IN RE US AIRWAYS, INC. (Bankr.E.D.Va. 2004)

In re: US AIRWAYS, INC., et al.,[1] Chapter 11 Debtors.

Case No. 04-13819, Jointly Administered.United States Bankruptcy Court, E.D. Virginia, Alexandria Division.
October 26, 2004.

[1] The Debtors are the following entities: US Airways, Inc., US Airways Group, Inc., PSA Airlines, Inc., Piedmont Airlines, Inc. and Material Services Company, Inc.

Brian P. Leitch, Esq., Daniel M. Lewis, Esq., Michael L. Bernstein, Esq., ARNOLD PORTER LLP, Denver, Colorado, and Washington, DC.

Robert A. Siegel, Esq., Tom A. Jerman, Esq., O’MELVENY MYERS LLP, Washington, D.C.

Lawrence E. Rifken, Esq., Douglas M. Foley, Esq., David I. Swan, Esq., McGUIREWOODS LLP, McLean, Virginia, Attorney for Debtors and Debtors-in-Possession.

Arthur M. Luby, Esq., O’DONNELL, SCHWARTZ AND ANDERSON, Washington, DC, Attorney for the Transport Workers Union, Locals 545, 546 and 547.

CONSENT ORDER APPROVING MODIFICATIONS TO DEBTORS’ COLLECTIVE BARGAINING AGREEMENTS WITH CERTAIN GROUPS WITHIN THE TRANSPORT WORKERS UNION
STEPHEN MITCHELL, Bankruptcy Judge

The Debtors in the above captioned Chapter 11 cases[2]
have filed a motion pursuant to §§ 105, 363, 1113 and 1114 of the Bankruptcy Code (the “Motion”) seeking

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the entry of an Order approving agreed-upon modifications to the terms of the collective bargaining agreements (“CBAs”) with the Transport Workers Union, Locals 545, 546 and 547 (collectively, the “TWU Groups”), which modifications are described in the documents attached as Exhibit B to the Motion and attached hereto as Exhibit A (the “Agreements”), and to the extent necessary, to authorize the Debtors to perform under the CBAs, as modified by the Agreements.

Upon consideration of the Motion and any timely opposition thereto, and upon consideration of the arguments of counsel and any evidence presented or proffered in support of and in opposition to the Motion, the Court finds[3] that (i) it has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157
and 1334; (ii) this proceeding is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2); (iii) venue is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409; (iv) proper and adequate notice of the Motion has been given and no other notice is required under any provision of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure or the Local Rules of this Court; (v) the relief sought in the Motion is in the best interests of the Debtors’ bankruptcy estates, their creditors and other parties-in-interest; and (vi) the Agreements strike a fair balance among the TWU Groups’ members in light of all considerations and consequences and do not impose modifications that are disproportionately adverse to any members of the TWU Groups, and the TWU Groups’ entry in the Agreements is reasonable and appropriate. After due deliberation and sufficient cause appearing therefore,

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IT IS HEREBY ORDERED THAT:

1. The Motion is GRANTED.

2. The Agreements are hereby approved. The CBAs shall be and hereby are deemed to be modified as reflected in the Agreements. The Debtors are authorized to perform under the CBAs as modified by the Agreements. The Debtors and the TWU Groups are authorized to enter into amended and restated collective bargaining agreements incorporating the terms of the Agreements and, once such amended and restated collective bargaining agreements have been entered into by the Debtors and the TWU Groups, they shall be binding upon the parties without the need for further order of this Court.

3. Nothing contained herein shall constitute an assumption of any agreement described herein, including without limitation the CBAs, nor shall anything herein be deemed to convert a prepetition claim into a postpetition claim or an administrative expense.

4. Pursuant to the Agreements, the Debtors are authorized to make the prepetition payments to the TWU Groups’ Defined Contribution Retirement Plan and 401(k) plans that had previously been withheld and to make all other prepetition payments of the TWU Groups’ retirement funds that were not paid as of September 12, 2004.

5. As agreed by the TWU Groups and the Debtors, the Agreements and this Order shall be effective retroactive to October 1, 2004.

6. This Court retains jurisdiction with respect to all matters arising from or related to the implementation of this Order.

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TWU LOCAL 545 TERM SHEET (Dispatchers)

Effective Date October 1, 2004

Duration December 31, 2009.

Other terms of 1999 Other than as modified in these documents, all terms and conditions
Agreement as of the TWU-US Airways Collective Bargaining Agreement
amended: effective July 30, 1999, as amended on July 2002 and January 2003,
shall remain in full force and effect.

No-Furlough Clause • Eliminate minimum fleet size provision of July 2002
restructuring agreement and all related provisions of the January
2003 Restructuring Agreement

• One-time Enhanced Separation Program the terms of which are
set forth in Attachment A

Productivity • Eliminate positions as the result of the following:

• implement a 5-2-5-3 work schedule for all dispatch
employees including dispatch instructors with 8-hour work
day effective 10/1/04, adjustment of shift start times as
necessary;

• institute flexible vacation relief (TWU and Company will
jointly develop language to provide needed flexibility);

• decrease vacation relief lines by 4,

• eliminate the fuel liaison support line, and

• eliminate EOM/TMS staffing on midnights

• Eliminate assistant dispatcher position. To the extent the job
functions currently carried out by assistant dispatchers cannot be
automated, those job functions will be assigned to non-covered
employees and such assignment will not be in violation of the
scope provisions of Article 1.

• Retain at company discretion express operations manager and
fuel conservation liaison positions. In the event the Company
decides to eliminate any additional express operations manager
positions and/or fuel conversation liaison positions, those
positions will return to the floor as dispatcher positions but will
not result in any corresponding furlough.

• Reduce sick accrual from one (1) day per month to one-half
(1/2) day per month; no accrual in months of June and October;
paid out at straight (1x) rate for a maximum of eight (8) hours
per day; charges to sick leave accrual will be on an eight (8)
daily basis in accordance with actual hours paid.

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• Modify vacation accrual as follows:

• Accrual of vacation credits based on an 8-hour day

• Through the 10th year of service: 10 days

• 11th through 17th year of service: 15 days

• 18th through 24th years of service: 20 days

• 25+ years of service: 25 days

Current year’s vacation will be honored as bid through February
28, 2005.

Revisions to Pay Rates • Reduce the 2004 pay rates set forth in Article 18 as amended by
the July 2002 agreement by 10.3%, with the reduced rates taking
effect the first full pay period following ratification.

• Eliminate all snap-backs currently scheduled to take effect 2009

• Replace the 2% annual pay increases currently scheduled for
January 1st of each year through January 1, 2008, with the
following:

• 4% effective January 1, 2006

• 2.5% effective January 1, 2007

• 2.0% effective January 1, 2008

• 3.0% effective January 1, 2009

• Eliminate guarantee of annual base rate income of $30,000

Midnight Differential Eliminate shift differential for midnight shift

Double Time Reduce double time to time and one-half

Holiday Pay Eliminate holiday pay premium

Holiday Pay/Vacation Eliminate holiday pay while on vacation

Block Holder Relief Allow employees requiring training due to classification bid changes
to begin training during the months of January, February, and March

Overrides Eliminate current overrides. Company has the discretion to
establish overrides as necessary.

Post Retirement Pre-65 Retiree Medical and Dental, Retirement Pre 1/1/05:
Medical

• Pre-65 retirees who are participating in retiree medical coverage
on 12/31/04 will be grandfathered on the following terms:

— Current plan options (same as actives)

— Implement Defined Dollar Benefit (DDB) cap

— Set DDB cap at $4,600 net cost basis

— Base all pre-65 costs and contributions on true pre-65 costs.

• Grandfathered pre-65 retirees will cease to participate in retiree
medical coverage upon reaching age 65.

• Grandfathered pre-65 retirees will cease to participate in retiree
dental coverage as of midnight on 12/31/04.

Pre-65 Medical and Dental, Retirement On or After 1/1/05:

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• For purposes of funding monthly pre-65 retiree medical
premiums, a day of sick pay will be valued at $123.00. Four
days of accrued sick pay ($492.00) will be credited towards the
monthly pre-65 retiree medical premium until the 150 days of
sick pay is exhausted.

• Should the monthly pre-65 retiree medical premium exceed the
available credit, the retiree will be responsible for timely
payment of the premium in excess of the credit.

• In the event the retiree at the time of retirement declines pre-65
retiree medical coverage, the retiree will be paid $100.20 for
each day of accrued sick leave up to a maximum of 150 days,
such payment to be made in equal monthly installments over a
twelve-month period. The retiree will not thereafter be eligible
to participate in pre-65 retiree medical benefits.

• Pre-65 retirees will cease to participate in retiree medical
coverage upon reaching age 65.

• Pre-65 retirees are not eligible for retiree dental coverage.

Age 65 and Post-65 Retiree Medical and Dental:

• As of midnight on 12/31/04 eliminate medical and dental
coverage for age 65 retirees.

• Age 65 retirees participating in retiree medical coverage on
12/31/04 (closed group) will be eligible to continue prescription
drug coverage through 2005 (coincident with new Medicare
drug benefit). Subsidy caps and retiree contributions for 2005
will be reset to reflect prescription drug coverage only.

The Company agrees to indemnify TWU from any and all liability,
loss, damages, fines, penalties, excise taxes and costs, including
expenses and reasonable attorneys’ fees, which TWU sustains
arising out of or in connection with these Company-proposed
changes to Post-Retirement Medical for employees who retired prior
to the effective date of this Agreement. The Union agrees that it
will not settle a matter covered by this indemnity at the Company’s
cost without the Company’s approval, and that the Union will
provide assistance as reasonably required or requested by the
Company in any matter for which such indemnity is being provided.

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The Company will make commercially reasonable efforts to include
a lower-cost “catastrophic option” for post-retirement medical
coverage, subject to a prompt, detailed review of plan options and
plan costs. The Company will meet with TWU upon completion of
such review to discuss the feasibility and costs associated with
offering such an option.

Change in Control The provisions of the Restructuring Agreement Special Provisions
Letter of Agreement attached to and incorporated into the July 2002
Restructuring Agreement do not apply with respect to any action by
the Company to achieve, or pursuant to, a confirmed plan of
reorganization through Chapter 11 bankruptcy.

System Board of Adopt expedited arbitration procedures as set forth in Attachment B
Adjustment

Profit Sharing The Company will offer a profit-sharing program for dispatchers
subject to the following conditions:

• TWU’s agreement to eliminate the current profit-sharing
provisions of the 1999 Dispatcher
Agreement as modified;

• Approval by the US Airways Group, Inc., Board
of Directors; and

• Approval as part of the Company’s confirmed
plan of reorganization in bankruptcy.

Assuming satisfaction of the conditions set forth above, the profit-sharing
plan will be based on the following terms:

1. Company profit sharing pool to be established at 10% of
the pre-tax profit excluding unusual items (as reported,
according to GAAP accounting practices) for pre-tax
margins ranging from 0.1% to 5.0%; and at the above,
plus 25% of any pre-tax profit excluding unusual items
(as reported, according to GAAP accounting practices) in
excess of a pre-tax margin of 5.0%.

2. TWU’s portion of the profit-sharing pool will be
proportionate to TWU’s share of the overall cost savings
achieved through the Transformation Plan.

3. An individual dispatch employee’s profit-sharing
payment will be based on such employee’s gross W-2
earnings (prior to any elective deferrals) for the prior

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calendar year divided by the gross W-2 earnings (prior to
any elective deferrals) for all eligible dispatch employees
for the prior calendar year. At TWU’s option, “eligible
dispatch employee” may include retired or furloughed
dispatch employees who had gross W-2 earnings (prior
to any elective deferrals) for the prior calendar year,
subject to applicable law.

Negotiation Fees and The Company will pay the reasonable fees and expenses incurred by
Expenses: the Union in connection with the review, design, negotiation,
approval, ratification and implementation of the Transformation
Agreement, including the customary fees and expenses of outside
legal, investment banking and other advisors, offset by any
payments made to the Union during the Transformation
Negotiations for such purposes. Such payment shall be made
promptly following the effective date of this Transformation
Agreement as to amounts accrued as of that date; thereafter,
payments shall be made promptly as to amounts accrued following
the effective date. The obligation to make such payment shall give
rise to an administrative claim in any bankruptcy of the Company.

Equity At this time the Company does not anticipate equity participation in
exchange for concessions. However, if during the bankruptcy
process and as part of the Company’s action to achieve a confirmed
plan of reorganization through Chapter 11 bankruptcy, provisions
are made for equity participation by other labor groups, TWU may
participate at a level that will be proportionate to its share of the
overall labor concessions taking into account returns provided to
TWU in profit sharing.

No Cost Exchange • Exchanging items in this proposal for other items of equal cost
or benefit to the Company will require mutual agreement of the
parties.

• In the event an alternative work schedule is proposed by TWU
that is both cost neutral and operationally feasible, the Company
will implement the alternative work schedule. Determination of
feasibility and cost neutrality are within the Company’s sole
discretion.

Jumpseat • The Company will include dispatchers in the ATA cockpit
security system (CASS) should the Company implement CASS
for pilots provided that dispatchers are otherwise eligible to
participate in CASS.

• The Company will incorporate the jumpseat policy currently in
place at Hawaiian Airlines into the existing jumpseat policy for
dispatchers.

DCRP/401(k) Upon ratification of this proposal and contingent on approval by the

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bankruptcy court, the Company will make the affected TWU
dispatch employees whole for pre-petition contributions to the
DCRP/401k. There will be no change as a result of this agreement
to the current Defined Contribution Retirement Plan or the 401(k)
Plan.

Voluntary Furlough As set forth in Attachment C

Cost Saving Target It is the intention of both parties that the projected cost savings
achieved by the terms of this Term Sheet meet the savings targets
established by the Company.

Bankruptcy The Company’s obligations hereunder will be subject to Bankruptcy
Court approval as required by law. This proposal will not be binding
on the US Airways, Inc., Chapter 11 Estate except after entry of an
order of the bankruptcy court in a form acceptable to Debtors
authorizing the US Airways Inc Estate’s entry into the agreement
contemplated hereby and providing protection to the Estate from the
incursion of any extraordinary administrative liability related to this
agreement or the pension plans referred to therein.

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[EDITORS’ NOTE: LOGO IS ELECTRONICALLY NON-TRANSFERRABLE.]

U.S AIRWAYS ATTACHMENT A

September 21, 2004

Mr. Don Wright President, TWU Local 545 Post Office Box 28 Imperial, PA 15126

Re: Enhanced Separation Program

Dear Don:

In an effort to minimize the adverse impact of the dispatcher furloughs that are unavoidable under the Transformation Plan, the TWU and the Company have agreed to provide a cost neutral, operationally feasible enhanced separation program to dispatchers on the following terms:

1. Eligibility — All active mainline dispatchers not otherwise slated for furlough are eligible to participate in the Enhanced Separation Program. Active MidAtlantic dispatchers who are currently on furlough from mainline are not eligible to participate in the Enhanced Separation Program.
2. Timing of Separation — Dispatchers electing to participate in the Enhanced Separation Program (“participating dispatchers”) will be separated from the Company on a date to coincide with furlough date. However, the Company may hold the participating dispatchers beyond that date for training and transition purposes.
3. Separation Payment — As consideration for their voluntary separation from the Company, participating dispatchers will receive a payment in the amount of $21,648.00 to be paid in equal monthly installments of $1,804.00 (less applicable taxes) with the first installment being made within thirty (30) days following separation from the Company. The separation payment is not subject to DCRP or 401(k) contributions (base or match).
4. Retirement — Participating dispatchers, if otherwise eligible for retirement, may retire concurrent with separation without regard for the 90-day notice requirement. Participating dispatchers who opt to retire concurrent with separation will be entitled to all retirement benefits otherwise available to them (i.e., retiree medical/dental/life, retiree travel) in addition to the separation payment set forth above but will not receive the benefits set forth below.

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5. Medical and Dental Coverage — Pursuant to COBRA, participating dispatchers will be offered medical coverage for eighteen (18) months following separation. Participating dispatchers who elect medical coverage pursuant to COBRA will receive the first 15 weeks of coverage at current rates. Coverage thereafter will be at COBRA rates (e.g., full cost plus 2% administrative fee).
6. Travel — Participating dispatchers will receive on-line, non-revenue travel privileges (excluding companion pass privileges) in accordance with Company policy for a period of twelve (12) months from the date of separation. In the event the Company offers as part of the Transformation Plan more beneficial on-line, non-revenue travel privileges to any other employee group as part of voluntary separation incentive program, the Company will extend the same privileges to participating dispatchers.

Please sign below to indicate your acceptance of the foregoing terms and conditions.

Very Truly Yours,

US Airways, Inc.

____________________________________________ By Ernie Pickell Director, Labor Relations — Flight

cc: R. Maloney

Accepted and agreed

Transport Workers Union

____________________________________________ By Don Wright President, TWU Local 545

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ATTACHMENT B

LETTER OF AGREEMENT between US Airways, Inc., and Dispatchers in the Service of US Airways, Inc., as represented by the Transport Workers Union of America Expedited Arbitration THIS LETTER OF AGREEMENT is made and entered into in accordance with the provisions of Title II of the Railway Labor Act, as amended, by and between US Airways, Inc. (“Company”), and the dispatchers in the service of US Airways, Inc., as represented by the Transport Workers Union (“Union”).

The following shall set forth the procedures to be utilized for expedited arbitration for the purpose of resolving disputes which may arise under the provisions of the US Airways Dispatchers Agreement:

1. The Company and the Union shall mutually agree on the selection of one neutral who, together with one union appointed member and one company appointed member, shall constitute the Expedited Arbitration Board of Adjustment. The Expedited Arbitration Board will convene at a date and time agreed to by the parties. Unless the parties agree otherwise, all hearings will be held at the Corporate Headquarters in Crystal City, Virginia.

2. The Expedited Arbitration Board shall be authorized to hear and decide only those cases that are mutually selected by the parties for resolution through expedited arbitration.

3. At the time the cases are selected by the parties for resolution through expedited arbitration, the parties will determine for each selected case whether the resolution will be on a precedent or non-precedent basis.

4. The Expedited Arbitration Board shall have jurisdiction over grievances that have been processed in accordance with, but not resolved through, the procedures set forth in Section 14 of the US Airways Dispatcher Agreement.

5. Selection of a case for expedited arbitration shall constitute a waiver by the parties of their respective procedural rights under the arbitration provisions of Section 15 of the US Airways Dispatcher Agreement. However, unless specifically amended by this Expedited Arbitration Agreement, the provisions of Section 15 shall govern the expedited arbitration process.

6. Each party shall have the right to select a single representative to function as an advocate and shall be limited to one additional representative to testify or provide relevant clarifying information. Should a party intend to have a representative present to testify or provide relevant clarifying information, the party must provide written notification of its intention to the other party at least ten (10) working days prior to the scheduled hearing date. The

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Expedited Arbitration Board is prohibited from calling additional witnesses beyond those identified pursuant to this paragraph.

7. The parties agree to submit as joint exhibits (i) the Dispatcher Agreement under which the dispute arose, (ii) the written grievance, and (iii) written decisions issued in response to the grievance.

8. Each party shall have no more than forty (40) minutes to present its case and no more than five (5) minutes for rebuttal and/or closing. Each party shall have the right to submit documentary evidence during either its case-in-chief or its rebuttal.

9. In keeping with the objectives of expedited arbitration, the parties agree to make every reasonable effort to exchange exhibits in advance of the hearing and resolve any issues that might arise regarding admissibility of a given exhibit. If the parties are able to stipulate to the admissibility of exhibits prior to the opening of the hearing, the exhibits may be submitted along with the joint exhibits. In the event the parties are unable to stipulate to the admissibility of an exhibit, the party offering the exhibit must offer the exhibit during the presentation of the party’s case-in-chief.

10. Once the hearing has convened, there will be no adjournments or postponements except (i) by agreement of the parties, or (ii) upon the order of the neutral member of the Expedited Arbitration Board to protect the procedural due process rights of the parties.

11. Unless the parties agree otherwise in advance, there will be no transcripts or electronic records made of the proceedings.

12. Neither pre-hearing nor post-hearing briefs will be allowed.

13. At the conclusion of each case, the Expedited Arbitration Board shall issue a written award without written opinion.

14. The Expedited Arbitration Board is expressly prohibited from incurring expenses other than those expenses authorized in advance by agreement of the parties.

AGREED:

For the Transport Workers Union For US Airways, Inc.

________________________________ ____________________________

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[EDITORS’ NOTE: LOGO IS ELECTRONICALLY NON-TRANSFERRABLE.]

U.S AIRWAYS ATTACHMENT C

September 21, 2004

Mr. Don Wright President, TWU Local 545 Post Office Box 28 Imperial, PA 15126

Re: Voluntary Furloughs

Dear Don:

To reduce involuntary furloughs as a result of the current concessionary negotiations the Company has agreed to offer Voluntary Furloughs. Due to the unique circumstances that have required the furloughs, the following provisions are being offered on a non-precedent, non-referral basis. While it is anticipated that Voluntary Furloughs will be offered for the duration of time that employees remain on furlough, the Company reserves the right to discontinue the Voluntary Furloughs at any time by providing advance written notice to the TWU and to those employees on Voluntary Furlough.

1. The Company will offer voluntary furloughs to employees who are active as of September 30, 2004, and who will not be furloughed so that employees who would otherwise be involuntarily furloughed may remain active, i.e. on a one-for-one basis. Voluntary furloughs will be offered for a period of seventeen (17) months commencing October 1, 2004 and ending on February 28, 2006.

2. Voluntary furloughs will be offered in seniority order as staffing levels permit. Employees who desire a voluntary furlough must submit a written request in advance.

3. Voluntary furloughees are considered to be inactive for the duration of the voluntary furlough.

4. Voluntary furloughees will have their current medical, dental and life insurance benefits continued through December 31, 2004 at the current contribution rates. Thereafter, voluntary furloughees will have access to coverage through COBRA.

5. Voluntary furloughees will receive on-line pass privileges (other than companion pass privileges) in accordance with Company policy for the duration of the voluntary furlough. Jumpseat travel privileges will not be extended to voluntary furloughees.

6. Voluntary furloughees will continue to accrue dispatch group seniority (as defined in Article 8.A) and seniority for pay and vacation purposes (as defined in Article 8.C) for the duration of the voluntary furlough.

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7. A voluntary furloughee may retire from voluntary furlough status if otherwise eligible to do so.

8. Voluntary furloughees may opt to bank any accrued but unused vacation or may have it paid out in successive pay periods.

9. Voluntary furloughees are not entitled to furlough pay.

10. Based on projected staffing requirements, the Company may recall a voluntary furloughee with a minimum of fourteen (14) days notice. Notice shall be to the address of record. Failure on the part of the voluntary furloughee to respond to the recall notice within the 14-day notice period will constitute a voluntary resignation, and the voluntary furloughee’s name will be removed from the seniority list.

11. If, as a result of an employee returning from a voluntary furlough, a junior employee no longer has the seniority to hold a position, then such junior employee may be placed on furlough until a vacancy becomes available. The TWU agrees not to file any grievance challenging the Company’s right to furlough when such furloughs are triggered solely by the return to active status of voluntary furloughees.

12. Voluntary furloughees shall provide the Company with a current address and telephone contact number at all times during the furlough.

13. An employee returning from voluntary furlough will receive compensation while completing all FAA mandated training and up to a maximum of four (4) days OJT. Any additional OJT days will be unpaid. Annual Competency Checks will be governed by Article 25, paragraph I of the current collective bargaining agreement.

14. The Company will not contest any Unemployment Compensation claim filed by an employee who elects a Voluntary Furlough pursuant to this Letter.

Please sign below to indicate your acceptance of the foregoing terms and conditions.

Very Truly Yours,

US Airways, Inc.

__________________________________________ By Ernie Pickell Director, Labor Relations — Flight

cc: R. Maloney

Accepted and agreed

Transport Workers Union

__________________________________________ By Don Wright, President TWU Local 545

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TWU LOCAL 546 TERM SHEET (Flight Simulator Engineers)

Effective Date October 1, 2004

Duration December 31, 2011.

Other terms of 1999 Other than as modified in these documents, all terms and conditions
Agreement as of the TWU-US Airways Collective Bargaining Agreement
amended: effective August 1, 2000 as amended on July 2002 and January
2003, shall remain in full force and effect.

No-Furlough Clause Eliminate minimum fleet size provision of July 2002 Restructuring
Agreement and the January 2003 Restructuring Agreement

Productivity • Modify vacation accrual as follows:
• Through the 10th year of service: 10 days
• 11th through 17th year of service: 15 days
• 18th through 24th years of service: 20 days
• 25 + years of service: 25 days
• Eliminate vacation accrual snap-back provisions of July
2002 restructuring agreement
• Current year’s vacation will be honored as bid

Revisions to Pay Rates • Reduce the 2004 pay rates set forth in Article 20 as amended by
the July 2002 and January 2003 agreements by 11.8%, with the
reduced rates taking effect the first full pay period following
ratification.

• Eliminate all snap-backs currently scheduled to take effect 2009
• Replace the annual pay increases currently scheduled for January
1st of each year through January 1, 2009, with the following:
• 0.5% effective January 1, 2006
• 1.5% effective January 1, 2007
• 2.0% effective January 1, 2008
• 5.0% effective January 1, 2009
• 5.0% effective January 1, 2010
• 5.0% effective January 1, 2011
• Eliminate guarantee of annual base rate income of $30,000

Shift Differential Eliminate all shift differentials

Holiday Pay • Eliminate all paid holidays except for Christmas
• Add two floating holidays to be paid at straight time rate

Degree Premium Eliminate degree premium

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• Grandfathered pre-65 retirees will cease to participate in retiree
medical coverage upon reaching age 65.
• Grandfathered pre-65 retirees will cease to participate in retiree
dental coverage as of midnight on 12/31/04.

Pre-65 Medical and Dental, Retirement On or After 1/1/05:

• For purposes of funding monthly pre-65 retiree medical
premiums, a day of sick pay will be valued at $128.00. Four
days of accrued sick pay ($512.00) will be credited towards the
monthly pre-65 retiree medical premium until the 150 days of
sick pay is exhausted.

• Should the monthly pre-65 retiree medical premium exceed the
available credit, the retiree will be responsible for timely
payment of the premium in excess of the credit.

• In the event the retiree at the time of retirement declines pre-65
retiree medical coverage, the retiree will be paid $104.20 for
each day of accrued sick leave up to a maximum of 150 days,
such payment to be made in equal monthly installments over a
twelve-month period. The retiree will not thereafter be eligible
to participate in pre-65 retiree medical benefits.

• Pre-65 retirees will cease to participate in retiree medical
coverage upon reaching age 65.

• Pre-65 retirees are not eligible for retiree dental coverage.

Age 65 and Post-65 Retiree Medical and Dental:

• As of midnight on 12/31/04 eliminate medical and dental
coverage for age 65 retirees.

• Age 65 retirees participating in retiree medical coverage on

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12/31/04 (closed group) will be eligible to continue prescription
drug coverage through 2005 (coincident with new Medicare
drug benefit). Subsidy caps and retiree contributions for 2005
will be reset to reflect prescription drug coverage only.

System Board of Adopt expedited arbitration procedures as set forth in Attachment A
Adjustment

Profit Sharing The Company will offer a profit-sharing program for engineers
subject to the following conditions:

• TWU’s agreement to eliminate the current profit-sharing
provisions of the July 2002 and January
2003 Restructuring Agreements;

• Approval by the US Airways Group, Inc., Board
of Directors; and

• Approval as part of the Company’s confirmed
plan of reorganization in bankruptcy.

Assuming satisfaction of the conditions set forth above, the profit-sharing

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plan will be based on the following terms:

2. TWU’s portion of the profit-sharing pool will be
proportionate to TWU’s share of the overall cost savings
achieved through the Transformation Plan.

3. An individual FSE employee’s profit-sharing payment
will be based on such employee’s gross W-2 earnings
(prior to any elective deferrals) for the prior calendar
year divided by the gross W-2 earnings (prior to any
elective deferrals) for all eligible FSE employees for the
prior calendar year. At TWU’s option, “eligible FSE
employee” may include retired or furloughed FSE
employees who had gross W-2 earnings (prior to any
elective deferrals) for the prior calendar year, subject to
applicable law.

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TWU in profit sharing.

Retirement Benefits • Retain the current DCRP with respect to the base account, the
401(k) account and the company match account
• Eliminate the profit sharing account from the current DCRP

DCRP/401(k) Upon ratification of this proposal and contingent on approval by the
bankruptcy court, the Company will make the affected TWU
simulator engineers whole for pre-petition contributions to the
DCRP/401(k).

No Cost Exchange • Exchanging items in this proposal for other items of equal cost
or benefit to the Company will require mutual agreement of the
parties. Determination of cost neutrality is within the
Company’s sole discretion.

• “Back-to-Back” shift swaps will be permitted in accordance with
Attachment B.

Cost Saving Target It is the intention of both parties that the projected cost savings
achieved by the terms of this Term Sheet meet the savings targets
established by the Company.

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ATTACHMENT A

LETTER OF AGREEMENT between US Airways, Inc., and Flight Simulator Engineers in the Service of US Airways, Inc., as represented by the Transport Workers Union of America Expedited Arbitration THIS LETTER OF AGREEMENT is made and entered into in accordance with the provisions of Title II of the Railway Labor Act, as amended, by and between US Airways, Inc. (“Company”), and the simulator engineers in the service of US Airways, Inc., as represented by the Transport Workers Union (“Union”).

2. The Expedited Arbitration Board shall be authorized to hear and decide only those cases that are mutually selected by the parties for resolution through expedited arbitration.

5. Selection of a case for expedited arbitration shall constitute a waiver by the parties of their respective procedural rights under the arbitration provisions of Section 15 of the US Airways Simulator Engineers Agreement. However, unless specifically amended by this Expedited Arbitration Agreement, the provisions of Section 15 shall govern the expedited arbitration process.

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relevant clarifying information, the party must provide written notification of its intention to the other party at least ten (10) working days prior to the scheduled hearing date. The Expedited Arbitration Board is prohibited from calling additional witnesses beyond those identified pursuant to this paragraph.

7. The parties agree to submit as joint exhibits (i) the Simulator Engineers Agreement under which the dispute arose, (ii) the written grievance, and (iii) written decisions issued in response to the grievance.

11. Unless the parties agree otherwise in advance, there will be no transcripts or electronic records made of the proceedings.

12. Neither pre-hearing nor post-hearing briefs will be allowed.

13. At the conclusion of each case, the Expedited Arbitration Board shall issue a written award without written opinion.

14. The Expedited Arbitration Board is expressly prohibited from incurring expenses other than those expenses authorized in advance by agreement of the parties.

AGREED:

For the Transport Workers Union For US Airways, Inc.

_________________________________ __________________________

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[EDITORS’ NOTE: LOGO IS ELECTRONICALLY NON-TRANSFERRABLE.]

U.S AIRWAYS ATTACHMENT B
September 29, 2004

Robert Lenhart President, TWU Local 546 Post Office Box 28 Imperial, PA 15126

Re: Back-to-Back Shift Swaps

Dear Mr. Lenhart,

Following ratification of the tentative agreement, the Company will effective November 1, 2004, allow simulator engineers to do back-to-back double shift swaps on the following conditions:

1. The Company may disapprove any back-to-back double shift swap for any simulator engineer if the Company has
a) determined that the simulator engineer’s productivity, safety or job performance is adversely affected,
b) advised the simulator engineer of the determination, and
c) given the simulator engineer an opportunity to respond to the Company’s concerns.
2. There must be a minimum of 8 hours of rest between each double shift worked back-to-back.
3. Where back-to-back double shift swaps have been approved but the simulator engineer who is scheduled to work for another is unable to do so, the Company may cancel the shift swap in which case the simulator engineer originally scheduled to work the shift will be required to work the shift.
4. If the Company determines that the use of back-to-back double shifts are adversely impacting safety, job performance and/or productivity,

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the Company may either discontinue all back-to-back double shift swaps or modify the conditions under which such shift swaps will be permitted. Prior to doing so, the Company will advise TWU of the basis for the determination and an opportunity to respond to the determination.

Please sign below to indicate your acceptance of the foregoing terms and conditions.

Very Truly Yours,

US Airways, Inc.

__________________________________________ By Ernie Pickell Director, Labor Relations — Flight

Accepted and agreed

Transport Workers Union

__________________________________________ By Robert Lenhart, President, TWU Local 546

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TWU LOCAL 547 TERM SHEET (Flight Crew Training Instructors [FCTI’s])

Effective Date October 1, 2004

Duration December 31, 2011

Other Terms of 1999 Other than as modified in these documents, all terms and conditions
Agreement as of the TWU — US Airways Collective Bargaining Agreement
Amended effective May 3, 1999, as amended on August 2002 and February
2003, shall remain in full force and effect.

No-Furlough Clause Eliminate the Minimum Aircraft provision in Attachment A of the
February 2003 Restructuring Agreement.

Productivity A. Scheduling:

1. Post bid sheet by 15th of preceding month.

2. FCTI Bid Process to be completed by the 25th of preceding
month

3. Establish “Events” as the bid standard

a. An Event shall be defined as up to a four hour work
period. If an Event extends beyond four hours, an
FCTI shall be paid but not credited for time in excess
of four (4:00) hours.

b. Each FCTI shall be responsible thirty-two (32)
Events per bid month.

c. Each FCTI shall be guaranteed a minimum of 13 days
off in a 31 day bid month and 12 days off in a 30 day
bid month

d. If a training Event(s) is canceled, an FCTI may be
reassigned to future Events with seven (7) days notice
including training Events occurring on a different
start time(s) or different day(s); or, the affected FCTI
may be required to remain available (on call) on the
same scheduled day(s) for the same number of Events
as originally scheduled for training Events to be
determined.

e. An FCTI may elect to bid or work a maximum of
three (3) Events in a calendar day but may not be
assigned more than two (2) Events in a calendar day.

4. Discuss the establishment of a part-time FCTI position under
the scope of this Agreement as follows. Prior to its

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implementation, the parties will agree on a methodology to
(1) value this provision (2) apply the value to future pay
adjustments and (3) choose part-time FCTIs:

a. The number of the part-time FCTIs within each Part-Time
List shall be determined by the Company.
However, the number of Primary and Secondary Part-Time
FCTIs shall be equivalent provided that FCTIs
eligible for the Primary Part-Time List make
themselves available in sufficient numbers
determined by the Company. If an insufficient
number of FCTIs make themselves available for the
Primary Part-Time List, the Company may increase
the number of Secondary List Part-Time List FCTIs
as necessary to meet the needs of the schedule (but
not to exceed the 25% maximum defined in
paragraph A.4.h below).

b. The Company will establish and maintain a Primary
and Secondary Part-Time List. Part-Time FCTIs who
bypass an assignment will be placed at the last
position in the rotation. Part-Time FCTIs who bypass
assignments on a regular basis may be removed from
their respective List by the Company.

c. The Primary Part-Time List is comprised of voluntary
leave of absence, retired or furloughed FCTIs.

d. The Secondary Part-Time List shall be comprised of
retired, furloughed or disabled mainline US Airways
pilots.

e. Part-Time award sequence (offered on a rotational
basis within each list):

1. Primary Part-Time List
2. IAW Article 7 (see process below)
3. Secondary Part-Time

a. Compensation for part-time FCTI shall be $300 per
Event. No benefits.

b. Part-time scheduling to be limited to 25% of each
Section’s monthly total scheduled Events

5. Eliminate the current hourly bid restrictions
a. Eliminate the 110 hr monthly maximum bid time

b. Eliminate the 100/120 instructional time maximum

6. Modify bid month schedules as follows:

a. January bid month to cover January 1 through
January 30;

b. February bid month to cover January 31 through
March 1;

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c. March bid month to cover March 2 through March
31;

7. Reserve Event (R) An “on call” Event created by an Event
cancellation that has not been rescheduled as another Event
or by the inability of an FCTI to complete his monthly bid
requirement of 32 Events.

8. On Call: The FCTI will be available to report to the work
site within two (2) hours. The on call period ends two (2)
hours prior to the last Event for the Section.

B. Other Contract Changes:

1. Replace Article 4(I) An employee shall not bid Events that
together create more than six (6) consecutive workdays.
Reconcile Article 4(L)(2)(c) . . . more than six (6) consecutive
Events.

2. Reconcile Article 4(M) (“Short Month”) with the new
“Event” system.

3. Modify Article 5, paragraph (2) to permit the use of an FCTI
in areas of instruction that the FCTI is qualified to instruct
(in his current section) until fully qualified provided that the
FCTI’s own training track is not unreasonably extended.

4. FCTI in training will be guaranteed his/her 12/13 days off.

5. Eliminate Article 6(B) (“Start Time Differential”) and
Article 6(C) (“Section Experience Premium”)

6. Eliminate all Premium Pay. All pay at straight time rates.

7. Amend Article 7 as follows:

ARTICLE 7

Additional Events

(A) Additional Events above thirty-two (32) Events in a month
will be paid at straight time rate.

(B) Additional Events shall be distributed among qualified
employees within a section necessitating the additional Events as
equitably as practicable. Out of base additional Events will not be offered
to an employee if the awarding of the Event would necessitate additional
Event pay to cover that employee’s absence. The employee would be
considered as not available for the Event.

(1) In base work:

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(a) Additional Events will be offered to the
employee who is lowest on the
section equalization list at that base.

(b) In the Event there are insufficient available
employees, the Company may then assign
employees, qualified for the requirement, who
are lowest on the section equalization list to
perform such work or may offer the work to an
employee at another base who is lowest on the
section equalization list.

(2) Out of base work (work at a location where no
Instructors are based):

(a) Additional Events will be offered to the
qualified employee who is lowest on the
section’s equalization list, (i.e., all
section Instructors regardless of base.)

(b) In the Event there are insufficient available
employees, the Company may then assign
employees, qualified for the requirement, who
are lowest on the combined section equalization
list to perform such work.

(3) An employee, when available, who is lowest on the
section equalization list and does not work an
available additional Event, shall be charged with the
additional Event missed, for equalization purposes, as
though it had been worked.

(4) The Company may assign qualified employees
finishing a scheduled Event to work an additional
Event when unforeseen conditions exist which require
immediate action.

(5) If an employee is on an authorized leave of absence,
vacation, jury duty, short month etc., he is not eligible
for an additional Event unless it is refused by all other
available employees.

(C) No additional Event shall be worked except by the direction
of the proper supervisory personnel of the Company, except in the case of
emergency when prior authority cannot be obtained.

(D) When operational conditions change which would no longer

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necessitate additional Event awarded, the additional Event may be
cancelled only when there is advance personal notice given to the
affected employee.

(F) Due to the specialized nature of some projects additional
Events required to complete those projects will be made available only to
those employees assigned to those projects, upon notification to the
Union.

(G) Additional Events shall be offered to employees in
chronological order (date and time) as these Events become available.

(H) In the Event a Reserve Instructor becomes available after an
additional Event is awarded; first, he may be assigned to replace an
Instructor on a forced additional Event and second, assigned to replace
Instructors awarded additional Events in reverse order of offering.

(I) Employees completing (an) additional Event(s) through the
provisions of this article may elect to receive this compensation as pay or
deposit the Event(s) into a compensatory time off bank. This election shall
be made at the time the employee files his work report by completing two
(2) work reports, one (1) for pay and one (1) for compensatory time.

(J) It is understood that the compensatory time off bank will be
used only for time off and not for pay. Employees will be permitted to use
compensatory time off from their bank at not than less than one-half (1/2)
Event increments. An employee must request such time at least one (1)
day in advance, however, the Company may approve requests with less
than one (1) day notice at their discretion. Compensatory time off requests
shall be awarded as determined by the Company depending on the needs
of the service. In the Event there are more requests than the Company can
grant, seniority shall govern.

8. Eliminate Article 8 (“Holidays”)

9. Modify Article 9 (“Vacation”) as follows:

a. Accrual of vacation credits based on an 8-hour day

b. 1st through the 11th year of service: 10 days

c. 12th through 17th year of service: 15 days

d. 18th through 22nd years of service: 20 days

e. 23+ years of service: 25 days

10. For moving allowances subsequent to the consolidation of
the PIT and CLT facilities and the relocation of the FCTIs
from PIT to CLT, modify Article 14 (“Moving Expenses”) as
follows:

a. Eliminate Paragraph (E) and add the following
language to Paragraph (B): “The Company shall

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provide reasonable actual expenses for meals and
lodging enroute for the employee and members of
his/her immediate family.”

b. Create a new Paragraph (E) as follows:

“In order to be eligible for a moving allowance, the
employee’s residence prior to the move must be
within 200 miles of the work location from which
he/she is displaced, the employee’s new residence
must be located more than 50 miles from his/her
previous residence and must be located within 200
miles of his/her new work location.”

11. Modify Article 23(H) as follows:

a. New (H)5. Travel on a day before or after a training
Event shall be paid but not credited the greater of
four (4) hours or actual travel time.

b. New (H)6. A FCTI will be paid for travel time on the
day of a training Event and shall be credited for the
Event or Events completed while out-of-base.

c. Training Events requiring travel will be offered on a
rotational basis.

12. Jumpseat for Qualification and Continuing Qualification

a. Domestic: Each calendar day shall be credited as one
(1) Event, inclusive of any required deadhead;
however, any time in excess of four (4) hours from
the report time as defined in paragraph (H)4 shall be
paid at actual time but not credited as an additional
Event.

b. International: Each calendar day shall be credited as
two (2) Events, inclusive of any required deadhead.

13. The parties will discuss performing SPV/Type Orals based
upon valuation given for cost savings in comparison to
current practice. Valuation will be given as a pay rate
increase on the following January.

14. Within sixty (60) days of emergence from Chapter 11 the
Company agrees to meet and discuss the feasibility of
offering an enhanced DB plan program with the
understanding that such program must be cost neutral to the
Company.

Revisions to Pay Rates • Reduce the pay rates in effect as of January 1, 2004 by 5.0%.
Pay reduction to be effective on the first day of the first full pay
period following ratification.

• Replace the annual pay increases currently scheduled for January
1st of each year through January 1, 2011, with the following:

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2006 — 1.5%
2007 — 1.5%
2008 — 1.5%
2009 — 3%
2010 — 3%
2011 — 3%
• Eliminate status quo increases beyond amendable date
• Event Rate = Monthly Salary divided by thirty-two (32)
• Hourly rate = Event Rate divided by four (4)

Post Retirement Pre-65 Retiree Medical and Dental, Retirement Pre 1/1/05:
Medical
• Pre-65 retirees who are participating in retiree medical coverage
on 12/31/04 will be grandfathered on the following terms:
— Current plan options (same as actives)
— Implement Defined Dollar Benefit (DDB) cap
— Set DDB cap at $4,600 net cost basis
— Base all pre-65 costs and contributions on true pre-65 costs.
• Grandfathered pre-65 retirees will cease to participate in retiree
medical coverage upon reaching age 65.
• Grandfathered pre-65 retirees will cease to participate in retiree
dental coverage as of midnight on 12/31/04.

Pre-65 Medical and Dental, Retirement On or After 1/1/05:

• Employees retiring before age 65 who elect at the time of
retirement to participate in retiree medical benefits may use
accrued sick pay up to a maximum of 150 days to fund a portion
of the monthly pre-65 retiree medical premium (access plan).
• For purposes of funding monthly pre-65 retiree medical
premiums, a day of sick pay will be valued at $140.00. Four
days of accrued sick pay ($564.00) will be credited towards the
monthly pre-65 retiree medical premium until the 150 days of
sick pay is exhausted.
• Should the monthly pre-65 retiree medical premium exceed the
available credit, the retiree will be responsible for timely
payment of the premium in excess of the credit.
• In the event the retiree at the time of retirement declines pre-65
retiree medical coverage, the retiree will be paid $114.80 for
each day of accrued sick leave up to a maximum of 150 days,
such payment to be made in equal monthly installments over a

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twelve-month period. The retiree will not thereafter be eligible
to participate in pre-65 retiree medical benefits.
• Pre-65 retirees will cease to participate in retiree medical
coverage upon reaching age 65.
• Pre-65 retirees are not eligible for retiree dental coverage.

Age 65 and Post-65 Retiree Medical and Dental:

• As of midnight on 12/31/04 eliminate medical and dental
coverage for age 65 retirees.
• Age 65 retirees participating in retiree medical coverage on
12/31/04 (closed group) will be eligible to continue prescription
drug coverage through 2005 (coincident with new Medicare drug
benefit). Subsidy caps and retiree contributions for 2005 will be
reset to reflect prescription drug coverage only.

Indemnification:

The Company agrees to indemnify TWU from any and all liability,
loss, damages, fines, penalties, excise taxes and costs, including
expenses and reasonable attorneys’ fees, which TWU sustains arising
out of or in connection with these Company-proposed changes to
Post-Retirement Medical for employees who retired prior to the
effective date of this Agreement. The Association agrees that it will
not settle a matter covered by this indemnity at the Company’s cost
without the Company’s approval, and that the Association will
provide assistance as reasonably required or requested by the
Company in any matter for which such indemnity is being provided.

Change in Control The Change in Control provisions of the Term Sheet attached to and
incorporated into the August 2002 Restructuring Agreement do not
apply with respect to any action by the Company to achieve, or
pursuant to, a confirmed plan of reorganization through Chapter 11
bankruptcy.

Profit Sharing The Company will offer a profit-sharing program for flight crew
training instructors subject to the following conditions:

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• Local 547’s agreement to eliminate the current
profit-sharing provisions of the February 2003
Restructuring Agreement;
• Approval by the US Airways Group, Inc., Board
of Directors; and
• Approval as part of the Company’s confirmed
plan of reorganization in bankruptcy.

Assuming satisfaction of the conditions set forth above, the profit-sharing
plan will be based on the following terms:

2. Local 547’s portion of the profit-sharing pool will be
proportionate to Local 547’s share of the overall cost
savings achieved through the Transformation Plan.

3. An individual FCTI employee’s profit-sharing payment
will be based on such employee’s gross W-2 earnings
(prior to any elective deferrals) for the prior calendar year
divided by the gross W-2 earnings (prior to any elective
deferrals) for all eligible FCTI employees for the prior
calendar year. At Local 547’s option, “eligible FCTI
employee” may include retired or furloughed FCTI
employees who had gross W-2 earnings (prior to any
elective deferrals) for the prior calendar year, subject to
applicable law.

Negotiation Fees and The Company will pay the reasonable fees and expenses incurred by
Expenses: the Association in connection with the review, design, negotiation,
approval, ratification and implementation of the Transformation
Agreement, including the customary fees and expenses of outside
legal, investment banking and other advisors, offset by any payments
made to the Association during the Transformation Negotiations for
such purposes. Such payment shall be made promptly following the
effective date of this Transformation Agreement as to amounts
accrued as of that date; thereafter, payments shall be made promptly

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as to amounts accrued following the effective date. The obligation
to make such payment shall give rise to an administrative claim in
any bankruptcy of the Company.

DCRP/401(k) Upon ratification of this proposal and contingent on approval by the
bankruptcy court, the Company will make the affected TWU FCTI
employees whole for pre-petition contributions to the DCRP/401k.
There will be no change as a result of this agreement to the current
Defined Contribution Retirement Plan or the 401(k) Plan.

Cost Saving Target It is the intention of both parties that the projected cost savings
achieved by the terms of this Term Sheet meet the savings targets
established by the Company.

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US AIRWAYSATTACHMENT A

September 24, 2004

Mr. William E. Gray
President, Transport Workers Union — Local 547 2801 Beaver Grade Road Moon Township, PA 15108

Re: Voluntary Leaves in Lieu of Furloughs

Dear Bill:

To reduce involuntary furloughs as a result of the current concessionary negotiations the Company has agreed to offer Voluntary Leaves in Lieu of Furloughs (VLLFs). Due to the unique circumstances that have required the furloughs, the following provisions are being offered on a non-precedent, non-referral basis. While it is anticipated that VLLFs will be offered for the duration of time that employees remain on furlough, the Company reserves the right to discontinue the VLLFs at any time by providing advance written notice to the TWU and to those employees on VLLF.

1. The Company will offer VLLFs to employees who are active as of September 30, 2004, and who will not be involuntarily furloughed so that employees who would otherwise be involuntarily furloughed may remain active, i.e. on a one-for-one basis. VLLFs will be offered for a period of thirteen (13) months commencing November 1, 2004 and ending on December 31, 2005.

2. VLLFs will be offered in seniority order as staffing levels permit. Employees who desire a VLLF must submit a written request in advance.

3. Employees on VLLFs are considered to be inactive for the duration of the VLLF

4. Employees on VLLF will have their current medical, dental and life insurance benefits continued through January 31, 2005 at the current contribution rates. Thereafter, employees on VLLF will have access to coverage through COBRA.

5. Employees on VLLF will receive on-line pass privileges (other than companion pass privileges) in accordance with Company policy for the duration of the VLLF. Jumpseat travel privileges will not be extended to employees on VLLF.

6. Employees on VLLF will continue to accrue flight crew training instructor classification seniority as defined in Article 11(A) and seniority for pay and vacation purposes as defined in Article 11(B) for the duration of the VLLF.

7. An employee on VLLF may retire from VLLF status if otherwise eligible to do so.

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8. Employees on VLLF may opt to bank any accrued but unused vacation or may have it paid out in successive pay periods.

9. Employees electing a VLLF will not be entitled to furlough pay.

10. Based on projected staffing requirements, the Company may recall an employee on VLLF with a minimum of fourteen (14) days notice. Notice shall be to the address of record. Failure on the part of the employee on VLLF to respond to the recall notice within the 14-day notice period will constitute a voluntary resignation, and the employee on VLLF will be removed from the seniority list.

11. If, as a result of an employee returning from a VLLF, a junior employee no longer has the seniority to hold a position, then such junior employee may be placed on furlough until a vacancy becomes available. The TWU agrees not to file any grievance challenging the Company’s right to furlough when such furloughs are triggered solely by the return to active status of employees on VLLF.

12. Employees on VLLF shall provide the Company with a current address and telephone contact number at all times during the furlough.

13. The Company will not contest any Unemployment Compensation claim filed by an employee who elects a Voluntary Furlough pursuant to this Letter.

Please sign below to indicate your acceptance of the foregoing terms and conditions.

Very Truly Yours,

US Airways, Inc.

___________________________________________ By Anthony J. Bralich Jr. Managing Director, Labor Relations — Flight

cc: P. Morell

Accepted and agreed

Transport Workers Union

___________________________________________ By William E. Gray President, TWU Local 547

[2] All capitalized terms not defined herein shall be defined as in the Motion.

[3] To the extent required, all findings of fact shall be treated as conclusions of law and all conclusions of law shall be treated as findings of fact.

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