US Airways Group Inc.

US Airways Group Inc.
Item# 4627
$19.00

US Airways traces its history to All American Aviation Company, a company founded by du Pont family brothers Richard C. du Pont, Alexis Felix du Pont, Jr. and CEO Steven Gardner. Hubbed in Pittsburgh, the airline served the Ohio River valley in 1939. In 1949, the company was renamed All American Airways as it switched from airmail to passenger service. The company was again renamed to Allegheny Airlines in 1953.

Allegheny expanded progressively, introducing the Douglas DC-9 in 1966 and absorbing Lake Central Airlines in 1968 and Mohawk Airlines in 1972 to become one of the largest carriers in the northeastern United States and sixth largest airline in the world as measured by passenger boardings.

But with expansion came growing pains: by the 1970s Allegheny Airlines had earned the nickname "Agony Air" due to customer dissatisfaction with the carrier's service.

Allegheny's agreement with Henson Airlines, the forerunner to today's US Airways Express carrier Piedmont Airlines, to provide service under the Allegheny Commuter banner, is generally regarded as the industry's first code-share agreement, a type of service now offered throughout the industry.

Allegheny changed its name to USAir in 1979 following the passage of the Airline Deregulation Act the previous year, which enabled the airline to expand its route network into the southeastern United States.

USAir expanded dramatically in 1989, when it purchased San Diego-based Pacific Southwest Airlines and Winston-Salem, North Carolina-based Piedmont Airlines. The mergers gave the airline hubs in Baltimore, Charlotte, Syracuse, and Dayton, as well as prized routes to the West Coast and Piedmont's transatlantic routes to London Gatwick Airport. While Dayton was a hub for USAir for several years following the Piedmont merger, only Baltimore and Charlotte remained hubs later on. When the Piedmont acquisition was completed in 1989, it was the largest merger in airline history, and USAir became one of the world's largest airlines, operating more than 5,000 flights daily.

In the early 1990s, USAir expanded its service to Europe with flights to London, Paris and Frankfurt from its four primary hubs. The company formed partnerships, marketing the Trump Shuttle as the "USAir Shuttle" and accepted a large investment from British Airways that started one of the first transatlantic airline alliances. In 1996, the alliance between USAir and British Airways ended in a court battle, once British Airways announced its intentions to partner with American Airlines.

On November 12, 1996, the airline announced that it would change its name to US Airways and introduce a new corporate identity in early 1997. The new logo, a stylized version of the Flag of the United States, would be adopted. The new branding was to be applied to terminals and ticket jackets. The airline planned to paint aircraft in deep blue and medium gray with red and white accent lines. That same year, the airline also introduced a single-class subsidiary service known as MetroJet, which competed with low-cost carriers expanding into the East, in particular Southwest Airlines.

In 1997, US Airways bought the remains of Trump Shuttle. US Airways also steadily expanded its flights to Europe through the end of the decade. Although the airline returned to profitability in the mid-1990s, its route network's concentration in the U.S. Northeast and high operating costs prompted calls for the company to merge with another airline.

On May 24, 2000 US Airways announced plans to be acquired for $4.3 billion by UAL Corporation, the parent company of United Airlines, the world's largest commercial carrier at the time. The complex deal drew immediate objections from labor unions, consumer advocates and antitrust regulators. Negotiations stalled; with both airlines losing money, and the deal all but certain to be blocked by the federal government, UAL withdrew its purchase offer on July 27, 2001, paying US Airways a $50 million penalty for withdrawing from the deal.

As the largest carrier at Washington-Reagan, US Airways was disproportionately affected by that airport's extended closure following the September 11 terrorist attacks. The resulting financial disaster precipitated the closure of the airline's MetroJet network, which led to the de-hubbing of the subsidiary's primary operating base at Baltimore-Washington International Airport and the furloughing of thousands of employees. The airline entered Chapter 11 bankruptcy on August 11, 2002, but received a government-guaranteed loan through the Air Transportation Stabilization Board and was able to exit bankruptcy in 2003.

In late 2003-early 2004, US Airways lobbied for lower operating fees at Pittsburgh International Airport, citing its economies of scale as the primary carrier and largest tenant at the airport. US Airways attempted to leverage its adverse cash position and "red ink" in the years following 9/11 to negotiate better financial terms with the airport. The Allegheny County Airport Authority rejected US Airways' demands for reduced landing fees and lower lease payments, in part due to antitrust and FAA regulations that required the airport operator to extend the same financial terms to all carriers if it accepted US Airways' demands. US Airways threatened to move traffic to rival hubs in Philadelphia and Charlotte, and the airline made good on its threat in November 2004, reducing its flights at Pittsburgh International Airport from primary-hub to secondary-hub status. The airline, led by former ExpressJet Airlines CEO David N. Siegel, continued to demote Pittsburgh International Airport in subsequent years until it became only a focus city airport for the company.

Even before the second bankruptcy filing of 2004, one of the alternatives US Airways Group explored was a possible merger with America West, as the two airlines had complementary networks and similar labor costs. The parties held preliminary discussions and conducted due diligence from February through July 2004. Ultimately, these talks ended due to issues related to labor, pension, and benefit costs. By December 2004, US Airways had cut labor costs significantly. Its investment adviser, the Seabury Group, suggested putting the airline up for sale. The following month, US Airways Group and America West Holdings resumed their discussions. On May 19, 2005, both airlines officially announced the merger deal, structured as a reverse takeover. Financing for the deal was supplied by outside investors including Airbus S.A.S., an aircraft manufacturing subsidiary of EADS, the European aerospace consortium. Air Wisconsin Airlines Corporation, operator of numerous US Airways Express flights, and ACE Aviation Holdings, the parent company of Air Canada, also bought shares in the combined airline. The merged airline retained the US Airways name to emphasize its national scope, as well as to capitalize on US Airways' worldwide recognition. On September 13, 2005, America West shareholders voted to approve the merger agreement, and three days later the U.S. Bankruptcy Court for the Eastern District of Virginia approved US Airways' emergence from bankruptcy, allowing the merger to close on September 27.


Certificate: Common Stock, issued on Septmber 26, 2001

Printer: Security-Columbian / United States Bank Note Company

Dimensions: 8” (h) x 12” (w)

State: NY-New York

Subject Matter: Famous Companies | Aviation and Aerospace | Commercial Airlines

Vignette Topic(s): None

Condition: No fold lines, punch hole cancels in signature areas and bodies. Very crisp.





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