US AIRWAYS GROUP 2ND QUARTER NET INCOME IS $80 MILLION

ARLINGTON, Va., July 19, 2000 -- US Airways Group, Inc., reported net income for the second quarter today of $80 million on revenues of $2.4 billion. Operating income for the quarter was $168 million. Diluted earnings per common share were $1.17.

"While there was a significant impact on earnings from the high cost of fuel, US Airways has benefited from the improved business climate affecting the entire industry," said US Airways President and CEO Rakesh Gangwal.

Gangwal noted that there were a number of major developments during the quarter, including the approval of a new flight attendant contract, continued gains internationally and the rapid development of US Airways’ new Airbus fleet, with the addition of A330-300 transatlantic aircraft as well as new single-aisle A319s and A320s.

"Despite the competitive pressures from low-cost carriers and the challenge of an unusual number of summer storms and associated air traffic control delays, US Airways’ employees are to be congratulated for remaining focused on providing the highest levels of service," Gangwal said.

US Airways Chairman Stephen M. Wolf said, "Going forward, we are focused on bringing to fruition the merger between US Airways and United Airlines, a development that will bring great benefit to the traveling public as well as the employees and shareholders of US Airways."

US Airways Group’s operating income of $168 million was down by 39.8 percent from the $279 million reported in the second quarter of 1999. This was the result primarily of sharply increased fuel costs and the negative impact on passenger volume and yields from threatened labor action at the end of the first quarter that continued to have an impact in the second. Total operating expenses for the quarter were $2.3 billion, an increase of 12.9 percent over the second quarter of 1999.

Pre-tax income for the quarter was $135 million, 74.6 percent below the comparable 1999 figure of $532 million, which included a gain of $274 million relating to the company’s sale of its interest in Galileo International, Inc. and expense credits totaling $16 million resulting from asset dispositions. Net income of $80 million was 74.8 percent below the second quarter 1999 net income figure of $317 million.

On a per-share basis, the $1.17 figure for second quarter 2000 compares to $4.26 for second quarter 1999, including the nonrecurring items and $1.83 excluding nonrecurring items.

For the second quarter of 2000, US Airways’ revenue passenger miles increased by 11.4 percent with a 9.6 percent increase in available seat miles. The number of passengers increased by 5.4 percent, the length of the average passenger journey by 5.7 percent and the passenger load factor by 1.2 percentage points to 74.7 percent. Revenue per available seat mile was 13.33 cents, down 2.7 percent while cost per available seat mile was 12.62 cents, an increase of 2.0 percent, driven largely by increased fuel costs. Cost of aviation fuel per gallon for the quarter was 85.29 cents, an increase of 62.8 percent over the previous year.

For the first six months of 2000, the net loss was $138 million as compared to net income, including one-time gains, of $363 million for the first half of 1999. Operating revenues for the period were $4.5 billion, an increase of 4.0 percent, while operating expenses were $4.5 billion, an increase of 12.8 percent. Operating income for the six-month period was $29 million as compared to $368 million in 1999, again largely reflecting increased fuel costs. Loss per common share for the period was $2.07 as compared to diluted earnings per share of $4.67, including one-time factors, in the first half of 1999.

Revenue passenger miles for the six-month period increased 6.6 percent with an increase in available seat miles of 8.1 percent. The number of passengers carried increased 2.2 percent and the length of the average passenger journey by 4.5 percent, while the passenger load factor for the period declined by 1.0 percentage points to 69.7 percent. Revenue per available seat mile was 12.88 cents, down by 4.0 percent, while cost per available seat mile was 12.99 cents, an increase of 3.5 percent. Cost of aviation fuel per gallon was 86.98 cents, an increase of 81.5 percent over 1999.

Statement of Operations

In connection with the merger of US Airways with a wholly-owned subsidiary of UAL Corporation, US Airways filed a preliminary proxy statement on Schedule 14A with the United States Securities and Exchange Commission (the "SEC") on July 6, 2000. STOCKHOLDERS OF US AIRWAYS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Information concerning participants in the solicitation of proxies by US Airways from stockholders to approve the merger as well as information on how you can get the definitive proxy statement for free, when it becomes available, and other relevant documents, on the SEC web site is contained in the Schedule 14A filed by US Airways with the SEC pursuant to Rule 14a-12 of the Securities Exchange Act of 1934, as amended, on May 25, 2000.

Reporters needing additional information should contact US Airways Corporate Communications at (703)872-5100.