Total Savings: $26.0 million

Annual Savings*

Productivity

$10.2

Modify Rigs and VM

• Trip rig of 1:4

• Duty rig of 1:2.5 for day (0600-2159) and 1:2.25 for night (2200-0559)

• Variable minimum day of 4.0 with floor of 3.0 and ceiling of 5.0

$1.6

Replace Primary, SAP, Secondary Lines System with Pref Bid; modify AIL so that flight attendants can pick up higher-time trips on same days as original trip or to pick up time on scheduled days off.

$4.2

Modify Reserve System

•       The Company will assign trips to reserves by first considering days of availability, legalities and qualifications.  If the Company determines that more than one flight attendant is eligible for assignment based on these factors, the trip will be assigned to the flight attendant with the least number of credited hours in the month.
  

•       Reserves may not pass trip assignments.
  

•       The same criteria will be used for assignment of flight attendants to OPR duty, except that seniority will govern if all other factors are equal.

$1.7

Claiming Sick Leave

•       A flight attendant’s sick claim, when added to his/her previous and subsequent flying and other credited time for that month, may not exceed the flight attendant’s monthly guarantee (Section 8.E.1 and 8.E.2).

$1.5

Rescheduling

•      The Company may reschedule flight attendants prior to report.
  

•      The Company may reschedule a flight attendant after report even if there is an available unassigned reserve in domicile (eliminate 90 minute rule in Section 9.G.1.a(2)).
  

•       The window for advising a rescheduled flight attendant of the new duty assignment will be 4 hours for domestic flying and 6 hours for international flying after the flight attendant has been notified of the rescheduling (Section 9.G.1.a(3) and 9.G.2.a).
  

•        The window for returning a rescheduled flight attendant to domicile will be 12 hours for domestic flying and 24 hours for international flying (Section 9.G.4).

Annual*

Benefits

$6.7

See attached

War/Terrorism Contingency

•       In the event that the U.S. invades Iraq or another terrorist attack provokes a confrontation, there will be an immediate 5% pay deferral implemented for all employees for up to 18 months.  The deferral will begin to be repaid to employees starting in the 19th month, and will continue to be repaid in 18 monthly installments.  In the event the Company reports a pre-tax profit in any quarter during which the pay deferral is in effect, the deferral will immediately stop and repayment will begin in the next month and be repaid in monthly installments equal to the length of time the deferral was in place  (e.g., pay deferral in place for 3 months, the Company reports a pre-tax profit, the repayment will occur over the next 3 months).

*Annual figures represent average annual savings through 2008.

Returns

Scope and Job Security

•       The Company will maintain a minimum fleet size of 279 Total Mainline Aircraft (inclusive of maintenance and spares), subject to a Force Majeure clause that includes acts of terrorism.

Mid Atlantic Airways (MDA)

•       The Company agrees to operate MDA as a separate division within mainline - US Airways, Inc.

•       Wages, benefits and work rules will match the AA Eagle flight attendants agreement.

Enhanced Profit Sharing

•       Enhanced profit sharing returns in exchange for participation in $200 million "Modified Restructuring Program" as follows:

•       Any year in which pre-tax profits exceed 7%, 50% of such profits in excess of 7% will be distributed to participating employees.

-          Capped at $100 million

-          Program ceases at end of loan period

-          50% paid as lump sum payments

-          50% paid to defined benefit pension plan above any minimum contribution requirements, but not in excess of maximum tax deductible contributions, under ERISA.

• Pre-tax defined as excluding extraordinary and one-time adjustments.