US Airways Group, Inc. Reports Second Quarter 2008 Results

Unprecedented Fuel Prices Add $390 Million in Additional Costs
versus the Second Quarter 2007;

Liquidity Position Remains Strong at $2.8 Billion in Total Cash
and Investments at Quarter's End

Highlights of US Airways Group, Inc.'s (the Company's) second
quarter 2008 results:

-- The Company reported a second quarter 2008 net loss of $567
million, or $6.16 per share, which included net special items
of $466 million. The largest special item was a $640 million
non-cash impairment charge related to the write down of
goodwill and spare parts.

-- Excluding special items, the Company reported a net loss of
$101 million or $1.11 per share versus a net profit of $261
million, or $2.74 per diluted share for the same period last
year. The decline in earnings was driven by significantly
higher oil prices. Had fuel prices remained constant versus
the second quarter 2007, US Airways' fuel expenses including
realized gains on fuel hedging instruments would have been
approximately $390 million lower.

-- The Company ended the second quarter with $2.8 billion in
total cash and investments, of which $2.3 billion was
unrestricted.

-- The Company has taken aggressive steps to mitigate the impact
of record high fuel costs through reductions in capacity and
other cost saving initiatives. The Company plans further
fourth quarter and 2009 capacity reductions of an additional
one to two percent, bringing its total capacity reductions to
four to six percent for both the fourth quarter 2008 and
full-year 2009.

-- The Company's a la carte pricing strategy is performing well.
Based on results thus far, the Company anticipates these
programs will generate approximately $400 to $500 million
annually, up $100 million from initial estimates.

-- The Company's operational improvement plan continued to
produce industry-leading on-time performance results with six
consecutive months of top-three finishes among the ten largest
U.S. airlines in on-time performance as measured by the
Department of Transportation (DOT).
TEMPE, Ariz.--(Business Wire)--
US Airways Group, Inc. (NYSE: LCC) today reported a net loss for
its second quarter 2008 of $567 million, or $6.16 per share, compared
to a net profit of $263 million, or $2.77 per diluted share for the
same period last year. Excluding net special items of $466 million,
the Company reported a net loss of $101 million, or $1.11 per share
for its second quarter 2008. This compares to a net profit excluding
special items of $261 million, or $2.74 per diluted share for the
second quarter of 2007, which included $2 million of net special
items. See the accompanying notes in the Financial Tables section of
this press release for a reconciliation of Generally Accepted
Accounting Principles (GAAP) financial information to non-GAAP
financial information.

US Airways Chairman and CEO Doug Parker said, "Our second quarter
results reflect the unprecedented rise in fuel prices that are
impacting our industry. We are working diligently to reduce capacity
and costs and execute on the new revenue programs recently announced
by US Airways and other airlines. Despite our disappointing results,
we are pleased with the early performance of our a la carte
initiatives as we are seeing strong early sales in our Choice Seats
program and encouraging revenue trends from our new first and second
checked bag policies. We are also encouraged by our industry's
response to the current economic environment.

"On the liquidity front, we ended the quarter with a strong total
cash and investments balance of $2.8 billion. While pleased with this
position relative to our peers, in light of the industry environment,
we are working productively with all of our stakeholders to further
enhance liquidity.

"Last but certainly not least, US Airways' operational turnaround
has been nothing short of spectacular. Following six consecutive
months of top-three finishes in on-time performance among the ten
largest U.S. airlines, our team of 35,000 employees is to be
congratulated. As a result of their hard work, US Airways is leading
the major airlines in on-time performance in 2008," continued Parker.

Revenue and Cost Comparisons

Mainline passenger revenue per available seat mile (PRASM) in the
second quarter was 11.42 cents, up 1.6 percent over the same period
last year. Express PRASM was 20.60 cents, down 0.6 percent over the
second quarter 2007. Total mainline and Express PRASM for US Airways
Group was 12.96 cents, which was up 2.0 percent over the second
quarter 2007 on a 0.9 percent increase in total available seat miles
(ASMs).

Mainline cost per available seat mile (CASM) was 15.33 cents, up
35.2 percent versus the same period last year on a decrease in
mainline capacity of 0.7 percent versus the second quarter of 2007.
The non-cash goodwill impairment contributed 3.21 cents, or 80 percent
of the period-over-period CASM increase. Additionally, fuel expense
continues to be a significant contributing factor to the CASM increase
as the average mainline fuel price per gallon excluding realized
gains/losses on fuel hedging instruments increased 69.2 percent
year-over-year. Excluding fuel, unrealized and realized gains/losses
on fuel hedging instruments, and net special items, mainline CASM was
8.32 cents, up 4.0 percent from the same period last year.

Chief Financial Officer Derek Kerr stated, "Although our second
quarter results reflect the staggering increase in the price of fuel,
our fuel hedging strategy resulted in significant realized gains of
$192 million during the quarter. Had the average price per gallon
remained constant from the second quarter 2007, our total fuel
expense, including realized gains/losses on fuel hedging instruments,
would have been approximately $390 million lower. In addition, during
the second quarter we also saw an increase in non-fuel unit costs that
was primarily driven by higher engine maintenance expense as well as a
reduction in mainline capacity of 0.7 percent."

Liquidity

As of June 30, 2008, the Company had $2.8 billion in total cash
and investments, of which $2.3 billion was unrestricted.

As previously announced, in order to preserve liquidity, US
Airways has reduced its forecasted capital expenditure plan for 2008
by approximately $90 million since the beginning of the year. This
brings the total 2008 estimated non-aircraft capital expenditures to
$225 million.

Capacity Reductions

In response to the continued and unprecedented surge in oil
prices, the airline will reduce its fourth quarter and 2009 capacity
by an additional one to two percent on a year-over-year basis. The
airline had previously planned on a three to five percent decrease in
system capacity for both its fourth quarter 2008 and full-year 2009.

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*T
Available Seat Miles Year-Over-Year Change
------------------------------------------------------
3Q08 4Q08 FY08 FY09
-------------- ------------- ------------- -----------
Domestic -1% to -3% -6% to -8% -3% to -5% -8% to -10%
International -0% to -2% -1% to -3% +2% to +4% +9% to +11%
-------------- ------------- ------------- -----------
Total Mainline -1% to -3% -5% to -7% -1% to -3% -4% to -6%
Express +8% to +10% -1% to -3% +4% to +6% -5% to -7%
-------------- ------------- ------------- -----------
Total System -1% to +1% -4% to -6% -0% to -2% -4% to -6%
*T

Second Quarter Special Items

During its second quarter, the Company recognized $466 million of
net special items. These special items included a non-cash accounting
charge of $622 million to write off all of the goodwill created by the
merger of US Airways Group, Inc. and America West Holdings Corporation
in September 2005, a non-cash accounting charge of $18 million related
to the decline in fair market value of certain spare parts associated
with the Company's Boeing 737 aircraft, $10 million in merger related
transition costs, and a $6 million charge for lease return costs and
lease cancellation penalties related to certain Airbus aircraft as a
result of the fleet reductions announced in June 2008. These expenses
were offset by a $190 million non-cash unrealized net gain associated
with the change in fair value of the Company's outstanding fuel hedge
contracts.

Notable Accomplishments

People

-- Signed contracts with the airline's fleet service, maintenance
training instructors, and mechanic-and-related employees
represented by the International Association of Machinists and
Aerospace Workers (IAM). US Airways now has ratified contracts
with all 11,000 of its IAM-represented employees.

-- Distributed approximately $10 million over the first six
months of 2008 to the airline's 35,000 employees through its
Triple Play program, which measures US Airways' operational
performance against the 10 largest U.S. airlines.

Finance

-- Announced several significant changes to the airline's
business model including the fourth quarter 2008 and full-year
2009 domestic mainline capacity reductions of six to eight
percent and eight to ten percent, respectively.

-- Implemented an a la carte pricing strategy, which was
originally expected to generate approximately $300 to $400
million annually in incremental revenue; the Company recently
revised its estimates by $100 million based on positive
results thus far. The Company now anticipates it will generate
$400 to $500 million in incremental revenue on an annualized
basis.

Marketing

-- Introduced upgraded and enhanced Envoy (trans-Atlantic premium
class) product with more personalized in-flight service,
better-quality menus and greater choice.

-- Successfully began offering Choice Seats, where customers can
reserve window and aisle seat assignments in the first few
rows in the main cabin during web check-in for a small fee.

-- Signed new codeshare agreements with Swiss International Air
Lines and Air China. The new agreements allow for more
convenient connectivity options for US Airways customers to
both Europe and Asia.

-- Introduced redesigned and updated flight attendant and airport
customer service employee uniforms.

Operations

-- For six consecutive months, US Airways has ranked as one of
the top three airlines in on-time performance (among the 10
largest U.S. carriers). This includes three number one
finishes in December, January and March.

-- Broke ground on a new, state-of-the-art, environmentally
friendly, 58,000 square foot ground service equipment facility
at Philadelphia International Airport.

Analyst Conference Call/Webcast Details

US Airways will conduct a live audio webcast of its earnings call
today at 12:30 p.m. EDT, which will be available to the public on a
listen-only basis at www.usairways.com under the About US // Investor
Relations tab. An archive of the call/webcast will be available in the
Public/Investor Relations portion of the Web site through Aug. 22,
2008.

The airline will also update its investor relations guidance on
its Web site (www.usairways.com). Information that will be updated
includes cost per available seat mile (CASM) excluding fuel and
transition expenses, fuel prices and hedging positions, other
revenues, estimated interest expense/income and merger related
transition expense guidance. The investor relations update page also
includes the airline's capacity, fleet plan, and estimated capital
spending for 2008.

About US Airways

US Airways is the fifth largest domestic airline employing more
than 35,000 aviation professionals worldwide. US Airways, US Airways
Shuttle and US Airways Express operate approximately 3,500 flights per
day and serve more than 230 communities in the U.S., Canada, Europe,
the Caribbean and Latin America. US Airways is a member of the Star
Alliance network, which offers our customers 18,000 daily flights to
965 destinations in 162 countries worldwide. This press release and
additional information on US Airways can be found at
www.usairways.com. (LCCF)

Forward Looking Statements

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, expected fuel costs, revenue and
pricing environment, and expected financial performance of US Airways
Group (the "Company"). Such statements include, but are not limited
to, statements about the benefits of the business combination
transaction involving America West Holdings Corporation and US Airways
Group, including future financial and operating results, the Company's
plans, objectives, expectations and intentions, and other statements
that are not historical facts. These 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 impact of high fuel costs,
significant disruptions in fuel supply and further significant
increases to fuel prices; the impact of future significant operating
losses; the Company's high level of fixed obligations (including
compliance with financial covenants related to those obligations) and
the ability of the Company to obtain and maintain any necessary
financing for operations and other purposes; the impact of changes in
the Company's business model; the ability of the Company to maintain
adequate liquidity; changes in prevailing interest rates and increased
costs of financing; the impact of economic conditions; the ability of
the Company to obtain and maintain commercially reasonable terms with
vendors and service providers and reliance on those vendors and
service providers; reliance on third party service providers and the
impact of any failure or disruption by these providers; labor costs,
relations with unionized employees generally and the impact and
outcome of the labor negotiations; reliance on automated systems and
the impact of any failure or disruption of these systems; the impact
of industry consolidation; competitive practices in the industry,
including significant fare restructuring activities, capacity
reductions or other restructuring or consolidation activities by major
airlines; the ability to attract and retain qualified personnel; the
impact of global instability including the potential impact of current
and future hostilities, terrorist attacks, infectious disease
outbreaks or other global events; security-related and insurance
costs; government legislation and regulation, including environmental
regulation; the Company's ability to obtain and maintain adequate
facilities and infrastructure to operate and grow the Company's
network; costs of ongoing data security compliance requirements and
the impact of any data security breach; interruptions or disruptions
in service at one or more of the Company's hub airports; the impact of
any accident involving the Company's aircraft; delays in scheduled
aircraft deliveries or other loss of anticipated fleet capacity;
weather conditions; the cyclical nature of the airline industry; the
impact of foreign currency exchange rate fluctuations; the ability to
use pre-merger NOLs and certain other tax attributes; ability to
integrate management, operations and labor groups; the ability to
maintain contracts critical to the Company's operations; the ability
of the Company to attract and retain customers; and other risks and
uncertainties listed from time to time in the Company's 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" in the Company's Report
on Form 10-Q for the quarter ended March 31, 2008 and in the Company's
filings with the SEC, which are available at www.usairways.com.

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*T
US Airways Group, Inc.
Condensed Consolidated Statements of Operations
(in millions, except share and per share amounts)
(unaudited)

3 Months Ended 3 Months Ended Percent
June 30, 2008 June 30, 2007 Change
-------------- -------------- -------

Operating revenues:
Mainline passenger $ 2,214 $ 2,194 0.9
Express passenger 802 737 8.8
Cargo 38 34 12.1
Other 203 190 6.7
-------------- --------------
Total operating revenues 3,257 3,155 3.2
-------------- --------------

Operating expenses:
Aircraft fuel and related
taxes 1,086 658 65.1
Loss (gain) on fuel hedging
instruments, net:
Realized (192) 2 nm
Unrealized (190) (25) nm
Salaries and related costs 571 576 (0.9)
Express expenses:
Fuel 340 187 81.6
Other 482 465 3.6
Aircraft rent 183 180 1.5
Aircraft maintenance 200 170 17.9
Other rent and landing fees 142 139 2.2
Selling expenses 116 125 (7.1)
Special items, net 34 27 22.8
Depreciation and
amortization 57 46 22.4
Goodwill impairment 622 - nm
Other 342 316 9.0
-------------- --------------
Total operating expenses 3,793 2,866 32.4
-------------- --------------

Operating income (loss) (536) 289 nm
-------------- --------------

Nonoperating income (expense):
Interest income 21 48 (56.2)
Interest expense, net (56) (69) (18.4)
Other, net 4 3 60.8
-------------- --------------
Total nonoperating expense,
net (31) (18) 69.0
-------------- --------------

Income (loss) before income
taxes (567) 271 nm

Income tax provision - 8 nm
-------------- --------------

Net income (loss) $ (567) $ 263 nm
============== ==============

Earnings (loss) per share:
Basic $ (6.16) $ 2.88
============== ==============
Diluted $ (6.16) $ 2.77
============== ==============

Shares used for computation (in
thousands):
Basic 92,137 91,477
============== ==============
Diluted 92,137 95,613
============== ==============

6 Months Ended 6 Months Ended Percent
June 30, 2008 June 30, 2007 Change
-------------- -------------- -------

Operating revenues:
Mainline passenger $ 4,167 $ 4,100 1.6
Express passenger 1,459 1,346 8.4
Cargo 74 70 5.4
Other 396 371 6.9
-------------- --------------
Total operating revenues 6,096 5,887 3.6
-------------- --------------

Operating expenses:
Aircraft fuel and related
taxes 1,908 1,208 58.0
Loss (gain) on fuel hedging
instruments, net:
Realized (274) 37 nm
Unrealized (226) (115) 96.2
Salaries and related costs 1,134 1,104 2.7
Express expenses:
Fuel 589 340 73.2
Other 967 932 3.7
Aircraft rent 361 360 0.3
Aircraft maintenance 413 335 23.2
Other rent and landing fees 287 267 7.5
Selling expenses 220 231 (4.7)
Special items, net 59 66 (10.7)
Depreciation and
amortization 107 90 18.1
Goodwill impairment 622 - nm
Other 662 627 5.7
-------------- --------------
Total operating expenses 6,829 5,482 24.6
-------------- --------------

Operating income (loss) (733) 405 nm
-------------- --------------

Nonoperating income (expense):
Interest income 50 88 (43.6)
Interest expense, net (116) (140) (16.9)
Other, net (5) (13) (66.9)
-------------- --------------
Total nonoperating expense,
net (71) (65) 9.4
-------------- --------------

Income (loss) before income
taxes (804) 340 nm

Income tax provision - 11 nm
-------------- --------------

Net income (loss) $ (804) $ 329 nm
============== ==============

Earnings (loss) per share:
Basic $ (8.73) $ 3.60
============== ==============
Diluted $ (8.73) $ 3.46
============== ==============

Shares used for computation (in
thousands):
Basic 92,080 91,420
============== ==============
Diluted 92,080 95,918
============== ==============
*T

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*T

US Airways Group, Inc.
Operating Statistics

3 Months Ended 3 Months Ended Percent
June 30, 2008 June 30, 2007 Change
-------------- -------------- -------

Mainline
-----------------------------
Revenue passenger miles
(millions) 16,193 16,294 (0.6)
Available seat miles (ASM)
(millions) 19,387 19,523 (0.7)
Passenger load factor
(percent) 83.5 83.5 - pts
Yield (cents) 13.67 13.47 1.5
Passenger revenue per ASM
(cents) 11.42 11.24 1.6

Passenger enplanements
(thousands) 14,410 15,375 (6.3)
Departures (thousands) 127.2 134.3 (5.3)
Aircraft at end of period 357 358 (0.3)

Block hours 337,257 344,736 (2.2)
Average stage length (miles) 971 930 4.5
Average passenger journey
(miles) 1,584 1,494 6.0
Fuel consumption (gallons in
millions) 299.1 306.6 (2.4)
Average aircraft fuel price
including related taxes
(dollars per gallon) 3.63 2.15 69.2
Average aircraft fuel price
including related taxes and
realized loss (gain) on fuel
hedging instruments, net
(dollars per gallon) 2.99 2.15 38.9
Full-time equivalent
employees at end of period 34,359 35,532 (3.3)

Operating cost per ASM
(cents) 15.33 11.34 35.2
Operating cost per ASM
excluding special items
(cents) 12.92 11.37 13.6
Operating cost per ASM
excluding special items,
fuel and realized gain
(loss) on fuel hedging
instruments, net (cents) 8.32 8.00 4.0

Express*
-----------------------------
Revenue passenger miles
(millions) 2,906 2,740 6.1
Available seat miles
(millions) 3,893 3,558 9.4
Passenger load factor
(percent) 74.7 77.0 (2.3) pts
Yield (cents) 27.59 26.90 2.5
Passenger revenue per ASM
(cents) 20.60 20.72 (0.6)

Passenger enplanements
(thousands) 7,071 6,857 3.1
Aircraft at end of period 295 281 5.0
Fuel consumption (gallons in
millions) 91.3 86.1 6.0
Average aircraft fuel price
including related taxes
(dollars per gallon) 3.72 2.17 71.3

Operating cost per ASM
(cents) 21.12 18.34 15.1
Operating cost per ASM
excluding fuel, net (cents) 12.39 13.08 (5.3)

TOTAL - Mainline & Express
-----------------------------
Revenue passenger miles
(millions) 19,099 19,034 0.3
Available seat miles
(millions) 23,280 23,081 0.9
Passenger load factor
(percent) 82.0 82.5 (0.5) pts
Yield (cents) 15.79 15.40 2.5
Passenger revenue per ASM
(cents) 12.96 12.70 2.0
Total revenue per ASM (cents) 13.99 13.67 2.3
Passenger enplanements
(thousands) 21,481 22,232 (3.4)
Aircraft at end of period 652 639 2.0
Fuel consumption (gallons in
millions) 390.4 392.7 (0.6)
Average aircraft fuel price
including related taxes
(dollars per gallon) 3.65 2.15 69.7
Operating cost per ASM
(cents) 16.29 12.42 31.2

6 Months Ended 6 Months Ended Percent
June 30, 2008 June 30, 2007 Change
-------------- -------------- -------

Mainline
-----------------------------
Revenue passenger miles
(millions) 30,682 30,712 (0.1)
Available seat miles (ASM)
(millions) 37,721 38,079 (0.9)
Passenger load factor
(percent) 81.3 80.7 0.6 pts
Yield (cents) 13.58 13.35 1.7
Passenger revenue per ASM
(cents) 11.05 10.77 2.6

Passenger enplanements
(thousands) 27,946 29,355 (4.8)
Departures (thousands) 253.0 266.0 (4.9)
Aircraft at end of period 357 358 (0.3)

Block hours 664,587 679,693 (2.2)
Average stage length (miles) 954 921 3.6
Average passenger journey
(miles) 1,552 1,478 4.9
Fuel consumption (gallons in
millions) 584.6 598.5 (2.3)
Average aircraft fuel price
including related taxes
(dollars per gallon) 3.26 2.02 61.8
Average aircraft fuel price
including related taxes and
realized loss (gain) on fuel
hedging instruments, net
(dollars per gallon) 2.80 2.08 34.4
Full-time equivalent
employees at end of period 34,359 35,532 (3.3)

Operating cost per ASM
(cents) 13.98 11.06 26.5
Operating cost per ASM
excluding special items
(cents) 12.77 11.21 14.0
Operating cost per ASM
excluding special items,
fuel and realized gain
(loss) on fuel hedging
instruments, net (cents) 8.44 7.94 6.3

Express*
-----------------------------
Revenue passenger miles
(millions) 5,391 5,123 5.2
Available seat miles
(millions) 7,492 7,006 6.9
Passenger load factor
(percent) 72.0 73.1 (1.1) pts
Yield (cents) 27.07 26.28 3.0
Passenger revenue per ASM
(cents) 19.48 19.22 1.3

Passenger enplanements
(thousands) 13,266 12,812 3.5
Aircraft at end of period 295 281 5.0
Fuel consumption (gallons in
millions) 177.0 170.3 3.9
Average aircraft fuel price
including related taxes
(dollars per gallon) 3.33 2.00 66.4

Operating cost per ASM
(cents) 20.77 18.16 14.3
Operating cost per ASM
excluding fuel, net (cents) 12.91 13.30 (3.0)

TOTAL - Mainline & Express
-----------------------------
Revenue passenger miles
(millions) 36,073 35,835 0.7
Available seat miles
(millions) 45,213 45,085 0.3
Passenger load factor
(percent) 79.8 79.5 0.3 pts
Yield (cents) 15.60 15.20 2.6
Passenger revenue per ASM
(cents) 12.44 12.08 3.0
Total revenue per ASM (cents) 13.48 13.06 3.3
Passenger enplanements
(thousands) 41,212 42,167 (2.3)
Aircraft at end of period 652 639 2.0
Fuel consumption (gallons in
millions) 761.6 768.8 (0.9)
Average aircraft fuel price
including related taxes
(dollars per gallon) 3.28 2.01 62.8
Operating cost per ASM
(cents) 15.11 12.16 24.2

* Express includes US Airways Group's wholly owned regional airline
subsidiaries, Piedmont Airlines and PSA Airlines, as well as
operating and financial results from capacity purchase agreements
with Mesa Airlines, Chautauqua Airlines, Air Wisconsin Airlines and
Republic Airlines.
*T

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Reconciliation of GAAP Financial Information to Non-GAAP Financial
Information

US Airways Group, Inc. (the "Company") is providing disclosure of the
reconciliation of reported non-GAAP financial measures to their
comparable financial measures on a GAAP basis. The Company believes
that the non-GAAP financial measures provide investors the ability to
measure financial performance excluding special items, which is more
indicative of the Company's ongoing performance and is more
comparable to measures reported by other major airlines. The Company
believes that the presentation of mainline and Express CASM excluding
fuel and gain or loss on fuel hedging instruments is useful to
investors as both the cost and availability of fuel are subject to
many economic and political factors beyond the Company's control.

3 Months Ended 3 Months Ended
June 30, 2008 June 30, 2007
-------------- ---------------
(in millions, except share and
per share amounts)

Reconciliation of Net Income (loss)
Excluding Special Items for US
Airways Group, Inc.
-------------------------------------

Net income (loss) as reported $ (567) $ 263

Special items:
Unrealized gain on fuel hedging
instruments, net (1) (190) (25)
Special items, net (2) 34 27
Goodwill impairment (3) 622 -
Other operating special items, net
(4) - (9)
Nonoperating special items, net
(5) - -
Non-cash tax provision from
utilization of pre-acquisition
NOL (6) - 5
------------- -------------

Net income (loss) as adjusted for
special items $ (101) $ 261
============= =============

Shares used for computation (in
thousands):
Basic 92,137 91,477
============= =============
Diluted (7) 92,137 95,613
============= =============

Earnings (loss) per share as adjusted
for special items:
Basic $ (1.11) $ 2.85
============= =============
Diluted $ (1.11) $ 2.74
============= =============

3 Months Ended 3 Months Ended
June 30, 2008 June 30, 2007
-------------- ---------------

Reconciliation of Operating Cost per
ASM Excluding Special Items, Fuel,
Realized Gain (Loss) on Fuel Hedging
Instruments, Net - Mainline only
-------------------------------------

US Airways Group, Inc.
-----------------------------------
(in millions)
Total operating expenses $ 3,793 $ 2,866
Less Express expenses:
Fuel (340) (187)
Other (482) (465)
------------- -------------
Total mainline operating expenses 2,971 2,214

Special items:
Unrealized gain on fuel hedging
instruments, net (1) 190 25
Special items, net (2) (34) (27)
Goodwill impairment (3) (622) -
Other operating special items, net
(4) - 9
------------- -------------
Mainline operating expenses,
excluding special items 2,505 2,221

Aircraft fuel and related taxes (1,086) (658)
Realized gain (loss) on fuel hedging
instruments, net 192 (2)
------------- -------------
Mainline operating expenses,
excluding special items, fuel and
realized gain (loss) on fuel
hedging instruments, net $ 1,611 $ 1,561
============= =============

(in cents)
Mainline operating expenses per ASM 15.33 11.34

Special items per ASM
Unrealized gain on fuel hedging
instruments, net (1) 0.98 0.13
Special items, net (2) (0.17) (0.14)
Goodwill impairment (3) (3.21) -
Other operating special items,
net (4) - 0.05
------------- -------------
Mainline operating expenses per ASM,
excluding special items 12.92 11.37

Aircraft fuel and related taxes (5.60) (3.37)
Realized gain (loss) on fuel hedging
instruments, net 0.99 (0.01)
------------- -------------
Mainline operating expenses per ASM,
excluding special items, fuel and
realized gain (loss) on fuel
hedging instruments, net $ 8.32 $ 8.00
============= =============

3 Months Ended 3 Months Ended
June 30, 2008 June 30, 2007
-------------- ---------------

Reconciliation of Operating Cost per
ASM Excluding Fuel - Express only
-------------------------------------

US Airways Group, Inc.
-----------------------------------
(in millions)
Total Express operating expenses $ 822 $ 652

Aircraft fuel and related taxes (340) (187)
------------- -------------
Express operating expenses,
excluding fuel $ 482 $ 465
============= =============

(in cents)
Express operating expenses per ASM 21.12 18.34

Aircraft fuel and related taxes (8.73) (5.26)
------------- -------------
Express operating expenses per ASM,
excluding fuel $ 12.39 $ 13.08
============= =============

6 Months Ended 6 Months Ended
June 30, 2008 June 30, 2007
-------------- --------------
(in millions, except share and
per share amounts)

Reconciliation of Net Income (loss)
Excluding Special Items for US
Airways Group, Inc.
------------------------------------

Net income (loss) as reported $ (804) $ 329

Special items:
Unrealized gain on fuel hedging
instruments, net (1) (226) (115)
Special items, net (2) 59 66
Goodwill impairment (3) 622 -
Other operating special items,
net (4) - (9)
Nonoperating special items, net
(5) 7 18
Non-cash tax provision from
utilization of pre-acquisition
NOL (6) - 6
------------- --------------

Net income (loss) as adjusted for
special items $ (342) $ 295
============= ==============

Shares used for computation (in
thousands):
Basic 92,080 91,420
============= ==============
Diluted (7) 92,080 95,918
============= ==============

Earnings (loss) per share as
adjusted for special items:
Basic $ (3.70) $ 3.23
============= ==============
Diluted $ (3.70) $ 3.11
============= ==============

6 Months Ended 6 Months Ended
June 30, 2008 June 30, 2007
-------------- --------------

Reconciliation of Operating Cost per
ASM Excluding Special Items, Fuel,
Realized Gain (Loss) on Fuel
Hedging Instruments, Net - Mainline
only
------------------------------------

US Airways Group, Inc.
----------------------------------
(in millions)
Total operating expenses $ 6,829 $ 5,482
Less Express expenses:
Fuel (589) (340)
Other (967) (932)
------------- --------------
Total mainline operating expenses 5,273 4,210

Special items:
Unrealized gain on fuel hedging
instruments, net (1) 226 115
Special items, net (2) (59) (66)
Goodwill impairment (3) (622) -
Other operating special items,
net (4) - 9
------------- --------------
Mainline operating expenses,
excluding special items 4,818 4,268

Aircraft fuel and related taxes (1,908) (1,208)
Realized gain (loss) on fuel
hedging instruments, net 274 (37)
------------- --------------
Mainline operating expenses,
excluding special items, fuel and
realized gain (loss) on fuel
hedging instruments, net $ 3,184 $ 3,023
============= ==============

(in cents)
Mainline operating expenses per ASM 13.98 11.06

Special items per ASM
Unrealized gain on fuel hedging
instruments, net (1) 0.60 0.30
Special items, net (2) (0.16) (0.17)
Goodwill impairment (3) (1.65) -
Other operating special items,
net (4) - 0.03
------------- --------------
Mainline operating expenses per
ASM, excluding special items 12.77 11.21

Aircraft fuel and related taxes (5.06) (3.17)
Realized gain (loss) on fuel
hedging instruments, net 0.73 (0.10)
------------- --------------
Mainline operating expenses per
ASM, excluding special items, fuel
and realized gain (loss) on fuel
hedging instruments, net $ 8.44 $ 7.94
============= ==============

6 Months Ended 6 Months Ended
June 30, 2008 June 30, 2007
-------------- --------------

Reconciliation of Operating Cost per
ASM Excluding Fuel - Express only
------------------------------------

US Airways Group, Inc.
----------------------------------
(in millions)
Total Express operating expenses $ 1,556 $ 1,272

Aircraft fuel and related taxes (589) (340)
------------- --------------
Express operating expenses,
excluding fuel $ 967 $ 932
============= ==============

(in cents)
Express operating expenses per ASM 20.77 18.16

Aircraft fuel and related taxes (7.86) (4.86)
------------- --------------
Express operating expenses per ASM,
excluding fuel $ 12.91 $ 13.30
============= ==============

Note: Amounts may not recalculate due to rounding.
*T

-0-
*T
FOOTNOTES:
-------------------------------------------------------------------

1) The 2008 second quarter and six month periods include $190 million
and $226 million of unrealized gains, respectively, and the 2007
second quarter and six month periods include $25 million and $115
million of unrealized gains, respectively, resulting from mark-to-
market accounting for changes in the fair value of the Company's
fuel hedging instruments.

2) The 2008 second quarter includes $18 million of non-cash accounting
charges related to the decline in fair market value of certain
spare parts associated with the Company's Boeing 737 aircraft
fleet, $10 million of merger related transition expenses, and $6
million in charges for lease return costs and lease cancellation
penalties related to certain Airbus aircraft as a result of the
capacity reductions announced in June 2008. The 2008 six month
period includes the $18 million and $6 million discussed above in
addition to $35 million of merger related transition expenses. The
2007 second quarter and six month periods include $27 million and
$66 million, respectively, of merger related transition expenses.

3) The 2008 second quarter and six month periods include a non-cash
accounting charge of $622 million to write off all the goodwill
created by the merger of US Airways Group, Inc. and America West
Holdings Corporation in September of 2005.

4) The 2007 second quarter and six month periods include $9 million
of insurance settlement proceeds related to business interruption
and property damages incurred as a result of Hurricane Katrina.

5) The 2008 six month period includes $13 million in impairment losses
on certain available for sale auction rate securities considered
to be other than temporary, as well as a $2 million write-off of
debt discount and debt issuance costs in connection with the
refinancing of certain aircraft equipment notes, offset by $8
million in gains on forgiveness of debt. The 2007 six month period
includes an $18 million write-off of debt issuance costs in
connection with the refinancing of the $1.25 billion GE debt.

6) For the three and six months ended June 20, 2007, the Company
utilized $5 million and $6 million, respectively, of NOL acquired
from US Airways. The valuation allowance associated with the
acquired NOL was recognized as a reduction of goodwill rather than
a reduction in tax expense. As a result, the Company recorded non-
cash expense for income taxes of $5 million and $6 million,
respectively, in the three and six months ended June 30, 2007.

7) The 2007 diluted EPS computation excludes interest associated with
the 7.0% senior convertible notes of $1 million and $3 million for
the three and six month periods, respectively.
*T

-0-
*T
US Airways Group, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)

June 30, 2008 December 31, 2007
------------- -----------------
Assets

Current assets
Cash, cash equivalents and
investments in marketable
securities 2,010 2,174
Restricted cash 2 2
Accounts receivable, net 564 374
Materials and supplies, net 290 249
Prepaid expenses and other 862 548
------------- -----------------
Total current assets 3,728 3,347

Property and equipment
Flight equipment 2,704 2,414
Ground property and equipment 772 703
Less accumulated depreciation and
amortization (856) (757)
------------- -----------------
2,620 2,360
Equipment purchase deposits 207 128
------------- -----------------
Total property and equipment 2,827 2,488

Other assets
Goodwill - 622
Other intangibles, net 558 553
Restricted cash 460 466
Investments in marketable
securities 285 353
Other assets, net 213 211
------------- -----------------
Total other assets 1,516 2,205

Total assets $8,071 $8,040
============= =================

Liabilities and Stockholders' Equity

Current liabilities
Current maturities of debt and
capital leases 159 117
Accounts payable 533 366
Air traffic liability 1,286 832
Accrued compensation and vacation 171 225
Accrued taxes 184 152
Other accrued expenses 924 859
------------- -----------------
Total current liabilities 3,257 2,551

Noncurrent liabilities and deferred
credits
Long-term debt and capital leases,
net of current maturities 3,205 3,031
Deferred gains and credits, net 142 168
Employee benefit liabilities and
other 874 851
------------- -----------------
Total noncurrent liabilities and
deferred credits 4,221 4,050

Stockholders' equity
Common stock 1 1
Additional paid-in capital 1,554 1,536
Accumulated other comprehensive
income (loss) (48) 10
Accumulated deficit (901) (95)
Treasury stock (13) (13)
------------- -----------------
Total stockholders' equity 593 1,439
------------- -----------------

Total liabilities and stockholders'
equity $8,071 $8,040
============= =================
*T

US Airways Group, Inc.
Dan Cravens, 480-693-5729

Copyright Business Wire 2008