buyers will provide reasonable assistance to enable
          the Seller to enforce the rights so assigned.

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12.4      INTERFACE COMMITMENT

12.4.1    Interface Problem

          If any Buyer experiences any technical problem in the operation of an
          Aircraft or its systems, the cause of which, after due and reasonable
          investigation, is not readily identifiable by such Buyer, but which
          such Buyer reasonably believes to be attributable to the design
          characteristics of one or more components of the Aircraft and/or its
          systems (an "INTERFACE PROBLEM"), the Seller will, if requested by
          such Buyer, and without additional charge to any Buyer, promptly
          conduct or have conducted an investigation and analysis of such
          problem to determine, if possible, the cause or causes of the problem
          and to recommend such corrective action as may be feasible, provided,
          however, that if the Seller determines, after such investigation, that
          the Interface Problem was due to or caused by any act or omission of
          any Buyer in its performance of its obligations hereunder, the Buyers
          will, jointly and severally, pay to the Seller all reasonable costs
          and expenses incurred by the Seller during such investigation. The
          Buyers will furnish to the Seller all data and information in the
          possession of any of them relevant to the Interface Problem and will
          reasonably cooperate with the Seller in the conduct of the Seller's
          investigations and such tests as may be required. At the conclusion of
          such investigation the Seller will promptly advise the Buyers in
          writing of the Seller's opinion as to the cause or causes of the
          Interface Problem and the Seller's recommendations as to corrective
          action.

12.4.2    Seller's Responsibility

          If the Seller determines that the Interface Problem is primarily
          attributable to the design of a Warranted Part, the Seller will, if
          requested by a Buyer, take prompt action to correct the design of such
          Warranted Part, pursuant to the terms and conditions of Clause 12.1.

12.4.3    Supplier's Responsibility

          If the Seller determines that the Interface Problem is primarily
          attributable to the design of any Supplier Part, the Seller will at
          any Buyer's request, assist such Buyer in processing any warranty
          claim such Buyer may have against the manufacturer of such Supplier
          Part. [...***...]

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12.4.4    Joint Responsibility

          If the Seller determines that the Interface Problem is attributable
          partially to the design of a Warranted Part and partially to the
          design of any Supplier Part, the Seller will, if requested by a Buyer,
          seek a solution to the Interface Problem through cooperative efforts
          of the Seller and any Supplier(s) involved. The Seller will promptly
          advise the Buyers of any corrective action proposed by the Seller and
          any such Supplier(s). Such proposal will be consistent with any then
          existing obligations of the Seller hereunder and of any such Supplier
          to the Buyers. Such corrective action, unless reasonably rejected by
          the Buyers, will constitute full satisfaction of any claim any of the
          Buyers may have against either the Seller or any such Supplier(s) with
          respect to such Interface Problem, unless such corrective action does
          not resolve the Interface Problem.

12.4.5    General

12.4.5.1  All requests under this Clause 12.4 will be directed both to the
          Seller and the affected Suppliers.

12.4.5.2  Except as specifically set forth in this Clause 12.4, this Clause 12.4
          will not be deemed to impose on the Seller any obligations not
          expressly set forth elsewhere in this Agreement.

12.4.5.3  All reports, recommendations, data and other documents furnished by
          the Seller to a Buyer pursuant to this Clause 12.4 will be deemed to
          be delivered under this Agreement and will be subject to the terms,
          covenants and conditions set forth in this Clause 12 and in Clause
          22.7.

12.5      EXCLUSIVITY OF WARRANTIES

          THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE EXCLUSIVE
          WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE
          SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO ANY BUYER, WHETHER
          UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR
          NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT,
          EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE
          SELLER UNDER THIS AGREEMENT.

          EACH OF THE BUYERS RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES
          IN THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYERS
          FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS
          AND SERVICES SUPPLIED UNDER THIS AGREEMENT. EACH OF THE BUYERS HEREBY
          WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS,
          GUARANTEES AND LIABILITIES OF

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          THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF ANY BUYER
          AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, OR
          STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR
          DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT,
          ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER
          UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

          (1)       ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR
                    ANY GENERAL OR PARTICULAR PURPOSE;

          (2)       ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
                    PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

          (3)       ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

          (4)       ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF
                    LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO,
                    ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE,
                    INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY,
                    PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

          (5)       ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM
                    COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

          (6)       ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
                    STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR
                    LOCAL STATUTE OR AGENCY;

          (7)       ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

                        (a)   LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT,
                              COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED
                              UNDER THIS AGREEMENT;

                        (b)   LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT,
                              COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED
                              UNDER THIS AGREEMENT;

                        (c)   LOSS OF PROFITS AND/OR REVENUES;

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                        (d)   ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

          THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT WILL
          NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT
          SIGNED BY THE SELLER AND THE BUYERS. IF ANY PROVISION OF THIS CLAUSE
          12 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE,
          THE REMAINDER OF THIS CLAUSE 12 WILL REMAIN IN FULL FORCE AND EFFECT.

          FOR THE PURPOSE OF THIS CLAUSE 12.5, "SELLER" WILL BE UNDERSTOOD TO
          INCLUDE THE SELLER, ITS AFFILIATES, SUPPLIERS AND ASSOCIATED
          CONTRACTORS.

          [...***...]

12.6      DUPLICATE REMEDIES

          The remedies provided to the Buyers under this Clause 12 as to any
          defect in respect of the Aircraft or any part thereof are mutually
          exclusive and not cumulative. The Buyers will be entitled to the
          remedy that provides the maximum benefit to them, as the Buyers may
          elect, pursuant to the terms and conditions of this Clause 12 for any
          defect for which remedies are provided under this Clause 12 provided,
          however, that none of the Buyers will be entitled to elect a remedy
          under more than one part of this Clause 12 for the same defect. The
          Buyers' rights and remedies herein for the nonperformance of any
          obligations or liabilities of the Seller arising under these
          warranties will be in monetary damages limited to the amount the
          Buyers expend in procuring a correction or replacement for any covered
          part subject to a defect or nonperformance covered by this Clause 12,
          and none of the Buyers will have any right to require specific
          performance by the Seller.

UNQUOTE

          In consideration of the assignment and subrogation by the Seller under
          this Clause 12 in favor of the Buyers in respect of the Seller's
          rights against and obligations to the Manufacturer under the
          provisions quoted above, each of the Buyers hereby accepts such
          assignment and subrogation and agrees to be bound by all of the terms,
          conditions and limitations therein contained, specifically including,
          without

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          limitation, the Exclusivity of Warranties and General Limitations of
          Liability provisions and Duplicate Remedies provisions.

          THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE EXCLUSIVE
          WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE
          SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYERS, WHETHER
          UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR
          NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT,
          EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE
          SELLER UNDER THIS AGREEMENT.

          EACH OF THE BUYERS RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES
          IN THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYERS
          FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS
          AND SERVICES SUPPLIED UNDER THIS AGREEMENT. EACH OF THE BUYERS HEREBY
          WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS,
          GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS
          AND REMEDIES OF ANY BUYER AGAINST THE SELLER, WHETHER EXPRESS OR
          IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT
          TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT,
          COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE
          DELIVERED BY THE SELLER UNDER THIS AGREEMENT, INCLUDING BUT NOT
          LIMITED TO:

          (1)       ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR
                    ANY GENERAL OR PARTICULAR PURPOSE;

          (2)       ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
                    PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

          (3)       ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

          (4)       ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF
                    LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO,
                    ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE,
                    INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY,
                    PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

          (5)       ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM
                    COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

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          (6)       ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
                    STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR
                    LOCAL STATUTE OR AGENCY;

          (7)       ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

                       (a)    LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT,
                              COMPONENT, EQUIPMENT, ACCESSORY PART, SOFTWARE OR
                              DATA PROVIDED UNDER THIS AGREEMENT;

                       (b)    LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT,
                              COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE OR
                              DATA PROVIDED UNDER THIS AGREEMENT;

                       (c)    LOSS OF PROFITS AND/OR REVENUES;

                       (d)    ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

          THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT WILL
          NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT
          SIGNED BY THE SELLER AND THE BUYERS. IN THE EVENT THAT ANY PROVISION
          OF THIS CLAUSE 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE
          UNENFORCEABLE, THE REMAINDER OF THIS CLAUSE 12 WILL REMAIN IN FULL
          FORCE AND EFFECT.

          The remedies provided to the Buyers under this Clause 12 as to any
          defect in respect of the Aircraft or any part thereof are mutually
          exclusive and not cumulative. The Buyers will be entitled to the
          remedy that provides the maximum benefit to them, as the Buyers may
          elect, pursuant to the terms and conditions of this Clause 12 for any
          defect for which remedies are provided under this Clause 12, provided,
          however, that the none of the Buyers will be entitled to elect a
          remedy under more than one part of this Clause 12 for the same defect.
          The Buyers' rights and remedies herein for the nonperformance of any
          obligations or liabilities of the Seller arising under these
          warranties will be in monetary damages limited to the amount the
          Buyers expend in procuring a correction or replacement for any covered
          part subject to a defect or nonperformance covered by this Clause 12,
          and none of the Buyers will have any right to require specific
          performance by the Seller.

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12.7        NEGOTIATED AGREEMENT

            Each of the Buyers specifically recognizes that:

            (i)   the Specification has been agreed upon after careful
                  consideration by the Buyers using their judgment as
                  professional operators of, and maintenance providers with
                  respect to, aircraft used in public transportation and as such
                  is are professionals within the same industry as the Seller;

            (ii)  this Agreement, and in particular this Clause 12, has been the
                  subject of discussion and negotiation and is fully understood
                  by the Buyers;

            (iii) the price of the Aircraft and the other mutual agreements of
                  the Buyers set forth in this Agreement were arrived at in
                  consideration of, inter alia, the provisions of this Clause
                  12, specifically including the Exclusivity of Warranties set
                  forth in Clause 12.5.

12.8        SURVIVABILITY

            [...***...]

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13.         PATENT AND COPYRIGHT INDEMNITY

            The Seller represents and warrants that the Manufacturer has
            provided to the Seller the following indemnity against patent and
            copyright infringements with respect to the Aircraft that are
            reproduced below between the words QUOTE and UNQUOTE, subject to the
            terms, conditions, limitations and restrictions (including, but not
            limited to, the Exclusivity of Warranties and General Limitations of
            Liability and Duplicate Remedies provisions) set forth below. The
            Seller hereby assigns to the Buyers, and each of the Buyers hereby
            accepts, all of the Seller's rights and obligations as the "Buyer"
            under the said indemnity against patent and copyright infringements,
            and the Seller subrogates the Buyers to all such rights and
            obligations in respect of the Aircraft. The Seller hereby warrants
            to the Buyers that (i) it has all requisite authority to make the
            foregoing assignment to and to effect the foregoing subrogation in
            favor of the Buyers, (ii) such assignment and subrogation are
            effective to confer on the Buyers all of the foregoing rights and
            obligations of the Seller, (iii) the provisions so assigned are in
            full force and effect and have not been amended prior to the date
            hereof, and (iv) the Seller will not enter into any amendment of the
            provisions so assigned without the prior written consent of each of
            the Buyers.

QUOTE

13.1        Indemnity

13.1.1      Subject to the provisions of Clause 13.2.3, the Seller will
            indemnify the Buyers from and against any damages, costs and
            expenses including legal costs (excluding damages, costs, expenses,
            loss of profits and other liabilities in respect of or resulting
            from loss of use of the Aircraft) resulting from any infringement or
            claim of infringement by the Airframe or any part or software
            installed therein at Delivery of

            (i)   any British, French, German, Spanish or U.S. patent;

            (ii)  any patent issued under the laws of any other country in which
                  any of the Buyers may lawfully operate the Aircraft, provided
                  that from the time of design of such Airframe or any part or
                  software installed therein at Delivery and until infringement
                  claims are resolved, the country of the patent and the flag
                  country of the Aircraft are both parties to:

                  (1)   the Chicago Convention on International Civil Aviation
                        of December 7, 1944, and are each fully entitled to all
                        benefits of Article 27 thereof, or,

                  (2)   the International Convention for the Protection of
                        Industrial Property of March 20, 1883; and

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            (iii) in respect of computer software installed on the Aircraft, any
                  copyright, provided that the Seller's obligation to indemnify
                  will be limited to infringements in countries which, at the
                  time of infringement, are members of The Berne Union and
                  recognize computer software as a "work" under the Berne
                  Convention.

13.1.2      Clause 13.1.1 will not apply to

            (i)   Buyer Furnished Equipment;

            (ii)  the Propulsion Systems;

            (iii) Supplier Parts; or

            (iv)  software not developed by the Seller.

13.1.3      If any of the Buyers is, due to circumstances contemplated in Clause
            13.1.1, prevented from using the Aircraft (whether by a valid
            judgment of a court of competent jurisdiction or by a settlement
            arrived at among the claimant, the Seller and any Buyer), the Seller
            will at its expense either

            (i) procure for the Buyers the right to use the affected Airframe,
            part or software free of charge; or

            (ii) replace the infringing part or software as soon as possible
            with a non-infringing substitute.

13.2        Administration of Patent and Copyright Indemnity Claims

13.2.1      If any Buyer receives a written claim or a suit is threatened or
            begun against such Buyer for infringement of a patent or copyright
            referred to in Clause 13.1, such Buyer will

            (i)   forthwith notify the Seller, giving particulars thereof;

            (ii)  furnish to the Seller all data, papers and records within the
                  Buyers' control or possession relating to such patent or
                  claim;

            (iii) refrain from admitting any liability or making any payment, or
                  assuming any expenses, damages, costs or royalties, or
                  otherwise acting in a manner prejudicial to the defense or
                  denial of the suit or claim, it being agreed that nothing in
                  this Clause 13.2.1(iii) will prevent a Buyer from paying the
                  sums that may be required to obtain the release of the
                  Aircraft, provided that payment is accompanied by a denial of
                  liability and is made without prejudice;

            (iv)  fully cooperate with, and render all assistance to, the Seller
                  as may be pertinent to the defense or denial of the suit or
                  claim; and

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            (v)   act to mitigate damages and/or to reduce the amount of
                  royalties that may be payable, and act to minimize costs and
                  expenses.

13.2.2.1    The Seller will be entitled either in its own name or on behalf of
            each of the Buyers to conduct negotiations with the party or parties
            alleging infringement and may assume and conduct the defense or
            settlement of any suit or claim in the manner that, in the Seller's
            opinion, it deems proper.

13.2.3      The Seller's liability hereunder will be conditional on the strict
            and timely compliance by each of the Buyers with the terms of this
            Clause and is in lieu of any other liability to any Buyer, whether
            express or implied, that the Seller might incur at law as a result
            of any infringement or claim of infringement of any patent or
            copyright.

UNQUOTE

      In consideration of the assignment and subrogation by the Seller under
      this Clause 13 in favor of the Buyers in respect of the Seller's rights
      against and obligations to the Manufacturer under the provisions quoted
      above, each of the Buyers hereby accepts such assignment and subrogation
      and agrees to be bound by all of the terms, conditions and limitations
      therein contained (specifically including, without limitation, the waiver,
      release and renunciation provision).

      THE INDEMNITY PROVIDED IN THIS CLAUSE 13 AND THE OBLIGATIONS AND
      LIABILITIES OF THE SELLER UNDER THIS CLAUSE 13 ARE EXCLUSIVE AND IN
      SUBSTITUTION FOR, AND EACH OF THE BUYERS HEREBY WAIVES, RELEASES AND
      RENOUNCES ALL OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS, GUARANTEES AND
      LIABILITIES ON THE PART OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES OF
      ANY BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR
      OTHERWISE (INCLUDING WITHOUT LIMITATION ANY OBLIGATION, LIABILITY, RIGHT,
      CLAIM OR REMEDY ARISING FROM OR WITH RESPECT TO LOSS OF USE OR REVENUE OR
      CONSEQUENTIAL DAMAGES), WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT
      INFRINGEMENT OR THE LIKE BY ANY AIRFRAME, PART OR SOFTWARE INSTALLED
      THEREIN AT DELIVERY, OR THE USE OR SALE THEREOF, PROVIDED THAT, IN THE
      EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD
      UNLAWFUL OR OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS CLAUSE WILL
      REMAIN IN FULL FORCE AND EFFECT. THIS INDEMNITY AGAINST PATENT AND
      COPYRIGHT INFRINGEMENTS WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY
      A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYERS.

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14          TECHNICAL DATA AND SOFTWARE SERVICES

            The Seller will make available or will cause the Seller's designee
            ANACS to make available to the Buyers the Technical Data and certain
            additional services under the terms and conditions set forth in this
            Clause 14.

14.1        Supply

            The Technical Data will be supplied in the English language using
            the aeronautical terminology in common use.

            Range, form, type, format, Air Transport Association ("ATA")
            compliance or non-compliance, quantity and delivery schedule of the
            Technical Data to be provided under this Agreement are covered in
            Exhibit F. [...***...]

            The Buyers will not receive compensation or credits of any kind for
            return of unused or partially used Technical Data.

14.2        Aircraft Identification for Technical Data

14.2.1      For Technical Data customized to the Aircraft, the Buyers agree to
            the allocation of fleet serial numbers ("FSN(S)") in the form of
            block of numbers selected in the range from 001 to 999.

14.2.2      The sequence will not be interrupted except if two (2) different
            Propulsion Systems or two (2) different Aircraft models are
            selected.

14.2.3      The Buyers will indicate to the Seller the FSNs allocated to each
            Aircraft corresponding to the Aircraft rank in the delivery schedule
            set forth in Clause 9.1.1 not later than twenty-four (24) months
            prior to the Scheduled Delivery Month for the first Aircraft to be
            delivered hereunder. The allocation of such FSNs to such Aircraft
            will not constitute any proprietary, insurable or other interest of
            any Buyer in any Aircraft prior to its Delivery.

14.3        Integration of Equipment Data

14.3.1      Supplier Equipment

            If necessary for the understanding of the affected systems,
            information relating to Supplier Equipment that is installed on the
            Aircraft by the Seller, will be introduced free of charge into the
            first issue, subsequent to the installation of the Supplier
            equipment of the customized Technical Data supplied to the Buyers,
            provided Clause 14.3.2.2 is complied with (the "FIRST ISSUE").

*** Confidential Treatment Requested

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14.3.2      Buyer Furnished Equipment

14.3.2.1    The Seller will introduce BFE data, for equipment installed on the
            Aircraft by the Seller, into the customized Technical Data at no
            additional charge to the Buyers for the First Issue, provided such
            data are provided in accordance with the conditions set forth in
            Clauses 14.3.2.2 through 14.3.2.5.

14.3.2.2    [...***...]

14.3.2.3    The BFE data will comply with applicable revision of the ATA 2200
            Specification applicable to the corresponding aircraft type.
            Subsequent revisions of the ATA specification will be considered as
            applicable.

14.3.2.4    The Buyers and the Seller will agree on the requirements for the
            provision to the Seller of BFE data for "on-aircraft maintenance."
            These requirements include but are not limited to timeframe, media
            and format, to facilitate the efficient, expedited and economic
            integration of BFE data into Technical Data.

14.3.2.5    The BFE data will be delivered in digital format and/or in Portable
            Document Format, as agreed between the Buyers and the Seller.

14.3.2.6    All costs related to the delivery to the Seller of BFE data will be
            borne by the Buyers.

14.3.2.7    Clause 14.3.2 will apply to the BFE data provided by the Seller
            under the terms of Clause 18.1.3.

14.4        Delivery

14.4.1      The Technical Data are delivered on-line and/or off-line, as set
            forth in Exhibit F.

14.4.2      For Technical Data delivered off-line, the Technical Data and
            corresponding revisions will be sent to one address only. The Buyers
            will specify such address.

14.4.3      Packing and shipment of the Technical Data and their revisions will
            be carried out by the quickest transportation methods. Shipment will
            be FCA Toulouse, France, FCA Hamburg, Germany, and/or FCA Ashburn,
            VA, USA.

14.4.4      The delivery schedule of the First Issue will be phased as mutually
            agreed to correspond with Aircraft deliveries. The Buyers agree to
            provide forty (40) days' notice when requesting a change to the
            delivery schedule.

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14.4.5      The Buyers will be responsible for coordinating with and satisfying
            the requirements of the FAA for Technical Data. Reasonable
            quantities of Technical Data will be supplied by the Seller for
            delivery to the FAA at no charge to the Buyer, FCA Toulouse, France,
            FCA Hamburg, Germany, and/or FCA Ashburn, VA, USA.

14.4.6      [...***...]

14.5        Revision Service

            Unless otherwise specifically stated, revision service will be
            provided on a free-of-charge basis for a period of one (1) year
            after Delivery of the last Aircraft. Thereafter revision service
            will be provided at the standard conditions set forth in the then
            current ANACS Customer Services Catalog.

14.6        Service Bulletins Incorporation

            During the period of revision service and upon the Buyers' request
            for incorporation, which will be made [...***...] after issuance of
            a Service Bulletin, Seller's Service Bulletin information will be
            incorporated into the Technical Data for the Aircraft after formal
            notification by any Buyer of its intention to accomplish a Service
            Bulletin. The split effectivity for a Service Bulletin will remain
            in the Technical Data until notification from the Buyers that
            accomplishment has been completed on all the applicable Aircraft,
            except that for the Flight Manual, Configuration Deviation List,
            Weight and Balance Manual and the MMEL only the pre- or post-Service
            Bulletin status will be shown.

14.7        Future Developments

            The Seller will continuously monitor technological developments and
            apply them to data and document production and methods of
            transmission where beneficial and economical. The Buyers agree to
            give reasonable consideration to any new development proposed by the
            Seller for implementation.

14.8        Technical Data Familiarization

            Upon request by the Buyers, the Seller will provide a one (1) week
            Technical Data familiarization training at the Seller's or at the
            facilities of one of the Buyers. If such familiarization is
            conducted at a Buyer's facilities, the Buyers will reimburse the
            Seller for all air travel or will provide free of charge air travel

*** Confidential Treatment Requested

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            (business class for international travel and coach for domestic) to
            and from the nearest point on any Buyer's network and living
            expenses of the representatives of the Seller conducting such
            familiarization training.

14.9        Customer Originated Changes

14.9.1      Data on Customer Originated Changes may be incorporated into the
            following Technical Data when customized to the Buyers:

            -     Aircraft Maintenance Manual

            -     Illustrated Parts Catalog

            -     Trouble Shooting Manual

            -     Aircraft Wiring Manual

            -     Aircraft Schematics Manual

            -     Aircraft Wiring Lists

            -     Flight Crew Operating Manual

            -     Quick Reference Handbook

14.9.2      COC data will be developed by the Buyers according to the "Customer
            Guide for Customer Originated Changes" issued by the Manufacturer.
            The Buyers will ensure that any such COC data is in compliance with
            the requirements of the FAA.

            COC data will be incorporated by the Seller into all affected
            customized Technical Data unless the Buyers specify in writing the
            documents into which the Buyers desire the COC to be incorporated.
            Following incorporation of the COC into the customized Technical
            Data, the relevant Technical Data will show only the aircraft
            configuration that reflects the COC data and not the configuration
            before such COC data are incorporated.

14.9.3.

            (a)   Each of the Buyers hereby acknowledges and accepts that the
                  incorporation of any COC data into the Technical Data issued
                  by the Seller will be at the Buyers' sole risk, that the
                  Seller will have no obligation to check the COC data for
                  accuracy or validity, and that the Seller will have no
                  liability whatsoever with respect to (a) the contents of any
                  COC data (including omissions or inaccuracies therein) (b) any
                  effect that the incorporation of such COC data may have on the
                  Technical Data or (c) any costs of any nature that the COC
                  data may add to subsequent Service Bulletins or modifications.

            (b)   THE SELLER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES
                  OR LIABILITIES, EXPRESSED OR IMPLIED, ORAL OR WRITTEN, ARISING
                  BY LAW, COURSE OF DEALING OR OTHERWISE, AND WITHOUT LIMITATION
                  ALL WARRANTIES AS TO QUALITY, OPERATION, MERCHANTABILITY,
                  FITNESS FOR ANY INTENDED PURPOSE, AND ALL OTHER

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                  CHARACTERISTICS WHATSOEVER, INCLUDING ANY OMISSIONS OR
                  INACCURACIES THEREIN, OF ANY COC DATA INCORPORATED INTO THE
                  TECHNICAL DATA ISSUED BY THE SELLER.

            (c)   Each of the Buyers will indemnify and hold the Seller harmless
                  from and against any losses (including reasonable attorneys'
                  fees) arising from claims by any third party for injury, loss
                  or damage incurred directly or indirectly as a result of the
                  incorporation of any COC data into the Technical Data issued
                  by the Seller.

            (d)   If any Buyer sells, leases or otherwise transfers any Aircraft
                  to which the COC data apply:

            (i)   the Buyers will remain fully liable for the COC data and any
                  and all effects of their incorporation, as set forth in this
                  Clause 14.9;

                  (ii)  the Seller may disclose the COC data to the subsequent
                        owner(s) or operator(s) of the transferred Aircraft;

                  (iii) it will be the sole responsibility of the Buyers to
                        notify, or cause notification to be made to, the
                        subsequent owner(s) or operator(s) of the existence of
                        the such COC data in the Technical Data applicable to
                        the corresponding Aircraft.

            The Seller hereby disclaims any and all liabilities whatsoever for
            the COC data in the event of transfer, sale or lease of any Aircraft
            to which COC data apply.

14.9.4      The incorporation of any COC will be performed under the conditions
            specified in the Seller's then current Customer Services Catalog.

14.10       Software Products

            Software Products are available to the Buyers exclusively from ANACS
            and may be licensed under the General Terms and Conditions of
            Licensing set forth in Exhibit H.

14.10.1     Performance Engineer's Programs

            (i)   In addition to the standard operational manuals, the Seller
                  will provide to the Buyers software components and databases
                  composing the Performance Engineer's Programs ("PEP") for the
                  Aircraft.

            (ii)  The license to use the PEP will be granted free of charge for
                  as long as the revisions of the PEP are free of charge in
                  accordance with Clause 14.5. At the end of such period,
                  license fees may be charged and yearly revision

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                  service for the PEP will be provided to the Buyers at the
                  standard commercial conditions set forth in the then current
                  ANACS Customer Services Catalog.

14.10.2     [...***...]

14.10.3     Airbus|World Customer Portal

14.10.3.1   The Buyers will be entitled to obtain access to a wide range of
            information and services, including Technical Data, available in the
            secure zone of Airbus's Customer Portal Airbus|World
            ("AIRBUS|WORLD"). Access will be free of charge for as long as any
            Buyer operates the Aircraft.

            Access to the secure zone of Airbus|World (the "SECURE ZONE") is
            reserved to Airbus owners and operators and is subject to the prior
            signature by each of the Buyers of the "General Terms and Conditions
            of Access to and Use of Airbus Secure Area of Customer Portal."


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            A description of the basic services available to the Buyers in the
            Secure Zone is set forth in the ANACS Customer Services Catalog.

14.10.3.2   On-Line Technical Data

            (i)   The Technical Data specified in Exhibit F as being provided
                  on-line will be made available to the Buyers through the
                  Secure Zone at no cost as long as revision service for such
                  Technical Data is free of charge in accordance with Clause
                  14.5.

            (ii)  The list of the Technical Data available on-line may be
                  amended from time to time.

                  For any Technical Data that are or become available on-line,
                  the Seller will notify the Buyers thereof and the Seller
                  reserves the right to discontinue other formats for such
                  Technical Data. On-line and old formats of such Technical Data
                  are to be available in parallel for a period of six (6) months
                  or one (1) revision cycle, whichever is shorter.

14.10.3.3   [...***...]

14.11       Warranties

            The Seller represents and warrants that the Manufacturer has
            provided to the Seller a warranty with respect to the Technical Data
            that is reproduced below between the words QUOTE and UNQUOTE,
            subject to the terms, conditions, limitations and restrictions
            (including, but not limited to, the Exclusivity of Warranties and
            General Limitations of Liability and Duplicate Remedies provisions)
            set forth below. The Seller hereby assigns to the Buyers, and the
            Buyers hereby accept, all of the Seller's rights and obligations as
            the "Buyer" under the said warranty, and the Seller subrogates the
            Buyers to all such rights and obligations in respect of the
            Aircraft. The Seller hereby warrants to the Buyers that (i) it has
            all requisite authority to make the foregoing assignment to and to
            effect the foregoing subrogation in favor of the Buyers, (ii) such
            assignment and subrogation are effective to confer on the Buyers all
            of the foregoing rights and obligations of the Seller, (iii) the
            provisions so assigned are in full force and effect and have not
            been amended prior to the date hereof and (iv) the Seller will not
            enter into any amendment of the provisions so assigned without the
            prior written consent of each of the Buyers.

QUOTE

14.11.1     The Seller warrants that the Technical Data (exclusive of COC) are
            prepared in accordance with the state of art at the date of their
            conception. SHOULD ANY

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            TECHNICAL DATA PREPARED BY THE SELLER CONTAIN ANY NONCONFORMITY OR
            DEFECT, THE SOLE AND EXCLUSIVE LIABILITY OF THE SELLER WILL BE TO
            TAKE ALL REASONABLE AND PROPER STEPS, AT ITS OPTION, TO CORRECT OR
            REPLACE SUCH TECHNICAL DATA.

14.11.2     THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS
            SUPPLIERS AND REMEDIES OF THE BUYERS SET FORTH IN THIS CLAUSE 14 ARE
            EXCLUSIVE AND IN SUBSTITUTION FOR, AND EACH OF THE BUYERS HEREBY
            WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND
            LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND RIGHTS, CLAIMS
            AND REMEDIES OF ANY OF THE BUYERS AGAINST THE SELLER, ITS SUPPLIERS
            AND/OR THEIR INSURERS, EXPRESS OR IMPLIED, ARISING BY LAW OR
            OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN ANY
            TECHNICAL DATA DELIVERED UNDER THIS AGREEMENT, INCLUDING BUT NOT
            LIMITED TO:

            (A)   ANY WARRANTY AGAINST HIDDEN DEFECTS

            (B)   ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

            (C)   ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE,
                  COURSE OF DEALING OR USAGE OF TRADE;

            (D)   ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER
                  CONTRACTUAL OR DELICTUAL AND WHETHER OR NOT ARISING FROM THE
                  SELLER'S AND/OR ITS SUPPLIERS' NEGLIGENCE, ACTUAL OR IMPUTED;
                  AND

            (E)   ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR
                  DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR
                  PART THEREOF OR ANY TECHNICAL DATA DELIVERED HEREUNDER.

            THE SELLER AND/OR ITS SUPPLIERS WILL HAVE NO OBLIGATION OR
            LIABILITY, HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR
            FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH
            RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY TECHNICAL DATA
            DELIVERED UNDER THIS AGREEMENT.

            FOR THE PURPOSES OF THIS CLAUSE 14.11.2, "THE SELLER" WILL INCLUDE
            THE SELLER, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.

UNQUOTE

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14.12       Proprietary Rights

            All proprietary rights, including but not limited to patent, design
            and copyrights, relating to Technical Data will remain with the
            Seller and/or its Affiliates as the case may be. All Technical Data
            are supplied for the sole use by the Buyers in maintaining and
            operating the Aircraft and each of the Buyers undertakes not to
            modify, copy the contents of, or use the Technical Data to
            manufacture any parts or components of the Aircraft, save as
            explicitly permitted herein, in the Technical Data itself, or as
            otherwise expressly authorized by the Seller. These proprietary
            rights will also apply to any translation of Technical Data into a
            language or languages or medium or media that may have been
            performed or caused to be performed by any of the Buyers.

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15          SELLER REPRESENTATIVES

15.1        The Seller will provide or cause to be provided at no charge to the
            Buyers the services described in this Clause 15, at the main base of
            any of the Buyers or at other locations to be mutually agreed.

15.2        Resident Customer Support Representatives

15.2.1      The Seller will provide representatives to act in an advisory
            capacity ("RESIDENT CUSTOMER SUPPORT REPRESENTATIVE") as follows:

            (i)   The Seller will provide one or more dedicated Resident
                  Customer Support Representatives for pre-entry-into-service
                  support of the Aircraft, commencing at or prior to
                  entry-into-service of the first Aircraft for a total of
                  [...***...] man-months;

            (ii)  In addition, the Seller will provide a total of [...***...]
                  man-months of Resident Customer Support Representatives for
                  support of the A350 aircraft in the Buyers' fleet; and

            (iii) The actual number of Customer Support Representatives assigned
                  to the Buyers at any one time will not exceed [...***...].

15.2.2      The Seller will provide to the Buyers an annual written account of
            the consumed months and any remaining balance of months.

15.2.3      Should any Buyer request additional services that exceed the amounts
            set forth in Clause 15.2.1(ii), the Seller may provide additional
            service subject to the terms and conditions agreed by such Buyer and
            the Seller at the time of such request.

15.2.4      The Seller will cause similar services to be provided by the
            representatives of the Propulsion System manufacturer and by
            representatives of the Suppliers when necessary and applicable.

15.3        Customer Support Director

            The Seller will assign the services of one (1) Customer Support
            Director based in Herndon, Virginia, to liaise between the
            Manufacturer and the Buyers on product support matters after
            signature of this Agreement for as long as any Buyer operates at
            least one (1) Aircraft.

15.4        [...***...]

*** Confidential Treatment Requested

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15.5        Buyers' Service

15.5.1      From the date of arrival of the first Resident Customer Support
            Representative and Spare Parts Field Representative and until the
            duration of the assignment, the Buyers will provide free of charge,
            suitable office space, office equipment and facilities for the sole
            use of the Resident Customer Support Representative(s) in or
            conveniently near the maintenance facilities of one of the Buyers.
            The Buyers will also provide internet access, telephone, and
            facsimile connections at the Seller's cost to be invoiced on a
            monthly basis.

15.5.2      In accordance with the Buyers' regulations, the Buyers will provide
            at no charge to the Seller

            (i)   airline tickets in economy class, confirmed and guaranteed
                  between the locations mentioned above in Clause 15.1 and the
                  international airport nearest Toulouse, France, that is on any
                  Buyer's network for the Resident Customer Support
                  Representative(s) and the Spare Parts Field Representative
                  mentioned in Clause 15.2.1 and 15.4, for travel at the
                  beginning and end of the applicable assignment; and

            (ii)  when said Resident Customer Support Representative(s) are
                  assigned away from the locations mentioned above in Clause
                  15.2.1 at the Buyers' request, transportation on similar basis
                  between the said locations and the place of assignment.

15.5.3      The parties will give each other all necessary reasonable assistance
            with general administrative functions specific to their respective
            countries and procurement of the documents necessary to live and
            work there.

15.6        Temporary Assignment and Withdrawal of Resident Customer Support
            Representative

            The Seller will have the right, upon written notice to and
            communication with the Buyers, to transfer or recall any Resident
            Customer Support Representative(s) on a temporary or permanent basis
            if, in the Seller's opinion, conditions are dangerous to the
            Resident Customer Support Representative's safety or health or
            prevent the fulfillment of such Resident Customer Support
            Representative's contractual tasks. The Buyers will receive credit
            for the man-days during which any Resident Customer Support
            Representative is absent from the Buyers' facility pursuant to this
            Clause 15.

15.7        Representatives' Status

            In providing the above technical service, the Seller's employees,
            including Resident Customer Support Representative(s), the Spare
            Parts Field Representative and the Customer Support Director, are
            deemed to be acting in an

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            advisory capacity only and at no time will they be deemed to be
            acting, either directly or indirectly, as the employees or agents of
            any of the Buyers.

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16          TRAINING AND TRAINING AIDS

16.1.       General

            This Clause 16 covers the terms and conditions for the supply of
            training and training aids for the Buyers' personnel to support the
            Aircraft operation.

16.2.       Scope

16.2.1      The range and quantity of training and training aids to be provided
            free of charge under this Agreement are covered in Appendix A to
            this Clause 16. The Seller will arrange availability of such
            training and training aids in relation to the delivery schedule for
            the Aircraft set forth in Clause 9.1.1.

16.2.2      The Maintenance Training and Flight Training courses described in
            Appendix A to this Clause 16 will be provided up to two (2) years
            after Delivery of the last Aircraft.

16.2.3      Except as set forth in Appendix A to this Clause 16, no compensation
            or credit of any sort will be provided for unused or partially used
            training or training aids offered pursuant to this Clause 16.

16.3.       Training Organization / Location

16.3.1      The Seller will provide the training at the Airbus Training Center
            in Miami, Florida (the "SELLER'S TRAINING CENTER"), and/or at its
            affiliated training center in Blagnac, France (the "AFFILIATED
            TRAINING CENTER").

16.3.2      If unavailability of facilities or scheduling difficulties make
            training by the Seller impractical at the training centers listed in
            Clause 16.3.1, the Seller will ensure that the Buyers are provided
            such training at locations other than those named in Clause 16.3.1.

16.3.3      Upon the Buyers' request, the Seller may also provide certain
            training at one of the Buyers' bases, if and when practicable for
            the Seller, under terms and conditions to be mutually agreed upon.
            In this event, all additional charges listed in Clause 16.6.2 will
            be borne by the Buyers.

16.4        Training Courses

16.4.1      Training courses, as well as the minimum and maximum numbers of
            trainees per course provided for the Buyer's personnel, are defined
            in the applicable training course catalog (the "TRAINING COURSE
            CATALOG") and will be scheduled as mutually agreed upon during a
            training conference (the "TRAINING CONFERENCE") that will be held as
            soon as practicable after signature of this Agreement and no later
            than six (6) months prior to delivery of the first Aircraft.

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16.4.2      The following terms will apply when training is performed by the
            Seller:

            (i)   Training courses will be the Seller's standard courses as
                  described in the Seller's applicable Training Course Catalog
                  valid at the time of execution of the course. The Seller will
                  be responsible for all training course syllabi, training aids
                  and training equipment necessary for the organization of the
                  training courses.

            (ii)  The training curricula and the training equipment may not be
                  fully customized. However, they may be modified to include the
                  most significant aspects of the Specification as known, at the
                  latest, six (6) months prior to the date of the first training
                  course planned for the Buyers and will be configured in order
                  to obtain the relevant Aviation Authority's approval and to
                  support the Seller's training programs.

            (iii) Training data and documentation necessary for training
                  detailed in Appendix A to this Clause 16 will be
                  free-of-charge and will not be revised. Training data and
                  documentation will be marked "FOR TRAINING ONLY" and as such
                  will be supplied for the sole and express purpose of training.

            (iv)  Upon the request of the Buyers and at no charge to the Buyers,
                  the Seller will collect and pack for consolidated shipment to
                  the facility of one of the Buyers, all training data and
                  documentation of the Buyers' trainees attending training at
                  the Airbus Training Center in Miami, Florida or Blagnac,
                  France, as applicable. This training data and documentation
                  will be delivered FCA Miami International Airport. The Buyers
                  will designate in writing one Buyer to receive title to such
                  training data and documentation and title to and risk of loss
                  of the training data and documentation will pass to such Buyer
                  upon delivery.

16.4.3      If the Buyers decide to cancel or reschedule a training course, a
            minimum advance notice of sixty (60) calendar days will be required.
            Any later cancellation or change from the Buyers, when courses
            cannot be allocated to other customers, will be deducted from the
            training allowances defined herein or will be charged to the Buyers,
            as applicable.

16.4.4      The Seller will deliver, or will cause any third party training
            provider to deliver, to the trainees a certificate of completion at
            the end of any such training course. No such certificate will
            represent authority or qualification by any Aviation Authority but
            may be presented to such officials in order to obtain relevant
            formal qualification.

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16.5        Prerequisites

16.5.1      Training will be conducted in English and all training aids are
            written in English using common aeronautical terminology. Trainees
            must have the prerequisite experience set forth in Appendix B to
            this Clause 16.

            The Seller's training courses are "TRANSITION TRAINING COURSES" and
            not "AB INITIO TRAINING COURSES."

            The Buyers will be responsible for the selection of the trainees and
            for any liability with respect to the entry knowledge level of the
            trainees.

16.5.2      The Buyers will provide the Seller with an attendance list of the
            trainees for each course with the validated qualification of each
            trainee. The Seller reserves the right to verify the trainees'
            proficiency and previous professional experience. The Seller will in
            no case warrant or otherwise be held liable for any trainee's
            performance as a result of any training services provided.

16.5.3      The Seller will provide to the Buyers an "Airbus Pre-Training
            Survey", and/or the "Maintenance Training Survey", as applicable, to
            obtain the trainee's associated background. The Buyers will complete
            such survey(s) and return them to the Seller at least two (2) months
            prior to the start of the training course.

16.5.4      If the Buyers make a change to any trainee attendance list within
            the two (2) month period stated in Clause 16.5.3, the Buyers will
            immediately inform the Seller thereof and send the Seller on updated
            Airbus Pre-Training Survey and/or Maintenance Training Survey
            reflecting requested information for the replacement trainee(s).

16.6.       Logistics

16.6.1      Trainees

            (a)   When training is done at the Airbus Training Center in Miami,
                  Florida, the Seller will provide a free-of-charge rental car
                  for all of the Buyers' trainees for the duration of the
                  training course on the basis of one (1) rental car per four
                  (4) maintenance, operations and cabin attendant trainees and
                  one (1) rental car per each flight crew.

                  The Seller will provide rental cars with unlimited mileage,
                  and the Buyers will pay for gas, and fines, if any. However,
                  the Buyers will indemnify and hold the Seller harmless from
                  and against all liabilities, claims, damages, costs and
                  expenses for any injury to or death of any of the Buyer's
                  trainees occasioned during the course of such transportation.

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            (b)   When training is done at the Airbus Training Center in
                  Blagnac, France, the Seller will provide free local
                  transportation by bus for the Buyer's trainees to and from
                  designated pick up points and the training center

            (c)   Living expenses for the Buyer's trainees are to be borne by
                  the Buyers.

16.6.2      Training at External Location

            (a)   Seller's Instructors

                  If at any Buyer's request, training is provided by the
                  Seller's instructors at any location other than the Seller's
                  training centers, the Buyers will reimburse the Seller for all
                  expenses set forth in Clauses 16.6.2(b) 16.6.2(c), 16.6.2(d)
                  and 16.6.2(e) related to the assignment of such instructors
                  and their performance of the duties as aforesaid.

            (b)   Living Expenses for the Seller's Instructors

                  Such expenses, covering the entire period from day of
                  secondment to day of return to the Seller's base, will include
                  but will not be limited to lodging, food and local
                  transportation to and from the place of lodging and the
                  training course location. The Buyers will reimburse the Seller
                  for such expenses on the basis of a per diem rate
                  corresponding to the current per diem rate used by the Seller
                  for its personnel.

            (c)   Air Travel

                  The Buyers will reimburse the Seller for the transportation
                  costs of the Seller's instructors in confirmed business class
                  or in confirmed coach class, where business class is not
                  available, to and from the Buyers' designated training site
                  and the Seller's training center.

            (d)   Training Material

                  The Buyers will reimburse the Seller for the cost of shipping
                  the training material needed to conduct such courses.

            (e)   Buyers' Indemnity

                  The Buyers will be solely liable for any and all cancellation
                  or delay in the performance of the training outside of the
                  Seller's training centers that is associated with the
                  transportation provided under Clause 16.6.2(c) and will,
                  jointly and severally, indemnify and hold the Seller harmless
                  from such delay and any consequences arising there from.

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            (f)   Training Equipment Availability

                  Training equipment necessary for course performance at any
                  course location other than the Seller's training centers or
                  the facilities of the training provider selected by the Seller
                  will be provided by the Buyers in accordance with the Seller's
                  specifications.

16.7        Flight Operations Training

16.7.1      Flight Crew Training Course

            (a)   The Seller will perform a flight crew training course program
                  for the Buyers' flight crews. [...***...] The training manual
                  used will be the Seller's Flight Crew Operating Manual
                  ("FCOM"), except for the base flight training, for which the
                  Buyer's Customized FCOM will be used.

            (b)   The Buyers will use delivered Aircraft for any required
                  in-flight training. This training will not exceed one (1)
                  session of forty-five (45) minutes per pilot. When in-flight
                  crew training is performed in Blagnac, France, the Seller will
                  provide free-of-charge line maintenance, including servicing,
                  preflight checks and changing of minor components, subject to
                  conditions agreed in this Agreement.

            (c)   The Buyers will provide mutually agreed spare parts as
                  required to support said in-flight training and will provide
                  evidence of insurance coverage required under Clause 19.

            (d)   In all cases, the Buyers will bear the expenses of fuel, oil
                  and landing fees.

16.7.2      Flight Crew Line Initial Operating Experience

            (a)   In order to assist the Buyers with initial operating
                  experience after Delivery of the first Aircraft, the Seller
                  will provide to the Buyers pilot instructor(s) as described in
                  Exhibit A to this Clause 16.

            (b)   Additional pilot instructors can be provided at the Buyers'
                  expense upon conditions to be mutually agreed.

            (c)   Prior to any flight training to be performed by the Seller on
                  the Buyers' Aircraft, the Buyers will provide to the Seller
                  evidence of insurance coverage as required under Clause 19.

*** Confidential Treatment Requested

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16.7.3      Instructor Cabin Attendants' Familiarization Course

            The Seller will provide instructor cabin attendant's course(s) to
            the Buyers' cabin attendants, as described in Exhibit A to this
            Clause 16, at the Seller's Training Center.

            The instructor cabin attendants familiarization course, when
            incorporating the features of the Aircraft, will be given no earlier
            than six (6) months and no later than ninety (90) days before the
            Delivery of the first Aircraft. The instructor cabin attendants'
            familiarization course material will be provided no later than six
            (6) months before the Delivery of the first Aircraft.

16.7.4      Performance / Operations Course

            The Seller will provide performance/operations training for the
            Buyers' personnel as described in Exhibit A to this Clause 16.

            The available courses are listed in the Seller's applicable Training
            Courses Catalog.

16.7.5      Transition Type Rating Instructor Course

            The Seller will provide transition type rating instructor training
            for the Buyer's flight crew instructors as described in Exhibit A to
            this Clause 16. This course provides the Buyers' instructors with
            the training in flight instruction and synthetic instruction
            required to instruct on Airbus aircraft.

16.7.6      During any and all flights performed in accordance with this Clause
            16.7, the Buyers will bear full responsibility for the aircraft upon
            which the flight is performed, including but not limited to any
            required maintenance, all expenses such as fuel, oil or landing fees
            and the provision of insurance required under Clause 19.

16.8        Maintenance Training

16.8.1      The Seller will provide maintenance training for the Buyers' ground
            personnel as described in Exhibit A to this Clause 16. The available
            courses are listed in the Seller's applicable Training Course
            Catalog. The practical training provided in the frame of maintenance
            training is performed exclusively on the training devices in use in
            the Seller's Training Center or the Affiliated Training Center. If
            additional practical training is required, such additional practical
            training can be organized with the assistance of the Seller, in
            accordance with Clause 16.8.2.

16.8.2      Practical Training

            If the Buyers require practical training to be organized at another
            airline's facilities, then the Seller will assist the Buyers in
            organizing this training without guaranteeing the availability of
            any other airline's facilities. The provision of an

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            instructor by the Seller for such practical training will be
            deducted from the trainee-day allowance set forth in Paragraph 2.1
            of Exhibit A to this Clause 16 in the manner described in Paragraph
            3 of such Exhibit A. The Buyers will reimburse the Seller the
            expenses for said instructor in accordance with Clause 16.6.2.

16.8.3      Line Maintenance Initial Operating Experience Training

            In order to assist the Buyers during the entry into service of the
            Aircraft, the Seller will provide to the Buyers maintenance
            instructor(s) at the Buyers' main A350 base as set forth in Appendix
            A to this Clause 16.

            (a)   Line maintenance initial operating experience training will
                  cover training in handling and servicing of Aircraft, flight
                  crew and maintenance coordination, use of Technical Data
                  and/or any other activities which may be deemed necessary
                  after Delivery of the first Aircraft.

            (b)   The Buyers will reimburse the expenses for said instructor(s)
                  in accordance with Clause 16.6.2. Additional maintenance
                  instructors can be provided at the Buyers' expense.

16.9        Supplier and Engine Manufacturer Training

            The Seller will ensure that major Suppliers and the Propulsion
            System manufacturer provide maintenance training and overhaul
            training on their products at appropriate times. A copy of the
            Supplier Training Catalog, listing the suppliers that provide
            training, will be supplied to the Buyers on request.

16.10       Training Aids for the Buyers' Training Organization

16.10.1     The Seller will provide to the Buyers Airbus computer based training
            ("AIRBUS CBT"), training aids, as used in the Seller's Training
            Centers and the Virtual Aircraft (Walk Around and Component
            Location), free of charge as set forth in Exhibit A to this Clause
            16.

            The Airbus CBT and training aids supplied to the Buyers will be
            similar to those used at the Airbus Training Centers for training.
            The Seller has no obligation to cause the Manufacturer to revise the
            Airbus CBT. The Airbus CBT in use at the Seller's Training Center
            may be revised on a regular basis, and such revisions, if any, will
            be provided to the Buyers until the expiration of the period when
            training courses provided under this Clause 16 are performed for the
            Buyers, or up to one (1) year after delivery of the Airbus CBT or
            Virtual Aircraft to the Buyers, whichever occurs first.

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16.10.2     Delivery

            (a)   The Seller will deliver to the Buyers the Airbus CBT and
                  training aids, at a date to be mutually agreed during the
                  Training Conference, but no later than six (6) months before
                  the Delivery Date of the first Aircraft.

            (b)   Those items supplied to the Buyers pursuant to Clause 16.10.1
                  will be delivered FCA Toulouse, France, and/or FCA Hamburg,
                  Germany. Title to and risk of loss of said items will pass to
                  the Buyer selected pursuant to Clause 16.4.2(iv) upon
                  delivery.

16.10.3     Installation of Airbus CBT System

            (a)   Before the initial delivery of the Airbus CBT, the Seller will
                  provide an "Airbus CBT Administrator Course" to up to six (6)
                  trainees of the Buyers, at the facilities of one of the
                  Buyers. To conduct the course, the workstations and/or
                  servers, as applicable, will be ready for use and will comply
                  with the latest "Airbus CBT Workstation Technical
                  Specification" or "Airbus CBT Server Technical Specification",
                  as applicable.

            (b)   The Buyers will provide any and all the necessary hardware on
                  which the Airbus CBT will be installed and Seller will not be
                  responsible for any incompatibility of such hardware with the
                  Airbus CBT.

            (c)   The Airbus CBT will be installed by the Buyers' personnel who
                  have completed the Airbus CBT training, and the Seller will be
                  held harmless from any damage to person and/or to property
                  caused by or in any way connected with the handling and/or
                  installation of the Airbus CBT by the Buyers' personnel.

            (d)   In accordance with Clause 16.6.2, the Buyers will reimburse
                  the expenses for the Seller's personnel required at any
                  Buyer's facility to conduct Airbus CBT Training and/or provide
                  installation assistance.

16.10.4     License

            (a)   The Seller will grant the Buyers a license to use the Airbus
                  CBT and the Virtual Aircraft that will incorporate the Terms
                  and Conditions for License for Use of Software set forth in
                  Exhibit H.

            (b)   Supply of additional sets of Virtual Aircraft Software and
                  courseware supports, as well as any extension to the license
                  for such courseware, will be subject to terms and conditions
                  to be mutually agreed.

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16.10.5     The Seller will not be responsible for, and hereby disclaims any and
            all liabilities resulting from or in connection with the use by the
            Buyers of the Airbus CBT, the Virtual Aircraft and any other
            training aids at the Buyers' facilities.

16.11       Proprietary Rights

            The Seller's training data and documentation, Airbus CBT and
            training aids are proprietary to the Manufacturer and its suppliers.
            All such training materials are supplied for the sole use by the
            Buyers in training its personnel to maintainand operate the
            Aircraft. These proprietary rights will also apply to any
            translation of such Material into a language or languages or medium
            or media that may have been performed or caused to be performed by
            the Buyer.

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                                                         APPENDIX A TO CLAUSE 16

                               TRAINING ALLOWANCES

[...***...]

*** Confidential Treatment Requested

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[...***...]

*** Confidential Treatment Requested

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      [...***...]

***   Confidential Treatment Requested

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                                                         APPENDIX B TO CLAUSE 16

                        MINIMUM RECOMMENDED QUALIFICATION
                      IN RELATION TO TRAINING REQUIREMENTS

                          (Standard Transition Courses)

The prerequisites listed below are the minimum recommended requirements
specified for Airbus training. If the appropriate Aviation Authority or the
specific airline policy of the trainee demands greater or additional
requirements, such requirements will be prerequisites.

- -     CAPTAIN prerequisites

            -     Previously qualified on JAR/FAR/CS 25 aircraft and commercial
                  operations

            -     Valid and current Airlines Transport License (ATPLY)

            -     Previous command experience

            -     Fluency in English

            -     Jet experience

            -     1500 hours minimum flying experience as pilot

            -     1000 hours experience on FAR/JAR 25/CS 25 aircraft

            -     200 hours experience as airline, corporate pilot or military
                  transport pilot

            -     Must have flown transport type aircraft, as flying pilot,
                  within the last 12 months.

- -     FIRST OFFICER prerequisites

            -     Previously qualified on JAR/FAR/CS 25 aircraft and commercial
                  operations

            -     Aircraft and commercial operations valid and current
                  commercial pilot license with instrument rating

            -     Fluency in English

            -     Jet experience

            -     500 hours minimum flying experience as pilot of fixed wing
                  aircraft

            -     300 hours experience on FAR/JAR/CS 25 aircraft

            -     200 hours flying experience as airline pilot or a corporate
                  pilot or military transport pilot

      For both CAPTAIN and FIRST OFFICER, if one or several of the above
      criteria are not met, the trainee must follow

            (i)   an adapted course or

            (ii)  an entry level training program before entering the regular or
                  the adapted course.

      Such course(s), if required, will be at the Buyers' expense.

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                                                         APPENDIX B TO CLAUSE 16

- -     FIRST TYPE RATING COURSE

This course is designed for ab initio pilots who do not hold an aircraft type
rating on their pilot license

      PILOT PREREQUISITES

      -     Valid and current commercial pilot license

      -     Valid and current instrument rating on multi engine aircraft

      -     Airlines Transport License (ATPLY) written examination

      -     Fluency in English

      -     Flight experience:

                  -     220 hours as pilot

                  -     100 hours as pilot in command

                  -     25 hours on multi engine aircraft (up to 10 hours can be
                        completed in a simulator)

In addition to the above conditions and in accordance to the JAR Flight Crew
Licensing and the Airbus Training Policy, a pilot applying for a first type
rating must have followed either an approved JAR Multi Crew Cooperation ("MCC")
program or regulatory equivalent or the "Airbus Entry Level Training program"
(combined MCC and jet familiarization course). Such course, if required, will be
at the Buyers' expense.

- -     CQ ADDITIONAL prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard
Transition Course, both CAPTAIN and FIRST OFFICER must:

            -     be qualified and current on the base aircraft type

            -     have 150 hours minimum and 3 months minimum of operations on
                  the base aircraft type.

- -        TRI COURSE ADDITIONAL prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard
Transition Course, it is the responsibility of the Buyers to:

            -     select instructor candidate(s) with airmanship and behavior
                  corresponding to the role and responsibility of an airline
                  instructor, and

            -     designate instructor candidate(s) with the Airbus
                  prerequisite, which corresponds to the JAR requirements (ref
                  JAR - FCL 1 - Requirements/ Subparts H - Instructor rating
                  (Aeroplane) C.

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                                                         APPENDIX B TO CLAUSE 16

      MAINTENANCE PERSONNEL prerequisites

      (i)   For all maintenance courses:

                  Fluency in English
                  Experience on first or second generation jet transport
                  category aircraft

      (ii)  Additional prerequisites for Aircraft Rigging Engine Run-Up and
                  Maintenance Initial Operating Course:

                  -     Qualified as line or line and base mechanic on the
                  concerned Airbus aircraft type (for Maintenance Initial
                  Operating Experience Course).

      (iii) Additional prerequisites - Maintenance Initial Operating Experience

                  Be currently qualified as line or base mechanic on the base
                  Aircraft

      (iv)  Additional prerequisites - MAINTENANCE TRAINING DIFFERENCE COURSE

                  Be current and operating on the base Aircraft.

AWE/USA - A350 - PA                                                           85

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17 -        SUPPLIER PRODUCT SUPPORT

17.1        Equipment Supplier Product Support Agreements

17.1.1      The Seller will, at no charge to the Buyers, transfer to the Buyers
            the Supplier Product Support Agreements transferable to the Buyers
            from Suppliers of Seller Furnished Equipment listed in the
            Specification on Delivery. These agreements are based on the "World
            Airlines and Suppliers Guide" and include Supplier commitments
            contained in the Supplier Product Support Agreements, which include
            the following:

            (i)   Technical data and manuals required to operate, maintain,
                  service and overhaul the Supplier items will (a) be prepared
                  in accordance with the applicable provisions of ATA
                  Specification 100 and 101 in accordance with Clause 14, (b)
                  include revision service, and (c) be published in the English
                  language. The Seller will make reasonable efforts to ensure
                  that software data, supplied in the form of an appendix to the
                  Component Maintenance Manual, be provided in compliance with
                  ATA Specification 102 up to level 3 to protect Suppliers'
                  proprietary interests,

            (ii)  Warranties and guarantees, including Suppliers' standard
                  warranties, and in the case of Suppliers of landing gear,
                  service life policies for selected landing gear structures,

            (iii) Training to ensure efficient operation, maintenance and
                  overhaul of the Suppliers' items for the Buyers' instructors,
                  shop and line service personnel.

            (iv)  Spares data in compliance with ATA Specification 200 or 2000,
                  initial provisioning recommendations, spares and logistics
                  service, including routine and emergency deliveries, and

            (v)   Technical service to assist the Buyers with maintenance,
                  overhaul, repair, operation and inspection of Supplier items
                  as well as required tooling and spares provisioning.

17.2        Supplier Compliance

            The Seller will monitor Supplier compliance with support commitments
            defined in the Supplier Product Support Agreements and will take
            action together with the Buyers, if necessary.

17.3        Supplier Part Repair Stations

            The Seller has developed with the Suppliers a comprehensive network
            of repair stations in the United States of America and Canada for
            those Supplier Parts originating from outside these countries.
            [...***...]

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AWE/USA - A350 - PA                                                           86

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18          BUYER FURNISHED EQUIPMENT

18.1        Administration

18.1.1      Without additional charge and in accordance with the Specification,
            the Seller will cause the Manufacturer to provide for the
            installation of the Buyer Furnished Equipment, provided that the BFE
            is referred to in the Airbus BFE Catalog of Approved Suppliers by
            Products valid at the time the BFE is ordered.

            The Seller will cause the Manufacturer to advise the Buyers of the
            dates by and location to which, in the planned release of
            engineering for the Aircraft, the Seller requires a written detailed
            engineering definition. This description will include the definition
            of the dimensions and weight of BFE, the information related to its
            certification and information necessary for the installation and
            operation thereof. The Buyers will furnish such detailed description
            and information by the dates specified. Thereafter, no information,
            dimensions or weights will be revised unless authorized by an SCN.

            The Seller will also provide the Buyers in due time with a schedule
            of dates and shipping addresses for delivery of BFE and (when
            requested by the Seller) additional spare BFE in order permit
            installation of the BFE in the Aircraft and delivery of the Aircraft
            in accordance with the delivery schedule. The Buyers will provide
            the BFE by such dates in a serviceable condition, to allow
            performance of any assembly, test, or acceptance process in
            accordance with the Seller's industrial schedule.

            The Buyers will also provide, when requested by the Manufacturer, at
            Airbus France S.A.S. works and/or at Airbus Deutschland GmbH works,
            as applicable and needed, adequate field service, including support
            from BFE suppliers to act in a technical advisory capacity to the
            Seller in the installation, calibration and possible repair of any
            BFE.

18.1.2      The BFE will be imported into France or into Germany by the Buyers
            under a suspensive customs system ("Regime de l'entrepot industriel
            pour fabrication coordonnee" or "Zollverschluss") without
            application of any French or German tax or customs duty, and will be
            Delivered Duty Unpaid (DDU) (as defined in Incoterms 2000:ICC
            Official Rules for the Interpretation of Trade Terms, published by
            the International Chamber of Commerce), to

                  Airbus France S.A.S.
                  316 Route de Bayonne
                  31300 Toulouse, France
                  or
                  Airbus Deutchland GmbH
                  Division Hamburger Flugzeugbau
                  Kreetslag 10
                  21129 Hamburg
                  Federal Republic of Germany
                  as provided in Clause 18.1.1.

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18.1.3      If any of the Buyers requests the Seller to supply directly certain
            items that are considered BFE according to the Specification, and if
            such request is notified to the Seller in due time in order not to
            affect the Delivery Date of the Aircraft, the Seller may agree to
            order such items subject to the execution of an SCN reflecting the
            effect on price, escalation adjustment, and any other conditions of
            the Agreement. In such a case the Seller will be entitled to the
            payment of a reasonable handling charge and will bear no liability
            in respect of delay and product support commitments for such items.

18.2        Requirements

            Each of the Buyers is responsible for assuring and warranting, at
            its expense, that BFE will (i) be manufactured by a qualified
            supplier in accordance with the provisions of Clause 18.1.1, (ii)
            meet the requirements of the applicable Specification, (iii) comply
            with applicable requirements incorporated by reference to the Type
            Certificate and listed in the Type Certificate Data Sheet, and (iv)
            be approved by the applicable Aviation Authority delivering the
            Export Certificate of Airworthiness and by the FAA for installation
            and use on the Aircraft at the time of Delivery of such Aircraft.
            The Seller will be entitled to refuse any item of BFE that it
            considers incompatible with the Specification, the engineering
            definition mentioned above in Clause 18.1.1 or the certification
            requirements.

18.3        Buyers' Obligation and Seller's Remedies

18.3.1      Any delay or failure in

            (i)   furnishing the BFE in serviceable condition at the requested
                  delivery date,

            (ii)  complying with the warranty in Clause 18.2 or in providing the
                  descriptive information or service representatives mentioned
                  in Clause 18.1.1, or

            (iii) in obtaining any required approval for such equipment under
                  the above mentioned Aviation Authorities regulations

            may delay the performance of any act to be performed by the Seller,
            and cause the Final Contract Price of the Aircraft to be adjusted in
            accordance with the updated delivery schedule, including, in
            particular, the costs the Seller incurs that are attributable to the
            delay or failure described above, such as storage, taxes, insurance
            and costs of out-of sequence installation.

18.3.2      In addition to the consequences outlined in Clause 18.3.1, in the
            event of a delay or failure described in Clause 18.3.1,

            (i)   the Seller may select, purchase and install equipment similar
                  to the BFE at issue, in which event the Final Contract Price
                  of the affected Aircraft will also be increased by the
                  purchase price of such equipment, plus reasonable costs and
                  expenses incurred by the Seller for handling charges,
                  transportation, insurance, packaging and, if required and not
                  already provided for in the price of the Aircraft, for
                  adjustment and calibration; or

AWE/USA - A350 - PA                                                           88

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            (ii)  if the BFE is delayed more than thirty (30) days beyond, or
                  unapproved within thirty (30) days of the date specified in
                  Clause 18.1.1, then the Seller may deliver or the Buyers may
                  elect to have the Aircraft delivered without the installation
                  of such equipment, notwithstanding the terms of Clause 7.2
                  insofar as it may otherwise have applied, whereon the Seller
                  will be relieved of all obligations to install such equipment.

18.4        Title and Risk of Loss

            Title to (subject to Clause 18.5.5) and risk of loss of BFE will at
            all times remain with the Buyer that is the owner thereof, except
            that risk of loss (limited to cost of replacement of said BFE and
            excluding in particular loss of use) will be with the Seller for as
            long as the BFE is in the care, custody and control of the Seller.

18.5        Disposition of BFE Following Termination

18.5.1      If a termination of this Agreement pursuant to the provisions of
            Clause 21 occurs with respect to an Aircraft in which all or any
            part of the BFE has been installed prior to the date of such
            termination, the Seller will be entitled, but not required, to
            remove all items of BFE that can be removed without damage to the
            Aircraft and to undertake commercially reasonable efforts to
            facilitate the sale of such items of BFE to other customers,
            retaining and applying the proceeds of such sales to reduce Seller's
            damages resulting from the termination.

18.5.2      The Buyers will cooperate with the Seller in facilitating the sale
            of BFE pursuant to Clause 18.5.1 and will, jointly and severally, be
            responsible for all costs incurred by the Seller in removing and
            facilitating the sale of such BFE. The Buyers will, jointly and
            severally, reimburse the Seller for all such costs within five (5)
            Working Days of receiving documentation of such costs from the
            Seller.

18.5.3      The Seller will notify the Buyers as to those items of BFE not sold
            by the Seller pursuant to Clause 18.5.1 and, at the Seller's
            request, the Buyers will remove such items from the Seller' facility
            within thirty (30) days of the date of such notice. The Buyers will
            have no claim against the Seller for damage or destruction of any
            item of BFE removed from the Aircraft and not removed from Seller's
            facility within such period.

18.5.4      The Buyers will have no claim against the Seller for damage to or
            destruction of any item of BFE damaged or destroyed in the process
            of being deinstalled from the Aircraft, provided that the Seller
            will use reasonable care in such deinstallation.

18.5.5      The Buyers will grant title to the Seller for any BFE items that
            cannot be removed from the Aircraft without causing damage to the
            Aircraft or rendering any system in the Aircraft unusable.

AWE/USA - A350 - PA                                                           89

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19          Indemnities and Insurance

19.1        Seller's Indemnities

            The Seller will, except in the case of gross negligence or willful
            misconduct of any Buyer, it's directors, officers, agents, or
            employees, be solely liable for and will indemnify and will hold the
            Buyers and their respective directors, officers, agents or
            employees, Affiliates and Suppliers harmless against all losses,
            liabilities, claims, damages, costs and expenses, including court
            costs and reasonable attorneys' fees ("LOSSES"), arising from claims
            for

            (a)   injuries to, or deaths of, the Seller's, Manufacturer's or any
                  Associated Contractor's respective directors, officers, agents
                  or employees, or loss or damage to property of the Seller,
                  Manufacturer or any Associated Contractor or their respective
                  employees or agents when such losses occur during or are
                  incidental to (i) the exercise by any of the Buyers of its
                  inspection rights under Clause 6, (ii) the Technical
                  Acceptance Process described in Clause 8, (iii) the provision
                  of Resident Customer Support pursuant to Clause 15 or (iv) the
                  provision of training pursuant to Clause 16; and

            (b)   injuries to or deaths of third parties, or loss of property of
                  third parties, occurring during, or incidental to (i) the
                  exercise by any Buyer of its inspection rights pursuant to
                  Clause 6 or (ii) the Technical Acceptance Process described in
                  Clause 8.

19.2        Buyers' Indemnities

            The Buyers will, jointly and severally, except in the case of gross
            negligence or willful misconduct of the Seller, its directors,
            officers, agents and employees, be solely liable for and will
            indemnify and will hold the Seller, the Manufacturer, each of the
            Associated Contractors and their respective subcontractors,
            Affiliates and Suppliers of the Seller, the Seller's
            representatives, and the respective assignees, directors, officers,
            agents and employees of each of the foregoing, harmless against all
            Losses arising from:

            (a)   injuries to or deaths of the directors, officers, agents or
                  employees of any Buyer, or loss or damage to property of any
                  Buyer or the employees or agents of any of them, when such
                  losses occur during or are incidental to (i) the exercise by
                  any Buyer of its inspection rights under Clause 6; (ii) the
                  Technical Acceptance Process described in Clause 8, (iii) the
                  provision of Field Assistance pursuant to Clause 15, or (iv)
                  the provision of training pursuant to Clause 16; and

            (b)   claims for injuries to or deaths of third parties, or loss of
                  property of third parties, where such losses occur during or
                  incidental to (i) the provision of Field Services under Clause
                  15 or (ii) arise out of the provision of training pursuant to
                  Clause 16 and are not caused by a defect of the type specified
                  in Clause 12.1.1 that is not excluded under Clause 12.1.2.

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19.3        Notice and Defense of Claims

            (a)   If any claim is made or suit is brought against a party or
                  entity entitled to indemnification under this Clause 19 (the
                  "INDEMNITEE") for damages for which liability has been assumed
                  by the other party under this Clause 19, (the "INDEMNITOR"),
                  the Indemnitee will promptly give notice to the Indemnitor and
                  the Indemnitor (unless otherwise requested by the Indemnitee)
                  will assume and conduct the defense, or settlement, of such
                  suit, as the Indemnitor will deem prudent. Notice of the claim
                  or suit will be accompanied by all information pertinent to
                  the matter as is reasonably available to the Indemnitee and
                  will be followed by such cooperation by the Indemnitee as the
                  Indemnitor or its counsel may reasonably request at the
                  expense of the Indemnitor.

            (b)   If the Indemnitor fails or refuses to assume the defense of
                  any claim or lawsuit notified to it under this Clause 19, the
                  Indemnitee will have the right to proceed with the defense or
                  settlement of the claim or lawsuit as it deems prudent and
                  will have a claim over against the Indemnitor for any
                  judgments, settlements, costs or expenses, including
                  reasonable attorneys' fees. Further, in such event, the
                  Indemnitor will be deemed to have waived any objection or
                  defense to the Indemnitee's claim based on the reasonableness
                  of any settlement.

19.4        Insurance

            [...***...]

            [...***...]

            [...***...]

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AWE/USA - A350 - PA                                                           91

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            [...***...]

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AWE/USA - A350 - PA                                                           92

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20          ASSIGNMENTS AND TRANSFERS

20.1        Assignments by Buyers

            Except as hereinafter provided, none of the Buyers may sell, assign
            or transfer its rights or obligations under this Agreement to any
            person without the prior written consent of the Seller.

20.2        Assignments on Sale, Merger or Consolidation

            The Buyers will be entitled to assign their rights under this
            Agreement at any time due to a merger or consolidation, provided the
            Buyers first obtains the written consent of the Seller. The Seller
            will provide its consent if:

            (i)   the surviving or acquiring entity is organized and existing
                  under the laws of the United States;

            (ii)  the surviving or acquiring entity has executed an assumption
                  agreement, in form and substance reasonably acceptable to the
                  Seller, agreeing to assume all of the Buyers' obligations
                  under this Agreement;

            (iii) at the time, and immediately following the consummation, of
                  the merger, consolidation or sale, no event of default exists
                  or will have occurred and be continuing;

            (iv)  there exists with respect to the surviving or acquiring entity
                  no basis for a Termination Event within the meaning of Clause
                  21;

            (v)   the surviving or acquiring entity holds an air carrier
                  operating certificate issued by the FAA at the time, and
                  immediately following the consummation, of such sale, merger
                  or consolidation; and

            (vi)  following the sale, merger or consolidation, the surviving or
                  acquiring entity in a financial condition at least equal to
                  that of the Buyers, collectively, at time of execution of this
                  Agreement.

20.3        Designations by Seller

            The Seller may at any time by notice to the Buyers designate
            facilities or personnel of the Manufacturer, ANACS, any of the
            Associated Contractors or any Affiliate of the Manufacturer or any
            Affiliate of an Associated Contractor at which or by whom the
            services to be performed under this Agreement will be performed. The
            Seller may also designate the Manufacturer or any Affiliate of an
            Associated Contractor as the party responsible on behalf of the
            Seller for providing to the Buyers all or any of the Agreement.
            Notwithstanding such designation, the Seller will remain ultimately
            responsible for fulfillment of all obligations undertaken by the
            Seller in this Agreement.

AWE/USA - A350 - PA                                                           93

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20.4        Transfer of Rights and Obligations upon Reorganization

            If at any time until the date upon which all the obligations and
            liabilities of the Seller under this Agreement have been discharged,
            the legal structure, the membership or the business of the Seller is
            reorganized or the legal form of the Seller is changed and as a
            consequence thereof the Seller wishes the Buyers to accept the
            substitution of the Seller by another entity within the restructured
            Airbus group (or the Seller in its new legal form) ("NEWCO") as
            contemplated below, the Seller will promptly notify the Buyers of
            its wish.

            In such event, the Seller may request the Buyers to enter into a
            novation agreement and/or other agreement having the same effect
            whereby the Seller's rights and obligations under this Agreement are
            novated or transferred in favor of Newco. Upon receipt of such
            request, the Buyers will enter into a novation agreement and/or
            other appropriate agreement, provided that the Buyers' rights and
            obligations under this Agreement are not materially adversely
            affected by such novation and/or other agreement.

            Until any such novation agreement/other appropriate documentation
            has come into effect, this Agreement will remain in full force and
            effect, and each party will act diligently and in good faith to
            implement the novation agreement and/or other appropriate
            documentation as soon as practicable after Newco has come into
            existence.

20.5        [...***...]

            [...***...]

20.6        [...***...]

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AWE/USA - A350 - PA                                                           94

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AWE/USA - A350 - PA                                                           95

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21.         TERMINATION

21.1        Termination Events

            Each of the following will constitute a "TERMINATION EVENT

            [...***...]


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AWE/USA - A350 - PA                                                           96

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                  [...***...]

21.2        If a Termination Event occurs, each of the Buyers will be in
            material breach of this Agreement, and the Seller will have the
            right to receive payment from the Buyers, jointly and severally, as
            liquidated damages and not as a penalty, an amount equal to, for
            each Affected Aircraft (as defined in Clause 21.2(2) below), and
            may, without limitation, by written notice to the Buyers,
            immediately:

            [...***...]


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AWE/USA - A350 - PA                                                           97

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                  [...***...]

                  [...***...]

                  [...***...]

            (3)   Liquidated damages will be payable by the Buyers promptly, and
                  in any event within ten (10) days of the date of written
                  notice and demand therefor from Seller, such demand to set
                  forth in reasonable detail the calculation of such liquidated
                  damages and will identify the Termination Event upon which the
                  Seller is relying. The parties agree that the remedy of
                  liquidated damages is not to be denied to the Seller due to
                  the inability of Seller to deliver a notice and demand for
                  payment thereof due to the operation of law following a
                  bankruptcy or other Termination Event under Clauses 21.1.1(1)
                  - (4). The parties further agree that in circumstances where a
                  Termination Event has occurred and the Seller does not cancel
                  this Agreement as to any or all Aircraft, but instead seeks to
                  recover its actual damages resulting therefrom, the amount of
                  actual damages payable by the Buyers will not exceed the
                  amount of liquidated damages that could have been claimed by
                  Seller pursuant to Clause 21.1.2(2) had the Seller elected to
                  claim, as a result of such Termination Event, liquidated
                  damages pursuant to Clause 21.2(2).

            (4)   The parties to this Agreement are commercially sophisticated
                  parties represented by competent counsel. The parties
                  expressly agree and declare that damages for material breach
                  of this Agreement by the Buyers resulting in a termination of
                  this Agreement pursuant to Clause 21.1.2(1)(iv) as to any or
                  all Aircraft have been liquidated at amounts which are
                  reasonable in light of the anticipated or actual harm caused
                  by any Buyer's breach, the difficulties of proof of loss and
                  the nonfeasibility of otherwise obtaining an adequate remedy.
                  It is understood and agreed by the parties that the amount of
                  liquidated damages set forth herein is the total amount of
                  monetary damages, no more and no less, to which the Seller
                  will be entitled for and with respect to any Aircraft as
                  recovery for material breach of this Agreement by any Buyer
                  resulting in a Termination by the Seller of this Agreement as
                  to such Aircraft.

21.3        For purposes of this Clause 21

            (i)   "Affected Aircraft" - means any or all Aircraft with respect
                  to which the Seller has cancelled or terminated this Agreement
                  pursuant to Clause 21.1.2(1)(iv),

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AWE/USA - A350 - PA                                                           98

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            (ii)  "Applicable Date" - for any Affected Aircraft means the date
                  of the Termination Event that the Seller specifies in its
                  notice and demand for payment of liquidated damages delivered
                  under Clause 21.1(3), and

            (iii) "Escalated Price" - means the sum of (i) the Base Price of the
                  Aircraft and (ii) the Base Price of SCNs and MSCNs entered
                  into after the date of this Agreement, both as escalated to
                  the Applicable Date in accordance with the provisions of
                  Clause 4.

21.         4. Promptly upon obtaining knowledge of the occurrence of a
            Termination Event by any Buyer, such Buyer will notify the Seller of
            such occurrence in writing, provided, that any failure by any Buyer
            to notify the Seller will not prejudice the Seller's rights or
            remedies hereunder.

21.5        If at any time prior to Scheduled Delivery Date of an Aircraft, the
            Seller has reasonable grounds for insecurity as to the ability of
            any Buyer to perform its obligation to take Delivery of such
            Aircraft, then the Seller will send the Buyers a written demand for
            adequate assurance of performance. If adequate assurance acceptable
            to the Seller is not received within thirty (30) days following the
            date of such written demand, then the Seller will have the right to
            either (a) exercise the remedies provided under Section 2-609 of the
            Uniform Commercial Code or (b) exercise any of its remedies under
            Clause 21.2.

21.6        Information Covenants

            Each of the Buyers hereby covenants and agrees that, from the date
            of this Agreement until no further Aircraft are to be delivered
            hereunder, the Buyers will furnish or cause to be furnished to the
            Seller the following:

            (a)   Annual Financial Statements. As soon as available and in any
                  event no later than the date that the Buyers furnish such
                  annual statements to the Securities and Exchange Commission or
                  successor thereto (the "SEC") (i) a copy of the SEC Form 10-K
                  filed by the Buyers, as a group, with the SEC for such fiscal
                  year, or, if no such Form 10-K was filed by the Buyers for
                  such fiscal year, no later than the 90th day following the
                  close of such fiscal year of the Buyers, the consolidated
                  balance sheet of the Buyers and their Subsidiaries, as at the
                  end of such fiscal year and the related consolidated
                  statements of operations, of common stockholders' equity
                  (deficit) (in the case of the Buyers and their Subsidiaries)
                  and of cash flows for such fiscal year, setting forth
                  comparative consolidated figures as of the end of and for the
                  preceding fiscal year, and examined by any firm of independent
                  public accountants of recognized standing selected by the
                  Buyers and reasonably acceptable to the Seller, whose opinion
                  will not be qualified as to the scope of audit or as to the
                  status of the Buyers as a going concern, and (ii) a
                  certificate of such accounting firm stating that its audit of
                  the business of the Buyers was conducted in accordance with
                  generally accepted auditing standards. In lieu of actual
                  delivery of such Form 10-K, the Buyers may notify the Seller
                  that such report has been filed with the SEC and is publicly
                  available on EDGAR (or any successor online resource).

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            (b)   Quarterly Financial Statements. As soon as available and in
                  any event no later than the date that the Buyers furnish such
                  quarterly statements to the SEC, a copy of the SEC Form 10-Q
                  filed by the Buyers, as a group, with the SEC for such
                  quarterly period, or, if no such Form 10-Q was filed by the
                  Buyers with respect to any such quarterly period, no later
                  than the forty-fifth (45th) day following the close of such
                  quarterly period, the consolidated balance sheet of the Buyers
                  and their Subsidiaries, as at the end of such quarterly period
                  and the related consolidated statements of operations for such
                  quarterly period and for the elapsed portion of the fiscal
                  year ended with the last day of such quarterly period and in
                  each case setting forth comparative consolidated figures as of
                  the end of and for the related periods in the prior fiscal
                  year, all of which will be certified by an Authorized Officer
                  of each of the Buyers, subject to changes resulting from audit
                  and normal year-end audit adjustments. In lieu of actual
                  delivery of such Form 10-Q, the Buyers may notify the Seller
                  that such report has been filed with the SEC and is publicly
                  available on EDGAR (or any successor online resource).

            (c)   Debt Rescheduling. (i) Promptly upon the commencement by any
                  of the Buyers of negotiations with one or more of its
                  significant creditors with a view to general readjustment or
                  rescheduling of all or any material part of its indebtedness
                  under circumstances in which a reasonable business person, in
                  the exercise of prudent business judgment, would conclude that
                  such Buyer would otherwise not be able to pay such
                  indebtedness as it falls due, notice of commencement of such
                  negotiations, and (ii) thereafter timely advice of the
                  progress of such negotiations until such negotiations are
                  terminated or completed.

            (d)   Acceleration of other indebtedness. Immediately upon knowledge
                  by any Buyer that the holder of any bond, debenture,
                  promissory note or any similar evidence of indebtedness of
                  such Buyer or Affiliate thereof ("OTHER INDEBTEDNESS") has
                  demanded payment, given notice or exercised its right to a
                  remedy having the effect of acceleration with respect to a
                  claimed event of default under any Other Indebtedness, where
                  the impact of the acceleration is likely to have a material
                  adverse effect on such Buyer's ability to perform its
                  obligations under or in connection with the transactions
                  contemplated by this Agreement, notice of the demand made,
                  notice given or action taken by such holder and the nature and
                  status of the claimed event of default and what the action
                  such Buyer is taking with respect thereto.

            (e)   Other Information. Promptly upon transmission thereof, copies
                  of any filings and registrations with, and reports to, the SEC
                  by any Buyer or any of its Affiliates, and, with reasonable
                  promptness, such other information or documents (financial or
                  otherwise) as the Seller may reasonably request from time to
                  time. In lieu of actual delivery of any such filing or
                  registration, the Buyers may notify the Seller that the same
                  has been filed with the SEC and is publicly available on EDGAR
                  (or any successor online resource).

            For the purposes of this Subclause 21.2, (x) an "AUTHORIZED OFFICER"
            of any Buyer will mean the Chief Executive Officer, the Chief
            Financial Officer or any Vice President and above thereof who
            reports directly or indirectly to the Chief Financial Officer and
            (y) "SUBSIDIARIES"

AWE/USA - A350 - PA                                                          100

                          PRIVILEGED AND CONFIDENTIAL



            will mean, as of any date of determination, those companies owned by
            any Buyer whose financial results the Buyers are required to include
            in their statements of consolidated operations and consolidated
            balance sheets.

AWE/USA - A350 - PA                                                          101

                          PRIVILEGED AND CONFIDENTIAL



22          MISCELLANEOUS PROVISIONS

22.1        Data Retrieval

            On the Seller's reasonable request, each Buyer will provide the
            Seller with all the necessary data, as customarily compiled by it
            and pertaining to the operation of the Aircraft, to assist the
            Seller in making an efficient and coordinated survey of all
            reliability, maintenance, operational and cost data with a view to
            improving the safety, availability and operational costs of the
            Aircraft.

22.2        Notices

            All notices and requests required or authorized hereunder will be
            given in writing either by personal delivery to a responsible
            officer of the party to whom the same is given or by commercial
            courier, certified air mail (return receipt requested) or facsimile
            at the addresses and numbers set forth below. The date on which any
            such notice or request is so personally delivered, or if such notice
            or request is given by commercial courier, certified air mail or
            facsimile the date on which it is given, will be deemed to be the
            effective date of such notice or request.

            The Seller will be addressed at:

                  2, rond-point Maurice Bellonte
                  31700 Blagnac France
                  Attention: Director - Contracts

                  Telephone: 33 05 61 30 40 12
                  Telecopy: 33 05 61 30 40 11

            Each of the Buyers will be addressed, in the case of any item to be
            delivered other than via courier or personal service or delivery,
            at:

                  4000 East Sky Harbor Blvd.
                  Phoenix, AZ 85034
                  Attention: Senior Vice President and Chief Financial Officer

                  Telephone: (480) 693-5710
                  Fax: (480) 693-2899

            And, in the case of any item to be delivered via courier or personal
            service or delivery,

                  111 Rio Salado
                  Tempe, AZ 85281
                  Attention: Senior Vice President and Chief Financial Officer

AWE/USA - A350 - PA                                                          102

                          PRIVILEGED AND CONFIDENTIAL



            From time to time, the party receiving the notice or request may
            designate another address or another person.

22.3        Waiver

            The failure of either party to enforce at any time any of the
            provisions of this Agreement, to exercise any right herein provided
            or to require at any time performance by the other party of any of
            the provisions hereof will in no way be construed to be a present or
            future waiver of such provisions nor in any way to affect the
            validity of this Agreement or any part hereof or the right of the
            other party thereafter to enforce each and every such provision. The
            express waiver by either party of any provision, condition or
            requirement of this Agreement will not constitute a waiver of any
            future obligation to comply with such provision, condition or
            requirement.

22.4        INTERPRETATION AND LAW

            THIS AGREEMENT WILL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW
            SECTION 5-1401, BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
            THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE
            OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS
            PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY
            OTHER JURISDICTION.

            [...***...]

            Each party (i) hereby irrevocably submits itself to the nonexclusive
            jurisdiction of the courts of the state of New York in New York
            County and, to the extent permitted by applicable law, of the United
            States District Court for the Southern District of New York, for the
            purposes of any suit, action or other proceeding arising out of this
            Agreement or any of the transactions contemplated hereby brought by
            any party or parties hereto, and (ii) hereby waives, and agrees not
            to assert, by way of motion, as a defense, counterclaim or
            otherwise, in any such suit, action or proceeding, to the extent
            permitted by applicable law, the defense of sovereign immunity, any
            claim that it is not personally subject to the jurisdiction of the
            above-named courts by reason of sovereign immunity or otherwise or
            that it or its property is exempt or immune from jurisdiction of
            such court or from legal process (whether through service of notice,
            attachment prior to judgment, attachment in aid of execution or
            judgment, execution of judgment or otherwise) and to the extent
            permitted by applicable law, that the suit, action or proceeding
            which is referred to in clause (i) above is brought in an
            inconvenient forum, that the venue of such suit, action or
            proceeding is improper, or that this Agreement or the subject matter
            hereof or any of the transactions contemplated hereby may not be
            enforced in or by these courts.

*** Confidential Treatment Requested

AWE/USA - A350 - PA                                                          103

                          PRIVILEGED AND CONFIDENTIAL



22.4.1      Service of process in any suit, action or proceeding in respect of
            any matter as to which a Buyer has submitted to jurisdiction under
            Clause 22.4 may be made on such Buyer by delivery of the same
            personally or by dispatching the same via Federal Express, UPS, or
            similar international air courier, service prepaid to, CT
            Corporation, 111 Hudson St., New York, NY (or such other office in
            the City of New York as such agent will then be occupying), as agent
            for each of the Buyers, it being agreed that service upon CT
            Corporation will constitute valid service upon such Buyer or by any
            other method authorized by the laws of the State of New York.

22.5        Waiver of Jury Trial

            EACH OF THE PARTIES HERETO WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY
            LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND FOR ANY
            COUNTERCLAIM OR CROSS-CLAIM THEREIN.

22.6        No Representations outside of this Agreement.

            The parties declare that, prior to the execution of this Agreement,
            they, with the advice of their respective counsel, apprised
            themselves of sufficient relevant data in order that they might
            intelligently exercise their own judgments in deciding whether to
            execute this Agreement and in deciding on the contents of this
            Agreement. Each party further declares that its decision to execute
            this Agreement is not predicated on or influenced by any
            declarations or representations by any other person, party, or any
            predecessors in interest, successors, assigns, officers, directors,
            employees, agents or attorneys of any said person or party, except
            as set forth in this Agreement. This Agreement resulted from
            negotiation involving counsel for all of the parties hereto and no
            term herein will be construed or interpreted against any party under
            the contra proferentum or any related doctrine.

22.7        Confidentiality

            [...***...]

*** Confidential Treatment Requested

AWE/USA - A350 - PA                                                          104

                          PRIVILEGED AND CONFIDENTIAL



            [...***...]

            [...***...]

            [...***...]

22.8        Severability

            If any provision of this Agreement should for any reason be held to
            be without effect, the remainder of this Agreement will remain in
            full force and effect. To the extent permitted by applicable law,
            each party hereto hereby waives any provision of law, which renders
            any provision of this Agreement prohibited or unenforceable in any
            respect.

22.9        Alterations to Contract

            This Agreement, including its Exhibits and Appendices, contains the
            entire agreement between the parties with respect to the subject
            matter hereof and thereof and supersedes any previous understanding,
            commitments or representations whatsoever, whether oral or written
            including that certain MOU, AVSA No. 5343 between the Seller and the
            Buyers dated May 18, 2005. This Agreement will not be amended or
            modified except by an instrument in writing of even date herewith or
            subsequent hereto executed by both parties or by their fully
            authorized representatives.

22.10       Inconsistencies

            [...***...]

*** Confidential Treatment Requested

AWE/USA - A350 - PA                                                          105

                          PRIVILEGED AND CONFIDENTIAL



22.11       Language

            All correspondence, documents and any other written matters in
            connection with this Agreement will be in English.

22.12       Headings

            All headings in this Agreement are for convenience of reference only
            and do not constitute a part of this Agreement.

22.13       Counterparts

            This Agreement may be executed by the parties hereto in separate
            counterparts, each of which when so executed and delivered will be
            an original, but all such counterparts will together constitute but
            one and the same instrument.

AWE/USA - A350 - PA                                                          106

                          PRIVILEGED AND CONFIDENTIAL



23.         CERTAIN REPRESENTATIONS OF THE PARTIES

23.1.       Buyers' Representations

            Each of the Buyers represents and warrants to the Seller:

            (i)   it is a corporation organized and existing in good standing
                  under the laws of the State of Delaware and has the corporate
                  power and authority to enter into and perform its obligations
                  under this Agreement;

            (ii)  neither the execution and delivery by it of this Agreement,
                  nor the consummation of any of the transactions by it
                  contemplated hereby, nor the performance by it of the
                  obligations hereunder, constitutes a breach of any agreement
                  to which it is a party or by which its assets are bound;

            (iii) this Agreement has been duly authorized, executed and
                  delivered by it and constitutes its legal, valid and binding
                  obligation, enforceable against it in accordance with its
                  terms.

23.2        Seller's Representations

            The Seller represents and warrants to each of the Buyers:

            (i)   the Seller is a societe a responsabilite limitee organized and
                  existing in good standing under the laws of the Republic of
                  France and has the corporate power and authority to enter into
                  and perform its obligations under this Agreement;

            (ii)  neither the execution and delivery by the Seller of this
                  Agreement, nor the consummation of any of the transactions by
                  the Seller contemplated hereby, nor the performance by the
                  Seller of the obligations hereunder, constitutes a breach of
                  any agreement to which the Seller is a party or by which its
                  assets are bound;

            (iii) this Agreement has been duly authorized, executed and
                  delivered by the Seller and constitutes the legal, valid and
                  binding obligation of the Seller enforceable against the
                  Seller in accordance with its terms.

AWE/USA - A350 - PA                                                          107

                          PRIVILEGED AND CONFIDENTIAL



IN WITNESS WHEREOF, these presents were entered into as of the day and year
first above written.

AVSA, S.A.R.L.

By: ___________________________

Title: ________________________


US AIRWAYS, INC.

By: ___________________________

Title: ________________________


AMERICA WEST AIRLINES, INC.

By: ___________________________

Title: ________________________


US AIRWAYS GROUP, INC.

By: ___________________________

Title: ________________________


AWE/USA - A350 - PA                                                          108

                          PRIVILEGED AND CONFIDENTIAL

                                                                     EXHIBIT A-1

The A350-800 Standard Specification is contained in a separate folder.

BARBELL -A350 - PA Draft 1                                              Exh. A-1
DRAFT WITHOUT PREJUDICE                            PRIVILEGED AND CONFIDENTIAL

                                                                     EXHIBIT A-2

The A350-900 Standard Specification is contained in a separate folder.

BARBELL -A350 - PA Draft 1                                              Exh. A-2
DRAFT WITHOUT PREJUDICE                            PRIVILEGED AND CONFIDENTIAL


                                                                     EXHIBIT B-1

                      AVSA                        SCN No.
            SPECIFICATION CHANGE NOTICE           Issue
                     (SCN)                        Dated
                                                  Page No.

TITLE

DESCRIPTION

EFFECT ON WEIGHT
Manufacturer's Weight Empty Change:

Operational Weight Empty Change:

Allowable Payload Change:

REMARKS/REFERENCES
Response to RFC

SPECIFICATION CHANGED BY THIS SCN

THIS SCN REQUIRES PRIOR OR CONCURRENT ACCEPTANCE OF THE FOLLOWING SCN(s)

PRICE PER AIRCRAFT

US DOLLARS:

AT DELIVERY CONDITIONS:

This change will be effective on___________Aircraft No.___________and subsequent
provided approval is received by_____________________________.

BUYER APPROVAL                                     SELLER APPROVAL

By:                                                By:

Title: (Authorized Officer)             Date:

Date:

AWE/USA-A350                                                             Exh B-1
                           PRIVILEGED AND CONFIDENTIAL



                                                                     EXHIBIT B-1

                      AVSA                        SCN No.
            SPECIFICATION CHANGE NOTICE           Issue
                     (SCN)                        Dated
                                                  Page No.

SCOPE OF CHANGE (FOR INFORMATION ONLY)

AWE/USA-A350                                                             Exh B-1
                           PRIVILEGED AND CONFIDENTIAL


                                                                     EXHIBIT B-2

(AVSA LOGO)                     AIRLINE

MANUFACTURER'S SPECIFICATION    MSCN Number
       CHANGE NOTICE            Issue
                                Dated
           (MSCN)               Page          1 of 3
- --------------------------------------------------------------------------------

    TITLE:

    DESCRIPTION

      EFFECT ON WEIGHT

                Manufacturer's Weight Empty Change :
                Operational Weight Empty Change    :
                Allowable Payload Change           :

    REMARKS / REFERENCES

    SPECIFICATION CHANGED BY THIS MSCN

================================================================================
PRICE PER AIRCRAFT

  US DOLLARS :

  AT DELIVERY CONDITIONS :.

  This change will be effective on      AIRCRAFT N(degrees)     and subsequent.

  Provided MSCN is not rejected by

  BUYER APPROVAL                          SELLER APPROVAL

  By   :                                  By  :

  Date :                                  Date :

AWE/USA -A350                                                            Exh B-2
                           PRIVILEGED AND CONFIDENTIAL



                                                                     EXHIBIT B-2

(AVSA LOGO)                     AIRLINE

MANUFACTURER'S SPECIFICATION    MSCN Number
       CHANGE NOTICE            Issue
                                Dated
           (MSCN)               Page          2 of 3
- --------------------------------------------------------------------------------

SPECIFICATION REPERCUSSION:

   After contractual agreement with respect to weight, performance, delivery,
   etc, the indicated part of the specification wording will read as follows:

AWE/USA -A350                                                            Exh B-2
                           PRIVILEGED AND CONFIDENTIAL



                                                                     EXHIBIT B-2

(AVSA LOGO)                     AIRLINE

MANUFACTURER'S SPECIFICATION    MSCN Number
       CHANGE NOTICE            Issue
                                Dated
           (MSCN)               Page          3 of 3
- --------------------------------------------------------------------------------

SCOPE OF CHANGE (FOR INFORMATION ONLY)

AWE/USA -A350                                                            Exh B-2
                           PRIVILEGED AND CONFIDENTIAL

                                                                       EXHIBIT C

            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
               FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24B-2 OF THE
                  SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                           SELLER SERVICE LIFE POLICY


[...***...]

                                                                        Exh. C-1

***Confidential Treatment Requested

AWE/USA-A350
                           PRIVILEGED AND CONFIDENTIAL



                                                                       EXHIBIT D

                            CERTIFICATE OF ACCEPTANCE
                                FOR A350 AIRCRAFT

In accordance with the terms of that certain A350 Purchase Agreement dated as of
____________, between __________, ("Designated Buyer") and AVSA, S.A.R.L.
("AVSA") (the "Purchase Agreement"), the acceptance inspections relating to the
Airbus A350 aircraft, Manufacturer's Serial Number: _____, U.S. Registration
Number: ______ with two (2) General Electric GEnx series propulsion systems
installed thereon, serial nos. ______ (position #1) and _______ (position #2)
(the "A350 Aircraft"), have taken place at Toulouse, France on the ____ day of
_____________, ____.

In view of said inspections having been carried out with satisfactory results,
and with any remaining discrepancies note separately, [Designated Buyer] hereby
approves the A350 Aircraft as being in conformity with the provisions of the
Purchase Agreement.

This acceptance does not impair the rights of [buyers] that may be derived from
the warranties relating to the A350 Aircraft set forth in the Purchase
Agreement.

                                   RECEIPT AND ACCEPTANCE OF THE ABOVE-
                                   DESCRIBED A350 AIRCRAFT ACKNOWLEDGED

                                   [BUYERS]

                                   By: ___________________________

                                   Its: __________________________

                                                                          Exh. D
AWE/USA-A350
                           PRIVILEGED AND CONFIDENTIAL


                                                                       EXHIBIT E

                                  BILL OF SALE
                              FOR A350-800 AIRCRAFT

Know all persons by these presents that AVSA, S.A.R.L. ("AVSA"), a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, whose address is 2 rond-point Maurice Bellonte, 31700 Blagnac, FRANCE,
is the owner of the full legal and beneficial title to the following airframe
(the "AIRFRAME"), the attached engines as specified (the "ENGINES") and all
appliances, components, parts, instruments, accessories, furnishings, modules
and other equipment of any nature, excluding buyer furnished equipment,
incorporated therein, installed thereon or attached thereto on the date hereof
(the "PARTS"):

MANUFACTURER OF AIRFRAME:                        MANUFACTURER OF ENGINES:

AIRBUS S.A.S                                     [GENERAL ELECTRIC]

MODEL:     A350-800                              MODEL:    GEnx

MANUFACTURER'S                                   SERIAL NUMBERS:
SERIAL NUMBER:       [     ]                     LH :      [     ]
REGISTRATION NO:     [     ]                     RH :      [     ]

The Airframe, Engines and Parts are hereafter together referred to as the
aircraft (the "A350 AIRCRAFT").

AVSA does this ___ day of _______________ sell, transfer and deliver all of its
above described rights, title and interest to the A350 Aircraft to the following
company forever, said A350 Aircraft to be the property thereof:

[BUYERS]

AVSA hereby warrants to the "Buyers" its successors and assigns that it has on
the date hereof good and lawful right to sell, deliver and transfer title to the
A350 Aircraft to the Buyers and that there is hereby conveyed to the Buyers on
the date hereof good, legal and valid title to the A350 Aircraft, free and clear
of all liens, claims, charges, encumbrances and rights of others, and that it
will warrant and defend such title forever against all claims and demands
whatsoever.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by
its duly authorized representative this ______ day of [         ]

AVSA, S.A.R.L.
By:
Title:
Signature:
Location:

                                                                        Exh. E-1

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



                                                                       EXHIBIT E

                                  BILL OF SALE
                              FOR A350-900 AIRCRAFT

Know all persons by these presents that AVSA, S.A.R.L. ("AVSA"), a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, whose address is 2 rond-point Maurice Bellonte, 31700 Blagnac, FRANCE,
is the owner of the full legal and beneficial title to the following airframe
(the "AIRFRAME"), the attached engines as specified (the "ENGINES") and all
appliances, components, parts, instruments, accessories, furnishings, modules
and other equipment of any nature, excluding buyer furnished equipment,
incorporated therein, installed thereon or attached thereto on the date hereof
(the "PARTS"):

MANUFACTURER OF AIRFRAME:                        MANUFACTURER OF ENGINES:

AIRBUS S.A.S                                     [GENERAL ELECTRIC]

MODEL:     A350-900                              MODEL:    GEnx

MANUFACTURER'S                                   SERIAL NUMBERS:
SERIAL NUMBER:       [     ]                     LH :      [     ]
REGISTRATION NO:     [     ]                     RH :      [     ]

The Airframe, Engines and Parts are hereafter together referred to as the
aircraft (the "A350 AIRCRAFT").

AVSA does this ___ day of _______________ sell, transfer and deliver all of its
above described rights, title and interest to the A350 Aircraft to the following
company forever, said A350 Aircraft to be the property thereof:

[BUYERS]

AVSA hereby warrants to the "Buyers" its successors and assigns that it has on
the date hereof good and lawful right to sell, deliver and transfer title to the
A350 Aircraft to the Buyer and that there is hereby conveyed to the Buyers on
the date hereof good, legal and valid title to the A350 Aircraft, free and clear
of all liens, claims, charges, encumbrances and rights of others and that it
will warrant and defend such title forever against all claims and demands
whatsoever.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by
its duly authorized representative this ______ day of [          ]

AVSA, S.A.R.L.
By:
Title:
Signature:
Location:

                                                                        Exh. E-2

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL


                                                                       EXHIBIT F

                                    EXHIBIT F

                              TECHNICAL DATA INDEX

AWE/USA -A350                                                           Exh. F-1
                           PRIVILEGED AND CONFIDENTIAL



                                                                       EXHIBIT F

                              TECHNICAL DATA INDEX

Where applicable, data will be established in general compliance with ATA
Specification 2200 (iSpec2200), Information Standards for Aviation Maintenance
(Revision 2003).

The following index identifies the Technical Data provided in support of the
Aircraft.

The explanation of the table is as follows:

NOMENCLATURE                              Self-explanatory.

ABBREVIATED DESIGNATION (Abbr)            Self-explanatory.

AVAILABILITY (Avail)

Technical Data can be available :

- -     ON-LINE (ON) through the relevant Service on Airbus Customer Portal

      and / or

- -     OFF-LINE (OFF) through the most suitable means applicable to the size of
      the concerned document (e.g CD or DVD).

FORMAT (Form)

Following formats can be used :

- -     SGML - Standard Generalized Mark-up Language, which allows further data
      processing by the Buyer.

- -     XML - Evolution of the SGML format to cope with WEB technology
      requirements.

- -     PDF (Portable Document Format) -Adobe format allowing data consultation.

The Standard functions of PDF are as follows:

  -     Viewing: Page based presentation identical to paper and film,

  -     Functions like zooming, 'full page'/'fit screen' layouts are available,

AWE/USA -A350                                                           Exh. F-2
                           PRIVILEGED AND CONFIDENTIAL





                                                                       EXHIBIT F

  -     Output: Copy/paste function and printing,

  -     Search functions: Bookmarks, and word search (full text search),

  -     Requires standard PC and Acrobat Reader.

- -     Advanced Consultation Tool, which comes with the relevant consultation and
      navigation system.

- -     Advanced Customization Tool - FOSP (Flight Operations Standard Package) is
      the advanced customization tool to be used by the Buyer to browse a
      manual, customize a manual in accordance with its own operational or
      regulatory requirements and/or publish a manual in OIS format.

TYPE     C    CUSTOMIZED. Refers to manuals that are applicable to an
              individual Airbus customer/operator fleet or aircraft.

         G    GENERIC. Refers to manuals that are applicable for all
              Airbus aircraft types/models/series.

         E    ENVELOPE. Refers to manuals that are applicable to a whole
              group of Airbus customers for a specific aircraft
              type/model/series.

QUANTITY (Qty)    Self-explanatory for physical media.

DELIVERY (Deliv)  Delivery refers to scheduled delivery dates and is expressed
                  in either the number of corresponding days prior to first
                  Aircraft Delivery, or nil (0) corresponding to the first
                  Delivery day.

                  The number of days indicated shall be rounded up to the next
                  regular revision release date.

AWE/USA -A350                                                           Exh. F-3
                           PRIVILEGED AND CONFIDENTIAL




                                                                       EXHIBIT F


              NOMENCLATURE                     ABBR  AVAIL      FORM      TYPE  QTY DELIV                    COMMENTS
- ----------------------------------------      ------ -----  ------------- ----  --- -----  -----------------------------------------
                                                                      
  OPERATIONAL MANUALS AND DATA

Flight Crew Operating Manual /                FCOM   OFF      Advanced     C         180   Preliminary Customized FCOM reflecting
Quick Reference Leaflet (QRL)                               Customization                  the status of Aircraft as known to Airbus
                                                                Tool                       at thattime/a final customized version
                                                                                           will be made available through revision
                                                                                           service prior to Aircraft delivery.

                                              FCOM   ON        Advanced    C    N/A  90
                                                            Customization
                                                                Tool

                                              FCOM   ON         XML        C    N/A  90

                                              FCOM   OFF        XML        C     1   90

                                              QRL    OFF       Paper       C     *   90    * Two per Aircraft at Delivery + 20
                                                                                           copies per Aircraft

                                              QRL    ON         XML        C    N/A  90

                                              QRL    OFF        XML        C     1   90


Cabin Crew Operating Manual                   CCOM   OFF      Advanced     C         90
                                                            Customization
                                                                Tool

                                              CCOM   ON       Advanced     C    N/A  90
                                                            Customization
                                                                Tool

                                              CCOM   ON        XML         C    N/A  90

                                              CCOM   OFF       XML         C     1   90

Flight Manual / Configuration Deviation       FM/CDL OFF     (PDF*)        C          0    (*) plus one copy per Aircraft at
List                                                                                       Delivery under PDF or securised format,
                                                                                           as agreed with the Airworthiness
                                                                                           Authorities

                                              FM/CDL ON       Advanced     C    N/A   0
                                                            Customization
                                                                Tool

                                              FM/CDL ON         XML        C    N/A   0

                                              FM/CDL OFF        XML        C     1    0


AWE/USA -A350                                                           Exh. F-4
                           PRIVILEGED AND CONFIDENTIAL



                                                                       EXHIBIT F


               NOMENCLATURE                    ABBR  AVAIL       FORM     TYPE  QTY DELIV                 COMMENTS
- ----------------------------------------      ------ -----  ------------- ----  --- -----  -----------------------------------------
                                                                      
  OPERATIONAL MANUALS AND DATA  (CONT'D)

Master Minimum Equipment List                 MMEL   OFF       (PDF *)      C        0     (*) plus one copy per Aircraft at
                                                                                           Delivery under PDF or securised format,
                                                                                           as agreed with the Airworthiness
                                                                                           Authorities

                                              MMEL   OFF      Advanced      C       180
                                                            Customization
                                                                Tool

                                              MMEL   ON       Advanced      C   N/A 180
                                                            Customization
                                                                Tool

                                              MMEL   ON          XML        C   N/A 180

                                              MMEL   OFF         XML        C    1  180

Trim Sheet                                    TS     OFF       WordDoc      C        0     Office Automation format (.doc) for
                                                                                           further processing by the Buyer

                                              TS     ON        WordDoc      C   N/A  0

Weight and Balance Manual                     WBM    OFF       (PDF *)      C        0     (*) plus one copy per Aircraft at
                                                                                           Delivery under PDF or securised format,
                                                                                           as agreed with the Airworthiness
                                                                                           Authorities

                                              WBM    OFF      Advanced      C       90
                                                            Customization
                                                                Tool

                                              WBM    ON       Advanced      C   N/A 90
                                                            Customization
                                                                Tool

                                              WBM    ON          XML        C   N/A 90

                                              WBM    OFF         XML        C    1  90


AWE/USA -A350                                                           Exh. F-5
                           PRIVILEGED AND CONFIDENTIAL




                                                                       EXHIBIT F


                 NOMENCLATURE                 ABBR   AVAIL     FORM       TYPE  QTY DELIV  COMMENTS
- ----------------------------------------      ------ -----  ------------- ----  --- -----  --------
                                                                      
 OPERATIONAL MANUALS AND DATA (CONT'D)

Performance Engineer's Programs               PEP    OFF      Advanced     C         90
                                                            Consultation
                                                                Tool

                                              PEP     ON      Advanced     C    N/A  90
                                                            Consultation
                                                                Tool

Performance Programs Manual                   PPM    OFF      Advanced     C         90
                                                            Consultation
                                                                Tool

                                              PPM     ON      Advanced     C    N/A 90
                                                            Consultation
                                                               Tool


AWE/USA -A350                                                           Exh. F-6
                           PRIVILEGED AND CONFIDENTIAL




                                                                       EXHIBIT F


              NOMENCLATURE                   ABBR    AVAIL    FORM        TYPE  QTY DELIV               COMMENTS
- ---------------------------------------- ----------- -----  ------------- ----  --- -----  -----------------------------------------
                                                                      
  MAINTENANCE AND ASSOCIATED MANUALS

AirN@v MAINTENANCE, including :          AirN@v       ON      Advanced     C     N/A  90
Aircraft Maintenance Manual              Maintenance        Consultation
Illustrated Parts Catalog (Airframe)                             Tool
Illustrated Parts Catalog (Powerplant)
Trouble Shooting Manual                  AirN@v      OFF      Advanced     C      20  90   Recommended basic delivery quantity
Aircraft Schematics Manual               Maintenance        Consultation
Aircraft Wiring Lists                                         Tool on
Aircraft Wiring Manual                                          DVD
Electrical Standard Practices Manual
+ Associated Data >
Consumable Material List
Standards Manual

Aircraft Maintenance Manual              AMM          ON        SGML       C     N/A  90

                                         AMM         OFF        SGML       C          90   If selected by the Buyer, SGML format
                                                                                           will not be automatically supplied.
                                                                                           Effective delivery will only take place
                                                                                           upon explicit request from the Buyer

Aircraft Schematics Manual               ASM          ON        SGML       C     N/A  90

                                         ASM         OFF        SGML       C          90   See comments under AMM SGML

Aircraft Wiring Lists                    AWL          ON        SGML       C     N/A  90

                                         AWL         OFF        SGML       C          90   See comments under AMM SGML

Aircraft Wiring Manual                   AWM          ON        SGML       C     N/A  90

                                         AWM         OFF        SGML       C          90   See comments under AMM SGML

Consumable Material List                 CML          ON        SGML       G     N/A 180

                                         CML         OFF        SGML       G         180   See comments under AMM SGML


AWE/USA -A350                                                           Exh. F-7
                           PRIVILEGED AND CONFIDENTIAL



                                                                       EXHIBIT F


            NOMENCLATURE                       ABBR  AVAIL      FORM      TYPE  QTY DELIV                 COMMENTS
- ----------------------------------------      ------ -----  ------------- ----  --- -----  -----------------------------------------
                                                                      
 MAINTENANCE AND ASSOCIATED
   MANUALS (CONT'D)

AirN@v ENGINEERING, including                 EDCI*  ON       Advanced     C    N/A  90    AirN@v Engineering is an  "Engineering
Airworthiness Directives / AD                               Consultation                   Documentation Combined Index" providing
Consignes de Navigabilite / CN                                   Tool                      an access to some document indexes and
 (French DGAC)                                                                             contents and cross-references between
All Operator Telex / AOT                                                                   such documents
Operator Information Telex / OIT
Flight Operator Telex / FOT                   EDCI*  OFF      Advanced     C    20   90
Modification / MOD                                          Consultation
Modification Proposal / MP                                      Tool
Service Bulletin / SB
Service Information Letter / SIL
Technical Follow-Up / TFU
Vendor Service Bulletin / VSB

Electrical Load Analysis                      ELA    OFF      PDF/RTF/     C        +30    One ELA supplied for each Aircraft,
                                                                 XLS                       delivered one month after Aircraft
                                                                                           Delivery PDF File + Office automation
                                                                                           format RTF & Excel file delivered on one
                                                                                           single CD for ELA updating by the Buyer

Electrical Standard Practices Manual          ESPM   ON         SGML       G    N/A  90

                                              ESPM   OFF        SGML       G         90    See  comments under AMM SGML

                                              ESPM   ON          PDF       G    N/A  90

                                              ESPM   OFF        CD-P       G         90

Electrical Standard Practices booklet         ESP    OFF         P2*       G         90    *Refers to a two-side printed document

Illustrated Parts Catalog (Airframe)          IPC    ON         SGML       C    N/A  90

                                              IPC    OFF        SGML       C         90    See comments under AMM SGML

Illustrated Parts Catalog  (Powerplant)       PIPC   ON         SGML       C    N/A  90

                                              PIPC   OFF        SGML       C         90    See comments under AMM SGML


AWE/USA -A350                                                           Exh. F-8
                           PRIVILEGED AND CONFIDENTIAL



                                                                       EXHIBIT F


             NOMENCLATURE                   ABBR     AVAIL       FORM           QTY DELIV               COMMENTS
- ---------------------------------------- ----------- -----  -------------       --- -----  --------------------------------------
                                                                      
  MAINTENANCE AND ASSOCIATED
   MANUALS (CONT'D)

AirN@v PLANNING, including:              AirN@v       ON      Advanced     E    N/A   90*  With first AMM issue
Maintenance Planning Document            Planning           Consultation                   Upon Customer's request, the MPD may
                                                               Tool                        be supplied

                                         AirN@v      OFF      Advanced     E    20    90*
                                         Planning           Consultation
                                                            Tool on DVD

Maintenance Planning Document            MPD          ON        SGML       E    N/A  360

                                         MPD         OFF        SGML       E         360   See comments under AMM SGML

                                         MPD         OFF        PDF        E     *   360   * Supplied upon Buyer's request only
                                                                                           Contains PDF , Excel  File and TSDF /
                                                                                           Task Structured Data File for further
                                                                                           processing

Maintenance Review Board Report          MRBR         ON        PDF        E    N/A  360   MRB Report ocument includes the
                                                                                           Certification Maintenance Requirements
                                                                                           (CMR) and Airworthiness Limitation
                                                                                           Items (ALI) documents.

                                         MRBR        OFF        CD-P       E         360

Support Equipment Summary                SES          ON        PDF        G    N/A  360

                                         SES         OFF*       CD-P       G         360   * Contained on one single CD with TEI/
                                                                                            TEM

Tool and Equipment Drawings              TED          ON      Advanced     E    N/A  360   On-line Consultation from Engineering
                                                            Consultation                   Drawings Service
                                                                Tool

Tool and Equipment Index                 TEI          ON        PDF        E    N/A  360

                                         TEI         OFF*       CD-P       E         360   *Contained on one single CD with TEM
                                                                                            & SES

Illustrated Tool and Equipment Manual    TEM          ON        PDF        E    N/A  360

                                         TEM         OFF*       CD-P       E         360   * Contained on one single CD with TEI
                                                                                            & SES

Trouble Shooting Manual                  TSM          ON        SGML       C    N/A   90

                                         TSM         OFF        SGML       C          90   See comments under AMM SGML


AWE/USA -A350                                                           Exh. F-9
                           PRIVILEGED AND CONFIDENTIAL




                                                                       EXHIBIT F


            NOMENCLATURE                  ABBR       AVAIL     FORM       TYPE  QTY DELIV               COMMENTS
- ---------------------------------------- -------     -----  ----------    ----  --- -----  --------------------------------------
                                                                      
  STRUCTURAL MANUALS

AirN@v REPAIR , including :              AirN@v       ON     Advance       E    N/A  90.
Structural Repair Manual                 Repair             Consultati
Nacelle Structural Repair Manual                             on Tool
 ( integrated in Airbus SRM )
Non Destructive Testing Manual           AirN@v      OFF      Advance      E    20*  90.
+ Associated Data >                      Repair              Consultati
Consumable Material List                                      on Tool
Standards Manual                                               On DVD                      *Recommended basic delivery quantity

Structural Repair Manual                 SRM          ON       SGML        E    N/A   90

                                         SRM         OFF       SGML        E          90   If selected by the Buyer, SGML format
                                                                                           will not be automatically supplied.
                                                                                           Effective delivery will only take place
                                                                                           upon explicit request from the Buyer

Nacelle Structural Repair Manual         NSRM         ON       SGML        E    N/A   90
(integrated in Airbus SRM)

                                         NSRM        OFF       SGML        E          90   See comments under SRM SGML

Nondestructive Testing Manual            NTM          ON       SGML        E    N/A   90

                                         NTM         OFF       SGML        E          90   See comments under SRM SGML


AWE/USA -A350                                                          Exh. F-10
                           PRIVILEGED AND CONFIDENTIAL




                                                                       EXHIBIT F


          NOMENCLATURE                    ABBR       AVAIL      FORM      TYPE  QTY DELIV               COMMENTS
- ---------------------------------------- ------      -----  ------------- ----  --- -----  -----------------------------------------
                                                                      
   OVERHAUL DATA

AirN@v SHOP , including :                AirN@v       ON      Advance      E    N/A  90
Component Maintenance Manual -            Shop              Consultation
 Manufacturer                                                  Tool
Duct Repair Manual
+ Associated Data >                      AirN@v      OFF      Advance      E    20
Consumable Material List                  Shop              Consultation
Standards Manual                                               Tool
                                                              On DVD

Component Maintenance Manual -           CMMM         ON        PDF        E    N/A  90
Manufacturer                                                                               Supplied upon Buyer's request

                                         CMMM        OFF       CD-P        E         90

Component Maintenance Manual -           CMMM         ON       SGML        E    N/A  90
Manufacturer

                                         CMMM        OFF       SGML        E         90    If selected by the Buyer, SGML format
                                                                                           will not be automatically supplied.
                                                                                           Effective delivery will only take place
                                                                                           upon explicit request from the Buyer

Duct Repair Manual                       DRM          ON        PDF        E    N/A  90
                                                                                           Supplied upon Buyer's request

                                         DRM         OFF       CD-P        E         90

Duct Repair Manual                       DRM          ON       SGML        E    N/A  90

                                         DRM         OFF       SGML        E         90    If selected by the Buyer, SGML format
                                                                                           will not be automatically supplied.
                                                                                           Effective delivery will only take place
                                                                                           upon explicit request from the Buyer

Fuel Pipe Repair Manual                  FPRM         ON        PDF        G    N/A  90

                                         FPRM        OFF       CD-P        G         90

Component Documentation Status           CDS          ON      Advanced     C    N/A  90    Revised until 180 days after Aircraft
                                                            Consultation                     Delivery
                                                               Tool

                                         CDS         OFF     Advanced      C         90
                                                            Consultation
                                                                Tool


AWE/USA -A350                                                          Exh. F-11
                           PRIVILEGED AND CONFIDENTIAL




                                                                       EXHIBIT F




             NOMENCLATURE                      ABBR  AVAIL   FORM         TYPE  QTY DELIV                    COMMENTS
- ----------------------------------------       ----- -----   ----         ----  --- -----  ----------------------------------------
                                                                      
   OVERHAUL DATA CONT'D

Component Evolution List                       CEL    ON     PDF           G    N/A   -    Available on-line through Airbus Portal

                                               CEL   OFF     CD-P          G          -


AWE/USA -A350                                                          Exh. F-12
                           PRIVILEGED AND CONFIDENTIAL




                                                                       EXHIBIT F


             NOMENCLATURE                 ABBR       AVAIL     FORM       TYPE  QTY DELIV                COMMENTS
- ----------------------------------------  ----       -----  ------------- ----  --- -----  --------------------------------
                                                                      
  ENGINEERING DOCUMENTS

Installation and Assembly Drawings        IAD         ON     Advanced       C   N/A   0    On-line Consultation from
(mechanical)                                                Consultation                   Engineering Drawings Service
                                                               Tool

Parts Usage (Effectivity)                 PU          ON      Advanced      C   N/A   0    On-line Consultation from
                                                            Consultation                   Engineering Drawings Service
                                                               Tool

Parts List                                PL          ON      Advanced      C   N/A   0    On-line Consultation from
                                                            Consultation                   Engineering Drawings Service
                                                               Tool

Standards Manual                          SM          ON       SGML         E   N/A  90

                                          SM         OFF       SGML         E        90    If selected by the Buyer, SGML
                                                                                           format will not be automatically
                                                                                           supplied. Effective delivery will
                                                                                           only take place upon explicit
                                                                                           request from the Buyer

Process and Material Specification        PMS         ON      PDF          G    N/A   0

                                          PMS        OFF      CD-P         G          0


AWE/USA -A350                                                          Exh. F-13
                           PRIVILEGED AND CONFIDENTIAL



                                                                       EXHIBIT F



              NOMENCLATURE                 ABBR      AVAIL      FORM      TYPE  QTY DELIV                  COMMENTS
- ---------------------------------------- --------    -----  ------------- ----  --- -----  -----------------------------------------
                                                                      
MISCELLANEOUS PUBLICATIONS

Aircraft Characteristics for Airport     AC/MFP        ON       PDF         E   N/A 360
and Maintenance Facility Planning

ATA Index                                ATI           ON       PDF         E   N/A 360

CADETS (Technical Publications           CADETS        OFF    Advanced      G    20 360
Training)                                                   Consultation
                                                                Tool

Aircraft Recovery Manual                 ARM           ON       PDF         E   N/A  90

                                         ARM           OFF      CD-P        E        90

Aircraft Rescue & Firefighting Chart     ARFC          ON       PDF         E       180

                                         ARFC          OFF      P1*         E   N/A 180    *Refers to a one-side printed document

Cargo Loading System Manual              CLS           ON       PDF         E   N/A 180

List of Applicable Publications          LAP           ON       PDF         C   N/A  90

List of Radioactive and Hazardous
 Elements                                LRE           ON       PDF         G   N/A  90

                                         LRE           OFF      CD-P        G        90

Livestock Transportation Manual          LTM           ON     Advanced      E   N/A  90
                                                            Consultation                   Includes a Livestock Transportation and
                                                                Tool                       Calculation Tool

                                         LTM           OFF    Advanced      E        90
                                                            Consultation
                                                                Tool

Service Bulletins                        SB            ON     Advanced      C   N/A  0
                                                              Cons.Tool

                                         SB            ON       SGML        C   N/A  0

                                         SB            OFF      SGML        C        0

                                         SB            ON       PDF         C   N/A  0

                                         SB            OFF      CD-P        C        0


AWE/USA -A350                                                          Exh. F-14
                           PRIVILEGED AND CONFIDENTIAL




                                                                       EXHIBIT F


                NOMENCLATURE             ABBR        AVAIL     FORM       TYPE  QTY DELIV            COMMENTS
- ---------------------------------------- ----        -----  ------------- ----  --- -----  -------------------------------
                                                                      
   MISCELLANEOUS PUBLICATIONS

Supplier Product Support Agreements 2000 SPSA         ON        PDF        G    N/A  360   Based on General Conditions of
                                                                                           Purchase (GCP) 2000 Issue 5

                                         SPSA        OFF        CD-P       G         360

Transportability Manual                  TM           ON        PDF        G    N/A  180

                                         TM          OFF        CD-P       G         180

Vendor Information Manual                VIM          ON      Advanced     G    N/A  360
                                                            Consultation
                                                                Tool

                                         VIM         OFF      Advanced     G         360
                                                            Consultation
                                                                Tool

                                         VIM/GSE      ON      Advanced     G    N/A  360
                                                            Consultation
                                                                Tool


AWE/USA -A350                                                          Exh. F-15
                           PRIVILEGED AND CONFIDENTIAL


                                                                       EXHIBIT G

            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                          SELLER PRICE REVISION FORMULA

1     BASE PRICE

      The Base Price of the A350-800 Aircraft is quoted in Clause 3.1.1 and of
      the A350-900 Aircraft in clause 3.1.2 of the Agreement. Each Base Price is
      subject to adjustment for changes in economic conditions as measured by
      data obtained from the US Department of Labor, Bureau of Labor Statistics,
      and in accordance with the provisions hereof.

2     BASE PERIOD

      The Base Price of the Aircraft has been established in accordance with the
      average economic conditions prevailing in December 2003, January 2004,
      February 2004 and corresponding to a theoretical delivery in January 2005
      as defined by [...***...] and [...***...] index values indicated
      hereafter.

      [...***...] and [...***...] index values indicated herein will not be
      subject to any revision.

3     INDEXES

      Labor Index: [...***...]

      Material Index: [...***...]


***Confidential Treatment Requested

AWE/USA-A350                                                             Exh G-1

                          PRIVILEGED AND CONFIDENTIAL



                                                                       EXHIBIT G

4     REVISION FORMULA

      [...***...]

5     GENERAL PROVISIONS

5.1   Roundings

      The [...***...] average and the [...***...] average will be computed to
      the first decimal. If the next succeeding place is five (5) or more, the
      preceding decimal place shall be raised to the next higher figure.

      Each quotient shall be rounded to the nearest ten-thousandth (4 decimals).
      If the next succeeding place is five (5) or more, the preceding decimal
      place shall be raised to the next higher figure.

***Confidential Treatment Requested

AWE/USA-A350                                                             Exh G-2

                          PRIVILEGED AND CONFIDENTIAL



                                                                       EXHIBIT G

      The final factor will be rounded to the nearest ten-thousandth
      (4 decimals).

      The final price will be rounded to the nearest whole number (0.5 or more
      rounded to 1).

5.2   Substitution of Indexes for Aircraft Price Revision Formula

      If;

      (i)   the United States Department of Labor substantially revises the
            methodology of calculation of the labor index [...***...] or
            material index [...***...] as used in this Exhibit G, or

      (ii)  the United States Department of Labor discontinues, either
            temporarily or permanently, such labor index [...***...] or
            material index [...***...] index, or

      (iii) the data samples used to calculate such labor index [...***...] or
            material index [...***...] are substantially changed;

      the Seller will select a substitute index for inclusion in the Seller
      Price Revision Formula (the "Substitute Index").

      The Substitute Index will reflect as closely as possible the actual
      variance of the labor costs or of the material costs used in the
      calculation of the original labor index [...***...] or material index
      [...***...] as the case may be.

      As a result of the selection of the Substitute Index, the Seller will make
      an appropriate adjustment to the Seller Price Revision Formula to combine
      the successive utilization of the original labor index [...***...] or
      material index [...***...] (as the case may be) and of the Substitute
      Index.

5.3   Final Index Values

      The Index values as defined in Paragraph 4 above will be considered final
      and no further adjustment to the basic prices as revised at delivery of
      the applicable Aircraft will be made after delivery of the applicable
      Aircraft for any subsequent changes in the published index values.


***Confidential Treatment Requested


AWE/USA-A350                                                             Exh G-3

                          PRIVILEGED AND CONFIDENTIAL

                                                                      EXHIBIT H

              TERMS AND CONDITIONS FOR LICENSE FOR USE OF SOFTWARE

These Terms and Conditions for License for Use of Software (the "LICENSE
CONDITIONS") will govern the license granted by AIRBUS NORTH AMERICA CUSTOMER
SERVICES, INC. a Delaware incorporated company whose registered office is at 198
Van Buren Street, Suite 300, Herndon, VA 20170 ("ANACS" or "LICENSOR") to, a [ ]
corporation whose principal office is located at [_______________________] (the
"LICENSEE") under a separate Software License and Product Supply Agreement (the
"SLPA").

WHEREAS ANACS is engaged in the business of supplying products and services to
North American and South American owners and operators of aircraft manufactured
by Airbus and the designees of such owners and operators, and

WHEREAS Airbus has developed and owns certain software and ANACS was granted a
license to use such Software and to sublicense the same, under the License
Conditions, to qualified entities who have entered into a SLPA with ANACS, and

WHEREAS, the Licensee has entered, or intends to enter into a SLPA and is
willing to accept the License Conditions,

NOW THEREFORE IT IS AGREED AS FOLLOWS:

[...***...]

*** Confidential Treatment Requested

AWE/USA -A350                                                          Exh H - 1

                           PRIVILEGED AND CONFIDENTIAL




            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 1

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ 85034

Re: SPARE PARTS PROCUREMENT

Ladies and Gentlemen,

US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of the date hereof (the "Agreement"), which covers,
among other things, the sale by the Seller and the purchase by the Buyers of
certain Aircraft, under the terms and conditions set forth in said Agreement.
The Buyers and the Seller have agreed to set forth in this Letter Agreement No.
1 (the "Letter Agreement") certain additional terms and conditions regarding the
sale of the Aircraft. Capitalized terms used herein and not otherwise defined in
this Letter Agreement will have the meanings assigned thereto in the Agreement.
Technical and trade terms used but not defined herein or in the Agreement will
be defined as generally accepted in the airline and/or aircraft manufacturing
industries. The terms "herein," "hereof" and "hereunder" and words of similar
import refer to this Letter Agreement.

All of the parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

                                                                           LA1-1

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



                                    CONTENTS

PARAGRAPHS

1  -  GENERAL

2  -  INITIAL PROVISIONING

3  -  STORES

4  -  DELIVERY

5  -  PRICE

6  -  PAYMENT PROCEDURES AND CONDITIONS

7  -  TITLE

8  -  PACKAGING

9  -  DATA RETRIEVAL

10 -  BUY-BACK

11 -  WARRANTIES

12 -  LEASING

[...***...]

14 -  TERMINATION

15 -  ASSIGNMENT

16 -  COUNTERPARTS

                                                                           LA1-2
***Confidential Treatment Requested


AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



1. GENERAL

1.1   Material

      This Letter Agreement covers the terms and conditions for the services
      offered by the Seller to the Buyers in respect of the Aircraft spare parts
      and other equipment ("Material Support") listed below in Paragraphs 1.1(a)
      through 1.1(f) ("Material") and is intended by the parties to be and will
      constitute an agreement of sale of all Material furnished to the Buyers by
      the Seller pursuant hereto, except as to Material leased to the Buyers
      pursuant to Paragraph 12 of this Letter Agreement.

      The Material will comprise:

      (a)   Seller Parts (defined as industrial proprietary components,
            equipment, accessories or parts of the Manufacturer manufactured to
            the detailed design of the Manufacturer or a subcontractor of it and
            bearing official part numbers of the Manufacturer or material for
            which the Seller has exclusive sales rights in the United States).

      (b)   Supplier Parts classified as Repairable Line Maintenance Parts in
            accordance with SPEC 2000.

      (c)   Supplier Parts classified as Expendable Line Maintenance Parts in
            accordance with SPEC 2000.

      (d)   Ground Support Equipment (GSE) and Specific (To-Type) tools.

      (e)   Hardware and standard material.

      (f)   Consumables and raw material as a package.

      It is expressly understood that Seller Parts will not include parts
      manufactured pursuant to a parts manufacturing authority.

      Material covered under Paragraphs 1.1(e) and 1.1(f) is available only as a
      package when supplied as part of the Initial Provisioning defined in
      Paragraph 1.2.1(a).

                                                                           LA1-3

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



1.2   Scope of Material Support

1.2.1 The Material Support to be provided by the Seller hereunder covers the
      following:

      (a)   all Material purchased by the Buyers from the Seller during the
            Initial Provisioning Period (defined below in Paragraph 2) (the
            "Initial Provisioning") and all items in Paragraphs 1.1(a) through
            1.1(d) for purchases additional to the Initial Provisioning, and

      (b)   the Seller's leasing of Seller Parts to the Buyers for the Buyers'
            use on its Aircraft in commercial air transport service as set forth
            in Paragraph 12 of this Letter Agreement.

1.2.2 Propulsion Systems, including associated parts and spare parts therefore,
      are not covered under this Letter Agreement and will be subject to direct
      negotiations between the Buyers and the Propulsion Systems
      manufacturer(s). [...***...]

1.2.3 During a period commencing on the date hereof and continuing as long as at
      least five (5) aircraft of the type of the Aircraft are operated in
      commercial air transport service of which, at least one (1) is operated by
      the Buyers (the "Term"), the Seller will maintain or cause to be
      maintained such stock of Seller Parts as the Seller deems reasonable and
      will furnish at reasonable prices Seller Parts adequate to meet the
      Buyers' needs for maintenance of the Aircraft. Such Seller Parts will be
      sold and delivered in accordance with Paragraphs 4 and 5 of this Letter
      Agreement, upon receipt of the Buyers' orders.

      The Seller will use its reasonable efforts to obtain a similar service
      from all Suppliers of parts that are originally installed on the Aircraft
      and not manufactured by the Seller.

1.3   Purchase Source of Material

      The Buyers agree to purchase from the Seller's designee, ANACS, the Seller
      Parts required for the Buyers' own needs during the Term, provided that
      this Paragraph 1.3 will not in any way prevent the Buyers from resorting
      to the stocks of Seller Parts of other operators using A350 aircraft or
      from purchasing items equivalent to Seller Parts from said operators or
      from distributors, on the condition that said Seller Parts


***Confidential Treatment Requested                                        LA1-4

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



      have been designed and manufactured by, or obtained from the Seller, and,
      provided further that this Paragraph 1.3 will not prevent the Buyers from
      exercising its rights under Paragraph 1.4 of this Letter Agreement.

1.4   Manufacture of Material by the Buyer

1.4.1 The provisions of Paragraph 1.3 of this Letter Agreement notwithstanding,
      the Buyers may manufacture or have manufactured Seller Parts for its own
      use or may purchase for its own use Seller Parts from any source other
      than those listed in Paragraph 1.3.1 in the following cases:

      (a)   after expiration of the Term, provided that at such time the Seller
            is out of stock of a required Seller Part;

      (b)   at any time, to the extent Seller Parts are needed to effect AOG
            repairs on any Aircraft and are not available from the Seller within
            a lead time shorter than or equal to the time in which the Buyers
            can procure said Seller Parts from another source, provided the
            Buyers will sell or lease such Seller Parts only if they are
            assembled in an Aircraft that is sold or leased;

      (c)   at any time, if the Seller fails to fulfill its obligations with
            respect to any Seller Parts pursuant to Paragraph 1.2 above within a
            reasonable period after written notice thereof from the Buyers; and

      (d)   at any time, if with respect to certain Seller Parts, the Seller has
            granted, under the Illustrated Parts Catalog supplied in accordance
            with this Letter Agreement, the right of local manufacture of Seller
            Parts.

1.4.2 The Buyers may manufacture the Seller's proprietary tooling from drawings
      and other data supplied by the Seller or the manufacturer.

1.4.3 The rights granted to the Buyers in Paragraph 1.4.1 will not in any way be
      construed as a license, nor will they in any way obligate the Buyers to
      pay any license fee, royalty or obligation whatsoever, nor will they in
      any way be construed to affect the rights of third parties.

1.4.4 The Seller will provide the Buyers with all technical data reasonably
      necessary to manufacture Seller Parts and the Seller's proprietary
      tooling, in the event the Buyers are entitled to do so pursuant to
      Paragraphs 1.4.1 and 1.4.2. The proprietary rights to such technical data
      will be subject to the terms of Clause 14.12 of the Agreement.

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2.    INITIAL PROVISIONING

      The period up to and including the [...***...] day after delivery of
      the last Aircraft will hereinafter be referred to as the Initial
      Provisioning Period.

2.1   Seller-Supplied Data

      The Seller will prepare and supply to the Buyers the following data:

2.1.1 Initial Provisioning Data - Seller

      The Seller will provide to the Buyers initial provisioning data provided
      for in Chapter 1 of ATA 2000 ("Initial Provisioning Data") in a form,
      format and within a time period to be mutually agreed upon.

      A free of charge revision service will be effected every ninety (90) days,
      up to the end of the Initial Provisioning Period.

      The Seller will ensure that Initial Provisioning Data is released to the
      Buyers in time to allow the necessary evaluation time by the Buyers and
      the on-time delivery of ordered Material.

2.1.2 Supplementary Data

      The Seller will provide the Buyers with Local Manufacture Tables (X-File),
      as part of the Illustrated Parts Catalog (Additional Cross-Reference
      Tables), which will be a part of the Initial Provisioning Data package.

2.1.3 Data for Standard Hardware

      The Initial Provisioning Data provided to the Buyers shall include data
      for hardware and standard material.

2.2   Supplier-Supplied Data

2.2.1 General

      Suppliers will prepare and issue CMM parts and IPL parts (T-files) in the
      English language for those Supplier components for which the Buyers has
      elected to receive data and the Seller will make reasonable efforts to
      ensure that the Suppliers take such actions.

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      Said data (initial issue and revisions) will be transmitted to the Buyers
      through the Suppliers and/or the Seller. The Seller will [...***...] not
      be responsible for the substance of such data [...***...]

      The Seller will exert its reasonable efforts to supply Initial
      Provisioning Data to the Buyers in time to allow the necessary evaluations
      by the Buyers and on-time deliveries.

2.2.2 Initial Provisioning Data - Supplier

      Initial Provisioning Data for Supplier products provided for in Chapter 1
      of ATA 2000 will be furnished as mutually agreed upon during a
      Preprovisioning Meeting (defined below), with free of charge revision
      service assured up to the end of the Initial Provisioning Period, or until
      it reflects the configuration of the delivered Aircraft.

2.3   Preprovisioning Meeting

2.3.1 The Seller will organize a meeting (i) at the Manufacturer's spares center
      in Hamburg, Germany ("MSC"), (ii) at ANACS or (iii) at a place to be
      mutually agreed, in order to formulate an acceptable schedule and working
      procedure to accomplish the Initial Provisioning of Material (the
      "Preprovisioning Meeting").

2.3.2 The date of the Preprovisioning Meeting will be mutually agreed upon, but
      it will take place no earlier than three (3) months after the Agreement
      will have taken effect and no later than eighteen (18) months before
      delivery of the Buyers' first Aircraft.

2.4   Initial Provisioning Training

      The Seller will furnish, at the Buyers' request and at no charge to the
      Buyers, training courses related to the Seller's provisioning documents,
      purchase order administration and handling at MSC or at a mutually agreed
      location. The areas covered in these training courses are (i)
      familiarization of the Buyers with the provisioning; (ii)


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      explanation of the technical function as well as the necessary technical
      and commercial Initial Provisioning Data; and (iii) familiarization with
      the Seller's purchase order administration system.

2.5   Initial Provisioning Conference

      The Seller will organize an Initial Provisioning conference at MSC, ANACS
      or a location to be mutually agreed upon that will include participation
      of major Suppliers, as agreed upon during the Pre-provisioning Meeting
      (the "Initial Provisioning Conference").

      Such Initial Provisioning Conference will take place no earlier than eight
      (8) weeks after Buyer Furnished Equipment (BFE) selection or Customer
      Definition Freeze (CDF), whichever last occurs.

2.6   Initial Provisioning Data Compliance

2.6.1 Initial Provisioning Data generated by the Seller and supplied to the
      Buyers will comply with the latest configuration of the Aircraft to which
      such data relate, as known three (3) months before the data are issued.
      Said data will enable the Buyers to order Material conforming to its
      Aircraft as required for maintenance and overhaul.

      This provision will not cover Buyers modifications unknown to the Seller,
      or modifications not agreed to or designed by the Seller.

2.7   Delivery of Initial Provisioning Material

2.7.1 During the Initial Provisioning Period, Material will conform with the
      latest configuration standard of the affected Aircraft and with the
      Initial Provisioning Data transmitted by the Seller. The Seller, in
      addition, will use its reasonable efforts to cause Suppliers to provide a
      similar service for their items. Should the Seller default in this
      obligation, it will immediately replace such Seller parts and/or authorize
      return shipment at no transportation cost to the Buyers. The Buyers will
      make reasonable efforts to minimize such cost.

2.7.2 The Seller will use its reasonable efforts to deliver Initial Provisioning
      Material in Paragraph 1.1(a) of this Letter Agreement against the Buyers'
      orders from the Seller and according to the following schedule, provided
      the orders are received by the Seller in accordance with published
      leadtime.

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      Initial Provisioning Material will be delivered as provided below:

      (a)   At least fifty percent (50%) of the ordered quantity of each Line
            Replacement or Line Maintenance item three (3) months before
            delivery of the first Aircraft of each block of Aircraft for which
            the Buyers have placed Initial Provisioning orders for Material
            defined above in Paragraph 1.1(a).

      (b)   At least seventy-five percent (75%) of the ordered quantity of each
            Line Replacement or Line Maintenance item: one (1) month (for items
            identified as line station items, two (2) months) before delivery of
            the first Aircraft of each block of Aircraft for which the Buyers
            have placed Initial Provisioning orders for Material defined above
            in Paragraph 1.1(a).

      (c)   Fifty percent (50%) of the ordered quantity of each item except as
            specified in Paragraphs 2.7.1 (a) and 2.7.1 (b) above: at delivery
            of the first Aircraft of each block of Aircraft for which the Buyers
            have placed Initial Provisioning orders for Material defined above
            in Paragraph 1.1(a).

      (d)   One hundred percent (100%) of the ordered quantity of each item,
            including line station items: three (3) months after delivery of the
            first Aircraft of each block of Aircraft for which the Buyers have
            placed Initial Provisioning orders for Material, as defined above in
            Paragraph 1.1(a). If said one hundred percent (100%) cannot be
            accomplished, the Seller will endeavor to have such items available
            at its facilities for immediate supply, in case of an AOG.

      The size of each block of Aircraft referred to in the schedule above will
      be defined at the Pre-Provisioning Conference and the Material will be
      delivered in sequence.

2.7.3 [...***...]


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2.7.4 The Buyers may cancel or modify Initial Provisioning orders placed with
      the Seller with no cancellation charge as follows:

      (a)   "Long Lead-Time Material" (lead time exceeding [...***...], not
            later than [...***...] before scheduled delivery of said Material.

      (b)   Normal lead time Material, not later than [...***...] before
            scheduled delivery of said Material, provided however, that for
            Material that has a lead time of [...***...] or less, the published
            lead time for the Buyers' right to cancel or modify orders will be
            equal to the published lead time for such Material plus [...***...].

      (c)   Buyers-specific Material and Material described in Paragraphs 1.1(b)
            through 1.1(f), not later than the quoted lead time before scheduled
            delivery of said Material.

2.7.5 Should the Buyers cancel or modify any orders for Material outside the
      time limits defined above in Paragraph 2.7.4, the Seller will have no
      liability for the cancellation or modification, and the Buyers will
      reimburse the Seller for any direct cost incurred in connection therewith.

2.7.6 Except as otherwise set forth herein, all transportation costs for the
      return of Material under this Paragraph 2, including any insurance and
      customs duties applicable or other related expenditures, will be borne by
      the Buyers.

3.    STORES

3.1   ANACS Spares Center

      The Seller has established and will maintain or cause to be maintained, as
      long as at least five (5) aircraft of the type of the Aircraft are
      operated by [...***...] airlines in commercial air transport service of
      which at least one (1) is operated by the Buyers (the "US Term"), a US
      store located near Dulles International Airport, Washington, DC, known as
      the ANACS Spares Center - Washington ("ANACS Spares Center"). The ANACS
      Spares Center will be operated twenty-four (24) hours/day, seven (7)
      days/week, all year for the handling of AOG and critical orders for Seller
      Parts. [...***...]

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      [...***...]

3.2   Material Support Center, Germany

      The Manufacturer has established and will maintain or cause to be
      maintained during the Term a store of Seller Parts at MSC. MSC will be
      operated twenty-four (24) hours per day, seven (7) days per week, twelve
      months a year.

3.3   Other Points of Shipment

      The Seller reserves the right to effect deliveries from distribution
      centers other than the ANACS Spares Center or MSC and from any of the
      production facilities of the Associated Contractors.

4.    DELIVERY

4.1   General

      The Buyers' purchase orders will be administered in accordance with ATA
      Specification 2000.

      The provisions of Paragraph 4.2 of this Letter Agreement do not apply to
      Initial Provisioning Data or Material as described in Paragraph 2 of this
      Letter Agreement.

4.2   Lead Times

4.2.1 In general, the lead times are (and, unless otherwise agreed, will at all
      times be) in accordance with the definition in the "World Airline and
      Suppliers Guide" (latest edition).

4.2.2 Material will be dispatched within the lead times quoted in the published
      Seller's price catalog for Material described in Paragraph 1.1(a), and
      within the Supplier's or supplier's lead time augmented by the Seller's
      own order and delivery processing time (such in-house processing time not
      to exceed fifteen (15) days) for Material described in Paragraphs 1.1(b)
      through 1.1(d). The Seller will endeavor to improve its lead times and
      neither the Seller, the Manufacturer nor any of their Affiliates will
      discriminate against the Buyers in delivery processing time.

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4.2.3 Expedite Service

      The Seller operates a twenty-four (24) hour-a-day, seven (7) day-a-week
      expedite service to supply the relevant Seller Parts available in the
      Seller's stock, workshops and assembly line, including high-cost/long-
      lead-time items, to the international airport nearest the location of such
      items (the "Expedite Service").

      The Expedite Service is operated in accordance with the "World Airlines
      and Suppliers Guide." Accordingly, the Seller will notify the Buyer of the
      action taken to effect the Expedite Service as follows:

      (a)   four (4) hours after receipt of an AOG order,

      (b)   twenty-four (24) hours after receipt of a critical order (imminent
            AOG or work stoppage),

      (c)   five (5) days after receipt of an expedite order from the Buyers
            (nil stock at the Buyers' for no-go items).

      The Seller and its subcontractors will deliver Seller Parts requested on
      expedite basis against normal orders previously placed by the Buyers or
      upon requests by telephone or facsimile by the Buyers' representatives,
      such requests to be confirmed by the Buyers' subsequent order for such
      Seller Parts within a reasonable time.

4.3   Delivery Status

      The Seller agrees to report to the Buyers the status of supplies against
      orders on a monthly basis or on a mutually agreed timeframe.

4.4   Excusable Delay

      Clause 10.1 of the Agreement will apply to the Material support as defined
      in Paragraph 1 of this Letter Agreement.

4.5   Shortages, Overshipments, Nonconformance in Orders

4.5.1 Within thirty (30) days after receipt of Material delivered pursuant to a
      purchase order, the Buyers will advise the Seller of any alleged shortages
      or overshipments with respect to such purchase order and of all claimed
      nonconformance to specification of parts in such order.

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      In the event that the Buyers have not reported such alleged shortages,
      overshipments or nonconformance within such period, the Buyers will be
      deemed to have accepted the deliveries unless, in the case of shortages,
      the Buyers can prove within a reasonable period of time that it did not
      receive the Material.

4.5.2 In the event that the Buyers report over-shipments or nonconformance to
      the specifications within the period specified in Paragraph 4.5.1, the
      Seller will, if such report is accepted, either replace the Material
      concerned or credit the Buyers for Material paid for but returned to the
      Seller. In such case, transportation charges will be borne by the Seller.

      The Buyers will endeavor to minimize such costs.

4.6   [...***...]

4.7   [...***...]

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4.8   Cessation of Deliveries

      The Seller reserves the right to stop or otherwise suspend deliveries if
      the Buyers fail to meet its obligations under Paragraph 6.

5.    PRICE

5.1   The Material prices will be:

5.1.1 [...***...]

5.1.2 [...***...]

5.2   Validity of Prices

5.2.1 The Material prices are the Seller's published prices in effect on the
      date of receipt of the purchase order (subject to reasonable quantities
      and delivery time) and will be expressed in US dollars. Payment will be
      made by the Buyers to the Seller in US dollars as set forth below in
      Paragraph 6.1.

5.2.2 Prices of Seller Parts will be in accordance with the then current ANAC's
      Spare Parts Price List. Prices will be firm for each calendar year, except
      that the Seller reserves the right to revise the prices of Seller Parts
      during the course of the calendar year in the following cases:

      -     significant revision in manufacturing costs,

      -     significant revision in Manufacturer's purchase price of materials
            (including significant variation of exchange rates),

      -     significant error in estimation of expression of any price.

      [...***...]

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5.2.3 [...***...]

5.2.4 The Seller warrants that, should the Buyers purchase from the Seller one
      hundred percent (100%) of the recommended Initial Provisioning of Material
      identified in Paragraphs 1.1(b) through 1.1(d), above, the average
      handling charge on the total package will not exceed fifteen percent
      (15%). This average handling charge will be increased to eighteen percent
      (18%) on any orders placed less than six (6) months prior to delivery of
      the first Aircraft.

6.    PAYMENT PROCEDURES AND CONDITIONS

6.1   Currency

      Payment will be made in US dollars.

6.2   Time and Means of Payment

      Payment will be made by transfer of immediately available funds from the
      Buyers to the Seller within thirty (30) days from the date of invoice.
      [...***...]

6.3   Bank Accounts

      The Buyers will make all payments hereunder in full without setoff,
      counterclaim, deduction or withholding of any kind to the accounts listed
      below, unless otherwise directed by the Seller:

      (a)   For wire transfer, in favor of Airbus North America Customer
            Services, Inc.:


            [...***...]
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      (b)   For direct deposit (lockbox), in favor of Airbus North America
            Customer Services, Inc.:

            Airbus North America Customer Services, Inc.:
            PO Box 8500
            Lock Box No. 4555
            Philadelphia, PA 19178-4555

6.4   Taxes

      All payments due the Seller hereunder will be made in full without setoff
      or counterclaim and without deduction or withholding of any kind.
      Consequently, the Buyers will assure that the sums received by the Seller
      under this Letter Agreement are equal to the full amounts expressed to be
      due the Seller hereunder, without deduction or withholding on account of
      and free from any and all taxes, levies, imposts, dues or charges of
      whatever nature except that if the Buyers are compelled by law to make any
      such deduction or withholding the Buyers will pay such additional amounts
      as may be necessary in order that the net amount received by the Seller
      after such deduction or withholding will equal the amounts that would have
      been received in the absence of such deduction or withholding.

6.5   If any payment due the Seller is not received in accordance with the time
      period provided in Paragraph 6.2, the Seller will have the right to claim
      from the Buyers and the Buyers will promptly pay to the Seller interest on
      the unpaid amount at an annual rate equal to [...***...] per month to be
      calculated from (and including) the due date to (but excluding) the date
      payment is received by the Seller, on the basis of a 360-day year and
      actual number of days elapsed. The Seller's claim to such interest will
      not prejudice any other rights the Seller may have under this Letter
      Agreement or applicable law.

7.    TITLE

      Title to any Material purchased under this Letter Agreement will remain
      with the Seller until full payment of the invoices therefore and any
      interest thereon has been received by the Seller.

      The Buyers will undertake that Material to which title has not passed to
      the Buyers will be kept free from any lien, security interest mortgage or
      other charge or claim in favor of any third party.

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8.    PACKAGING

      All material will be packaged in accordance with ATA 300 specification,
      Category III for consumable/expendable Material and Category II for
      rotables. Category I containers will be used if requested by the Buyers
      and the difference between Category I and Category II packaging costs will
      be paid by the Buyers together with payment for the respective Material.

9.    DATA RETRIEVAL

      The Buyers undertake to provide periodically to the Seller, as the Seller
      may reasonably request, during the Term, a quantitative list of the parts
      used for maintenance and overhaul of the Aircraft. The range and contents
      of this list will be established by mutual agreement between the Seller
      and the Buyers.

10.   BUY-BACK

10.1  Buy-Back of Obsolete Material

      The Seller agrees to buy back unused Seller Parts that may become obsolete
      for the Buyers' fleet [...***...] as a result of mandatory modifications
      required by the Buyers' or Seller's Aviation Authorities, subject to the
      following:

      (a)   the Seller Parts involved will be those which the Seller directs the
            Buyers to scrap or dispose of and which cannot be reworked or
            repaired to satisfy the revised standard;

      (b)   the Seller will grant the Buyers a credit equal to the purchase
            price paid by the Buyers for any such obsolete parts, such credit
            will not exceed the value of the provisioning quantities recommended
            by the Seller in the Initial Provisioning recommendation as mutually
            agreed upon at the Initial Provisioning Conference;

      (c)   the Seller will use its reasonable efforts to obtain for the Buyers
            the same protection from Suppliers and will promptly assist the
            Buyers if so requested by the Buyers.


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10.2   Buy-Back of Surplus Material

10.2.1 The Seller agrees that at any time after one (1) year and within three
       (3) years after delivery of the first Aircraft to the Buyers, Buyers
       will have the right to return to the Seller, [...***...], unused
       and undamaged Material described in Paragraphs 1.1(a) and 1.1(b)
       originally purchased from the Seller under the terms hereof, provided (i)
       that the selected protection level does not exceed ninety-six percent
       (96%) with a turnaround time of forty-five (45) days, (ii) that said
       Material does not exceed the provisioning quantities recommended by the
       Seller in the Initial Provisioning recommendations, does not have a
       limited shelf life nor contain any shelf-life limited components with
       less than [...***...] of their shelf life remaining when
       returned to the Seller, and (iii) that the Material is returned with the
       Seller's original documentation and any such documentation (including
       tags, certificates) required to identify, substantiate the condition of
       and enable the resale of such Material.

10.2.2 The Seller's agreement in writing is necessary before any Material in
       excess of the Seller's recommendation may be considered for buy-back.

10.2.3 It is expressly understood and agreed that the rights granted to the
       Buyers under this Paragraph 10.2 will not apply to Material that may
       become obsolete at any time or for any reason other than as set forth in
       Paragraph 10.1.

10.2.4 [...***...]

10.3   Except as otherwise set forth herein, all transportation costs for the
       return of surplus Material under this Paragraph 10, including any
       applicable insurance and customs duties or other related expenditures,
       will be borne by the Seller.

10.4   The Seller's obligation to repurchase surplus and obsolete Material
       depends upon the Buyers' demonstration, by the Buyers' compliance with
       the requirements set forth in Paragraph 9 of this Letter Agreement, that
       such Material exceeds the Initial Provisioning requirements.

11.1   WARRANTIES ON SELLER PARTS

       The Seller represents and warrants that the Manufacturer has provided to
       the Seller the following Warranty, Supplier Warranties and Interface
       Commitment with respect to Seller Parts, that are reproduced below
       between the words QUOTE and


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       UNQUOTE and are subject to the terms, conditions, limitations and
       restrictions (including, but not limited to, the Exclusivity of
       Warranties and General Limitations of Liability and Duplicate Remedies
       provisions) set forth below. The Seller hereby assigns to the Buyers, and
       the Buyers hereby accept, all of the Seller's rights and obligations as
       "Buyers" under the said Warranty, Supplier Warranties and Interface
       Commitment, and the Seller subrogates the Buyers to all such rights and
       obligations in respect of the Seller Parts. The Seller hereby warrants to
       the Buyers that (i) it has all requisite authority to make the foregoing
       assignment to and to effect the foregoing subrogation in favor of the
       Buyers, (ii) such assignment and subrogation are effective to confer on
       the Buyers all of the foregoing rights and obligations of the Seller,
       (iii) the provisions so assigned are in full force and effect and have
       not been amended prior to the date hereof, and (iv) the Seller will not
       enter into any amendment of the provisions so assigned without the prior
       written consent of the Buyers.

QUOTE

11.1   WARRANTY

11.1.1 Nature of Warranty

       Subject to the limitations and conditions hereinafter provided, and
       except as provided in Paragraph 11.1.2, the Seller warrants to the Buyers
       that each Seller Part will at the time of Delivery to the Buyer be free
       from defects:

       (i)    in material,

       (ii)   in workmanship, including, without limitation, processes of
              manufacture,

       (iii)  in design (including, without limitation, selection of materials)
              having regard to the state of the art at the date of such design,
              and

       (iv)   arising from failure to conform to the Specification, except as to
              those portions of the Specification that are expressly stated in
              the Specification to be estimates or approximations or design
              aims.

11.1.2 [...***...]

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11.1.3 Exceptions

       The warranties set forth in Paragraph 11.1.1 will not apply to Buyer
       Furnished Equipment, Propulsion Systems, or to any component, accessory,
       equipment or part purchased by the Buyers that is not a Seller Part,
       provided, however, that any defect inherent in the Seller's design of the
       installation, considering the state of the art at the date of such
       design, that impairs the use of such items will constitute a defect in
       design for the purposes of this Paragraph 11.1 and be covered by the
       warranty set forth in Paragraph 11.1.1(iii).

11.1.4 Warranty Period

       The warranties described in Paragraphs 11.1.1 will be limited to those
       defects that become apparent within [...***...] after delivery of the
       Seller Part (the "SELLER PART WARRANTY PERIOD").

11.1.5 Buyer's Remedy and Seller's Obligation

       The Buyers' remedy and the Seller's obligation and liability under
       Paragraph 11.1 are limited to, at the Seller's expense, the repair,
       replacement or correction of, or the supply of modification kits
       rectifying the defect to any defective Warranted Part, [...***...].

       [...***...]

       The provisions of Subclauses 12.1.6, 12.1.7, 12.1.8 and 12.1.9 of the
       Agreement will, as applicable, also apply to this Paragraph 11.

11.2   EXCLUSIVITY OF WARRANTIES

       THIS PARAGRAPH 11 (INCLUDING ITS SUBPARTS) SETS FORTH THE EXCLUSIVE
       WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE
       SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYERS, WHETHER UNDER
       THIS LETTER AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR
       NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY SELLER PART DELIVERED BY THE
       SELLER UNDER THIS AGREEMENT.

       THE BUYERS RECOGNIZE THAT THE RIGHTS, WARRANTIES AND


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       REMEDIES IN THIS PARAGRAPH 11 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE
       BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE
       SELLER PARTS SUPPLIED UNDER THIS LETTER AGREEMENT. THE BUYERS HEREBY
       WAIVE, RELEASE AND RENOUNCE ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES
       AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES
       OF THE BUYERS AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT,
       TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR
       DEFECT OR PROBLEM OF ANY KIND IN ANY SELLER PART DELIVERED BY THE SELLER
       UNDER THIS LETTER AGREEMENT, INCLUDING BUT NOT LIMITED TO:

       (1)    ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY
              GENERAL OR PARTICULAR PURPOSE;

       (2)    ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
              PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

       (3)    ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

       (4)    ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF
              LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS
              AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS,
              WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT
              LIABILITY OR FAILURE TO WARN;

       (5)    ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL
              CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

       (6)    ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
              STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL
              STATUTE OR AGENCY;

       (7)    ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

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              (a)    LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, OR PART
                     PROVIDED UNDER THE AGREEMENT DUE TO A DEFECT, NONCONFORMITY
                     OR OTHER PROBLEM IN ANY SELLER PART;

              (b)    LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT,
                     EQUIPMENT, ACCESSORY OR PART DUE TO A DEFECT, NONCONFORMITY
                     OR OTHER PROBLEM IN ANY SELLER PART;

              (c)    LOSS OF PROFITS AND/OR REVENUES;

              (d)    ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

       THE WARRANTIES PROVIDED BY THIS LETTER AGREEMENT WILL NOT BE EXTENDED,
       ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND
       THE BUYERS. IN THE EVENT THAT ANY PROVISION OF THIS PARAGRAPH 11 SHOULD
       FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE
       REMAINDER OF THIS PARAGRAPH 11 WILL REMAIN IN FULL FORCE AND EFFECT.

       FOR THE PURPOSE OF THIS PARAGRAPH 11.2, "SELLER" WILL BE UNDERSTOOD TO
       INCLUDE THE SELLER, ITS AFFILIATES, SUPPLIERS AND ASSOCIATED CONTRACTORS.

       [...***...]

11.3   DUPLICATE REMEDIES

       The remedies provided to the Buyers under Paragraph 11 as to any part
       thereof are mutually exclusive and not cumulative. The Buyers will be
       entitled to the remedy that provides the maximum benefit to it, as the
       Buyer may elect, pursuant to the terms and conditions of this Paragraph
       11 for any such particular defect for which remedies are provided under
       this Paragraph 11, provided, however, that the Buyers will not be


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       entitled to elect a remedy under more than one part of this Paragraph 11
       for the same defect. [...***...]

    UNQUOTE

       In consideration of the foregoing assignment and subrogation by the
       Seller in favor of the Buyers in respect of the Seller's rights against
       and obligations to the Manufacturer under the provisions quoted above,
       the Buyers hereby accepts such assignment and subrogation and agrees to
       be bound by all of the terms, conditions and limitations therein
       contained.

11.4   NEGOTIATED AGREEMENT

       The Buyers and Seller agree that this Paragraph 11 has been the subject
       of discussion and negotiation and is fully understood by the parties, and
       that the price of the Aircraft and the other mutual agreements of the
       parties set forth in the Agreement were arrived at in consideration of,
       inter alia, the Exclusivity of Warranties and General Limitations of
       Liability provisions and Duplicate Remedies provisions set forth in this
       Paragraph 11.

12.    LEASING OF SPARE PARTS

12.1   Applicable Terms

       The terms and conditions of this Paragraph 12 will apply to the Lease of
       Seller Parts listed in Appendix "A" to this Paragraph 12 ("Leased Parts")
       and will form a part of each lease of any Leased Part by the Buyers from
       the Seller after the date hereof. Except for the description of the
       Leased Part, the Lease Term, the Leased Part delivery and return
       locations and the Lease Charges (defined below in Paragraph 12.4), all
       other terms and conditions appearing on any order form or other document
       pertaining to Leased Parts will be deemed inapplicable, and in lieu
       thereof the terms and conditions of this Paragraph 12 will prevail. For
       purposes of this Paragraph 12, the term "Lessor" refers to the Seller and
       the term "Lessees" refers to the Buyers. Parts not included in Appendix
       "A" to this Paragraph 12 may be supplied under a separate lease agreement
       between the Seller and the Buyers.

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12.2   Lease Procedure: Spare Parts Leased

       At the Lessees' request by telephone (to be confirmed promptly in
       writing), facsimile, letter or other written instrument, the Lessor will
       lease Leased Parts, which will be made available in accordance with
       Paragraph 4.2.3, to the Lessees as substitutes for parts withdrawn from
       an Aircraft for repair or overhaul. Each lease of Leased Parts will be
       evidenced by a lease document ("Lease") issued by the Lessor to the
       Lessees no later than seven (7) business days after delivery of the
       Leased Part.

12.3   Lease Term: Return

       The term of the lease ("Lease Term") will commence on the date of
       dispatch of the Leased Part to the Lessees or its agent at the Lessor's
       facility and will end on the date of receipt at the Lessor's facility of
       the Leased Part or in a serviceable condition. The Lease Term will not
       exceed thirty (30) days after such date of dispatch, unless extended by
       written agreement between Lessor and Lessees within such thirty (30)-day
       period (such extension not to exceed an additional thirty (30) days).
       Notwithstanding the foregoing, the Lease Term will end in the event, and
       upon the date, of exercise of the Lessees' option to either purchase or
       exchange the Leased Part, as provided herein.

12.4   Lease Charges and Taxes

       The Lessees will pay the Lessor (a) a daily rental charge for the Lease
       Term in respect of each Leased Part equal to
       one-three-hundred-sixty-fifth (1/365) of the Catalog Price of such Leased
       Part, as set forth in the Seller's Spare Parts Price List in effect on
       the date of commencement of the Lease Term, (b) any reasonable additional
       costs which may be incurred by the Lessor as a direct result of such
       Lease, such as inspection, test, repair, overhaul and repackaging costs
       as required to place the Leased Part in satisfactory condition for lease
       to a subsequent customer, (c) all transportation and insurance charges
       and (d) any taxes, charges or customs duties imposed upon the Lessor or
       its property as a result of the lease, sale, delivery, storage or
       transfer of any Leased Part (the "Lease Charges"). All payments due
       hereunder will be made in accordance with Paragraph 6.

       In the event that the Leased Part has not been returned to the Lessor's
       designated facilities by the last day of the Lease Term, the Lessor will
       be entitled, in addition to any other remedy it may have at law or under
       this Paragraph 12, to charge to the Lessees, and the Lessees will pay,
       all of the charges referred to in this Paragraph 12.4 accruing for each
       day after the end of the Lease Term and for as long as such Leased Part
       is not returned to the Lessor and as though the Lease Term were extended
       to the

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       period of such delay.

       Should the Lessees fail to return the Leased Part of the Lessor at the
       end of the lease Term, such failure will be deemed to be an election by
       the Lessees to purchase the Leased Part and the Lessees will pay the
       price set forth in Paragraph 12.8.

12.5   Title

       Title to each Leased Part will remain with the Lessor at all times unless
       the Lessees exercises its option to purchase it in accordance with
       Paragraph 12.8 of this Letter Agreement, in which case title will pass to
       the Lessees in accordance with Paragraph 7 of this Letter Agreement.

12.6   Risk of Loss

       Except for normal wear and tear, each Leased Part will be returned to the
       Lessor in the same condition as when delivered to the Lessees. However,
       the Lessees will not without the Lessors' prior written consent repair,
       modify or alter any Leased Part. Risk of loss or damage to each Leased
       Part will remain with the Lessees until such Leased Part is redelivered
       to the Lessor at the return location specified in the applicable Lease.
       If a Leased Part is lost or damaged beyond repair, the Lessees will be
       deemed to have exercised its option to purchase the part in accordance
       with Paragraph 12.8, as of the date of such loss or damage.

12.7   Record of Flight Hours

       All flight hours accumulated by the Lessees on each Leased Part during
       the Lease Term will be documented by the Lessees. Records will be
       delivered to the Lessor upon return of such Leased Part to the Lessor
       include all documentation pertinent to inspection, maintenance and/or
       rework of the Leased Part and evidence of incidents such as hard landings
       of aircraft on which such Leased Part was installed from time to time
       during the Lease term, abnormalities of operation and corrective action
       taken by the Lessees as a result of such incidents.

12.8   Option to Purchase

12.8.1 Option to Purchase

       The Lessees may at its option, exercisable by written notice given to the
       Lessor, elect during or at the end of the Lease Term to purchase each
       Leased Part, in which case the then current purchase price for such
       Leased Part as set forth in the Seller's Spare

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       Parts Price List will be paid by the Lessees to the Lessor. The
       immediately preceding sentence will apply to new Leased Parts only. In
       the event the Leased Part is used, [...***...] of the then current
       purchase price for such Leased Part will be paid by the Lessees to the
       Lessor. Such option will be contingent upon the Lessees' providing the
       Lessor with evidence satisfactory to the Lessor that the original part
       fitted to the Aircraft is beyond economical repair. [...***...]

12.8.2 In the event of purchase, the Leased Part will be warranted in accordance
       with Paragraph 11 as though such Leased Part were a Seller Part;
       provided, however, that (i) the Seller will prorate the full Seller Part
       Warranty Period granted to the Buyer according to the actual usage of
       such Leased Part and (ii) in no event will such Seller Part Warranty
       Period be less than six (6) months from the date of purchase of such
       Leased Part. A warranty granted under this Paragraph 12.8.2 will be in
       substitution for the warranty granted under Paragraph 12.9 at the
       commencement of the Lease Term.

12.9   Warranties on Leased Parts

       The Lessor, in its capacity as "Lessees," under its arrangements with the
       Manufacturer, in its capacity as "Lessor," has negotiated and obtained
       the following warranties from the Manufacturer with respect to the Leased
       Parts, subject to the terms, conditions, limitations and restrictions all
       as hereinafter set out. The Lessor hereby assigns to the Lessees, and the
       Lessee hereby accepts, all of the rights and obligations of the Lessor in
       its capacity as "Lessees" as aforesaid under the said warranties and the
       Lessor subrogates the Lessee as to all such rights and obligations in
       respect of Leased Parts during the Lease Term with respect thereto. The
       Lessor hereby warrants to the Lessees that it has all requisite authority
       to make the foregoing assignment and effect the foregoing subrogation to
       and in favor of the Lessees and that it will not enter into any amendment
       of the provisions so assigned or subrogated without the prior written
       consent of the Lessees. Capitalized terms utilized in the following
       provisions have the meanings assigned thereto in this Letter Agreement,
       except that the term "Lessor" refers to the Manufacturer and the term
       "Lessees" refers to the Lessor.

                                                                          LA1-26

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QUOTE

12.9.1 The Lessor warrants that each Leased Part will at the time of delivery
       thereof:

       (a)    conform to the applicable specification for such part,

       (b)    be free from defects in material,

       (c)    be free from defects in workmanship, including without limitation
              processes of manufacture, and

       (d)    be free from defects in design (including, without limitation,
              selection of materials) having regard to the state of the art at
              the date of such design.

12.9.2 Survival of Warranties

       With respect to each Leased Part, the warranty set forth above in
       Paragraph 12.9.1(a) will not survive delivery, and the warranties set
       forth above in Paragraphs 12.9.1(b), 12.9.1(c) and 12.9.1 (d) will
       survive delivery only upon the conditions and subject to the limitations
       set forth below in Paragraphs 12.9.3 through 12.9.8.

12.9.3 Warranty and Notice Periods

       The Lessees' remedy and the Lessor's obligation and liability under this
       Paragraph 12.9, with respect to each defect, are conditioned upon (i) the
       defect having become apparent to the Lessees within the Lease Term and
       (ii) the Lessor's warranty administrator having received written notice
       of the defect from the Lessees within [...***...] after the defect
       became apparent to the Lessees.

12.9.4 Return and Proof

       The Lessees' remedy and the Lessor's obligation and liability under this
       Paragraph 12.9, with respect to each defect, are also conditioned upon:

       (a)    the return by the Lessees as soon as practicable to the return
              location specified in the applicable Lease, or such other place as
              may be mutually agreeable, of the Leased Part claimed to be
              defective, and

       (b)    the submission by the Lessees to the Lessor's warranty
              administrator of reasonable proof that the claimed defect is due
              to a matter embraced within

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              the Lessor's warranty under this Paragraph 12.9 and that such
              defect did not result from any act or omission of the Lessees,
              including but not limited to any failure to operate or maintain
              the Leased Part claimed to be defective or the Aircraft in which
              it was installed in accordance with applicable governmental
              regulations and the Lessor's applicable written instructions.

12.9.5   Limitation of Warranty

         The Lessees' remedy and the Lessor's obligation and liability under
         this Paragraph 12.9 with respect to each defect are limited to the
         repair of such defect in the Leased Part in which the defect appears,
         or, as mutually agreed, to the replacement of such Leased Part with a
         similar part free from defect.

         Any replacement part furnished under this Paragraph 12.9.5 will for the
         purposes of this Letter Agreement be deemed to be the Leased Part so
         replaced.

12.9.6   Suspension and Transportation Costs

12.9.6.1 If a Leased Part is found to be defective and is covered by this
         warranty, the Lease Term and the Lessees' obligation to pay rental
         charges as provided in Paragraph 12.4(a) of this Letter Agreement will
         be suspended from the date on which the Lessees notify the Lessor of
         such defect until the date on which the Lessor has repaired, corrected
         or replaced the defective Leased Part, provided, however, that the
         Lessees have withdrawn such defective Leased Part from use, promptly
         after giving such notice to the Lessor. If the defective Leased Part is
         replaced, such replacement will be deemed to no longer be a Leased Part
         under the Lease as of the date on which such part was received by the
         Lessor at the return location specified in the applicable Lease.

         If a Leased Part is found to be defective on first use by the Lessees
         and is covered by this warranty, rental charges as provided in
         Paragraph 12.4(a) will not accrue and will not be payable by the
         Lessees until the date on which the Lessor has repaired, corrected or
         replaced the defective Leased Part.

12.9.6.2 All transportation and insurance costs associated with the return of
         the defective Leased Part to the Lessor and the return of the repaired,
         corrected or replacement part to the Lessees will be borne by the
         Lessor.

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12.9.7   Wear and Tear

         Normal wear and tear and the need for regular maintenance and overhaul
         will not constitute a defect or nonconformance under this Paragraph
         12.9.

12.9.8.  EXCLUSIVITY OF WARRANTIES

         THIS PARAGRAPH 12.9.8 (INCLUDING ITS SUBPARTS) SETS FORTH THE EXCLUSIVE
         WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE
         SELLERS, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER
         UNDER THIS LETTER AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR
         NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY LEASED PART.

         THE BUYERS RECOGNIZE THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS
         PARAGRAPH 12.9.8 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYERS FROM
         ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE LEASED PARTS.
         THE BUYERS HEREBY WAIVE, RELEASE AND RENOUNCE ALL OTHER WARRANTIES,
         OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER
         RIGHTS, CLAIMS AND REMEDIES OF THE BUYERS AGAINST THE SELLER, WHETHER
         EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE,
         WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN
         ANY LEASED PART, INCLUDING BUT NOT LIMITED TO:

         (1)      ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY
                  GENERAL OR PARTICULAR PURPOSE;

         (2)      ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
                  PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

         (3)      ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

         (4)      ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF
                  LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO,
                  ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE,
                  INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT
                  LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

         (5)      ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM

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                  COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

         (6)      ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
                  STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR
                  LOCAL STATUTE OR AGENCY;

         (7)      ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

                  (a)      LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, OR
                           LEASED;

                  (b)      LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT OR
                           LEASED PART;

                  (c)      LOSS OF PROFITS AND/OR REVENUES;

                  (d)      ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

         THE WARRANTIES PROVIDED BY THIS LETTER AGREEMENT WILL NOT BE EXTENDED,
         ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER
         AND THE BUYERS. IN THE EVENT THAT ANY PROVISION OF THIS PARAGRAPH
         12.9.8 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE
         UNENFORCEABLE, THE REMAINDER OF THIS PARAGRAPH 12.9.8 WILL REMAIN IN
         FULL FORCE AND EFFECT.

         FOR THE PURPOSE OF THIS PARAGRAPH 12.9.8, "SELLER" WILL BE UNDERSTOOD
         TO INCLUDE THE SELLER, ITS AFFILIATES, SUPPLIERS AND ASSOCIATED
         CONTRACTORS.

         [...***...]


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12.9.9 DUPLICATE REMEDIES

       The remedies provided to the Buyers under Paragraph 12 as to any part
       thereof are mutually exclusive and not cumulative. The Buyers will be
       entitled to the remedy that provides the maximum benefit to it, as the
       Buyers may elect, pursuant to the terms and conditions of this Paragraph
       12 for any such particular defect for which remedies are provided under
       this Paragraph 12, provided, however, that the Buyers will not be
       entitled to elect a remedy under more than one part of this Paragraph 12
       for the same defect. [...***...]

     UNQUOTE

       In consideration of the assignment and subrogation by the Seller under
       this Paragraph 12 in favor of the Buyers in respect of the Seller's
       rights against and obligations to the Manufacturer under the provisions
       quoted above, the Buyers hereby accepts such assignment and subrogation
       and agrees to be bound by all of the terms, conditions and limitations
       therein contained.

12.10. NEGOTIATED AGREEMENT

       The Buyers and Seller agree that this Paragraph 12 has been the subject
       of discussion and negotiation and is fully understood by the parties, and
       that the price of the Aircraft and the other mutual agreements of the
       parties set forth in the Agreement were arrived at in consideration of,
       inter alia, the Exclusivity of Warranties and General Limitations of
       Liability provisions and Duplicate Remedies provisions set forth in
       Paragraph 12.

13.    [...***...]


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14.    TERMINATION

       Any termination under Paragraph 10, 11 or 21 of the Agreement or under
       the Letter Agreements thereto will discharge all obligations and
       liabilities of the parties hereunder with respect to undelivered
       Material, services, data or other items to be purchased hereunder that
       are applicable to those Aircraft as to which the Agreement has been
       terminated, provided that the Seller will nevertheless repurchase new and
       unused Material in excess of the Buyers' requirements due to an Aircraft
       cancellation pursuant to Paragraph 10 or 11 of the Agreement, as provided
       in Paragraph 10.2. In the case of any termination of this Letter
       Agreement in connection with a termination under Clause 21 of the
       Agreement, the Seller will not have any obligation to repurchase Material
       delivered in respect of any undelivered Aircraft and the Seller's rights
       to payment for services or spare parts actually delivered to the Buyers
       or, in the case of spare parts, the return thereof in new and unused
       condition, in their original packaging with all applicable documentation
       will not be limited by the liquidated damages provision included in
       Clause 21 of the Agreement.

15.    MISCELLANEOUS

      [...***...]

16.    ASSIGNMENT

       This Letter Agreement may be assigned in accordance with Clause 20 of the
       Agreement. This Letter Agreement is otherwise not assignable.

17.    COUNTERPARTS

       This Letter Agreement may be signed in any number of separate
       counterparts. Each counterpart, when signed and delivered (including
       counterparts delivered by facsimile transmission), will be an original,
       and the counterparts will together constitute one same instrument.


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IN WITNESS WHEREOF, these presents were entered into as of the day and year
first above written.

                                Very truly yours,

                                AVSA, S.A.R.L.

                                By: __________________________

                                Its: _________________________

Accepted and Agreed

US AIRWAYS GROUP, INC.

By: _________________________
Its:

AMERICA WEST AIRLINES, INC.

By: _________________________
Its:

US AIRWAYS, INC.

By: _________________________
Its:

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APPENDIX "A" TO PARAGRAPH 12

SELLER PARTS LEASING LIST

(Leased Parts)

AILERONS

AUXILIARY POWER UNIT (APU) DOORS

CARGO DOORS

PASSENGER DOORS

ELEVATORS

FLAPS

LANDING GEAR DOORS

RUDDER

TAIL CONE

WING SLATS

SPOILERS

AIRBRAKES

WING TIPS

[...***...]


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            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 2

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ  85034

Re:  OTHER MATTERS

Ladies and Gentlemen,

US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of even date herewith (the "Agreement"), which
covers, among other things, the sale by the Seller and the purchase by the
Buyers of certain Aircraft, under the terms and conditions set forth in said
Agreement. The Buyers and the Seller have agreed to set forth in this Letter
Agreement No. 2 (the "Letter Agreement") certain additional terms and conditions
regarding the sale of the Aircraft. Capitalized terms used herein and not
otherwise defined in this Letter Agreement will have the meanings assigned
thereto in the Agreement. Technical and trade terms used but not defined herein
or in the Agreement will be defined as generally accepted in the airline and/or
aircraft manufacturing industries. The terms "herein," "hereof" and "hereunder"
and words of similar import refer to this Letter Agreement.

All of the parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

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1.   [...***...]


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2.    [...***...]


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3.    ASSIGNMENT

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyer hereunder will not be assigned
      or transferred in any manner without the prior written consent of the
      Seller, and any attempted assignment or transfer in contravention of the
      provisions of this Paragraph 3 will be void and of no force or effect.

4.    COUNTERPARTS

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

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      IN WITNESS WHEREOF, these presents were entered into as of the day and
      year first above written.

                                                     Very truly yours,

                                                     AVSA, S.A.R.L.

                                                     By:  ______________________

                                                     Its:

      Accepted and Agreed

      US AIRWAYS GROUP, INC.

      By:   _________________________
      Its:

      AMERICA WEST AIRLINES, INC.

      By:   _________________________
      Its:

      US AIRWAYS, INC.

      By:   _________________________
      Its:

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            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 3

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ  85034

Re: ADDITIONAL AIRCRAFT

Ladies and Gentlemen,

US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of the date hereof (the "Agreement"), which covers,
among other things, the sale by the Seller and the purchase by the Buyers of
certain Aircraft under the terms and conditions set forth in said Agreement. The
Buyers and the Seller have agreed to set forth in this Letter Agreement No. 3
(the "Letter Agreement") certain additional terms and conditions regarding the
sale of the Aircraft. Capitalized terms used herein and not otherwise defined in
this Letter Agreement will have the meanings assigned thereto in the Agreement.
Technical and trade terms used but not defined herein or in the Agreement will
be defined as generally accepted in the airline and/or aircraft manufacturing
industries. The terms "herein," "hereof" and "hereunder" and words of similar
import refer to this Letter Agreement.

All of the parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

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                          PRIVILEGED AND CONFIDENTIAL



1.    PURCHASE RIGHTS

1.1   The Seller hereby grants the Buyers, acting jointly, the right to purchase
      up to [...***...] A350 aircraft, either as A350-800 aircraft or as
      A350-900 aircraft (the "Additional Aircraft") in addition to the Aircraft.
      The terms and conditions set out in the Agreement will apply to the
      Additional Aircraft, as applicable, [...***...].

1.2   Upon any written request made by the Buyers to the Seller specifying a
      number of Additional Aircraft that the Buyers wish to purchase, the last
      such request to be made not later than [...***...], the Seller will
      promptly provide the Buyers with a proposal for scheduled delivery months
      to be applicable to such Additional Aircraft. Such scheduled delivery
      months will be held for the Buyers during the [...***...] period
      following the date of the Seller's proposal. The Buyers may exercise their
      right to purchase any such Additional Aircraft by written notice to the
      Seller, executed by each Buyer, and by making the Initial Payment and any
      other then due Predelivery Payments applicable under Letter Agreement No.
      11, in respect of such Additional Aircraft, which Additional Aircraft
      shall then become firmly ordered Aircraft with immediate effect. The
      parties will thereafter conclude as soon as possible definitive
      documentation to amend the Agreement accordingly.

1.3   [...***...]

2.    ASSIGNMENT

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without the prior written consent of
      the Seller, and any attempted assignment or transfer in contravention of
      the provisions of this Paragraph 2 will be void and of no force or effect.

3.    COUNTERPARTS

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

                                                                           LA3-2
***Confidential Treatment Requested

AWE/USA-A350
                          PRIVILEGED AND CONFIDENTIAL



      IN WITNESS WHEREOF, these presents were entered into as of the day and
      year first above written.

                                      Very truly yours,

                                      AVSA, S.A.R.L.

                                      By:  _________________________
                                      Its:

      Accepted and Agreed:

      US AIRWAYS GROUP, INC.

      By:  _________________________
      Its:

      AMERICA WEST AIRLINES, INC.

      By:  _________________________
      Its:

      US AIRWAYS, INC.

      By:  _________________________
      Its:

                                                                           LA3-3

AWE/USA--A350
                          PRIVILEGED AND CONFIDENTIAL


            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 4

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ  85034

Re: CONVERSION RIGHTS

Ladies and Gentlemen,

US Airways, Inc., America West Airlines, Inc., US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of even date herewith (the "Agreement"), which
covers, among other things, the sale by the Seller and the purchase by the
Buyers of certain Aircraft, under the terms and conditions set forth in said
Agreement. The Buyers and the Seller have agreed to set forth in this Letter
Agreement No. 4 (the "Letter Agreement") certain additional terms and conditions
regarding the sale of the Aircraft. Capitalized terms used herein and not
otherwise defined in this Letter Agreement will have the meanings assigned
thereto in the Agreement. Technical and trade items used but not defined herein
or in the Agreement will be defined as generally accepted in the airline and/or
aircraft manufacturing industries. The terms "herein," "hereof" and "hereunder"
and words of similar import refer to this Letter Agreement.

The parties agree that this Letter Agreement will constitute an integral,
nonseverable part of the Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

AWE/USA--A350                                                              LA4-1
                          PRIVILEGED AND CONFIDENTIAL



1.    [...***...]

2.    [...***...]

***Confidential Treatment Requested
AWE/USA--A350                                                              LA4-2
                          PRIVILEGED AND CONFIDENTIAL


3.    ASSIGNMENT

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without the prior written consent of
      the Seller, and any attempted assignment or transfer in contravention of
      the provisions of this Paragraph 3 will be void and of no force or effect.

4.    COUNTERPARTS

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

AWE/USA--A350                                                              LA4-3
                          PRIVILEGED AND CONFIDENTIAL



      IN WITNESS WHEREOF, these presents were entered into as of the day and
      year first above written.

                                        Very truly yours,

                                        AVSA, S.A.R.L.

                                        By:  _________________________

                                        Its:

      Accepted and Agreed

      US AIRWAYS GROUP, INC.

      By:  _________________________
      Its:

      AMERICA WEST AIRLINES, INC.

      By:  _________________________
      Its:

      US AIRWAYS, INC.

      By:  _________________________
      Its:

AWE/USA--A350                                                              LA4-4
                          PRIVILEGED AND CONFIDENTIAL


            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 5

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ  85034

Re: PURCHASE INCENTIVES

Ladies and Gentlemen,

US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of the date hereof (the "Agreement"), which covers,
among other things, the sale by the Seller and the purchase by the Buyers of
certain Aircraft, under the terms and conditions set forth in said Agreement.
The Buyers and the Seller have agreed to set forth in this Letter Agreement No.
5 (the "Letter Agreement") certain additional terms and conditions regarding the
sale of the Aircraft. Capitalized terms used herein and not otherwise defined in
this Letter Agreement will have the meanings assigned thereto in the Agreement.
Technical and trade terms used but not defined herein or in the Agreement will
be defined as generally accepted in the airline and/or aircraft manufacturing
industries. The terms "herein," "hereof" and "hereunder" and words of similar
import refer to this Letter Agreement.

All of the parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

                                                                           LA5-1

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



1.    [...***...]

2.    [...***...]

                                                                           LA5-2

*** Confidential Treatment Requested

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



3.    ASSIGNMENT

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without the prior written consent of
      the Seller, and any attempted assignment or transfer in contravention of
      the provisions of this Paragraph 3 will be void and of no force or effect.

4.    COUNTERPARTS

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

                                                                           LA5-3

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



      IN WITNESS WHEREOF, these presents were entered into as of the day and
      year first above written.

                                              Very truly yours,

                                              AVSA, S.A.R.L.

                                              By: ______________________________

                                              Its:

      Accepted and Agreed

      US AIRWAYS GROUP, INC.

      By: ______________________________
      Its:

      AMERICA WEST AIRLINES, INC.

      By: ______________________________
      Its:

      US AIRWAYS, INC.

      By: ______________________________
      Its:

                                                                           LA5-4

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL


            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 6

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ  85034

Re: SPECIFICATION MATTERS

Ladies and Gentlemen,

US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of the date hereof (the "Agreement"), which covers,
among other things, the sale by the Seller and the purchase by the Buyers of
certain Aircraft, under the terms and conditions set forth in said Agreement.
The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 6
(the "Letter Agreement") certain additional terms and conditions regarding the
sale of the Aircraft. Capitalized terms used herein and not otherwise defined in
this Letter Agreement will have the meanings assigned thereto in the Agreement.
Technical and trade terms used but not defined herein or in the Agreement will
be defined as generally accepted in the airline and/or aircraft manufacturing
industries. The terms "herein," "hereof" and "hereunder" and words of similar
import refer to this Letter Agreement.

All of the parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

                                                                           LA6-1

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



1.    SPECIFICATION

      Up to and including the date on which Issue 1 of the Standard
      Specification is published (the "First Production Standard
      Specification"), the Seller and the Buyers agree that the A350-800
      Standard Specification and A350-900 Standard Specification of the A350
      Aircraft will incorporate all development changes reflected in updated
      versions of such standard specification from time to time. [...***...]

      [...***...]

      The Buyers will be invited by the Seller to attend all customer focus
      group meetings ("CFGs") and program progress reviews ("PPRs") with respect
      to the A350 aircraft from the date hereof. The Buyers may, during the CFGs
      and/or the PPRs, make suggestions from time to time with respect to the
      A350-800 Standard Specification or A350-900 Standard Specification as
      applicable with respect to any changes contemplated by the Seller. The
      Seller will make reasonable efforts to accommodate any such suggestions.
      However, any and all changes to any standard specification will be at the
      Seller's sole discretion.

2.    PROPULSION SYSTEMS

2.1   [...***...]

***Confidential Treatment Requested
                                                                           LA6-2

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



2.2   [...***...]

3.    MTOW INCREASE

      [...***...]

4.    ASSIGNMENT

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without the prior written consent of
      the Seller, and any attempted assignment or transfer in contravention of
      the provisions of this Paragraph 4 will be void and of no force or effect.

5.    COUNTERPARTS

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

***Confidential Treatment Requested
                                                                           LA6-3

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL



      IN WITNESS WHEREOF, these presents were entered into as of the day and
      year first above written.

                                              Very truly yours,

                                              AVSA, S.A.R.L.

                                              By: ______________________________
                                              Its:

      Accepted and Agreed

      US AIRWAYS, INC.

      By: ______________________________
      Its:

      AMERICA WEST AIRLINES, INC.

      By: ______________________________
      Its:

      US AIRWAYS GROUP, INC.

      By: ______________________________
      Its:

                                                                           LA6-4

AWE/USA-A350

                           PRIVILEGED AND CONFIDENTIAL


            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
               FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                  SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 7

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ 85034

Re: PRODUCT SUPPORT

Ladies and Gentlemen,

US Airways, Inc., America West Airlines, Inc., US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of even date herewith (the "Agreement"), which
covers, among other things, the sale by the Seller and the purchase by the
Buyers of certain Aircraft, under the terms and conditions set forth in said
Agreement. The Buyers and the Seller have agreed to set forth in this Letter
Agreement No. 7 (the "Letter Agreement") certain additional terms and conditions
regarding the sale of the Aircraft. Capitalized terms used herein and not
otherwise defined in this Letter Agreement will have the meanings assigned
thereto in the Agreement. Technical and trade terms used but not defined herein
or in the Agreement will be defined as generally accepted in the airline and/or
aircraft manufacturing industries. The terms "herein," "hereof" and "hereunder"
and words of similar import refer to this Letter Agreement.

All of the parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

                                                                           LA7-1

AWE/USA--A350

                          PRIVILEGED AND CONFIDENTIAL



1.      TRAINING SUPPORT

1.1     [...***...]

1.2     [...***...]

1.3     [...***...]

2.      TECHNICAL DATA AND SOFTWARE SERVICES

2.1     The first sentence of Clause 14.5 of the Agreement is superseded and
        replaced by the following:

     QUOTE

        Revision service will be provided [...***...] for a period
        of [...***...] after Delivery of the last Aircraft.

     UNQUOTE

2.2     ELOGBOOK

        The Buyers will be entitled to obtain the Airbus eLogbook under the
        license conditions as set forth in Exhibit H to the Agreement. The
        Airbus eLogbook tool allows the airline pilots to enter standardized
        pilot reports. [...***...]

***Confidential Treatment Requested
                                                                           LA7-2

AWE/USA--A350

                           PRIVILEGED AND CONFIDENTIAL




        [...***...]

2.3     ADOC Job Card Publisher

        The Buyers will be entitled to one (1) license of the ADOC Job Card
        Publisher. With this package, which is based on the ADOC Job Card
        Publisher software module, the Buyers will be able to build their own
        database from their SGML documentation (including in-house
        modifications) using one (1) customized job card model developed by
        Airbus and based on specifications of the content and structure of the
        job cards provided by the Airline.

        ADOC Job Card Publisher integrates with the Buyers' Maintenance
        Information Systems. The Buyers are responsible to integrate the
        Maintenance Information System with ADOC Job Card Publisher.

        [...***...]

3.      OPERATION SUPPORT

        The Seller will provide to the Buyers the following software tools
        during the [...***...] period preceding delivery of the first Aircraft
        and revision service therefor [...***...], including:

        (i)     [...***...]

        (ii)    [...***...]

                                                                           LA7-3

***Confidential Treatment Requested

AWE/USA--A350

                          PRIVILEGED AND CONFIDENTIAL



        (iii)   [...***...]

        (iv)    [...***...]

        [...***...]

4.      [...***...]

4.1     [...***...]

     QUOTE

        [...***...]

     UNQUOTE

4.2     [...***...]

     QUOTE

        [...***...]

     UNQUOTE

                                                                           LA7-4

***Confidential Treatment Requested

AWE/USA--A350

                           PRIVILEGED AND CONFIDENTIAL



5.      AIRCRAFT MAINTENANCE MANUAL LIMITS

        The Seller endeavors to harmonize all relevant production limits with
        the relevant limits specified in the Aircraft Maintenance Manual
        provided to the Buyers pursuant to Clause 14 of the Agreement.

6.      ETOPS SUPPORT

        [...***...] The Seller will support the Buyers' efforts to obtain FAA
        approval for ETOPS operation of the A350-800 Aircraft.

7.      [...***...]

8.      [...***...]

                                                                           LA7-5

***Confidential Treatment Requested

AWE/USA--A350

                          PRIVILEGED AND CONFIDENTIAL



     QUOTE

        [...***...]

     UNQUOTE

9.      AIRBUS ONLINE CONTENT MANAGEMENT

        On Line Content Management enables the Buyers to access from the Airbus
        on-line portal Airbus Technical Data (AMM, IPC, TSM, ASM, AWL, AWM, SRM,
        NTM) in order to perform modifications to this Technical Data prior to
        producing the AirN@v consultation database used by the Buyers'
        operations.

        Tasks regarding administration of the hardware and software will be
        performed by the Seller. Modification of the Technical Data carried out
        by the Buyers authors remains under the full responsibility of the
        Buyers.

        [...***...]
                                                                           LA7-6
***Confidential Treatment Requested
AWE/USA--A350

                           PRIVILEGED AND CONFIDENTIAL



10.     [...***...]

11.     ASSIGNMENT

        Except as set forth in Clause 20.2 of the Agreement, this Letter
        Agreement and the rights and obligations of the Buyers hereunder will
        not be assigned or transferred in any manner without the prior written
        consent of the Seller, and any attempted assignment or transfer in
        contravention of the provisions of this Paragraph 11 will be void and of
        no force or effect.

12.     COUNTERPARTS

        This Letter Agreement may be signed in any number of separate
        counterparts. Each counterpart, when signed and delivered (including
        counterparts delivered by facsimile transmission), will be an original,
        and the counterparts will together constitute one same instrument.

                                                                           LA7-7

*** Confidential Treatment Requested

AWE/USA--A350

                          PRIVILEGED AND CONFIDENTIAL



IN WITNESS WHEREOF, these presents were entered into as of the day and year
first above written.

                                                  Very truly yours,

                                                  AVSA, S.A.R.L.

                                                  By: __________________________
                                                  Its:

 Accepted and Agreed

 US AIRWAYS GROUP, INC.

 By: _________________________
 Its:

 AMERICA WEST AIRLINES, INC.

 By: _________________________
 Its:

 US AIRWAYS, INC.

 By: _________________________
 Its:

                                                                           LA7-8

AWE/USA--A350

                          PRIVILEGED AND CONFIDENTIAL


            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 8A

                                                        As of September 27, 2005

 US Airways Group, Inc.
 US Airways, Inc.
 America West Airlines, Inc.
 4000 East Sky Harbor Boulevard
 Phoenix, AZ  85034

Re: A350-800 with GEnx-1A72 PERFORMANCE GUARANTEES

Dear  Ladies and Gentlemen:

US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of even date herewith (the "Agreement"), which
covers, among other things, the sale by the Seller and the purchase by the
Buyers of certain A350-800 Aircraft, under the terms and conditions set forth in
said Agreement. The Buyers and the Seller have agreed to set forth in this
Letter Agreement No. 8A (the "Letter Agreement") certain additional terms and
conditions regarding the sale of the A350-800 Aircraft. Capitalized terms used
herein and not otherwise defined in this Letter Agreement will have the meanings
assigned thereto in the Agreement. Technical and trade terms used but not
defined herein or in the Agreement will be defined as generally accepted in the
airline and/or aircraft manufacturing industries. The terms "herein," "hereof"
and "hereunder" and words of similar import refer to this Letter Agreement.

All of the parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

                                                                         LA 8A-1
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



      The Seller represents and warrants that the Manufacturer has provided to
      the Seller the performance, noise and weight guarantees (the "Guarantees")
      that are reproduced below between the words QUOTE and UNQUOTE, subject to
      the terms, conditions, limitations and restrictions set forth below. The
      Seller hereby assigns to the Buyers, and the Buyers hereby accept, as to
      each A350-800 Aircraft delivered to the Buyers under the Agreement, all of
      the Seller's rights and obligations with respect to such A350-800 Aircraft
      in its capacity as "Buyers" as aforesaid under the said Guarantees, and
      the Seller subrogates the Buyers into all such rights and obligations in
      respect of the A350-800 Aircraft. The Seller hereby warrants to the Buyers
      that (i) it has all requisite authority to make the foregoing assignment
      to and to effect the foregoing subrogation in favor of the Buyers, (ii)
      such assignment and subrogation are effective to confer on the Buyers all
      of the foregoing rights and obligations of the Seller, (iii) the
      provisions so assigned are in full force and effect and have not been
      amended prior to the date hereof, and (iv) the Seller will not enter into
      any amendment of the provisions so assigned without the prior written
      consent of the Buyers.

QUOTE

1     AIRCRAFT CONFIGURATION

1.1   The Guarantees defined below are applicable to the A350-800 Aircraft
      powered by General Electric GEnx-1A72 engines, as described in the
      Standard Specification Ref. G.000.08000 Issue B dated 30th June 2005,
      without taking into account any further changes thereto as provided in the
      Agreement, herein after referred as "the Specification" without taking
      into account any further changes thereto as provided in the Agreement.

2     GUARANTEED PERFORMANCE

2.1   Take-off Field Length

      FAR take-off field length ("TOFL") at an Aircraft gross weight of 540,133
      lb (245,000 kg) at the start of Take-Off Distance Available (TODA) at Sea
      Level pressure altitude in ISA+15 degrees C conditions will be not more
      than a guaranteed value of [...***...].

2.2   Second Segment Climb

     The Aircraft will meet FAR 25 regulations for one engine inoperative climb
      after take-off, undercarriage retracted, at a weight corresponding to the
      stated weight at the start of ground run, at the altitude and temperature,
      and in the configuration of flap angle and safety speed required to comply
      with the performance guaranteed in paragraph 2.1 and 2.3.

                                                                         LA 8A-2
***Confidential Treatment Requested
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



2.3   Take-off Weight

2.3.1 When operated under the following conditions (representative of FRA 25R)

                                                      
Pressure altitude                                        : 364 ft
Ambient temperature                                      : 24 degrees C
Take-off run available                                   : 13,123 ft
Take-off distance available                              : 13,123 ft
Accelerate-stop distance available                       : 13,123 ft
Slope                                                    : -0.26% (downhill)
Wind                                                     : Zero
Line-up allowance TOD                                    : 80 ft
Line-up allowance ASD                                    : 153 ft
Obstacles (Height/Distance above/from start of TODA):      -28ft/13,488ft
                                                           -23ft/13,980ft
                                                           -21ft/14,236ft
                                                           59ft/17,388ft
                                                           60ft/17,598ft
                                                           61ft/17,795ft
                                                           62ft/18,035ft
                                                           65ft/18,848ft
                                                           67ft/19,918ft
                                                           76ft/23,402ft



      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be not less than a guaranteed value of [...***...]

2.3.2 When operated under the following conditions (representative of PHL 27L)

                                                      
Pressure altitude                                        : 10 ft
Ambient temperature                                      : 30 degrees C
Take-off run available                                   : 10,506 ft
Take-off distance available                              : 10,506 ft
Accelerate-stop distance available                       : 10,506 ft
Slope                                                    : 0.11% (uphill)
Wind                                                     : Zero
Line-up allowance TOD                                    : 80 ft
Line-up allowance ASD                                    : 153 ft
Obstacles (Height/Distance above/from start of TODA):      33ft/11,312ft
                                                           38ft/12,036ft



      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be

                                                                         LA 8A-3
***Confidential Treatment Requested
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



      not less than a guaranteed value of [...***...].

2.3.3 When operated under the following conditions (representative of PHX 26)

                                                      
Pressure altitude                                        : 1,135 ft
Take-off run available                                   : 11,490 ft
Take-off distance available                              : 11,490 ft
Accelerate-stop distance available                       : 11,490 ft
Slope                                                    : -0.21% (downhill)
Wind                                                     : Zero
Line-up allowance TOD                                    : 80 ft
Line-up allowance ASD                                    : 153 ft
Obstacles (Height/Distance above/from start of TODA):     -13ft/12,506ft
                                                          -5ft/12,852ft
                                                          36ft/13,792ft
                                                          42ft/14,510ft
                                                          195ft/22,434ft



      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be not less than a guaranteed value of

                                      
Ambient temperature of 41 degrees C:     [...***...]
Ambient temperature of 46 degrees C:     [...***...]



2.3.4 When operated under the following conditions (representative of TLV 26)

                                                          
Pressure altitude                                            : 135 ft
Ambient temperature                                          : 32 degrees C
Take-off run available                                       : 11,998 ft
Take-off distance available                                  : 12,392 ft
Accelerate-stop distance available                           : 12,293 ft
Slope                                                        : -0.32% (downhill)
Wind                                                         : Zero
Line-up allowance TOD                                        : 80 ft
Line-up allowance ASD                                        : 153 ft
Obstacles (Height/Distance above/from start of TODA)         : none



      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be not less than a guaranteed value of [...***...].

2.3.5 When operated under the following conditions (representative of NRT 34L)

                                                                         LA 8A-4
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AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



                                                                     
Pressure altitude                                                       : 139 ft
Ambient temperature                                                     : 29 degrees C
Take-off run available                                                  : 13,123 ft
Take-off distance available                                             : 13,123 ft
Accelerate-stop distance available                                      : 13,123 ft
Slope                                                                   : -0.07% (downhill)
Wind                                                                    : Zero
Line-up allowance TOD                                                   : 80 ft
Line-up allowance ASD                                                   : 153 ft
Obstacles (Height/Distance above/from start of TODA):                    -2ft/13,905ft
                                                                         4ft/14,541ft
                                                                         8ft/14,780ft
                                                                         25ft/15,892ft
                                                                         28ft/16,030ft
                                                                         29ft/16,269ft
                                                                         30ft/16,303ft
                                                                         32ft/16,967ft
                                                                         53ft/18,187ft
                                                                         57ft/19,378ft
                                                                         65ft/20,659ft



      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be not less than a guaranteed value of [...***...].

2.4   Landing Field Length

      FAR certified dry landing field length ("LFL") at an Aircraft gross weight
      of 401,241 lb (182,000 kg) at Sea Level pressure altitude will not be more
      than a guaranteed value of [...***...].

2.5   En-route One Engine Inoperative

      The A350-800 Aircraft will meet the FAR regulations minimum en-route climb
      one engine inoperative and the other operating at the maximum continuous
      thrust with anti-icing off at an A350-800 Aircraft gross weight of 500,000
      lb in the cruise configuration in ISA+10C conditions at a guaranteed
      pressure altitude of not less than [...***...]

2.6   Approach Climb

2.6.1 The A350-800 Aircraft will meet FAR regulations approach climb gradient
      one engine inoperative and the other operating at the maximum go-round
      thrust with air conditioning on and anti-icing off at sea level pressure
      altitude at an A350-800 Aircraft gross weight of 401,241

***Confidential Treatment Requested

                                                                         LA 8A-5
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



      lb at a temperature of not less than the guarantee value of [...***...].

2.6.2 The A350-800 Aircraft will meet FAR regulations approach climb gradient
      one engine inoperative and the other operating at the maximum go-round
      thrust with air conditioning on and anti-icing off at a pressure altitude
      of 5,000 feet at an A350-800 Aircraft gross weight of 401,241 lb at a
      temperature of not less than the guarantee value of [...***...] and a
      nominal value of [...***...].

2.7   Specific Range

      The nautical miles per pound of fuel at an A350-800 Aircraft gross weight
      of 500,000 lb at a pressure altitude of 33,000 ft in ISA+10C conditions at
      a true Mach number of 0.82 will not be less than a guaranteed value of
      [...***...].

      The nautical miles per pound of fuel at an A350-800 Aircraft gross weight
      of 490,000 lb at a pressure altitude of 35,000 ft in ISA+10C conditions at
      a true Mach number of 0.82 will not be less than a guaranteed value of
      [...***...].

      The nautical miles per pound of fuel at an A350-800 Aircraft gross weight
      of 480,000 lb at a pressure altitude of 33,000 ft in ISA+10C conditions at
      a true Mach number of 0.84 will not be less than a guaranteed value of
      [...***...].

      The nautical miles per pound of fuel at an A350-800 Aircraft gross weight
      of 470,000 lb at a pressure altitude of 35,000 ft in ISA+10C conditions at
      a true Mach number of 0.84 will not be less than a guaranteed value of
      [...***...].

2.8   Initial Cruise Altitude

      At an A350-800 gross weight of 527,000 lb (representing the estimated
      weight at start of cruise following a take-off at sea level at Maximum
      Take-off Weight) in ISA+10C conditions the pressure altitude for:

            1.    Level flight at a true Mach number of 0.82 using a thrust not
                  exceeding maximum cruise thrust

            2.    A rate of climb of not less than then 300 ft/min at a true
                  Mach number of 0.82 using a thrust not exceeding maximum climb
                  thrust

            3.    A buffet maneuver margin of not less than 0.3g at a true Mach
                  number of 0.82

      will be not less than [...***...].

***Confidential Treatment Requested

                                                                         LA 8A-6
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



2.9   Speed

      Level flight speed at an A350-800 Aircraft gross weight of 527,000 lb at a
      pressure altitude of 33,000 ft in ISA+10C conditions using a thrust not
      exceeding maximum cruise thrust will be not less than a guaranteed true
      Mach number of [...***...].

3     MISSION GUARANTEES

3.1   Mission Usable Load: TLV - PHL

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      (as defined in Paragraph 3.11 below) of not less than [...***...] over a
      still air stage distance of 5,849 nautical miles (representative of TLV to
      PHL mission with a 58 knots headwind) when operated under the conditions
      defined below:

3.1.1 The departure airport conditions are such to allow the required Takeoff
      Weight to be used without any restriction. Pressure altitude is 135 ft.

      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 10 ft.

3.1.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

3.1.3 An allowance of 1,840 lb of fuel and 3 minutes is included for take-off
      and climb to 1,635 ft pressure altitude with acceleration to climb speed
      at a temperature of 29 degrees C. No credit is taken for the distance
      covered in these segments.

3.1.4 Climb from 1,635 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 31,000 ft, 35,000 ft and 39,000 ft and descent to 1,510 ft
      pressure altitude are conducted in ISA+10 degrees C conditions. Climb and
      descent speeds below 10,000 ft will be 250 knots CAS. A wind component of
      70% of cruise wind has been considered during climb and descent.

3.1.5 An allowance of 430 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

3.1.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing as defined in
      paragraphs 3.1.2 to 3.1.5 above. Stage distance is defined as the distance
      covered during climb, cruise and descent as described in paragraph 3.1.4
      above.

***Confidential Treatment Requested
                                                                         LA 8A-7
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



3.1.7 At the end of approach and landing 14,800 lb of usable fuel will remain in
      the tanks. This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
            altitude and using long range procedures

      4)    Holding for 30 minutes at 1,500 ft pressure altitude in
            ISA+10 degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

3.2   Mission fuel burn: TLV - PHL

      In carrying a fixed Usable Load of 136,780 lb over a still air stage
      distance of 5,849 nautical miles (representative of TLV to PHL mission
      with a 58 knots headwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.1.1 to 3.1.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...]. Block time is defined
      as the time for engine start-up and taxi-out, take-off, climb, cruise,
      descent, approach and landing as defined in paragraphs 3.1.2 to 3.1.5
      above.

3.3   Mission Usable Load: FRA - PHX

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      of not less than [...***...] over a still air stage distance of 5,482
      nautical miles (representative of FRA to PHX mission with a 40 knots
      headwind) when operated under the conditions defined below:

3.3.1 The departure airport conditions are such to allow the required Takeoff
      Weight to be used without any restriction. Pressure altitude is 364 ft.

      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 1,135 ft.

3.3.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

3.3.3 An allowance of 1,750 lb of fuel and 3 minutes is included for take-off
      and climb to 1,864 ft pressure altitude with acceleration to climb speed
      at a temperature of 21 degrees C. No credit is taken for the distance
      covered in these segments.

3.3.4 Climb from 1,864 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 31,000 ft, 35,000 ft and 39,000 ft and descent to 2,635 ft
      pressure altitude are conducted in ISA+10 degrees C conditions.


***Confidential Treatment Requested


                                                                         LA 8A-8
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



      Climb and descent speeds below 10,000 ft will be 250 knots CAS. A wind
      component of 70% of cruise wind has been considered during climb and
      descent.

3.3.5 An allowance of 440 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

3.3.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing and manoeuvre as
      defined in paragraphs 3.3.2 to 3.3.5 above. Stage distance is defined as
      the distance covered during climb, cruise and descent as described in
      paragraph 3.3.4 above.

3.3.7 At the end of approach and landing 14,600 lb of usable fuel will remain in
      the tanks. This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
            altitude and using long range procedures

      4)    Holding for 30 minutes at 1,500 ft pressure altitude in
            ISA+10 degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

3.4   Mission fuel burn: FRA - PHX

      In carrying a fixed Usable Load of 140,630 lb over a still air stage
      distance of 5,482 nautical miles (representative of FRA to PHX mission
      with a 40 knots headwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.3.1 to 3.3.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...].

      Block time is defined as the time for engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing as defined in
      paragraphs 3.3.2 to 3.3.5 above.

3.5   Mission Usable Load: PHX - FRA (41 degrees C at PHX)

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      of not less than [...***...] over a still air stage distance of 4,980
      nautical miles (representative of PHX to FRA mission with a 5 knots
      tailwind) when operated under the conditions defined below:

3.5.1 The departure airport conditions (representative of PHX runway 26) are as
      defined in paragraph 2.3.3 above (ambient temperature of 41 degrees C).
      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 364 ft.


***Confidential Treatment Requested


                                                                         LA 8A-9
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



3.5.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

3.5.3 An allowance of 1,730 lb of fuel and 3 minutes is included for take-off
      and climb to 2,635 ft pressure altitude with acceleration to climb speed
      at a temperature of 38 degrees C. No credit is taken for the distance
      covered in these segments.

3.5.4 Climb from 2,635 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 33,000 ft, 37,000 ft and 41,000 ft and descent to 1,864 ft
      pressure altitude are conducted in ISA+10 degrees C conditions. Climb and
      descent speeds below 10,000 ft will be 250 knots CAS. A wind component of
      70% of cruise wind has been considered during climb and descent.

3.5.5 An allowance of 410 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

3.5.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing and manoeuvre as
      defined in paragraphs 3.5.2 to 3.5.5 above.

      Stage distance is defined as the distance covered during climb, cruise and
      descent as described in paragraph 3.5.4 above.

3.5.7 At the end of approach and landing 13,320 lb of usable fuel will remain in
      the tanks. This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
            altitude and using long range procedures

      4)    Holding for 30 minutes at 1,500 ft pressure altitude in
            ISA+10 degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

3.6   Mission fuel burn: PHX - FRA (41 degrees C at PHX)

      In carrying a fixed Usable Load of 113,760 lb over a still air stage
      distance of 4,980 nautical miles (representative of PHX to FRA mission
      with a 5 knots tailwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.5.1 to 3.5.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...]. Block time is defined
      as the time for engine start-up and taxi-out, take-off, climb, cruise,
      descent, approach and landing as defined in paragraphs 3.5.2 to 3.5.5
      above.


***Confidential Treatment Requested


                                                                        LA 8A-10
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



3.7   Mission Usable Load: PHL - NRT

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      of not less than [...***...] over a still air stage
      distance of 6,542 nautical miles (representative of PHL to NRT mission
      with a 38 knots headwind) when operated under the conditions defined
      below:

3.7.1 The departure airport conditions (representative of PHL runway 27L) are as
      defined in paragraph 2.3.2 above.

      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 139 ft.

3.7.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

3.7.3 An allowance of 1,800 lb of fuel and 3 minutes is included for take-off
      and climb to 1,510 ft pressure altitude with acceleration to climb speed
      at a temperature of 27 degrees C. No credit is taken for the distance
      covered in these segments.

3.7.4 Climb from 1,510 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 31,000 ft, 35,000 ft and 39,000 ft and descent to 1,639 ft
      pressure altitude are conducted in ISA+10 degrees C conditions. Climb and
      descent speeds below 10,000 ft will be 250 knots CAS. A wind component of
      70% of cruise wind has been considered during climb and descent.

3.7.5 An allowance of 420 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

3.7.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing and manoeuvre as
      defined in paragraphs 3.7.2 to 3.7.5 above. Stage distance is defined as
      the distance covered during climb, cruise and descent as described in
      paragraph 3.7.4 above.

3.7.7 At the end of approach and landing 14,800 lb of usable fuel will remain in
      the tanks. This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
            altitude and using long range procedures

      4)    Holding for 30 minutes at 1,500 ft pressure altitude in
            ISA+10 degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

                                                                        LA 8A-11
***Confidential Treatment Requested
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



3.8   Mission fuel burn: PHL - NRT

      In carrying a fixed Usable Load of 120,290 lb over a still air stage
      distance of 6,542 nautical miles (representative of PHL to NRT mission
      with a 38 knots headwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.7.1 to 3.7.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...]. Block time is defined
      as the time for engine start-up and taxi-out, take-off, climb, cruise,
      descent, approach and landing as defined in paragraphs 3.7.2 to 3.7.5
      above.

3.9   Mission Usable Load: PHX - NRT (41 degrees C at PHX)

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      of not less than [...***...] over a still air stage
      distance of 5,971 nautical miles (representative of PHX to NRT mission
      with a 67 knots headwind) when operated under the conditions defined
      below:

3.9.1 The departure airport conditions (representative of PHX runway 26) are as
      defined in paragraph 2.3.3 above (ambient temperature of 41 degrees C).
      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 139 ft.

3.9.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

3.9.3 An allowance of 1,730 lb of fuel and 3 minutes is included for take-off
      and climb to 2,635 ft pressure altitude with acceleration to climb speed
      at a temperature of 38 degrees C. No credit is taken for the distance
      covered in these segments.

3.9.4 Climb from 2,635 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 35,000 ft and 39,000 ft and descent to 1,639 ft pressure
      altitude are conducted in ISA+10 degrees C conditions.

      Climb and descent speeds below 10,000 ft will be 250 knots CAS. A wind
      component of 70% of cruise wind has been considered during climb and
      descent.

3.9.5 An allowance of 420 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

3.9.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing and manoeuvre as
      defined in paragraphs 3.9.2 to 3.9.5 above. Stage distance is defined as
      the distance covered during climb, cruise and descent as described in
      paragraph 3.9.4 above.

                                                                        LA 8A-12
***Confidential Treatment Requested
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



3.9.7 At the end of approach and landing 13,460 lb of usable fuel will remain in
      the tanks. This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
            altitude and using long range procedures

      4)    Holding for 30 minutes at 1,500 ft pressure altitude in ISA+10
            degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

3.10  Mission fuel burn: PHX - NRT (41 degrees C at PHX)

      In carrying a fixed Usable Load of 93,790 lb over a still air stage
      distance of 5,971 nautical miles (representative of PHX to NRT mission
      with a 67 knots headwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.9.1 to 3.9.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...]. Block time is defined
      as the time for engine start-up and taxi-out, take-off, climb, cruise,
      descent, approach and landing as defined in paragraphs 3.9.2 to 3.9.5
      above.

3.11  For the mission "Usable Load" guarantees defined in Paragraphs 3.1, 3.3,
      3.5, 3.7 and 3.9 above, the guaranteed usable loads are calculated as Zero
      Fuel Weight minus the Manufacturer's Weight Empty as defined in the
      Specification which will be derived from the weighing of the Aircraft.

4     Structural Usable Load

      The Seller guarantees that the difference between:

      -     the Maximum Zero Fuel Weight (MZFW) of the Aircraft (as defined in
            the A350-800 Standard Specification set forth in Paragraph 1) and

      -     the Manufacturer's Weight Empty (as defined in the A350-800 Standard
            Specification set forth in Paragraph 1) and which will be derived
            from the weighing of the Aircraft

      will not be less than [...***...]

      The Manufacturer's Weight Empty is subject to adjustment as defined in
      Paragraph 9.2 below.

                                                                        LA 8A-13
***Confidential Treatment Requested
AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL



5     Noise

5.1   Exterior Noise

5.1.1 Noise Certification

      The A350-800 powered by GENX-1A72 engines at a MTOW of 245,000 KG and a
      MLW of 182,000 KG will meet the noise levels limits as defined in ICAO
      Annex 16, Volume I, 'A350-800 Aircraft Noise', CHAPTER 4, third edition,
      effective 11th November 1993, [...***...].

      Noise data will be obtained and evaluated in accordance with the
      requirements of ICAO Annex 16, Volume I, 'Aircraft Noise', Amendment 7,
      Chapter 4, third edition, applicable 21st March 2002, and relevant
      appendices.

5.1.2 APU Noise

      The APU of the A350-800 will comply with the noise limits as defined in
      ICAO Annex 16, Vol. 1, Chapter 9, Attachment C, third edition, effective
      11th November 1993.

5.2   Interior Noise

5.2.1 Interior Noise in Flight

5.2.1.1 Cockpit Noise

      At a pressure altitude of 35000 feet and a true Mach number of 0.82 in
      straight and level flight in still air under ISA conditions, the
      guaranteed A-weighted Sound Pressure Level (SPL) and the Speech
      Interference Level (SIL) will not exceed the following values:



                                      Guarantee
                                   
SPL dB(A)                                [...***...]
SIL dB                                   [...***...]


      Noise levels will be measured at the Captain's and First Officer's seat
      position at head level with normal cockpit air conditioning and
      ventilation in operation.

5.2.1.2 Cabin Noise

      At a pressure altitude of 35000 feet and a true Mach number of 0.82 in
      straight and level flight in still air under ISA conditions, the
      guaranteed A-weighted Sound Pressure Level (SPL) and the Speech
      Interference Level (SIL) will not exceed the following values, considering
      leather seats are part of the cabin lay-out.


***CONFIDENTIAL TREATMENT REQUESTED                                     LA 8A-14

AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL





                                        Guarantee
               (a [...***...] extra is accounted for leather seats installation)
             
SPL dB(A)                                  [...***...]
SIL dB                                     [...***...]


      Noise levels will be measured at a height of 40 inches above the passenger
      compartment floor on the aisle center lines in the passenger seated area.
      Effects on noise of Buyer Furnished Equipment and installations by or on
      behalf of the Buyers are not covered by this guarantee. The noise levels
      are provided for leather seats.

6     Emissions

      The GENX-1A72 engines will meet the emission levels for Smoke as defined
      in ICAO Annex 16, Volume II `A350-800 Aircraft Engine Emissions', Second
      Edition effective 11th November 1993, section 2.2.2.

      The GENX-1A72 engines will meet the emission levels for Unburned
      Hydrocarbons (HC), Carbon Monoxide (CO) as defined in ICAO Annex 16,
      Volume II `A350-800 Aircraft Engine Emissions', Second Edition effective
      11th November 1993, section 2.3.2.

      The GENX-1A72 engines will meet the emission levels for Oxides of Nitrogen
      (NOx) as specified in the proposed ICAO Annex 16, Volume II `A350-800
      Aircraft Engine Emissions', Second Edition effective 11th November 1993,
      Chapter 2.3.2D (CAEP/6).

      Engine emission data will be obtained and evaluated in accordance with the
      requirements of the ICAO Annex 16, Volume II `A350-800 Aircraft Engine
      Emissions', Second Edition effective 11th November 1993.

7     GUARANTEE CONDITIONS

7.1   The performance and noise certification requirements for the Aircraft,
      except where otherwise noted, will be as stated in Section 02 of the
      Specification.

7.2   For the determination of FAR take-off and landing performance a hard dry
      level runway surface with no runway strength limitations, no line-up
      allowances, no obstacles, zero wind, atmosphere according to ISA, except
      as otherwise noted, and the use of centre of gravity positions, speed
      brakes, flaps, landing gear and engines in the conditions liable to
      provide the best results will be assumed.


***CONFIDENTIAL TREATMENT REQUESTED                                    LA 8A-15

AWE/USA - A350
                           PRIVILEGED AND CONFIDENTIAL





7.2.1 When establishing take-off and second segment performance no air will be
      bled from the engines for cabin air conditioning or anti-icing.

7.3   The en-route one engine inoperative climb performance will be established
      with the amount of engine air bleed associated with the maximum cabin
      altitude as specified in Section 21 of the Specification and an average
      ventilation rate not less than the amount defined in the Specification but
      no air will be bled from the engines for anti-icing.

7.4   Climb, cruise and descent performance associated with the Guarantees will
      include allowances for normal electrical load and for normal engine air
      bleed and power extraction associated with cabin differential pressure as
      defined in Section 21-30.31 of the Specification. Cabin air conditioning
      management during performance demonstration as described in Subparagraph
      8.3 below may be such as to optimise the Aircraft performance while
      meeting the normal air conditioning requirements defined above. Unless
      otherwise stated no air will be bled from the engines for anti-icing.

      Cruise performance at 20,000 ft and above is based on a centre of gravity
      position of 34% MAC.

7.5   The engines will be operated using not more than the engine manufacturer's
      maximum recommended outputs for take-off, maximum go-round, maximum
      continuous, maximum climb and cruise for normal operation unless otherwise
      stated.

7.6   Where applicable the Guarantees assume the use of an approved fuel having
      a density of 6.7 lb per US gallon and a lower heating value of 18,590 BTU
      per lb.

7.7   Speech Interference Level (SIL) is defined as the arithmetic average of
      the sound pressure levels in the 1000, 2000 and 4000 Hz octave bands.
      A-Weighted sound pressure level (dB(A)) is as defined in the American
      National Standard Specification ANSI.4-1971.

7.8   All guaranteed interior noise levels refer to an A350-800 Aircraft with
      standard acoustic insulation and an interior completely furnished. The
      effect of Buyer Furnished Equipment other than leather passenger seats
      (leather seats or acoustically equivalent) will be the responsibility of
      the Buyers (Remark: Standard seats tend to decrease interior noise levels
      by 1-2 dB)

7.9   For purposes of the sound levels guaranteed in Clause 5.2.1.2 of this
      Letter Agreement, the APU and air conditioning system will be operating.
      Sound level measurements may be made at the prevailing ambient temperature
      with the air conditioning packs controlled to approximate air conditioning
      machinery rotational speed appropriate to an ambient temperature of 25C.

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8     GUARANTEE COMPLIANCE

8.1   Compliance with the Guarantees will be demonstrated using operating
      procedures and limitations in accordance with those defined by the
      certifying Airworthiness Authority and by the Seller unless otherwise
      stated.

8.2   Compliance with the take-off, second segment, en-route one engine
      inoperative, approach climb and landing elements of the Guarantees will be
      demonstrated with reference to the approved Flight Manual.

8.3   Compliance with those parts of the Guarantees defined in paragraph 2 and 3
      above not covered by the requirements of the certifying Airworthiness
      Authority will be demonstrated by calculation based on data obtained
      during flight tests conducted on one (or more, at the Seller's discretion)
      aircraft of the same aerodynamic configuration as the Aircraft and
      incorporated in the In-Flight Performance Program and data bases ("the
      IFP") appropriate to the Aircraft.

8.4   Compliance with the Structure Usable Load guarantee defined in Paragraph 4
      will be demonstrated with reference to a weight compliance report.

8.5   The approved A350-800 Aircraft flight manual will be used to demonstrate
      compliance with the guarantees of certification noise levels.

8.6   Compliance with the APU noise and interior noise guarantees will be
      demonstrated with reference to noise surveys conducted on one (or more, at
      the Seller's discretion) A350-800 Aircraft of an acoustically equivalent
      standard to those A350-800 Aircraft purchased by the Buyers.

8.7   Data derived from flight tests and noise surveys will be adjusted as
      required using conventional methods of correction, interpolation or
      extrapolation in accordance with established aeronautical practices to
      show compliance with the Guarantees.

8.8   Compliance with the emission guarantee will be demonstrated by reference
      to the ICAO Aircraft Engine Exhaust Emissions Databank entry for the
      GEnx-1A72 engine.

8.9   Compliance with the Guarantees is not contingent on engine performance
      defined in the engine manufacturer's specification.

8.10  The Seller undertakes to furnish the Buyers with a report or reports
      demonstrating compliance with the Guarantees at, or as soon as possible
      after, the delivery of each of the A350-800 Aircraft.

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9     ADJUSTMENT OF GUARANTEES

9.1   In the event of any change to any law, governmental regulation or
      requirement or interpretation thereof ("rule change") by any governmental
      agency made subsequent to the date of the Agreement and such rule change
      affects the Aircraft configuration or performance or both required to
      obtain certification the Guarantees will be appropriately modified to
      reflect the effect of any such change.

9.2   The Guarantees apply to the Aircraft as described in paragraph 1 of this
      Letter Agreement and may be adjusted in the event of:

            i)    Any further configuration change which is the subject of an
                  SCN

            ii)   Variation in actual weights of items defined in Section 13-10
                  of the Specification

            iii)  Changes required to obtain certification that cause
                  modifications to the performance or weight of the A350-800
                  Aircraft

10    EXCLUSIVE GUARANTEES

      The Guarantees are exclusive and are provided in lieu of any and all other
      performance and weight guarantees of any nature which may be stated,
      referenced or incorporated in the Specification or any other document.

11    [...***...]


11.1  [...***...]


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      [...***...]

11.2  [...***...]

11.3  [...***...]

UNQUOTE

12    ASSIGNMENT

      In consideration of the assignment and subrogation by Seller under this
      Letter Agreement in favor of the Buyers in respect of Seller's rights
      against and obligations to the Manufacturer under the provisions quoted
      above, the Buyers hereby accept such assignment and subrogation and agrees
      to be bound by all of the terms, conditions and limitations therein
      contained. The Buyers and the Seller recognize and agree that, except as
      otherwise expressly provided in Clause 11 of this Letter Agreement, all
      the provisions of Clause 12 of the Agreement, including without limitation
      the Exclusivity of Warranties and General Limitations of Liability and
      Duplicate Remedies provisions therein contained, will apply to the
      foregoing performance guarantees.

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without


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      prior written consent of AVSA and any attempted assignment or transfer in
      contravention of the provisions of this sentence will be void and of no
      force and effect.

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

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IN WITNESS WHEREOF, these presents were entered into as of the day and year
first above written.

                              Very truly yours,

                              AVSA, S.A.R.L.

                              By:   __________________________

                              Its:  __________________________

           Accepted and Agreed

           US Airways Group, Inc.

           By:   _________________________
           Its:

           AMERICA WEST AIRLINES, Inc.

           By:   _________________________
           Its:

           US Airways Group, Inc.

           By:   _________________________
           Its:
                                                                        LA 8A-21
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           *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 8B

                                                        As of September 27, 2005

      US Airways Group, Inc.
      US Airways, Inc.
      America West Airlines, Inc.
      4000 East Sky Harbor Boulevard
      Phoenix, AZ 85034

      Re: A350-800 with GEnx - 1A75 Engines PERFORMANCE GUARANTEES

      Dear Ladies and Gentlemen:

      US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc.
      (the "Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an
      Airbus A350 Purchase Agreement dated as of even date herewith (the
      "Agreement"), which covers, among other things, the sale by the Seller and
      the purchase by the Buyers of certain A350-800 Aircraft, under the terms
      and conditions set forth in said Agreement. The Buyers and the Seller have
      agreed to set forth in this Letter Agreement No. 8B (the "Letter
      Agreement") certain additional terms and conditions regarding the sale of
      the A350-800 Aircraft. Capitalized terms used herein and not otherwise
      defined in this Letter Agreement will have the meanings assigned thereto
      in the Agreement. Technical and trade terms used but not defined herein or
      in the Agreement will be defined as generally accepted in the airline
      and/or aircraft manufacturing industries. The terms "herein," "hereof" and
      "hereunder" and words of similar import refer to this Letter Agreement.

      All of the parties agree that this Letter Agreement will constitute an
      integral, nonseverable part of said Agreement, that the provisions of said
      Agreement are hereby incorporated herein by reference, and that this
      Letter Agreement will be governed by the provisions of said Agreement,
      except that if the Agreement and this Letter Agreement have specific
      provisions which are inconsistent, the specific provisions contained in
      this Letter Agreement will govern.

                                                                       LA 8B - 1

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      The Seller represents and warrants that the Manufacturer has provided to
      the Seller the performance, noise and weight guarantees (the "Guarantees")
      that are reproduced below between the words QUOTE and UNQUOTE, subject to
      the terms, conditions, limitations and restrictions set forth below. The
      Seller hereby assigns to the Buyers, and the Buyers hereby accept, as to
      each A350-800 Aircraft delivered to the Buyers under the Agreement, all of
      the Seller's rights and obligations with respect to such A350-800 Aircraft
      in its capacity as "Buyers" as aforesaid under the said Guarantees, and
      the Seller subrogates the Buyers into all such rights and obligations in
      respect of the A350-800 Aircraft. The Seller hereby warrants to the Buyers
      that (i) it has all requisite authority to make the foregoing assignment
      to and to effect the foregoing subrogation in favor of the Buyers, (ii)
      such assignment and subrogation are effective to confer on the Buyers all
      of the foregoing rights and obligations of the Seller, (iii) the
      provisions so assigned are in full force and effect and have not been
      amended prior to the date hereof, and (iv) the Seller will not enter into
      any amendment of the provisions so assigned without the prior written
      consent of the Buyers.

QUOTE

1     AIRCRAFT CONFIGURATION

1.1   The Guarantees defined below are applicable to the A350-800 Aircraft
      powered by General Electric GEnx-1A75 engines, as described in the
      Standard Specification Ref. G.000.08000 Issue B dated 30th June 2005,
      without taking into account any further changes thereto as provided in the
      Agreement, herein after referred as "the Specification" without taking
      into account any further changes thereto as provided in the Agreement.

2     GUARANTEED PERFORMANCE

2.1   Take-off Field Length

      FAR take-off field length ("TOFL") at an Aircraft gross weight of 540,133
      lb (245,000 kg) at the start of Take-Off Distance Available (TODA) at Sea
      Level pressure altitude in ISA+15(degrees)C conditions will be not more
      than a guaranteed value of [...***...].

2.2   Second Segment Climb

      The Aircraft will meet FAR 25 regulations for one engine inoperative climb
      after take-off, undercarriage retracted, at a weight corresponding to the
      stated weight at the start of ground run, at the altitude and temperature,
      and in the configuration of flap angle and safety speed required to comply
      with the performance guaranteed in paragraph 2.1 and 2.3.

                                                                       LA 8B - 2
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2.3   Take-off Weight

2.3.1 When operated under the following conditions (representative of FRA 25R)

       Pressure altitude                                     : 364 ft
       Ambient temperature                                   : 24 degrees C
       Take-off run available                                : 13,123 ft
       Take-off distance available                           : 13,123 ft
       Accelerate-stop distance available                    : 13,123 ft
       Slope                                                 : -0.26% (downhill)
       Wind                                                  : Zero
       Line-up allowance TOD                                 : 80 ft
       Line-up allowance ASD                                 : 153 ft
       Obstacles (Height/Distance above/fromstart of TODA)   :-28ft/13,488ft
                                                              -23ft/13,980ft
                                                              -21ft/14,236ft
                                                               59ft/17,388ft
                                                               60ft/17,598ft
                                                               61ft/17,795ft
                                                               62ft/18,035ft
                                                               65ft/18,848ft
                                                               67ft/19,918ft
                                                               76ft/23,402ft

      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be not less than a guaranteed value of 540,133 lb (Max
      Structural)

2.3.2 When operated under the following conditions (representative of PHL 27L)

       Pressure altitude                                       : 10 ft
       Ambient temperature                                     : 30(degrees)C
       Take-off run available                                  : 10,506 ft
       Take-off distance available                             : 10,506 ft
       Accelerate-stop distance available                      : 10,506 ft
       Slope                                                   : 0.11% (uphill)
       Wind                                                    : Zero
       Line-up allowance TOD                                   : 80 ft
       Line-up allowance ASD                                   : 153 ft
       Obstacles (Height/Distance above/from start of TODA):     33ft/11,312ft
                                                                 38ft/12,036ft

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      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be not less than a guaranteed value of [...***...].

2.3.3 When operated under the following conditions (representative of PHX 26)

       Pressure altitude                                     : 1,135 ft
       Take-off run available                                : 11,490 ft
       Take-off distance available                           : 11,490 ft
       Accelerate-stop distance available                    : 11,490 ft
       Slope                                                 : -0.21% (downhill)
       Wind                                                  : Zero
       Line-up allowance TOD                                 : 80 ft
       Line-up allowance ASD                                 : 153 ft
       Obstacles (Height/Distance above/from start of TODA)  : -13ft/12,506ft
                                                               -5ft/12,852ft
                                                                36ft/13,792ft
                                                                42ft/14,510ft
                                                               195ft/22,434ft

      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be not less than a guaranteed value of

Ambient temperature of 41(degrees)C:     [...***...]

Ambient temperature of 46(degrees)C:     [...***...]

2.3.4 When operated under the following conditions (representative of TLV 26)

       Pressure altitude                                     : 135 ft
       Ambient temperature                                   : 32 degrees C
       Take-off run available                                : 11,998 ft
       Take-off distance available                           : 12,392 ft
       Accelerate-stop distance available                    : 12,293 ft
       Slope                                                 : -0.32% (downhill)
       Wind                                                  : Zero
       Line-up allowance TOD                                 : 80 ft
       Line-up allowance ASD                                 : 153 ft
       Obstacles (Height/Distance above/from start of TODA)  : none

      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be not less than a guaranteed value of [...***...].


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2.3.5 When operated under the following conditions (representative of NRT 34L)

       Pressure altitude                                     : 139 ft
       Ambient temperature                                   : 29 degrees C
       Take-off run available                                : 13,123 ft
       Take-off distance available                           : 13,123 ft
       Accelerate-stop distance available                    : 13,123 ft
       Slope                                                 : -0.07% (downhill)
       Wind                                                  : Zero
       Line-up allowance TOD                                 : 80 ft
       Line-up allowance ASD                                 : 153 ft
       Obstacles (Height/Distance above/from start of TODA)  : -2ft/13,905ft
                                                               4ft/14,541ft
                                                               8ft/14,780ft
                                                               25ft/15,892ft
                                                               28ft/16,030ft
                                                               29ft/16,269ft
                                                               30ft/16,303ft
                                                               32ft/16,967ft
                                                               53ft/18,187ft
                                                               57ft/19,378ft
                                                               65ft/20,659ft

      the maximum permissible take-off weight at the start of Take-off Distance
      Available will be not less than a guaranteed value of [...***...]

2.4   Landing Field Length

      FAR certified dry landing field length ("LFL") at an Aircraft gross weight
      of 401,241 lb (182,000 kg) at Sea Level pressure altitude will not be more
      than a guaranteed value of [...***...].

2.5   En-route One Engine Inoperative

      The A350-800 Aircraft will meet the FAR regulations minimum en-route climb
      one engine inoperative and the other operating at the maximum continuous
      thrust with anti-icing off at an A350-800Aircraft gross weight of 500,000
      lb in the cruise configuration in ISA+10C conditions at a guaranteed
      pressure altitude of not less than [...***...]


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2.6   Approach Climb

2.6.1 The A350-800 Aircraft will meet FAR regulations approach climb gradient
      one engine inoperative and the other operating at the maximum go-round
      thrust with air conditioning on and anti-icing off at sea level pressure
      altitude at an A350-800 Aircraft gross weight of 401,241 lb at a
      temperature of not less than the guarantee value of [...***...].

2.6.2 The A350-800 Aircraft will meet FAR regulations approach climb gradient
      one engine inoperative and the other operating at the maximum go-round
      thrust with air conditioning on and anti-icing off at a pressure altitude
      of 5,000 feet at an A350-800 Aircraft gross weight of 401,241 lb at a
      temperature of not less than the guarantee value of [...***...] and a
      nominal value of [...***...].

2.7   Specific Range

      The nautical miles per pound of fuel at an A350-800 Aircraft gross weight
      of 500,000 lb at a pressure altitude of 33,000 ft in ISA+10C conditions at
      a true Mach number of 0.82 will not be less than a guaranteed value of
      [...***...].

      The nautical miles per pound of fuel at an A350-800 Aircraft gross weight
      of 490,000 lb at a pressure altitude of 35,000 ft in ISA+10C conditions at
      a true Mach number of 0.82 will not be less than a guaranteed value of
      [...***...].

      The nautical miles per pound of fuel at an A350-800 Aircraft gross weight
      of 480,000 lb at a pressure altitude of 33,000 ft in ISA+10C conditions at
      a true Mach number of 0.84 will not be less than a guaranteed value of
      [...***...].

      The nautical miles per pound of fuel at an A350-800 Aircraft gross weight
      of 470,000 lb at a pressure altitude of 35,000 ft in ISA+10C conditions at
      a true Mach number of 0.84 will not be less than a guaranteed value of
      [...***...].

2.8   Initial Cruise Altitude

      At an A350-800 gross weight of 527,000 lb (representing the estimated
      weight at start of cruise following a take-off at sea level at Maximum
      Take-off Weight) in ISA+10C conditions the pressure altitude for:

            1.    Level flight at a true Mach number of 0.82 using a thrust not
                  exceeding maximum cruise thrust

            2.    A rate of climb of not less than then 300 ft/min at a true
                  Mach number of 0.82 using a


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                  thrust not exceeding maximum climb thrust

            3.    A buffet maneuver margin of not less than 0.3g at a true Mach
                  number of 0.82 will be not less than [...***...].

2.9   Speed

      Level flight speed at an A350-800 Aircraft gross weight of 527,000 lb at a
      pressure altitude of 35,000 ft in ISA+10C conditions using a thrust not
      exceeding maximum cruise thrust will be not less than a guaranteed true
      Mach number of [...***...].

3     MISSION GUARANTEES

3.1   Mission Usable Load: TLV - PHL

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      (as defined in Paragraph 3.11 below) of not less than [...***...] over a
      still air stage distance of 5,849 nautical miles (representative of TLV to
      PHL mission with a 58 knots headwind) when operated under the conditions
      defined below:

3.1.1 The departure airport conditions are such to allow the required Takeoff
      Weight to be used without any restriction. Pressure altitude is 135 ft.

      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 10 ft.

3.1.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

3.1.3 An allowance of 1,840 lb of fuel and 3 minutes is included for take-off
      and climb to 1,635 ft pressure altitude with acceleration to climb speed
      at a temperature of 29 degrees C. No credit is taken for the distance
      covered in these segments.

3.1.4 Climb from 1,635 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 31,000 ft, 35,000 ft and 39,000 ft and descent to 1,510 ft
      pressure altitude are conducted in ISA+10 degrees C conditions.

      Climb and descent speeds below 10,000 ft will be 250 knots CAS. A wind
      component of 70% of cruise wind has been considered during climb and
      descent.

3.1.5 An allowance of 430 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

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3.1.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing as defined in
      paragraphs 3.1.2 to 3.1.5 above.

      Stage distance is defined as the distance covered during climb, cruise and
      descent as described in paragraph 3.1.4 above.

3.1.7 At the end of approach and landing 14,800 lb of usable fuel will remain in
      the tanks.

      This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
             altitude and using long range procedures

      4)    Holding for 30 minutes at 1,500 ft pressure altitude in
            ISA+10 degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

3.2   Mission fuel burn: TLV - PHL

      In carrying a fixed Usable Load of 136,780 lb over a still air stage
      distance of 5,849 nautical miles (representative of TLV to PHL mission
      with a 58 knots headwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.1.1 to 3.1.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...].

      Block time is defined as the time for engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing as defined in
      paragraphs 3.1.2 to 3.1.5 above.

3.3   Mission Usable Load: FRA - PHX

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      of not less than [...***...] over a still air stage distance of 5,482
      nautical miles (representative of FRA to PHX mission with a 40 knots
      headwind) when operated under the conditions defined below:

3.3.1 The departure airport conditions are such to allow the required Takeoff
      Weight to be used without any restriction. Pressure altitude is 364 ft.

      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 1,135 ft.

3.3.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

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3.3.3 An allowance of 1,750 lb of fuel and 3 minutes is included for take-off
      and climb to 1,864 ft pressure altitude with acceleration to climb speed
      at a temperature of 21 degrees C. No credit is taken for the distance
      covered in these segments.

3.3.4 Climb from 1,864 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 31,000 ft, 35,000 ft and 39,000 ft and descent to 2,635 ft
      pressure altitude are conducted in ISA+10 degrees C conditions.

      Climb and descent speeds below 10,000 ft will be 250 knots CAS. A wind
      component of 70% of cruise wind has been considered during climb and
      descent.

3.3.5 An allowance of 440 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

3.3.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing and manoeuvre as
      defined in paragraphs 3.3.2 to 3.3.5 above.

      Stage distance is defined as the distance covered during climb, cruise and
      descent as described in paragraph 3.3.4 above.

3.3.7 At the end of approach and landing 14,600 lb of usable fuel will remain in
      the tanks.

      This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
            altitude and using long range procedures

      4)    Holding for 30 minutes at 1,500 ft pressure altitude in
            ISA+10 degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

3.4   Mission fuel burn: FRA - PHX

      In carrying a fixed Usable Load of 140,630 lb over a still air stage
      distance of 5,482 nautical miles (representative of FRA to PHX mission
      with a 40 knots headwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.3.1 to 3.3.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...]. Block time is defined
      as the time for engine start-up and taxi-out, take-off, climb, cruise,
      descent, approach and landing as defined in paragraphs 3.3.2 to 3.3.5
      above.

                                                                       LA 8B - 9

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3.5   Mission Usable Load: PHX - FRA (41 degrees C at PHX)

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      of not less than [...***...] over a still air stage distance of 4,980
      nautical miles (representative of PHX to FRA mission with a 5 knots
      tailwind) when operated under the conditions defined below:

3.5.1 The departure airport conditions (representative of PHX runway 26) are as
      defined in paragraph 2.3.3 above (ambient temperature of 41 degrees C).

      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 364 ft.

3.5.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

3.5.3 An allowance of 1,800 lb of fuel and 3 minutes is included for take-off
      and climb to 2,635 ft pressure altitude with acceleration to climb speed
      at a temperature of 38 degrees C. No credit is taken for the distance
      covered in these segments.

3.5.4 Climb from 2,635 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 33,000 ft, 37,000 ft and 41,000 ft and descent to 1,864 ft
      pressure altitude are conducted in ISA+10 degrees C conditions.

      Climb and descent speeds below 10,000 ft will be 250 knots CAS. A wind
      component of 70% of cruise wind has been considered during climb and
      descent.

3.5.5 An allowance of 415 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

3.5.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing and manoeuvre as
      defined in paragraphs 3.5.2 to 3.5.5 above.

      Stage distance is defined as the distance covered during climb, cruise and
      descent as described in paragraph 3.5.4 above.

3.5.7 At the end of approach and landing 13,650 lb of usable fuel will remain in
      the tanks.

      This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
            altitude and using long range procedures

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      4)    Holding for 30 minutes at 1,500 ft pressure altitude in
            ISA+10 degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

3.6   Mission fuel burn: PHX - FRA (41 degrees C at PHX)

      In carrying a fixed Usable Load of 123,470 lb over a still air stage
      distance of 4,980 nautical miles (representative of PHX to FRA mission
      with a 5 knots tailwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.5.1 to 3.5.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...]. Block time is defined
      as the time for engine start-up and taxi-out, take-off, climb, cruise,
      descent, approach and landing as defined in paragraphs 3.5.2 to 3.5.5
      above.

3.7   Mission Usable Load: PHL - NRT

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      of not less than [...***...] over a still air stage distance of 6,542
      nautical miles (representative of PHL to NRT mission with a 38 knots
      headwind) when operated under the conditions defined below:

3.7.1 The departure airport conditions (representative of PHL runway 27L) are as
      defined in paragraph 2.3.2 above.

      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 139 ft.

3.7.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

3.7.3 An allowance of 1,810 lb of fuel and 3 minutes is included for take-off
      and climb to 1,510 ft pressure altitude with acceleration to climb speed
      at a temperature of 27 degrees C. No credit is taken for the distance
      covered in these segments.

3.7.4 Climb from 1,510 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 31,000 ft, 35,000 ft and 39,000 ft and descent to 1,639 ft
      pressure altitude are conducted in ISA+10 degrees C conditions.

      Climb and descent speeds below 10,000 ft will be 250 knots CAS. A wind
      component of 70% of cruise wind has been considered during climb and
      descent.

3.7.5 An allowance of 420 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

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3.7.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing and manoeuvre as
      defined in paragraphs 3.7.2 to 3.7.5 above. Stage distance is defined as
      the distance covered during climb, cruise and descent as described in
      paragraph 3.7.4 above.

3.7.7 At the end of approach and landing 14,850 lb of usable fuel will remain in
      the tanks.

      This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
            altitude and using long range procedures

      4)    Holding for 30 minutes at 1,500 ft pressure altitude in
            ISA+10 degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

3.8   Mission fuel burn: PHL - NRT

      In carrying a fixed Usable Load of 121,920 lb over a still air stage
      distance of 6,542 nautical miles (representative of PHL to NRT mission
      with a 38 knots headwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.7.1 to 3.7.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...]. Block time is defined
      as the time for engine start-up and taxi-out, take-off, climb, cruise,
      descent, approach and landing as defined in paragraphs 3.7.2 to 3.7.5
      above.

3.9   Mission Usable Load: PHX - NRT (41 degrees C at PHX)

      The A350-800 Aircraft will be capable of carrying a guaranteed Usable Load
      of not less than [...***...] over a still air stage distance of 5,971
      nautical miles (representative of PHX to NRT mission with a 67 knots
      headwind) when operated under the conditions defined below:

3.9.1 The departure airport conditions (representative of PHX runway 26) are as
      defined in paragraph 2.3.3 above (ambient temperature of 41 degrees C).

      The destination airport conditions are such to allow the required Landing
      Weight to be used without any restriction. Pressure altitude is 139 ft.

3.9.2 An allowance of 570 lb of fuel and 9 minutes is considered for engine
      start-up and taxi-out.

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3.9.3 An allowance of 1,790 lb of fuel and 3 minutes is included for take-off
      and climb to 2,635 ft pressure altitude with acceleration to climb speed
      at a temperature of 38 degrees C. No credit is taken for the distance
      covered in these segments.

3.9.4 Climb from 2,635 ft pressure altitude up to cruise altitude using maximum
      climb thrust, cruise at a fixed Mach number of M=0.82 at pressure
      altitudes of 35,000 ft and 39,000 ft and descent to 1,639 ft pressure
      altitude are conducted in ISA+10 degrees C conditions.

      Climb and descent speeds below 10,000 ft will be 250 knots CAS. A wind
      component of 70% of cruise wind has been considered during climb and
      descent.

3.9.5 An allowance of 420 lb of fuel and 4 minutes is considered for approach
      and landing at the destination airport. No credit is taken for the
      distance covered in these segments.

3.9.6 Trip fuel is defined as the fuel used during engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing and manoeuvre as
      defined in paragraphs 3.9.2 to 3.9.5 above. Stage distance is defined as
      the distance covered during climb, cruise and descent as described in
      paragraph 3.9.4 above.

3.9.7 At the end of approach and landing 13,740 lb of usable fuel will remain in
      the tanks.

      This represents the estimated fuel required for:

      1)    En-route reserves: 4% of trip time representing use of re-dispatch
            procedures

      2)    Missed approach at destination

      3)    Diversion in ISA+10 degrees C conditions over a still air distance
            of 150 nautical miles starting and ending at 1,500 ft pressure
            altitude and using long range procedures

      4)    Holding for 30 minutes at 1,500 ft pressure altitude in
            ISA+10 degrees C conditions

      5)    An allowance of fuel for approach and landing at alternate airport

3.10  Mission fuel burn: PHX - NRT (41 degrees C at PHX)

      In carrying a fixed Usable Load of 103,440 lb over a still air stage
      distance of 5,971 nautical miles (representative of PHX to NRT mission
      with a 67 knots headwind) the trip fuel burnt when operated under the
      conditions defined in paragraphs 3.9.1 to 3.9.7 inclusive above will be
      not more than a guaranteed value of [...***...] and the block time will
      not be more than a guaranteed value of [...***...].

      Block time is defined as the time for engine start-up and taxi-out,
      take-off, climb, cruise, descent, approach and landing as defined in
      paragraphs 3.9.2 to 3.9.5 above.

3.11  For the mission usable load guarantees defined in Paragraphs 3.1, 3.3,
      3.5, 3.7 and 3.9 above the guaranteed usable loads are calculated as Zero
      Fuel Weight minus the Manufacturer's

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      Weight Empty as defined in the Specification which will be derived from
      the weighing of the Aircraft.

4     Structural Usable Load

      The Seller guarantees that the difference between:

      -     the Maximum Zero Fuel Weight (MZFW) of the Aircraft (as defined in
            the A350-800 Standard Specification set forth in Paragraph 1)

            and

      -     the Manufacturer's Weight Empty (as defined in the A350-800 Standard
            Specification set forth in Paragraph 1) and which will be derived
            from the weighing of the Aircraft

      will not be less than [...***...]

      The Manufacturer's Weight Empty is subject to adjustment as defined in
      Paragraph 9.2 below.

5     Noise

5.1   Exterior Noise

5.1.1 Noise Certification

      The A350-800 powered by GENX-1A75 engines at a MTOW of 245,000 KG and a
      MLW of 182,000 KG will meet the noise levels limits as defined in ICAO
      Annex 16, Volume I, 'A350-800 Aircraft Noise', CHAPTER 4, third edition,
      effective 11th November 1993, [...***...].

      Noise data will be obtained and evaluated in accordance with the
      requirements of ICAO Annex 16, Volume I, 'Aircraft Noise', Amendment 7,
      Chapter 4, third edition, applicable 21st March 2002, and relevant
      appendices.

5.1.2 APU Noise

      The APU of the A350-800 will comply with the noise limits as defined in
      ICAO Annex 16, Vol. 1, Chapter 9, Attachment C, third edition, effective
      11th November 1993.

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5.2   Interior Noise

5.2.1 Interior Noise in Flight

5.2.1.1 Cockpit Noise

      At a pressure altitude of 35000 feet and a true Mach number of 0.82 in
      straight and level flight in still air under ISA conditions, the
      guaranteed A-weighted Sound Pressure Level (SPL) and the Speech
      Interference Level (SIL) will not exceed the following values:



                                Guarantee
                                ----------
                             
SPL dB(A)                       [...***...]
SIL dB                          [...***...]


      Noise levels will be measured at the Captain's and First Officer's seat
      position at head level with normal cockpit air conditioning and
      ventilation in operation.

5.2.1.2 Cabin Noise

      At a pressure altitude of 35000 feet and a true Mach number of 0.82 in
      straight and level flight in still air under ISA conditions, the
      guaranteed A-weighted Sound Pressure Level (SPL) and the Speech
      Interference Level (SIL) will not exceed the following values, considering
      leather seats are part of the cabin lay-out.



                                                  Guarantee
                      (a [...***...] extra is accounted for leather seats installation)
                      -----------------------------------------------------------------
                   
SPL dB(A)                                         [...***...]
IL dB                                             [...***...]


      Noise levels will be measured at a height of 40 inches above the passenger
      compartment floor on the aisle center lines in the passenger seated area.
      Effects on noise of Buyer Furnished Equipment and installations by or on
      behalf of the Buyers are not covered by this guarantee. The noise levels
      are provided for leather seats.

6     Emissions

      The GENX-1A75 engines will meet the emission levels for Smoke as defined
      in ICAO Annex 16, Volume II `A350-800 Aircraft Engine Emissions', Second
      Edition effective 11th November 1993, section 2.2.2.

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      The GENX-1A75 engines will meet the emission levels for Unburned
      Hydrocarbons (HC), Carbon Monoxide (CO) as defined in ICAO Annex 16,
      Volume II `A350-800 Aircraft Engine Emissions', Second Edition effective
      11th November 1993, section 2.3.2.

      The GENX-1A75 engines will meet the emission levels for Oxides of Nitrogen
      (NOx) as specified in the proposed ICAO Annex 16, Volume II `A350-800
      Aircraft Engine Emissions', Second Edition effective 11th November 1993,
      Chapter 2.3.2D (CAEP/6).

      Engine emission data will be obtained and evaluated in accordance with the
      requirements of the ICAO Annex 16, Volume II `A350-800 Aircraft Engine
      Emissions', Second Edition effective 11th November 1993.

7     GUARANTEE CONDITIONS

7.1   The performance and noise certification requirements for the Aircraft,
      except where otherwise noted, will be as stated in Section 02 of the
      Specification.

7.2   For the determination of FAR take-off and landing performance a hard dry
      level runway surface with no runway strength limitations, no line-up
      allowances, no obstacles, zero wind, atmosphere according to ISA, except
      as otherwise noted, and the use of centre of gravity positions, speed
      brakes, flaps, landing gear and engines in the conditions liable to
      provide the best results will be assumed.

7.2.1 When establishing take-off and second segment performance no air will be
      bled from the engines for cabin air conditioning or anti-icing.

7.3   The en-route one engine inoperative climb performance will be established
      with the amount of engine air bleed associated with the maximum cabin
      altitude as specified in Section 21 of the Specification and an average
      ventilation rate not less than the amount defined in the Specification but
      no air will be bled from the engines for anti-icing.

7.4   Climb, cruise and descent performance associated with the Guarantees will
      include allowances for normal electrical load and for normal engine air
      bleed and power extraction associated with cabin differential pressure as
      defined in Section 21-30.31 of the Specification. Cabin air conditioning
      management during performance demonstration as described in Subparagraph
      8.3 below may be such as to optimise the Aircraft performance while
      meeting the normal air conditioning requirements defined above. Unless
      otherwise stated no air will be bled from the engines for anti-icing.

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      Cruise performance at 20,000 ft and above is based on a centre of gravity
      position of 34% MAC.

7.5   The engines will be operated using not more than the engine manufacturer's
      maximum recommended outputs for take-off, maximum go-round, maximum
      continuous, maximum climb and cruise for normal operation unless otherwise
      stated.

7.6   Where applicable the Guarantees assume the use of an approved fuel having
      a density of 6.7 lb per US gallon and a lower heating value of 18,590 BTU
      per lb.

7.7   Speech Interference Level (SIL) is defined as the arithmetic average of
      the sound pressure levels in the 1000, 2000 and 4000 Hz octave bands.
      A-Weighted sound pressure level (dB(A)) is as defined in the American
      National Standard Specification ANSI.4-1971.

7.8   All guaranteed interior noise levels refer to an A350-800 Aircraft with
      standard acoustic insulation and an interior completely furnished. The
      effect of Buyer Furnished Equipment other than leather passenger seats
      (leather seats or acoustically equivalent) will be the responsibility of
      the Buyers (Remark: Standard seats tend to decrease interior noise levels
      by 1-2 dB)

7.9   For purposes of the sound levels guaranteed in Clause 5.2.1.2 of this
      Letter Agreement, the APU and air conditioning system will be operating.
      Sound level measurements may be made at the prevailing ambient temperature
      with the air conditioning packs controlled to approximate air conditioning
      machinery rotational speed appropriate to an ambient temperature of 25C.

8     GUARANTEE COMPLIANCE

8.1   Compliance with the Guarantees will be demonstrated using operating
      procedures and limitations in accordance with those defined by the
      certifying Airworthiness Authority and by the Seller unless otherwise
      stated.

8.2   Compliance with the take-off, second segment, en-route one engine
      inoperative, approach climb and landing elements of the Guarantees will be
      demonstrated with reference to the approved Flight Manual.

8.3   Compliance with those parts of the Guarantees defined in paragraph 2 and 3
      above not covered by the requirements of the certifying Airworthiness
      Authority will be demonstrated by calculation based on data obtained
      during flight tests conducted on one (or more, at the Seller's discretion)
      aircraft of the same aerodynamic configuration as the Aircraft and
      incorporated in the In-Flight Performance Program and data bases ("the
      IFP") appropriate to the Aircraft.

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8.4   Compliance with the Structure Usable Load guarantee defined in Paragraph 4
      will be demonstrated with reference to a weight compliance report.

8.5   The approved A350-800 Aircraft flight manual will be used to demonstrate
      compliance with the guarantees of certification noise levels.

8.6   Compliance with the APU noise and interior noise guarantees will be
      demonstrated with reference to noise surveys conducted on one (or more, at
      the Seller's discretion) A350-800 Aircraft of an acoustically equivalent
      standard to those A350-800 Aircraft purchased by the Buyers.

8.7   Data derived from flight tests and noise surveys will be adjusted as
      required using conventional methods of correction, interpolation or
      extrapolation in accordance with established aeronautical practices to
      show compliance with the Guarantees.

8.8   Compliance with the emission guarantee will be demonstrated by reference
      to the ICAO Aircraft Engine Exhaust Emissions Databank entry for the
      GEnx-1A75 engine.

8.9   Compliance with the Guarantees is not contingent on engine performance
      defined in the engine manufacturer's specification.

8.10  The Seller undertakes to furnish the Buyers with a report or reports
      demonstrating compliance with the Guarantees at, or as soon as possible
      after, the delivery of each of the A350-800 Aircraft.

9     ADJUSTMENT OF GUARANTEES

9.1   In the event of any change to any law, governmental regulation or
      requirement or interpretation thereof ("rule change") by any governmental
      agency made subsequent to the date of the Agreement and such rule change
      affects the Aircraft configuration or performance or both required to
      obtain certification the Guarantees will be appropriately modified to
      reflect the effect of any such change.

9.2   The Guarantees apply to the Aircraft as described in paragraph 1 of this
      Letter Agreement and may be adjusted in the event of:

            i)    Any further configuration change which is the subject of an
                  SCN

            ii)   Variation in actual weights of items defined in Section 13-10
                  of the Specification

            iii)  Changes required to obtain certification that cause
                  modifications to the performance or weight of the A350-800
                  Aircraft

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10    EXCLUSIVE GUARANTEES

      The Guarantees are exclusive and are provided in lieu of any and all other
      performance and weight guarantees of any nature which may be stated,
      referenced or incorporated in the Specification or any other document.

11    [...***...]

11.1  [...***...]

11.2  [...***...]

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11.3  [...***...]

UNQUOTE

12    ASSIGNMENT

      In consideration of the assignment and subrogation by Seller under this
      Letter Agreement in favor of the Buyers in respect of Seller's rights
      against and obligations to the Manufacturer under the provisions quoted
      above, the Buyers hereby accepts such assignment and subrogation and
      agrees to be bound by all of the terms, conditions and limitations therein
      contained. The Buyers and Seller recognize and agree that, except as
      otherwise expressly provided in Clause 11 of this Letter Agreement, all
      the provisions of Clause 12 of the Agreement, including without limitation
      the Exclusivity of Warranties and General Limitations of Liability and
      Duplicate Remedies provisions therein contained, will apply to the
      foregoing performance guarantees.

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without prior written consent of
      AVSA and any attempted assignment or transfer in contravention of the
      provisions of this sentence will be void and of no force and effect.
      Notwithstanding the preceding sentence, the terms of Clauses 20.1 and 20.2
      of the Agreement will apply to this Letter Agreement.

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

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IN WITNESS WHEREOF, these presents were entered into as of the day and year
first above written.

                                         Very truly yours,

                                         AVSA, S.A.R.L.

                                         By: __________________________________

                                         Its: __________________________________

      Accepted and Agreed

      US AIRWAYS GROUP, INC.

      By: _________________________
      Its:

      AMERICA WEST AIRLINES, INC.

      By: _________________________
      Its:

      US AIRWAYS GROUP, INC.

      By: _________________________
      Its:

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            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 9

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ 85034

Re: MAINTENANCE COST GUARANTEE

Dear Ladies and Gentlemen:

US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of even date herewith (the "Agreement"), which
covers, among other things, the sale by the Seller and the purchase by the
Buyers of certain A350 Aircraft, under the terms and conditions set forth in
said Agreement. The Buyers and the Seller have agreed to set forth in this
Letter Agreement No. 9 (the "Letter Agreement") certain additional terms and
conditions regarding the sale of the A350 Aircraft. Capitalized terms used
herein and not otherwise defined in this Letter Agreement will have the meanings
assigned thereto in the Agreement. The terms "herein," "hereof" and "hereunder"
and words of similar import refer to this Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

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The Seller represents and warrants that the Manufacturer has provided to the
Seller the maintenance cost guarantee that are reproduced below between the
words QUOTE and UNQUOTE, subject to the terms, conditions, limitations and
restrictions (including, but not limited to, the Exclusivity of Warranties and
General Limitations of Liability and Duplicate Remedies provisions) set forth
below. The Seller hereby assigns to the Buyers, and the Buyers hereby accepts,
all of the Seller's rights and obligations as the "Buyers" under the said
maintenance cost guarantees, and the Seller subrogates the Buyers to all such
rights and obligations in respect of the A350 Aircraft. The Seller hereby
warrants to the Buyers that (i) it has all requisite authority to make the
foregoing assignment to and to effect the foregoing subrogation in favor of the
Buyers, (ii) such assignment and subrogation are effective to confer on the
Buyers all of the foregoing rights and obligations of the Seller, (iii) the
provisions so assigned are in full force and effect and have not been amended
prior to the date hereof, and (iv) the Seller will not enter into any amendment
of the provisions so assigned without the prior written consent of the Buyers.

Prior to implementation of the following maintenance cost guarantee, the Buyers
will designate one Buyer who will act on behalf of the Buyers as a group, and
the Buyers will give notice to the Seller of this designation.

QUOTE

1.    SCOPE

1.1   The Seller hereby provides the Buyers with the following maintenance cost
      guarantee (the "Maintenance Cost Guarantee").

1.2   The Seller guarantees the maximum direct labor and material costs for
      parts and systems identified in Appendix 1 ("Parts and Systems"). The
      Maintenance Cost Guarantee applies to maintenance related to parts,
      subassemblies or assemblies that are scrapped in the process of
      maintaining, restoring or overhauling A350 Aircraft components categorized
      as "rotable" or "repairable" items, and does not include any indirect
      maintenance labor and material expenditures.

1.3   The Maintenance Cost Guarantee does not cover line maintenance or A
      checks, or any work related to either line maintenance or A checks
      (transit, daily and weekly checks and associated trouble-shooting and
      deferrals, etc.).

2.    DURATION

      This Maintenance Cost Guarantee covers the [...***...] period commencing
      on Delivery of the first A350-800 Aircraft, for A350-800 Aircraft, or
      A350-900 Aircraft, for A350-900 Aircraft (the "Duration").

3.    GUARANTEED DIRECT MAINTENANCE COST

3.1   Direct maintenance costs ("DMCs") are those maintenance labor and material
      costs directly expended in performing maintenance on an item or aircraft.

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      DMCs do not include those indirect maintenance labor and material
      expenditures which contribute to the overall maintenance operations, line
      station servicing, administration, record keeping, supervision, tooling,
      test equipment, facilities, etc.

      (DMC definition source: ATA CSDD - Common Support Data Dictionary.)

3.2   The Seller guarantees for the Duration that the Direct Maintenance Cost
      per flying hour for the maintenance, restoration, and overhaul of the
      Parts and Systems (the "Guaranteed Direct Maintenance Cost") will not
      exceed an average of:

      (i)   For the A350-800 Aircraft:

            (a)   [...***...] per flight hour for the First Computation Period
                  (as defined in Clause 6.2) (the "A350-800 First Guaranteed
                  DMC"); or

            (b)   [...***...] per flight hour for the Second Computation Period
                  (as defined in Clause 6.3) (the "A350-800 Second Guaranteed
                  DMC").

            The A350-800 First Guaranteed DMC and the A350-800 Second Guaranteed
            DMC are together the "A350-800 Guaranteed DMCs."

      (ii)  For the A350-900 Aircraft:

            (a)   [...***...] per flight hour for the First Computation Period
                  (as defined in Clause 6.2) (the "A350-900 First Guaranteed
                  DMC"); or

            (b)   [...***...] per flight hour for the Second Computation Period
                  (as defined in Clause 6.3) (the "A350-900 Second Guaranteed
                  DMC").

            The A350-900 First Guaranteed DMC and the A350-900 Second Guaranteed
            DMC are together the "A350-900 Guaranteed DMCs".

      The A350-800 Guaranteed DMCs and the A350-900 Guaranteed DMCs are
      collectively the "Guaranteed DMCs."

3.3   The Guaranteed DMC values are expressed in January 2005 prices. These
      prices will be increased every year in accordance with the Direct
      Maintenance Cost Adjustment Formula set out in Appendix 3.

4.    ADJUSTMENTS

4.1   The Guaranteed DMCs are based on the assumptions set out in Appendix 2 and
      an estimated A350 Aircraft average flight leg time of seven point zero
      (7.0) hours and an average usage rate of four thousand five hundred
      (4,500) flight hours per year per A350 Aircraft. Should

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      the applicable A350 Aircraft average flight leg time differ from seven
      point zero (7.0) hours, then adjustments will be made in accordance with
      the following formula No. 1.

             X + YT(F)
      C(G) = --------- formula No. (1)
               T(F)

      where,

      C(G)  is the A350-800 Guaranteed DMC or A350-900 Guaranteed DMC per flight
            hour, as applicable, in US dollars specified in Paragraph 3,

      T(F)  is the applicable A350 Aircraft average flight leg time, in hours.

      (i)   For the A350-800 Aircraft:

            for the First Computation Period

            X     is [...***...] per flight cycle,

            Y     is [...***...] per flight hour,

            for the Second Computation Period

            X     is [...***...] per flight cycle,

            Y     is [...***...] per flight hour,

      (ii)  For the A350-900 Aircraft:

            for the First Computation Period

            X     is [...***...] per flight cycle,

            Y     is [...***...] per flight hour,

            for the Second Computation Period

            X     is [...***...] per flight cycle,

            Y     is [...***...] per flight hour,

4.2   Should the applicable A350 Aircraft average usage rate differ from four
      thousand five hundred (4,500) flight hours by more than ten percent (10%),
      then the corresponding Guaranteed DMC values will be adjusted by the
      Seller accordingly.

5.    REPORTING

5.1   The Buyers will provide the Seller with complete and detailed maintenance
      cost data ("A350 Maintenance Cost Data") annually, in English for each
      A350 Aircraft. The A350


***Confidential Treatment Requested


AWE/USA -A350                                                              LA9-4
                           PRIVILEGED AND CONFIDENTIAL



      Maintenance Cost Data will include, as applicable:

      -     A350 Aircraft MSN or registration number

      -     All in-house accounting related to maintenance costs

      -     All invoicing related to maintenance costs

      -     Access to maintenance contracts where allowable

      -     Maintenance reports

      -     Pilots' reports

      -     Operational data such as A350 Aircraft flight hours and flight
            cycles and auxiliary power unit running hours

5.2   If the Seller finds such A350 Maintenance Cost Data to be insufficiently
      detailed or unsubstantiated, the Buyers, using reasonable efforts, will
      supply additional data at the Seller's request.

5.3   With respect to maintenance or repairs subcontracted by the Buyers to, and
      performed by, third parties, the actual direct cost of consumed material
      will be deemed to be [...***...] of the price to the Buyers of
      such maintenance or repairs, if an insufficient breakdown of such
      maintenance or repair costs is supplied.

5.4   The Buyers will deliver the A350 Maintenance Cost Data not later than
      [...***...] following the end of each of its accounting years; and the
      Buyers will put at the Seller's disposal any documents, records, books,
      etc. necessary for validating the Buyers' information.

5.5   Should the Buyers not be able to provide sufficient Maintenance Cost Data
      to the Seller for the purpose of this Maintenance Cost Guarantee, the
      Buyers will notify the Seller within [...***...] after the end of the
      first of the Buyers' accounting years of the reasons why.

      If the Seller receives no A350 Maintenance Cost Data from the Buyers
      within [...***...] after the end of the second of the Buyers'
      accounting years occurring during the Duration, then the Direct
      Maintenance Costs will be considered acceptable to the Buyers and this
      Maintenance Cost Guarantee will automatically terminate.

6.    RESULTS AND REMEDY

6.1.  Annual Reviews

6.1.1 Not later than [...***...] following the end of each accounting year of
      the Buyers, the Buyers and the Seller will organize an annual maintenance
      cost review, in order to:

      (a)   jointly review the accounted DMCs,

      (b)   correct any accounting error in the actual DMCs due to any of the
            exclusions in Paragraph 8 and/or Appendix 1,

      (c)   make any necessary adjustments to the actual DMCs in accordance with
            Paragraphs 4 and/or 7,


***Confidential Treatment Requested

AWE/USA -A350                                                              LA9-5
                           PRIVILEGED AND CONFIDENTIAL




      and calculate, for each A350 Aircraft, the following parameters:

      C(AN) the actual DMC of the applicable A350 Aircraft in US dollars per
            flight hour for each year in the Duration as measured by the
            Accounting System (defined in Paragraph 11.1) and agreed by the
            Seller, and

      C(GN) the Guaranteed DMC as determined pursuant to Clause 4 for the year
            "N."

6.1.2 The Seller will, following these analyses and reviews and at the Seller's
      discretion, propose maintenance cost reduction initiatives and/or
      recommendations to the Buyers including, but not limited to, those
      described in Paragraph 9.

6.1.3 As a result of the third year annual maintenance cost review, should the
      Buyers and Seller mutually agree that the adjusted DMCs for the A350
      Aircraft exceed the Guaranteed Direct Maintenance Cost by more than
      [...***...] during each of the first three (3) consecutive years
      of the Duration, then the interval between computation periods will be
      adjusted to [...***...], and Paragraphs 6.2 and 6.3 will be modified
      accordingly.

6.2   First Computation Period

6.2.1 Within [...***...] after the end of the [...***...] of the Duration (the
      "A350-800 First Computation Period" for the A350-800 Aircraft and the
      "A350-900 First Computation Period" for the A350-900 Aircraft), the Direct
      [...***...] for each of the first [...***...] of the Duration will
      be calculated in accordance with Paragraph 4. The Seller and the Buyers
      will:

      (a)   jointly review the accounted DMCs,

      (b)   correct any accounting error in the actual DMCs due to any of the
            exclusions in Paragraph 8 and/or Appendix 1,

      (c)   make any necessary adjustments to the actual DMCs in accordance with
            Paragraphs 4 and/or 7, and

      (d)   calculate for each A350 Aircraft the Seller's liability for the
            A350-800 First Computation Period and A350-900 First Computation
            Period, as applicable, using formula No. (2) below:

            [...***...]

            where,

            [...***...]

AWE/USA -A350                                                              LA9-6
                           PRIVILEGED AND CONFIDENTIAL





            C(AN) and C(GN) are determined as provided in Clause 6.1.1 for each
            of the first [...***...] of the Duration.

6.2.2 [...***...]

6.2.3 [...***...]

6.3   Second Computation Period

6.3.1 Within [...***...] after the end of the Duration, the Direct
      Maintenance Costs for each of the [...***...] of the Duration (the
      "A350-800 Second Computation Period" for the A350-800 Aircraft and the
      "A350-900 Second Computation Period" for the A350-900 Aircraft) will be
      calculated in accordance with Paragraph 4. The Seller and the Buyers will:

      (a)   jointly review the accounted DMCs,

      (b)   correct any accounting error in the actual DMCs due to any of the
            exclusions in Paragraph 8 and/or Appendix 1,

      (c)   make any necessary adjustments to the actual DMCs in accordance with
            Paragraphs 4 and/or 7 ,

      (d)   calculate for each A350 Aircraft the Seller's liability for the
            A350-800 Second Computation Period or A350-900 Second Computation
            Period, as applicable, using formula No. (3) below:

                       12
            [...***...] formula No. (3)
                       n=1

      where,

            [...***...]

            [...***...]

            C(AN) and C(GN) are as determined pursuant to Paragraph 6.1.1 for
            each of the twelve (12) years of the Duration.


***Confidential Treatment Requested


AWE/USA -A350                                                              LA9-7
                           PRIVILEGED AND CONFIDENTIAL




6.3.2 [...***...]

6.3.3 [...***...]

6.3.4 [...***...]

7.    CONDITIONS OF THE GUARANTEE

7.1   Guaranteed DMC values in Paragraph 3 are based on a typical block concept
      maintenance program approved by the FAA, covering routine maintenance
      tasks and their associated non- routine work, as specified in the Airbus
      Maintenance Planning Document ("Airbus MPD").

      The Guaranteed DMC values will be revised by the Seller and the Buyers,
      subject to mutual agreement, in accordance with the maintenance tasks
      specified in the A350 Airbus MPD of the Buyers' FAA approved maintenance
      program developed by the Buyers and based on the Airbus MPD, when
      finalized and in accordance with the Buyers' organization of, and strategy
      for A350 Aircraft maintenance.

      In addition to the adjustments described in Paragraph 4, any changes to
      the conditions herein will be cause for reevaluation and/or adjustment of
      the Maintenance Cost Guarantee, including, but not limited to:

      (a)   Changes in the assumptions listed in Appendix 2.

      (b)   One or more contracts and/or fixed cost per flight hour or per
            landing agreements between the Buyers and third parties are
            concluded. The Buyers will provide the Seller with a true and
            complete copy of each such agreement.

            The Seller agrees not to disclose any information in any such
            agreement to third parties. If, notwithstanding such non-disclosure
            commitment from the Seller, the Buyers is precluded from disclosing
            all relevant particulars of any such agreement to the Seller after
            having made best efforts to obtain consent from the relevant third
            party, the Seller may consider alternative information from the
            Buyers, provided that such information is acceptable to the Seller,
            at its sole discretion, in determining whether there is cause for
            reevaluation and/or adjustment of this Maintenance Cost Guarantee.


***Confidential Treatment Requested


AWE/USA -A350                                                              LA9-8
                           PRIVILEGED AND CONFIDENTIAL




      (c)   Should there occur any certification, regulatory or A350 Aircraft
            operational changes outside the Seller's control or influence that
            may have an effect on the Buyers' Direct Maintenance Costs.

7.2   The obligations of the Seller hereunder are subject to each of the
      following requirements:

      (a)   This Maintenance Cost Guarantee covers routine tasks as defined in
            the Airbus MPD and non-routine related findings and refurbishing
            work in accordance with approved maintenance practices.

      (b)   The Buyers' maintenance personnel, including its maintenance control
            center personnel will be trained to a level equivalent to Airbus
            training level III where required, and they will receive periodic
            refreshment training.

      (c)   Parts, equipments and tools will be maintained by the Buyers in
            accordance with manufacturers' recommendations.

      (d)   The Buyers will comply with the Airbus no-fault-found policy (NFF),
            or if not possible, the Buyers will demonstrate to the Seller the
            non-applicability due to the A350 Aircraft operational constraints.

      (e)   The Seller's representatives will be fully authorized by the Buyers
            to visit the Buyers' or its maintenance provider's facilities to
            confirm the implementation by the Buyers of the Seller's maintenance
            procedures and to audit maintenance costs accounting.

      (f)   AIRMAN (or equivalent reporting system utilized by Buyers) with
            real-time access, will be implemented by the Buyers to launch,
            report and track maintenance actions.

      (g)   Shop-findings related to an equipment or line replaceable unit
            removal will be collected and recorded with the job-card or log-book
            reference.

      (h)   Elapsed time and man-hours expended on each action will be recorded
            onto the relevant job card to enable retrieval of the information
            from AIRMAN (or equivalent reporting system utilized by Buyers).

      (i)   The Buyers will implement the recommendations mutually agreed on by
            the Seller and the Buyers following a "Best Industry Practices"
            review.

      (j)   Deferred line maintenance actions will be tracked and reported.

8.    EXCLUSIONS

      This Maintenance Cost Guarantee will only apply to Direct Maintenance
      Costs arising from proper operations, and will not cover Direct
      Maintenance Costs resulting from:

      -     force majeure,

      -     acts of any third party,

      -     consequential damages,

      -     negligence, incidental or accidental damage,

      -     modifications not related to a decrease in Direct Maintenance Cost,

AWE/USA -A350                                                              LA9-9
                           PRIVILEGED AND CONFIDENTIAL



      -     line maintenance (transit, daily and weekly checks and associated
            trouble-shooting and deferrals, etc.),

      -     all A-checks and associated trouble-shooting,

      -     maintenance performed for Propulsion Systems, Propulsion Systems
            manufacturer supplied equipment, Propulsion Systems related Buyer
            Furnished Equipment,

      -     maintenance of equipment classified as Buyer Furnished Equipment,

      -     maintenance of equipment classified as Operator Furnished Equipment
            under the A350-800 Standard Specification, Issue B or A350-900
            Standard Specification, Issue B,

      -     non-routine work exceeding twenty-five (25) man-hours per Airbus MPD
            task,

      -     non-compliance by the Buyers with accepted industry practices or
            acts attributable to the negligence of the Buyers or its
            subcontractors and agents,

      -     partial or complete painting of the A350 Aircraft for cosmetic
            reasons (this exclusion does not include painting for corrosion
            preventative maintenance),

      -     refurbishing work that is included in the Buyers' FAA approved
            maintenance program but not in accordance with and not directly
            related to routine Airbus MPD tasks,

      -     any maintenance task that is not included in the Buyers' FAA
            approved maintenance program and does not originate from the Airbus
            MPD.

      In addition, the following costs are specifically excluded:

      -     cost of taxes, duties, transportation, interest, overheads, burden
            or other charges which are not the Seller's responsibility,

      -     cost of fluids, compounds, paints and cleaning material, and any
            other such disposable materials, and

      -     all handling fees.

9.    MAINTENANCE COST REDUCTION INITIATIVES

9.1   As stated in Paragraphs 6.2 and 6.3, during any review of the Buyers'
      maintenance operations, in the event that the A350-800 Guaranteed DMC or
      A350-900 Guaranteed DMC level is exceeded, the Seller may propose
      initiatives and/or recommendations to reduce maintenance costs. To make
      these proposals, the Seller may audit the Buyers' maintenance operation
      and or selected maintenance provider's A350 Maintenance Cost Data to
      propose:

      -     modifications in working practices,

      -     technical reviews,

      -     an alternative maintenance provider or maintenance solution

      -     modifications to maintenance programs (including escalation where
            possible) or training, and/or

      -     any other action which should lead to a reduction of the Buyers'
            direct labor man-hour maintenance expenditure.

9.2   Should the Buyers or its maintenance provider elect to not implement or
      disagree as to the effectiveness of such initiatives and/or
      recommendations proposed by the Seller, the

AWE/USA -A350                                                             LA9-10
                           PRIVILEGED AND CONFIDENTIAL




      Buyers will then reasonably demonstrate to the Seller that those
      initiative and/or recommendations to reduce maintenance costs are
      ineffective, uneconomical and impractical in reducing the A350 Maintenance
      Cost Data for the Buyers' operations. Both parties will then use
      reasonable efforts to determine mutually acceptable maintenance cost
      reduction initiatives.

      The Seller reserves the right to reasonably deduct from the actual DMC the
      benefits expected from the implementation of such initiatives and or
      recommendations.

9.3   For the Duration, the Buyers will use all means possible to incorporate
      modifications (including, but not limited to, Service Bulletins),
      procedures or recommendations (collectively, "Recommendations") that may
      be made by the Seller to reduce the DMCs of the A350 Aircraft, [...***...]

10.   MAINTENANCE PROCEDURES

      The Buyers will perform its maintenance operations in compliance with the
      applicable FAA approved A350 Aircraft maintenance and overhaul manuals.
      Such maintenance operations will be performed by appropriately trained
      personnel and FAA approved maintenance organizations.

11.   ACCOUNTING SYSTEM

11.1  This Maintenance Cost Guarantee is subject to the establishment by the
      Buyers of an accounting system relating to its maintenance costs (an
      "Accounting System") that is approved by the Seller not later than
      [...***...] prior to Delivery of the first A350 Aircraft, to ensure
      accurate maintenance cost reporting hereunder. If the Seller fails to
      conduct a review of they Buyers' accounting system at this time, the
      Buyers' accounting system will be deemed acceptable and will be used the
      source of the information needed to provide the required information.

11.2  The Accounting System will take into account any and all warranty,
      guarantee and other, similar payments made by the Seller or any other
      person in respect of any item of equipment the maintenance costs of which
      are proposed by the Buyers to be included in the calculation of its direct
      maintenance costs for purposes of this Letter Agreement.

11.3  Should the Accounting System not provide for accurate cost reporting to
      the Seller's satisfaction, the Guaranteed DMC will be mutually reviewed
      and agreed between the Buyers and the Seller.

12.   DISRUPTIONS

      The provisions of this Maintenance Cost Guarantee will not apply during
      any period when the Buyers experiences disruptions of operations.

***Confidential Treatment Requested

AWE/USA -A350                                                             LA9-11
                           PRIVILEGED AND CONFIDENTIAL





13.   [...***...]

14.   SELLER'S LIABILITY

      The Seller's liability under this Maintenance Cost Guarantee will be
      governed solely by the terms of the present Maintenance Cost Guarantee

15.   NO DUPLICATE REMEDIES

      The intent of this Maintenance Cost Guarantee is to provide benefits to
      the Buyers in order to ensure that the actual direct maintenance cost
      levels of the A350 Aircraft are not higher than the Guaranteed Direct
      Maintenance Costs. It is not the intent, however, to duplicate similar
      benefits available to the Buyers under any other applicable agreement
      (including, without limitation, the Agreement), guarantee, warranty,
      service life policy, or any other special benefit of any kind.

16.   ASSIGNMENT

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers herein will not be assigned
      or transferred in any manner and any attempted assignment or transfer in
      contravention of the provisions of this paragraph will be void and of no
      force or effect.

17.   NEGOTIATED AGREEMENT

      THE BUYERS AND THE SELLER AGREE THAT THIS LETTER AGREEMENT HAS BEEN THE
      SUBJECT OF DISCUSSIONS AND NEGOTIATION BY THE PARTIES AND THAT THE OTHER
      MUTUAL AGREEMENT OF THE PARTIES SET FORTH IN THE PURCHASE AGREEMENT WERE
      ARRIVED AT IN CONSIDERATION OF, INTER ALIA, THE PROVISIONS OF THIS LETTER
      AGREEMENT.

      UNQUOTE

      In consideration of the assignment and subrogation by the Seller under
      this Letter Agreement in favor of the Buyers in respect of the Seller's
      rights against and obligations to the Manufacturer under the provisions
      quoted above, the Buyers hereby accepts such assignment and subrogation
      and agrees to be bound by all of the terms, conditions and limitations
      therein contained. The Buyers and Seller recognize and agree that all the
      provisions of Clause 12 of the Agreement, mutatis mutandis, including
      without limitation the Exclusivity of Warranties and General Limitations
      of Liability and Duplicate Remedies provisions therein contained, will
      apply to the foregoing maintenance cost guarantee.

***Confidential Treatment Requested

AWE/USA -A350                                                             LA9-12
                           PRIVILEGED AND CONFIDENTIAL



18.   ASSIGNMENT

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without the prior written consent of
      the Seller, and any attempted assignment or transfer in contravention of
      the provisions of this paragraph will be void and of no force or effect.

19.   COUNTERPARTS

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

AWE/USA -A350                                                             LA9-13
                           PRIVILEGED AND CONFIDENTIAL



      IN WITNESS WHEREOF, these presents were entered into as of the day and
      year first above written.

                                                Very truly yours,

                                                AVSA, S.A.R.L.

                                                By: ____________________________

                                                Its:

      Accepted and Agreed

      US Airways, Inc.

      By: _________________________
      Its:

      America west airlines, Inc.

      By: _________________________
      Its:

      US AIRWAYS GROUP, INC.

      By: _________________________
      Its:

AWE/USA -A350                                                             LA9-14
                           PRIVILEGED AND CONFIDENTIAL




                    APPENDIX 1 TO MAINTENANCE COST GUARANTEE

The following systems are covered by the Maintenance Cost Guarantee:



System No.       System Name                       System/subsystem exclusions
- ------------------------------------------------------------------------------
                                             

[...***...]



The following are also excluded from the Maintenance Cost Guarantee in their
entirety:

      -     Seller Furnished Equipment that has been changed from Buyer
            Furnished Equipment at the Buyers' request;

      -     Buyer Furnished Equipment and

      -     Optional Equipment.

If the Buyers enters into direct agreements with third parties for the
maintenance of brakes, wheels, tires, APU, landing gear, etc., then, as set
forth in Paragraph 7.1, the Guaranteed DMCs will be adjusted accordingly.

***Confidential Treatment Requested

AWE/USA -A350                                                             LA9-15
                           PRIVILEGED AND CONFIDENTIAL




                    APPENDIX 2 TO MAINTENANCE COST GUARANTEE

Basis assumptions:

Average sector length:          7.0 flight hours
Average annual utilization:     4,500 flight hours

Proportion of work carried out in-house:

[...***...]

In-house conditions:

[...***...]

Subcontracted conditions:

[...***...]

***Confidential Treatment Requested

AWE/USA -A350                                                             LA9-16
                           PRIVILEGED AND CONFIDENTIAL




                    APPENDIX 3 TO MAINTENANCE COST GUARANTEE

                   DIRECT MAINTENANCE COST ADJUSTMENT FORMULA

                                  [...***...]
      Where

            [...***...]

[...***...]

*** Confidential Treatment Requested

AWE/USA -A350                                                             LA9-17
                           PRIVILEGED AND CONFIDENTIAL


            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 10

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ  85034

Re:  MISCELLANEOUS

Ladies and Gentlemen,

US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of the date hereof (the "Agreement"), which covers,
among other things, the sale by the Seller and the purchase by the Buyers of
certain Aircraft, under the terms and conditions set forth in said Agreement.
The Buyer and the Seller have agreed to set forth in this Letter Agreement No.
10 (the "Letter Agreement") certain additional terms and conditions regarding
the sale of the Aircraft. Capitalized terms used herein and not otherwise
defined in this Letter Agreement will have the meanings assigned thereto in the
Agreement. Technical and trade terms used but not defined herein or in the
Agreement will be defined as generally accepted in the airline and/or aircraft
manufacturing industries. The terms "herein," "hereof" and "hereunder" and words
of similar import refer to this Letter Agreement.

All of the parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

                                                                          LA10-1

AWE/USA -- A350

                           PRIVILEGED AND CONFIDENTIAL



1.          CROSS-DEFAULT

            Clause 21.1 of the Agreement is hereby amended by the addition of
            the following text:

      QUOTE

            [...***...]

      UNQUOTE

2.          LEASED AIRCRAFT

            [...***...]

                                                                          LA10-2
*** Confidential Treatment Requested

AWE/USA -- A350

                           PRIVILEGED AND CONFIDENTIAL



3.          [...***...]

4.          TERMINATION

            [...***...]

            QUOTE

                  [...***...]

                                                                          LA10-3

*** Confidential Treatment Requested

AWE/USA -- A350

                           PRIVILEGED AND CONFIDENTIAL



            UNQUOTE

5.          CONDITIONS PRECEDENT

            It will be a condition precedent to the effectiveness of this
            Agreement that the conditions precedent to the obligations of Airbus
            Financial Services (the "Lender") set forth in the $161,000,000 Loan
            Agreement dated as September 27, 2005 among US Airways, Inc.,
            America West Airlines, Inc., US Airways Group, Inc., the Lender and
            Wells Fargo Bank Northwest, National Association, as Collateral
            Agent, have been either satisfied or been waived by the Lender.

6.          ASSIGNMENT

            Except as set forth in Clause 20.2 of the Agreement, this Letter
            Agreement and the rights and obligations of the Buyer hereunder will
            not be assigned or transferred in any manner without the prior
            written consent of the Seller, and any attempted assignment or
            transfer in contravention of the provisions of this Paragraph 6 will
            be void and of no force or effect.

7.          COUNTERPARTS

            This Letter Agreement may be signed in any number of separate
            counterparts. Each counterpart, when signed and delivered (including
            counterparts delivered by facsimile transmission), will be an
            original, and the counterparts will together constitute one same
            instrument.

                                                                          LA10-4

AWE/USA -- A350

                           PRIVILEGED AND CONFIDENTIAL



IN WITNESS WHEREOF, these presents were entered into as of the day and year
first above written.

                                                     Very truly yours,

                                                     AVSA, S.A.R.L.

                                                     By:   ____________________

                                                     Its:


      Accepted and Agreed

      US AIRWAYS GROUP, Inc.

      By: _________________________
      Its:

      AMERICA WEST AIRLINES, INC.

      By: _________________________
      Its:

      US AIRWAYS, INC.

      By: _________________________
      Its:

                                                                          LA10-5

AWE/USA -- A350

                           PRIVILEGED AND CONFIDENTIAL


            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 11

                                                        As of September 27, 2005

US Airways Group, Inc.
US Airways, Inc.
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ 85034

Re: PREDELIVERY PAYMENTS

Ladies and Gentlemen,

US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc. (the
"Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an Airbus A350
Purchase Agreement dated as of even date herewith (the "Agreement"), which
covers, among other things, the sale by the Seller and the purchase by the
Buyers of certain Aircraft, under the terms and conditions set forth in said
Agreement. The Buyers and the Seller have agreed to set forth in this Letter
Agreement No. 11 (the "Letter Agreement") certain additional terms and
conditions regarding the sale of the Aircraft. Capitalized terms used herein and
not otherwise defined in this Letter Agreement will have the meanings assigned
thereto in the Agreement. Technical and trade terms used but not defined herein
or in the Agreement will be defined as generally accepted in the airline and/or
aircraft manufacturing industries. The terms "herein," "hereof" and "hereunder"
and words of similar import refer to this Letter Agreement.

All of the parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

                                                                          LA11-1

AWE/A350--A350

                           PRIVILEGED AND CONFIDENTIAL



1.    [...***...]

***Confidential Treatment Requested

                                                                          LA11-2

AWE/A350--A350

                           PRIVILEGED AND CONFIDENTIAL







                           PRIVILEGED AND CONFIDENTIAL





2.    ASSIGNMENT

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without the prior written consent of
      the Seller, and any attempted assignment or transfer in contravention of
      the provisions of this Paragraph 2 will be void and of no force or effect.

3.    COUNTERPARTS

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

                                                                          LA11-4

AWE/A350--A350

                           PRIVILEGED AND CONFIDENTIAL



      IN WITNESS WHEREOF, these presents were entered into as of the day and
      year first above written.

                                      Very truly yours,

                                      AVSA, S.A.R.L.

                                      By:  __________________________
                                      Its:

       Accepted and Agreed

       US AIRWAYS, INC.

       By: __________________________
       Its:

       AMERICA WEST AIRLINES, INC.

       By: _________________________
       Its:

       US AIRWAYS GROUP, INC.

       By: _________________________
       Its
                                                                          LA11-5

AWE/A350--A350

                           PRIVILEGED AND CONFIDENTIAL



            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 12

                                                        As of September 27, 2005

      US Airways Group, Inc.
      US Airways, Inc.
      America West Airlines, Inc.
      4000 East Sky Harbor Boulevard
      Phoenix, AZ  85034

      Re: [...***...]

      Dear Ladies and Gentlemen:

      US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc.
      (the "Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an
      Airbus A350 Purchase Agreement dated as of even date herewith (the
      "Agreement"), which covers, among other things, the sale by the Seller and
      the purchase by the Buyers of certain A350-800 Aircraft, under the terms
      and conditions set forth in said Agreement. The Buyers and the Seller have
      agreed to set forth in this Letter Agreement No. 12 (the "Letter
      Agreement") certain additional terms and conditions regarding the sale of
      the A350-800 Aircraft. Capitalized terms used herein and not otherwise
      defined in this Letter Agreement will have the meanings assigned thereto
      in the Agreement. Technical and trade terms used but not defined herein or
      in the Agreement will be defined as generally accepted in the airline
      and/or aircraft manufacturing industries. The terms "herein," "hereof" and
      "hereunder" and words of similar import refer to this Letter Agreement.

      All of the parties agree that this Letter Agreement will constitute an
      integral, nonseverable part of said Agreement, that the provisions of said
      Agreement are hereby incorporated herein by reference, and that this
      Letter Agreement will be governed by the provisions of said Agreement,
      except that if the Agreement and this Letter Agreement have specific
      provisions which are inconsistent, the specific provisions contained in
      this Letter Agreement will govern.


***Confidential Treatment Requested


AWE/A350 -A350                                                          LA 12-1
                           PRIVILEGED AND CONFIDENTIAL


      The Seller represents and warrants that the Manufacturer has provided to
      the Seller the [...***...] (the "Guarantees") that are reproduced below
      between the words QUOTE and UNQUOTE, subject to the terms, conditions,
      limitations and restrictions (including, but not limited to, the
      Exclusivity of Warranties and General Limitations of Liability and
      Duplicate Remedies provisions) set forth below. The Seller hereby assigns
      to the Buyers, and the Buyers hereby accept, all of the Seller's rights
      and obligations as the "Buyers" under the said Guarantees, and the Seller
      subrogates the Buyers to all such rights and obligations in respect of the
      A350-800 Aircraft. The Seller hereby warrants to the Buyers that (i) it
      has all requisite authority to make the foregoing assignment to and to
      effect the foregoing subrogation in favor of the Buyers, (ii) such
      assignment and subrogation are effective to confer on the Buyers all of
      the foregoing rights and obligations of the Seller, (iii) the provisions
      so assigned are in full force and effect and have not been amended prior
      to the date hereof, and (iv) the Seller will not enter into any amendment
      of the provisions so assigned without the prior written consent of the
      Buyers.

QUOTE

1     PREAMBLE

1.1   AIRCRAFT CONFIGURATION

      The guarantees defined below ("the Guarantees") are applicable to the
      A350-800 Aircraft as described in the Standard Specification Ref. G 000
      08000 Issue A dated February 28th, 2005 and [...***...].

1.2   INTRODUCTION

      The paragraphs hereafter define the Guarantee provided by the Seller to
      the Buyers, together with the associated conditions, compliance
      demonstration and settlement procedures. [...***...].

2     [...***...]

2.1   This Guarantee will apply to the Aircraft as defined in the preamble to
      this Letter Agreement.

      The term "Fleet" will mean a fleet of A350 Aircraft to be delivered
      [...***...].

      The Guarantee [...***...], is based on such delivery plan of Buyers' A350
      Aircraft and will be reviewed in good faith between the Buyers and the
      Seller should the actual delivery plan (dates, composition of the fleet,
      number of firm aircraft) differ from the planned delivery schedule
      [...***...].


***Confidential Treatment Requested


AWE/A350 -A350                                                          LA 12-2
                           PRIVILEGED AND CONFIDENTIAL



2.2   [...***...]

2.3   [...***...]

***Confidential Treatment Requested

AWE/A350 -A350                                                          LA 12-3
                           PRIVILEGED AND CONFIDENTIAL


3     [...***...]

***Confidential Treatment Requested

AWE/A350 -A350                                                          LA 12-4
                           PRIVILEGED AND CONFIDENTIAL


4     [...***...]

***Confidential Treatment Requested

AWE/A350 -A350                                                          LA 12-5
                           PRIVILEGED AND CONFIDENTIAL


AWE/A350 -A350                                                          LA 12-6
                           PRIVILEGED AND CONFIDENTIAL




5     [...***...]


***Confidential Treatment Requested


AWE/A350 -A350                                                          LA 12-7
                           PRIVILEGED AND CONFIDENTIAL




AWE/A350 -A350                                                          LA 12-8
                           PRIVILEGED AND CONFIDENTIAL



6.    [...***...]

***Confidential Treatment Requested


AWE/A350 -A350                                                          LA 12-9
                           PRIVILEGED AND CONFIDENTIAL



7.    [...***...]

8     [..***...]

***Confidential Treatment Requested

AWE/A350 -A350                                                          LA 12-10
                           PRIVILEGED AND CONFIDENTIAL



9     [...***...]

10    [...***...]

11    NON TRANSFERABILITY

      This Letter Agreement is not transferable, notwithstanding clause 21 of
      the Agreement, and the Buyers' rights under this Letter Agreement will not
      be assigned, sold, transferred or otherwise alienated by operation of law
      or otherwise to any person other than the Buyers. Any unauthorised
      assignment, sale, transfer or other alienation of the Buyers' rights under
      this Letter Agreement with respect to any Aircraft will immediately void
      this Letter Agreement in its entirety as to any such Aircraft.

UNQUOTE

12    ASSIGNMENT

      In consideration of the assignment and subrogation by the Seller under
      this Letter Agreement in favor of the Buyer in respect of the Seller's
      rights against and obligations to the Manufacturer under the provisions
      quoted above, the Buyer hereby accepts such assignment and subrogation and
      agrees to be bound by all of the terms, conditions and limitations therein
      contained. The Buyer and Seller recognize and agree that all the
      provisions of Clause 12 of the Agreement, including without limitation the
      Exclusivity of Warranties and General Limitations of Liability and
      Duplicate Remedies provisions therein contained, will apply to the
      foregoing Performance Retention Guarantee.

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without prior written consent of the
      Seller and any attempted assignment or transfer in contravention of the
      provisions of this sentence will be void and of no force and effect.

13.   COUNTERPARTS

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

***Confidential Treatment Requested

AWE/A350 -A350                                                          LA 12-11
                           PRIVILEGED AND CONFIDENTIAL



      IN WITNESS WHEREOF, these presents were entered into as of the day and
year first above written.

                                            Very truly yours,

                                            AVSA, S.A.R.L.

                                            By: __________________________
                                            Its:

Accepted and Agreed

US AIRWAYS GROUP, INC.

By: _________________________
Its:

AMERICA WEST AIRLINES, INC.

By: _________________________
Its:

US AIRWAYS GROUP, INC.

By: _________________________
Its:

AWE/A350 -A350                                                          LA 12-12
                           PRIVILEGED AND CONFIDENTIAL


                                  [...***...]


*** Confidential Treatment Requested

AWE/A350 -A350                                                          LA 12-13
                           PRIVILEGED AND CONFIDENTIAL



                                  [...***...]

***Confidential Treatment Requested

AWE/A350 -A350                                                          LA 12-15
                           PRIVILEGED AND CONFIDENTIAL


            ***CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24B-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                             LETTER AGREEMENT NO. 13

                                                        As of September 27, 2005

      US Airways Group, Inc.
      US Airways, Inc.
      America West Airlines, Inc.
      4000 East Sky Harbor Boulevard
      Phoenix, AZ 85034

      Re:DISPATCH RELIABILITY GUARANTEE

      Dear Ladies and Gentlemen:

      US Airways, Inc., America West Airlines, Inc. and US Airways Group, Inc.
      (the "Buyers"), and AVSA, S.A.R.L. (the "Seller"), have entered into an
      Airbus A350 Purchase Agreement dated as of even date herewith (the
      "Agreement"), which covers, among other things, the sale by the Seller and
      the purchase by the Buyers of certain A350-800 Aircraft, under the terms
      and conditions set forth in said Agreement. The Buyers and the Seller have
      agreed to set forth in this Letter Agreement No. 13 (the "Letter
      Agreement") certain additional terms and conditions regarding the sale of
      the A350-800 Aircraft. Capitalized terms used herein and not otherwise
      defined in this Letter Agreement will have the meanings assigned thereto
      in the Agreement. Technical and trade terms used but not defined herein or
      in the Agreement will be defined as generally accepted in the airline
      and/or aircraft manufacturing industries. The terms "herein," "hereof" and
      "hereunder" and words of similar import refer to this Letter Agreement.

      All of the parties agree that this Letter Agreement will constitute an
      integral, nonseverable part of said Agreement, that the provisions of said
      Agreement are hereby incorporated herein by reference, and that this
      Letter Agreement will be governed by the provisions of said Agreement,
      except that if the Agreement and this Letter Agreement have specific
      provisions which are inconsistent, the specific provisions contained in
      this Letter Agreement will govern.

      AWE/USA--A350                                                     LA 13-1
                           PRIVILEGED AND CONFIDENTIAL



      The Seller represents and warrants that the Manufacturer has provided to
      the Seller the dispatch reliability guarantees that are reproduced below
      between the words QUOTE and UNQUOTE, subject to the terms, conditions,
      limitations and restrictions set forth below. The Seller hereby assigns to
      the Buyers, and the Buyers hereby accept, as to each A350-800 Aircraft
      delivered to the Buyers under the Agreement, all of the Seller's rights
      and obligations with respect to such A350-800 Aircraft in its capacity as
      "Buyers" as aforesaid under the said dispatch reliability guarantees, and
      the Seller subrogates the Buyers into all such rights and obligations in
      respect of the A350-800 Aircraft. The Seller hereby warrants to the Buyers
      that (i) it has all requisite authority to make the foregoing assignment
      to and to effect the foregoing subrogation in favor of the Buyers, (ii)
      such assignment and subrogation are effective to confer on the Buyers all
      of the foregoing rights and obligations of the Seller, (iii) the
      provisions so assigned are in full force and effect and have not been
      amended prior to the date hereof, and (iv) the Seller will not enter into
      any amendment of the provisions so assigned without the prior written
      consent of the Buyers.

      QUOTE

1.    SCOPE

      The Buyer and the Seller agree they have a mutual interest in the
      technical reliability of the Buyer's Aircraft fleet to be of a high order,
      with a high probability that the aircraft will be Dispatched on time
      ("Dispatch Reliability"). This Letter Agreement extends to the Buyer's
      Aircraft fleet described in the Agreement and operated by the Buyer, a
      Dispatch Reliability guarantee (the "Guarantee").

2.    DURATION

      The obligations of the Buyer and the Seller under this Letter Agreement
      shall become binding upon signature of the Agreement and shall remain in
      force for a period of [...***...] from delivery of the first (1st)
      Aircraft to the Buyer (the "Duration").

      At the end of the year following the Duration, the Buyer and the Seller
      will organise a Review Meeting as per Paragraph 9. At the occasion of this
      Review, if the Achieved Dispatch Reliability is confirmed and agreed by
      the Buyer and the Seller as below the Guaranteed Dispatch Reliability, the
      Seller will continue to make Recommendations in order to improve the
      Dispatch Reliability of the Buyer's fleet for the following year. These
      Buyer's and Seller's obligations will set in force until the Achieved
      Dispatch Reliability is above the Guaranteed Dispatch Reliability and for
      a period not exceeding [...***...] from delivery of the first (1st)
      Aircraft to the Buyer.

3.    DEFINITIONS

3.1   ACHIEVED DISPATCH RELIABILITY

      The "Achieved Dispatch Reliability" is the actual dispatch reliability
      obtained by the Buyer's Aircraft fleet in regular Scheduled Revenue Flight
      service adjusted in accordance with the clauses of this Guarantee.

***Confidential Treatment Requested


      AWE/USA--A350                                                     LA 13-2
                           PRIVILEGED AND CONFIDENTIAL


      Achieved Dispatch Reliability will be calculated for each Computation
      Period, expressed as a percentage, as follows:

      [...***...]

3.2   AIRCRAFT INHERENT MALFUNCTION

      An "Aircraft Inherent Malfunction" is a condition whereby maintenance
      actions confirm that the operation of a system or component is outside the
      specified limitations: a) as defined in the applicable Maintenance or
      Operations Manual(s), and/or b) has not been induced by a secondary cause
      or as a consequence of an Excluded Event as defined in paragraph 5.

3.3   CHARGEABLE EVENT

      Under this Guarantee a "Chargeable Event" is a Chargeable Delay or
      Chargeable Cancellation or Chargeable Return to Gate as defined hereunder.
      If analysis of substantiating data determines that the primary reason(s)
      for any Chargeable Event are not due to an Aircraft Inherent Malfunction
      or are due to an Excluded Event, such Chargeable Delay or Chargeable
      Cancellation shall not constitute a Chargeable Event.

      3.3.1 A "Chargeable Delay" occurs when a confirmed Aircraft Inherent
      Malfunction directly results in an originating Scheduled Revenue Flight to
      be Dispatched more than [...***...] later than the scheduled time
      of departure.

      3.3.2 A "Chargeable Return to Gate" occurs when the Aircraft, after being
      Dispatched returns to the parking position or gate, including a return to
      takeoff initiation (ground turn-back) or after takeoff initiation (aborted
      takeoff).

      3.3.3 A "Chargeable Cancellation" occurs when a Scheduled Revenue Flight
      cannot take place as a direct result of a confirmed Aircraft Inherent
      Malfunction. Cancellation of any or all of the flight legs of a multi-leg
      flight if related to a Chargeable Event, constitutes and is counted as one
      Chargeable Event only.

3.4   COMMENCEMENT DATE

      The "Commencement Date" is the [...***...] following the month of delivery
      of the first Aircraft to the Buyer.

3.5   COMPUTATION PERIOD

      For the guarantee Duration each "Computation Period" consists of
      [...***...], the first to run from the commencement date to the
      [...***...] of the delivery date of the first Aircraft to the Buyer. Each
      subsequent Computation Period to run consecutively thereafter.

      ***Confidential Treatment Requested
      AWE/USA--A350                                                     LA 13-3
                           PRIVILEGED AND CONFIDENTIAL


3.6   DISPATCHED

      Once an Aircraft has left the gate or stand for a Scheduled Revenue Flight
      it shall be deemed to have been "Dispatched", except as provided for in
      paragraph 3.3 above.

3.7   SCHEDULED REVENUE FLIGHT

      A "Scheduled Revenue Flight" is one originating flight operated by the
      Buyer using the Buyer's Aircraft delivered under the Agreement, available
      to be Dispatched prior to the original scheduled time of departure as
      stipulated:

      a) in the Buyer's timetable, as a scheduled flight, and/or

      b) in advance by the Buyer, as a charter flight.

4.    GUARANTEE

4.1   GUARANTEED DISPATCH RELIABILITY

      The "Guaranteed Dispatch Reliability" exclusively relating to this
      Guarantee is solely as defined herein and provided in lieu of any and all
      other guarantees relating to Dispatch Reliability of any nature that may
      be stated, referenced or incorporated in any other document related to the
      Agreement.

      4.1.1 Guaranteed Dispatch Reliability [...***...]

      The Seller guarantees that from the Commencement Date to the end of the
      [...***...] of Schedule Revenue Flight operation, on average, an Aircraft
      available to be Dispatched will have a [...***...] probability of being
      Dispatched without a Chargeable Event.

      4.1.2 Guaranteed Dispatch Reliability

      The Seller guarantees that, for the [...***...] of Schedule Revenue Flight
      operation, on average, an Aircraft available to be Dispatched will have a
      [...***...] probability of being Dispatched without a Chargeable Event.

4.2   SUSPENSION OF GUARANTEE

      The provisions of this Guarantee shall not apply for any Computation
      Period during which:

      [...***...]

      where :

      [...***...]

      ***Confidential Treatment Requested
      AWE/USA--A350                                                     LA 13-4
                           PRIVILEGED AND CONFIDENTIAL



      [...***...]

4.3   [...***...]

5.    EXCLUSIONS

      Delays and/or cancellations due to any of the causes below are
      specifically excluded from this Guarantee, similarly if the Aircraft is
      consequently subject to a Chargeable Event. An "Excluded Event" is a delay
      or cancellation due to:

      a) Acts of third party

      b) Aircraft damage due to external forces such as lightning strikes, force
      majeure, personnel error or by passengers, etc.

      c) Buyer Furnished Equipment (BFE) or software embodied therein.

      d) Late arrival of the Aircraft, resulting in insufficient ground time for
      the Aircraft to be Dispatched at the scheduled departure time.

      e) Maintenance Staff untimely request and/or unavailability. Late call by
      flight crew and/or late arrival of maintenance staff at the Aircraft to
      assist in returning the Aircraft to Scheduled Revenue Flight condition
      resulting in the Aircraft being unable to be Dispatched within fifteen
      (15) minutes.

      f) MMEL Items. Delays or cancellations due to any reason designated as
      "Go" or "Go If" in the FAA approved Master Minimum Equipment List (MMEL)
      for the Buyer's Aircraft.

      g) Normal Wear Maintenance.

      - Decals / paint / appearance items

      -  Brakes and/or tires - worn beyond limits or imbalanced replacement

      -  Passenger amenity items.

      h) Non-Schedule Revenue Flights

      -  Delays and cancellations relating to flights outside the definition of
         Schedule Revenue Flights in paragraph 3.7 above, including
         substitutions or aircraft swap made after the stipulated scheduled time
         of departure has elapsed.

      i) Precautionary Maintenance (No corrective Maintenance required)

      -  Doors - manual closing or cycling of passenger / crew / cargo doors

      -  Fluid leaks - within specified limits contained in applicable
         maintenance manual

      -  Placard - installing / continuing

      -  System(s) reset by resetting circuit breakers, switches or power
         supply.


***Confidential Treatment Requested

 AWE/USA--A350                                                     LA 13-5
                           PRIVILEGED AND CONFIDENTIAL


      j) Propulsion Systems.

      Delays or cancellations attributable to the propulsion systems (ATA 70 to
      80).

      k) Scheduled Maintenance Activities. Late release from scheduled / planned
      maintenance work content and set-ups.

      l) Servicing (No corrective maintenance required)

            All servicing activities where no physical adjustment or replacement
      or corrective action is required to enable deferral of a repair and/or
      replacement of hardware/software in order to prevent a Chargeable Event

      - Data loading or Printer paper replacement

      - De-icing

      - Fuelling related

      - Hydraulic fluid

      - Oil or lubrication

      - Moisture or condensation

      - Oxygen servicing

      - Routine cleaning

      - Sanitizing / flushing or water / waste

      - Struts

      - Tire pressure servicing

      m) Spare Parts Unavailability. Delays or cancellations due to
      unavailability of the spare parts, unless such unavailability is caused by
      the Seller.

      n) Subsequent delay(s) and/or cancellation(s). Subsequent to a primary
      Chargeable Event, the primary and related subsequent Chargeable Event(s)
      resulting from the same Aircraft Inherent Malfunction root cause shall be
      counted as one Chargeable Event.

6.    REPORTING

      a) The Buyer agrees to implement a Dispatch Reliability reporting
      procedure to be mutually agreed upon between the Buyer and the Seller's
      specialists not later than [...***...] prior to delivery of the first
      Aircraft to the Buyer.

      b) In order to allow the Seller to assess the Aircraft Inherent
      Malfunctions the Buyer shall regularly submit Chargeable Event Data for
      each "Reporting Period", monthly, not later than [...***...] after a
      reporting month.

      c) All relevant data reported by the Buyer to the Seller under this letter
      agreement shall be in English. Such Chargeable Event "Data" must be
      accurate and detailed, to the extent ascertainable, including as a minimum
      but not limited to:

      - Affected Aircraft MSN or registration

      - Aircraft log book entries

      - ATA chapter reference

      - Date of the delay or cancellation event

      - Delay duration due to Aircraft Inherent Malfunction

      - Departure station where the event occurred

      - Detailed description, including timing, of the event

      - Maintenance reports

      - Pilots reports

      - Technical log reports

      ***Confidential Treatment Requested
      AWE/USA--A350                                                     LA 13-6
                           PRIVILEGED AND CONFIDENTIAL



      - The number of actual Scheduled Revenue Flights for each Reporting Period

      - AIRMAN data

      If the Seller finds such data to be insufficiently detailed or
      unsubstantiated, the Buyer shall supply additional data as the Seller may
      reasonably request.

      d) The Buyer will notify the Seller if the Achieved Dispatch Reliability
      is below the Guaranteed Dispatch Reliability, not later than [...***...]
      after the end of a Computation Period. In such event, all detailed,
      substantiating operational and engineering information shall be provided
      by the Buyer in order to assist the Seller to determine the necessary
      action.

7.    BUYER'S AND SELLER'S OBLIGATIONS

7.1   BUYER'S OBLIGATIONS

      For the guarantee Duration, the Buyer shall:

      a) Use reasonable efforts to apply maintenance and trouble shooting
      procedures by qualified personnel with the objective of achieving the
      Guaranteed Dispatch Reliability.

      b) Incorporate modifications, procedures, initiatives and recommendations
      ("Recommendations") made by the Seller in order to increase the Buyer's
      Aircraft Achieved Dispatch Reliability [...***...].

      c) [...***...]

      d) Set the Buyer's Aircraft fleet technical Dispatch Reliability targets,
      as shown in the Buyer's regular Reliability Report (or equivalent), at a
      level equal to or greater than the Guaranteed Dispatch Reliability so that
      both the Buyer's and Seller's technical staff aggressively pursue
      attainment of the Guaranteed Dispatch Reliability.

      e) Use reasonable efforts to implement the recommendations made by the
      Seller following a "Best Industry Practices" (BIP) or similar review by
      the Seller of the Buyer's operations and organisational structure, with
      the objective of exceeding the Guaranteed Dispatch Reliability.

      f) Use AIRMAN or equivalent, with the objective of exceeding the
      Guaranteed Dispatch Reliability.

7.2   SELLER'S OBLIGATIONS

      For the guarantee Duration the Seller shall:

      a) Provide technical and operational analyses of all delays and
         cancellations including Chargeable Events.

      b) Hold regular Review Meetings with the Buyer to address additional level
         of support and action as necessary.

      c) Following reporting from the Buyer that the Achieved Dispatch
         Reliability is below the Guaranteed Dispatch Reliability, jointly with
         the Buyer review and compare the Achieved

***Confidential Treatment Requested

      AWE/USA--A350                                                     LA 13-7
                           PRIVILEGED AND CONFIDENTIAL


         Dispatch Reliability to the Guaranteed Dispatch Reliability.

      d) If the Achieved Dispatch Reliability is confirmed and agreed by the
         Buyer and the Seller as below the Guaranteed Dispatch Reliability,
         where practicable not later than [...***...] after Reporting by the
         Buyer, to improve the Achieved Dispatch Reliability and at no charge to
         the Buyer, the Seller shall:

         [...***...]

8.    ADJUSTMENT

      8.1 Notwithstanding the Buyer's Obligations in paragraph 7.1 above, the
      Buyer may decline to incorporate such Recommendations referred to. Should
      the Buyer so decline, the Seller has the right to make adjustment to the
      Guaranteed Dispatch Reliability by an amount consistent with the expected
      improvement in the Achieved Dispatch Reliability, based on reasonable
      substantiation by the Seller and, if available, on the Seller's experience
      with other operators.

      8.2 Any design, certification, regulatory, organizational structure or
      Aircraft operational changes outside the Seller's control that may have an
      effect upon the operation and dispatch characteristics of the Aircraft
      shall be cause for re-evaluation and/or adjustment of the Guaranteed
      Dispatch Reliability by the Seller.

9.    REVIEW MEETINGS

      Dispatch Reliability "Review Meetings" shall be scheduled at the end of
      each [...***...] period of the Buyer's Aircraft operation or,
      exceptionally, at any other time by mutual agreement of the Seller and the
      Buyer. Representatives of the Seller and the Buyer shall participate in
      such a review meeting and shall:

      a) Review Achieved Dispatch Reliability of the Buyer's Aircraft fleet and
      all related Data.

      b) Eliminate unsupported or non Aircraft Inherent Malfunction Chargeable
      Events or Excluded Events to compute Achieved Dispatch Reliability.

      c) Review the Buyer's incorporation of Recommendations as described in
      paragraph 7.1.

      d) Review requirements for adjustment, as above, of the Guaranteed
      Dispatch Reliability.

10.   LIABILITY LIMITATION

      10.1 The Seller's liability under this Dispatch Reliability Guarantee
      shall be governed solely by the terms and conditions of this Guarantee.

      10.2 The Buyer and the Seller recognize and agree that the Exclusivity of
      Warranties and General Limitations of Liability provisions contained in
      Clause 12 of the Agreement shall apply to the foregoing Dispatch
      Reliability Guarantee.

***Confidential Treatment Requested

      AWE/USA--A350                                                     LA 13-8
                           PRIVILEGED AND CONFIDENTIAL


11.   NEGOTIATED AGREEMENT

      THE BUYER AND THE SELLER AGREE THAT THIS LETTER AGREEMENT HAS BEEN THE
      SUBJECT OF DISCUSSIONS AND NEGOTIATION BY THE PARTIES AND THAT THE OTHER
      MUTUAL AGREEMENT OF THE PARTIES SET FORTH IN THE PURCHASE AGREEMENT WERE
      ARRIVED AT IN CONSIDERATION OF, INTER ALIA, THE PROVISIONS OF THIS LETTER
      AGREEMENT.

12.   ASSIGNMENT

      In consideration of the assignment and subrogation by the Seller under
      this Letter Agreement in favor of the Buyer in respect of the Seller's
      rights against and obligations to the Manufacturer under the provisions
      quoted above, the Buyer hereby accepts such assignment and subrogation and
      agrees to be bound by all of the terms, conditions and limitations therein
      contained. The Buyer and Seller recognize and agree that all the
      provisions of Clause 12 of the Agreement, including without limitation the
      Exclusivity of Warranties and General Limitations of Liability and
      Duplicate Remedies provisions therein contained, will apply to the
      foregoing Performance Retention Guarantee.

      Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement
      and the rights and obligations of the Buyers hereunder will not be
      assigned or transferred in any manner without prior written consent of the
      Seller and any attempted assignment or transfer in contravention of the
      provisions of this sentence will be void and of no force and effect.

13.   COUNTERPARTS

      This Letter Agreement may be signed in any number of separate
      counterparts. Each counterpart, when signed and delivered (including
      counterparts delivered by facsimile transmission), will be an original,
      and the counterparts will together constitute one same instrument.

      AWE/USA--A350                                                     LA 13-9
                           PRIVILEGED AND CONFIDENTIAL


      IN WITNESS WHEREOF, these presents were entered into as of the day and
      year first above written.

      Very truly yours,

      AVSA, S.A.R.L.

      By: __________________________
      Its:

      Accepted and Agreed

      US AIRWAYS GROUP, INC.

      By: _________________________
      Its:

      AMERICA WEST AIRLINES, Inc.

      By: _________________________
      Its:

      US AIRWAYS, INC.

      By: _________________________
      Its:

      AWE/USA--A350                                                     LA 13-10
                           PRIVILEGED AND CONFIDENTIAL

EX-10.6

                                                                    Exhibit 10.6

            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                                Amendment No. 16

                    TO THE A319/A320/A321 PURCHASE AGREEMENT

                          dated as of October 31, 1997

                                     between

                                 AVSA, S.A.R.L.,

                                       And

                             US AIRWAYS GROUP, INC.

This Amendment No. 16 (this "Amendment") entered into as of September 27, 2005,
by and between AVSA, S.A.R.L., a societe a responsabilite limitee organized and
existing under the laws of the Republic of France, having its registered office
located at 2, Rond Point Maurice Bellonte, 31700 Blagnac, France (the "Seller"),
and US Airways Group, Inc., a corporation organized and existing under the laws
of the State of Delaware, United States of America, having its executive offices
located at 2345 Crystal Drive, Arlington, VA 22227, U.S.A. (the "Buyer");

WITNESSETH:

WHEREAS, the Buyer and the Seller entered into an Airbus A319/A320/A321 Purchase
Agreement, dated as of October 31, 1997, relating to the sale by the Seller and
the purchase by the Buyer of certain Airbus A319, A320 and A321 model aircraft
(the "Aircraft"), which, together with all Exhibits, Appendices and Letter
Agreements attached thereto and as amended by Amendment No. 1 dated as of June
10, 1998, Amendment No. 2 dated as of January 19, 1999, Amendment No. 3 dated as
of March 31, 1999, Amendment No. 4 dated as of August 31, 1999, Amendment No. 5
dated as of October 29, 1999, Amendment No. 6 dated as of April 19, 2000,
Amendment No. 7 dated as of June 29, 2000, Amendment No. 8 dated as of November
27, 2000, Amendment No. 9 dated as of December 29, 2000, Amendment No. 10 dated
as of April 9, 2001, Amendment No. 11 dated as of July 17, 2002, Amendment No.
12 dated as of March 29, 2003, Amendment No. 13 dated as of August 30, 2004,
Amendment No. 14 dated as of December 22, 2004, and Amendment No. 15 dated as of
January 17, 2005, thereto is hereinafter called the "Agreement";


US Airways - A319/A320/A321 - AMENDMENT 16

                                      1/6

WHEREAS, the Buyer and the Seller are parties to the Memorandum of Understanding
among the Seller, the Buyer, US Airways, Inc., and America West Airlines, Inc.,
bearing AVSA No. 5343 and signed by all the parties thereto as of May 19, 2005
(the "MOU"); and


WHEREAS, the Buyer has requested, and the Seller has agreed, on the terms and
conditions set forth in this Amendment, to modify certain provisions of the
Agreement as set forth herein;

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

Capitalized terms used herein and not otherwise defined in this Amendment will
have the meanings assigned to them in the Agreement. The terms "herein,"
"hereof," and "hereunder" and words of similar import refer to this Amendment.

1.    DEFINITIONS

      Clause 1 of the Agreement is hereby amended by the addition of the
      following text:

      QUOTE

      A350 Purchase Agreement - The A350 purchase agreement dated as of even
      date herewith among the Seller, the Buyer, US Airways, Inc., and America
      West Airlines, Inc. (the "A350 Purchase Agreement").

      UNQUOTE

2.    ASSUMPTION OF PURCHASE AGREEMENT

      The Buyer will assume the Agreement in connection with its emergence from
      the bankruptcy proceedings of the Buyer, US Airways, Inc. and certain of
      their affiliates commenced on September 12, 2004, in the United States
      Bankruptcy Court for the Eastern District of Virginia, Alexandria Division
      (the "Chapter 11 Case").

3.    CLAUSE 9 AND CLAUSE 3 OF PURCHASE AGREEMENT:  DELIVERY AND SPECIFICATION

3.1   The delivery schedule for the Aircraft as set forth in the Agreement is
      hereby deleted and replaced with the following:

      QUOTE



      Aircraft No.                Type                  Scheduled Delivery Month
      ------------                ----                  ------------------------
                                                  
      [...***...]


***CONFIDENTIAL TREATMENT REQUESTED


US Airways - A319/A320/A321 - AMENDMENT 16

                                      2/6

      UNQUOTE

      The Aircraft shown in the table above are hereinafter referred to as the
      "Rescheduled Aircraft."

3.2   It is understood that the Buyer may from time to time desire to
      [...***...] the delivery of one or more Rescheduled Aircraft. The Seller
      agrees to continue to evaluate the availability of [...***...] delivery
      positions in light of the Seller's contractual commitments to other
      purchasers. For the avoidance of doubt, contractual commitments to other
      purchasers include [...***...].

3.3   In respect of the Rescheduled Aircraft, Clause 3.2 of the Agreement will
      be replaced with the following quoted text:

      QUOTE

      The Rescheduled Aircraft (as such term is defined in Amendment No. 16 to
      this Agreement) will be delivered based on the latest applicable standard
      specification available from the Manufacturer at the time the final
      definition of the Rescheduled Aircraft must be concluded, in order to
      accommodate timely manufacturing and delivery thereof (the "Latest
      Standard Specification"). The parties will execute all Manufacturer
      Specification Change Notices needed to amend the Standard Specification to
      the Latest Standard Specification (the "Required MSCNs"). Any and all
      costs associated with the incorporation of such Required MSCNs will be
      borne by the Seller, [...***...].

      UNQUOTE

3.4   [...***...]

4.    AMENDMENT 12:  LETTER AGREEMENT NO. 1

4.1   Paragraph 11.4 of Letter Agreement No. 1 of Amendment No. 12 to the
      Agreement is hereby deleted and replaced with the following:

QUOTE

11.4  [...***...]

UNQUOTE

4.2   [...***...]

5.    AMENDMENT 12:  LETTER AGREEMENT NO. 2

      The provisions of Letter Agreement No. 2 of Amendment No. 12 to the
      Agreement are hereby deleted in their entirety and of no further effect.

***CONFIDENTIAL TREATMENT REQUESTED


US Airways - A319/A320/A321 - AMENDMENT 16

                                      3/6

6.    PRICE REVISION

      The Final Contract Price for each Rescheduled Aircraft will be derived as
      provided in the Agreement, [...***...].

7.    [...***...]

8.    MISCELLANEOUS

      If the Buyer and/or US Airways, Inc. [...***...] of US Airways, Inc., at
      or prior to Bankruptcy Emergence, then, upon the satisfaction of the
      conditions set forth in Paragraph 9.1below [...***...].

9.    SPARES SUPPORT

      Effective on the later of (i) the date on which the Buyer or any of its
      Affiliate(s) and America West Airlines, Inc. operate under a common
      operating certificate as recognized by the Buyer's aviation authorities
      and (ii) December 31, 2007, then Paragraph 5.1 of Letter Agreement No. 1
      to the Agreement will be deleted and replaced with the following quoted
      text:

      QUOTE

      5.1 Point of Shipment

      [...***...]

      UNQUOTE

10.   EFFECT OF AMENDMENT

10.1  It will be a condition precedent to the effectiveness of this Amendment
      that the conditions precedent to (i) the validity of the A350 Purchase
      Agreement dated as of even date herewith have been satisfied, and (ii) the
      conditions precedent to the obligations of Airbus Financial Services (the
      "Lender") set forth in the $161,000,000 Loan Agreement dated as of
      September 27, 2005 among US Airways, Inc., America West Airlines, Inc., US
      Airways Group, Inc., the Lender and Wells Fargo Bank Northwest, National
      Association, as Collateral Agent, have been either satisfied or been
      waived by the Lender.

10.2  Upon effectiveness, the provisions of this Amendment will constitute a
      valid amendment to the Agreement and the Agreement will be deemed to be
      amended to the extent herein provided. This Amendment supersedes any
      previous understandings, commitments, or representations whatsoever,
      whether oral or written, related to the subject matter of this Amendment,
      including Paragraph 2 of the MOU.

***CONFIDENTIAL TREATMENT REQUESTED


US Airways - A319/A320/A321 - AMENDMENT 16

                                      4/6

10.3  Both parties agree that this Amendment will constitute an integral,
      nonseverable part of the Agreement, and that this Amendment will be
      governed by the provisions of the Agreement, except that if the Agreement
      and this Amendment have specific provisions that are inconsistent, the
      specific provisions contained in this Amendment will govern.

11.   GOVERNING LAW

      THIS AMENDMENT AND THE AGREEMENTS CONTEMPLATED HEREBY WILL, PURSUANT TO
      SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BE GOVERNED BY AND
      CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS
      CONFLICTS OF LAWS PROVISION THAT WOULD RESULT IN THE APPLICATION OF THE
      LAW OF ANY OTHER JURISDICTION. EXCEPT TO THE EXTENT THAT THE BANKRUPTCY
      COURT IN THE CHAPTER 11 CASE HAS JURISDICTION THEREOF, ANY DISPUTE ARISING
      HEREUNDER WILL BE REFERRED TO THE FEDERAL OR STATE COURTS LOCATED IN NEW
      YORK CITY, NEW YORK, AND EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO
      AND ACCEPTS SUCH JURISDICTION.

      IT IS AGREED THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE
      INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS AMENDMENT OR TO THE
      AGREEMENTS CONTEMPLATED HEREIN.

12.   CONFIDENTIALITY

      Notwithstanding the Confidentiality provisions of Clause 22.4 of the
      Agreement, the Seller and the Buyer (including their employees, agents and
      advisors) agree to keep the terms and conditions of this Amendment hereby
      strictly confidential, except as required by applicable law or pursuant to
      legal process, and except that the Buyer may disclose the terms of this
      Amendment to the parties to the ATSB loan agreement dated as of March 31,
      2003, as amended, and the committee professionals of the Unsecured
      Creditors Committee in the Chapter 11 Case and any proposed equity
      investor in the Buyer that is making its investment substantially
      contemporaneously as of the date hereof, provided, however, that each such
      person agrees to hold the terms and conditions of this Amendment
      confidential.

13.   COUNTERPARTS

      This Amendment may be signed in any number of separate counterparts. Each
      counterpart, when signed and delivered (including counterparts delivered
      by facsimile transmission), will be an original, and the counterparts will
      together constitute one same instrument.


US Airways - A319/A320/A321 - AMENDMENT 16

                                      5/6

IN WITNESS WHEREOF, these presents were entered into as of the day and year
first above written.

      US AIRWAYS GROUP, INC.                    AVSA, S.A.R.L.


      By:                                       By:
         ----------------------------              -----------------------------


      Its:                                      Its:
          ---------------------------               ----------------------------


US Airways - A319/A320/A321 - AMENDMENT 16

                                      6/6

EX-10.7

                                                                    Exhibit 10.7

            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                                Amendment No. 10

                       TO THE A330/A340 PURCHASE AGREEMENT

                          dated as of November 24, 1998

                                     between

                                 AVSA, S.A.R.L.,

                                       and

                             US AIRWAYS GROUP, INC.

This Amendment No. 10 (this "Amendment") entered into as of September 27, 2005,
by and between AVSA, S.A.R.L., a societe a responsabilite limitee organized and
existing under the laws of the Republic of France, having its registered office
located at 2, Rond Point Maurice Bellonte, 31700 Blagnac, France (the "Seller"),
and US Airways Group, Inc., a corporation organized and existing under the laws
of the State of Delaware, United States of America, having its executive offices
located at 2345 Crystal Drive, Arlington, VA 22227, U.S.A. (the "Buyer");

                                   WITNESSETH:

WHEREAS, the Buyer and the Seller entered into an Airbus A330/A340 Purchase
Agreement, dated as of November 24, 1998, relating to the sale by the Seller
and the purchase by the Buyer of certain Airbus A330 and A340 model aircraft
(the "Aircraft"), which, together with all Exhibits, Appendices and Letter
Agreements attached thereto and as amended by Amendment No.1 dated as of March
23, 2000, Amendment No. 2 dated as of June 29, 2000, Amendment No. 3 dated as
of November 27, 2000, Amendment No. 4 dated as of September 20, 2001,
Amendment No. 5 dated as of July 17, 2002, Amendment No. 6 dated as of March
29, 2003, Amendment No. 7 dated as of August 30, 2004, Amendment No. 8 dated
as of December 22, 2004, and Amendment No. 9 dated as of January 17, 2005, is
hereinafter called the "Agreement";

WHEREAS, the Buyer and the Seller are parties to the Memorandum of
Understanding among the Seller, the Buyer, US Airways, Inc., and America West
Airlines, Inc., bearing AVSA No. 5343 and signed by all the parties thereto as
of May 19, 2005 (the "MOU"); and

WHEREAS, the Buyer has requested, and the Seller, has agreed, on the terms and
conditions set forth in this Amendment, to modify certain provisions of the
Agreement as set forth herein.


US Airways - A330/A340 - AMENDMENT 10

                                       1/6

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:


Capitalized terms used herein and not otherwise defined in this Amendment will
have the meanings assigned to them in the Agreement. The terms "herein,"
"hereof," and "hereunder" and words of similar import refer to this Amendment.

1.    DEFINITIONS

      Clause 1 of the Agreement is hereby amended by addition of the following
      text:

      QUOTE

      A350 Purchase Agreement - The A350 purchase agreement dated as of
      September 27, 2005 among the Seller, the Buyer, US Airways, Inc. and
      America West Airlines, Inc. (the "A350 Purchase Agreement").

      UNQUOTE

2.    ASSUMPTION OF PURCHASE AGREEMENT

      The Buyer will assume the Agreement in connection with its emergence from
      the bankruptcy proceedings of the Buyer and US Airways, Inc., and certain
      of their affiliates commenced on September 12, 2004, in the United States
      Bankruptcy Court for the Eastern District of Virginia, Alexandria Division
      (the "Chapter 11 Case").

3.    PARAGRAPH 9 AND PARAGRAPH 2 OF PURCHASE AGREEMENT:  DELIVERY AND
      SPECIFICATION

3.1   The delivery schedule for the Aircraft as set forth in Subclause 9.1.1 of
      the Agreement is hereby deleted and replaced with the following:

      QUOTE

      Aircraft No.      Type                    Scheduled Delivery Month
      ------------      ----                    ------------------------

      [...***...]

      UNQUOTE

      The Aircraft shown in the table above are hereinafter referred to as the
      "Rescheduled Aircraft."

***CONFIDENTIAL TREATMENT REQUESTED


US Airways - A330/A340 - AMENDMENT 10

                                       2/6

3.2   In respect of the Rescheduled Aircraft, Clause 3.2 of the Agreement will
      be replaced with the following quoted text:

      QUOTE

      The Rescheduled Aircraft (as such term is defined in Amendment No. 10 to
      this Agreement) will be delivered based on the latest applicable standard
      specification available from the Manufacturer at the time the final
      definition of the Rescheduled Aircraft must be concluded, in order to
      accommodate timely manufacturing and delivery thereof (the "Latest
      Standard Specification"). The parties will execute all of manufacturer
      initiated changes to the Standard Specification (the "Manufacturer
      Specification Change Notices") ("MSCNS")) needed to amend the Standard
      Specification to the Latest Standard Specification (the "Required MSCNs").
      Any and all costs associated with the incorporation of such Required MSCNs
      will be borne by the Seller, [...***...].

      UNQUOTE

3.3   [...***...]

4.    A330 AIRCRAFT COMMITMENT

      The Buyer undertakes not to remove [...***...] Aircraft in service in the
      fleet of the Buyer or US Airways, Inc, as of the date hereof prior to the
      date (with respect to the removal of any [...***...] such Aircraft) that
      is [...***...] prior to the expected delivery date of (i) an A350 Aircraft
      under the A350 Purchase Agreement or (ii) a Rescheduled Aircraft purchased
      either hereunder or purchased by the Buyer pursuant to its right to
      convert an A350 Aircraft to an A330 Aircraft under the A350 Purchase
      Agreement (such [...***...] period being hereinafter referred to as the
      [...***...]) (the aircraft referred to in (i) and/or (ii) being the
      "Replacement Aircraft"). [...***...].

5.    LETTER AGREEMENT NO. 2 AND A330-200 FIRM ORDER RESTRUCTURING

5.1   The Buyer will pay the Seller a nonrefundable fee in the amount of
      [...***...] (the "Restructuring Fee"), which will be due and owing on the
      satisfaction of the conditions precedent set forth below in Paragraph
      8.1. In consideration of and immediately on the Buyer's paying the
      Restructuring Fee, (i) Letter Agreement No. 2 to Amendment No. 6 to the
      Agreement will be canceled, and neither the Buyer nor the Seller will
      have any more rights or obligations under such Letter Agreement, and
      (ii) [...***...].

5.2   [...***...]

5.3   The Restructuring Fee will be paid [...***...].  After this [...***...],
      the Buyer and Seller agree that [...***...] will amount to [...***...],
      which the Seller will retain [...***...]:

***CONFIDENTIAL TREATMENT REQUESTED


US Airways - A330/A340 - AMENDMENT 10

                                       3/6

      (i)   the Seller will apply [...***...] an equal  amount due the Seller
            in "Initial Payments," of which [...***...] is allocated to each
            of the twenty (20) A350 Aircraft as due  the Seller as of the date
            hereof under the A350 Purchase Agreement, and

      (ii)  the Seller will apply [...***...], to the ten (10) Rescheduled
            Aircraft on firm order in this Amendment, of which [...***...] is
            allocated to each of the ten (10) Rescheduled Aircraft (the "Initial
            A330 Payment(s)"). [...***...].

6.    LETTER AGREEMENT NO. 3:  ADDITIONAL AIRCRAFT

      Letter Agreement No. 3 to the Agreement is hereby canceled, and neither
      the Seller nor the Buyer will have any further rights or obligations with
      respect to such Letter Agreement or the Additional Aircraft that are the
      subject of such Letter Agreement, nor will such cancellation give rise to
      any claim against US Airways, Inc., the Buyer or their affiliates or
      subsidiaries, either in the Chapter 11 Case or otherwise.

7.    SPARES SUPPORT

      Effective on the later of (i) the date on which the Buyer or any of its
      Affiliate(s) and America West Airlines, Inc. operate under a common
      operating certificate as recognized by the Buyer's aviation authorities
      and (ii) December 31, 2007, then Paragraph 5.1 of Letter Agreement No. 1
      to the Agreement will be deleted and replaced with the following quoted
      text:

      QUOTE

      5.1 Point of Shipment

      [...***...]

      UNQUOTE

8.    EFFECT OF AMENDMENT

8.1   It will be a condition precedent to the effectiveness of this Amendment
      that the conditions precedent to (i) the validity of the A350 Purchase
      Agreement have been satisfied, and (ii) the conditions precedent to the
      obligations of Airbus Financial Services (the "Lender") set forth in the
      $161,000,000 Loan Agreement dated as of September 27, 2005 among US
      Airways, Inc., America West Airlines, Inc., US Airways Group, Inc., the
      Lender and Wells Fargo Bank Northwest, National Association, as Collateral
      Agent, have been either satisfied or been waived by the Lender.

***CONFIDENTIAL TREATMENT REQUESTED


US Airways - A330/A340 - AMENDMENT 10

                                       4/6

8.2   Upon effectiveness, the provisions of this Amendment will constitute a
      valid amendment to the Agreement and the Agreement will be deemed to be
      amended to the extent herein provided. This Amendment supersedes any
      previous understandings, commitments, or representations whatsoever,
      whether oral or written, related to the subject matter of this Amendment,
      including Paragraph 3 of the MOU.

8.3   Both parties agree that this Amendment will constitute an integral,
      nonseverable part of the Agreement, and that this Amendment will be
      governed by the provisions of the Agreement, except that if the Agreement
      and this Amendment have specific provisions that are inconsistent, the
      specific provisions contained in this Amendment will govern.

9.    GOVERNING LAW

      THIS AMENDMENT AND THE AGREEMENTS CONTEMPLATED HEREBY WILL, PURSUANT TO
      SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BE GOVERNED BY AND
      CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS
      CONFLICTS OF LAWS PROVISION THAT WOULD RESULT IN THE APPLICATION OF THE
      LAW OF ANY OTHER JURISDICTION. EXCEPT TO THE EXTENT THAT THE BANKRUPTCY
      COURT IN THE CHAPTER 11 CASE HAS JURISDICTION THEREOF, ANY DISPUTE ARISING
      HEREUNDER WILL BE REFERRED TO THE FEDERAL OR STATE COURTS LOCATED IN NEW
      YORK CITY, NEW YORK, AND EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO
      AND ACCEPTS SUCH JURISDICTION.

      IT IS AGREED THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE
      INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS AMENDMENT OR TO THE
      AGREEMENTS CONTEMPLATED HEREIN.

10.   CONFIDENTIALITY

      Notwithstanding the Confidentiality provisions of Clause 22.4 of the
      Agreement, the Seller and the Buyer (including their employees, agents and
      advisors) agree to keep the terms and conditions of this Amendment hereby
      strictly confidential, except as required by applicable law or pursuant to
      legal process, and except that the Buyer may disclose the terms of this
      Amendment to the parties to the ATSB loan agreement dated as of March 31,
      2003, as amended, and the committee professionals of the Unsecured
      Creditors Committee in the Chapter 11 Case and any proposed equity
      investor in the Buyer that is making its investment substantially
      contemporaneously as of the date hereof, provided, however, that each such
      person agrees to hold the terms and conditions of this Amendment
      confidential.

11.   COUNTERPARTS

      This Amendment may be signed in any number of separate counterparts. Each
      counterpart, when signed and delivered (including counterparts delivered
      by facsimile transmission), will be an original, and the counterparts will
      together constitute one same instrument.


US Airways - A330/A340 - AMENDMENT 10

                                       5/6

      IN WITNESS WHEREOF, these presents were entered into as of the day and
      year first above written.

      US AIRWAYS GROUP, INC.                    AVSA, S.A.R.L.


      By:                                       By:
           ------------------------------          ----------------------------


      Its:                                      Its:
          -------------------------------           ---------------------------


US Airways - A330/A340 - AMENDMENT 10

                                       6/6

EX-10.8

                                                                    Exhibit 10.8

            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                                 AMENDMENT NO. 9

                                       TO

                        THE A319/A320 PURCHASE AGREEMENT
                         DATED AS OF SEPTEMBER 12, 1997

                              BETWEEN AVSA S.A.R.L.

                                       AND

                           AMERICA WEST AIRLINES, INC.

This Amendment No. 9 (hereinafter referred to as the "Amendment") entered into
as of September 27, 2005 by and between AVSA S.A.R.L., a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, having its registered office located at 2, Rond Point Maurice Bellonte,
31700 Blagnac, France (hereinafter referred to as the "USeller") and AMERICA
WEST AIRLINES, INC., a corporation organized and existing under the laws of the
State of Delaware, United States of America, having its principal corporate
office located at Phoenix Sky Harbor International Airport, 4000 East Sky Harbor
Boulevard, Phoenix, Arizona 85034, U.S.A. (hereinafter referred to as the
"Buyer").

WITNESSETH:

WHEREAS, the Buyer and the Seller have entered into an A319/A320 Purchase
Agreement, dated as of September 12, 1997 (which agreement, as previously
amended by and supplemented with all Exhibits, Appendices, Letter Agreements and
amendments (including Amendment No. 1 executed on April 27, 1998, Amendment No.
2 executed on December 9, 1998 together with Letter Agreement No. 1 to Amendment
No. 2 executed on May 24, 1999, Amendment No. 3 together with all Letter
Agreements thereto executed on October 14, 1999 and together with Letter
Agreement to Amendment No. 3 executed on May 10, 2001, Amendment No. 4 executed
on July 1, 2000 together with Letter Agreement to Amendment No. 4 executed on
July 28, 2000, Amendment No. 5 executed on October 12, 2000 together with Letter
Agreement to Amendment No. 5 executed on October 26, 2000, Amendment No. 6
executed on October 28, 2002, Amendment No. 7 together with all Letter
Agreements thereto executed on July 30, 2004, and Amendment 8 executed on
October 1, 2004 is hereinafter called the "Agreement"), which Agreement relates
to, inter alia, the sale by the Seller and the purchase by the Buyer of certain
firmly ordered Airbus A318-100, A319-100 and A320-200 model aircraft.


AWE - A319/A320 - Amendment No.  9
                                    AM 9 - 1

WHEREAS, in consideration of the Buyer's execution of the Memorandum of
Understanding referenced by AVSA No. 5343 dated May 18, 2005 (the "MOU"), the
Buyer and the Seller agree to reschedule the last eleven (11) Amendment 7 Firm
Aircraft (the "Rescheduled Aircraft").

WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement. The terms
"herein," "hereof," and "hereunder" and words of similar import refer to this
Amendment.

NOW, THEREFORE IT IS AGREED AS FOLLOWS:

1-    DELIVERY

1.1   Notwithstanding the provisions of Paragraph 4.2.A.6 of Amendment 7 to
      the Agreement, the Amendment 7 Firm A319 Aircraft scheduled to deliver
      in [...***...] are rescheduled to dates set forth in bold characters
      below (the "Rescheduled Amendment 7 A319 Aircraft") and the table set
      forth Paragraph 4.2.A.6 of in Amendment 7 to the Agreement is hereby
      canceled and replaced with the following table:




                   YEAR OF      MONTH OF     NUMBER OF
                   DELIVERY     DELIVERY     AIRCRAFT
                   -------------------------------------
                                       
                               [...***...]
                   -------------------------------------


1.2   Notwithstanding the provisions of Paragraph 5.2.A.6 of Amendment 7 to
      the Agreement, the Amendment 7 Firm A320 Aircraft scheduled to deliver
      in [...***...] are rescheduled to dates set forth in bold characters
      below (the "Rescheduled Amendment 7 A320 Aircraft") and the table set
      forth in Paragraph 5.2.A.6 of Amendment 7 to the Agreement is hereby
      canceled and replaced with the following table:





                   YEAR OF      MONTH OF     NUMBER OF
                   DELIVERY     DELIVERY     AIRCRAFT
                   -------------------------------------
                                       
                               [...***...]
                   -------------------------------------


***CONFIDENTIAL TREATMENT REQUESTED


AWE - A319/A320 - Amendment No.  9
                                    AM 9 - 2

1.3   It is understood that the Buyer may from time to time desire to
      [...***...] the delivery of one or more Rescheduled Aircraft.  The Seller
      agrees to continue to evaluate the availability of [...***...] delivery
      positions in light of the Seller's contractual commitments to other
      purchasers.  [...***...].

2-    SPECIFICATION

      In respect of the Rescheduled Aircraft only, Clause 3.2 of the Agreement
      will be replaced with the following quoted text:

      QUOTE

            The Rescheduled Aircraft (as such term is defined in Amendment No. 9
      to this Agreement) will be delivered based on the latest applicable
      standard specification available from the Manufacturer at the time the
      final definition of the Rescheduled Aircraft must be concluded, in order
      to accommodate timely manufacturing and delivery thereof (the "Latest
      Standard Specification"). The parties will execute all notices of
      manufacturer initiated changes to the Standard Specification (the
      "Manufacturer Specification Change Notices" ("MSCNS")) needed to amend the
      Standard Specification to the Latest Standard Specification (the "Required
      MSCNs"). [...***...].

      UNQUOTE

3-    BASE PRICE

      The Base Price of the Amendment 7 A319 Aircraft will apply to the
      Rescheduled Amendment 7 A319 Aircraft in accordance with the provisions of
      Amendment 7 to the Agreement. The Base Price of the Amendment 7 A320
      Aircraft will apply to the Rescheduled Amendment 7 A320 Aircraft in
      accordance with the provisions of Amendment 7 to the Agreement.

4-    PREDELIVERY PAYMENTS

4.1   [...***...].  The Buyer will pay to the Seller Predelivery Payments for
      the Rescheduled Aircraft in accordance with the Predelivery Payment
      schedule set forth in Paragraph 4.3 below when such Predelivery Payments
      come due.

4.2   [...***...].

4.3   The Buyer will make Predelivery Payments for the Rescheduled Aircraft in
      accordance with the provisions of the Agreement.

***CONFIDENTIAL TREATMENT REQUESTED


AWE - A319/A320 - Amendment No.  9
                                    AM 9 - 3

5-    [...***...]

6-    EFFECT OF THE AMENDMENT AND OTHER MATTERS
      -----------------------------------------

6.1   This Amendment contains the entire agreement between the parties with
      respect to the subject matter hereof and supersedes any previous
      understanding, commitments or representations whatsoever, whether oral or
      written between the Buyer and the Seller.

6.2   The Agreement will be deemed amended to the extent provided in this
      Amendment and, except as specifically amended hereby, will continue in
      full force and effect in accordance with its original terms. Both parties
      agree that this Amendment will constitute an integral, nonseverable part
      of the Agreement and be governed by its provisions, except that if the
      Agreement and this Amendment have specific provisions that are
      inconsistent, the specific provisions contained in this Amendment will
      govern.

7 -   CONFIDENTIALITY

      The Seller and the Buyer (including their employees, agents and advisors)
      agree to keep the terms and conditions of this Amendment strictly
      confidential, except as required by applicable law or pursuant to legal
      process. The Seller and the Buyer will consult prior to any public
      disclosure regarding this Amendment; provided, however that, following
      execution of this Amendment, Buyer may make such disclosure thereof as may
      be required by law or governmental orders, rules or regulations.

8-    GOVERNING LAW
      -------------

      THIS AMENDMENT AND THE AGREEMENTS CONTEMPLATED HEREBY WILL BE GOVERNED BY
      AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE
      WITH THE PROVISIONS OF PARAGRAPH 22.3 OF THE AGREEMENT.

      IT IS AGREED THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE
      INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS AMENDMENT.

9-    COUNTERPARTS

      This Amendment may be executed by the parties hereto in separate
      counterparts, each of which when so executed shall be an original, but all
      such counterparts shall together constitute one and the same instrument.

***CONFIDENTIAL TREATMENT REQUESTED


AWE - A319/A320 - Amendment No.  9
                                    AM 9 - 4

      If the foregoing correctly sets forth our understanding, please execute
the original and one (1) copy hereof in the space provided below and return a
copy to the Seller.

                                          Very truly yours,

                                          AVSA S.A.R.L.

                                          By:
                                             ----------------------

                                          Its:
                                              ---------------------

Accepted and Agreed,

AMERICA WEST AIRLINES, INC.

By:
   ----------------------------

Its:
    ---------------------------


AWE - A319/A320 - Amendment No.  9
                                    AM 9 - 5

EX-10.9

                                                                    Exhibit 10.9

            *** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                    COMMISSION PURSUANT TO RULE 24b-2 OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                                AMENDMENT NO. 10

                                       TO

                        THE A319/A320 PURCHASE AGREEMENT
                         DATED AS OF SEPTEMBER 12, 1997

                              BETWEEN AVSA S.A.R.L.

                                       AND

                           AMERICA WEST AIRLINES, INC.

This Amendment No. 10 (hereinafter referred to as the "Amendment") entered into
as of September 27, 2005 by and between AVSA S.A.R.L., a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, having its registered office located at 2, Rond Point Maurice Bellonte,
31700 Blagnac, France (hereinafter referred to as the "USeller") and AMERICA
WEST AIRLINES, INC., a corporation organized and existing under the laws of the
State of Delaware, United States of America, having its principal corporate
office located at Phoenix Sky Harbor International Airport, 4000 East Sky Harbor
Boulevard, Phoenix, Arizona 85034, U.S.A. (hereinafter referred to as the
"Buyer").

WITNESSETH:

WHEREAS, the Buyer and the Seller have entered into an A319/A320 Purchase
Agreement, dated as of September 12, 1997 (which agreement, as previously
amended by and supplemented with all Exhibits, Appendices, Letter Agreements and
amendments, including Amendment No. 1 executed on April 27, 1998, Amendment No.
2 executed on December 9, 1998 together with Letter Agreement No. 1 to Amendment
No. 2 executed on May 24, 1999, Amendment No. 3 together with all Letter
Agreements thereto executed on October 14, 1999 and together with Letter
Agreement to Amendment No. 3 executed on May 10, 2001, Amendment No. 4 executed
on July 1, 2000 together with Letter Agreement to Amendment No. 4 executed on
July 28, 2000, Amendment No. 5 executed on October 12, 2000 together with Letter
Agreement to Amendment No. 5 executed on October 26, 2000, Amendment No. 6
executed on October 28, 2002, Amendment No. 7 together with all Letter
Agreements thereto executed on July 30, 2004, Amendment 8 executed on October 1,
2004, and Amendment 9 executed on September 27, 2005, the "Agreement"), which
Agreement relates to, inter alia, the sale by the Seller and the purchase by the
Buyer of certain firmly ordered Airbus A318-100, A319-100 and A320-200 model
aircraft.


AWE - A319/A320 - Amendment No. 10
                                   AM 10 - 1

WHEREAS, in consideration of the Buyer's execution of the Memorandum of
Understanding referenced by AVSA No. 5343 dated May 18, 2005 (the "MOU"), the
Buyer and the Seller agree to restructure certain terms of the Agreement.

WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement. The terms
"herein," "hereof," and "hereunder" and words of similar import refer to this
Amendment.

NOW, THEREFORE IT IS AGREED AS FOLLOWS:

1.    [...***...].

2.    RESCHEDULED AIRCRAFT INITIAL PAYMENT

      Upon satisfaction of all the conditions precedent listed in Paragraph 7.1
      herein, the Buyer will pay to the Seller an initial payment in the amount
      of [...***...] for each Rescheduled Aircraft (the "Rescheduled Aircraft
      Initial Payment") for a total of [...***...] for the eleven (11)
      Rescheduled Aircraft (as defined in Amendment 9 to the Agreement).

3.    PREDELIVERY PAYMENTS

3.1   Prior to the date of this Amendment, the Seller has received from
      the Buyer cash Predelivery Payments in the amount of [...***...]
      pursuant to Paragraphs 1 and 2 of Letter Agreement No. 4 to
      Amendment 7 (Amended and Restated Letter Agreement No. 4 to the
      Agreement) ("LA 4").  The Seller will, upon satisfaction of all the
      conditions precedent listed in Paragraph 7.1 herein, apply such cash
      Predelivery Payments as follows:

      (i)   [...***...]; and

      (ii)  to the Rescheduled Aircraft Initial Payment.

3.2   In respect of the Rescheduled Aircraft, the A318 Aircraft and the
      [...***...], the provisions set forth in LA 4 will be deemed
      cancelled and of no further effect.

3.3   The Buyer will make Predelivery Payments on the Rescheduled
      Aircraft, the A318 Aircraft and the [...***...] to the Seller as
      follows:

            (i)   on the [...***...] Working Day of the [...***...] month
                  prior to each Scheduled Date of Delivery of each
                  Rescheduled Aircraft, the A318 Aircraft and the
                  [...***...] each in the amount of [...***...] (less the
                  Rescheduled Aircraft Initial Payment (only for the
                  Rescheduled Aircraft),

***CONFIDENTIAL TREATMENT REQUESTED


AWE - A319/A320 - Amendment No. 10
                                   AM 10 - 2

            (ii)  on the [...***...] Working day of the [...***...] month prior
                  to each Scheduled Date of Delivery of each Rescheduled
                  Aircraft, the A318 Aircraft and the [...***...] each in the
                  amount of [...***...], and

            (iii) on the [...***...] Working day of the [...***...] month prior
                  to each Scheduled Date of Delivery of each Rescheduled
                  Aircraft, the A318 Aircraft, the [...***...] (the "PDP Due
                  Date) each in the amount of [...***...].

3.3.1 All Predelivery Payments shall be paid in immediately available
      funds. With respect to amounts due pursuant to paragraph 3.3 (iii)
      above, [...***...].

3.3.2 [...***...].

3.4   In respect of the New Purchase Right Aircraft, the provisions set forth in
      LA 4 will be deemed cancelled and of no further effect.

3.5   The Buyer will make Predelivery Payments on each New Purchase Right
      Aircraft converted into a firm order to the Seller as follows:

            (i)   upon written confirmation of acceptance by Buyer of the
                  New Purchase Right Aircraft delivery position, the New
                  Purchase Right Aircraft Predelivery Payment in the
                  amount of [...***...] as set forth in Paragraph 2 to
                  Letter Agreement No. 2 of Amendment 7 to the Agreement
                  (as amended by Paragraph 6 hereof); and

            (ii)  in accordance with Paragraphs 3.3(i), 3.3(ii), 3.3(iii), 3.3.1
                  and 3.3.2 it being understood that if the Buyer's written
                  confirmation of acceptance of the New Purchase Right Aircraft
                  delivery position occurs after the month specified for
                  payment, then such payment will be due upon Buyer's written
                  confirmation of acceptance of the New Purchase Right Aircraft
                  delivery position.

4-    PRICE REVISION

      The Final Contract Price for each Rescheduled Aircraft shall be derived as
      provided in the Agreement, [...***...].

5-    [...***...]

6-    NEW PURCHASE RIGHT AIRCRAFT

      Paragraph 2 of Letter Agreement No. 2 to Amendment No. 7 to the
      Agreement is deleted in its entirety and replaced by the following
      quoted language:

***CONFIDENTIAL TREATMENT REQUESTED


AWE - A319/A320 - Amendment No. 10
                                   AM 10 - 3

      QUOTE

      2.    New Purchase Right Aircraft

      2.1   The Seller hereby grants to Buyer the right to purchase up to
            [...***...] New Purchase Right Aircraft, which the Buyer will
            have the right to purchase as either an A319, A320 and/or A321
            Aircraft for delivery dates in [...***...].

      2.2   The New Purchase Right Aircraft will remain without reserved
            delivery quarters by the Seller (i.e. remain subject to the
            Seller's industrial and commercial constraints and subject to
            prior sale and other disposition) until the Buyer requests a
            delivery date by written notice to the Seller, such notice
            also specifying the type of New Purchase Right Aircraft the
            Buyer is considering to firmly purchase.  The Seller will then
            provide in writing within ten (10) Working Days, subject to
            its industrial and commercial constraints at the time, a
            delivery month and year, which will remain subject to prior
            sale and other disposition until written confirmation of
            acceptance from the Buyer and concurrent payment of a New
            Purchase Right Aircraft Predelivery Payment in an amount of
            [...***...] (the "New Purchase Right Aircraft Predelivery
            Payment") (upon which the New Purchase Right Aircraft will be
            an Amendment 7 Aircraft under the Agreement).

      2.3   In connection with the unexercised Option Aircraft cancelled
            pursuant to Paragraph 1, above, the Seller acknowledges to
            have already received as of date hereof, from the Buyer Option
            Fees in the amount of [...***...] and the Seller and the Buyer
            agree that such Option Fees will be credited to the Buyer in
            increments of [...***...] against the New Purchase Right
            Aircraft Predelivery Payment to be paid by the Buyer to the
            Seller upon the exercise of each of the New Purchase Right
            Aircraft.

      2.4   Purchase Incentives for New Purchase Right Aircraft are set
            forth in Letter Agreement No. 3 to the Amendment.

   UNQUOTE

7-    EFFECT OF THE AMENDMENT AND OTHER MATTERS

7.1   It will be a condition precedent to the effectiveness of this
      Amendment that the conditions precedent to (i) the validity of the
      A350 Purchase Agreement dated as of the date hereof have been
      satisfied, and (ii) the conditions precedent to the obligations of
      Airbus Financial Services (the "Lender") set forth in the
      $161,000,000 Loan Agreement dated as of September 27, 2005 among US
      Airways, Inc., America West Airlines, Inc., US Airways Group, Inc.,
      the Lender and Wells Fargo bank Northwest,

***CONFIDENTIAL TREATMENT REQUESTED


AWE - A319/A320 - Amendment No. 10
                                   AM 10 - 4

      National Association, as Collateral Agent, have been either satisfied or
      been waived by the Lender.

7.2   Upon effectiveness, the provisions of this Amendment will constitute a
      valid amendment to the Agreement and the Agreement will be deemed to be
      amended to the extent herein provided. This Amendment supersedes any
      previous understandings, commitments, or representations whatsoever,
      whether oral or written, related to the subject matter of this Amendment,
      including Paragraph 5 of the MOU.

      Both parties agree that this Amendment will constitute an integral,
      nonseverable part of the Agreement, and that this Amendment will be
      governed by the provisions of the Agreement, except that if the Agreement
      and this Amendment have specific provisions that are inconsistent, the
      specific provisions contained in this Amendment will govern.

8.    GOVERNING LAW

      THIS AMENDMENT AND THE AGREEMENTS CONTEMPLATED HEREBY WILL BE GOVERNED BY
      AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE
      WITH THE PROVISIONS OF SUBPARAGRAPH 22.3 OF THE AGREEMENT.

      IT IS AGREED THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE
      INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS AMENDMENT OR TO THE
      AGREEMENTS CONTEMPLATED HEREIN.

9.    CONFIDENTIALITY

      The Seller and the Buyer (including their employees, agents and advisors)
      agree to keep the terms and conditions of this Amendment strictly
      confidential, except as required by applicable law or pursuant to legal
      process. The Seller and the Buyer will consult prior to any public
      disclosure regarding this Amendment; provided, however that, following
      execution of this Amendment, Buyer may make such disclosure thereof as may
      be required by law or governmental orders, rules or regulations.

10-   COUNTERPARTS

      This Amendment may be signed in any number of separate counterparts. Each
      counterpart when signed and delivered (including counterparts delivered by
      facsimile transmission) will be an original, and the counterparts will
      together constitute one same instrument.


AWE - A319/A320 - Amendment No. 10
                                   AM 10 - 5

      If the foregoing correctly sets forth our understanding, please execute
the original and one (1) copy hereof in the space provided below and return a
copy to the Seller.

                                          Very truly yours,

                                          AVSA S.A.R.L.

                                          By:
                                             ----------------------

                                          Its:
                                              ---------------------

Accepted and Agreed,

AMERICA WEST AIRLINES, INC.

By:
   ----------------------------

Its:
    ---------------------------



AWE - A319/A320 - Amendment No. 10
                                   AM 10 - 6

EX-10.11

                                                                   Exhibit 10.11


                                                                    CONFIDENTIAL

                             US AIRWAYS GROUP, INC.
                               2345 Crystal Drive
                            Arlington, Virginia 22227

                                                              September 16, 2005

Ladies and Gentlemen:

This letter agreement is with reference to (i) the Agreement and Plan of Merger,
dated as of May 19, 2005 (the "Merger Agreement"), by and among US Airways
Group, Inc., a Delaware corporation, and its successors (including, as the
context may require, on or after the effective date of the Plan, as reorganized
pursuant to the Bankruptcy Code) ("East"), America West Holdings Corporation, a
Delaware corporation ("West"), and Barbell Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of East ("Merger Sub"), in respect of
the merger of Merger Sub with and into West, (ii) the Financing Commitments
entered into by and among East, West and the Equity Investors, (iii) the
Stockholders' Agreement (the "Stockholders' Agreement"), by and among East, West
and the Equity Investors, to be executed prior to the Effective Date, and (iv)
the letter agreement, dated as of July 7, 2005 (the "July Letter Agreement"), by
and among East, West and the Equity Investors (other than Tudor). Any
capitalized term not defined in this letter agreement shall have the meaning set
forth in the Merger Agreement or the Financing Commitments, as amended by the
July Letter Agreement, as applicable.

The parties to this letter agreement hereby acknowledge and agree as follows:

(1) Notwithstanding anything in the Financing Commitments or the July Letter
Agreement to the contrary, (a) the Equity Investors hereby agree that East may
offer and issue New Common Stock in an underwritten public offering (the "Public
Offering") pursuant to the registration statement on Form S-1, File No.
333-126226, and further agree that East may use up to $172,500,000 of the
proceeds raised in connection therewith for general corporate purposes, provided
that (i) the public offering price per share of New Common Stock in the Public
Offering is no less than $16.50, (ii) the registration statement for the Public
Offering becomes effective, and the underwriting agreement for the Public
Offering is executed, before 5 p.m., eastern time, on the ninth (9th) Business
Day following the Closing Date, and (iii) the aggregate proceeds, including from
any over-allotment option, from the Public Offering shall not exceed
$172,500,000, and (b) except as provided in paragraphs (5) and (6) of this
letter agreement, prior to the Closing Date, East shall not offer, issue, sell
or agree, commit or obligate itself to offer, issue or sell any Equity
Securities pursuant to Section 6.08(a)(i)(B) or Section 6.08(a)(iv) of the
Financing Commitments (Section 6.07(a)(i)(B) and Section 6.08(a)(iv) in respect
of the Financing Commitment to which Eastshore Aviation, LLC is a party) unless
the Public Offering has been terminated.

(2) Section 2.02(a) of each of the Financing Commitments is hereby replaced in
its entirety by the following:

             "Section 2.02 Closing. (a) Subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Sections 7.01 and 7.02
hereof, the Closing shall take place at the offices of Arnold & Porter LLP, 555
Twelfth Street, NW, Washington D.C. 20004, at 10:00 a.m., Washington D.C. time,
on the same Business Day as the Effective Time (as such term is defined in the
Merger Agreement) or at such other time, date and place as the parties may agree
(the date on which the Closing occurs, the "Closing Date")."

(3) In addition to the Equity Securities that East is permitted to issue
pursuant to Section 6.08, as amended, of each of the Financing Commitments
(Section 6.07 in respect of the Financing Commitment to which Eastshore
Aviation, LLC is a party) and the Equity Securities to be issued pursuant to the
Public Offering, each of the Equity Investors listed below is hereby granted
options to purchase, at $15.00 per share, up to the number of additional shares
of New Common Stock set forth next to each Equity Investor below, on the same
terms and conditions as such Equity Investor's Financing Commitment:



                                         TRANCHE A OPTIONS     TRANCHE B OPTIONS
                                         -----------------     -----------------
                                                         
PAR Investment Partners, L.P.:            2,000,000 shares      1,000,000 shares

Peninsula Investment Partners, L.P.:        444,444 shares        222,223 shares

ACE Aviation Holdings Inc.:                 666,667 shares        333,333 shares

Wellington Investors:                     1,333,333 shares        666,667 shares

Tudor Investors:                            577,778 shares        288,889 shares


The Tranche A Options are exercisable by written notice to East and West on or
prior to the earlier to occur of (a) 5:00 p.m., eastern time, on the Business
Day following the day the underwriting agreement for the Public Offering is
executed and (b) 5:00 p.m., eastern time, on the tenth (10th) Business Day
following the day the New Common Stock starts trading publicly on the New York
Stock Exchange (the "Tranche A Option Expiration Date"). The Tranche B Options
are exercisable by written notice to East and West on or prior to the fifteenth
(15th) calendar day following the Tranche A Option Expiration Date (the "Tranche
B Option Expiration Date" and together with the Tranche A Option Expiration
Date, the "Option Expiration Date"). Payment in respect of the Tranche A Options
and Tranche B Options shall occur on the second Business Day following the
respective Option Expiration Date.

Each foregoing option is transferable, in whole or in part, among the Equity
Investors, up until the respective Option Expiration Date, subject to certain
restrictions on foreign ownership contained in the Parent Charter and Parent
Amended By-Laws. The options to purchase an aggregate of 3,000,000 shares of New
Common Stock that PAR Investment Partners, L.P. has includes Eastshore Aviation,
LLC's option to purchase 1,666,667 shares that Eastshore Aviation, LLC sold to
PAR Investment

                                       2

Partners, L.P. pursuant to an Option Purchase Agreement, dated as of September
15, 2005.

Upon each Option Expiration Date, East shall make an offer to Eastshore
Aviation, LLC, in an amount equal to one-third of the proceeds received from
exercise of the options, to repurchase shares of East Common Stock held by
Eastshore Aviation, LLC, at a purchase price of $15.00 per share, and Eastshore
Aviation, LLC shall have the right but not the obligation to accept such offer
to repurchase in whole or in part for a period of at least 30 days after the
receipt of such offer.

Paragraph (8) of the July Letter Agreement is replaced in its entirety by the
foregoing, and to the extent this paragraph (3) conflicts with Section 6.08(c)
and (d) of the Tudor Investment Agreement, the provisions of this paragraph (3)
shall be controlling.

(4) The director to be nominated to the Board of Directors of East by each of
ACE Aviation Holdings Inc. and Eastshore Aviation, LLC shall be appointed to the
Board of Directors of East on the date which is two Business Days after the
Effective Time. The Stockholders' Agreement will reflect the provisions of this
paragraph (4).

(5) The parties to this letter agreement consent to the issuance of options as
described in Exhibit A of this letter agreement and agree that the issuance of
such options and the New Common Stock issued upon exercise of such options shall
not reduce the number of shares of New Common Stock available for issuance under
the Employee Pool.

(6) In lieu of the Notes referenced on Schedule 3.05 of each of the Financing
Commitments, the Company may issue up to $125 million principal amount (plus a
15% over-allotment option) of convertible notes to Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and other initial purchasers for
resale to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933 (the "144A Convertible Notes"). Each of the Equity
Investors hereby consents to the issuance of the 144A Convertible Notes in lieu
of the Notes.

(7) Except as expressly modified by this letter agreement, the provisions of the
Merger Agreement, each Financing Commitment and the July Letter Agreement shall
remain unaffected. Moreover, to the extent that Section 4.20 of the Merger
Agreement becomes applicable as a result of any agreement entered into after the
date of this letter agreement, the rights of the Equity Investors, including but
not limited to, Section 6.08 of the Financing Commitments (Section 6.07 in
respect of the Financing Commitment to which Eastshore Aviation, LLC is a party)
and Section 6.09 of the Eastshore Aviation, LLC Junior Secured
Debtor-in-Possession Credit Facility Agreement are fully reserved and unaffected
hereby. To the extent not governed by the Bankruptcy Code, this letter agreement
shall be governed by, and interpreted in accordance with, the Laws of the State
of New York applicable to contracts made and to be performed in that State
without reference to its conflict of laws rules. This letter agreement may be
executed in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one single instrument.

              [REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]



                                       3

If the forgoing is in accordance with your understanding, please sign and return
to us one counterpart hereof.

Very truly yours,

US AIRWAYS GROUP, INC.

By: /s/ Elizabeth K. Lanier
    ----------------------------------------------
      Name:  Elizabeth K. Lanier
      Title: Executive Vice President & General Counsel

                              Acknowledged and agreed by:


                              AMERICA WEST HOLDINGS
                              CORPORATION

                              By:
                                  -------------------------
                                      Name:
                                      Title:

                              BARBELL ACQUISITION CORP.

                              By:
                                  -------------------------
                                      Name:
                                      Title:

                              ACE AVIATION HOLDINGS INC.

                              By:
                                  -------------------------
                                      Name:
                                      Title:

                              EASTSHORE AVIATION, LLC

                              By:
                                  -------------------------
                                      Name:
                                      Title:



                                       4

                              PAR INVESTMENT PARTNERS, L.P.

                              By:     PAR GROUP, L.P.
                                      its general partner

                              By:     PAR CAPITAL MANAGEMENT, INC.
                                      its general partner


                              By:
                                  -------------------------
                                      Name:
                                      Title:


                              PENINSULA INVESTMENT
                              PARTNERS, L.P.

                              By:     PENINSULA CAPITAL
                                      APPRECIATION LLC
                                      its general partner


                              By:
                                  -------------------------
                                      Name:
                                      Title:


                              WELLINGTON MANAGEMENT
                              COMPANY, LLP, AS INVESTMENT ADVISER
                              TO EACH INVESTOR LISTED ON SCHEDULE 1 OF
                              THE WELLINGTON INVESTMENT AGREEMENT



                              By:
                                  -------------------------
                                      Name:
                                      Title:


                              TUDOR INVESTMENT CORP.,
                              AS INVESTMENT ADVISER TO EACH INVESTOR
                              LISTED ON SCHEDULE 1 OF THE TUDOR
                              INVESTMENT AGREEMENT (OTHER THAN
                              TUDOR PROPRIETARY TRADING, L.L.C.)

                              By:
                                     ------------------------------
                              Name:
                                     ------------------------------
                              Title:
                                     ------------------------------



                                       5

                              TUDOR PROPRIETARY TRADING, L.L.C.

                              By:
                                     ------------------------------
                              Name:
                                     ------------------------------
                              Title:
                                     ------------------------------




                                       6

                                    EXHIBIT A

                             US AIRWAYS GROUP, INC.

              PRINCIPAL TERMS AND CONDITIONS OF PILOT STOCK OPTIONS

ISSUER:                  US Airways Group, Inc. and any successor

SECURITIES ISSUED:       Options (the "Options") to purchase the common stock of
                         the Issuer (the "Common Stock"). Each Option shall
                         entitle the holder to purchase one share of the common
                         stock at the Exercise Price (see below).

AGGREGATE NUMBER OF      1,100,000 in the aggregate, with the first tranche of
OPTIONS ISSUABLE:        500,000 Options being issued January 31, 2006 (the
                         "First Tranche Options"), a second tranche of 300,000
                         Options to be issued on January 31, 2007 (the "Second
                         Tranche Options") and the third tranche of 300,000
                         Options to be issued on January 31, 2008 (the "Third
                         Tranche Options").

OPTION GRANTEE:          The formula for the allocation of options to the
                         grantees shall be determined by ALPA.

OPTION TERM:             Five (5) years from each grant date.

EXERCISABILITY:          At any time, in whole or in part during the Option
                         Term; provided, however that, upon any change in
                         control event (as defined in the Collective Bargaining
                         Agreement), the issuance of any and all Options shall
                         be immediately issued and accelerated and shall be
                         immediately exercisable.

EXERCISE PRICE:          To be equal in the case of each Tranche of Options to
                         the average of the closing price per share of Common
                         Stock as reflected on the New York Stock Exchange (or
                         other actively traded national securities exchange on
                         which the Common Stock is principally traded)for the
                         20 business day period prior to the applicable
                         Options issuance date in respect of the First, Second
                         or Third Tranche Options, as the case may be.

EXERCISE MECHANISM:      Cashless and otherwise to be determined by ALPA and the
                         Company.

TRANSFER RESTRICTIONS:   Subject to tax and accounting considerations, options
                         may not be transferred at any time except to a
                         beneficiary of a deceased individual holder; provided
                         however that the Company will not unreasonably withhold
                         its consent to a sale of all or a significant portion
                         of such Options pursuant to a sale authorized by ALPA
                         to a financial institution or institutions.

ANTI-DILUTION:           Customary anti-dilution provisions.



                                       7

EX-31.1

Exhibit 31.1

CEO CERTIFICATION

I, W. Douglas Parker, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of US Airways Group, Inc;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principle;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 9, 2005	/s/ W. Douglas Parker
	W. Douglas Parker Chief Executive Officer

EX-31.2

Exhibit 31.2

CFO CERTIFICATION

I, Derek J. Kerr, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of US Airways Group, Inc;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principle;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 9, 2005	/s/ Derek J. Kerr
	Derek J. Kerr Chief Financial Officer

EX-31.3

Exhibit 31.3

CEO CERTIFICATION

I, W. Douglas Parker, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of America West Airlines, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principle;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 9, 2005	/s/ W. Douglas Parker
	W. Douglas Parker Chief Executive Officer

EX-31.4

Exhibit 31.4

CFO CERTIFICATION

I, Derek J. Kerr, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of America West Airlines, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principle;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 9, 2005	/s/ Derek J. Kerr
	Derek J. Kerr Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, W. Douglas Parker, the Chief Executive Officer of US Airways Group, Inc. (the “Company”) and Derek J. Kerr, the Chief Financial Officer of the Company, hereby certify that, to the best of their knowledge:

1.	The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2005, to which this certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, and
2.	The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 9th day of November 2005.

/s/ W. Douglas Parker

W. Douglas Parker
Chief Executive Officer

/s/ Derek J. Kerr

Derek J. Kerr
Chief Financial Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, W. Douglas Parker, the Chief Executive Officer of America West Airlines, Inc. (the “Company”) and Derek J. Kerr, the Chief Financial Officer of the Company, hereby certify that, to the best of their knowledge:

1.	The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2005, to which this Certification is attached as Exhibit 32.2 (the “Periodic Report”), fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, and
2.	The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 9th day of November 2005.

/s/ W. Douglas Parker

W. Douglas Parker
Chief Executive Officer

/s/ Derek J. Kerr

Derek J. Kerr
Chief Financial Officer