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EXHIBIT 10.39
V2500(R)
SUPPORT CONTRACT
BETWEEN
IAE INTERNATIONAL AERO ENGINES AG
AND
AMERICA WEST AIRLINES, INC.
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INDEX
Commencement
Recitals
CLAUSE 1 DEFINITIONS
CLAUSE 2 SALE OF PURCHASED ITEMS
2.1 Intent
2.2 Agreement to Place Orders
2.3 Type Approval and Changes in Specification
2.4 Inspection and Acceptance
2.5 Delivery, Shipping, Title and Risk of Loss or Damage
2.6 Price
2.7 Payment
CLAUSE 3 SPARE PARTS PROVISIONS
3.1 Intent and Term
3.2 ATA Standards
3.3 Initial Provisioning
3.4 Change in Initial Provisioning Data
3.5 Discontinuance of Initial Provisioning Data -
Use of Procurement Data
3.6 Stocking of Spare Parts
3.7 Lead Times
3.8 Ordering Procedure
3.9 Modifications to Spare Parts
3.10 Inspection
3.11 Delivery and Packing
3.12 Prices
3.13 Payment
3.14 Resale of Surplus Spare Parts
3.15 Purchase by AWA from Others
3.16 Special Tools, Ground Equipment and Consumable
Stores
3.17 Conflict
CLAUSE 4 WARRANTIES, GUARANTEES AND LIABILITIES
CLAUSE 5 PRODUCT SUPPORT
CLAUSE 6 MISCELLANEOUS
6.1 Delay in Delivery
6.2 Patents
6.3 Credit Reimbursement
6.4 Non-Disclosure and Non-Use
6.5 Taxes
6.6 Amendment
6.7 Assignment
6.8 Exhibits
6.9 Headings
6.10 Law
6.11 Notices
6.12 Exclusion of Other Provisions and Previous Understandings
6.13 Term of Contract
6.14 Costs and Fees
EXHIBIT A CONTRACT SPECIFICATION
EXHIBIT B PURCHASED ITEMS, PRICE, ESCALATION FORMULA, AND DELIVERY SCHEDULE
EXHIBIT C PRODUCT SUPPORT
EXHIBIT D WARRANTIES, GUARANTEES AND PLANS
D-1 ENGINE AND PARTS SERVICE POLICY
D-2 NACELLE SERVICE POLICY
D-3 NON-INSTALLATION ITEMS WARRANTY
D-4 PARTS COSTS GUARANTEE
D-5 RELIABILITY GUARANTEE
D-6 INFLIGHT SHUTDOWN GUARANTEE
D-7 FUEL CONSUMPTION RETENTION GUARANTEE
D-8 EXHAUST GAS TEMPERATURE GUARANTEE
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THIS CONTRACT is made this 23d day of December, 1994
BETWEEN
IAE INTERNATIONAL AERO a joint stock company organized and
ENGINES AG existing under the laws of Switzerland,
whose registered office is at
Stampfenbachstrasse 73, 8035 Zurich,
Switzerland (hereinafter called "IAE")
and
AMERICA WEST AIRLINES, INC. a corporation organized and existing
under the laws of United States of
America whose registered office is at
4000 East Sky Harbour Boulevard, Sky
Harbour International Airport, Phoenix,
Arizona 85034, U.S.A. (hereinafter
called "AWA")
WHEREAS:
A. AWA has firmly committed to purchase from AVSA S.A.R.L. twenty-four
(24) new A320-200 aircraft to be powered by IAE V2527-A5 engines; and
B. IAE is prepared to supply to AWA V2527-A5 spare engines, modules,
spare parts, special tools, ground equipment, product support services
and consumable stores for the support and operation of the V2500
Propulsion Systems;
NOW THEREFORE IT IS AGREED AS FOLLOWS:
CLAUSE 1 DEFINITIONS
In this Contract, unless the context otherwise requires:
1.1 "Aircraft" means the new A320-200 aircraft powered by new Engines and
being acquired by AWA from AVSA for delivery as follows:
1998 1999 2000
January 1 1 1
February 1 1 1
March 1 1 1
May 1 1 1
July 1 1 1
September 1 1 1
October 1 1 1
November 1 1 1
----------------------------------------------------------
TOTALS FOR YEAR 8 8 8
1.2 "AVSA" means AVSA S.A.R.L., a societe a responsibilite limitee
organized and existing under the Laws of the Republic of France,
having its registered office located at 2, Rond-Point Maurice
Bellonte, 31700 Blagnac France.
1.3 "Basic Contract Price" means the basic price of each item of the
Purchased Items as specified in Exhibit B to this Contract.
1.4 "Engine(s)" means the IAE V2527-A5 aero engine described in the
Specification.
1.5 "Initial Provisioning" means the establishment by AWA of an initial
stock of Spare Parts.
1.6 "Initial Provisioning Data" means information supplied by IAE to AWA
for Initial Provisioning purposes.
1.7 "Initial Provisioning Orders" means orders for Spare Parts for Initial
Provisioning purposes.
1.8 "Installation Items" means Engines, modules, accessories, exhaust
systems, nacelles and all ancillary equipment therefor described in
the Specification which are being supplied pursuant to this Contract
for installation in the Aircraft.
1.9 "Lead Time" means the period between acceptance by IAE of an order of
AWA and commencement of delivery.
1.10 "Non-Installation Items" means jigs, tools, handling and transportation
equipment and all equipment whatsoever to be supplied pursuant to this
Contract for use with the Installation Items and not for installation
in the Aircraft.
1.11 "Other Supplies" means special tools, ground equipment and consumable
stores (e.g. oils, greases, dyes and penetrants).
1.12 "Procurement Data" means information supplied by IAE to AWA about
Spare Parts required to replenish the said initial stock.
1.13 "Purchased Items" means those Installation Items and Non-Installation
Items specified in Exhibit B to this Contract.
1.14 "Service Bulletins" means those service bulletins containing advice
and instructions issued by IAE to AWA from time to time in respect of
Engines.
1.15 "Spare Parts" means spare parts for Engines excluding the items listed
in the Specification as being items of supply by AWA.
1.16 "Specification" means the IAE Contract Specification No. IAE S27A5
which forms Exhibit A to this Contract.
1.17 "Supplies" means Installation Items, Non-Installation Items, Spare
Parts and any other goods or services supplied pursuant to this
Contract.
1.18 "Vendor Parts" means Spare Parts described in Initial Provisioning
Data or Procurement Data which are not manufactured pursuant to the
detailed design and order of IAE.
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CLAUSE 2 SALE OF PURCHASED ITEMS
2.1 Intent
Subject to the provisions of this Contract, IAE agrees to sell to AWA
and AWA agrees to buy from IAE, the Purchased Items.
2.2 Agreement to Place Orders
2.2.1 AWA confirms that it has entered into a firm and binding
agreement with the AVSA for the purchase of at least
twenty-four (24) firm, new Aircraft powered by new V2527-A5
Engines for delivery as set forth in Clause 1.1 above.
2.2.2 AWA hereby enters into a firm and binding agreement with IAE
for the purchase of six (6) new V2527-A5 Spare Engines for
delivery as set forth in Exhibit B to the Contract.
2.3 Type Approval and Changes in Specification
2.3.1 IAE will manufacture the Purchased Items to the Specification.
After the date of this Contract the Purchased Items may be
varied from time to time by Change Orders in writing which
shall set forth in detail:
2.3.1.1 The changes to be made in the Purchased Items
and
2.3.1.2 The effect (if any) of such changes on the
Specification (including but not limited to
performance and weight), on
interchangeability of the Purchased Items in
the airframe, on prices and on dates of
delivery of the Purchased Items.
Change Orders shall not be binding on either party until
signed by IAE and AWA but upon being so signed shall
constitute amendments to this Contract.
2.3.2 IAE may make any changes in the Purchased Items which do not
adversely affect the Specification (including but not limited
to performance and weight), interchangeability of the
Purchased Items in the airframe, prices or dates of delivery
of the Purchased Items. In the case of such permitted
changes, a Change Order shall not be required. Provided it
will not create any undue burden, IAE will provide reasonable
notification of all such changes to AWA prior to delivery.
2.3.3 At the time of delivery of the Purchased Items there is to be
in existence a Type Approval Certificate in accordance with
the provisions of the Specification.
2.3.4 The Specification has, however, been drawn with a view to the
requirements of the Certification Authority referred to in the
Specification and the official interpretations of such
requirements in existence at the date of this Contract (such
requirements and interpretations being hereinafter referred to
as "Current Rules"). Subject to Clause 2.3.2 above IAE and
AWA agree that they will execute an approparite Change Order
in respect of any change required to the Purchased Items to
enable such Purchased Items to conform to the requirements of
the Certification Authority and the official interpretations
of such requirements in force at the date of delivery of such
Purchased Items.
2.3.5 The price of any Change Order is to be borne:
2.3.5.1 in the case of changes required to conform to
the Current Rules - by IAE; and
2.3.5.2 in any other case - by AWA.
2.4 Inspection and Acceptance
2.4.1 Conformance to the Specification of Purchased Items which are
Installation Items will be assured by IAE through the
maintenance of procedures, systems and records approved by the
Engine Certification Authority. Conformance documentation
will be issued and signed by personnel authorized for such
purposes.
2.4.2 Conformance to the Specification of Purchased Items which are
Non-Installation Items will be assured by IAE conformance
documentation.
2.4.3 Upon issue of conformance documentation pursuant to Clause
2.4.1 or Clause 2.4.2 above, AWA shall be deemed to have
accepted the Purchased Items and that the Purchased Items
conform to the Specification. IAE shall, subject to the
permission of the appropriate governmental authorities,
arrange for AWA to have reasonable access to the appropriate
premises in order to examine the Purchased Items prior to the
issue of conformance documentation and to witness Engine
acceptance tests.
2.4.4 If AWA refuses or hinders delivery, or if IAE at AWA's written
request agrees to delay delivery, of any of the Purchased
Items, AWA shall nevertheless pay or cause IAE to be paid
therefor as if, for the purposes of payment only, the
Purchased Items had been delivered. Upon receipt of full
payment by IAE, and at the request of AWA, IAE shall provide
to AWA evidence of good title for such Purchased Items at
which time risk of loss shall pass to AWA.
2.4.5 In any of the cases specified in Clause 2.4.4 above, AWA shall
also pay to IAE such reasonable sum as IAE shall require in
respect of storage, maintenance and insurance of those
Purchased Items.
2.5 Delivery, Shipping, Title and Risk of Loss or Damage
2.5.1 IAE will deliver the Purchased Items, at its option, either
ex-works Connecticut, U.S.A., or to such other state within
the U.S.A. as the parties will determine by agreement, in
accordance with the delivery schedule set out in Exhibit B to
this Contract.
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2.5.2 Upon such delivery, title to and risk of loss of or damage to
the Purchased Items shall pass to AWA.
2.5.3 AWA will notify IAE at least four (4) weeks before the time
for delivery of the Purchased Items of its instructions as to
the marking and shipping of the Purchased Items.
2.6 Price
The Purchase Price for each of the Purchased Items shall be the Basic
Contract Price, amended pursuant to Clause 2.3 above, and escalated in
accordance with the escalation formula contained in Exhibit B to this
Contract.
2.7 Payment
2.7.1 AWA will make payment in United States Dollars as follows:
2.7.1.1 Upon signature of this Contract, AWA shall
pay to IAE a deposit of ten percent (10%) of
the Estimated Purchase Price of the Purchased
Items.
2.7.1.2 Eighteen (18) months before the scheduled
delivery of each of the Purchased Items, AWA
shall pay to IAE a further deposit of ten
percent (10%) of the Estimated Purchase Price
of such item.
2.7.1.3 Twelve (12) months before the scheduled
delivery of each of the Purchased Items, AWA
shall pay to IAE a further deposit of ten
percent (10%) of the Estimated Purchase Price
of such item.
2.7.1.4 On delivery of each of the Purchased Items,
AWA shall pay to IAE the balance of the
Purchase Price of such item.
2.7.2 IAE shall have the right to require AWA to make additional
deposits in respect of price changes arising from the
provisions of Clause 2.3 above on a similar basis to that
specified in Clause 2.7.1 above.
2.7.3 AWA undertakes that IAE shall receive the full amount of
payments falling due under this Clause 2.7, without any
withholding or deduction whatsoever.
2.7.4 All payments under this Clause 2.7 shall be made by cable or
telegraphic transfer and shall be deposited not later than the
due date of payment with the following bank for the account of
IAE: National Westminster Bank plc
New York Branch
175 Water Street
New York, NY 10038
Account No. 00078700
ABA No. 026002749
2.7.5 For the purpose of this Clause 2.7 "payment" shall only be
deemed to have been made to the extent cleared or good value
funds are received in the numbered IAE bank account specified
in sub-clause 2.7.4 above.
2.7.6 For the purpose of this Clause 2.7, the "Estimated Purchase
Price" of any of the Purchased Items shall be calculated in
accordance with the following formula:
P = Bx(1.06) (N)
where:
P is the Estimated Purchase Price
B is the applicable Basic Contract Price
N is the year of scheduled delivery minus the
year for which the Basic Contract Price is defined.
CLAUSE 3 SPARE PARTS PROVISIONS
3.1 Intent and Term
3.1.1 For as long as AWA owns and operates one or more Aircraft in
regular commercial service, IAE shall provide that adequate
supplies of Spare Parts are available for sale to AWA under
this Contract. In consideration thereof, IAE shall sell to
AWA and, except as hereinafater provided, AWA shall buy from
IAE AWA requirements of the following Spare Parts.
3.1.1.1 All Spare Parts manufactured pursuant to the
detailed design and order of IAE where IAE is
the only source from which AWA can purchase
such Spare Parts in an unused condition and
in quantities sufficient to meet AWA's
requirements; and
3.1.1.2 Vendor Parts for which direct supply
arrangements between the manufacturers of
such Vendor Parts and AWA cannot be
established. Except for the purposes of
Initial Provisioning pursuant to Clause 3.3
below, AWA shall notify IAE in writing not
less than twelve (12) months before scheduled
delivery that AWA intends to purchase such
Vendor Parts from IAE.
3.1.2 In an emergency, IAE shall sell to AWA Vendor Parts which it
is not obliged to sell under this Contract, but which it has
in stock or otherwise has reasonably available to it.
3.2 ATA Standards
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The parties to this Contract shall comply with the requirements of ATA
Specifications 200 and 300, provided that any of the parties shall be
entitled to negotiate reasonable changes in those procedures or
requirements of the said specifications which, if complied with
exactly, would result in an undue operating burden or unnecessary
economic penalty.
3.3 Initial Provisioning
3.3.1 To assist AWA's Initial Provisioning, IAE shall supply AWA
with Initial Provisioning Data in accordance with ATA
Specification 200, subject to Clause 3.2 above.
3.3.2 Details of the format and precise nature of the said Initial
Provisioning Data, including the applicable revision numbers
of ATA Specification 200, definition of Spare Parts
Categories, and Lead Times, and agreement on technical
publications shall be agreed between IAE and AWA at a
preliminary meeting held for this purpose at a time and place
to be agreed.
3.3.3 The said Initial Provisioning Data shall cover all Spare
Parts, including agreed Vendor Parts, which may be reasonably
required for AWA's operation of the Installation Items.
3.3.4 Before AWA places Initial Provisioning Orders, a conference
shall be held for the review of Initial Provisioning Data
supplied by IAE under Clause 3.3.1 above. The said conference
shall be held approximately eighteen (18) months before
Aircraft delivery and shall be attended by the personnel of
each party directly responsible for Initial Provisioning;
provided, however, that with respect to the GPA Aircraft said
conference will be held at a time which will allow the parties
reasonable lead time prior to delivery.
3.4 Change In Initial Provisioning Data
IAE shall, free of charge, progressively and promptly revise Initial
Provisioning Data in accordance with ATA Specification 200 to take
into account any changes which may materially affect provisioning
decisions.
3.5 Discontinuance of Initial Provisioning Data - Use of Procurement Data
3.5.1 Use of Initial Provisioning Data shall be discontinued on a
date to be agreed by the parties hereto, but in any event no
later than the date of delivery of the last Aircraft firmly
ordered by AWA at the date of this Contract. On or before the
said date IAE shall furnish AWA with Procurement Data
complying with ATA Specification 200 and shall revise the said
Procurement Data as a matter of routine thereafter.
3.5.2 Procurement Data shall be used to enable AWA to continue to
order Spare Parts to support the Installation Items.
3.6 Stocking of Spare Parts
Upon request, AWA shall provide IAE with information reasonably
required to enable IAE to organize the manufacture and stocking of
Spare Parts efficiently.
3.7 Lead Times
3.7.1 Spare Parts for Initial Provisioning shall be delivered on or
before the dates specified in AWA's orders, provided that the
said dates comply with the terms of this Contract and do not
call for delivery more than three (3) months before the
scheduled date of delivery of the first Aircraft to AWA and
provided further that delivery of the total Initial
Provisioning quantity shall be effected against a schedule
commensurate with AWA fleet build up and Aircraft utilization.
3.7.2 Save as herein provided, replenishment Spare Parts shall be
delivered within the Lead Time specified in the IAE Spare
Parts Catalog, except for certain major Spare Parts which
shall be designated in Initial Provisioning Data and
Procurement Data as being available at prices and lead times
to be quoted upon request.
3.7.3 If any order for replenishment Spare Parts shall call for a
quantity materially in excess of AWA's normal requirements,
IAE shall use its best efforts to complete such order in
accordance with Clause 3.7.1 above, provided however, that IAE
shall have the right to notify AWA and IAE may request a
special delivery schedule. If AWA confirms that the full
quantity ordered is required, delivery of the order shall be
effected at delivery dates specified by IAE and the Lead Times
provided by this Clause shall not apply.
3.7.4 In an emergency, IAE shall endeavor to deliver Spare Parts,
including certain major Spare Parts referred to in Clause
3.7.2 above, within the time limits specified by AWA. The
action to be taken on such orders shall be advised as follows
within the following time periods from IAE's receipt of such
notice:
3.7.4.1 AOG orders - within 4 hours;
3.7.4.2 other emergency orders - within 24 hours;
3.7.4.3 orders for items of which AWA is out-of-stock
- within 7 days.
3.8 Ordering Procedure
3.8.1 After receipt of Initial Provisioning Data, AWA shall place
its Initial Provisioning Orders in sufficient time to allow
IAE to commence delivery prior to delivery of the first
Aircraft. AWA shall use its best efforts to give priority to
ordering major items designated in the Initial Provisioning
Data.
3.8.2 Subsequent orders for Spare Parts shall be placed by AWA from
time to time as may be appropriate. AWA shall give IAE as
much notice as possible of any change in its operation,
including, but not limited to, changes in maintenance or
overhaul arrangements affecting its requirements of Spare
Parts, including Vendor Parts.
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3.8.3 IAE shall promptly acknowledge receipt of each order for Spare
Parts in accordance with ATA Specification 200 procedure.
Unless qualified, such acknowledgement, subject to variation
in accordance with Clause 3.7.3 above, shall constitute an
acceptance of the order under the terms of this Contract.
3.8.4 Subject to Clause 3.72.2 below, IAE shall accept "control
shipdates" as defined in ATA Specification 200 in orders for
Spare Parts provided that such dates allow IAE its applicable
Lead Times in making shipment and are not subject to
cancellation by AWA at less than twelve (12) calendar months'
notice.
3.8.5 If IAE notifies AWA that certain Spare Parts are packed in
standard package quantities (hereinafter called "SPQ's") or
that a minimum sales quantity (hereinafter called "MSQ")
applies, AWA's subsequent orders for such Spare Parts shall be
for SPQ's or multiples thereof with a minimum of one MSQ.
3.8.6 Unless AWA shall have specified "Total Quantity Required" on
its orders, IAE shall be entitled to consider an order for
inexpensive Spare Parts complete if at least ninety percent
(90%) of the quantity ordered is delivered. For the purpose
of this Clause the term "inexpensive" shall mean a price
listed in the IAE Spare Parts Catalog at less than Ten U.S.
Dollars ($10) per unit, but shall be subject to review by IAE
from time to time.
3.8.7 Not later than the time of placing Initial Provisioning
Orders, AWA shall provide IAE with full shipping instructions
applicable to both Initial Provisioning Orders and to
subsequent standard replenishment orders for Spare Parts to be
placed by AWA.
3.9 Modifications to Spare Parts
3.9.1 IAE shall be entitled to make modifications or changes to the
Spare Parts ordered by AWA hereunder. IAE shall promptly
inform AWA by means of Initial Provisioning Data, Procurement
Data and Service Bulletins when such modified Spare Parts (or
Spare Parts introduced by a repair scheme) become available
for supply hereunder. Notification of such availability shall
be given to AWA before delivery.
3.9.2 Modified Spare Parts may be supplied unless the modifications
stated in Service Bulletins, in the recommended or optional
category, are considered by AWA to be unacceptable and AWA so
states in writing to IAE within ninety (90) days of the
transmittal date of a Service Bulletin, in which case AWA
shall be entitled to place a single order for AWA's
anticipated total requirement of pre-modified Spare Parts, at
a price and delivery schedule to be agreed.
3.9.3 Unless AWA notifies IAE in writing under the provisions of
Clause 3.9.2 hereof, IAE may supply at the expense of AWA a
modification of any Spare Part ordered (including any
additional Spare Part needed to ensure interchangeability),
provided that the said modification has received the approval
of the Certification Authority. The delivery of such Spare
Parts shall begin on dates indicated by Service Bulletin. The
delivery schedule shall be agreed at the time when orders for
modifications are accepted by IAE.
3.9.4 If Spare Parts required for incorporation of a modification
are not ordered as a kit, AWA's orders must distinguish them
from normal replacement Spare Parts in accordance with ATA
Specification 200.
3.10 Inspection
3.10.1 Conformance to the Specification of Installation Items will be
assured by IAE through the maintenance of procedures, systems
and records approved by the Certification Authority.
Conformance documentation will be issued and signed by
personnel authorized for such purpose.
3.10.2 Conformance of Non-Installation Items will be assured by IAE
conformance documentation.
3.10.3 Upon the issue of conformance documentation in accordance with
Clauses 3.10.1 or 3.10.2 above, AWA shall be deemed to have
accepted the Installation Items and Non-Installation Items and
that such Items conform to specification.
3.11 Delivery and Packing
3.11.1 IAE shall deliver Spare Parts and Other Supplies ex-works, the
IAE point of manufacture. Shipping documents and invoices
shall be in accordance with ATA Specification 200.
3.11.2 Upon such delivery, title to and risk of loss of or damage to
the said Spare Parts and Other Supplies shall pass to AWA.
3.11.3 In accordance with ATA Specification 200 requirements, AWA
shall advise IAE at time of order of its instructions as to
the marking and shipping of the Spare Parts and Other
Supplies.
3.11.4 The packaging of Spare Parts shall normally be in accordance
with ATA Specification 300 Category 2 standard and shall be
free of charge to AWA. Category 1 standard packaging if
required by AWA shall be paid for by AWA.
3.12 Prices
3.12.1 Subject to Clause 3.7.2 above, prices of all Spare Parts shall
be quoted in U.S. Dollars, in the IAE Spare Parts Price
Catalog, Initial Provisioning Data and Procurement Data. Such
prices shall represent net unit prices, ex-works the IAE
point of manufacture.
3.12.2 Prices applicable to each order placed by AWA hereunder shall
be the prices in effect on the date IAE receives such order,
except when delivery of Spare Parts against any
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order is scheduled to take place after the Lead Time stated in
the IAE Spare Parts Price Catalog, in which event the prices
for such items shall be those prices in effect ninety (90) days
prior to the scheduled time for delivery in accordance with
Clause 3.12.3 below.
3.12.3 IAE may from time to time adjust its prices for Spare Parts
upon not less than ninety (90) days notice to AWA, except that
prices for Spare Parts quoted in Initial Provisioning Data
shall be firm, provided that:
3.12.3.1 Orders are placed within three (3) months of
receipt by AWA of Initial Provisioning Data,
and
3.12.3.2 Ordered quantities are agreed by IAE, and
3.12.3.3 Deliveries are scheduled to be made prior to
the scheduled date for delivery of the first
Aircraft as at the date of supply by IAE of
Initial Provisioning Data.
If for any reason orders are placed or subsequently
rescheduled to specify delivery more than six (6) months after
the date of first Aircraft delivery as scheduled at the date
of supply by IAE of Initial Provisioning Data, then the prices
for such items shall be those prices in effect ninety (90)
days prior to the scheduled time for delivery of such items
against a schedule commensurate with AWA fleet build up and
Aircraft utilization. Notwithstanding the above, individual
price errors in the calculation of prices may be adjusted
without advance notice to AWA.
3.12.4 On request by AWA, prices of Spare Parts or other materials
not included in the Spare Parts Price Catalog shall be quoted
within a reasonable time by IAE.
3.13 Payment
3.13.1 Payment for all purchases under this Clause 3 shall be made by
AWA to IAE within thirty (30) days after the date of delivery.
3.13.2 AWA undertakes that IAE shall receive payment in U.S. Dollars
of the full amount of payments falling due under this Clause
3.13, without any withholding or deduction whatsoever.
3.13.3 All payments under this Clause 3.13 shall be made by cable or
telegraphic transfer to, and shall be deposited not later than
the due date of payment with:
National Westminster Bank plc
New York Branch
175 Water Street
New York, NY 10038
Account No. 00078700
ABA No. 026002749
3.13.4 For the purpose of this Clause 3.13, payment shall only be
deemed to have been made to the extent cleared or good value
funds are received in the numbered IAE bank account specified
in sub-clause 3.13.2 above.
3.14 Resale of Surplus Spare Parts
3.14.1 At any one time during the fifth year after delivery of AWA's
first Aircraft, AWA shall have the right to sell to IAE any
unused, serviceable and currently usable Spare Parts which
were purchased hereunder in accordance with the
recommendations of IAE contained in Initial Provisioning Data
and which are surplus to AWA's reasonable future needs,
provided that such surplus has not been created due to a
change in or cessation of AWA's operation of the Aircraft on
which IAE based its Initial Provisioning recommendations.
3.14.2 Spare Parts to be resold shall be identified on lists
submitted by AWA to IAE at the time of resale and shall be
delivered at AWA's cost to IAE, at the factory of the
Manufacturer or other mutually agreed location.
3.14.3 Prices for Spare Parts resold to IAE under Clause 3.14.1 above
shall be the unit net prices paid therefor by AWA. All
payments made by IAE under this Clause 3.14 shall be by way of
credit note to AWA's account at IAE.
3.14.4 IAE is prepared at any time to consider the repurchase of
Spare Parts from AWA, if they are surplus to AWA's
requirements.
3.15 Purchase by AWA from Others
3.15.1 AWA may purchase from another A320-200 operator Spare Parts,
which by virtue of Clause 3.1 above are required to be
purchased from IAE:
3.15.1.1 on an occasional basis; or
3.15.1.2 where the said operator has published details
of excessive stock holdings of the Spare
Parts concerned; or
3.15.1.3 pursuant to a pooling arrangement or joint
use agreement between AWA and the said
operator.
3.15.2 Subject to the conditions specified below, in the following
circumstances AWA may obtain from established and approved
sources, other than IAE or other A320-200 operators, Spare
Parts which by virtue of Clause 3.1 above are required to be
purchased from IAE:
3.15.2.1 as a temporary expedient in the event of a
temporary but material failure by IAE to
supply Spare Parts as required herein; or
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3.15.2.2 during any period when IAE is hindered or
prevented from delivering Spare Parts due to
circumstances beyond its control provided AWA
is thereby able to obtain the Spare Parts it
requires sooner than IAE is able to supply
them, and provided further that AWA will not
unreasonably thereby increase its stock of
the Spare Parts; or
3.15.2.3 where IAE identifies a Spare Part as a
standard part.
AWA's rights under sub-clause 3.15.2 above are subject to AWA
being unable to satisfy its requirements for Spare Parts
under the provisions of sub-clause 3.15.1 above.
3.15.3 Nothing in this Clause 3.15 shall be deemed to extend the
obligations of IAE or to diminish the limitations upon such
obligations under the Warranties referred to in sub-clauses
4.1 and 4.2 below.
3.15.4 Notwithstanding any extension of the time of delivery in
accordance with the provisions of Clause 6.1.1 below, AWA
shall be entitled to cancel all or part of any order on IAE
for Spare Parts which, pursuant to the terms of Clauses
3.15.2.1 and 3.15.2.2 are purchased from another source by
giving reasonable notice of cancellation of the said order.
3.15.5 In the event that AWA purchases Spare Parts under this Clause
3.15, AWA shall give written notice to IAE of the extent of
such purchase supported by any other technical information
which IAE may reasonably require.
3.16 Special Tools, Ground Equipment and Consumable Stores
IAE shall sell Other Supplies to AWA subject to the terms and
conditions of this Contract, but the detailed procedures of this
Contract with regard to Initial Provisioning, Procurement Data,
prices, stocking and Lead Time shall not apply. Technical data for
special tools and ground equipment shall be in accordance with ATA
Specification 101.
3.17 Conflict
In the event of any conflict between the provisions of this Contract
and the provisions of ATA Specifications 101, 200 and 300, the
provisions of this Contract shall prevail.
CLAUSE 4 WARRANTIES, GUARANTEES AND LIABILITIES
4.1 IAE warrants to AWA that at the time of delivery of the Supplies sold
hereunder such Supplies will be free of defects in material and
manufacture and will conform substantially to IAE's applicable
specifications as stipulated in this Contract. IAE's liability and
AWA's remedies under this warranty are limited to the repair or
replacement, at IAE's election, of Supplies or parts thereof returned
to IAE at the factory of the manufacturer which are shown to IAE's
reasonable satisfaction to have been defective; provided, that written
notice of the defect shall have been given by AWA to IAE within ninety
(90) days after the first operation or use of the Supplies (or if the
Supplies are installed in new Aircraft, within ninety (90) days after
acceptance of such Aircraft by its first operator) but in no event
later than one (1) year after the date of delivery of such Supplies by
IAE. Transportation charges for the return of defective Supplies to
IAE pursuant to this Clause 4.1 and their reshipment to AWA and the
risk of loss thereof will be borne by IAE only if the Supplies are
returned in accordance with written shipping instructions from IAE.
4.2 In addition, IAE grants and AWA accepts the following:
4.2.1 V2500 Engine and Parts Service Policy
4.2.2 V2500 Nacelle and Parts Service Policy
4.2.3 V2500 Non-Installation Items Warranty
4.2.4 Parts Cost Guarantee
4.2.5 Reliability Guarantee
4.2.6 Inflight Shutdown Guarantee
4.2.7 Fuel Consumption Rentention Guarantee
4.2.8 Exhaust Gas Temperature Guarantee
The Service Policies, Warranties and Guarantees referred to in this
Clause 4.2 are hereinafter called the "Warranties." The above Service
Policies, Warranties and Guarantees together form Exhibit D to this
Contract.
4.3 The parties agree that those of the Warranties set out in Clauses
4.2.1 and 4.2.2 above wherein AWA may be referred to as the "Operator"
shall also apply to any equipment which falls within the categories of
equipment referred to in the Warranties manufactured, supplied or
inspected by IAE howsoever and whenever (whether before, on or after
the date first above written) acquired by AWA from whatsoever source
including but not limited to any V2500 aero engines and any associated
equipment therefor, and any parts for such engines and associated
equipment which form part of any aircraft acquired from the
manufacturer.
4.4 The Warranties are personal to AWA and the obligations of IAE
thereunder shall only apply insofar as AWA has ownership and
possession of the Supplies covered thereunder.
4.5 AWA shall inform any person to whom it intends to sell, lease, loan or
otherwise dispose of any of the Supplies or equipment referred to in
Clause 4.3 above that such person may obtain from IAE a direct
warranty agreement incorporating those of the Warranties set out in
Clauses 4.2.1 and 4.2.2. AWA shall also use its reasonable endeavors
to ensure that such person shall enter into a direct warranty
agreement with IAE prior to delivery of any of the Supplies or such
equipment to such person.
4.6 IAE and AWA agree that the intent of the Warranties provided in Clause
4.2 is to provide specified benefits or remedies to AWA as a result of
specified events. It is not the intent
10
however to duplicate benefits or remedies provided to AWA by IAE or
another source, e.g., another equipment manufacturer or lessor, as a
result of the same event. Therefore, the terms of the Warranties
notwithstanding, AWA agrees that it shall not be eligible to receive
benefits or remedies from IAE if it stands to receive or has received
benefits or remedies from IAE or another source as a result of the same
event.
4.7 AWA accepts that the Warranties granted to AWA under Clauses 4.1, 4.2
and 4.3 above together with the express remedies provided to AWA in
respect of the Supplies in accordance with this Contract are expressly
in lieu of, and AWA hereby waives, all other remedies, conditions and
warranties, expressed or implied including without limitation, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR
PURPOSE, and all other obligations and liabilities whatsoever of IAE
and of its shareholders whether in contract or in tort or otherwise for
any defect, deficiency, failure, malfunctioning or failure to function
of any item of the Supplies or of the equipment referred to in Clause
4.3 above, howsoever and whenever acquired by AWA from whatever sources
and AWA agrees that neither IAE nor any of its shareholders shall be
liable to AWA upon any claim therefor or upon any claim howsoever
arising out of the manufacture or supply or inspection by IAE of any
item of the Supplies or of such equipment or any other item of whatever
nature, whether in contract or in tort or otherwise, except as
expressly provided in the said Warranties, and AWA assumes all risk and
liability whatsoever not expressly assumed by IAE in the said
Warranties.
4.8 IAE and AWA agree that this Clause 4 has been the subject of
discussion and negotiation, is fully understood by the parties and the
price of the Supplies and other mutual agreements of the parties set
forth in this Contract are arrived at in consideration of:
4.8.1 the express Warranties of IAE and AWA's rights thereunder; and
4.8.2 the exclusions, waivers and limitations set forth in Clause
4.7 above.
CLAUSE 5 PRODUCT SUPPORT SERVICES
5.1 IAE will make available to AWA the Product Support Services described
in Exhibit C to this Contract. Except when identified in such Exhibit
as requiring separate contractual arrangements, such Product Support
Services shall be supplied at no additional charge to AWA and subject
to the provisions of this Contract. IAE may delegate the performance
of product support services to an affiliated company.
CLAUSE 6 MISCELLANEOUS
6.1 Delay in Delivery
6.1.1 If IAE is hindered or prevented from delivering any of the
Supplies within the time for delivery specified in this
Contract (as such time may be extended pursuant to the
provisions of this Contract) by reason of:
6.1.1.1 any cause beyond the reasonable control of
IAE, or
6.1.1.2 fires, industrial disputes or introduction of
essential modifications the time for delivery shall be
extended by a period equal to the period for which delivery
shall have been so hindered or prevented, and IAE shall not be
under any liability whatsoever in respect of such delay.
6.1.2 If, by reason of any of the causes embraced by Clause 6.1.1
above, IAE is hindered or prevented from delivering any goods
(which are the same as and include the Supplies) to purchasers
(including AWA) then IAE shall have the right to allocate such
goods, as they become available, at its own discretion among
all such purchasers and IAE shall not be under any liability
whatsoever to AWA for delay in delivery to AWA resulting from
such allocation by IAE and the time for delivery shall be
extended by a period equal to the delay resulting from such
allocation by IAE.
6.1.3 Should IAE inexcusably delay delivery of any item of the
Supplies beyond the time for delivery specified in this
Contract (as such time may be extended pursuant to the
provisions of this Contract), then in respect of the first two
(2) months of such delay, IAE shall not be under any liability
whatsoever and thereafter in respect of any further delay in
delivery the damages recoverable by AWA from IAE as AWA's sole
remedy shall not exceed 1/2% (one half percent) of the
purchase price of the item of Supplies so delayed in respect
of each month of such further delay (and prorata for any
period of less than one (1) month) subject to an overall
maximum of 3 1/2% (three and one half percent) of the purchase
price of the item of the Supplies so delayed.
6.1.4 The right of AWA to claim damages shall be conditional upon
the submission of a written claim therefor, within thirty (30)
days from the date on which IAE notifies AWA that the item of
the Supplies so delayed is ready for delivery, or from the
date on which AWA exercises the right of cancellation in
respect of such item conferred in accordance with Clause 6.1.5
below, whichever date shall first occur.
6.1.5 Should IAE delay delivery of any item of the Supplies beyond
the time for delivery specified in this Contract (as such time
may be extended pursuant to the provisions of this Contract)
for a period of twelve (12) months then, in addition to the
right of AWA under Clause 6.1.3, AWA shall be entitled to
refuse to take delivery of such item on giving IAE notice in
writing within one (1) month after the expiration of such
period of twelve (12) months. Upon receipt of such notice IAE
shall be free from any obligation in respect of such item
except that IAE shall refund to AWA any deposits made in
respect of the purchase price of such item of the Supplies.
11
6.2 Patents
6.2.1 IAE shall, subject to the conditions set out in this Clause
and as the sole liability of IAE in respect of any claims for
infringement of industrial property rights, indemnify AWA
against any claim that the use of any of the Supplies by AWA
within any country to which at the date of such claim the
benefits of Article 27 of the Convention on International
Civil Aviation of 7th December l944 (The Chicago Convention)
apply, infringes any patent, design, or model duly granted or
registered provided, however, that IAE shall not be liable to
AWA for any consequential damage or any loss of use of the
Supplies or of the Aircraft in which the Supplies may be
incorporated arising as a result directly or indirectly of any
such claim.
6.2.2 AWA will give immediate notice in writing to IAE of any such
claim whereupon IAE shall have the right at its own expense to
assume the defense of or to dispose of or to settle such claim
in its sole discretion and AWA will give IAE all reasonable
assistance and will not by any act or omission do anything
which may directly or indirectly prejudice IAE in this
connection.
6.2.3 IAE shall have the right to substitute for any allegedly
infringing Supplies substantially equivalent non-infringing
supplies.
6.2.4 The indemnity contained in Clause 6.2.1 above shall not apply
to claims for infringement in respect of (i) Supplies
manufactured to the specific design instructions of AWA; (ii)
Supplies not of IAE design (but IAE shall in the event of any
claim for infringement pass on to AWA so far as it has the
right to do so the benefits of any indemnity given to IAE by
the designer, manufacturer or supplier of such Supplies);
(iii) the manner or method in which any of the Supplies is
installed in the Aircraft; or (iv) any combination of any of
the Supplies with any item or items other than Supplies.
6.3 Credit Reimbursement
If AWA should not accept delivery of a total of at least twenty (20)
Aircraft on order from AVSA (eight (8) of which Aircraft may be
existing "puts" from GPA) the date of this Contract and the Purchased
Items ordered in accordance with this Contract, including the firmly
ordered new V2500 Spare Engines, then, without prejudice to IAE's
other rights under this Contract, the value of any credits, hardware
or other concessions received by AWA pursuant to this Contract
(including any Side Letters and Amendments) will be adjusted to
amounts to be determined in good faith by IAE. If at the time of such
adjustment, the credits, hardware values or value of other concessions
which have been received by AWA exceed the final adjusted amounts AWA
will promptly reimburse IAE in an amount equal to such excess plus
interest on the excess amounts calculated from the time each
respective amount was applied or value received until reimbursement.
Interest will be calculated at a rate equal to the New York Citibank
prime rate in effect at the time each respective amount was applied or
value was received plus two percent (2%) per annum.
6.4 Non-Disclosure and Non-Use
6.4.1 Subject to Clause 6.4.3 below, AWA agrees to hold in
confidence any Information which it acquires directly or
indirectly from IAE and agrees not to use the same other than
for the purpose for which it was disclosed without the written
approval of IAE. The expression "Information" in this Clause
6.4.1 includes but is not limited to all oral or written
information, know-how, data, reports, drawings and
specifications, and all provisions of this Contract.
6.4.2 AWA shall be responsible for the observance of the provisions
of Clause 6.4.1 above by its employees.
6.4.3 The provisions of Clause 6.4.1 above shall not apply to
information which is or becomes generally known in the aero
engine industry nor shall the provisions of Clause 6.4.1 above
prevent any necessary disclosure of information to enable AWA
itself to operate, maintain or overhaul Supplies.
6.4.4 With respect to Supplies ordered by AWA for delivery to a
destination outside the U.S.A., AWA shall be responsible for
obtaining any required authorization including an Export
License, Import License, Exchange Permit or any other
governmental authorization required in connection with the
transactions contemplated under this Contract. AWA shall
restrict disclosure of all information and data furnished
thereto under this Agreement and shall ship the direct product
of such information and data to only those destinations
permitted under such governmental authorization.
6.4.5 In the event that any of the "Information" as described in
Clause 6.4.1 is required to be disclosed by AWA through a
valid governmental, judicial or regulatory agency order, or as
a result of compliance with any valid and enforceable law, AWA
agrees to limit the disclosure to only those portions of the
Information specifically required to be disclosed by such
order, and to maintain the confidentiality of as much of the
Information as legally possible.
6.5 Taxes
6.5.1 Subject to Clause 6.5.2 below, IAE shall pay all imposts,
duties, fees, taxes and other like charges levied by the
governments of the United Kingdom, the United States of
America, the Federal Republic of Germany, Japan and Italy or
any agency thereof in connection with the Supplies prior to
their delivery.
12
6.5.2 All amounts stated to be payable by AWA pursuant to this
Contract exclude any value added tax, sales tax or taxes on
turnover. In the event that the supply of goods or services
under this Contract is chargeable to any value added tax,
sales tax or taxes on turnover, such tax will be borne by AWA.
6.5.3 AWA shall pay all other imposts, duties, fees, taxes and other
like charges by whomsoever levied.
6.6 Amendment
This Contract shall not be amended in any way other than by agreement
in writing, entered into by the parties hereto after the date of this
Contract, which is expressly stated to amend this Contract.
6.7 Assignment
Neither party may assign any of its rights or obligations hereunder
without the written consent of the other party (except that IAE may
assign its rights to receive money hereunder). Any assignment made in
violation of this Clause 6.7 shall be null and void.
6.8 Exhibits
In the event of any conflict or discrepancy between the Exhibits
(which are hereby expressly made a part of this Contract) and Clauses
of this Contract then the Clauses shall prevail.
6.9 Headings
The Clause headings and the Index do not form a part of this Contract
and shall not govern or affect the interpretation of this Contract.
6.10 Law
This Contract shall be subject to and interpreted and construed in
accordance with the Laws of the State of New York, United States of
America.
6.11 Notices
Any notice to be served pursuant to this Contract is to be sent by
fax, or certified mail, return receipt requested, or by telex to:
In the case of IAE:
IAE International Aero Engines AG
628 Hebron Avenue
Glastonbury, Connecticut 06033-2595 U.S.A.
Telex No. 443603l INTLAERO
Fax No. (203) 659-1410
Attention: Business Director & Chief Legal Officer
In the case of AWA:
America West Airlines, Inc.
4000 East Sky Harbour Boulevard
Sky Harbour International Airport
Phoenix, Arizona 85034 U.S.A.
Attention: Sr. V.P. Operations
Telex No. 755089
Fax No. (602) 693-5811
or in each case to such other place of business as may be notified
from time to time by the receiving party.
6.12 Exclusion of Other Provisions and Previous Understandings
6.12.1 This Contract contains the only provisions governing the sale
and purchase of the Supplies and shall apply to the exclusion
of any other provisions on or attached to or otherwise forming
part of any order form of AWA, or any acknowledgement or
acceptance by IAE, or of any other document which may be
issued by either party relating to the sale and purchase of
the Supplies.
6.12.2 The parties agree that neither of them have placed any
reliance whatsoever on any representations, agreements,
statements or understandings made prior to the signature of
this Contract, whether orally or in writing, relating to the
Supplies, other than those expressly incorporated in this
Contract, which has been negotiated on the basis that its
provisions represent their entire agreement relating to the
Supplies and shall supersede all such representations,
agreements, statements and understandings.
6.13 Term of Contract
6.13.1 This Contract shall be in force and effect from the date of
execution hereof by both parties and remain in force and
effect until the earlier of twenty (20) years from the date of
execution hereof by both parties, or the date on which AWA no
longer owns or operates any of the Aircraft, whichever occurs
first.
13
6.13.2 So long as AWA operates V2500 powered Aircraft in regular
commercial service, this Contract will be automatically
renewed from year to year thereafter unless at least thirty
(30) days prior to the end of the original period or of any
subsequent yearly period, as the case may be, written notice
is given to the contrary by either party to the other, except
that (i) any orders placed hereunder prior to said notice of
non-renewal shall continue to be subject to all terms and
conditions hereof, and (ii) where the terms and conditions of
this Contract have been incorporated by reference into another
agreement, such terms and conditions shall remain in effect
for, and for the full term of, such other agreement.
IN WITNESS WHEREOF the parties hereto have caused this Contract to be signed on
their behalf by the hands of their authorized officers the day and year first
before written:
For IAE International Aero Engines AG ____________________
In the presence of ____________________
For America West Airlines, Inc. ____________________
In the presence of ____________________
14
EXHIBIT A
CONTRACT SPECIFICATION
V2500 TURBOFAN ENGINE MODEL SPECIFICATION
FAA Commercial Type Certificate E40NE Model V2527 - A5
Spec. No. IAE S27A5
SEA LEVEL RATINGS
(With Ideal Inlet and Exhaust Systems - See GENERAL NOTES)
Net Thrust lb
-------------
Takeoff Rating (Static) 24,800
Takeoff Rating (at 0.2 Mn) 22,020
Maximum Continuous Rating 22,240
DESCRIPTION
Type - An axial flow, two spool, turbofan engine with fan and multistage
compressors driven by multistage reaction turbines and designed for operation
with fixed area mixed exhaust system. Installation Drawing No. 4W6199. The
Engine Installation Drawing shows the Engine envelope and provides dimensions
and data for the engine installation interfaces.
FUEL AND OIL
Fuel - Specification MIL-T-5624, MIL-T-83133 or ASTM-D-1655
Oil - Specification MIL-L-23699 Type II
Oil Consumption, Maximum (As measured over a 10-Hour Period) 0.15 U.S. gal/hr
STANDARD EQUIPMENT
Included in Engine Price
(Partial List Comprised of Major Items)
FUEL SYSTEM AND CONTROL SYSTEM:
LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel
Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Relay Box, Electronic
Engine Control (EEC), Dedicated Generator, P4.9 Sensors and Manifold, Fuel
Metering Unit, Fuel Supply Pipe, Fuel Nozzles.
IGNITION SYSTEM:
Ignition Exciter, Igniter Plug, Ignition Lead (2 each) (without power source).
AIR SYSTEM:
No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control Valve,
Active Clearance Control Valve Actuator,LP Compressor Bleed Valve Master
Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane
Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids, HPT
Cooling Valve and Solenoid.
ENGINE INDICATING SYSTEM:
Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box, No. 4
Bearing Scavenge Pressure Transducer, Fuel Filter and Scavenge Differential
Pressure Switches, Scavenge Oil Temperature Sensor, Oil Pressure Transmitter,
Low Oil Pressure Switch, Vibration Transducers and Harness, Oil Quantity
Transmitter, Magnetic Chip Detectors, Fuel Flowmeter.
OIL SYSTEM:
Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil Filter
Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter Housing
Assembly and Element, No. 4 Bearing Compartment Scavenge Valve, Electrical Power
Generator Fuel Cooled Oil Cooler.
MISCELLANEOUS:
EEC Harnesses - Fan and Core, Ignition Supply Harness, General Service Harness,
Nose Spinner, Core Fuel Drains, Airframe Accessory Mounting Pads and Drives,
Various Brackets on working flanges for attachment of Nacelle and Aircraft
Equipment Electrical Power Generator Piping to Cooler, P2T2 Probe.
ADDITIONAL EQUIPMENT
Available at Increased Price
Shipping Stand
Engine Condition Monitoring Instrumentation
Items of ADDITIONAL EQUIPMENT should be ordered at the time of Engine
procurement in order to assure availability of this equipment at the time of
Engine shipment.
GENERAL NOTES
The specified Sea Level Static Ratings are ideal and are based on U.S.
Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal
inlet pressure recovery, no fan or compressor air bleed or load on accessory
drives, a mixed exhaust system having no internal pressure losses and with a
mixed primary nozzle velocity coefficient equal to 1.0.
Takeoff rating is the maximum thrust certified for takeoff operation. The
specified takeoff thrust is available at and below ISA + 56oF (31oC) ambient
temperature.
Maximum Continuous Rating is the maximum thrust certified for continuous
operation. The specified thrust is available at and below ISA + 18oF (10oC)
ambient temperature.
15
Maximum Climb Rating is the maximum thrust approved for normal climb operation.
Maximum Cruise Rating is the maximum thrust approved for normal cruise
operation.
Guaranteed Calibration Stand Performance values for specific engine
applications are provided in Appendix A to this specification.
Unless otherwise specified, engines will be supplied with the STANDARD EQUIPMENT
listed. The Electrical Power Generator Fuel Cooled Oil Cooler and any drains,
brackets and Electrical Power Generator piping, and other external hardware
supplied with the Engine are certified by the FAA-NER to FAR Part 33
requirements.
V2500 TURBOFAN ENGINE MODEL SPECIFICATION
Appendix A
FOR A COMPLETE PROPULSION SYSTEM INCLUDING ENGINE AND NACELLE TO BE INSTALLED
IN THE AIRBUS INDUSTRIE A320 AIRPLANE GUARANTEED CALIBRATION STAND PERFORMANCE
Sea Level Static
----------------
Net Max. Specific.
Thrust Fuel Consumption
lb. lb/hr/lb Thrust
------ -----------------
Takeoff Rating 24,200 TBD
Maximum Continuous Rating 21,750 TBD
90% of Maximum Continuous Rating 19,570 TBD
See GENERAL NOTES of the basic specification for rating definitions.
The ratings specified in this Appendix are attainable on the test stand at U.S.
Standard Atmosphere 1962 conditions, with the specified fuel and oil, the air
inlet and exhaust system described below, and without fan or compressor air
bleed for aircraft systems, or load on accessory drives. The air inlet and
exhaust system are shown on Propulsion System Drawing No. 745-7000 and consist
of the air inlet duct assembly, fan duct assembly, mixed nozzle assembly and
other associated V2500 Nacelle System hardware as would be installed in the
Airbus Industrie A320 airplane. The specified calibration stand performance
represents installed performance and is based on fuel having a LHV of 18,400
Btu/lb.
The maximum thrust specific fuel consumption values will be determined
based on the production acceptance to inflight correlation established after the
completion of airplane certification. The following items are included in
establishing the specified performance guarantees:
(a) Air inlet duct contours
(b) Air inlet duct acoustic treatment
(c) Fan duct and mixed nozzle contours
(d) Fan reverser blocker doors and drag links
(e) Fan duct and mixed nozzle acoustictreatment
(f) Fan duct bleed openings except that the precooler bleed duct is
shut off
(g) Fan air leakage with the exhaust system conforming to that shown on
the Engine Installation Drawing
(h) Fan air bleed for component cooling and nacelle ventilation
16
EXHIBIT B
PURCHASED ITEMS, PRICE,
ESCALATION FORMULA, AND
DELIVERY SCHEDULE
17
EXHIBIT B
PURCHASED ITEMS, PRICE,
ESCALATION FORMULA AND DELIVERY SCHEDULE
Exhibit B
Purchased Basic Contract Price Delivery
Item No.: U.S. Dollars (July 1988) Qty. Date
--------------- ------------------------ ---- ------------
1. V2500-A5 Spare Engine 4,210,000 1 January 1998
2. V2500-A5 Spare Engine 4.210,000 1 May 1998
3. V2500-A5 Spare Engine 4,210,000 1 October 1998
4. V2500-A5 Spare Engine 4.210,000 1 March 1999
5. V2500-A5 Spare Engine 4,210,000 1 January 2000
6. V2500-A5 Spare Engine 4,210,000 1 October 2000
ESCALATION FORMULA
1. Any Basic Contract Price or other Sum expressed to be subject to
escalation from a Base Month to a month of delivery or other date of
determination will be subject to adjustment in accordance with the
following formula:
P = Pb ( 0.60 L + 0.30 M + 0.10 E )
Lo Mo Eo
Where:
P = The Invoiced Purchase Price or Escalated Sum rounded to the
nearest dollar.
Pb = The Basic Contract Price or other Sum.
Lo = The "Average Hourly Earnings of Aircraft Engine and Engine
Parts Production Workers" SIC Code 3724 published by the
Bureau of Labor Statistics in the U.S. Department of Labor
for the month preceding the Base Month by four months.
L = The "Average Hourly Earnings of Aircraft Engine and Engine
Parts Production Workers" SIC Code 3724 for the month
preceding the month of delivery or other date of
determination by four months.
Mo = The "Producer Price Index, Code 10, For Metals and Metal
Products" published by the Bureau of Labor Statistics in the
U.S. Department of Labor for the month preceding the Base
Month by four months.
M = The "Producer Price Index, Code 10, For Metals and Metal
Products" for the month preceding the month of delivery or
other date of determination by four months.
Eo = The "Producer Price Index, Code 5, For Fuel and Related
Products and Power" published by the Bureau of Labor
Statistics in the U.S. Department of Labor for the month
preceding the Base Month by four months.
E = The "Producer Price Index, Code 5, For Fuel and Related
Products and Power" for the month preceding the month of
delivery or other date of determination by four months.
2. The values of the factors 0.60 L and 0.30 M and 0.10 E
- - -
L M E
respectively, shall be determined to the nearest fourth decimal place.
If the fifth decimal is five or more, the fourth decimal place shall be
raised to the next higher number.
3. If the U.S. Department of Labor ceases to publish the above codes or
modifies the basis of their calculation, then IAE may substitute any
officially recognized and substantially equivalent statistics.
4. The Basic Contract prices contained in this Exhibit B are subject to
escalation from a Base Month of July 1988 to the month of delivery
using Lo, Mo and Eo values for March 1988.
5. If the application of the formula contained in this Exhibit B results
in a Purchase Price which is lower than the Basic Contract Price, the
Basic Contract Price will be deemed to be the Purchase Price for such
Supplies.
18
EXHIBIT C
PRODUCT SUPPORT
19
PRODUCT SUPPORT
FOR THE
V2500 ENGINE
IAE INTERNATIONAL AERO ENGINES AG
Issue No. 3
20
INDEX
I. INTRODUCTION
II. CUSTOMER SUPPORT
- Customer Support Engineer
- Field Services Representatives
- Customer Training
III. CUSTOMER SERVICES
- Engine Warranty Services
- Maintenance Center Support
- Maintenance Facilities Planning Service
- Tooling and Support Equipment Services
- Product Support Technical Publications
- Lease Engine Program Support
IV. TECHNICAL SERVICES GROUP
- Product Support Engineering
- Powerplant Maintenance Engineering
- Customer Performance Engineering
- Diagnostic Systems Engineering
- Human Engineering
- Flight operations Engineering
- Repair Services
- Field Operations Data Analysis
V. SPARE PARTS SUPPORT
- Spare Parts Support
VI. BUSINESS SUPPORT GROUP
- Customer Maintenance Support
- Engine Reliability and Economic Forecasts
- Logistics Support Studies
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I. INTRODUCTION
International Aero Engines AG (IAE) will make the following support
personnel and services available to the V2500 engine customer: Flight
Operations Engineering, Customer Performance Engineering, Field
Representatives, Customer Maintenance Support, Product Support
Engineering, Powerplant Maintenance Engineering, Field Operations Data
Analysis, Human Engineering, Repair Services, Warranty Administration,
Maintenance Facilities Planning, Tooling and Support Equipment
Services, Product Support Technical Publications, Customer Training,
Spare Parts Support and Engine Overhaul and Repair Service Centers.
To make these support services readily available to you, our customer,
in the most efficient manner the Customer Support Group has been
established and assigned primary responsibility within IAE for customer
contact and communications. A Manager, Customer Support Engineer is
assigned to maintain direct liaison with each individual Customer. A
description of the various product support services available to each
customer follows. IAE reserves the right to withdraw or modify the
services described herein at any time at its sole discretion. No such
withdrawal or modification shall diminish the level of services and
support which the Customer may be entitled to receive with respect to
V2500 engines for which an acceptable order has been placed with IAE or
with respect to aircraft with installed V2500 engines for which a firm
and unconditional order has been placed with the aircraft manufacturer,
prior to the announcement of any such withdrawal or modification.
II. CUSTOMER SUPPORT GROUP
CUSTOMER SUPPORT MANAGER
The Customer Support Manager provides a direct liaison between the
airline customer's Engineering, Maintenance, Logistics and Financial
organizations and the corresponding functions within IAE. The Customer
Support Manager assigned to each airline is responsible for
coordinating and monitoring the effort of the Product Support
Department functional organization to achieve timely and responsive
support for the airline.
The Customer Support Manager provides the following specific services
to the airline customer:
- Technical recommendations and information.
- Refurbishment, Modification and Conversion program planning
assistance.
- Coordination of customer repair, maintenance and logistics
requirements with the appropriate Product Support functional
groups.
- Assist with preparation of all engine warranty/service policy
claims as may be requested by AWA.
The Customer Support Manager will represent the airline customer in IAE
internal discussions to ensure that the best interests of the customer
and IAE are considered when making recommendations to initiate a
program, change or improvement in the V2500 engine.
FIELD REPRESENTATIVES
IAE Field Representatives provide the following services to the airline
customer:
- 24 Hour Support
- Maintenance Action Recommendations
- Daily Reporting on Engine Technical Problems
- On-The-Job Training to include hands-on maintenance task as
requested by AWA
- Service Policy Preparation Assistance
- Prompt Communication with IAE
In addition to the two full time dedicated IAE Field Representatives
already identified, IAE will work with AWA, once AWA outstation
requirements are identified, to establish a Customer Support Plan to
provide adequate introductory coverage for the V2500.
ENGINE MAINTENANCE SUPPORT SERVICE
Field Representatives assist airline customer personnel in the necessary
preparation for engine operation and maintenance. The Representative, teamed
with Customer Support Manager will work closely with the airplane manufacturer's
field support team particularly during the initial period of aircraft operation.
Field Representatives are in frequent contact with the IAE offices on technical
matters. Information and guidance received from the home office is transmitted
promptly to the airline which allows the airline to share in all related
industry experience. The practice permits immediate use of the most effective
procedures and avoidance of unsuccessful techniques. The IAE office contact
ensures that IAE Field Representatives know, in detail, the latest and most
effective engine maintenance procedures and equipment being used for maintenance
and overhaul of V2500 engines. They offer technical information and
recommendations to airlines personnel on all aspects of maintenance, repair,
assembly, balancing, testing, and spare parts support of IAE.
ON-THE-JOB TRAINING
Field Representatives will conduct on-the-job training for the
airline's maintenance personnel. This training continues until the maintenance
personnel have achieved the necessary level of proficiency. Training of new
maintenance personnel will be conducted on a continuing basis.
SERVICE POLICY ADMINISTRATION
Field Representatives will provide administrative and technical assistance in
the application of the IAE Engine and Parts Service Policy to ensure expeditious
and accurate processing of airline customer claims.
CUSTOMER TRAINING
IAE Customer Training offers airline customers the following support:
- Technical Training at Purpose Built Facilities
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- On-site Technical Training
- Technical Training Consulting Service
- Training Aids and Materials
TRAINING PROGRAM
The IAE Customer Training Center will have an experienced full-time training
staff which conducts formal training programs for airline customers'
maintenance, training and engineering personnel. The standard training programs
are designed to prepare customer personnel, prior to the delivery of the first
aircraft, to operate and maintain the installed engines. Standard courses in
engine operation, line maintenance, heavy maintenance, performance and
trouble-shooting are also available throughout the production life of the
engine. The courses utilize the latest teaching technology, training aids and
student handouts. Customer Training will coordinate the scheduling of specific
courses as required. The following is the curriculum of standard courses for
IAE. On-site technical training, technical training consulting services and
customized courses may be provided upon customer request and subject to separate
contractual arrangements.
Maintenance and Provisioning Planner's Course
This two day course is designed specifically for experienced gas turbine
personnel who will be responsible for planning and provisioning for maintenance
on the V2500 engine. Discussions are concentrated in the following subject
areas:
- Engine construction features internal and external hardware.
- Engine systems operation, major components accessibility for
removal/replacement.
- Maintenance concepts, repair and replacement requirements and special
tooling.
The course is normally conducted in conjunction with two to three days of
consultations with IAE Spare Parts personnel or Support Equipment Personnel to
acquaint the customer with that Group's procedures and services including
computerized services.
Staff Orientation
This course is designed to familiarize key staff, supervisory and operations
planning personnel with engine construction features, fundamental systems
operation, performance characteristics, operational procedures and general
maintenance practices.
Flight Crew Familiarization
This course is designed to provide flight crew personnel with classroom
familiarization training in the following subject areas:
- Basic Engine Design Features
- Engine Systems and Airframe Interface
- Ground Operational Procedures
- Malperformance Analysis Concepts
V2500 General Familiarization
This course is designed to provide training for customer maintenance planning,
engineering and instructor personnel in the following subject areas:
- Construction Features
- Applied Performance
- Engine Systems
- Installed/Uninstalled Operation
- Maintenance Concepts
Note: This course contains no "hands-on" training.
Engine Troubleshooting
This course designed to develop the skills of V2500 experienced personnel in
detecting, analyzing and correcting malfunctions in the V2500 engine systems
and the engine/airframe interfaces. Classroom and shop training are provided in
the following subject areas:
- Troubleshooting Philosophy
- Systems Review
- Systems Troubleshooting
- Systems/Component Isolation Procedures
- Performance Parameter Analysis
- Practical Application of Troubleshooting Procedures
V2500 Familiarization and Non-flight Performance
This course is designed specifically for power plant engineering, condition
monitoring and instructor personnel. Performance characteristics are studied
in-depth with consideration given to basic performance losses attributable to
module deterioration. It does not include specific, in-depth, module
performance analysis.
Line Maintenance and Troubleshooting
This course is designed for key line maintenance and troubleshooting personnel
who have not received previous formal training on the V2500 engine. The
classroom phases provide the student with the information essential for timely
completion of line maintenance activities. The training focuses on the
following subject areas:
- Engine Description
- Systems operation
- Applied Performance
- Ground Operations
- Troubleshooting Procedures
- Practical Phase Line Maintenance Tasks
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V2500 Familiarization and Modular Maintenance
Provides experienced heavy maintenance personnel with engine modular disassembly
and assembly training. The training is concentrated in the following subject
areas:
- Engine Description Overview
- Engine Systems Overview
- Heavy Maintenance Tasks *
* Course duration and "hands-on" coverage are contingent on the
availability of an engine and required tooling.
III. CUSTOMER SERVICES
The Customer Services Group is dedicated to providing prompt and
accurate assistance to you, our V2500 airline customer. The Customer
Services Group provides the following categories of Assistance and
Support to the V2500 airline customer:
- Engine Warranty Services
- Maintenance Center Support
- Maintenance Facilities Planning Service
- Tooling and Support Equipment Services
- Product Support Technical Publications
- Lease Engine Program Support
ENGINE WARRANTY SERVICES
Engine Warranty Services will provide the following support for the
V2500 engine airline customer:
- Prompt administration of claims concerning Engine Warranty,
Service Policy, other support programs and Guarantee Plans.
- Investigation of part condition and part failure.
- Material provisioning administration for Controlled Service
Use programs and other material support.
PROMPT ADMINISTRATION
Each airline customer is assigned a Warranty Analyst whose job is to
provide individual attention and obtain prompt and effective
settlements of Warranty and Service Policy claims. A typical claim
properly submitted is generally settled, including issuance of
applicable credit memo, within thirty days. Experience generated by
much of the data derived from such claims often enables IAE to monitor
trends in operating experience and to address and often eliminate
potential problems.
INVESTIGATION AND REPORTS
Parts returned to IAE pursuant to the terms of the Service Policy are
investigated in appropriate detail to analyze and evaluate part
condition and cause of part failure. A report of findings is prepared
and forwarded to the airline customer and to all IAE departments
involved. In the case of vendor parts, the vendor is promptly informed.
Reports often include recommendations to preclude repetition of the
problem.
CONTROLLED SERVICE USE PROGRAMS AND MATERIAL SUPPORT
IAE shall assume responsibility for the planning, sourcing, scheduling
and delivery of Controlled Service Use material, warranty replacement
material, service campaign, material and program support material
subject to the terms of special contracts with customers. Urgent
customer shipments, both inbound and outbound, are monitored, traced,
routed and expedited as required. The receipt and movement of customer
owned material returned to IAE is carefully controlled, thus assuring
an accurate accounting at all times.
MAINTENANCE CENTER SUPPORT
IAE will arrange for the establishment of Maintenance Centers which
will be available to accomplish repairs, modifications and conversions,
as well as the complete overhaul of the V2500 engine subject to IAE's
standard terms and conditions for such work. Through the use of the IAE
established Maintenance Centers and its capabilities, an operator can
minimize or eliminate the need for investment in engine support areas
depending on the level of maintenance he elects the Maintenance Center
to perform. Savings in specific engine support areas, such as spare
parts inventory, maintenance and test tooling, support equipment and
test facilities, can be demonstrated. Use of the Maintenance Center can
also minimize the need for off-wing maintenance and test personnel with
their associated overhead.
MAINTENANCE FACILITIES PLANNING SERVICE
Maintenance Facilities Planning Service offers the following support
to IAE customer:
- General Maintenance Facility Planning Publications
- Customized Facility Plans
- Maintenance Facility and Test Cell Planning Consultation
Services
Maintenance Facilities Planning Service provides general and
customized facility planning data and consultation services. Facility
Planning Manuals for the V2500 engine will present the maintenance
tasks, facility equipment and typical departments floor plans showing
arrangement of equipment required to accomplish the tasks for all
levels of maintenance. The Facility Equipment Manual is a catalogue of
standard facility equipment such as lathes, process tanks, hoists,
cranes, etc., which is suitable for use in the maintenance and testing
of IAE engines. Customized facility planning services and consulting
services are offered subject to separate contractual arrangements.
Customized facility plans are developed to meet the requirements of
customers' specific fleet sizes, activities and growth plans. The
plans identify floor space,
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facility equipment, utilities and manpower requirements. on-site
surveys are conducted as a part of customized plan development to
determine the adaptability of existing facilities and equipment for
the desired maintenance program. These plans provide floor plan
layouts to show recommended locations for work stations, major
equipment, marshalling and storage areas, workflow patterns, and
structural and utility requirements to accommodate all the engine
models that are maintained in the customer's shop. The Maintenance
Facilities Planning Service also provides consultant services which
are specifically related to the development of engine test cells, and
the adaptation of existing maintenance facilities to accommodate
expanding production requirements and/or new or additional IAE models.
TOOLING AND SUPPORT EQUIPMENT SERVICES
The Tooling and Support Equipment Services Group assists the customer
by providing the following services:
- Support Equipment Manufacturing/Procurement Documentation
- Engine Accessory Test Equipment and Engine Transportation
Equipment Specifications
- Support Equipment Logistics Planning Assistance
SUPPORT EQUIPMENT DOCUMENTATION
The tooling and Support Equipment Services Group designs the special
support equipment required to disassemble, assemble, inspect, repair
and test IAE engines. Special support equipment design drawings and
Support Equipment Master Data Sheets, which describe how to use the
support equipment, are supplied to customers in the form of 35mm
aperture cards. Support equipment designs are kept current with engine
growth, and tool Bulletins are issued to customers as part of
continuing configuration management service. Updated Design and Master
Data Sheets Aperture Cards and Tool Bulletins are periodically
distributed to all IAE customers.
ENGINE ACCESSORY TEST EQUIPMENT AND
ENGINE TRANSPORTATION EQUIPMENT REQUIREMENTS
Engine accessory test equipment and engine transportation equipment
general requirements and specifications are defined and made available
to IAE customers. If requested, the Tooling and Support Equipment Group
will assist customers in the definition of engine accessory test and
engine transportation equipment required for specific IAE needs.
SUPPORT EQUIPMENT LOGISTICS PLANNING ASSISTANCE
The Tooling and Support Equipment Group will provide, at the customer's
request, special support equipment lists which reflect the customer's
unique requirements such as mix of engine models and desired level of
maintenance to aid in support equipment requirements planning.
PRODUCT SUPPORT TECHNICAL PUBLICATIONS
IAE and its subcontractors provide the required publications and
maintenance information as described below to support the maintenance
and modification requirements of the airline customer. The publications
are prepared in general accordance with Air Transport Association of
America (ATA) Specification No. 100 and will be available to the
airline customer prior to the delivery of the first aircraft.
Customization services and media options will be available for
procurement at established prices.
ON-WING MAINTENANCE DATA
IAE supplies the airplane manufacturer with all the necessary
information required to perform "On-Aircraft" engine maintenance,
troubleshooting, and servicing. This information is developed through
close coordination between the airplane manufacturer and IAE and is
integrated by the airplane manufacturer into his maintenance
publications.
TECHNICAL PUBLICATIONS
Listed and described below are the publications that will be provided
to support the airline customer's maintenance program:
Engine Manual
The Engine Manual is a document which will be structured in accordance
with ATA 100 section 2-13-0 with JEMTOSS applied in accordance with
section 2-13-14. Potential customer applications will be applied. The
manual will provide in one place the technical data requirements for
information needed to maintain the engine and the maximum potential
number of parts that could, regardless of design responsibility, remain
with the engine when it is removed from the airplane. Additionally the
manual shall include coverage of interrelated parts (e.g. thrust
reverser, cowlings, mounts, etc.) that whilst they can stay with the
airplane when the engine is removed can be removed for maintenance
purpose in lieu of individual component maintenance manuals.
Customized Engine Manuals can be prepared to incorporate customer
originated material related to data or procedures originated by or
peculiar to a specific IAE customer. Such customized Manuals are
provided by separate contractual arrangements. Customer material
authorized by the appropriate Airworthiness Authorities can be
incorporated into customized Manuals and will be identified in the
margin by the customer's initials.
Standard Practices Manual
The Standard Practices Manual supplements the Engine Manual by
providing, in a single document, all IAE recommended or approved
general procedures covering general torques, riveting, lockwiring,
cleaning policy, inspection policy standard repairs, etc., and marking
of parts.
25
Illustrated Parts Catalog
The Illustrated Parts Catalog will be structured in accordance with ATA
2-14-0 and is a document which is used in conjunction with the Engine
Manual for the identification and requisitioning of parts and
assemblies. Its ATA structure is to be compatible with the Engine
Manual Structure. Additionally the manual shall include coverage of
interrelated parts (e.g. thrust reverser, cowlings, mounts, etc.) that
whilst they can stay with the airplane when the engine is removed can
be removed for maintenance purpose in lieu of individual component
maintenance manuals.
IAE Proprietary Component Maintenance Manuals
These manuals will be structured in accordance with ATA 2-5-0 and will
cover data for chapters other than 71, 72, and 78.
Subcontractor Component Maintenance Manuals
These manuals will be structured in accordance with ATA 2-5-0 and are
prepared directly by the accessory manufacturers. All accessory data is
subject to IAE prepublication review and approval.
Engine and Accessory Component service Bulletins
Each Engine and Accessory Component Service Bulletin will be produced
in accordance with ATA 2-7-0. They will cover planning information,
engine or component effectivity, reason for Bulletin, recommended
compliance, manpower requirements, and tooling information relating to
parts repair or modification. Subcontractor prepared Accessory
Component Service Bulletins are reviewed by IAE prior to issuance.
Alert Service Bulletins will be issued on all matters requiring the
urgent attention of the airline customer and will generally be limited
to items affecting safety. The Bulletin will contain all the necessary
information to accomplish the required action.
Operating Instructions
Engine operating instructions are presented in the form of General
Operating Instructions supplemented by V2500 Specific Engine Operating
Instructions which provide operating information, procedures, operating
curves and engine limits.
Facilities Planning and Facility Equipment Manuals
The Facilities Planning Manual outlines the requirements for
engine/component overhaul, maintenance, and test facilities in terms of
basic operations, processes, time studies and equipment. The Facility
Equipment Manual lists and describes the facility equipment used for
engine maintenance, overhaul and repair.
Support Equipment Numerical Index
The Indexes, prepared for each major engine model, provide a listing,
in numeric sequence, by maintenance level, of all IAE ground support
equipment required to maintain and overhaul the engine. The Listings
are cross-indexed to the applicable engine dash model and to the
chapter and section of the Engine Manual.
Publications Index
This index contains a listing of available technical manuals covering
components of the V2500 Nacelle.
Service Bulletin Index
This index will be in a format and on a revision schedule as determined
by IAE.
Computer Software Manual
Data, will be supplied in accordance with ATA
102 revision 2 except where such data are prohibited due to proprietary
or Government restrictions.
REVISION SERVICES
Regular, temporary, and "as required" revisions to technical
publications will be made during the service life of IAE equipment. The
utilization of advanced techniques and equipment provides the airline
customer with expedited revision service.
DISTRIBUTION MEDIA OPTIONS
IAE will provide IAE technical publications to the airline customer on
roll microfilm at 24:1 reduction or magnetic tape. Media options such
as microfilm at 36:1 reduction, microfiche, and two side or one-sided
paper copy of reproducible quality will be available for procurement at
established prices.
LEASE ENGINE PROGRAM SUPPORT
An engine lease program will be made available to V2500 Airline
Customers subject to IAE's standard terms and conditions of lease. Pool
spares will be stationed at selected locations to assure emergency
protection against aircraft-on-ground (AOG) situations or to provide
supplemental support during "zero spares" conditions. The lease engines
will be incorporate the highest maintenance standards and configuration
levels. Availability will be subject to prior demand, however, the
program logistics will be continually reviewed to assure the most
effective deployment of available pool engines.
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IV. TECHNICAL SUPPORT GROUP
The Technical Support Group provides the following categories of
Technical Support to the airline customer:
- Product Support Engineering
- Powerplant Maintenance Engineering
- Customer Performance Engineering
- Diagnostic System Engineering
- Human Engineering
- Flight Operations Engineering
- Repair Services
- Field Operations Data Analysis
PRODUCT SUPPORT ENGINEERING
Product Support Engineering is responsible for the overall technical
support to the customers. The following services are provided:
- Technical Problem Identification/Corrective Action
Implementation
- Technical Communication
- Engine conversion Program Definition and Management
- Engine Upgrade and Commonality Studies
- Engine Hardware Retrofit Programs
- Controlled Service Use Programs and Material Support
- Engine Maintenance Management Plans
- Engine Incident Investigation Assistance
TECHNICAL SUPPORT
Technical information supplied through IAE Field Representatives,
Customer Support Managers, customer correspondence and direct meetings
with airlines' representatives permits assessment of the factors
involved in technical problems and their impact on engine reliability
and operating costs. Resolution of these problems is coordinated with
responsible groups within IAE and the necessary corrective action is
defined. In certain situations the corrective action involves the
establishment of Service Evaluation programs for proposed
modifications, and the establishment of warranty assistance programs in
conjunction with the IAE Warranty Administration Department. Product
Support Engineering will assist customers in the implementation of
recommended corrective action and improvements principally through
official IAE technical communications, and direct customer contact.
TECHNICAL COMMUNICATIONS
Product Support Engineering is responsible for the release of technical
communications. Primary communication modes involves release of limits
and procedures through engine and maintenance manual revisions and the
requirements associated with engine upgrade and/or conversion,
durability and performance improvements, and problem resolution through
Service Bulletins is provided by All Operator Letters and/or wires or
direct technical written response to individual customer inquiries.
ENGINE CONVERSION PROGRAMS
Product Support Engineering defines minimum configuration levels for
conversion of service engine models. They serve to assist the customer
with the implementation of conversion programs into existing fleets by
providing preliminary planning cost estimates and technical planning
information regarding tooling, material and instructional requirements.
Conversion programs are monitored for problem areas and Product support
Engineering initiates and implements corrective action as may be
necessary.
ENGINE HARDWARE RETROFIT PROGRAMS
Engine campaigns are carried out to provide retrofit of engine hardware
configuration when required on delivered engines. This involves
assisting in the marshalling of hardware, special tools, manpower and
the scheduling of engine and material to campaign sites.
ENGINE MAINTENANCE MANAGEMENT PLANS
Planning documents, tailored for individual operators, are developed to
serve as Engine Maintenance Management Program criteria. These are
directed toward the objective of ensuring cost-effective operation with
acceptable post-repair test performance, providing engine reliability
to achieve maximum time between shop visits, and minimizing the adverse
effects to operation of inflight shutdowns and delays/cancellations.
Through the institution of specific maintenance recommendations, proper
engine performance, durability, and hot section parts lives can be
achieved.
ENGINE INCIDENT INVESTIGATION ASSISTANCE
Assistance is provided to an airline in conducting engine incident
investigations in responding to the requirements of the appropriate Air
Worthiness authority.
LINE MAINTENANCE AND TROUBLESHOOTING
Line Maintenance and Troubleshooting Seminars can be conducted at the
IAE Training Center with the objective of improving line maintenance
effectiveness fleetwide. Specialized training on V2500 line maintenance
and troubleshooting can be provided through on-site workshops by
special contractual arrangement. Troubleshooting support is provided
primarily through powerplant troubleshooting procedures which are
published in IAE and airframe manufacturers manuals. When an airline
encounters an engine problem and corrective action taken has not been
effective, more direct support in troublehshooting and maintenance can
also be provided to the
27
customers line maintenance personnel. Instructions on V2500 powerplant
troubleshooting and maintenance can also be provided to customers line
maintenance personnel.
AIRLINE SHOP MAINTENANCE
Reviews of shop practices and procedures of individual airlines can be
conducted to determine the most efficient and cost-effective methods
for maintenance and repair of the V2500 in the environment in which the
airline must maintain that engine.
POWERPLANT MAINTENANCE ENGINEERING
Powerplant Maintenance Engineering covers responsibility for maximizing
engine maintainability, establishing maintenance concepts and
requirements and providing maintenance support plant for IAE.
This group provided the following services:
- Definition of Maintenance Tasks and Resource Requirements
- Planning Guides
MAINTENANCE ENGINEERING
Powerplant Maintenance Engineering conducts design reviews and
comprehensive maintenance analysis of new engine designs and engine
design changes to maximize engine maintainability consistent with
performance, reliability, durability and life cycle cost
considerations. Maintenance concepts, requirements and tasks are
established to minimize maintenance costs. This group represents the
customer's maintainability interests in internal IAE operations and
upon request will assist the customer in resolving specific maintenance
task problems.
PROGRESSIVE MAINTENANCE PLANNING
Powerplant Maintenance Engineering also provides Planning Guides based
upon Maintenance Task Analysis. The guides present engine maintenance
requirements, their subordinate tasks and the required resources to
accomplish on-aircraft engine maintenance and the off-aircraft repair
of engines by modular section/build group replacement. Maintenance
requirements are also presented for the refurbishment of modular
section/build group by parts replacement, the complete repair of parts,
the refurbishment of accessory components and for engine testing. The
data in the Planning Guides is presented in a manner that is primarily
intended to assist new operators by providing a phased introduction of
new engines into their shops and to capitalize on the design
maintainability features for the engine when they are developing their
maintenance plans. Powerplant Maintenance Engineering will assist new
operators in planning a gradual, technically feasible, and economically
acceptable expansion from line maintenance of installed engines through
the complete repair of parts and accessory components.
CUSTOMER PERFORMANCE ENGINEERING
Customer Performance Engineering provides for the following types of
technical assistance to the airline customer:
- Engine Performance Analysis Computer Programs for Test Cell
Use
- Test Cell Correlation Analysis and Correction Factors
- Engine Stability Procedures and Problem Analysis
Although much of the above support is provided in the form of
procedures, data and recommendations in various publications, the group
also answers inquiries of a performance nature which are forwarded to
IAE by individual customers.
ENGINE PERFORMANCE ANALYSIS
Technical support is provided in a number of areas related to
operational suitability including the development of the test
requirements and performance limits for the Adjustment and Test Section
of the Engine Manual. Computer programs that will assist the operator
in analyzing engine performance using test cell data can be provided
subject to IAE then current standard license fees and Terms and
Conditions.
TEST CELL CORRELATION
Technical assistance is provided to the customer for developing
appropriate corrections to be used for specific test configurations at
customer owned test cell facilities. Reports are provided presenting
correlation analyses and IAE recommended test cell corrections which
permit comparison of the performance of customer tested engines with
the respective Engine Manual limits and guarantee plan requirements.
ENGINE STABILITY
Technical support is provided to ensure that engine stability and
starting reliability are maintained. Service evaluation programs for
proposed improvements are initiated and monitored to determine their
effectiveness. In addition, problems relating to engine control systems
which impact engine stability and performance are analyzed.
DIAGNOSTIC SYSTEMS ENGINEERING
Diagnostic Systems Engineering is responsible for the technical support
of customer acquisition of inflight engine data and the assessment of
engine performance through the use of that data. Diagnostic Systems
Engineering personnel provide the following services:
- Guidance to help customers define their engine monitoring
system requirements.
- Development of hardware specifications and computer programs
(by separate contractual arrangement) to satisfy engine
diagnostic requirements.
- Coordination of all IAE airborne diagnostic support activity.
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GUIDANCE IN DEFINING ENGINE MONITORING SYSTEMS REQUIREMENTS
Diagnostic Systems Engineering can provide consultation services to
assist the customer in defining his engine condition and performance
monitoring requirements and in selection of appropriate hardware and
software systems to meet those requirements and options between the
customer, airframe manufacturer, and Airborne Integrated Data System
(AIDS) manufacturer.
DEVELOPMENT AND COORDINATION
Diagnostic Systems Engineering personnel can develop hardware
specification and make computer software available to accomplish Engine
Condition Monitoring (ECM) and performance analysis of engine modules
using AIDS data. Engine condition monitoring procedures, of both the
manual and computerized variety can also be developed and provided in
support of the customer's selected method of engine condition
monitoring. Computer software will be provided to the customer subject
to IAE's then current standard license fees and Terms and Conditions.
Diagnostic Systems Engineering personnel also coordinate activities of
cognizant functional groups at IAE to provide engine related
information to the customer, airframe manufacturer, and AIDS equipment
vendor during the planning, installation, and operation of AIDS.
HUMAN ENGINEERING
Human Engineering supplies data on task time and skill requirements
necessary for accomplishing maintenance procedures. Task data provided
includes estimates of the man-hours, elapsed time and job skills
necessary to accomplish maintenance tasks as described in IAE's Manual
and Service Bulletins. Data is supplied for "on" and "off" aircraft
maintenance tasks up to modular disassembly/assembly. Additional
selected task data can be supplied on disassembly/assembly to the piece
part level and on parts repair. In addition, the group can help solve
problems related to skill requirements, body dimensions, or excessive
man-hours encountered in accomplishing maintenance tasks.
FLIGHT OPERATIONS ENGINEERING
Flight Operations Engineering provides the airline customer with the
following technical assistance concerning installed engine operations:
- Introduction of new equipment
- Problem resolution and assistance with in-service equipment
- Contractual commitment and development program support
- Publication of engine operations literature and performance
aids
NEW EQUIPMENT
In accordance with customer needs, a Flight Operations Engineer can
provide on-site assistance in the training of operations personnel and
help in solving engine operational problems that might arise during the
initial commercial service period. Such assistance can include
participation in initial delivery flights, engine operational reviews,
and flight crew training activity.
PROBLEM RESOLUTION - IN-SERVICE EQUIPMENT
In accordance with a mutually agreed upon plan, a Flight Operations
Engineer can perform cockpit observations to identify or resolve engine
operating problems and to assess installed engine performance.
CONTRACTUAL SUPPORT AND DEVELOPMENT PROGRAMS
As required, a Flight Operations Engineer can assist in evaluating
installed engine performance relative to contractual commitments and
engine improvements which have an impact on engine operations.
PUBLICATION SUPPORT
Flight Operations Engineering is responsible for the issuance of
Propulsion System Operating Instructions and correspondence pertaining
to inflight engine operations. Such material is coordinated with the
airframe manufacturers as required. Special Presentations and Reports
are also issued, as required, to support the activity described above.
REPAIR SERVICES
Repair Service provides the following services to the airline
customers:
- Coordinated Repair Development Activity
- Customer Assistance on Repair Procedures and Techniques
- Qualification of Repair Sources
- Repair Workshops
- Repair Development List
COORDINATION OF REPAIR DEVELOPMENT
The Repair Services Engineer provided direct contact with all sources
that initiate repair schemes. The Engineer coordinates with
representatives of Engineering and Support Services disciplines in
identifying repair needs, evaluating various repair options and
establishing repair development procedures and schedules. The Engineer
participates in setting repair evaluation and approval requirements.
When the repair is approved and substantiating data is documented, the
Repair Services Engineer releases the repair to the Engine Manual.
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TECHNICAL ASSISTANCE
The Repair Services Engineer provides daily communications with airline
customers via technical responses to inquiries direct from the airline
or through our Field Service Representative office at the airline
facility. In addition, repair engineer make periodic visits to airline
repair facilities to discuss new repairs under development, answer
specific questions posed by the particular facility and review actual
parts awaiting a repair/scrap decision. Occasionally repair engineers
make special visits to customer facilities to assist in training
customer personnel in accomplishing particularly complex repairs.
QUALIFICATION OF REPAIR SOURCES
The Repair Services Engineer coordinates the qualification of repair
sources for repairs proprietary to IAE or to an outside repair agency.
They also perform a review of the qualifications of repair sources
for critical, nonproprietary repairs for which a source demonstration
is deemed necessary. The group participates in negotiation of the
legal and business agreements associated with these qualification
programs.
FIELD OPERATIONS DATA ANALYSIS
The following information is available to the airline customer from the
Field Operations Data Analysis organization:
- Composite Engine Parts List
- Industry Item Lists
- Service Bulletin Incorporation Lists
- Operating Experience Reports
COMPOSITE ENGINE PARTS LIST
The Composite Engine Parts List, a compilation of all saleable and
nonsaleable engine parts incorporated in production engines, describes
the configuration of each engine and identifies those engine parts for
which engineering changes, service bulletins and service instructions
have been issued.
INDUSTRY ITEM LISTS
An Industry Item List, consisting of a computer retrievable magnetic
tape and a hard copy printout, is provided after delivery of each new
engine to identify specific parts by part number and serial number
which the airline customer may choose to monitor during the engine
operational life. Listed parts represent approximately 80 percent of
engine total value.
SERVICE BULLETIN INCORPORATION LISTS
Lists are provided that identify all Service Bulletins which were not
incorporated and, separately, those which were incorporated during
initial build of each new engine.
OPERATION EXPERIENCE REPORTS
IAE will maintain a V2500 Operational Data base from which selected
engine operations and reliability summary reports will be developed and
made available on a scheduled basis to each airline customer. Data
reported by IAE Field Representatives serve as input to this data base.
This computerized data maintenance and retrieval system will permit:
- A pooling and exchange of service experience for the benefit
of the entire airline industry.
- A common statistical base.
- The selective querying of computer data files for answers to
customer inquiries. In addition to providing operations and
reliability reports, the Operating Experience Data Base serves
in-house programs directed at improving engine design and
enhancing overall customer support, including spare parts
provisioning and warranty administration.
V. SPARE PARTS GROUP
SPARE PARTS SUPPORT
The Spare Parts Group provides the following categories of spare parts
support to airline customers:
- Individual Customer Account Representatives
- Provisioning
- Planning
- Order Administration
- Spare Parts Inventory
- Effective Expedite Service
- Worldwide Distribution
ACCOUNT REPRESENTATIVE
An Account Representative is assigned to each customer using IAE
equipment. This representative provides individualized attention for
effective spare parts order administration, and is the customer's
interface on all matters pertaining to new part planning and
procurement. Each representative is responsible for monitoring each
assigned customer's requirements and providing effective administrative
support. The Account Representatives are thoroughly familiar with each
customer's spare parts ordering policies and procedures and are
responsible for ensuring that all customer new parts orders are
processed in an effective manner.
SPARE PARTS PROVISIONING PLANNING
Prior to delivery of the first new aircraft to an airline customer,
preplanning discussions will be held to determine the aircraft/engine
program, and engine spare parts provisioning and order plans. Mutually
agreed upon provisioning target dates are then established and on-time
completion tracked by the Customer Account Representative with the
assistance of
30
logistics specialists in Spare Parts Provisioning and Inventory
Management. Meetings are held with airline customers at a mutually
agreeable time to review suggested spare parts provisioning lists
prepared by spare parts Provisioning. These lists are designed to
support each customer's particular fleet size, route structure and
maintenance and overhaul program.
ORDER ADMINISTRATION
IAE subscribes to the general principles of Air Transport Association
of America (ATA) Specification No. 200, Integrated Data Processing -
Supply. The procedures of Air Transport Association of America (ATA)
Specification No. 200 may be used for Initial Provisioning, (Chapter
II) Order Administration (either Chapter III or Chapter VI) Invoicing
(Chapter IV). A spare parts supply objective is to maintain a 90
percent on-time shipment performance record to our published lead
times. The lead time for replenishment spare parts is identified in the
IAE spare Parts Price Catalog. Initial provisioning spare parts orders
should be placed at least six months prior to required delivery, while
conversions and major modifications require full manufacturing lead
times.
The action to be taken on emergency requests will be answered as
follows:
- Aircraft-On-Ground (AOG) within four hours (in these
instances every effort is made to ship immediately).
- Critical (Imminent Aircraft-On-Ground (AOG) or Work
Stoppage) -- Within 24 hours.
- Stock Outage -- Within seven working days (these items are
shipped as per customer request).
SPARE PARTS INVENTORY
To ensure availability of spare parts in accordance with published lead
time, spare parts provisioning maintains a modern, comprehensive
requirements planning and inventory management system which is
responsive to changes in customer demand, special support programs and
engineering design. Organized on an engine model basis, this system is
intended to maintain part availability for delivery to customers
consistent with published lead times.
A majority of parts in the spare parts inventory are continually
controlled by an Automatic Forecasting and Ordering System. Those parts
which do not lend themselves to automatic control due to supercedure,
unusual usage or conversion requirements are under the direct manual
control of Spares Planning personnel. As additional protection against
changes in production lead time or unpredicted demand, certain raw
materials are also inventoried. Successful inventory management is
keyed to accurate requirements planning. In support of the requirements
planning effort, a wide ranging data retrieval and analysis program is
offered. This program concerns itself both with the customer logistics
and technical considerations as follows:
- Forecasts of life limited parts requirements are requested and
received semi-annually from major customers.
- Engine technical conferences are held frequently within IAE to
assess the impact of technical problems on parts.
- For a selected group of parts a provisioning conference system
is offered which considers actual part inventory change,
including usage and receipts, as reported monthly by
participating customers.
INITIAL PROVISIONING PARTS BUY-BACK
IAE offers an initial provisioning parts buy-back service, the details
of which are contained in individual customer spare parts contracts.
PACKAGING
All material is packaged in general compliance with Air Transport
Association of America (ATA) Specification No. 300.
WORLD AIRLINE SUPPLIERS' GUIDE
IAE subscribes to the supply objectives set forth in the World Airlines
Supplier's Guide published by the Air Transport Association of America
(ATA). IAE requires that its proprietary component vendors also perform
in compliance with the precepts of the World Airline Suppliers' Guide.
VI. BUSINESS SUPPORT GROUP
CUSTOMER MAINTENANCE SUPPORT
This Service provides the following services to airline and engine
maintenance shop customers:
- Engine Reliability and Logistics Cost Forecasts
- Logistics Support Studies
ENGINE RELIABILITY AND ECONOMIC FORECASTS
Engine reliability and economic forecasts in the forms of predicted
shop visit rates and maintenance costs can be provided to reflect the
airline customers' operating characteristics. Additionally, various
analyses can be conducted to establish life probability profiles of
critical engine parts, and to determine optimum part configuration and
engine operating procedures.
LOGISTICS SUPPORT STUDIES
As required, logistics studies are conducted to assist in the planning
of engine operational support. Such studies may include spare engine
and spare module requirements forecasts, level of maintenance analyses,
engine type economics evaluations and life cycle cost estimates.
31
EXHIBIT D-1
IAE
INTERNATIONAL AERO ENGINES AG
V2500 ENGINE AND PARTS SERVICE POLICY
AWA AND IAE ACKNOWLEDGE THAT THIS EXHIBIT D-1 (SECTIONS I THROUGH VII) HAS NOT
BEEN AGREED UPON AS OF DECEMBER 23, 1994. CONTINGENT UPON AWA AND IAE REACHING A
MUTUAL AGREEMENT UPON THIS EXHIBIT D-1 ON OR BEFORE FEBRUARY 15, 1995, AWA AND
IAE HEREBY AGREE THAT IN ALL OTHER RESPECTS, HOWEVER, IAE AND AWA AGREE UPON THE
TERMS AND CONDITIONS OF THE V2500 SUPPORT CONTRACT, DATED DECEMBER 23, 1994.
IAE INTERNATIONAL AERO ENGINES AG AMERICA WEST AIRLINES, INC.
By:________________________________ By:________________________________
Title:_______________________________ Title:_______________________________
Date:_______________________________ Date:_______________________________
32
IAE
INTERNATIONAL AERO ENGINES AG
V2500 ENGINE AND PARTS SERVICE POLICY
This Engine and Parts Service Policy ("Service Policy") is a statement
of the terms and conditions under which IAE International Aero Engines
AG ("IAE") will grant the Operators of new V2500 Engines certain
Allowances and adjustments in the event that Parts of such Engines
suffer Failure in Commercial Aviation Use, or in the event that a Parts
Life Limit is established or reduced.
This Service Policy becomes effective for the Operator's first new
V2500 Engine. This Service Policy is divided into seven sections:
Section I describes the Credit Allowances which will be granted
should the Engine suffer a Failure.
Section II describes the Credit Allowances which will be
granted should a Primary Part Suffer a Failure.
Section III lists the Class Life for those Primary Parts for
which Credit Allowances will be granted.
Section IV describes the Credit Allowances which will be
granted when the establishment or reduction of a
Parts Life Limit is mandated.
Section V describes the Credit Allowances and adjustments
which will be granted when IAE declares a Campaign
Change.
Section VI contains the definitions of certain words and
terms used throughout this Service Policy. These
words and terms are identified in the text of this
Service Policy by the use of initial capital letters
for such words and terms.
Section VII contains the general conditions governing the
application of this Service Policy.
33
I. ENGINE FAILURE CREDIT ALLOWANCES
A. First Run Engine, Module and Part
1. A First Run Engine is an Engine with 3,000 hours or
less Engine Time, a First Run Module is a Module with
3,000 hours or less Module Time, and a First Run Part
is a Part with 3,000 hours or less Parts Time
operating in a First Run Engine or a First Run
Module.
2. If a First Run Part suffers Direct Damage or
Resultant Damage, and provided that the Part causing
Resultant Damage is also a First Run Part, IAE will
grant to the Operator:
a. A 100 percent Parts Credit Allowance for
any First Run Part Scrapped, or
b. A 100 percent Labor Credit Allowance for any
First Run Part Repaired.
3. If such Damage of a First Run Part requires the
removal of the Engine or a Module from the Aircraft,
IAE will, in addition to Subparagraph A.2. above,
grant to the Operator:
a. A 100 percent Labor Credit Allowance for
disassembly, reassembly and necessary
testing of the Engine or Module requiring
Reconditioning as a result of such Damage of
the First Run Part, and
b. A 100 percent Parts Credit Allowance for
those Expendable Parts required in the
Reconditioning of the Engine or Module.
4. If such Damage of a First Run Part requires the
removal of the Engine or a Module from the Aircraft,
IAE will arrange, upon request by the Operator, to
Recondition the Engine or Module or accomplish the
Parts Repair at no charge to the Operator rather than
providing the above Credit Allowances. Such work will
be accomplished at a V2500 Maintenance Center
designated by IAE. Transportation charges to and from
the Maintenance Center shall be paid by the Operator.
B. Extended First Run Engine, Module and Part
1. An Extended First Run Engine is an Engine with more
than 3,000 hours Engine Time but not more than 3,500
hours Engine Time, an Extended Run Module is a Module
with more than 3,000 hours Module Time, but not more
than 3,500 hours Module Time, and an Extended First
Run Part is a Part with 3,500 hours or less Parts
Time operating in an Extended First Run Engine or an
extended First Run Module.
2. If an Extended First Run Part suffers Direct Damage
or Resultant Damage, and provided that the Part
causing Resultant Damage is also an Extended First
Run Part, IAE will grant to the Operator:
a. A pro rata Parts Credit Allowance for any
Extended First Run Part Scrapped, or
b. A pro rata Labor Credit Allowance for any
Extended First Run Part Repaired.
If the Extended First Run Part is a Primary Part
(Section III), the pro rata Credit Allowances will be
based on l00 percent at 3,000 hours Engine Time which
then decreases, pro rata, to zero percent at 3,500
hours Engine Time, or, l00 percent to 2,000 hours
Parts Time which then decreases, pro rata, to zero
percent at the end of its Class Life (Section III),
whichever is greater. If the Extended First Run Part
is not a Primary Part, the pro rata Credit Allowances
will be based on l00 percent at 3,000 hours Engine
Time which then decrease, pro rata, to zero percent
at 3,500 hours Engine Time.
3. If such Damage of an Extended First Run Part requires
the removal of the Engine or a Module from the
Aircraft, IAE will, in addition to Subparagraph B.2.
above, grant to the Operator:
a. A pro rata Labor Credit Allowance for
disassembly, reassembly and necessary
testing of the Engine or Module requiring
Reconditioning as a result of such Damage of
the Extended First Run Part, and
b. A pro rata Parts Credit Allowance for those
Expendable Parts required in the
Reconditioning of the Engine or Module.
The pro rata Credit Allowances will be based on l00
percent at 3,000 hours Engine Time, which then
decreases, pro rata, to zero percent at 3,500 hours
Engine Time.
Note: Section VI, Paragraph D. contains the formulas to be used for
computing the Credit Allowances described above.
34
C. Engine or Module Failure Credit Allowances Illustration
[A GRAPHICAL REPRESENTATION OF SECTION I, PARAGRAPHS A AND B
APPEARS HERE]
Note: The Primary Parts Credit Allowances Illustration (Section II,
Paragraph B) is also applicable to the Credit Allowances which
are based on Parts Time as described in Section I,
Subparagraph B.2.
II. PRIMARY PARTS CREDIT ALLOWANCE
A. Primary Parts Other Than First Run Parts or Extended First Run
Parts
1. Primary Parts are limited to those Parts listed in
Section III while such Parts are within the Class
Life indicated in Section III.
2. The Primary Parts Credit Allowances described in
Subparagraph A.3 below will be based on l00 percent
to 2,000 hours total Parts Time which then decreases,
pro rata, to zero percent at the end of the
applicable hourly Class Life.
3. If a Primary Part suffers Direct Damage or Resultant
Damage, and provided that the Part causing Resultant
Damage is also a Primary Part, IAE will grant to the
Operator:
a. A Parts Credit Allowance for any Primary
Part Scrapped, or
b. A Labor Credit Allowance for any Primary
Part Repaired in accordance with a
Parts Repair designated in writing by IAE as
being eligible for a Credit Allowance under
this Section II, Paragraph A.
Note: Section VI, Paragraph D. contains the formulas to be used
for computing the Credit Allowances described above.
B. Primary Parts Credit Allowances Illustration
[A GRAPHICAL REPRESENTION OF SECTION II, PARAGRAPH A, APPEARS
HERE]
A = CLASS A PRIMARY PARTS (Page 5)
B = CLASS B PRIMARY PARTS (Page 6)
C = CLASS C PRIMARY PARTS (Page 6)
III IDENTIFICATION OF PRIMARY PARTS
The following Parts are defined as Primary Parts while such Parts are
within the Class Life indicated. Class Life is the period, expressed in
either hours or Parts Time or number of Parts Cycles during which IAE
will grant Credit Allowances for Primary Parts which suffer Direct
Damage or Resultant Damage, or for which a Parts Life Limit is
established or reduced.
CLASS A (4,000 HOURS PARTS TIME)
Cold Section Rotating Parts LP Compressor Inlet Cone - Spinner
LP Compressor 1st Stage Blade - Fan
LP Compressor 1st Stage Blade Annulus Fillers
LP Compressor 2nd Stage Blade
Radial Drive Bevel Gear
Tower Shaft
HP Compressor 3 through 12th Stage Blades
HP Compressor Front and Rear Rotating Airseals
LP Turbine Shaft Coupling Nut
Cold Section Static Parts
Fan Splitter Fairing
LP Compressor Stage 2 Inlet and Exhaust Stator Assembly
HP Compressor Stage 3 to Stage 6 Variable Stator Assembly
Fan Aerodynamic OGV's
HP Compressor Stage 6 to ll Stator Assembly
HP Compressor Exit Stator
Hot Section Rotating Parts
HP Turbine Stage 1 and 2 Blade
HP Turbine Gage Spacer
HP Turbine Lock Nut
LP Turbine Stage 3 to 7 Blades
LP Turbine Lock Nut
Hot Section Static Parts
Fuel Injector
Combustion Chamber Assembly
HPT First Stage Cooling Duct Assembly (TOBI Duct)
HPT lst and 2nd Stage Nozzle Guide Vane Assembly
HPT lst and 2nd Stage Outer Airseal Assembly
HP to LP Turbine Transition Duct (Inner & Outer)
LPT Stage 3 to 7 Nozzle Guide Vane Assembly
LPT Stage 3 to 7 Outer Airseal Assembly
Main and Angle Gearbox
Gearshafts and Bearings
Lay Shaft
All Accessory Drive Shafts
Gearbox Oil Pumps (Pressure and Scavenge)
CLASS B (8,000 HOURS PARTS TIME)
Fan Case Assembly (Includes Intermediate Case)
HP Compressor Front Casings (Split Casings)
HP Compressor Rear Casings
Diffuser Case
HP Turbine Case
LP Turbine Case
Turbine Exhaust Case
Main Gearbox Casing
Oil Tank
CLASS C (20,000 HOURS PARTS TIME FOR DAMAGE
15,000 PARTS CYCLES FOR LIFE LIMIT REDUCTION)
Fan Disk
LPC Drum
HPC 1 to 6 Drum
HPC 7 to 10 Drum
HP Turbine Stage 1 and 2 Disks
HP Turbine Spacer Disk
HP Turbine Stage 1 Front Rotating Airseal
HP Turbine 2nd Stage Disk Rear Seal
LP Turbine Stage 3-7 Disks
LP Turbine Stage 3-7 Rotating Airseals
Shafts
35
IV PARTS LIFE LIMIT ALLOWANCES
A. A Parts Life Limit is the maximum allowable Parts Time or
Parts Cycles for specific Parts as established by IAE and
the United States Federal Aviation Administration.
B. Credit Allowances
1. Class A and Class B Primary Parts
If a Parts Life Limit is established which results in
Part Scrappage at less than 4,000 hours Parts Time
for a Class A Primary Part or less than 8,000 hours
Parts Time for a Class B Primary Part, IAE will grant
for each such Primary Part Scrapped as a result
thereof, a Parts Credit Allowance based on 100
percent to 2,000 hours total Parts Time which then
decreases, pro rata, to zero percent at the end of
4,000 hours total Parts Time for a Class A Primary
Part or 8,000 hours total Parts Time for a Class B
Primary Part.
2. Class C Primary Parts
If a Parts Life Limit is established for a Class C
Primary Part which results in Part Scrappage in less
than l5,000 total Parts Cycles, IAE will grant for
each such Primary Part Scrapped as a result thereof,
a Parts Credit Allowance based on 100 percent to
10,000 total Parts Cycles which then decreases, pro
rata, to zero percent at 15,000 total Parts Cycles.
In addition, IAE will grant a similarly calculated
Labor Credit Allowance and Parts Credit Allowance for
that labor and those Expendable Parts which are
solely related to the removal and replacement of such
Class C Primary Parts and is additional to other
maintenance being performed on the Engine or Module.
Note: Section VI, Paragraph D. contains the formulas to be used for
computing the Credit Allowances described above.
C. Parts Life Limit Credit Allowances Illustrations
[A GRAPHICAL REPRESENTATION OF SECTION IV, PARAGRAPH B-1
APPEARS HERE]
A = CLASS A PRIMARY PARTS (Page 5)
B = CLASS B PRIMARY PARTS (Page 6)
[A GRAPHICAL REPRESENTATION OF SECTION IV, PARAGRAPH B-2
APPEARS HERE]
C = CLASS C PRIMARY PARTS (Page 6)
36
V CAMPAIGN CHANGE CREDIT ALLOWANCES AND ADJUSTMENTS
A. A Campaign Change is an IAE program, so designated in writing,
for the Reoperation, replacement, addition, or deletion of a
Part(s). IAE will grant the Credit Allowances and Adjustments
specified in this Section V to the Operator when Campaign
Change recommendations are complied with by the Operator.
B. Standard Allowances
1. A 100 percent Parts Credit Allowance for the
replacing Parts specified in the Campaign Change for
installed Parts or serviceable shelf stock Parts
which are Scrapped with 3,000 hours or less total
Parts Time.
2. A pro rata Parts Credit Allowance for the replacing
Parts specified in the Campaign Change for installed
Parts or serviceable shelf stock Parts which are
Scrapped with more than 3,000 hours total Parts Time
but less than 3,500 hours total Parts Time. The pro
rata Parts Credit Allowance will be based on 100
percent at 3,000 hours total Parts Time which then
decreases, pro rata, to 50 percent at 3,500 hours
total Parts Time.
3. A 50 percent Parts Credit Allowance for the replacing
Parts specified in the Campaign Change for installed
Parts or serviceable shelf stock Parts which are
Scrapped with more than 3,500 hours total Parts Time.
4. A 100 percent Labor Credit Allowance for Reoperation
of installed Parts or serviceable shelf stock Parts
with 3,000 hours or less total Parts Time which are
Reoperated in accordance with the Campaign Change.
5. A pro rata Labor Credit Allowance for Reoperation of
installed Parts or serviceable shelf stock Parts with
more than 3,000 hours total Parts Time but less than
3,500 hours total Parts Time which are Reoperated in
accordance with the Campaign Change. The pro rata
Labor Credit Allowance will be based on 100 percent
at 3,000 hours total Parts Time which then decreases,
pro rata, to 50 percent at 3,500 hours total Parts
Time.
6. A 50 percent Labor Credit Allowance for Reoperation
of installed Parts or serviceable shelf stock Parts
with more than 3,500 hours total Parts Time which are
Reoperated in accordance with the Campaign Change.
7. A 100 percent Labor Credit Allowance for disassembly
and reassembly of the Engine or Module, if the
disassembly of the Engine or Module is recommended by
IAE for accomplishment of the Campaign Change and
such disassembly is performed solely for the purpose
of accomplishing the Campaign Change.
Note: Section VI, Paragraph D. contains the formulas to be used for
computing the Credit Allowances described above.
C. Campaign Change Credit Allowances Illustration
[A GRAPHICAL REPRESENTATION OF SECTION V, PARAGRAPH B,
APPEARS HERE]
Note: The Labor Credit Allowance for Engine or Module disassembly and
reassembly remains at a constant 100%.
D. Optional Credit Allowances and Adjustments
1. When IAE declares a Campaign Change, IAE, at its sole
option, may grant to the Operator Credit Allowances
and adjustments, such as, but not necessarily limited
to:
a. No Charge material.
b. Specifically priced material.
c. Single credit settlements for the Operators'
fleet.
d. Fixed Credit Allowance support for each
Engine.
2. These optional Credit Allowances and Adjustments may
be provided: a. Instead of the standard Credit
Allowances of Section V, Paragraph B., b. In addition
to the standard Credit Allowances of Section V,
Paragraph B or c. As a portion of the standard Credit
Allowances of Section V, Paragraph B.
3. In no event shall the worth to the Operator, as
reasonably determined by IAE, be less than the amount
that would have been granted to the Operator as a
standard Campaign Change Credit Allowance, per
Section V, Paragraph B. In considering the use of
these optional Credit Allowances and adjustments, IAE
will attempt to minimize the financial and
administrative impact on the Operator.
37
VI DEFINITIONS
A. CAMPAIGN CHANGE is an IAE program, so designated in writing,
for the Reoperation, replacement, addition or deletion of
Part(s) and is characterized by the granting of certain Credit
Allowances to the Operator when such program recommendations
are complied with by the Operator.
B. CLASS LIFE is the period, expressed in either hours of Part
Time or number of Parts Cycles, during which IAE will grant
Credit Allowances for Primary Parts which suffer Direct Damage
or Resultant Damage, or for which a Parts Life Limit is
established or reduced.
C. COMMERCIAL AVIATION USE is the operation of Engines in
Aircraft used for commercial, corporate or private transport
purposes. The operation of Engines by government agencies or
services is normally excluded except that IAE will consider
written requests for the inclusion of such Engines under the
provisions of this Service Policy.
D. CREDIT ALLOWANCES
1. PARTS CREDIT ALLOWANCE is an amount determined in
accordance with the following formulas:
a. 100 percent Parts Credit Allowance = P
b. 50 percent Parts Credit Allowance = P/2
c. Pro rata Parts Credit Allowance =
(1) For a Primary Part which suffers
Direct or Resultant Damage, or a
Class A or Class B Primary Part for
which a Parts Life Limit is
established:
Lt - T
________ x P
Lt
(2) For a Class C Primary Part for which
a Parts Life Limit is established,
which is greater than 10,000 total
Parts Cycles but is less than 15,000
total Parts Cycles:
Lc - C
________ x P
Lc
(3) For replacement of a Part because of
a Campaign Change, when such a Part
has more than 3,000 hours Parts Time
but less than 3,500 hours Parts
Time:
4,000 - T
___________ x P
l,000
d. Extended First Run Parts Credit Allowance =
3,500 - E Lt - T
_________ x P or ________ x P
500 Lt
2. LABOR CREDIT ALLOWANCE is an amount determined in
accordance with the following formulas, except that
in no event shall the amount to be granted for repair
of Parts exceed the amount of the Parts Credit
Allowance which would have been granted if the Part
had been Scrapped:
a. 100 percent Labor Credit Allowance = H x R
b. 50 percent Labor Credit Allowance = H x R
c. Pro rata Labor Credit Allowance =
(1) For a Primary Part which suffers
Direct or Resultant Damage, or a
Class A or Class B Primary Part for
which a Parts Life Limit is
established:
Lt - T
________ x H x R
Lt
(2) For a Class C Primary Part for which
a Parts Life Limit is established
which is greater than l0,000 total
Parts Cycles but is less than l5,000
total Parts Cycles:
Lc - C
________ x H x R
Lc
(3) For replacement of a Part because of
a Campaign Change, which such a Part
has more than 3,000 hours Parts Time
but less than 3,500 hours Parts
Time:
4,000 - T
_________ x H x R
1,000
d. Extended First Run Labor Credit Allowance =
3,500 - E Lt - T
_________ x H x R or ______ x H x R
500 Lt
38
3. The variables used in calculating the above
allowances are defined as:
P = a. For a Part Scrapped because of
Direct Damage, Resultant Damage or a
Parts Life Limit being established,
the IAE commercial price of the Part
Scrapped current at the time of
either the Engine removal or Part
removal, whichever occurs sooner, or
b. For replacement of a Part because of
a Campaign Change, the IAE
commercial price of the replacing
Part specified in the Campaign
Change current at the time of
notification to the Operator of the
Campaign Change.
T = a. For a Primary Part which has
suffered Direct Damage or Resultant
Damage, the actual Parts Time on the
Part minus 2,000 hours, or
b. For a Class A or Class B Primary
Part for which a Parts Life Limit is
established, the actual Parts Time
on the Part minus 2,000 hours, or
the Parts Life Limit minus 2,000
hours, whichever is greater, or
c. For replacement of a Part because of
a Campaign Change, when such a Part
has more than 3,000 hours Parts Time
but less than 3,500 hours Parts
Time, the actual Parts Time on the
Part.
C = For a Class C Primary Part for which a
Parts Life Limit is established which is
greater than l0,000 Total Parts Cycles but
less than 15,000 Total Parts Cycles, the
greater of either:
a. The actual Parts Cycles on the Part
minus 10,000 cycles, or
b. The new Parts Life Limit minus
10,000 Cycles.
Lt = Either:
a. For a Primary Part which has
suffered Direct Damage or Resultant
Damage, the hours indicated in
Section III minus 2,000 hours, or
b. For a Class A or Class B Primary
Part for which a Parts Life Limit is
established, the hours indicated in
Section III minus 2,000 hours.
Lc = For a Class C Primary Part for which a
Parts Life Limit is established which is
greater than 10,000 total Parts Cycle, 5,000
Cycles.
H = The man-hours required to accomplish the
work as established in writing by IAE.
R = The labor rate, expressed in U.S. Dollars
per hour, which will be determined
as follows:
a. If the labor is performed at the
Operator's facility, or its
subcontractor's facility, the labor
rate will be the greater of the
Operator's labor rate or the
subcontractor's labor rate, where
the labor rates were determined in
accordance with IAE Form _____ and
provided to the Operator in writing,
or
b. If the labor is performed by IAE,
the labor rate will be the
then-current labor rate of IAE.
E = Actual Engine Time on an Extended First
Run Engine.
E. DIRECT DAMAGE is the damage suffered by a Part itself upon its Failure.
F. ECONOMICALLY REPAIRABLE shall generally mean that the cost of the repair
as determined by IAE, exclusive of modification and transportation costs,
will be equal to or less than 65 percent of the IAE commercial price of
the Part at the time the repair is considered, or, shall be as otherwise
reasonably determined by IAE.
G. ENGINE(S) means those V2500 Engine(s), as described by IAE Specifications
sold by IAE for Commercial Aviation Use, whether installed as new
equipment in aircraft by the manufacturer thereof and delivered to the
Operator or delivered directly to the Operator from IAE for use as a spare
Engine. An Engine which has been converted or upgraded in accordance with
IAE instructions shall continue to qualify for Credit Allowances and
Adjustments under the provisions of this Service Policy.
H. ENGINE OR MODULE TIME is the total number of flight hours of operation of
an Engine or a Module.
I. EXPENDABLE PARTS means those nonreusable Parts, as determined by IAE,
which are required to be replaced during inspection or Reconditioning,
regardless of the condition of the Part.
J. EXTENDED FIRST RUN ENGINE OR MODULE is an Engine or Module with more than
3,000 hours Engine or Module Time but not more than 3,500 hours Engine or
Module Time.
K. EXTENDED FIRST RUN PART means a Part with 3,500 hours or less Parts Time
operating in an Extended First Run Engine.
L. FAILURE (FAILED) is the breakage, injury, or malfunction of a Part
rendering it unserviceable and incapable of continued operation without
corrective action.
M. FIRST RUN ENGINE OR FIRST RUN MODULE is an Engine or Module with 3,000
hours or less Engine or Module Time.
39
N. FIRST RUN PART is an Engine Part with 3,000 hours or less
Parts Time operating in a First Run Engine.
O. MODULE(S) means any one or more of the following assemblies of
Parts: Fan Assembly and Low Pressure Compressor Assembly High
Pressure Compressor Assembly High Pressure Turbine Assembly
Low Pressure Turbine Assembly Main gearbox Any other Assembly
of Parts so designated by IAE
P. OPERATOR is the owner of one or more Engines operated for
Commercial Aviation Use, the lessee if such Engine(s) is the
subject of a long-term financing lease or as otherwise
reasonably determined by IAE.
Q. PART(S) means Engine parts sold by IAE and delivered to the
Operator as original equipment in an Engine or Engine parts
sold and delivered by IAE to the Operator as new spare parts
in support of an Engine.
R. PARTS CYCLE(S) means the aggregate total number of times a
Part completes an Aircraft takeoff and landing cycle, whether
or not thrust reverser is used on landing. As pilot training
will involve extra throttle transients such as touch and go
landings and takeoffs, IAE shall evaluate such transients for
Parts Cycle determination.
S. PARTS LIFE LIMIT is the maximum allowable total Parts Time or
total Parts Cycles for specific Parts, including Reoperation
if applicable, as established by IAE or by the United States
Federal Aviation Administration. Parts Life Limits are
published in the Time Limits Section (Chapter 05) of the
applicable V2500 Series Engine Manual.
T. PARTS REPAIR means the IAE designated restoration of Failed
Parts to functional serviceable status, excluding repair of
normal wear and tear, as determined by IAE.
U. PARTS TIME is the total number of flight hours of operation of
a Part.
V. PRIMARY PART(S) are limited to those Parts listed in Section
III while such Parts are within the Class Life indicated in
Section III.
W. RECONDITIONING means the restoration of an Engine or Module
allowing substitution of new or serviceable used Parts, to the
extent necessary for continued operation of the Engine or
Module as a serviceable unit. When such Reconditioning is
performed by IAE, the Parts Time or Parts Cycles, as
applicable, of the replaced Part shall, for the purpose of
this Service Policy, be applicable to the substituted new or
serviceable used Part. Said replaced Part shall become the
property of IAE.
X. REOPERATION is the alteration to or modification of a Part.
Y. RESULTANT DAMAGE is the damage suffered by a Part because of
the Failure of another Part within the same Engine.
Z. SCRAPPED PARTS (SCRAP, SCRAPPED, SCRAPPAGE) shall mean those
Parts determined by IAE to be unserviceable and not
Economically Repairable. The Operator shall cause such Parts
to be mutilated or disposed of in such a manner as to preclude
any possible further use as an Engine Part.
VII GENERAL CONDITIONS
The following general conditions govern the application of this Service
Policy:
A. Records and Audit
The Operator shall maintain adequate records for the
administration of this Service Policy and shall permit IAE to
audit such records at reasonable intervals.
B. Scrapping of Parts
1. Scrappage Verification
Any Part for which a Parts Credit Allowance is
requested shall be verified as Scrapped prior to the
issuance of the Parts Credit Allowance. Verification
of Scrappage shall occur as follows:
a. At the Operator's, or its subcontractor's,
facility. Such verification shall be
accomplished by the IAE Field
Representative.
b. At IAE, provided that IAE concurs that the
Part is to be Scrapped. Sufficient
information to identify the Part, the Engine
from which the Part was removed, and the
reason for its return shall be provided.
2. Return of Parts
IAE, at its sole option, may require the Operator to
return to IAE any Part for which a Parts Credit
Allowance is requested. Such return shall be a
condition for the issuance of a Parts Credit
Allowance.
3. Transportation Expenses
Transportation expenses shall be at the expense of
the Operator if such Parts are shipped to and from
IAE for examination and verification; except that IAE
shall pay the expense if such Parts as are shipped at
the request of IAE.
4. Title
Title to such Parts returned to IAE shall vest in
IAE:
a. Upon determination by IAE that the Operator
is eligible for a Parts Credit Allowance. If
it is determined that the Parts are scrapped
Parts but are not eligible for Service
Policy coverage, the Operator will be
notified of the decision and the Parts
returned at the Operator's expense if the
Operator so requests; otherwise, the Parts
will be disposed of by IAE without any type
of adjustment, or
40
b. Upon shipment, when such Parts are
determined to be Scrap at the Operator's
facility and are shipped to IAE at the
request of IAE.
C. Repairability Requirements
The Operator shall set aside and exclude from the operation of
this Service Policy for a period of six months any Part for
which IAE states it has, or plans to initiate, an active
program to achieve a repair, corrective Reoperation or Parts
Life Limit extension. In the event IAE has not released a
repair procedure, corrective Reoperation, or Parts Life Limit
extension by the expiration of this six month period, such
Part shall be retained by the Operator and excluded from the
operation of this Service Policy for additional periods beyond
the expiration of said six month period only if agreed to by
the Operator.
D. Exclusions from Service Policy
This Service Policy will not apply to any Engine, Module or
Part if it has been determined to the reasonable satisfaction
of IAE that said Engine, Module or Part has Failed because it:
1. Has not been properly installed or maintained in
accordance with IAE recommendations unless such
improper installation or maintenance was performed by
IAE, or
2. Has been used contrary to the operating and
maintenance instructions or recommendations
authorized or issued by IAE and current at the time,
or
3. Has been repaired or altered other than by an IAE
designated V2500 Maintenance Center in such a way as
to impair its safety, operation or efficiency, or
4. Has been subjected to:
a. Misuse, neglect, or accident, or
b. Ingestion of foreign material, or
5. Has been affected in any way by a part not defined as
a Part herein, or
6. Has been affected in any way by occurrences not
associated with ordinary use, such as, but not
limited to, acts of war, rebellion, seizure or other
belligerent acts.
E. Payment Options
IAE at its option may grant any Parts Credit Allowance as
either a credit to the Operator's account with IAE or as a
Part replacement.
F. Presentation of Claims
Any request for a Credit Allowance must be presented to IAE
not later than 180 days after the removal from service of the
Engine or Part for which the Credit Allowance is requested. If
IAE disallows the request, written notification will be
provided to the Operator. The Operator shall have 90 days from
such notification to request a reconsideration of the request
for Credit Allowance. IAE shall have the right to refuse any
request for a Credit Allowance which is not submitted within
the stated time periods.
G. Duration of Service Policy
This Service Policy will normally cease to apply to all Parts
in any Engine that is more than ten years old as measured from
the date of shipment of the Engine from the factory. Unless
advised to the contrary by IAE, this Service Policy shall,
however, continue to be applicable to individual Engines after
the expiration of the ten year period on a year to year basis
so that the Operator may continue to receive the benefits of
the Service Policy on the Parts in these Engines.
H. General Administration
On matters concerning this Service Policy, the Operator is
requested to address all correspondence to:
IAE International Aero Engines AG
Corporate Center II
628 Hebron Avenue
Glastonbury, Connecticut 06033-2595 USA
Attention: Warranty Administration
I. Limitation of Liability
1. The express provisions of this Service Policy set
forth the maximum liability of IAE with respect to
any claims relating to this Service Policy. In the
event of any conflict or inconsistency between the
express provisions of this Service Policy and any
Illustrations contained herein, the express
provisions shall govern.
2. Except to the extent that the Credit Allowances and
adjustments expressly set forth in this Service
Policy may exceed the limitations of the
corresponding portions of any warranties or
representations included in any sales agreements, the
provisions of this Service Policy do not modify,
enlarge or extend in any manner the conditions
governing the sale of its Engines and Parts by IAE.
41
3. IAE reserves the right to change or retract this
Service Policy at any time at its sole discretion. No
such retraction or change shall diminish the benefits
which the Operator may be entitled to receive with
respect to Engines for which an acceptable order has
been placed with IAE or with respect to aircraft with
installed Engines for which a firm unconditional
order has been placed with the aircraft manufacturer
prior to the announcement of any such retraction or
change.
J. Assignment of Service Policy
This Service Policy shall not be assigned, either in whole or
in part, by either party. IAE will, however, upon the written
request of the Operator consider an extension of Service
Policy Credit Allowances and adjustments to Engines, Modules
and Parts sold or leased by an Operator to another Operator,
to the extent only, however, that such Credit Allowances and
adjustments exist at the time of such sale or lease and
subject to the terms and conditions of the Service Policy. IAE
shall not unreasonably withhold such extension of such Credit
Allowances.
42
Exhibit D-2
IAE
INTERNATIONAL AERO ENGINES AG
V2500 NACELLE AND PARTS SERVICE POLICY
Issued: November 16, 1988
43
IAE
INTERNATIONAL AERO ENGINES AG
V2500 NACELLE AND PARTS SERVICE POLICY
This Nacelle and Parts Service Policy (Service Policy) is a statement of the
terms and conditions under which IAE International Aero Engines AG ("IAE") will
grant the Operators of its V2500 Nacelles certain Allowances and adjustments in
the event that Parts of such Nacelles suffer Failure in service.
This Service Policy is divided into four sections:
Section I describes the Allowances and adjustments which Page 1
will be granted should the Nacelle or Part(s)
suffer a Failure.
Section II describes the Allowances and adjustments which Page 2
will be granted when IAE declares a Campaign
Change.
Section III contains the definitions of certain words and Page 3
terms used throughout this Service Policy.
These words and terms are identified in the
text of this Service Policy by the use of
initial capital letters for such words and terms.
Section IV contains the general conditions governing the Page 6
application of this Service Policy.
44
I ALLOWANCES AND ADJUSTMENTS
A. First Run Nacelle and Part
1. A First Run Nacelle is a Nacelle with 6,000 hours or less
Nacelle Time and a First Run Part is a Part with 6,000
hours or less Parts Time operating in a First Run Nacelle.
2. If a First Run Part suffers Direct Damage or Resultant
Damage, and provided that the Part causing Resultant
Damage is also a First Run Part:
a. IAE will grant to the Operator:
(1) A 100 percent Parts Credit Allowance for any
such First Run Part Scrapped, and
(2) A 100 percent Labor Allowance for Parts
Repair of any First Run Part requiring Parts
Repair.
b. If such Damage of a First Run Part causes the
removal of the Nacelle from the Aircraft, IAE will,
in addition to Subparagraph a. above, grant to the
Operator:
(1) A 100 percent Labor Allowance for
disassembly, reassembly and necessary testing
of the Nacelle requiring Reconditioning as a
result of such Damage of the First Run Part,
and
(2) A 100 percent Parts Credit Allowance for
those Expendable Parts required in the
Reconditioning of the Nacelle.
c. If such Damage of a First Run Part causes the
removal of the Nacelle from the Aircraft, IAE will
arrange, upon request by the Operator, to
Recondition the Nacelle or accomplish the Parts
Repair at no charge to the Operator rather than
providing the above Allowances. Such work will be
accomplished at a V2500 Maintenance Center
designated by IAE. Transportation charges to and
from the Maintenance Center shall be paid by the
operator.
B. Primary Part
1. A Primary Part is a Part other than a First Run Part
but having not more than 6,000 hours Parts Time.
2. Primary Parts not eligible for those Allowances
granted to First Run Parts are eligible for
Allowances under this Section I, Paragraph B.,
provided that the Primary Part suffers Direct Damage
or Resultant Damage and Provided that the Part
causing Resultant Damage is also a Primary Part.
3. IAE will grant to the Operator a Parts Credit
Allowance for such a Primary Part Scrapped or a Labor
Allowance for such a Primary Part for which a Parts
Repair is designated in writing by IAE as being
eligible for adjustment under this Section I,
Paragraph B. Such Allowance will be based on 100
percent to 1,000 hours total Parts Time which then
decreases, pro rata, to zero percent at 6000 hours
Parts time.
II CAMPAIGN CHANGE ALLOWANCES AND ADJUSTMENTS
A. A Campaign Change is an IAE program, so designated in writing, for the
Reoperation, replacement, addition, or deletion of a Part(s). IAE
will grant the Allowances and adjustments specified in this Section II
to the Operator when Campaign Change recommendations are complied with
by the Operator.
B. Standard Allowances
1. A 100 percent Parts Credit Allowance for the replacing Parts
specified in the Campaign Change for installed or serviceable
shelf stock Nacelle Parts which are Scrapped with 6,000 hours
or less total Parts Time.
2. A 50 percent Parts Credit Allowance for the replacing Parts
specified in the Campaign Change for installed or serviceable
shelf stock Nacelle Parts which are Scrapped with more than
6,000 hours total Parts Time.
3. A 100 percent Labor Allowance for Reoperation of installed or
serviceable shelf stock Nacelle Parts with 6,000 hours or less
total Parts Time, which are Reoperated in accordance with the
Campaign Change.
4. A 50 percent Labor Allowance for Reoperation of installed or
serviceable shelf stock Nacelle Parts with more than 6,000
hours total Parts Time, which are Reoperated in accordance
with the Campaign Change.
5. A 100 percent Labor Allowance for disassembly and reassembly
of the Nacelle, if the disassembly is recommended by IAE for
accomplishment of the Campaign Change and such disassembly is
performed solely for the purpose of accomplishing the Campaign
Change.
C. Optional Allowances and Adjustments
1. When IAE declares a Campaign Change, IAE, at its sole option,
may grant to the Operator allowances and adjustments, such as,
but not necessarily limited to:
a. No charge material
b. Specially priced material
c. Single payment settlements for the Operators' fleet
d. Fixed allowance support for each Nacelle.
45
2. These optional allowances and adjustments will be provided
either:
a. Instead of the standard Allowances of Paragraph B.,
b. In addition to the standard Allowances of Paragraph
B., or
c. As a portion of the standard Allowances of Paragraph
B.
3. In no event shall the worth to the Operator, as reasonably
determined by IAE, be less than the amount that would have
been granted to the Operator as a standard Campaign Change
Allowance, per Paragraph B. In considering the use of these
optional allowances and adjustments, IAE will attempt to
minimize the financial and administrative impact on the
Operator.
III DEFINITIONS
A. ALLOWANCES
1. PARTS CREDIT ALLOWANCE is an amount determined in accordance
with the following formula:
a. 100 percent Parts Credit Allowance = P
b. 50 percent Parts Credit Allowance = P/2
c. Pro rata Parts Credit Allowance = 6,000 - T
_________ x P
5,000
2. LABOR ALLOWANCE is an amount determined in accordance with the
following formulas, except that in no event shall the amount
to be granted for repair of Parts exceed the amount of the
Parts Credit Allowance which would have been granted if the
Part had been Scrapped.
a. 100 percent Labor Allowance = H x R
b. 50 percent Labor Allowance = H x R
2
c. Pro rata Labor Allowance = 6,000 - T
_________ x H x R
5,000
3. The variables used in calculating the above Allowances are
defined as:
P = for a Part Scrapped because of Direct Damage or
Resultant Damage, the IAE commercial price of the Part
Scrapped current at the time of either the Nacelle
removal or Part removal, whichever occurs sooner, or
for replacement of Parts because of a Campaign Change,
the IAE price of the replacing Part specified in the
Campaign Change current at the time of notification to
the Operator of the Campaign Change.
T = actual Parts Time hours on a Part which has suffered
Direct Damage or Resultant Damage or the Parts Life
Limit as established for the Part.
H = the man-hours required to accomplish the work as
established in writing by IAE.
R = the labor rate, expressed in dollars per hour, which
will be determined as follows:
a. If the labor is performed at the Operator's
facility, or its subcontractor's facility,
the labor rate will be the greater of the
Operator's labor rate or the subcontractor's
labor rate, where the labor rates were
determined in accordance with IAE Form and
provided to the Operator in writing, or
b. If the labor is performed at a V2500
Maintenance Center designated by IAE, the
labor rate will be the then current labor
rate at that Center.
B. CAMPAIGN CHANGE is an IAE program, so designated in writing,
for the Reoperation, replacement, addition or deletion of a
Part(s) and is characterized by the granting of certain
Allowances to the Operator when such recommendations are
complied with by the Operator.
C. COMMERCIAL AVIATION USE is the operation of Nacelles in
Aircraft used for commercial, corporate or private transport
purposes. The operation of Nacelles by Government Agencies or
Services is normally excluded except that IAE will consider
written requests for the inclusion of such Nacelles under the
provisions of this Service Policy.
D. DIRECT DAMAGE is the damage suffered by a Part itself upon its
Failure.
E. ECONOMICALLY REPAIRABLE shall generally mean that the cost of
the repair as determined by IAE exclusive of modification and
transportation costs, will be equal to or less than 65 percent
of the IAE commercial price of the Part at the time the repair
is considered, or, shall be as otherwise reasonably determined
by IAE.
F. EXPENDABLE PARTS means those nonreusable Parts, as determined
by IAE, which are required to be replaced during inspection or
Reconditioning, regardless of the condition of the Part.
G. FAILURE (FAILED) is the breakage, injury, or malfunction of a
Part rendering it unserviceable and incapable of continued
operation without corrective action.
H. FIRST RUN NACELLE is a Nacelle with 6,000 hours or less
Nacelle Time.
I. FIRST RUN PART is a Nacelle Part with 6,000 hours or less
Parts Time operating in a First Run Nacelle.
46
J. NACELLE(S) means V2500 nacelle(s) and thrust reverser, as
described in IAE Specifications referenced below, as such
Specifications may be revised from time to time, sold by IAE
for Commercial Aviation Use, whether installed as new
equipment in aircraft by the manufacturer thereof and
delivered to the Operator or delivered directly to the
Operator from IAE for use as a spare nacelle. A Nacelle which
has been converted or upgraded in accordance with IAE
instructions shall continue to qualify for Allowances and
adjustments under the provisions of this Service Policy.
Model No. Specification No. Specification Date
V2500 -- ____________,198__
K. NACELLE TIME is the total number of flight hours of operation
of a Nacelle.
L. OPERATOR is the owner of one or more Nacelles operated for
Commercial Aviation use, the lessee if such Nacelle(s) is the
subject of a long-term financing lease or as otherwise
reasonably determined by IAE.
M. PART(S) means Nacelle parts sold by IAE and delivered to the
Operator as original equipment in a Nacelle or Nacelle parts
sold and delivered by IAE to the Operator as new spare parts
in support of a Nacelle.
N. PARTS LIFE LIMIT is the maximum allowable Parts Time, for
specific Parts as established by IAE or by the Federal
Aviation Administration in an Airworthiness Directive.
O. PARTS REPAIR means the IAE designated restoration of Failed
Parts to functional serviceable status, excluding repair of
normal wear and tear, as determined by IAE.
P. PARTS TIME is the total number of flight hours of operation of
a Part.
Q. PRIMARY PART means a Part other than a First Run Part but not
having more than 6,000 hours Parts Time.
R. RECONDITIONING means the restoration of a Nacelle allowing
substitution of new or serviceable used Parts, to the extent
necessary for continued operation of the Nacelle as a
serviceable unit. When such Reconditioning is performed by
IAE designated V2500 Maintenance Center, the Parts Time, of
the replaced Part shall, for the purpose of this Service
Policy, be applicable to the substituted new or serviceable
used Part. Said replaced Part shall become the property of
IAE.
S. REOPERATION is the alternation to or modification of a Part.
T. RESULTANT DAMAGE is the damage suffered by a Part because of
the Failure of another Part within the same Nacelle.
U. SCRAPPED PARTS (SCRAP, SCRAPPED, SCRAPPAGE) shall mean those
Parts determined by IAE to be unserviceable and not
Economically Repairable. The Operator shall cause such Parts
to be mutilated or disposed of in such a manner as to preclude
any possible further use as a Nacelle Part.
IV GENERAL CONDITIONS
The following general conditions govern the application of this
Service Policy:
A. Records and Audit
The Operator shall maintain adequate records for the
administration of this Service Policy and shall permit IAE to
audit such records at reasonable intervals.
B. Scrapping of Parts
1. Scrappage Verification
Any Part for which a Parts Credit Allowance is
requested shall be verified as Scrapped prior to the
issuance of the Allowance. Verification of Scrappage
shall occur as Follows:
a. At the Operator's, or its subcontractor's,
facility. Such verification shall be
accomplished by the IAE Field Representative.
b. At a V2500 Maintenance Center designated by
IAE, provided that IAE concurs that the Part
is to be Scrapped. Sufficient information to
identify the Nacelle from which the Part was
removed, and the reason for its return shall
be provided.
2. Return of Parts
IAE, at its sole option, may require the Operator to
return to IAE any Part for which a Parts Credit
Allowance is requested. Such return shall be a
condition for the issuance of a Parts Credit
Allowance.
3. Transportation Expenses
Transportation expenses shall be at the expense of
the Operator if such Parts are shipped to and from a
V2500 Maintenance Center designated by IAE for
examination and verification; except, that IAE shall
pay the expense of transport of such Parts as are
shipped at the request of IAE.
47
4. Title
Title to such Parts returned to IAE shall vest in IAE.
a. Upon determination by IAE that the Operator
is eligible for a Parts Credit Allowance. If
it is determined that the Parts are scrapped
Parts but are not eligible for Service Policy
coverage, the Operator will be notified of
the decision and the Parts returned at the
Operator's expense if the Operator so
requests; otherwise, the Parts will be
disposed of by IAE without any type of
adjustment, or
b. Upon shipment, when such Parts are determined
to be Scrap at the Operator's facility and
are shipped to IAE at the request of IAE.
C. Repairability Requirements
The Operator shall set aside and exclude from the operation of
this Service Policy for a period of six months any Part for
which IAE states it has, or plans to initiate, an active
program to achieve a repair, corrective Reoperation or Parts
Life Limit extension. In the event IAE has not released a
repair procedure, corrective Reoperation, or Parts Life Limit
extension by the expiration of this six month period, such
Part shall be retained by the Operator and excluded from the
operation of this Service Policy for additional periods beyond
the expiration of said six month period only if agreed to by
the Operator.
D. Exclusions from Service Policy
This Service Policy will not apply to any Nacelle, or Part if
it has been determined to the reasonable satisfaction of IAE
that said Nacelle or Part has Failed because it:
1. Has not been properly installed or maintained in
accordance with IAE recommendations unless such
improper installation or maintenance was performed by
IAE or at any V2500 Maintenance Center designated by
IAE.
2. Has been used contrary to the operating and
maintenance instructions or recommendations
authorized or issued by IAE and current at the time,
or
3. Has been repaired or altered outside any V2500
Maintenance Center in such a way as to impair its
safety, operation or efficiency, or
4. Has been subjected to:
a. Misuse, neglect, or accident, or
b. Ingestion of foreign material, or
5. Has been affected in any way by a part not defined as
a Part herein, or
6. Has been affected in any way by occurrences not
associated with ordinary use, such as, but not
limited to, acts of war, rebellion, seizure or other
belligerent acts.
E. Payment Options
IAE at its option may grant any Parts Credit Allowance as
either a credit to the Operator's account or as a Part
replacement.
F. Presentation of Claims
Any request for an Allowance must be presented to IAE not
later than 180 days after the removal from service of the
Engine or Part for which the Allowance is requested. If IAE
disallows the request, written notification will be provided
to the Operator. The Operator shall have 90 days from such
notification to request a reconsideration of the request for
Allowance. IAE shall have the right to refuse any request for
an Allowance which is not submitted within the stated time
periods.
G. Duration of Service Policy
This Service Policy will normally cease to apply to all Parts
in any Nacelle that is more than ten years old as measured
from the date of shipment of the Nacelle from the factory.
This Service Policy shall, however, continue to be applicable
to individual Nacelles after the expiration of the ten year
period on a year to year basis so that the Operator may
continue to receive the benefits of the Service Policy on the
Parts in these Nacelles.
H. General Administration
On matters concerning this Service Policy, the Operator is
requested to address all correspondence to:
IAE International Aero Engines AG
Corporate Center II
628 Hebron Avenue
Glastonbury, Connecticut 06033-2595 USA
Attention: Warranty Administration
I. Limitation of Liability
1. The express provisions of this Service Policy set
forth the maximum liability of IAE with respect to
any claims relating to this Service Policy.
2. Except to the extent that the Allowances and
adjustments expressly set forth in this Service
Policy may exceed the limitations of the
corresponding portions of any warranties or
representations included in any sales agreements, the
provisions of this Service Policy do not modify,
enlarge or extend in any manner the conditions
governing the sale of its Nacelles and Parts by IAE.
48
3. IAE reserves the right to change or retract this
Service Policy at any time at its sole discretion.
No such retraction or change shall diminish the
benefits which the Operator may be entitled to
receive with respect to Nacelles for which a
acceptable order has been placed with IAE or with
respect to aircraft with installed Nacelles for which
firm orders have been placed or options obtained with
the aircraft manufacturer prior to the announcement
of any such retraction or change.
J. Assignment of Service Policy
This Service Policy shall not be assigned, either in whole or
in part, by either party. IAE will, however, upon the written
request of the Operator consider an extension of Service
Policy Allowances and adjustments to Nacelles and Parts sold
or leased by an Operator to another Operator, to the extent
only, however, that such Allowances and adjustments exist at
the time of such sale or lease and subject to the terms and
conditions of the Service Policy. IAE shall not unreasonably
withhold such extension of such Allowances.
49
EXHIBIT D-3
NON-INSTALLATION ITEMS WARRANTY
WARRANTY FOR SPECIAL TOOLS AND GROUND EQUIPMENT
1. If it is shown that a defect in material or workmanship has become
apparent in any item of special tooling and ground equipment within
one year from the date of receipt of such item by the Operator, then
IAE will either as it may in its sole discretion determine repair or
exchange such item free of charge.
2. The obligations of IAE under this Warranty are subject to the
following terms and conditions.
2.1 The defect must not be due to misuse, negligence of anyone
other than IAE, accident or misapplication.
2.2 Such item shall not have been used, maintained, modified,
stored or handled other than in a manner approved by IAE.
2.3 Any claim under this Warranty shall be made in writing to IAE
within 90 days of the discovery of the defect and the
defective item shall be made available or sent to IAE for
inspection as it may require.
3. IAE shall not be liable for any incidental consequential or resultant
loss or damage howsoever occurring nor for labor costs involved in
removal or replacement of parts.
50
Exhibit D-4
V2500 PARTS COST GUARANTEE
I INTRODUCTION
IAE assures AWA that by the end of the 10 year period commencing with
AWA's first commercial operation of Aircraft powered by V2500 Engines,
the cumulative Eligible Parts Cost will not, subject to escalation,
exceed a Guaranteed Cost Rate of $58.00 per Eligible Engine flight
hour. Under this Guarantee, if the cumulative Eligible Parts Cost per
Eligible Engine flight hour of AWA's Engines over the Period of
Guarantee exceeds the escalated Guaranteed Cost Rate, IAE will credit
AWA's account with IAE an amount of 75% of the excess costs.
II GUARANTEE
A. Period of Guarantee
The Period of Guarantee will start on the date AWA initiates
commercial operation of its first Aircraft powered by Eligible
Engines and will terminate 10 years from that date.
B. Eligible Engines
The Engines that will be Eligible under this Guarantee shall
be new installed and new spare Engines which are owned and
operated by AWA during the Period of Guarantee and which have
been acquired pursuant to the Proposal or Contract to which
this Guarantee is attached and the related proposal or
contract for delivery of Aircraft. The Engines shall remain
Eligible provided that AWA or its authorized maintenance
facility maintains them in accordance with the IAE
instructions and recommendations contained in the applicable
IAE publications including the latest Maintenance Management
Plan as agreed to by AWA.
C. Eligible Parts Costs
Eligible Parts Costs shall comprise the cost of Parts which
are removed from Eligible Engines and actually Scrapped as a
result of:
1. a Failure of a Part in such Eligible Engines;
2. foreign object damage caused by the ingestion of
birds, hail stones or runway gravel;
3. an Airworthiness Directive issued by the applicable
Certification Authority; and
4. maintenance as recommended by IAE;
except for Parts Scrapped as the result of life limitation and
vendor proprietary accessories and parts therein.
D. Adjusted Parts Cost
Within thirty days following each anniversary of the
commencement of the Period of Guarantee, AWA will report to
IAE the Eligible Parts Costs incurred by AWA during the
preceding year together with a statement of any contributions
received from IAE or third parties towards such Eligible Parts
Costs. Within the following sixty days, IAE and AWA will
jointly calculate the Adjusted Parts Costs for that year
making appropriate reductions for contributions received by
AWA from IAE and third parties and for disallowed Parts Costs
incurred by AWA during maintenance undertaken contrary to IAE
recommendations.
E. Guaranteed Parts Cost
Within thirty days following each anniversary of the
commencement of the Period of Guarantee, AWA will report to
IAE the flight hours of Eligible Engines operated by AWA in
the preceding year. Within the following sixty days, IAE and
AWA will jointly calculate the Guaranteed Parts Cost for AWA
for that year using the following formula:
GPC = A x Escalated GCR
where:
A is the flight hours of Eligible Engines operated by AWA
in that year;
Escalated GCR is $58.00/EFH escalated for that year;
and the Escalated Guaranteed Cost for any year is calculated
by determining the arithmetic average of the Guaranteed Cost
Rate calculated for each month of that year using the IAE
Escalation Formula attached to this Proposal or Contract for a
Base Month of January, 1994.
F. Annual Statement
Within one hundred and twenty days following the second and
each subsequent anniversary of the commencement of the Period
of Guarantee, IAE will credit AWA's account with IAE an amount
equal to 75% of the difference between the sum of the Adjusted
Parts Costs for each preceding year and the sum of the
Guaranteed Parts Costs for each preceding year.
III DEFINITIONS AND GENERAL CONDITIONS
All of the definitions and General Conditions of the V2500 Engine and
Parts Service Policy shall apply to this Guarantee. Engines and
Engine maintenance excluded by the General Conditions of the Policy
shall be excluded from this Guarantee except that Parts Costs incurred
during Engine maintenance resulting from ingestion of birds,
hailstones or runway gravel shall be included as Eligible under this
Guarantee.
51
IV SPECIFIC CONDITIONS
A. The Guaranteed Cost Rate is predicated on the use by AWA of:
1. An average flight cycle of no less than 1.9 hours;
2. Thrust levels which are derated an average of 10
percent for Takeoff and Climb relative to full
Takeoff and Climb ratings;
3. An average Aircraft utilization equal to or less than
3,400 flight hours per year; and
4. An Aircraft and Engine delivery schedule in respect
of 24 firm Aircraft and 6 spare Engines as described
in the Proposal or Contract to which this Guarantee
is attached.
B. IAE reserves the right to make appropriate adjustments to the
Guaranteed Cost Rate if there is, during the Period of
Guarantee, a variation from the conditions upon which the
Guaranteed Cost Rate is predicated or a discontinuation of
ownership by AWA of any Engine or any V2500 powered Aircraft
subsequent to delivery to AWA.
C. In the event credits are issued under Section II, Paragraph F,
such credits will be dedicated to the procurement of Parts
aimed at correction of the situations contributing to excess
Parts Costs. Accordingly, AWA and IAE will establish jointly
the modifications or Parts to be selected, and AWA will
incorporate the changes into Eligible Engines.
V EXCLUSION OF BENEFITS
The intent of this Guarantee is to provide specified benefits to AWA
as a result of the failure of Eligible Engines to achieve the parts
cost level stipulated in the Guarantee. It is not the intent,
however, to duplicate benefits provided to AWA under any other
applicable guarantee, sales warranty, service policy, or any special
benefit of any kind as a result of the same failure. Therefore, the
terms and conditions of this Guarantee notwithstanding, if the terms
of this Guarantee should make duplicate benefits available to AWA from
IAE or any third-party, AWA may elect to receive the benefits under
this Guarantee or under any of the other benefits described above, but
not both.
52
Exhibit D-5
V2500 RELIABILITY GUARANTEE
I INTRODUCTION
IAE assures AWA that by the end of the 10 year period commencing with
AWA's first commercial operation of Aircraft powered by V2500 Engines,
the cumulative Engine Shop Visit Rate will not exceed a Guaranteed
Rate of 0.170 per 1000 Eligible Engine flight hours. Under this
Guarantee, if the cumulative Engine Shop Visit Rate exceeds the
Guaranteed Rate, IAE will credit AWA's account with IAE an amount of
$25,000 U.S. Dollars for each Eligible Engine Shop Visit determined to
have been in excess of the Guaranteed Rate.
II GUARANTEE
A. Period of Guarantee
The Period of Guarantee will start on the date AWA initiates
commercial operation of its first Aircraft powered by Eligible
Engines and will terminate 10 years from that date.
B. Eligible Engines
The Engines that will be Eligible under this Guarantee shall
be new installed and new spare Engines which are owned or
operated by AWA during the Period of Guarantee and which have
been acquired pursuant to the Proposal or Contract to which
this Guarantee is attached and the related proposal or
contract for delivery of Aircraft. The Engines shall remain
Eligible provided that AWA or its authorized maintenance
facility maintains them in accordance with the IAE
instructions and recommendations contained in the applicable
IAE publications including the latest Maintenance Management
Plan for AWA.
C. Eligible Shop Visits
Eligible Shop Visits shall comprise the shop visits of
Eligible Engines required for the following reasons:
1. a Failure of a Part in such Eligible Engines;
2. foreign object damage caused by the ingestion of
birds, hailstones or runway gravel;
3. an Airworthiness Directive issued by the applicable
Certification Authority;
and
4. maintenance as recommended by IAE.
D. Reporting of Engine Shop Visits and Engine Flight Hours
Eligible Shop Visits shall be reported to IAE by AWA within
thirty days after the date of such Engine Shop Visit using IAE
Form TBD together with such other information as may be needed
to determine the Eligibility of the Engine Shop Visit. Each
such Form shall be verified by an authorized IAE
Representative before submission. Should it be necessary for
him to disqualify a reported Engine Shop Visit, supporting
information will be furnished. Flight hours accumulated by
Eligible Engines during each month during the Period of
Guarantee shall be reported by AWA within thirty days after
each month's end to IAE on IAE Form TBD unless other
procedures are established for the reporting of flight hours.
E. Credit Allowance Calculation
A credit of $25,000 U.S. Dollars will be granted by IAE for
each Eligible Engine Shop Visit determined as calculated below
to be in excess of the Guaranteed Rate during the Period of
Guarantee. An annual calculation will be made no later than
sixty days after each yearly anniversary of the commencement
of the Period of Guarantee provided that the necessary Engine
Shop Visit records and Eligible Engine flight hour information
have been reported to IAE.
Each annual calculation will be made using data that will be
cumulative from the start of the Period of Guarantee. An
interim credit will be granted, if necessary, following the
annual calculations for the second year and each subsequent
year of the Period of Guarantee. If subsequent annual
calculations show that on a cumulative basis, a previous
interim credit (or portion thereof) was excessive, such excess
amount shall be subject to repayment which will be effected by
IAE issuing a debit against AWA's account with IAE. Credits
and debits will be applied to AWA's account with IAE not later
than thirty days following a calculation for the second year
and each subsequent year of the Period of Guarantee, as
applicable.
Credit Allowance = (AR - GR) x $25,000 U.S. Dollars
where:
AR = Total Eligible Engine Shop Visits during the
period of the calculation.
GR = 0.170/1,000 x total Engine flight hours
accumulated on Eligible Engines during the
period of the calculation.
(NOTE: GR will be rounded to the nearest whole number.)
53
III DEFINITIONS AND GENERAL CONDITIONS
All of the Definitions and General Conditions of the V2500 Engine and
Parts Service Policy shall apply to this Guarantee. Engines and
Engine Shop Visits excluded by the General Conditions of the Policy
shall be excluded from this Guarantee except that Engine Shop Visits
resulting from ingestion of birds, hailstones or runway gravel shall
be included as Eligible under this Guarantee.
IV SPECIFIC CONDITIONS
A. The Guaranteed Rate is predicated on the use by AWA of:
1. An average flight cycle of no less than 1.9 hours;
2. Thrust levels which are derated an average of 10
percent for Takeoff and Climb relative to full
Takeoff and Climb ratings;
3. An average Engine utilization equal to or less than
3,400 flight hours per year; and
4. An Aircraft and Engine delivery schedule in respect
of 24 firm Aircraft and 6 spare Engines as described
in the Proposal or Contract to which this Guarantee
is attached.
B. IAE reserves the right to make appropriate adjustments to the
Guaranteed Rate if there is, during the Period of Guarantee, a
variation from the conditions upon which the Guaranteed Rate
is predicated or a discontinuation of ownership by AWA of any
Engine or any V2500 powered Aircraft subsequent to delivery to
AWA.
C. In the event credits are issued under Section II, such credits
will be dedicated to the procurement of Parts aimed at
correction of the situations contributing to excess Engine
Shop Visits. Accordingly, AWA and IAE will establish jointly
the modifications or Parts to be selected, and AWA will
incorporate the changes into Eligible Engines.
V EXCLUSION OF BENEFITS
The intent of this Guarantee is to provide specified benefits to AWA
as a result of the failure of Eligible Engines to achieve the
reliability level stipulated in the Guarantee. It is not the intent,
however, to duplicate benefits provided to AWA under any other
applicable guarantee, sales warranty, service policy, or any special
benefit of any kind as a result of the same failure. Therefore, the
terms and conditions of this Guarantee notwithstanding, if the terms
of this Guarantee should make duplicate benefits available to AWA from
IAE or any third-party, AWA may elect to receive the benefits under
this Guarantee or under any of the other benefits described above, but
not both.
54
Exhibit D-6
V2500 INFLIGHT SHUTDOWN GUARANTEE
I INTRODUCTION
IAE assures AWA that by the end of the 10 year period commencing with
AWA`s first commercial operation of Aircraft powered by V2500 Engines,
the cumulative Engine Inflight Shutdown Rate will not exceed a
Guaranteed Rate of .020 per 1000 Eligible Engine flight hours. Under
this Guarantee, if the cumulative Eligible Inflight Shutdown Rate is
determined to have exceeded the Guaranteed Rate over the Period of
Guarantee, IAE will credit AWA`s account with IAE an amount of $10,000
U.S. Dollars for each Eligible Inflight Shutdown determined to have
been in excess of the Guaranteed Rate.
II GUARANTEE
A. Period of Guarantee
The Period of Guarantee will start on the date AWA initiates
commercial operation of its first Aircraft powered by Eligible
Engines and will terminate 10 years from that date.
B. Eligible Engines
The Engines that will be Eligible under this Guarantee shall
be new installed and new spare Engines which are owned and
operated by AWA during the Period of Guarantee and which have
been acquired pursuant to the Proposal or Contract to which
this Guarantee is attached and the related proposal or
contract for delivery of Aircraft. The Engines shall remain
Eligible provided that AWA or its authorized maintenance
facility maintains them in accordance with the IAE
instructions and recommendations contained in the applicable
IAE publications including the latest Maintenance Management
Plan as agreed to by AWA.
C. Eligible Inflight Shutdowns
Eligible Inflight Shutdowns shall comprise the inflight
shutdown of an Eligible Engine during a scheduled revenue
flight which is determined to have been caused by a Failure of
a Part of such Engine. Multiple inflight shutdowns of the
same Engine during the same flight leg for the same problem
will be counted as one Eligible Inflight Shutdown. A
subsequent inflight shutdown on a subsequent flight leg for
the same problem because corrective action has not been taken
will be excluded.
D. Reporting of Eligible Inflight Shutdowns
Eligible Inflight Shutdowns shall be reported to IAE by AWA
within thirty days after the date of such Inflight Shutdown
using IAE Form TBD together with such other information as may
be needed to determine the Eligibility of the Inflight
Shutdown. Each such Form shall be verified by an authorized
IAE Representative before submission. Should it be necessary
for him to disqualify a reported Inflight Shutdown, supporting
information will be furnished.
Flight hours accumulated by Eligible Engines during each month
during the Period of Guarantee shall be reported by AWA within
thirty days after each month's end to IAE on IAE Form TBD
unless other procedures are established for the reporting of
flight hours.
E. Credit Allowance Calculation
A credit of $10,000 U.S. Dollars will be granted by IAE for
each Eligible Inflight Shutdown determined as calculated below
to be in excess of the Guaranteed Rate during the Period of
Guarantee. An annual calculation will be made no later than
sixty days after each yearly anniversary of the commencement
of the Period of Guarantee provided that the necessary
Inflight Shutdown records and Eligible Engine flight hour
information have been reported to IAE.
Each annual calculation will be made using data that will be
cumulative from the start of the Period of Guarantee. An
interim credit will be granted, if necessary, following the
annual calculations for the second year and each subsequent
year of the Period of Guarantee. Credits will be applied to
AWA`s account with IAE not later than thirty days following a
calculation for the second year and each subsequent year of
the Period of Guarantee, as applicable.
The Credit Allowance = (AI - GI) x $10,000 U.S. Dollars
Where:
AI = Total Eligible Inflight Shutdowns during the
period of the calculation;
GI = (.020/1,000) x total Engine flight hours
accumulated on Eligible Engines during the
period of the calculation.
(NOTE: GI will be rounded to the nearest whole
number.)
III DEFINITIONS AND GENERAL CONDITIONS
All of the Definitions and General Conditions of the V2500 Engine and
Parts Service Policy shall apply to this Guarantee. Engines and
Inflight Shutdowns excluded by the General Conditions of the Policy
shall be excluded from this Guarantee.
55
IV SPECIFIC CONDITIONS
A. The Guaranteed Rate is predicated on the use by AWA of:
1. An average flight cycle of no less than 1.9 hours;
2. Thrust levels which are derated an average of 10
percent for Takeoff and Climb relative to full
Takeoff and Climb ratings;
3. An average Aircraft utilization equal to or less than
3,400 flight hours per year;
4. An Aircraft and Engine delivery schedule in respect
of 24 firm Aircraft and 6 spare Engines as described
in the Proposal or Contract to which this Guarantee
is attached.
B. IAE reserves the right to make appropriate adjustments to the
Guaranteed Rate if there is, during the Period of Guarantee, a
variation from the conditions upon which the Guaranteed Rate
is predicated or a discontinuation of ownership by AWA of any
Engine or any V2500 powered Aircraft subsequent to delivery to
AWA.
C. In the event credits are issued under Section II, such credits
will be dedicated to the procurement of Parts aimed at
correction of the situations contributing to excess Inflight
Shutdowns. Accordingly, AWA and IAE will establish jointly
the modifications or Parts to be selected, and AWA will
incorporate the changes into Eligible Engines.
V EXCLUSION OF BENEFITS
The intent of this Guarantee is to provide specified benefits to AWA
as a result of the failure of Eligible Engines to achieve the
reliability level stipulated in the Guarantee. It is not the intent,
however, to duplicate benefits provided to AWA under any other
applicable guarantee, sales warranty, service policy, or any special
benefit of any kind as a result of the same failure. Therefore, the
terms and conditions of this Guarantee notwithstanding, if the terms
of this Guarantee should make duplicate benefits available to AWA from
IAE or any third-party, AWA may elect to receive the benefits under
this Guarantee or under any of the other benefits described above, but
not both.
56
Exhibit D-7
V2500 FUEL CONSUMPTION RETENTION GUARANTEE
I INTRODUCTION
IAE assures AWA that at the end of the 10 year period commencing with
AWA's first commercial operation of Aircraft powered by V2500 Engines,
the fleet average cruise fuel consumption for Eligible Engines will
not have increased by more than a Guaranteed Margin of 2.0%. Under
this Guarantee, if the fleet average cruise fuel consumption for
Eligible Engines exceeds the Guaranteed Margin at the end of the
Guarantee Period, IAE will credit AWA's account with IAE an amount in
respect of excess fuel consumed.
II GUARANTEE
A. Period of Guarantee
The Period of Guarantee will start on the date AWA initiates
commercial operation of its first Aircraft powered by Eligible
Engines and will terminate 10 years from that date.
B. Eligible Engines
The Engines that will be Eligible under this Guarantee shall
be new installed and new spare Engines which are owned and
operated by AWA during the Period of Guarantee and which have
been acquired pursuant to the Proposal or Contract to which
this Guarantee is attached and the related proposal or
contract for delivery of Aircraft. The Engines shall remain
Eligible provided that AWA or its authorized maintenance
facility maintains them in accordance with the IAE
instructions and recommendations contained in the applicable
IAE publications including the latest Maintenance Management
Plan as agreed to by AWA.
C. Fuel Consumption Measurement
The inflight data required for administration of this
Guarantee will be obtained by AWA during steady state cruise
conditions using methods which will be mutually agreed between
AWA and IAE. Steady state cruise conditions are defined as a
minimum of five minutes at the same altitude, Mach number and
thrust setting Engine Pressure Ratio in clear, smooth air with
normal bleed and power extraction and autothrottle disengaged
(unless flight evaluation shows this disengagement to be
unnecessary). Data points falling within the following
envelope of altitude, Mach number and Engine Pressure Ratio:
Mach No. -- TBD to TBD, Altitude -- TBD to TBD feet, Engine
Pressure Ratio -- TBD to TBD will be deemed to be Acceptable
Data Points, provided that:
a) the fuel consumption data for any Eligible Engine on
which the engine parameters indicate a possible
malfunction (including associated Aircraft systems),
other than normal gas path deterioration, that is
subsequently confirmed by maintenance action will not
be considered acceptable data, and
b) data which is obviously inaccurate under normal
engine monitoring practices will not be considered
acceptable data; this type of data will be rejected
unless AWA validity checks have established that
Total Air Temperature, Fuel Flow Aircraft and Engine
Bleed Systems and other Aircraft parameters are
within normal operating ranges.
The data to be recorded will be that normally recorded for
Engine Condition Monitoring purposes and will include the
following:
Altitude
Mach Number
Total Air Temperature (TAT)
Indicated Airspeed (IAS)
Engine Pressure Ratio (EPR)
Fuel Flow
Low Compressor Rotor Speed (N1)
High Compressor Rotor Speed (N2)
Exhaust Gas Temperature (EGT)
Bleed Air Configuration
Engine Fuel Flow measurements will be referred to in the
Standard Engine Fuel Flow-Engine Pressure Ratio Relationship
which will be defined for installed Engines by the Aircraft
manufacturer during the Aircraft flight test certification
program.
D. Base Fuel Flow
The Base Fuel Flow shall be the initial fuel flow level of
each Eligible Engine on commencement of its commercial
service. This shall be the average of the cruise fuel flow
values for the first ten Acceptable Data Points recorded for
each Eligible Engine. Base Fuel Flow is represented as a
percentage deviation from the Standard Engine Fuel Flow-Engine
Pressure Ratio Relationship.
E. Cruise Fuel Flow
The Cruise Fuel Flow shall be the average of the cruise fuel
flow values for ten Acceptable Data Points for each installed
Eligible Engine at any time after that Engine's Base Fuel Flow
is established. Cruise Fuel Flow will also be expressed as a
percent deviation from the Standard Engine Fuel Flow-Engine
Pressure Ratio Relationship.
57
F. Engine Cruise Fuel Flow Deterioration
The Cruise Fuel Flow Deterioration for an Eligible Engine
shall be the difference between its Cruise Fuel Flow and the
Base Fuel Flow expressed in percentage points.
G. Periodic Fleet Average Cruise Fuel Consumption Deterioration
The Periodic Fleet Average Cruise Fuel Consumption
Deterioration shall be the average of the Cruise Fuel Flow
Deterioration for all installed Eligible Engines for a 30 day
reporting period. This is to be reported to IAE every 30
days.
H. Final Fleet Average Cruise Fuel Consumption Deterioration
The Final Fleet Average Cruise Fuel Consumption Deterioration
is the average of the Periodic Fleet Average Cruise Fuel
Consumption Deterioration values for all 30 day periods during
the Period of Guarantee.
I. Operational Data
AWA shall provide the following data to IAE as indicated
during the Period of the Guarantee:
1. Total quantity of fuel consumed by Eligible Engines
during the Period (U.S. Gallons), every thirty days.
2. Average cost of fuel to AWA over the Period of
Guarantee (U.S. Dollars per U.S. Gallon), every
thirty days.
3. Individual Eligible Engine operating hours for each
30 day period during the Period of Guarantee
identified by engine serial number, annually.
4. Engine maintenance action information, as requested.
J. Excess Fuel Consumption Credit Calculation
If at the end of the Period of Guarantee the Final Fleet
Average Fuel Consumption Deterioration exceeds the Guaranteed
Margin, IAE will grant AWA a credit in respect to excess fuel
consumption calculated in accordance with the following
formula:
C = (D-GM)% YHF
where:
C = the amount of the credit in U.S. dollars
D = the Final Fleet Average Fuel Consumption Deterioration
GM = the Guaranteed Margin
Y = average cruise fuel flow of new Eligible Engines
expressed in U.S. gallons per hour
H = the total of all flight hours flown by AWA's Eligible
Engines during the Period of Guarantee
F = The average net cost to AWA in U.S. Dollars per U.S.
Gallon (after deduction of subsidies or government or
other allowances received by AWA), of aviation fuel
consumed by AWA during the Period of Guarantee.
III DEFINITIONS AND GENERAL CONDITIONS
All of the Definitions and General Conditions of the V2500 Engine and
Parts Service Policy shall apply to this Guarantee. Engines excluded
by the General Conditions of the Policy shall be excluded from this
Guarantee.
IV SPECIFIC CONDITIONS
A. The Guaranteed Rate is predicated on the use by AWA of:
1. An average flight cycle of no less than 1.9hours;
2. Thrust levels which are derated an average of 10
percent for Takeoff and Climb relative to full
Takeoff and Climb ratings;
3. An average Aircraft utilization equal to or less than
3,400 flight hours per year;
4. An Aircraft and Engine delivery schedule in respect
of 24 firm Aircraft and 6 spare Engines as described
in the Proposal or Contract to which this Guarantee
is attached.
B. IAE reserves the right to make appropriate adjustments to the
Guaranteed Rate if there is, during the Period of Guarantee, a
variation from the conditions upon which the Guaranteed Rate
is predicated or a discontinuation of ownership by AWA of any
Engine or any V2500 powered Aircraft subsequent to delivery to
AWA.
V EXCLUSION OF BENEFITS
The intent of this Guarantee is to provide specified benefits to AWA
as a result of the failure of Eligible Engines to achieve the
performance level stipulated in the Guarantee. It is not the intent,
however, to duplicate benefits provided to AWA under any other
applicable guarantee, sales warranty, service policy, or any special
benefit of any kind as a result of the same failure. Therefore, the
terms and conditions of this Guarantee notwithstanding, if the terms
of this Guarantee should make duplicate benefits available to AWA from
IAE or any third-party, AWA may elect to receive the benefits under
this Guarantee or under any of the other benefits described above, but
not both.
58
Exhibit D-8
V2500 EXHAUST GAS TEMPERATURE GUARANTEE
I INTRODUCTION
IAE assures AWA that during the first 6,000 hours of operation of each
V2500 Engine, the maximum stabilized takeoff exhaust gas temperature
will not exceed the Certified Limit. Under this Guarantee if it is
confirmed that the Certified Limit has been exceeded, IAE will provide
technical assistance or perform Engine maintenance or both to correct
the condition. For the purpose of this Guarantee, the Certified Limit
is exceeded if the Engine will not achieve the specified engine
pressure ratio for takeoff thrust without exceeding the Certified
Limit for its Exhaust Gas Temperature.
II GUARANTEE
A. Period of Guarantee
The Period of Guarantee for each Eligible Engine will start on
the date AWA initiates commercial operation of its first
Aircraft powered by such Engine and will terminate 10 years
from that date or upon the expiration of the first 6,000 hours
of operation of such Engine, whichever is the sooner.
B. Eligible Engines
The Engines that will be Eligible under this Guarantee shall
be new installed and new spare Engines which are owned and
operated by AWA during the Period of Guarantee and which have
been acquired pursuant to the Proposal or Contract to which
this Guarantee is attached and the related proposal or
contract for delivery of Aircraft. The Engines shall remain
Eligible provided that AWA or its authorized maintenance
facility maintains them in accordance with the IAE
instructions and recommendations contained in the applicable
IAE publications including the latest Maintenance Management
Plan as agreed to by AWA.
C. Restoration of Installed Engine
If during the Period of Guarantee, the maximum stabilized
takeoff exhaust gas temperature of an Eligible Engine
installed in an Aircraft operated by AWA exceeds the Certified
Limit, AWA shall undertake on-wing Engine maintenance
recommended by IAE, with technical assistance provided by IAE,
to restore the performance of that Engine.
D. Calibration of Removed Engine
If the performance of an installed Eligible Engine cannot be
restored by the maintenance recommended under Section II,
Paragraph C, AWA shall promptly remove such Engine from the
Aircraft and dispatch it at its cost for calibration in an IAE
designated test cell. If such calibration verifies that the
exhaust gas temperature of the Engine is not in excess of the
Certified Limit or it is established that any excess is due to
causes which are excluded by the General Conditions in Section
III, then the cost of such test cell calibration and
associated transportation will be borne by AWA.
E. Restoration of Removed Engine
If (i) calibration under Section II, Paragraph D verifies that
the exhaust gas temperature of the Engine is in excess of the
Certified Limit, and (ii) such excess was the sole reason for
removing such Engine from the Aircraft, IAE shall:
a) bear the cost of such test cell calibration;
b) define the extent of work which will need to be
carried out on the Eligible Engine, its Modules and
its Parts to restore its performance such that its
maximum stabilized exhaust gas temperature should not
again exceed the Certified Limit prior to expiration
of the Period of Guarantee; and,
c) either:
c.1 Issue a credit note to AWA in an amount equal
to one hundred percent (100%) Parts Credit
Allowance and Labor Allowance for work
carried out by AWA calculated in accordance
with the V2500 Engine and Parts Service
Policy; or
c.2 make no charge for such work carried out by
IAE.
III DEFINITIONS AND GENERAL CONDITIONS
All of the Definitions and General Conditions of the V2500 Engine and
Parts Service Policy shall apply to this Guarantee. Engines excluded
by the General Conditions of the Policy shall be excluded from this
Guarantee.
IV SPECIFIC CONDITIONS
A. The Guaranteed Rate is predicated on the use by AWA of:
1. An average flight cycle of no less than 1.9hours;
2. Thrust levels which are derated an average of 10
percent for Takeoff and Climb relative to full
Takeoff and Climb ratings;
3. An average Aircraft utilization equal to or less than
3,400 flight hours per year; and
4. An Aircraft and Engine delivery schedule in respect
of 24 firm Aircraft and 6 spare Engines as described
in the Proposal or Contract to which this Guarantee
is attached.
B. IAE reserves the right to make appropriate adjustments to the
Guaranteed Rate if there is, during the Period of
Guarantee, a variation from the conditions upon which
59
the Guaranteed Rate is predicated or a discontinuation of
ownership by AWA of any Engine or any V2500 powered
Aircraft subsequent to delivery to AWA.
V EXCLUSION OF BENEFITS
The intent of this Guarantee is to provide specified benefits to AWA
as a result of the failure of Eligible Engines to achieve the
performance level stipulated in the Guarantee. It is not the intent,
however, to duplicate benefits provided to AWA under any other
applicable guarantee, sales warranty, service policy, or any special
benefit of any kind as a result of the same failure. Therefore, the
terms and conditions of this Guarantee notwithstanding, if the terms
of this Guarantee should make duplicate benefits available to AWA from
IAE or any third-party, AWA may elect to receive the benefits under
this Guarantee or under any of the other benefits described above, but
not both.