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NEW AGREEMENT REACHED FOR BRITISH AIRWAYS INVESTMENT IN USAIR

 ARLINGTON, Va., Jan. 21 /PRNewswire/ -- USAir today announced it has completed an agreement under which British Airways has made a $300 million investment in USAir through the purchase of a new series of USAir convertible preferred stock.
 USAir Chairman, President and CEO Seth E. Schofield said the investment was approved by the boards of directors of both companies and the transfer of funds took place earlier today.
 "This investment does not involve any issues of control or special voting rights and is responsive to policy concerns expressed previously by the U.S. Department of Transportation," Schofield noted. "It also meets our objective to strengthen our company financially for the long-term benefit of our shareholders, customers and employees."
 Schofield added that he looks forward to meeting with Secretary of Transportation-designate Federico Pena to discuss the terms of the agreement with British Airways, as well as trends in the world airline industry.
 The agreement would also permit British Airways over the next five years to invest another $450 million in USAir through the purchase of two other series of convertible preferred stock if current restrictions on foreign ownership and governance of U.S. airlines are modified.
 British Airways will also become USAir's code-sharing partner on flights linking USAir cities in the continental United States and key transatlantic gateways served by British Airways. This arrangement, Shofield noted, is in complete accord with the existing air bilateral agreement between the United States and the United Kingdom.
 "Our goal is to become an effective and viable competitor with the three largest U.S. airlines who already control the bulk of air service within the U.S.," Schofield said. "Our strengthened balance sheet and access to more foreign destinations will enable us to achieve this goal."
 The $300 million preferred stock purchased by British Airways under the first stage of the agreement will pay a 7 percent dividend and is convertible into USAir common stock at $19.50 per share.
 Following the investment made in USAir today, British Airways will receive three seats on a 16-member USAir board of directors. British Airways officers serving on the USAir board will be Sir Colin Marshall, deputy chairman and chief executive; Derek Stevens, chief financial officer; and Roger Maynard, director of corporate strategy. There are no governance or super-majority voting arrangements. British Airways' ownership of USAir voting stock will initially be 19.9 percent and may eventually reach 25 percent, the current legal limit allowed non-U.S. citizens.
 The option to purchase a second series of USAir preferred stock runs for three years and would involve British Airways making an additional investment of $200 million through purchase of a special issue of preferred stock paying 7 percent and convertible into USAir common stock at $20.50 per share.
 The option to purchase a third series of preferred stock could be exercised by British Airways within five years through the investment of an additional $250 million paying 7 percent interest and convertible at $21.82 per share.
 Daily service between London and Charlotte, Baltimore and Philadelphia, markets currently served by USAir, will continue. Flights between London, Charlotte and Baltimore, as well as new nonstop flights between London and Pittsburgh, will be operated by USAir personnel and USAir-owned aircraft flying in British Airways colors under a leasing agreement. British Airways will continue to operate daily service between Philadelphia and London.
 "Recent investment agreements and alliances between a number of the world's airlines have put our industry on an irreversible path to globalization," Schofield said. "This agreement ensures that the shareholders, customers and employees of both airlines will benefit."
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 -0- 1/21/93
 /CONTACT: USAir Corporate Communications, 703-418-5100 or 310-417-1294 (Western Region)/
 (U BAB)


CO: USAir; British Airways ST: Virginia IN: AIR SU: FNC

IH -- DC009 -- 7366 01/21/93 11:33 EST
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Date:Jan 21, 1993
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