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EXHIBIT 10.17
* TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTION 200.80(B)(4),
200.83 AND 240.24b-2
United Contract No. 163872
AMENDED AND RESTATED
UNITED EXPRESS(R) AGREEMENT
BETWEEN
UNITED AIR LINES, INC.
AND
MESA AIR GROUP, INC.
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TABLE OF CONTENTS
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ARTICLE TITLE PAGE
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I. DEFINITIONS................................................. 1
II. SCOPE, TERM, AND CONDITIONS................................. 4
A. SCOPE .................................................. 4
B. TERM ................................................... 5
C. CONDITIONS.............................................. 7
III. SUPPORT SERVICES AND FACILITIES............................. 7
A. GENERAL................................................. 7
B. SPECIAL SUPPORT SERVICES................................ 7
C. COMMUNICATIONS.......................................... 10
D. RESERVATIONS............................................ 10
E. OPERATIONS.............................................. 11
F. STATION SUPPORT SERVICES................................ 14
G. TARIFFS AND SCHEDULE PUBLICATION........................ 14
H. SALES SETTLEMENT........................................ 15
I. ADVERTISING AND PROMOTIONS.............................. 17
J. AUTOMATION.............................................. 17
K. OTHER SUPPLIES.......................................... 20
L. CONTRACTOR ASSISTANCE................................... 21
IV. AIR SERVICES TO BE PROVIDED BY CONTRACTOR................... 21
A. SCHEDULES AND CHARTERS TO BE OPERATED BY CONTRACTOR..... 21
B. AIRCRAFT TO BE USED..................................... 23
C. INVENTORY............................................... 26
D. FLIGHT CREWS TO BE USED................................. 26
E. INFLIGHT SALES.......................................... 27
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V. OPERATING RESTRICTIONS...................................... 27
A. UNITED EXPRESS OPERATIONS ONLY.......................... 27
B. NO OPERATION OUTSIDE AGREEMENT.......................... 27
C. BREACH OF OPERATING RESTRICTIONS........................ 28
VI. LICENSE..................................................... 28
A. GRANT OF LICENSE........................................ 28
B. TERMS AND CONDITIONS GOVERNING LICENSE.................. 28
C. INFRINGEMENT............................................ 30
VII. ADDITIONAL UNDERTAKINGS..................................... 30
A. BULK PURCHASES.......................................... 31
B. FUEL ................................................... 31
C. PURCHASE BY UNITED OF PASS THROUGH COST ITEMS........... 31
D. UNIFORMS................................................ 31
E. PASSES AND REDUCED RATE TRAVEL.......................... 31
F. SIGNAGE................................................. 32
G. ENVIRONMENTAL........................................... 32
H. START-UP COSTS.......................................... 32
I. AIRCRAFT SUBSTITUTIONS.................................. 33
VIII. RATES PAYABLE TO CONTRACTOR................................. 33
A. RATES .................................................. 33
B. OPERATING GOALS......................................... 36
C. MARKUP ................................................. 37
D. WIRE TRANSFER AND RECONCILIATION........................ 37
IX. FEES PAYABLE TO UNITED...................................... 38
A. GOVERNMENT ASSISTANCE................................... 38
X. MAINTENANCE AND FUELING..................................... 39
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XI. U.S. MAIL................................................... 39
XII. INSURANCE................................................... 39
A. INSURANCE TYPES......................................... 39
B. 30-DAY NOTICE........................................... 40
C. FAILURE TO MAINTAIN INSURANCE........................... 40
XIII. LIABILITY AND INDEMNIFICATION............................... 40
A. EMPLOYER'S LIABILITY AND WORKERS' COMPENSATION.......... 40
B. INDEMNIFICATION BY CONTRACTOR........................... 40
C. INDEMNIFICATION BY UNITED............................... 41
D. CONTRACTOR'S SUPPLIES LIABILITY......................... 41
E. UNITED DEFINITIONS...................................... 43
XIV. REPORTS..................................................... 43
A. CLOSE-OUT ENTRIES....................................... 43
B. BOARDING INFORMATION.................................... 44
C. OPERATING PERFORMANCE................................... 44
D. INSPECTION.............................................. 44
E. FINANCIAL STATEMENTS.................................... 44
F. GOVERNMENT FILINGS...................................... 44
G. COPY OF GOVERNMENT REPORTS.............................. 45
XV. INDEPENDENT CONTRACTORS AND UNAUTHORIZED OBLIGATIONS........ 45
A. INDEPENDENT CONTRACTORS................................. 45
B. UNAUTHORIZED OBLIGATIONS................................ 46
C. CONTRACTOR OPERATED FLIGHTS............................. 46
XVI. DEFAULT AND TERMINATION..................................... 46
A. OPERATIONS DEFAULT...................................... 46
B. COVENANT DEFAULT........................................ 47
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C. DEFAULT BY CONTRACTOR................................... 47
D. SIMILAR AGREEMENTS...................................... 48
E. NON-COMPLIANCE WITH STANDARDS........................... 48
F. CONSEQUENCES OF TERMINATION............................. 49
G. UNITED'S LIQUIDATED DAMAGES............................. 49
H. RESTRICTED ACTIONS...................................... 50
XVII. ASSIGNMENT, MERGER AND ACQUISITION.......................... 50
A. ASSIGNMENT.............................................. 50
B. MERGER AND ACQUISITION.................................. 51
XVIII. CHANGE OF LAW............................................... 51
XIX. TAXES, PERMITS AND LICENSES................................. 51
A. TRANSACTION TAXES....................................... 51
B. PAYROLL TAXES........................................... 52
C. PERMITS AND LICENSES.................................... 52
XX. REVIEW...................................................... 52
XXI. JURISDICTION................................................ 53
XXII. NOTICES..................................................... 53
XXIII. APPROVALS AND WAIVERS....................................... 54
XXIV. GOVERNING LAW............................................... 54
XXV. CUMULATIVE REMEDIES......................................... 54
XXVI. FORCE MAJEURE............................................... 55
XXVII. SEVERABILITY AND CONSTRUCTION............................... 55
XXVIII. ACKNOWLEDGMENT.............................................. 55
XXIX. CONFIDENTIALITY............................................. 55
XXX. RELATED AND THIRD PARTY AGREEMENTS.......................... 56
XXXI. ENTIRE AGREEMENT............................................ 56
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XXXII. REFERENCES TO TIME PERIODS................................... 56
APPENDIX A ............................................................. 58
APPENDIX B ............................................................. 59
APPENDIX C ............................................................. 60
APPENDIX D ............................................................. 61
APPENDIX E ............................................................. 63
APPENDIX F ............................................................. 64
APPENDIX G ............................................................. 66
APPENDIX H ............................................................. 68
APPENDIX I ............................................................. 77
APPENDIX J ............................................................. 78
Appendix K ............................................................. 79
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* TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTION 200.80(B)(4),
200.83 AND 240.24b-2
UNITED EXPRESS(R) AGREEMENT
This Agreement, dated as of January 28, 2004, is between UNITED AIR LINES,
INC., a Delaware corporation, with its worldwide headquarters located at 1200 E.
Algonquin Road, Elk Grove Township, IL 60007 ("UNITED"), and Mesa Air Group,
Inc., a Nevada corporation, having its principal mailing address at 410 N 44th
St., Suite 700 Phoenix, AZ 85008 ("CONTRACTOR").
WITNESSETH:
WHEREAS, United holds a certificate of public convenience and necessity
issued pursuant to the Federal Aviation Act of 1958 authorizing United to engage
in air transportation of persons, property and mail, and is a major airline
providing scheduled air service in both national and international markets;
WHEREAS, Contractor is the parent company of a group of air carriers
holding a certificate of public convenience and necessity issued pursuant to the
Federal Aviation Act of 1958 authorizing them to engage in air transportation of
persons and property;
WHEREAS, Contractor is willing to cause one or more of its wholly-owned
subsidiaries to perform service on behalf of United;
WHEREAS, United owns various trademarks, service marks, trade names,
logos, emblems, uniform designs and distinctive exterior and interior color
decor and patterns for its aircraft, including, but not limited to, the service
mark United Express (hereinafter referred to individually and collectively as
"UNITED MARKS" or "MARKS");
WHEREAS, United has entered into agreements with several regional carriers
to provide air transportation services under the United Express mark for city
pairs where it is generally uneconomic for United to operate such services;
WHEREAS, United will provide Contractor, pursuant to the terms of this
Agreement, a non-exclusive license to use one or more of the United Marks in
connection with Contractor's United Express Services.
NOW, THEREFORE, in consideration of the foregoing premises, mutual
covenants and obligations hereinafter contained, the parties agree as follows:
I DEFINITIONS
A. "Apollo Services" means the computerized Apollo Reservations and
Ticketing Service (or any similar or substitute service offered by or on behalf
of United), which
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performs flight, hotel, rental car and other travel related services,
reservations and ticket issuance functions.
B. "Contractor Location"
means any airport terminal facility where Contractor provides Contractor's
United Express Services pursuant to this Agreement and Contractor, but not
United, has employees stationed (including any terminal facility where
Contractor provides Contractor's United Express Services pursuant to this
Agreement that is different from the terminal facility from which United
operates in the same airport).
C. "Contractor's United Express Services"
means the services or operations provided and maintained by Contractor or
its affiliates in connection with providing scheduled air transportation service
as a United Express Carrier and related ground and other services to United and
its affiliates pursuant to the terms of this Agreement (including, without
limitation, the services required under ARTICLE IV).
D. "United Express Service Standards" or "Service Standards"
means the procedures prescribed by United that describe United's approved
standards, policies, requirements and procedures for various activities relating
to the provision of air transportation services. These Service Standards are
provided in APPENDIX H.
E. "Default"
means, individually or collectively, a SECTION A DEFAULT, a SECTION B
DEFAULT, a SECTION C DEFAULT, a SECTION D DEFAULT, or a SECTION E DEFAULT, each
as defined in ARTICLE XVI.
F. "Designated Personnel"
means all of Contractor's employees who provide Contractor's United
Express Services in job classifications requiring direct public contact.
Furthermore, this covers all customer service, ramp service, pilots, and flight
attendants.
G. "Effective Date"
shall have the meaning set forth in ARTICLE II.B.
H. "Environmental Laws"
means all federal, state, local and foreign laws and regulations, and
airport rules, regulations and policies relating to pollution or the
environment, including, without limitation, laws and regulations relating to
emissions to the air, discharges to surface and subsurface waters, safe drinking
water, the storage, release, disposal, transport or
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handling of chemicals, pollutants, contaminants, wastes, hazardous substances,
petroleum and petroleum products, and aircraft noise, vibration, exhaust and
overflight.
I. "Ground Handling Duties"
means the provision of one or more of the following: (1) lavatory service,
(2) overnight cabin cleaning, (3) loading and unloading of baggage, mail and
freight, (4) receipt and dispatch, (5) baggage delivery, and (6) provisioning
personnel and storage space.
J. "Ground Handling Provider" means, for each city in which Contractor
operates flights in Contractor's United Express Services, either United or
another entity selected by United (which, in some cities, will be Contractor) to
provide ground handling services to Contractor in that city.
K. "Joint Location"
means any airport terminal where Contractor provides Contractor's United
Express Services pursuant to this Agreement and both United and Contractor have
employees stationed.
L. "Marks" or "United Marks"
shall have the meaning set forth in the recitals of this Agreement.
M. "Rates"
shall have the meaning set forth in ARTICLE VIII
N. "Related Agreements"
shall have the meaning set forth in ARTICLE XXX.
O. "Revenue Passenger"
means each passenger traveling on Contractor in connection with
Contractor's United Express Services who holds a ticket (electronic or
otherwise), flight coupon, voucher or other form of document that (i) entitles
that passenger to board an aircraft and (ii) is issued pursuant to or in
connection with a published or unpublished fare. Passengers traveling on a
purchased ticket (including ID50 airline industry reduced rate tickets),
wholesaler voucher, or voucher issued as denied boarding compensation, shall be
considered to be Revenue Passengers. In addition, passengers traveling on a free
ticket as (or as part of) a Mileage Plus(R) award or a free ticket issued in
conjunction with a two-for-one fare or other similar fare established by United,
shall be considered to be Revenue Passengers. A passenger traveling on any other
type of free or service charge-based ticket, including, but not limited to, a
site inspection ticket, or wholesaler compensation ticket, any travel agent or
wholesaler traveling on a positive space or space available ticket, and any
employee of United, Contractor or any other carrier traveling on
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either a positive space or space available ticket, shall not be considered a
Revenue Passenger. All Revenue Passengers shall be considered when calculating
any Monthly Incentive Payment.
P. "Support Services"
means those activities set forth in ARTICLE III which are related to the
operation of airline services except during flight.
Q. "Termination Date"
shall have the meaning set forth in ARTICLE II.B.
R. "United Express Carrier"
means an air carrier which has been contractually given a non-exclusive
license to use the mark United Express and one or more other United Marks in
connection with providing air transportation service to United pursuant to an
agreement between United and such air carrier.
S. "United Location"
means any airport terminal facility where Contractor and United both have
operations and United, but not Contractor, has employees stationed.
T. "United's Actual Cost"
means any and all costs or expenses actually incurred by United, not
including any markup by United, any allocation of administrative or overhead
expenses, or any administrative service charge imposed by United.
U. "Aircraft Used in United Express Service"
means any type and amount of aircraft set forth in APPENDIX A.
II. SCOPE, TERM, AND CONDITIONS
A. SCOPE
The scope of this Agreement pertains to type and amount of Contractor's
aircraft set forth in APPENDIX A, and as it may be amended in accordance
herewith from time to time.
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B. TERM
1. TURBOPROP: This Agreement becomes effective on July 6, 2003 at 1:01
a.m., Chicago, Illinois time, on (the "EFFECTIVE DATE") and shall terminate 10
years from the effective date (the "TERMINATION DATE"), unless it is terminated
at an earlier date by United giving written notice * months prior to the *
anniversary of the Effective Date, or as otherwise set forth under the
provisions of this Agreement. Notwithstanding the preceding sentence, those
provisions of this Agreement that specifically require actions prior to the
Effective Date shall be effective upon execution of this Agreement. * months
prior to the Termination Date, United and Contractor shall engage in discussions
regarding the potential extension of the Agreement or ramp down schedule for
Contractor's United Express operations; provided, however, that the decision to
extend or ramp down the Agreement shall be at United's sole discretion. The
terms of any extension of the Agreement will be mutually agreed upon by
Contractor and United.
(i) DELIVERY OF TURBOPROPS: Turboprops must be delivered and ready
to enter the United Express schedule on the dates described in Appendix A.
(ii) CONSEQUENCES FOR LATE DELIVERY OF TURBOPROPS: If any Turboprop
is delivered later than * after the dates set out in Appendix A other than for
reasons set forth below *. If, upon inspection, an aircraft is determined by
Contractor to have any damage that must be repaired, or if the aircraft is
damaged after takeoff en route to Contractor for delivery, Contractor will have
the choice either to repair or replace the aircraft. If Contractor chooses to
repair the aircraft, the * deadline will be extended by no longer than the time
spent repairing the aircraft after the original * deadline. If Contractor
chooses to replace the aircraft, the * deadline will be extended by no longer
than the time it would have taken to repair the aircraft. The inspection
mentioned above must take place on or before *, regardless of the date of this
contract, and if Contractor determines from such inspection that repairs will be
necessary, Contractor must advise United of this delay by no later than * or
this extension of the delivery deadline will be waived. For no other reason will
the * deadline be extended. In such a case where repairs are required,
Contractor will use commercially reasonable efforts to expedite the repairs to
the aircraft.
2. REGIONAL JET: This Agreement as it relates to the RJ-50 and RJ-70
(collectively, "RJ") fleet becomes effective on August 1, 2003 at 1:01 a.m.,
Chicago, Illinois time (the "RJ START DATE").
a. INITIAL RJ-70: The first * 70-seat or 64-seat Regional Jet
("RJ") aircraft, as the case may be, will be divided into three tranches of *, *
and * aircraft, respectively ("RJ Tranches"). The term of this Agreement for (a)
the first RJ Tranche, which shall consist of the * RJ aircraft having the
earliest lease expiration dates, will expire December 31, 2011, (b) the second
RJ Tranche of * RJ aircraft will expire on December 31, 2012, and (c) the third
RJ Tranche, which shall consist of the * RJ aircraft having the latest lease
expiration dates, will expire on December 31, 2013. Upon expiration of this
Agreement for each RJ Tranche, and if United
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and Contractor do not thereupon extend the term of this Agreement for such RJ
Tranche, then ramp down of the aircraft for such RJ Tranche out of the terms and
conditions of this Agreement will take place gradually over * following
termination at a rate of no more than * aircraft per month, to be mutually
agreed upon by United and Contractor.
(i) DELIVERY OF INITIAL RJ-70s: RJ-70s must be delivered and
ready to enter the United Express schedule on the dates described in Appendix A.
(ii) CONSEQUENCES FOR LATE DELIVERY OF RJ-70S: If any RJ-70
is delivered later than * after the dates set out in Appendix A, *. In the case
where any of the RJ-70s cannot be delivered because of a delay by Bombardier of
RJ-900s to Contractor for reasons wholly related to Bombardier manufacturing
(including Bombardier employee strikes), and in the case that Bombardier can
produce verifiable proof that the delivery of the RJ-900s was a) delayed (and
the period of delay) and b) delayed for reasons wholly related to Bombardier
manufacturing (including Bombardier employee strikes), then *.
b. RJ-50: For * 50-seat Regional Jet ("RJ-50") aircraft, the term
of this Agreement will expire no later than December 31, 2008 and will
correspond to the introduction of the * Replacement RJ 70s as outlined in
ARTICLE FII.B.2.c.
(i) DELIVERY OF FIRST FIVE RJ-50S: First * RJ-50s must be
delivered and ready to enter the United Express schedule on the dates described
in Appendix A.
(ii) CONSEQUENCES FOR LATE DELIVERY OF FIRST FIVE RJ-50S: If
any RJ-50 is delivered later than * after the dates set out in Appendix A *.
(iii) DELIVERY OF LAST TEN RJ-50S: Contractor must provide
delivery dates for each of the Last * RJ-50s at any time at its discretion
before *. Once Contractor has submitted to United the delivery dates for the
Last * RJ-50s, at United's sole discretion United will be entitled to accept or
decline authorization of these aircraft on an aircraft by aircraft basis. If
accepted, Contractor must deliver the RJ50 on the date set out in the Last *
RJ-50 Schedule. If declined, Contractor will no longer be authorized to add the
declined aircraft to United Express' Fleet and no payments or penalties will be
owed by United on such declined aircraft..
(iv) CONSEQUENCES FOR LATE DELIVERY OF LAST TEN RJ-50S: If
any RJ-50 is delivered later than * after the dates set out in Last * RJ-50
Schedule, *.
c. 15 REPLACEMENT RJ 70S: The delivery of * RJ70s will occur no
sooner than the withdrawal of the * short term RJ50s on a one for one basis. *
All Replacement RJ-70 deliveries (and the corresponding RJ-50 retirements) must
be completed by no later than *. The term for the * replacement RJ 70s shall
expire * from the delivery of each individual RJ70, but in any case no later
than December 31, 2018.
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(i) DELIVERY OF REPLACEMENT RJ-70S: Contractor must advise
United of the delivery date of each Replacement RJ-70 no later than * before the
delivery date of each RJ-70. Contractor must advise United of the delivery dates
of all RJ-70s no later than *. Replacement RJ-70s must be delivered and ready to
enter the United Express schedule on these dates.
(ii) CONSEQUENCES FOR LATE DELIVERY OF REPLACEMENT RJ-70S: *.
C. CONDITIONS
1. RENEWAL OPTION. Upon expiration of this Agreement, for each RJ-70
Tranche and for the RJ-50 fleet, United may renew the term hereof for each RJ
Tranche aircraft and for each RJ-50 aircraft for an additional term of *, on the
then existing terms and conditions, upon at least * written notice prior to the
end of such term.
PILOT CONSIDERATION for 70-seat Regional Jet Employment for Furloughed United
Pilots. Contractor acknowledges that United has been required to furlough some
of its pilots over the past several years. As additional consideration, with the
exception of Paragraph 11 of the Letter 03-22, Contractor has agreed to
provisions outlined in Letter 03-22, Letter 03-23 and Letter 03-24, "Job
Opportunities for Furloughed United Pilots" between United and the Air Line
Pilot Association dated August 21, 2003, August 21, 2003 and September 5, 2003,
which is incorporated herein by reference. United retains the right to recall
furloughed pilots hired by Contractor. Should United decide to recall
aforementioned pilots within * months of any pilot's Contractor hire date,
United will reimburse the aforementioned pilots for Contractor's pilot prorated
training costs of $* per CRJ pilot, $* per Dash-8 pilot and $* per B1900 pilot,
prorated by the number of months remaining until that pilot's * anniversary as
compared to the full cost over *.
III. SUPPORT SERVICES AND FACILITIES
A. GENERAL
1. SUPPORT SERVICES. United and Contractor will provide Support
Services and facilities to the extent and in the manner set forth in the
subsequent provisions of this ARTICLE III. All such Support Services and
facilities set forth in this ARTICLE III will be furnished only with respect to
Contractor's United Express Services.
2. APPROVAL OF SUPPORT SERVICES. United reserves the right to
approve or disapprove the implementation of any Support Services or facilities
offered to Contractor for Contractor's United Express Services by any third
party at any location. Such approval shall not be unreasonably withheld.
B. SPECIAL SUPPORT SERVICES
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In addition to other services to be made available to or provided to
Contractor pursuant to this Agreement, and as summarized in and in accordance
with APPENDIX B (City Pairs and Ground Handling) and APPENDIX C (Contractor
Support Services), United agrees that it or its designees will provide and
Contractor agrees to use the following services and facilities for Contractor's
United Express Services, be they provided by United or its designee:
1. USE OF THE UNITED DESIGNATOR CODE
All scheduled air transportation provided by Contractor as a part of
Contractor's United Express Services will be displayed by United in Apollo
Services, the Official Airline Guide ("OAG") and all other computerized
reservations systems, using the appropriate United designator code, "UA" or
"UA*," and a flight number within a range of flight numbers assigned by United.
2. USE OF APOLLO SERVICES
In selling and providing Contractor's United Express Services,
Contractor will only use Apollo Services, including United's automated check-in,
United's ticketing (including United's electronic ticketing service,
E-Ticket(SM)) and boarding passes, advance seat reservation system and United's
automated baggage tag printing and baggage tracing systems.
3. PARTICIPATING IN UNITED'S MILEAGE PLUS(R) PROGRAM
At United's discretion, all passengers with paid tickets traveling
on a flight segment included in Contractor's United Express Services, whether or
not in conjunction with a United flight segment, will be awarded mileage credits
for United's Mileage Plus Program or any other frequent flyer program as
specifically approved by United. Contractor shall not participate in the
frequent traveler program of any other carrier in connection with Contractor's
United Express Services, unless otherwise mutually agreed between United and
Contractor in writing. United has sole discretion concerning decisions relating
to accrual or redemption of award travel on Contractor's United Express flights.
In addition, United will bear the cost of providing redemption travel and
receive all revenue and benefits from the sale of frequent flyer credits (e.g.
miles) related to Contractor's United Express service.
4. USE OF UNITED TICKET STOCK, BAGGAGE TAGS AND TICKET WALLETS
In selling air transportation of passengers and property, both
on-line and off-line, Contractor will use only United passenger ticket stock,
ticket wallets and baggage tags in connection with Contractor's United Express
Services. Unless otherwise agreed, United will provide to Contractor all United
passenger ticket stock, United airway bills, United cargo bills and other
shipping documentation for all Contractor's United Express Services, and United
will provide to Contractor ticket wallets and baggage tags for Joint Locations
and United Locations only; provided that such quantities do not exceed
reasonable levels. Contractor shall reimburse United, at United's Actual Cost,
for all
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documentation requested by Contractor. Ticket wallets, baggage tags and other
passenger processing documents approved by United will be acquired by Contractor
for all Contractor Locations through a supplier designated by United. Contractor
shall be required to convert to the use of different ticket wallets, baggage
tags and other passenger processing documents upon * prior written notice to
Contractor by United.
5. CREDIT CARD SALES AND REJECTS; BAD CHECKS
Contractor will use only credit-industry or airline-industry
standard credit card vouchers and receipts in connection with credit card sales
for tickets, cargo, excess baggage or other services on Contractor's United
Express Services. * Contractor will reimburse United for the expenses of such
discount fees and credit card rejects. Contractor will absorb the risk of bad
checks used as payment for tickets and vouchers written by Contractor for
passage or freight in connection with Contractor's United Express Services.
6. DENIED BOARDING
a. In the event of voluntary or involuntary denied
boardings, Contractor shall make a good faith effort to rebook United Express
customers on the next available flight operated by one of United's code share
partners, such as US Airways, or a Star Alliance partner, provided that the
routing is logical and does not seriously inconvenience the customer.
b. Contractor is required to provide to United, upon
specific written request from United, specific station information regarding the
weight restrictions and aircraft limitations which could results in Denied
Boardings. Such requests shall be made by United's Revenue Management Department
(WHQIM) and responses from Contractor shall be provided within * weeks of such
request.
c. United will pay Contractor the Unit Rates per completed
passenger for interrupted trip expense (RJ-50 and RJ-70 only) as set forth in
Appendix D. Contractor and United agree to review the interrupted trip expense
six months after execution of this agreement. If Contractor's actual
uncontrollable costs are below $* per passenger, Contractor will reduce this
rate to the actual cost for the remainder of this agreement.
7. TICKET AND BAGGAGE HANDLING FEES
All ticket handling, baggage handling and other service charges and
fees assessed by carriers other than United relating to Contractor's services
(including, but not limited to, Contractor's United Express Services) will be
absorbed directly by United.
8. CUSTOMER SERVICE TRAINING
On a schedule, at a place, to an extent, for a number of persons,
and in a manner determined by United, United will provide training for
Contractor's instructors
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that United deems sufficient to permit Contractor's instructors to be able to
provide and train others to provide customer services for Contractor's United
Express Services. Contractor will have no obligation to pay United for such
training. However, Contractor agrees to adhere to the United Express Standards
of Service as outlined in APPENDIX H for all Customer Service of their United
Express flights.
C. COMMUNICATIONS
1. TELEPHONE AND DATA LINES
United, at its expense, will provide and maintain or arrange for the
provision of reservations telephone lines connecting the cities served by
Contractor in connection with Contractor's United Express Services with United's
Reservations Centers. United, at its expense, will establish, operate and
maintain or arrange for the provision of the data circuits from Contractor's
airport ticket offices and other selected locations linking the United-approved
data processing equipment at those locations with Apollo Services. United, at
its expense, will also provide and arrange for Contractor's SOC Communication
with Apollo Services. United will determine, at its sole discretion, the
necessity and feasibility of installing all such communications equipment. All
other telephone expenses, such as Contractor's long distance expenses shall be
borne by Contractor as a station operating expense.
2. PROTECTION OF CIRCUITS
Contractor will take all necessary precautions to protect the data
circuits provided for Contractor's use pursuant to this Agreement by United or
its designee.
D. RESERVATIONS
1. RESERVATIONS FUNCTIONS
United agrees to provide, at its expense, the following reservations
functions for Contractor's United Express Services:
a. Answering reservations telephones, providing information
regarding schedules and fares, making bookings and providing other services
normally associated with airline reservations services in accordance with
United's established procedures.
b. Providing personnel so that telephone calls are answered
at a service level determined by United.
c. Answering all calls terminating on specified telephone
lines as United or United Express, at United's option.
d. To the extent practicable, re-accommodating and
notifying passengers of confirmation on United, Contractor and other airlines
and clearance from wait-list.
e. Reviewing and processing inbound prepaid ticket advices.
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f. Providing reservations services to the hearing impaired
via a special telephone number during normal business hours.
2. APOLLO SERVICES ACTIVITIES
Contractor agrees to use Apollo Services for the following
activities for Contractor's United Express Services, which are to be provided by
United:
a. Establishment, maintenance, display and change of
passenger name records (PNRs).
b. Confirmation of passengers against seat inventory on
Contractor's United Express Services and United's scheduled flights and on other
airlines where flight availability is maintained in Apollo Services.
c. Maintenance of seat availability for Contractor's United
Express Services scheduled flights.
d. Transmission of availability status messages (AVS) for
Contractor's United Express Services scheduled flights to other airlines with
which United has an agreement in accordance with Standard Industry Passenger
Procedures (SIPP).
e. Process inbound reservations messages received from
ARINC addressed to Contractor.
f. Routing of all inbound messages received from ARINC,
other than as stated in ARTICLE III.A.1.d above, to a computer message queue.
3. CRS FEES
Computer Reservations System ("CRS FEES") charged to Contractor as a
result of passengers booked on Contractor's United Express will be passed
through to United without markup and subject to invoice audit by United. As soon
as possible, United shall pay such CRS fees on behalf of Contractor.
E. OPERATIONS
1. SCHEDULED SERVICE UPDATE
Contractor will provide accurate updates of its flights' planned and
actual departure and arrival times (including updates of irregularities) in
Apollo Services as soon as the planned flight schedule is changed and the flight
departs and arrives or suffers an irregularity. Specifically, this includes
updating the out, off, on and in times for the aircraft within * minutes of the
occurrence of each event. In the event of flight delays, cancellations or other
schedule irregularities affecting Contractor's United Express Service flights,
and as soon as information concerning such irregularities is available,
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Contractor shall update Apollo Services to reflect such information and, when
requested by United, notify the designated United organization. For delayed
flights, Contractor shall provide updates to Customers and Apollo in no less
than * minute intervals. For purposes of this Agreement, such scheduled and
actual departure and arrival and irregularity information shall be known as
"FLIFO." United will notify Contractor in writing as soon as practicable after
United determines that Contractor has failed to update FLIFO in a timely and
accurate manner. If Contractor fails * times in any consecutive * period (the
"FLIFO THRESHOLD") to update FLIFO in a timely and accurate manner as soon as it
becomes evident to Contractor that a schedule deviation shall take place, then
upon notification by United to Contractor, Contractor shall pay United damages
of * for each occurrence over and above the first * occurrences during such *.
United agrees to bill Contractor any amount owed under this Section within *
after the end of each calendar * period during which Contractor has exceeded the
FLIFO Threshold. Such damages shall be United's exclusive remedy for
Contractor's non-compliance with this paragraph and may be collected by setoffs
against other amounts owed by United to Contractor hereunder.
2. NO FLIGHT DISPATCH DUTY
Contractor will be solely responsible for, and United will have no
obligations or duties with respect to, the dispatch of Contractor's flights. For
the purposes of this ARTICLE 2, the term "dispatch" will include, but will not
be limited to, all planning of aircraft itineraries and routings, fueling and
flight release.
3. COMPLIANCE WITH STATUTES
Contractor hereby represents, warrants and covenants that all air
transportation services performed by it pursuant to this Agreement or otherwise
will be conducted in full compliance with all applicable statutes, orders, rules
and regulations, whether now in effect or hereafter promulgated, of all
governmental agencies having jurisdiction over Contractor's operations,
including, but not limited to, the Federal Aviation Administration ("FAA") and
the Department of Transportation ("DOT"). Contractor's compliance with such
governmental statutes, orders, rules and regulations will be the sole and
exclusive obligation of Contractor and United will have no obligation,
responsibility or liability, whether direct or indirect, with respect to such
matters except as otherwise expressly provided herein. Additionally, Contractor
will comply during the term of this Agreement with the United/United Express
Safety Standards, as described on APPENDIX G.
4. WEATHER INFORMATION SERVICE
From time to time and upon the request of Contractor or its flight
crews, United may furnish Contractor's flight crews with such U.S. Weather
Bureau information or data as may be available to United; provided that (i) in
furnishing any such weather information or data to Contractor, neither United
nor its employees or agents will be
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responsible or liable for the accuracy thereof and, (ii) any and all costs or
expenses associated with such weather information or data are carrier controlled
costs and will be paid by Contractor.
5. FLIGHT INTERRUPTION MANIFESTS
Contractor shall use United FIMS to rebook customers who are denied
boarding on any United Express flight. Contractor's Customer Service employees
shall rebook the customer based on the ticketed class of service. If
Contractor's employees upgrade the customer inappropriately, United will bill
Contractor for the incremental cost of the upgrade. Contractor shall use
reasonable best efforts to rebook customers on United code share (e.g. US
Airways) or Star Alliance partner flights provided it does not seriously
inconvenience the passenger.
6. DIVERSIONS
United will pay Contractor under the terms of this Agreement for all
Contractor United Express diverted flights that are completed within * hours of
the scheduled arrival time. The cost of busing will be borne by the Contractor
at all times and is not reimbursable by United. Contractor will use its best
efforts to assure that no bus segment exceeds * as defined in the Apollo mileage
database. In the event a diverted flight is not completed within the * hour time
frame, United will pay Contractor for the originally scheduled departure
provided that both of the following conditions apply (i) the diversion is
outside of the control of Contractor and (ii) the destination airport was open
for FAR Part 121 flights at the time of departure and forecasted to be open at
the time of arrival. Contractor will pay for any repositioning costs, which
costs shall not be reimbursable by United. Upon request by United, Contractor
and United agree to meet to discuss opportunities to reduce the number of
Contractor diversions and costs associated with such diversions.
7. GROUND DELAY PROGRAM
Contractor will participate in United's ground delay program, which
stipulates that United may request Contractor to cancel, and Contractor shall
cancel, flights to free ATC slots at a hub when the FAA or United's Station
Control Center has initiated a Ground Delay Program ("GDP"). For cancellations
requested by United as part of the GDP, and in accordance with ARTICLE VIII,
United shall pay Contractor only a portion of the amounts normally due had the
flights not been cancelled.
For flights cancelled under the GDP program, United will pay
Contractor only the *. No payments will be made with respect to the * that
correspond to * in these categories. The Ground Delay Program will not affect
payments in the following three categories unless specifically included above:
*.
8. STATION OPERATIONS CENTER (SOC) - HUB LOCATIONS
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At United's request, Contractor shall provide adequate staffing in
the United Airlines SOC of each designated hub city at United's request. If the
number of departures in any single hub exceeds * per day, Contractor will
provide, at Contractor's expense, a full-time representative at United's
request. Such staffing will be provided during all normal hours of operation. If
the number of daily departures does not exceed * per day, then Contractor will
provide a point of contact and make a representative available on a limited
basis as requested by United.
F. STATION SUPPORT SERVICES
United will provide or cause to be provided, at its expense, to Contractor
certain support services as set forth on APPENDIX C, at the United Locations and
Joint Locations set forth in APPENDIX B; provided that United shall have the
right to add, delete or otherwise modify the services described on APPENDIX B if
United provides Contractor with * prior written notice of such modification;
provided, however, United shall use commercially reasonable efforts to notify
Contractor with * prior written notice. United agrees to reimburse Contractor
only for * incurred by Contractor as a result of a United requested location
change within a current station under this Section. *. At Contractor Locations,
Contractor will provide or cause to be provided at least those services and
facilities set forth in APPENDIX C. All such station support services will be
provided as of the Effective Date unless otherwise stated.
G. TARIFFS AND SCHEDULE PUBLICATION
1. GENERAL
United shall have the sole right and power to establish and modify,
from time to time, the fare/rate classes and fare/rate levels (including through
fares) and fare/rate descriptions for all Contractor's United Express Services
in the city pairs operated by Contractor under this Agreement, in a manner
consistent with pricing (including joint fares) established by United. United
shall comply with applicable governmental regulations pertaining to public
disclosure of fares, rates and rules tariffs and shall pay for any fines or
civil penalties incurred by Contractor as a result of violations by United
thereof, and for the cost of defense of such claims of violations including the
cost of defending or negotiating the terms of a consent order or decree.
2. PASSENGER FARE TARIFFS