Transcript of Crew News Session:

WHO BOUGHT WHOM?

SPEAKER: Thank you. Just a quick
question.

Going back five years ago, I'm a West coast
guy, and I do a lot of commuting in and out of the
West. And I'm just misled constantly from the West
and the East. I mean, we are definitely two
separate airlines, still.


Now, I hear a lot of the West people
talking five years ago during this merger, so they
say, was there money exchanged? Did -- US Airways
and America West, who bought who? Who merged?

Because I hear it constantly from the West,
Well, we bought you, so we should control you.

So who owns who?

MR. PARKER: Who says that to you?

SPEAKER: I hear it constantly from the
West crews.

MR. PARKER: All right. Well, tell them to
call me.

Let me tell you, look -- that's not
accurate.

SPEAKER: Was there money exchanged? I
thought it was just a simple merger.

MR. PARKER: I'm happy to explain it. I
was -- I would like to hope we were past this, but
since it --

SPEAKER: (Unintelligible.)

MR. PARKER: Yeah, no, I know. This is not
meant to be negative on your question. I just wish


we still weren't having to go through this because I
don't think it matters is the real answer.

But I'm happy to go through what did happen
if it helps.

What happened is in 2005, first off, at the
risk of offending people, US Airways was on the
verge of liquidation, not bankruptcy. We were
already in bankruptcy. We were going, I believe
without a merger, would have liquidated. So be it.

I think that's where this some of this
comes from with the "we saved you" stuff. But you
got to finish the story.

USAir -- America West was not in
dramatically better shape. While we weren't on the
verge of, you know, going away liquidating, as I
have said a number of times, I believe without a
merger -- well, let me tell you. By putting the two
companies together, a lot of new money came in is
the answer to your question.

America West did not have the money to go
fund the merger or anything close to it. And,
indeed, I think America West standalone -- this


is -- this gets some America West people upset
because, you know, they -- anyway, whatever reason.

But my view is, and a highly educated view
on this point, is that America West would have been
bankrupt by the end of 2005.

If you recall, by the end of 2005, Delta
and Northwest both filed, and I don't think America
West could have -- I'm pretty sure -- I'm actually,
virtually certain that America West would have filed
bankruptcy because we didn't have enough cash to
make it through the winter in that environment.

So -- and then more importantly, as it
relates to America West, the reason the merger was
so important to America West is America West was an
airline that lived off a cost structure advantage.

Much like I describe to US Airways
employees now, how we don't have the same revenue
generating capabilities as American, Delta, and
United, who are bigger than us. America West had
that in spades.

A Phoenix hub never had the ability to
generate the kind of revenues US Airways did, for


example. But the airline survived 25 years by
having much lower costs, and those lower costs
almost entirely labor based.

So what had happened is, is you, you know,
looking around the world, here at US Airways, for
example, had gotten its labor costs through two
bankruptcies and a lot of pain down to matching
America West.

That did not look like a good formula for
the America West -- for America West Airlines. You
have an airline now that has, not the same ability
to generate revenues, and the same costs as the guys
who can generate a lot more revenues than you.
Those airlines go away.

So whether or not America West would have
filed, you know, in late 2005, like I believe, that
airline, I'm certain, wouldn't have been able to
stand alone on its own in today's environment. You
know, much like Frontier, was very -- it's very
similar I think to America West.

You know, small West Coast, whole --
entirely labor-cost-based cost advantage. And, you


know, Frontier went bankrupt. They are still
floating around somewhere, but, you know, they are a
fifth of the size they used to be. And I think
that's the best I think America West could have done
on its own.

So the merger helped both of us, and in a 6
huge way. I don't think America West would have
made it on its own. I'm certain US Airways wouldn't
have. And with the merger, what we were able to
do -- you know, which, again, I -- I think we should
all feel good about -- we were able to go convince
people that, while these two airlines on their own
are having trouble, we can put them together and
build a real airline, and all we need is cash.

And so will you, Mr. Investor, invest in
this?

Now, we found some people who wanted to do
that because they didn't want us to go away, like
GE, who had a lot of airplanes leased to us, and
Airbus, who had a lot of airplanes on order to both
companies. So they put in monies because they
didn't want to see us go away.


But we found some other, you know, just
true equity investors, you know, stockholders that
said, yeah, that looks like something that will
work. I'll invest in that.

So the money that came to fund the merger
didn't exist, and neither airline could have raised
it on their own. It only came from the power of the
merger. 8

So the merger saved both of us. So if
anybody tells you, We saved you, vice versa, they
are wrong. We saved each other. And we saved each
other by merging the two companies and building a
stronger airline.

And, again, I haven't had to say this in a
few years, but I have said it a lot. And the story
has been entirely consistent. So it's a little
frustrating to me to have to keep saying it because
I, like you, get tired of hearing this stuff.

It's just absolutely.

SPEAKER: That's exactly what it was.

MR. PARKER: It's just absolutely
inaccurate.


So, anyway, hopefully this will help. We
have filmed it. People can watch it, but that's
what happened.

SPEAKER: (Unintelligible).

MR. PARKER: But, anyway, but that's the
point. But, anyway, the answer is, you know, we --
we needed each other. And I know we still got a lot
of work to do. As Eddie says, we haven't quite
gotten the marriage completed.

But, you know, if we hadn't gotten the
engagement done, we wouldn't be here. "