Exhibit 10.15
FIRST AMENDMENT
This First Amendment is entered and made as of November 24, 1999 (the
"Amendment") as an amendment to the Service Agreement dated as of November 11,
1997, by and between US Airways, Inc. ("US Airways") and MESA AIRLINES, INC.
("MesaJet") (the "Agreement").
WITNESSETH:
WHEREAS, US Airways and MesaJet have entered in the Agreement; and
WHEREAS, on or about the 15th day of June, 1999, US Airways and MesaJet entered
into a Memorandum of Understanding relating to the amendment of the Agreement in
certain respects; and
WHEREAS, US Airways and MesaJet desire to amend certain provisions of the
Agreement;
NOW THEREFORE, in consideration of the premises and mutual covenants hereinafter
set forth and for good and valuable consideration, the receipt and sufficiency
of which is acknowledged, US Airways and MesaJet hereby agree as follows:
1. Exhibit 2.1 of the Agreement is hereby amended by adding the following
to the list of operational aircraft set forth therein:
Date Number of Operational Aircraft
---- ------------------------------
April 1999 *
May 1999 *
September 1999 *
April 2000 *
April 2000 *
April 2000 *
June 2000 *
July 2000 *
August 2000 *
September 2000 *
September 2000 *
October 2000 *
November 2000 *
December 2000 *
January 2000 *
February 2001 *
US Airways acknowledges that changes in the delivery schedule may arise
due to circumstances beyond MesaJet's control, including, without
limitation, manufacturing delays, FAA or other regulatory delays or other
operational delays. MesaJet will make every reasonable effort to provide
as much advance notice to US Airways of such a change in the delivery
schedule as set forth in Exhibit 2.1. Under no circumstances will MesaJet
be liable to US Airways in any manner whatsoever for damages claimed by US
Airways or claims made against US Airways, resulting from a change in the
delivery schedule set forth in this Exhibit 2.1 when delays are beyond
MesaJet's reasonable control.
2. A new subsection 2.1(a) is hereby added to the Agreement as follows: "(a)
The in-service target date for Aircraft deliveries * in paragraph 1 of
this First Amendment will be on or about the 15th day of the month
indicated therein. Notwithstanding the preceding sentence, in the event
there are two or more deliveries in a given month, the in-service date for
the second aircraft will be on or about the 21st day of the month and the
in-service date for the third aircraft will be on or about the 30th day of
the month. MesaJet will inform US Airways of the exact in-service dates
for each month ninety (90) days prior to first day of the in-service month
indicated."
3. A new subsection 2.1(b) is hereby added to the Agreement as follows:
"Notwithstanding the listing of aircraft numbered * in Schedule 2.1,
attached hereto and made a part hereof, such aircraft will only be
accepted by US Airways to the extent that fleet growth in the US Airways
mainline jet network allows greater than thirty-five (35) regional jets to
be operated with the US Airways code pursuant to its labor agreement scope
clause. However, if fleet growth in the US Airways mainline jet network
does not reach a level to allow greater than thirty-five (35) regional
jets to be operated with the US Airways code, and provided that US Airways
gives at least three months written notice, MesaJet will not be obligated
to provide, and US Airways will not be obligated to accept the additional
Aircraft numbered *."
4. New subsections 2.2(a), (b), and (c) are added to the Agreement as
follows:
"(a) With the exception of Aircraft Numbered * listed in paragraph number
1 of this First Amendment, the additional Aircraft referenced in that
paragraph will be a different model from the current regional jets MesaJet
operates as US Airways Express under the Agreement. The additional
Aircraft are * aircraft. US Airways hereby allows MesaJet to swap regional
* currently in service with US Airways under the Agreement into *, as long
as the total number of regional jets MesaJet has in service with US
Airways is not reduced as a result of such aircraft swap.
(b) MesaJet will have the right to perform such aircraft swaps referenced
in subsection 2.2 (a), above, upon no less than ninety (90) days notice
prior to the first day of the month such swap is contemplated to occur. At
such time US Airways and MesaJet will jointly restructure the MesaJet
regional jet schedule to accomplish such swap in a manner to minimize any
adverse impact on aircraft utilization and on US Airways passengers.
(c) US Airways will provide reasonable assistance to MesaJet in meeting
the FAA requirements necessary to add the new * onto the MesaJet operating
certificate. US Airways will provide a single point of contact US Airways
employee to coordinate efforts within US Airways and interface with
MesaJet on the new * aircraft, including training and proving run
requirements associated with the addition of such aircraft."
5. Section 2.7 is hereby amended by deleting the word "thirteenth" in the
ninth line of that Section, substituting the word "seventeenth" in lieu thereof,
and inserting the parenthetical "(a "Spare Aircraft")" after the word "aircraft"
near the end of that line.
6. A new section 2.9 is hereby added to the Agreement as follows:
"2.9 US Airways and MesaJet will cooperate to develop ways to reduce
damage to Aircraft caused by impacts from ramp equipment, such as jet
bridges, baggage carts,
GPU and air conditioning carts and deicing equipment operated by US
Airways personnel."
7. A new section 2.10 is hereby added to the Agreement as follows: "2.10 US
Airways will coordinate schedule planning with MesaJet to minimize flight
crew and maintenance costs, subject to meeting US Airways reasonable
marketing objectives."
8. A new subsection 5.2(a) is hereby added to the Agreement as follows: "(a)
Notwithstanding the RJ Model referenced in section 5.1 above, US Airways
will adjust the reimbursement for * according to the following:
(i) *.
(ii) Effective as of April 1. 1999, to the extent MesaJet operates
greater than * Aircraft under this Agreement, US Airways will * per
Aircraft than the monthly ownership costs contained in the RJ Model.
In addition, such ownership costs will be subject to adjustments due
to changes in interest rates incurred in financing such Aircraft.
Such adjustments due to changes in interest rates will be in
accordance with the table attached hereto as Appendix A.
(iii) The interest rate referenced in subsection 5.2 (a) (ii) above, is
primarily predicted upon the * providing the debt financing
economically necessary for support of the *. In the event * fails to
provide such debt for a given Aircraft, then (a) MesaJet's
obligation to supply and US Airways obligation to accept such
additional Aircraft is suspended, and (b) US Airways and MesaJet
will cooperated to obtain alternative financing from * at a rate
acceptable to both Parties.
(iv) US Airways will increase reimbursement for MesaJet Crew costs by *.
Such adjustment will be amended by mutual agreement of the Parties
at the end of the sixth month following the execution of this
Amendment, and every six months thereafter, based on increases and
decreases in MesaJet's actual flight training costs (excluding pilot
salaries)."
9. Sections 5.4 and 5.5 of the Agreement are hereby deleted in their
entirety and US Airways hereby * and will eliminate the * from the date hereof
and throughout the remainder of the term of the Agreement. US Airways will
reimburse MesaJet the full amount withheld for services provided during 1999.
10. Section 7.1 of the Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"7.1 This Agreement is effective as of the date and year first
written above, and services provided hereunder will continue,
without interruption for a period * from the in-service date
of the first *, unless it is terminated on an earlier date
pursuant to the provisions of this Article 7. US Airways will
have the right to extend the term on each Aircraft by *."
11. Section 7.4 of the Agreement is hereby deleted in its entirety.
12. Section 8.1 of the Agreement is hereby amended by changing "*" and "*"
in line one to "*" and "*", respectively.
13. Section 8.2 of the Agreement is hereby amended by changing "arrival"
in line one to "*".
14. A new subsection 8.3 is hereby added to the Agreement as follows:
"8.3 In the event that an aircraft used by MesaJet to perform services called
for in this Agreement is damaged during the execution of agreed to ground
support functions set forth in Section 4.3 of the Agreement by a US Airways
employee, or an individual contracted by US Airways to perform such ground
support services, and such damage is sustained while the aircraft is parked or
being pushed or towed by said employee or contract individual, and
such damage occurs while the aircraft is not being operated by a MesaJet
employee or individual contracted by MesaJet to perform services for MesaJet,
then the calculations contained in this Article 8 will be modified as follows:
The number of scheduled flights for the month will be reduced by *.
This modification to the calculation of performance will only be
applied if US Airways is notified in writing within one business day
of the date on which such damage occurs of: i) the time, place and
circumstances surrounding the damage; ii) the expected flight
adjustments/cancellations made or required due to the out of service
aircraft and; iii) the estimated return to service date of the
damaged aircraft.
15. A new subsection 8.4 is hereby added to the Agreement as
follows:
"8.4 Both parties agree that attrition of pilots is a normal part of the
planning and execution of a regional jet operation. Further both parties
understand that from time to time, the pilot hiring at US Airways may be greater
than expected and that the increase in US Airways hiring may affect the
attrition rate of active Mesa pilots. Since a higher than expected attrition
rate may affect MesaJet's operating performance, the parties agree that in the
event that the following conditions exist, then the calculations contained in
this Article 8 will be modified as set forth below:
(a) Triggering Event:
If within a given month, US Airways hires an extraordinary number of
active Mesa pilots, as defined below, then the calculations contained in
this Article 8 will be modified. For use within this section the following
definitions will apply:
1. The act of hiring an Mesa pilot will be defined as the
successful completion by an active Mesa pilot of the total US
Airways pilot employment process up to and including the
sign-on process and the attendance at the first day of
training.
2. (a) The number of active Mesa pilots hired by US Airways
will be deemed to be extraordinary if: i.) Mesa's pilot
attrition rate to all certified
non-Mesa carriers for any given month increases * over the average attrition
rate for the preceding six months; ii)US Airways' hiring of Mesa pilots in
any given month exceeds by * the average number of Mesa pilots hired in the
preceding six months, and iii) the actual number of Mesa pilots hired as a
result of the * increase in Mesa's pilot attrition rate referenced in
2(a)(i) above.
(b) Subsequent to the occurrence of a triggering event, as defined in
Section 8.4 (a), above, Mesa's attrition rate for any given month shall be
calculated using the attrition rate for the month immediately preceding the
triggering event. Such attrition rate shall remain Mesa's average attrition
rate for the preceding * months, for purposes of the next two subsequent
monthly calculations of Mesa's pilot attrition rate, or until the actual
number of Mesa pilots hired by US Airways in a given month returns to or
falls below the actual number for the month immediately preceding the
triggering event.
3. An active Mesa pilot will be defined as any Mesa pilot who is currently a
certified Captain or First Officer.
16. A new subsection 8.5 is hereby added to the Agreement as follows:
"8.5 Modification of the Article 8 Calculations
Once it has been mutually agreed that a triggering event, as described in
Section 8.4 (a), above, has occurred, then the monthly calculations in this
Article 8 will be modified for the month of the triggering event and the next
month in the following manner:
(a) The number of scheduled flights that is used to calculate the completion
performance measures will be reduced *. The number of normally experienced
flight crew cancellations will be determined by *.
(b) The number of scheduled flights that is used to calculate the arrival
performance measures will be reduced by *. The number of normally
experienced flight crew arrival delays will be determined by *."
17. A new section 12.3 is hereby added to the Agreement as follows;
"12.3 US Airways will have the right of first refusal on * groups of *
supplemental Aircraft * that MesaJet has on firm order (the "Conditional
Aircraft"). Such rights of first refusal will expire *. The delivery dates
of such Conditional Aircraft are set forth below.
Aircraft Number Delivery Date
--------------- -------------
Block One * May *
* September *
* November *
* December *
* April *
* May *
* June *
* June *
(a) In the event US Airways exercises its right to one or more of the
Conditional Aircraft, then within one year of such exercise, the
Parties will work together to determine whether and if so, which
Conditional Aircraft will be considered as a second Spare Aircraft.
Such determination will be based upon completion and on-time
statistics of the fleet. Either Party will have the right to
determine whether a second Spare Aircraft is necessary after the
delivery of the first Conditional Aircraft. The Parties will
mutually agree on the timing of the introduction of the second Spare
Aircraft.
18. A new subsection 12.4 is hereby added to the Agreement as follows:
"12.4 MesaJet has additional aircraft on option order at a rate * Section
12.3, above ("Option Aircraft"). MesaJet's rights to the Option Aircraft
are *. US Airways may, by giving written notice one month prior to the
Notice Period to MesaJet, direct MesaJet to increase the number of
Aircraft ordered beyond *. In the event Us Airways foregoes exercising
greater than * consecutive blocks of Option Aircraft, then US Airways will
forego rights to *. In the event US Airways directs MesaJet to increase
the number of Aircraft ordered beyond *, such Option Aircraft will be
delivered to US Airways in accordance with the schedule attached hereto as
Exhibit B. The schedule set forth in Exhibit B is indicative only and is
subject to change. However, MesaJet will use all reasonable efforts to
adhere to said schedule *."
Except as reflected above, the Agreement remains unchanged in all other
respects. Upon its execution, this First Amendment, together with the Agreement,
will be the complete and binding understanding of the Parties with respect to
the terms and conditions of the Agreement, as amended by the terms set forth
herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first above
written.
MESA AIRLINES, INC. US AIRWAYS, INC.
/S/ William P. Kostel /S/ Thomas M. Hanley
- --------------------- ---------------------------------
By: By: Thomas M. Hanley
Title: Vice President - Planning Title: Vice President
US Airways Express
Appendix A
OWNERSHIP REIMBURSEMENT ADJUSTMENT SCHEDULE
Reference Interest Ownership
RATE (%) Adjustment
-------- ----------
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
*Where Reference Interest Rate is: Five Year LIBOR as published on Reuters
Service under code USD5YDHBEL
APPENDIX B
OPTION AIRCRAFT SCHEDULE
Option Option Notice
Number Aircraft Number Delivery Month-Year Month-Year
- ------ --------------- ------------------- ----------
* Aircraft #* July * December *
* Aircraft #* August * December *
* Aircraft #* September * December *
* Aircraft #* October * December *
* Aircraft #* November * December *
* Aircraft #* January * May *
* Aircraft #* February * May *
* Aircraft #* March * May *
* Aircraft #* April * May *
* Aircraft #* June * October *
* Aircraft #* August * October *
* Aircraft #* September * October *
* Aircraft #* October * March *
* Aircraft #* November * March *
* Aircraft #* December * March *
* Aircraft #* January * March *
* Aircraft #* March * August *
* Aircraft #* April * August *
* Aircraft #* May * August *
* Aircraft #* June * August *