American Trans Air, Inc.
7337 West Washington St.
Indianapolis International Airport
Indianapolis, Indiana 46231
Subject: Demonstration Flight Waiver
Reference: Purchase Agreement 2262 (the Purchase Agreement) between The
Boeing Company (Boeing) and American Trans Air, Inc. (Customer) relating to
Model 737-83N aircraft (the Aircraft)
This Letter Agreement amends and supplements the Purchase Agreement. All terms
used but not defined in this Letter Agreement shall have the same meaning as in
the Purchase Agreement.
Definition of Terms:
Correction Costs: Customer's direct labor costs and the cost of any material
required to correct a Flight Discrepancy where direct labor costs are equal to
the warranty labor rate in effect between the parties at the time such labor is
expended.
Flight Discrepancy: A failure or malfunction of an Aircraft, or the accessories,
equipment or parts installed on the Aircraft which results from a defect in the
Aircraft, Boeing Product, engine or Supplier Product or a nonconformance to the
Detail Specification for the Aircraft.
The AGTA provides that each aircraft will be test flown prior to delivery for
the purpose of demonstrating the functioning of such Aircraft and its equipment
to Customer; however, Customer may elect to waive this test flight. For each
test flight waived, Boeing agrees to provide Customer an amount of jet fuel at
delivery that, including the standard fuel entitlement, totals the following
amount of fuel:
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Aircraft Model Total Fuel Entitlement (U.S. Gallons)
--------------- -------------------------------------------------
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737 Full tanks (approx. 5,300 to 6,800, depending
on model)
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747 26,000
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757 9,600
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767 11,000
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--------------- -------------------------------------------------
777 10,300
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Further, Boeing agrees to reimburse Customer for any Correction Costs incurred
as a result of the discovery of a Flight Discrepancy during the first flight of
the aircraft by Customer following delivery to the extent such Correction Costs
are not covered under a warranty provided by Boeing, the engine manufacturer or
any of Boeing's suppliers.
Should a Flight Discrepancy be detected by Customer which requires the return of
the Aircraft to Boeing's facilities at Seattle, Washington, so that Boeing may
correct such Flight Discrepancy, Boeing and Customer agree that title to and
risk of loss of such Aircraft will remain with Customer. In addition, it is
agreed that Boeing will have responsibility for the Aircraft while it is on the
ground at Boeing's facilities in Seattle, Washington, as is chargeable by law to
a bailee for mutual benefit, but Boeing shall not be chargeable for loss of use.
To be reimbursed for Correction Costs, Customer shall submit a written itemized
statement describing any flight discrepancies and indicating the Correction Cost
incurred by Customer for each discrepancy. This request must be submitted to
Boeing's Contracts Regional Director at Renton, Washington, within ninety (90)
days after the first flight by Customer.
Very truly yours,
THE BOEING COMPANY
By
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Its Attorney-In-Fact
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ACCEPTED AND AGREED TO this
Date: , 2000
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AMERICAN TRANS AIR, INC.
By
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Its
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