EXHIBIT 10.7
CODESHARE AGREEMENT
This Codeshare Agreement (the "Agreement"), dated as of September 4,
2001, is entered into by and between Frontier Airlines, Inc. ("Frontier"), a
corporation organized under the laws of Colorado, and Mesa Airlines, Inc.
("Mesa"), a corporation organized under the laws of Nevada.
WHEREAS, Frontier wishes to expand its route network to offer new
competitive services in additional markets, and to enhance Frontier's
existing route network by increasing frequency of service on certain
routes;
WHEREAS, Mesa is an operator of regional jet aircraft;
WHEREAS, Frontier is hub carrier at Denver;
WHEREAS, Mesa has no services at Denver;
WHEREAS, Mesa and Frontier wish to collaborate to provide new services,
where neither Frontier nor Mesa could economically and efficiently do
so independently;
WHEREAS, Frontier and Mesa wish to enter into this Agreement whereby
Mesa will carry the "F9" code on the routes identified in Annex B;
NOW THEREFORE, In consideration of the mutual covenants and promises in
this Agreement, Frontier and Mesa hereby agree as follows:
1. DEFINITIONS
1.1 Capitalized terms used in this Agreement, unless the context
otherwise requires or expressly provides, shall have the meanings
set forth in Annex A.
1.2 It is agreed that accepted industry procedures and any existing
agreements relating to the interlining of passengers and baggage,
including those industry procedures set forth in the ATA
Resolution 5.65 (Interline Traffic Agreement - Passengers) for
carriage solely within and between the United States, Canada,
Puerto Rico and the U.S. Virgin Islands, shall apply to the
provision of air transport and the related transactions
contemplated by this Agreement, except to the extent inconsistent
or in conflict with the terms of this Agreement.
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2. CODESHARE SERVICE
2.1 The parties shall mutually designate certain flights as
Codeshared Flights, whereby Mesa will carry Frontier's "F9"
designator code on the city-pair routes identified in Annex B.
2.1.1 The parties shall use commercially reasonable efforts
to meet the target implementation dates specified in
Annex B. Provided, however, that these target dates
are subject to change in light of any necessary
regulatory approvals, operational constraints, and
the delivery of aircraft.
2.1.2 Frontier shall cooperate in promptly publishing all
Codeshared Flights in the Airline Guides,
Reservations Systems and CRSs.
2.1.3 Mesa reserves the right to discontinue Codeshared
Flights on any specific route, flight or schedule,
and in the event of such discontinuation, Frontier
shall cooperate in publishing the resulting changes
in the Airline Guides, Reservations Systems and CRSs.
2.1.4 Mesa shall have no obligation to extend Codeshared
Flights to other routes or to maintain operations on
any route; no such obligation can be created by any
oral statements or representations or course of
dealing, but only by express written agreement.
2.1.5 Mesa shall have the sole and exclusive right to
operate flights using the F9 code on the Mesa
Exclusive Routes; provided, however, that Mesa shall
have no obligation to operate flights on the Mesa
Exclusive Routes. Mesa agrees to provide Frontier
with ninety (90) days prior advance written notice of
intention to provide service on any Mesa Exclusive
Route.
2.1.6 Mesa shall have the right, but not the obligation, to
operate at least fifty percent (50%) of all flights
operating under the F9 code on the Mesa Minimum
Service Routes specified in Annex C.
2.2 Detailed procedures for implementing this Agreement will be set
forth in the procedures manual prepared by the parties in
conjunction with this Agreement (the "Procedures Manual"). The
parties will use their best commercially reasonable efforts to
finalize the Procedures Manual prior to
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program implementation. The Procedures Manual, including any
amendments or supplements thereto agreed in writing between the
parties from time to time is incorporated by reference into and made
a part of this Agreement; provided, however, that in the event of a
conflict between a provision of this Agreement and any provision of
the Procedures Manual, as amended and supplemented, the terms of
this Agreement shall prevail.
2.4 In the event of any flight delay or cancellation that requires a
Codeshared Passenger to be involuntarily rerouted or denied
boarding and denied boarding compensation is paid on the
operating carriers ticket stock or the Mesa special service
ticket stock, as the case may be, to such passenger, the party
causing such involuntarily rerouting or denied boarding shall
bear all reasonable associated costs arising out of its actions.
Each of the parties agrees to provide seat availability, subject
to reasonable capacity limitations, on their respective flights
in connection with vouchers awarded to passengers in connection
with this Section. Settlement of the costs associated with the
involuntary rerouting or denied boarding will be conducted
through the ACH and subject to ACH policies and procedures.
Notwithstanding the foregoing, Frontier agrees to provide
customer service support in the event of a flight delay or
cancellation at its Customer Service Counter at Denver
International Airport. In addition, baggage handling and
settlement of baggage handling claims shall be in accordance with
existing tariffs and the Trade Practice Manual of the Air
Transport Association or the IATA Resolutions and Recommended
Practices Manual, whichever is applicable.
2.5 The parties shall use commercially reasonable efforts to
coordinate their service schedules and to consider schedule and
route changes suggested by Frontier to maximize program
passengers and revenue and to maximize the convenience and
minimize the waiting time of passengers making connections
between the Codeshared Flights and other flights operated by the
parties; provided, however, that neither party is obligated to
operate specific flights or service schedules and each party
retains the right to determine the service schedules of its own
flights, including, without limitations, the right to reduce
flights, add new flights and discontinue flights and cities or
airports served. Each party agrees to notify the other party as
soon as practicable, but not less than sixty (60) days unless
otherwise agreed to by the parties, in advance of any schedule
change to a Codeshared Flight or a connecting Frontier-operated
flight. If Frontier suspends or terminates service to a
particular market shall be solely responsible for transferring
the reservations of such passengers to other carriers or making
alternative arrangements. If Mesa suspends or terminates service
to a particular market it will pay Frontier * per PNR to transfer
the reservations of such passengers to other carriers. Frontier
will charge Mesa the net expense of ticketing passengers on a
reaccomodation
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basis through the ACH.
2.6 The Conditions of Carriage of Frontier (as modified from time to
time) shall govern the transportation of Codeshared Passengers on
the Codeshared Flights, except that if there are any material
differences between the operating rules and procedures of Mesa,
and those operating rules and procedures that apply to
Frontier-operated flights, such material differences shall be
described in the Procedures Manual and Frontier shall disclose
the same in its Conditions of Carriage.
2.7 The Operating Carrier has final authority and responsibility
concerning the operation and safety of the aircraft and its
passengers. In emergencies, the parties shall adhere to the
emergency procedures for Codeshared Passengers set forth in the
Procedures Manual.
2.8 Upon request by Mesa, Frontier agrees to provide Mesa with
ticketing, gate and ground handling services at Denver
International Airport and stations where both carriers operate
based on a "per turn" fee to be agreed to by the parties and
subject to a separate ground handling agreement. Subject to the
provisions in Section 3.4, Mesa shall be responsible for the cost
of gates, facilities, and the build-out of such at each station.
Mesa will also be responsible for providing all the equipment
necessary for its operations at each station. Mesa shall be
responsible for securing gates at Denver International Airport.
3. IMPLEMENTATION EXPENSES
3.1. Each party shall bear its own automation costs and expenses
associated with the services contemplated by this Agreement.
Mesa shall retain the right under this Agreement to convert to
Mesa's reservation system, utilize Mesa ticket stock and operate
a dual code (YV) on the Mesa local markets.
3.2 Frontier and Mesa will share the cost and expense (on a * basis)
of roadside, exterior, check-in concourse, gate and baggage
service signage placed at airports and city ticket offices
identifying Frontier in locations served by the Codeshared
Flights in order to facilitate travel on the Codeshared Flights.
Frontier will be responsible for installing and maintaining all
such signage, but the parties will mutually determine which party
will obtain any necessary formal or informal approvals from
appropriate airport or other authorities to install such signage.
3.3 Each party shall retain all rights, titles and interests in systems,
software, equipment and facilities funded by it.
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3.4 *.
4. INVENTORY CONTROL AND PROCEDURES
4.1 Frontier will ticket Codeshared Passengers using available CRS
inventory (free sale environment) as set forth in the Procedures
Manual. The parties will map inventory classes of the Codeshared
Flights to inventory classes of Frontier as set forth in the
Procedures Manual. The parties will endeavor to map the average
coupon value of Frontier' inventory classes to comparable classes of
Mesa to provide nondiscriminatory access for bookings made by
Frontier for passengers yielding comparable revenue values, provided
however that Mesa will retain sole and ultimate control over the
management of seat inventory availability on Codeshared Flights that
are operated by Mesa.
4.2 Frontier shall provide authorized Mesa individuals restricted access
to Frontier's CRS partition. Each day Frontier will transmit to Mesa
a file containing daily booking information on each Codeshared
Flight. Each day Frontier shall accept from Mesa daily updated
authorization levels for each Codeshared Flight.
5. MARKETING, RESERVATIONS AND PRODUCT DISPLAY
5.1 The Codeshared Flights will be marketed and promoted by Frontier
under its flight designator code. Frontier agrees to promote the
Codeshared Flights throughout the term of this Agreement through
sales, advertising, and promotional support to enhance the
interline exchange of passengers between the parties. Each
party shall ensure that its respective advertising and promotions
shall comply with all applicable governmental laws, rules and
regulations. Frontier shall comply with 14 C.F.R. Section 399.88
and any other applicable rules regarding the disclosure and
holding out of Codeshared Flights provided for herein.
5.2 Reservations for passengers using the services described in this
Agreement will be made by Frontier on a non-discriminatory basis in
accordance with Frontier's established methods and procedures. For
passengers originating their travel at points other than those
served by Mesa under this Agreement, either on Frontier's system or
on the systems of other airlines, connecting reservations to the
services of Mesa will also be on a non-discriminatory basis in
accordance with currently established industry methods and
practices. In all cases, Frontier will confirm the reservations of
Mesa's passengers through the entire itinerary of their scheduled
trips. When a contact number is supplied by the passengers making
such reservations, Frontier will assume the responsibility of
notifying passengers of any changes in Mesa's schedules or
operations,
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provided that Mesa furnishes Frontier with advance notice as set
forth in Section 2.5 of such changes.
5.3 Frontier may identify the Codeshared Flights, to the extent
permitted by governmental rules and regulations, in Airline Guides,
Timetables, CRS' and Reservations Systems using Frontier' flight
designator code. Any costs incurred for the publication of
Codeshared Flights or connections to and from such flights in
Airline Guides, CRSs and Reservation Systems shall be borne by
Frontier. Each party shall include the Codeshared Flights in its
internal Reservations Systems.
5.4 Frontier will publish schedules for Mesa in cites served by Mesa but
not served by Frontier. The format and nature of such schedules
shall be consistent with schedules published by Frontier in cities
not served by Mesa.
5.5 Frontier and Mesa will mutually cooperate to create an interline
agreement to transport cargo on an interline basis, provided the
agreement makes sound business sense to both parties. This agreement
will be developed and executed separate to this Codeshare Agreement.
5.6 Mesa will actively pursue codeshare agreements with other codeshare
partners of Frontier. Upon reaching such agreements, Frontier will
be allowed to market codeshare to codeshare service. Under these
agreements, Frontier will only be allowed to recover its costs in
the manner prescribed in Section 6.
6. TRAFFIC DOCUMENT ISSUANCE AND SETTLEMENT
6.1 Frontier shall establish, publish and sell through passenger
fares. Passenger revenues will be allocated to each carrier
based upon the straight rate/prorate formula (as set forth in
detail in section 6.6), unless the division of such revenue is
otherwise mutually agreeable to Frontier and Mesa.
6.2 Mesa shall establish, publish, sell and collect local fares
applicable to travel within Mesa Exclusive Routes. Unless
otherwise provided herein, Mesa shall be paid its local fares for
passengers traveling solely on Mesa's flights in accordance with
industry and Clearing House practices.
6.3 Flight coupons for use on the Codeshared Flights may be issued by
either party, or by third parties with whom the parties from time
to time have interline traffic agreements.
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6.4 All flight coupons on Codeshared Flights shall be sent to and
retained by Mesa and shall be billed by Mesa to Frontier or the
third-party Ticketing Carrier, as applicable, using the standard
interline process of the ACH (as set forth in detail in section
6.5). Settlement of other charges between the carriers will be
invoiced and payable through the ACH.
6.5 Mesa shall remit to Frontier the interline service charge as
published by the ACH for all commissionable flight coupons billed
under this Agreement for passengers traveling solely on Mesa flights
(i.e., passengers who do not connect to/from a Frontier flight).
6.6 Marketing Carrier Tickets issued by Frontier or Mesa for
wholly-domestic itineraries shall be settled in accordance with
standard industry straight rate proration as defined in the
Passenger Proration Manual based on construction of "*" fare values,
which shall be agreed to by the parties in advance of commencing
Codeshared Flights and the parties agree to review such rates on a
quarterly basis if necessary or requested by the parties. For fare
verification purposes, the applicable published fare is that filed
with the U.S. Department of Transportation or shown in Air Tariff or
Airline Passenger Tariff in PIPPS (Passenger Interline Prorate
System) in effect on the date that the passenger's ticket is issued.
For example, if the Mesa's segment construction * fare OKC- DEN is
$* and the Frontier segment construction * fare for DEN- SEA $*, the
dollar value of the OKC-SEA ticket would be divided *% to Mesa and
*% to Frontier.
For itineraries involving an international segment (excluding
Canada and other countries that are treated as "domestic" for
proration purposes under the ACH rules), proration will be based
on the procedures of the Multilateral Prorate Agency as published
in the IATA Revenue Accounting Manual. Marketing Carrier Tickets
issued by parties other than Frontier or Mesa shall be settled in
accordance with any proration or similar agreements then in force
between Mesa and the Ticketing Carrier.
6.7 Frontier and Mesa will enter into an industry standard Ticketing and
Baggage Agreement that will become part of this Agreement. Each
carrier will use its own ticket stock associated for special service
ticket items. Any other matters not specifically addressed in this
Agreement, which require the collecting of fees or issuance of
ticket stock, will be subject to the rules of the ACH.
6.8 In consideration for the reservation services, CRS fees, credit
card charge commissions, and certain ticketing services provided
by Frontier under this Agreement, Mesa agrees to pay to Frontier
* per passenger fee that involves passengers flying solely on
Mesa routes. Frontier shall bill Mesa on a monthly basis and
such billing shall be conducted through the ACH and subject to
the ACH policies and procedures..
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6.9 In the case of a rejected credit card or a returned check,
Frontier may recover through the ACH any funds paid to Mesa
associated with such rejected credit card or returned check.
7. TRAINING
7.1 Except as otherwise agreed, each party shall provide or arrange,
at its own cost and expense, all initial and recurring training
of its personnel (and its travel agents) to facilitate the
Codeshared Flights and operations at airports served by the
Codeshared Flights, reservations and ticket offices and other
points of contact between the parties and with the public. This
training shall include passenger service, reservations and sales
activities and in-flight service involving the Codeshared
Flights, all as more fully described in the Procedures Manual.
7.2 Frontier and Mesa shall share any training materials developed to
support the Codeshared Flights; provided that the copyright and
all other propriety rights to any materials exchanged shall
remain with the party who originally developed such materials.
Notwithstanding, Mesa shall only be responsible for procedures
training as set forth in the Procedures Manual. Any changes to
the Procedures Manual must be agreed to by both Frontier and
Mesa.
8. SECURITY
The parties shall cooperate in matters of security procedures,
requirements and obligations at all airports served by the Codeshared
Flights in accordance with the Procedures Manual. The Operating
Carrier reserves the right to apply at its sole expense the provisions
of its own security programs to the carriage of all passengers, baggage
and cargo on board the Codeshared Flights. Such provisions may include
any then applicable procedures used for the physical screening of
passengers, baggage or cargo, interviewing of passengers and/or
selective loading of baggage or cargo. Mesa will be liable for only the
security costs related to local market passengers traveling solely on
Mesa flights.
9. AIRCRAFT MAINTENANCE AND CLEANING
The Operating Carrier shall have sole responsibility for the
maintenance and cleaning of its leased and owned aircraft and other
equipment used in connection with the Codeshared Flights. Maintenance
of such aircraft and equipment must, at a minimum, comply with the
standards imposed by the relevant aviation authorities.
10. FREE AND REDUCED RATE TRANSPORTATION
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Unless otherwise provided by relevant agreements between the Operating
Carrier and other parties neither party shall be entitled to ticket
travel industry non-revenue, discounted (i.e., AD, ID, etc.) or free
travel on the Codeshared Flights.
11. FREQUENT FLYERS
11.1 Frontier may offer to participants in the Frontier Frequent Flyer
program only (and not participants in any other frequent flyer
program with which Frontier may have a participation agreement)
the opportunity to accrue and redeem Frontier mileage on the
Codeshared Flights. Mileage accrual on Codeshared Flights will
be calculated by and awarded to Frontier Frequent Flyer
participants at Frontier' sole discretion. Mesa shall have sole
and exclusive control of frequent flyer capacity awarded in each
route for award travel on Codeshared Flights for Frontier
Frequent Flyer program members; provided, however such average
frequent flyer capacity on Mesa flights shall not be less than
seven percent("FF Seat Availability").
11.2 Within five (5) days after (a) issuance or receipt of notice of
termination of this Agreement or (b) receipt of notice of
discontinuance of designated Codeshared Flights for any reason,
Frontier will discontinue issuing Marketing Carrier Tickets as
frequent flyer awards for travel on the discontinued flights
where such travel is to occur after the effective date of such
termination or discontinuance and Mesa shall have no further
obligations under this Agreement.
11.3 Frontier shall administer its Frequent Flyer Program in a manner
that is consistent with the parties' respective obligations under
this Agreement and in accordance with all applicable laws.
Frontier shall be solely responsible for the promotion and
administration of its Frequent Flyer Program, including without
limitation, processing of member enrollments, determining
eligibility for award travel, issuance of all award certificates
and tickets, recording of mileage accruals, redemption's and
other account activity, preparation and distribution of account
statements, responding to member inquiries and other customer
services. The advertising and promotional materials disseminated
by Frontier respecting mileage accrual or redemption on the
Codeshared Flights shall, to the extent practicable, place the
public on notice that availability of such accruals and
redemption's will terminate in the event of the termination of
this Agreement or discontinuance of designated Codeshared
Flights. In the event either party gives notice of termination
of this Agreement, Frontier at its expense will advise members of
its Frequent Flyer Program in accordance with program rules of
the impending termination and the restrictions on
post-termination award travel on the Codeshared Flights.
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11.4 Mesa will have no responsibility or liability for Frontier'
promotion or administration of its Frequent Flyer Program and
Frontier shall indemnify, defend and hold harmless the Operating
Carrier Indemnified Party (as defined in Section 15.2) against
any and all Damages caused by, arising out of or relating to
Frontier' promotion or administration (whether proper or
improper) of its Frequent Flyer Program. This indemnity shall
survive the termination of this Agreement.
12. TRADEMARKS AND CORPORATE IDENTIFICATION
12.1 Each of Frontier and Mesa acknowledges for all purposes that any
and all logos, trademarks, service marks and trade names of the
other, whether registered or not, are and shall at all times
remain the exclusive property of the other and may not be used in
a manner not authorized without the prior written consent of such
party, except as set forth herein. Each of Frontier and Mesa
further acknowledges that any goodwill or other rights which
arise as a result of the use by it of the other party's marks as
permitted under this Agreement shall accrue solely to the benefit
of the party owning such marks, whether registered or not.
12.2 Each of Frontier and Mesa hereby grants to the other, a
non-exclusive, non-transferable, royalty-free license for the
terms of this Agreement to use their respective service marks
("Frontier" for Frontier and "Mesa" for Mesa, each a "Licensed
Trademark"), subject to the terms and conditions set forth in
this Section 12. This license is limited to the use of the
Licensed Trademarks in connection with the advertising and
promotion of the Codeshared Flights contemplated by this
Agreement.
12.3 Each party agrees to use the Licensed Trademarks only in a manner
approved in advance and in writing by the party owning such
Licensed Trademarks. Each Licensed Trademark shall be marked
with an (R) or TM or SM or other symbol.
12.4 Each party agrees that all advertising and promotional materials
bearing the Licensed Trademarks in relation to air transport
services contemplated by this Agreement shall meet the quality
and presentation standards as set forth by the party owning the
relevant Licensed Trademark.
12.5 Each party has sole discretion to determine the acceptability of
both the quality and presentation of advertising and promotional
materials using its Licensed Trademark.
12.6 Each party is responsible for providing to its own authorized
agents and airport locations the agreed promotional materials
bearing the Licensed Trademarks.
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12.7 Mesa operated flights under the F9 codeshare will be operated
with an aircraft livery that reflects either Mesa or Frontier.
13. REPRESENTATIONS AND WARRANTIES
13.1 Each of Frontier and Mesa hereby represents and warrants to the
others as follows:
a. It is a duly incorporated and validly existing corporation,
in good standing under the laws of its jurisdiction of
incorporation; is an air carrier duly authorized to act as
such by the government of its country of incorporation; and
has the requisite corporate power and authority to enter
into and perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement by it
have been duly authorized by all necessary corporate
action. This Agreement has been duly executed and
delivered by it and assuming due authorization, execution
and delivery by the other party hereto. This Agreement
constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except
to the extent that enforceability may be limited or
modified by the effect of bankruptcy, insolvency or other
similar laws affecting creditors' rights generally and the
application of general principles of equity and public
policy.
b. The execution, delivery or performance by it of this
Agreement, shall not (i) contravene, conflict with or cause
a default under (A) any applicable law, rule or regulation
binding on it, or (B) any provision of its Charter,
Certificate of Incorporation, Bylaws or other documents of
corporate governance, or (ii) contravene or cause a breach
or violation of any agreement or instrument to which it is
a party or by which it is bound, except where such
conflict, contravention or breach would not have a material
adverse effect on it and its Affiliates taken as a whole or
on its ability to perform this Agreement.
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c. The execution, delivery and performance by it of this
Agreement do not require the consent or approval of or the
giving of notice to, the registration with, the recording
or filing of any document with, or the taking of any other
action in respect of any competent authority, any trustee
or holder of any of its indebtedness or obligations any
stockholder or any other person or entity, and except where
failure to obtain or take such action would not have a
material adverse effect on it or a material adverse effect
on the transactions contemplated in this Agreement.
13.2 Each of the foregoing representations and warranties shall
survive the execution and delivery of this Agreement.
14. TERM
14.1 The term of this Agreement shall commence on the date Codeshared
Services begins and shall continue until the fifth year
anniversary of such date, unless earlier terminated pursuant to
Sections 14.2, 18, 24, or as elsewhere provided in this
Agreement. At the expiration of the initial term, this Agreement
shall be automatically renewed for additional terms of one year
each, unless either party provides written notice to the other
party of its intent not to renew this Agreement at least 350
days prior to the end of the initial or any renewal term.
14.2 This Agreement may be terminated prior to expiration as follows:
a. at any time by mutual written consent of the parties hereto;
b. by the non-breaching party upon the breach of a material
term, agreement, covenant, representation or warranty of
this Agreement (other than a breach of Section 6.3, 6.4,
6.5, or 6.6 of this Agreement or the failure to otherwise
pay any sums due pursuant to this Agreement), including a
failure to comply with any material obligations and
procedures set forth in the Procedures Manual, provided
that the non-breaching party provides the breaching party
at least 30 days' prior written notice describing the
alleged breach with as much particularity as reasonably
practicable. Termination under this Section 14.2.c shall
not be effective if the breaching party, (i) corrects such
breach within twenty-five (25) days following receipt of
such notice, or (ii) if such breach cannot be corrected in
such 25-day period, take actions reasonably contemplated to
correct such breach and which do correct such breach no
later than 30 days following receipt of such notice.
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c. by the non-breaching party upon the breach of Section 6 of
this Agreement or the failure to otherwise pay any sums due
to the non-breaching party pursuant to this Agreement by
the other party, after the non-breaching party provides the
breaching party at least 15 days' prior written notice
describing, with as much particularity as practical the
alleged breach and the breaching party does not, within 7
days following receipt of such notice, correct such breach;
or
d. at any time by Mesa or Frontier upon written notice if the
other party (i) makes an assignment for the benefit of
creditors; (ii) suspends the payment of or admits in
writing its inability to pay, or generally fails to pay,
its debts as they become due; (iii) has suspended (as
declared by a clearing house) its transactions with banks
and/or other financial institutions or proposes or
commences a moratorium upon or extension or composition of
its debts; (iv) has issued against it any writ, execution,
process or abstract of judgment which may have a material
adverse effect on it and which is not dismissed, satisfied
or stayed within 60 days; (v) files a petition for
bankruptcy, composition, corporate reorganization,
corporate liquidation, arrangement or special liquidation
proceedings; or (vi) ceases all or a substantial part of
its operations (other than due to Force Majeure as defined
in Section 18).
e. if: (i) Mesa's arrival performance as measured by the DOT
for the Denver hub falls one and one-half percentage
points below Frontier's arrival performance for the Denver
Hub for four of any five consecutive calendar months or
(ii) Mesa's flight completion factor (excluding
cancellations attributable to weather, air traffic control
cancellations, cancellations resulting from an emergency
airworthiness directive from the FAA affecting all aircraft
similarly equipped, cancellations resulting from the acts
or omissions of Frontier or its employees, including,
without limitation, damage to aircraft) for the Denver hub
falls below * for four of any of five consecutive calendar
months (each, a "Cancellation Event"), Frontier, at its
election, may by written notice (a "Performance Notice")
inform Mesa that if the Cancellation Event is not cured
within ninety (90) days from receipt of such Performance
Notice (the "Cure Period"), Frontier, at its option may
give a Termination Notice (as defined below). If the
Cancellation Event relates to Mesa's arrival performance, the
cure shall be effected by Mesa bringing its arrival
performance for such hub to a rate that is equal to or above
Frontier's arrival performance as measured by the DOT at the
Denver hub during the Cure Period. If the Cancellation Event
relates to the Mesa's flight completion factor, the cure shall
be effected by Mesa bringing its
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flight completion factor at the Denver hub to * or higher
during the Cure Period. If, after the Cure Period has expired
and Mesa has not cured the Cancellation Event as set forth
above, then Frontier at any time during the thirty (30) day
period following the lapse of the Cure Period without cure
may, upon 60 days' prior written notice to Mesa ("Termination
Notice"), terminate this Agreement. Frontier and Mesa shall
provide each other with written reports, within ten days from
the last day of the month, containing the necessary data for
the above calculations.
14.3 Subject to Section 14.4, in the event of termination or
expiration of this Agreement, Frontier shall take all reasonable
actions to confirm and preserve reservations on the Operating
Carrier for passengers scheduled to be traveling on Marketing
Carrier Tickets and, as applicable, endorse or otherwise modify
or reissue such tickets to permit use on the Operating Carrier.
The Operating Carrier shall accept passengers traveling on such
tickets as if such reservations had been booked through the
Operating Carrier using ordinary interline procedures but giving
effect to the ticket settlement methodology provided in Section
6.4 of this Agreement.
14.4 In the event that this Agreement is terminated by the Operating
Carrier pursuant to Section '4.2.b,c or d, the Operating Carrier, in
its sole discretion, may decline any or all passengers scheduled to
be traveling on Marketing Carrier Tickets. The Operating Carrier who
terminates this Agreement shall be solely responsible for
transferring the reservations of such passengers to other carriers
or making other alternative arrangements.
14.5 Mesa agrees to dedicate five (5) aircraft to Codeshare Flights
under this Agreement by April 30, 2002 and Mesa agrees that
absent a material adverse change in its business that it will not
reduce the size of its fleet in Denver by more than one aircaft
every two (2) months.
15. INDEMNIFICATION
15.1 Subject to the indemnities provided in Section 15.2(a), Mesa
shall indemnify, defend and hold harmless Frontier and its
Affiliates and their respective directors, officers, employees
and agents (individually a "Marketing Carrier Indemnified Party")
from and against any and all Damages arising out of, caused by or
occurring in connection with (or alleged to arise out of, be
caused by or be occurring in connection with):
a. the death of or injury to persons (other than employees of
Marketing Carrier Indemnified Party while performing
services required under this Agreement), delay of
passengers or delay or loss of or damage to property
(including aircraft, baggage or cargo) occurring while such
persons or property are under the control or
14
in the custody of, or being transported by, Mesa, (including
for the avoidance of doubt, death of or injury to codeshare
passengers traveling on Marketing Carrier Tickets that
implement limits of liability with respect to passenger claims
that differ from those of the Operating Carrier) except to the
extent and degree caused by the willful misconduct of a
Marketing Carrier Indemnified Party (in which case Frontier
shall indemnify Mesa);
b. negligent acts or omissions Mesa which are in any way
related to services contemplated by this Agreement to the
extent insurable;
c. Mesa's breach of any of its representations or warranties
set forth in Section 13 of this Agreement;
d. infringement of a third party's intellectual property or
similar rights by Mesa's logos, trademarks, service marks
or trade names; or
e. based upon Mesa's provision of or failure to provide
carriage or service in conformity with the governing
conditions of carriage or orders or regulations binding on
the carrier with which the passenger has a contract of
carriage.
15.2 Subject to the indemnities provided in Section 15.1(a), Frontier
shall indemnify, defend and hold harmless Mesa and its Affiliates
and their respective directors, officers, employees and agents
(individually an "Operating Carrier Indemnified Party") against
any and all Damages arising out of, caused by or occurring in
connection with (or alleged to arise out of, be caused by or be
occurring in connection with):
a. the death of or injury to persons (other than employees of
the Operating Carrier Indemnified Party while performing
services required under this Agreement), delay of
passengers or delay or loss of or damage to property
(including aircraft, baggage or cargo) occurring while such
persons or property are under the control or in the custody
of, or being transported by, the Marketing Carrier,
(including for the avoidance of doubt, death of or injury
to codeshare passengers traveling on Marketing Carrier
Tickets that implement limits of liability with respect to
passenger claims that differ from those of the Operating
Carrier) except to the extent and degree caused by the
willful misconduct of a Operating Carrier Indemnified Party
(in which case Mesa shall indemnify the Marketing Carrier
Indemnified Party
b. negligent acts or omissions of a Marketing Carrier
Indemnified Party which are in any way related to services
contemplated under
15
this Agreement to the extent insurable;
c. passenger claims based on Frontier' failure to properly
issue and complete transportation documentation in
accordance with the provisions of the standard IATA, or ATA
(as may be appropriate), ticketing procedures, including
the failure to put a proper notice of the limits of
liability on such documentation or regulatory requirements
imposed by governing governmental authorities;
d. Frontier' breach of its representations or warranties set
forth in Section 13of this Agreement; or
e. infringement of a third party's intellectual property or
similar rights by Frontier' logos, trademarks, service
marks or trade names.
15.3 A party (the "Indemnified Party") that believes it is entitled to
indemnification from another party (the "Indemnifying Party")
pursuant to the terms of this Agreement with respect to a third
party claim shall provide the Indemnifying Party with written
notice (an "Indemnification Notice") of such claim (provided,
however, that the failure to give such notice shall not relieve
the Indemnifying Party of its obligations hereunder except to the
extent that such failure is materially prejudicial to the
Indemnifying Party), and the Indemnifying Party shall be
entitled, at its own cost and expense and by its own legal
advisors, to control the defense of or to settle any such
third-party claim. The Indemnifying Party shall have the right
to elect to settle any such claim, for monetary damages only,
subject to the consent of the Indemnified Party; provided,
however, if the Indemnified Party fails to give such consent to a
settlement that has been agreed upon by the Indemnifying Party
and the claimant in question within 20 days of being requested to
do so, the Indemnified Party shall, assume the defense of such
claim or demand and regardless of the outcome of such matter, the
Indemnifying Party's liability hereunder shall be limited to the
amount of any such proposed settlement. If the Indemnifying
Party fails to take any action against the third-party claim that
is the subject of an Indemnification Notice within 30 days of
receiving such Indemnification Notice, or otherwise contests its
obligation to indemnify the Indemnified Party in connection
therewith, the Indemnified Party may, upon providing prior
written notice to, but without the further consent of, the
Indemnifying Party settle or defend against such third-party
claim for the account and at the expense of the Indemnifying
Party. Except as set forth in this Section 15.3, the Indemnified
Party shall not enter into any settlement or other compromise or
consent to a judgment with respect to a third party claim to
which the Indemnifying Party has an indemnity obligation without
the prior written consent of the Indemnifying Party. Each
Indemnified Party shall have the right, but not the duty, to
16
participate in the defense of any claim with attorneys of its own
choosing and at its own cost, without relieving the Indemnifying
Party of any obligations hereunder.
15.4 Each party further agrees to indemnify, defend and hold harmless
the other from and against any and all Taxes and related
assessments, levied upon or advanced by the Indemnified Party but
that ultimately the Indemnifying Party would be responsible for
paying and resulting from any transaction or activity
contemplated by this Agreement.
15.5 The rights and obligations of the parties under this Section 15
shall survive the termination or expiration of this Agreement.
16. INSURANCE
16.1 Mesa shall procure and maintain for the benefit of Frontier
during the term of this Agreement with insurance carriers of
known financial responsibility, insurance of the type and in the
amounts listed below:
a. comprehensive airline liability insurance, including
comprehensive general liability, passenger (including
Codeshared Passengers and all other revenue and non-revenue
passengers), baggage, cargo, mail and aircraft third party
legal liability (all policies shall be extended to include
war risks, hijacking and allied perils), in an amount not
less than Three Hundred Million Dollars (US $300,000,000)
(or other foreign currency equivalent) per any one
occurrence, or any lesser amount traditionally carried in
the regional airline industry under similar agreements.
This insurance must be primary to the extent of the
indemnification obligations of Mesa without right of
contribution from any insurance carried by Frontier, and
shall (i) name Frontier and the other Marketing Carrier
Indemnified Parties as additional insureds, (ii) contain a
severability of interest clause and a breach of warranty
clause in favor of Frontier, and (iii) specifically insure
the Operating Carrier's indemnification obligations under
this Agreement;
b. hull all risk insurance, including war risk, and such
policy shall include a waiver of subrogation in favor of
Marketing Carrier to the extent of the indemnity specified
in Section 15.1; and
c. Workers' compensation and employers' liability insurance or
such other similar or equivalent insurance carried outside of
the United States, in accordance with statutory limits.
17
16.2 Frontier shall procure and maintain for the benefit of Mesa
during the term of this Agreement with insurance carriers of
known financial responsibility, insurance of the type and in the
amounts listed below:
a. comprehensive airline liability insurance, including
comprehensive general liability, passenger (including
Codeshared Passengers and all other revenue and non-revenue
passengers), baggage, cargo, mail and aircraft third party
legal liability (all policies shall be extended to include
war risks, hijacking and allied perils), in an amount not
less than Three Hundred Million Dollars (US $300,000,000)
(or other foreign currency equivalent) per any one
occurrence. This insurance must be primary to the extent of
the indemnification obligations of Frontier without right
of contribution from any insurance carried by Mesa, and
shall (i) name Mesa and the other Operating Carrier
Indemnified Parties as additional insureds, (ii) contain a
severability of interest clause and a breach of warranty
clause in favor of Mesa, and (iii) specifically insure
Frontier's indemnification obligations under this Agreement;
b. hull all risk insurance, including war risk, and such
policy shall include a waiver of subrogation in favor of
Operating Carrier to the extent of the indemnity specified
in Section 15.1; and
c. workers' compensation and employers' liability insurance or
such other similar or equivalent insurance carried outside
of the United States, in accordance with statutory limits.
16.3 Both Mesa and Frontier shall provide to each other certificates
of insurance evidencing the required coverage within five (5)
Business Days after the effective date of this Agreement and
thereafter within five (5) days of the date of any renewal of
such coverage. The certificates must indicate that the above
coverage shall not be canceled or materially altered without
thirty (30) days' advance written notice to either party and that
either party shall be notified of any expiration or renewal of
such coverage. The notice period in respect of war and allied
perils coverage shall be 7 days or such lesser period as is or
may be available in accordance with policy conditions.
16.3 FAMILY ASSISTANCE. The carriers and their insurers shall
endeavor to cooperate in post-accident handling to mutually
ensure that the families of accident victims are treated with the
dignity, respect and financial assistance to which they are
entitled. All parties will act in the spirit of good faith and
reasonableness. Cooperation among all parties shall not be
unreasonably withheld.
18
The Operating Carrier shall be responsible for performing, and
incur all associated costs with respect to, all emergency
response activities at the accident scene and all Family
Assistance Activities as required by law (Aviation Disaster
Family Assistance Act of 1996 - 49 U.S.C. 1136 and 41113.) or
usual custom and practice.
The Operating Carrier and its insurers agree to be responsible
for the following:
a. Costs of defense;
b. All associated post-accident expenses mandated by local
and international law and industry agreements;
c. Indemnification to the Marketing Carrier for reasonable
services for which the Operating Carrier contracts
d. Safety audits and analyses; and
e. Limits of liability coverage to the extent to which the
Marketing Carrier has agreed to in its tariffs or
conditions of contract.
17. TAXES
17.1 Each party shall be responsible for any net or gross income or
franchise taxes (or taxes of a similar nature) on the revenues or
income or any measure thereof which is attributable to it in
connection with the sale of air transportation pursuant to this
Agreement. Each party shall be responsible for and pay such
taxes on the portion of such revenues or income attributable to
it in relation to any interline service charge.
17.2 Frontier (if it is the Ticketing Carrier) shall collect, except
as otherwise prohibited by law, all Ticket Taxes relating to
tickets sold or travel documents issued by it with respect to air
transport pursuant to this Agreement.
19
18. FORCE MAJEURE
Except with respect to the performance of payment obligations under
this Agreement, neither party shall be liable for delays in or failure
to perform under this Agreement to the extent that such delay or
failure (an "Excusable Delay") (a) is caused by any act of God, war,
natural disaster, strike, lockout, labor dispute, work stoppage, fire,
serious epidemic or quarantine restrictions, act of government or any
other cause, whether similar or dissimilar beyond the control of that
party; and (b) is not the result of that party's lack of reasonable
diligence. If an Excusable Delay continues for 20 consecutive days or
any 30 days out of any 45-day period, the non-delayed party shall have
the right, at its option to terminate this Agreement by giving the
delayed party at least 30 days' prior written notice.
19. GOVERNING LAW
19.1 This Agreement shall in all respects be governed by and construed
in accordance with the laws of the State of Colorado (without
regard to its conflict of laws principles thereof ) including all
matters of construction, validity and performance.
20. COVENANT TO COMPLY WITH ALL LAWS
20.1 In performing its obligations under this Agreement, each party
shall, at its own cost and expense, fully comply with, and have
all licenses under, all applicable federal, state, provincial and
local laws of the United States, including rules and regulations
promulgated by the U.S. National Transportation Safety Board,
Department of Transportation, U.S. Federal Aviation
Administration and the U.S. Department of Defense.
20.2 If either party has notice that a provision of this Agreement is
contrary to any applicable laws or governmental regulations, that
party shall immediately notify the other party in writing, such
notice to include a description of the perceived violation of
regulation and supporting written materials that facilitate the
other party's investigation of such perceived violation.
21. PUBLICITY
Except as required by applicable law, neither party may issue any
written press release concerning this Agreement without the prior
written consent of the other party (which consent shall not be
unreasonably withheld or delayed).
20
22. CONFIDENTIALITY
22.1 Except as necessary to obtain any Government Approvals or as
otherwise provided below, each party shall ensure that its
directors, officers, employees, Affiliates, and professional
advisors (collectively, the "Representatives"), at all times,
maintain strict confidence and secrecy in respect of all
Confidential Information of the other party (including its
Affiliates) received directly or indirectly as a result of this
Agreement. If a party (the "Disclosing Party") is requested to
disclose any Confidential Information of the other party (the
"Affected Party") under the terms of a subpoena or order issued
by a court or governmental body, it shall (a) notify the Affected
Party immediately of the existence, terms and circumstances
surrounding such request, (b) consult with the Affected Party on
the advisability of taking legally available steps to resist or
narrow such request and (c) if any disclosure of Confidential
Information is required to prevent the Disclosing Party from
being held in contempt or subject to other legal penalty, furnish
only such portion of the Confidential Information as it is
legally compelled to disclose and use commercially reasonable
efforts (at the cost of the party whose Confidential Information
is being protected) to obtain an order or other reliable
assurance that confidential treatment shall be accorded to the
disclosed Confidential Information. Each party agrees to
transmit Confidential Information only to such of its
Representatives as required for the purpose of implementing and
administering this Agreement, and shall inform such
Representatives of the confidential nature of the Confidential
Information and instruct such Representatives to treat such
Confidential Information in a manner consistent with this Section
22.1.
22.2 Within 90 days after the termination of this Agreement, each of
Frontier and Mesa shall, either deliver to the other party or
destroy all copies of the other party's Confidential Information
in its possession or the possession of any of its representatives
(including, without limitation, any reports, memoranda or other
materials prepared by such party or at its direction) and purge
all copies encoded or stored on magnetic or other electronic
media or processors, unless and only to the extent that the
Confidential Information is necessary for the continued
administration and operation of such party's programs or is
reasonably necessary in connection with the resolution of any
dispute between the parties.
22.3 Each party acknowledges and agrees that in the event of any
breach of this Section 22, the Affected Party shall be
irreparably and immediately harmed and could not be made whole by
monetary damages. Accordingly, it is agreed that, in addition to
any other remedy at law or in equity, the Affected Party shall be
entitled to an injunction or injunctions (without the posting of
any bond and without proof of actual damages) to prevent breaches
or threatened breaches of this Section 22 and/or compel
21
specific performances of this Section 22.
22.4 The confidential obligations of the parties under this Section 22
shall survive the termination or expiration of this Agreement.
23. ASSIGNMENT
None of the parties may assign or otherwise convey or transfer any of
its rights under this Agreement, or delegate or subcontract any of its
duties hereunder, without the prior written consent of the other
party.
24. SEVERABILITY
If any provision of this Agreement is or becomes illegal, invalid or
unenforceable under the law of any jurisdiction, such provision shall
be severed from this Agreement from the jurisdiction in question and
shall not affect the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
the enforceability of such provision under the law of any other
jurisdiction; unless in the reasonable opinion of either party, any
such severance affects the commercial basis of this Agreement, in which
case the party shall so inform the other party and the parties shall
negotiate to agree upon modification of this Agreement so as to
maintain the balance of the commercial interests of the parties. If,
however, such negotiations are not successfully concluded within 90
days from the date a party has informed the other that the commercial
basis has been affected, either party may terminate this Agreement by
giving at least 30 days' prior written notice to the other party.
25. EXCLUSIVITY
25.1 *.
25.2
Mesa Minimum Service Routes. *.
25.3 Other than as explicitly set forth in Sections 25.1, 25.2 and
25.5 this Agreement is non-exclusive and does not preclude any
party from entering into or maintaining marketing relationships,
including code-sharing, with other carriers.
25.4 Non-Mesa Exclusive Routes. *.
22
25.5 Except for codeshare agreements with America West Airlines, Inc.,
USAirways, Inc. and Midwest Express Airlines, Inc., Mesa agrees not
to enter into another codeshare agreement with a carrier hubbed in
Denver for markets served by Frontier that originate or end in
Denver, Colorado.
25.6 On flights where Mesa operates under the F9* code, Mesa may not
operate flights under another code other than the "YV" code.
26. RELATIONSHIP OF PARTIES
The relationship between Mesa and Frontier shall be that of independent
contractors. Each of Mesa and Frontier shall not have and shall not
represent to any other person that it has, any power, right or
authority to bind the other, or to assume, or create, any obligation or
responsibility, express or implied, on behalf of the other, except as
expressly required by this Agreement or as otherwise permitted in
writing. Nothing in this Agreement shall be construed to create
between Mesa and Frontier and/or their respective Representatives any
partnership, joint venture, employment relationship, franchise or
agency.
27. FURTHER ASSURANCES
Each party shall perform such further acts and execute and deliver such
further instruments and documents at such party's costs and expenses as
may be required by applicable law, rules or regulations or as may be
reasonably requested by the other to carry out and effectuate the
purposes of this Agreement.
28. MISCELLANEOUS
28.1 This Agreement contains the entire agreement between the parties
relating to its subject matter, and supersedes any prior
understandings or agreements between the parties regarding the
same subject matter. This Agreement may not be amended or
modified except in writing signed by a duly authorized
representative of each party.
28.2 Unless otherwise expressly required in this Agreement, all
notices, reports, invoices and other communications required or
permitted to be given to or made upon a party to this Agreement
shall be given in accordance with the procedures set forth in the
Procedures Manual.
28.3 All rights, remedies and obligations of the parties hereto shall
accrue and apply solely to the parties hereto and their permitted
successors and
23
assigns; there is no intent to benefit any third parties, including
the creditors of either party.
28.4 This Agreement may be executed and delivered by the parties in
separate counterparts, each of which when so executed and
delivered shall be an original, but all of which taken together
shall constitute one and the same instrument.
28.5 No failure to exercise and no delay in exercising, on the part of
any party, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof of the exercise of
any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative
and not exclusive of any rights, remedies, powers and privileges
provided by law. The failure of any party to insist upon a
strict performance of any of the terms or provisions of this
Agreement, or to exercise any option, right or remedy herein
contained, shall not be construed as a waiver or as a
relinquishment for the future of such term, provision, option,
right or remedy, but the same shall continue and remain in full
force and effect. No waiver by any party of any term or
provision of this Agreement shall be deemed to have been made
unless expressed in writing and signed by such party.
28.6 This Agreement is the product of negotiations between Frontier
and Mesa, and shall be construed as if jointly prepared and
drafted by them, and no provision hereof shall be construed for
or against any party by reason of ambiguity in language, rules of
construction against the drafting party, or similar doctrine.
24
28.7 NEITHER PARTY SHALL BE LIABLE FOR ANY EXEMPLARY PUNITIVE, SPECIAL
OR CONSEQUENTIAL DAMAGES, INCLUDING LOST REVENUES, LOST PROFITS
OR LOST PROSPECTIVE ECONOMIC ADVANTAGE, ARISING FROM ANY
PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT, EVEN IF
SUCH PARTY KNOWS OR SHOULD HAVE KNOW OF THE POSSIBILITY THEREOF,
AND EACH PARTY HEREBY RELEASES AND WAIVES ANY CLAIMS AGAINST THE
OTHER PARTY REGARDING SUCH DAMAGES. FOR THE AVOIDANCE OF DOUBT,
THE PARTIES AGREE THAT THE FOREGOING SHALL NOT LIMIT A PARTY'S
OBLIGATION TO INDEMNIFY THE OTHER IN ACCORDANCE WITH SECTION 16
FOR DAMAGES ARISING OUT OF OR RELATING TO CLAIM, SUIT OR CAUSE OF
ACTION BY A THIRD PARTY.
28.8 Unless otherwise expressly set forth in this Agreement, all
notices, reports, invoices and other communications required
hereunder to be given to or made upon any party shall be in writing,
shall be addressed as provided below and shall be considered as
properly given and received (i) when delivered, if delivered in
person (and a signed acknowledgment of receipt is obtained); (ii)
one Business Day after dispatch if dispatched by a recognized
express delivery service which provides signed acknowledgments of
receipt; or (iii) three Business Days after deposit in the U.S.
mail, if sent by certified or registered first class mail, postage
prepaid, return receipt requested. For the purposes of notice, the
addresses of the parties shall be as set forth below; provided,
however, that either party shall have the right to change its
address for notice to any other location by giving at least three
Business Days prior written notice to the other party in the manner
set forth above.
If to Frontier:
7001 Tower Road
Denver, Colorado 80249
Attention: Vice President- Marketing and Planning
Phone: 720/374-4200
Facsimile: 720/374-4375
with a copy to Attention: General Counsel
25
If to Mesa:
410 North 44th Street, Suite 700
Phoenix, Arizona 85008
Attention: Vice President - Planning
Phone: 602/685-4000
Facsimile: 602/685-4350
with a copy to Attention: General Counsel
28.9 Each carrier shall have the right, at its own cost, to inspect,
review, and observe the other carrier's operations of Codeshared
Flights, and/or to conduct a full safety and/or service audit of
the other carriers operations, manuals and procedures reasonably
related to the Codeshared Flights, at such intervals as each
carrier shall reasonably request. In the exercise of such right,
neither carrier shall undertake any responsibility for the
performance of the other's operations. Each carrier shall
carrier shall coordinate it's safety and service audits with the
other so as to avoid disruptions of the other carrier's
operations. Any safety audit may include, without limitation,
maintenance and operation procedures, crew planning,
reservations, passenger and baggage handling, customer service,
personnel records, spare parts, inventory records, training
records and manuals, flight training and operational records.
IN WITNESS WHEREOF, the day authorized representatives of the parties
have executed this Agreement as of the date first indicated above.
FRONTIER AIRLINES, INC. MESA AIRLINES, INC.
By: ___________________________ By: ___________________________
Name: ___________________________ Name: ___________________________
Title: ___________________________ Title: ___________________________
Attachments:
Annex A - Definitions
Annex B - Codeshared Flights
Annex C - Mesa Mininum Service Markets and Mesa Exclusive Routes
26
ANNEX A
DEFINITIONS
"ACH" means Airlines Clearing House, Inc., a clearing house which administers
and implements revenue settlement between carriers by reference to ACH's
Manual of Procedure.
"Affiliate" means with respect to any person or entity, any other person or
entity directly or indirectly controlling, controlled by, or under common
control with, such person or entity. For purposes of this definition,
"control" (including "controlled by" and "under common control with") means
the power directly or indirectly, to direct or cause the direction of the
management and policies of such person or entity, whether through the
ownership of voting securities, by contract or otherwise.
"Airline Guides" means the printed and electronic data versions of the
"Official Airline Guide" and its respective successor.
"ATA" means the Air Transport Association.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banking institutions in New York, New York are required by law,
regulation or executive order to be closed.
"Codeshared Flights" means all flights operated by Mesa which carry the
Frontier "F9" flight designator code. Such flights shall be established by
mutual agreement, and specifically include services operated on Mesa
Exclusive Routes and Mesa Minimum Service Routes. The currently agreed
routes for all such flights are listed in Annex B; routes may be added or
deleted from Annex B upon mutual agreement of Frontier and Mesa and shall be
reflected in a signed written amendment to Annex B.
"Codeshared Passenger" means a passenger traveling on a Marketing Carrier
Ticket.
"Codeshared Services" means the actual transportation of passengers on
Codeshared Flights per this Agreement.
"Conditions of Carriage" means those tariffs and rules of carriage of a party
that govern the transport of passengers traveling on tickets showing such
party's two letter flight designator code in the carrier code box of the
flight coupon.
"Confidential Information" means (a) all confidential or proprietary
information of a party, including, without limitation, trade secrets,
information concerning past, present and future research development,
business activities and affairs, finances, properties, methods of operation,
processes and systems, customer lists, customer information (such as
passenger name record or "PNR" data) and computer procedures and access
codes; and (b) the terms and conditions of this Agreement and any reports,
invoices or other communications between the parties given in connection with
the negotiation or
27
performance of this Agreement; and (c) excludes (i) information already in a
party's possession prior to its disclosure by other party; (ii) information
obtained from a third person or entity that is not prohibited from transmitting
such information to the receiving party as a result of a contractual, legal or
fiduciary obligation to the party whose information is being disclosed; (iii)
information that is or becomes generally available to the public, other than as
a result of disclosure by a party in violation of this Agreement; or (iv)
information that has been or is independently acquired or developed by a party,
or its Affiliate, without violating any of its obligations under this Agreement.
"CRS" means a computerized reservations system owned or operated by any
entity, including either party to this Agreement, that contains information
about commercial airline schedules, fares, cargo rates, passenger and cargo
tariff rules and flight availability that is made available to travel agents,
cargo agents, and other non-airline entities to facilitate their ability to
make reservations and issue tickets and air waybills.
"Damages" means all claims, suits, causes of action, penalties, liabilities,
judgments, fines, losses and expenses of any nature or kind whatsoever under
the laws of any jurisdiction (whether arising in tort, contract, under the
Warsaw Convention and related instrument, or otherwise), including reasonable
costs and expenses of investigating, preparing or defending any claim, suit,
action or proceeding (including post judgment and appellate proceedings or
proceedings that are incidental to the successful establishment of a right of
indemnification), such as reasonable attorneys' fees and fees for expert
witnesses, consultants and litigation support services, but not including
internal expenses of the indemnified party, such as employee salaries and the
costs of cooperating in the investigation, preparation or defense of claims.
"IATA" means the International Air Transport Association.
"ISC" means the Interline Service Charge. The Interline Service Charge (ISC),
as determined and published by the ACH, is the percentage charged on an
interline billing to reimburse the billing carrier for travel agent
commission they paid on the ticket when it was reported to the Airlines
Reporting Corporation (ARC). Due to the various commission rates paid by all
carriers, ARC looks at the amount of commission paid and the base fare of all
tickets reported to them and this determines the ISC rate charged for the
following three months. An Airlines Clearing House (ACH) memo is distributed
to all participating carriers quarterly to inform them whether or not this
average commission percentage changes or not.
"Marketing Carrier Ticket" means a ticket issued by Frontier, Mesa or a third
party for travel on a Codeshared Flight showing Frontier' two letter flight
designator code in the carrier code box of the flight coupon.
"Marketing Flight(s)" means a Codeshared Flight when shown only as a flight of
Frontier.
"Mesa Exclusive Routes" means *.
28
"Mesa Minimum Service Routes" means *.
"Operating Carrier" means the party having operational control of an aircraft
used for a given Codeshared Flight.
"Procedures Manual" means a detailed procedures manual prepared by the
parties for implementing the transactions contemplated by this Agreement.
"Reservations System" means the internal computerized airline passenger or
cargo reservations system used by the personnel of an airline that contains
information about flight schedules, fares, cargo rates, passenger and cargo
tariff rules and seat availability of that airline and other carriers, and
provides the ability to make reservations and issue tickets or air waybills.
"Ticketing Carrier" means a carrier whose traffic documents are used to issue
a ticket.
"Ticket Taxes" means any transactional taxes or passenger facility charges,
including, without limitation, sales taxes, use taxes, stamp taxes, excise
taxes, value added taxes, gross receipt taxes, departure taxes, surcharges
and travel taxes, and all related charges, fees, licenses or assessments (and
any interest or penalty thereon) imposed by any authority in any country, or
political subdivision thereof or public authority operating therein
(including, without limitation any national, federal, state, provincial,
territorial, local, municipal, port or airport authority) or levied upon it
by operation of applicable law, or industry standard. Ticket Taxes together
with the taxes referred to in Section 18 are hereinafter collectively
referred to as "Taxes".
"$" or USS" or "Dollars" means lawful currency of the United States of
America.
29
ANNEX B
CODESHARED FLIGHTS IMPLEMENTATION DATE
Between Denver and:
- ------------------
*
30
ANNEX C
MESA MINIMUM SERVICE ROUTES
Between Denver and:
- ------------------
*
MESA EXCLUSIVE ROUTES
Between Denver and:
------------------
*
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