Frontier Airlines 2006 Annual Report Download - page 251

differences between a “wet lease” arrangement and a capacity purchase arrangement), and such “wet lease” shall supersede the
capacity purchase provisions of this Agreement with respect to such Covered Aircraft. In such event, RAI's compensation hereunder,
including without limitation in this Article II, in Article III and in Exhibit D, shall be adjusted so that RAI's aggregate compensation
from such “wet lease” arrangements and the capacity purchase arrangements applicable to the remaining Covered Aircraft are equal to
the amount of RAI's aggregate compensation had no such “wet lease” arrangements been entered into.
(d) Start Up Dates. The Covered Aircraft shall be placed into service under the terms and conditions of this
Agreement on such dates as are provided on Exhibit B.
(e) Spare Aircraft. The Spare Aircraft constituting a Covered Aircraft shall be used by RAI solely as an
operational and maintenance spare to replace Covered Aircraft that are out of service due to scheduled maintenance or to cover for
other irregular operations, provided, RAI may use the Spare Aircraft for flights operated for its own benefit or to cover flights for any
other airline subject to the following conditions:
(1) Frontier will have the right to designate which of the first twelve Covered Aircraft will be the Spare
Aircraft no later than the inservice date of the twelfth Covered Aircraft, such designation to be provided to RAI in writing no
fewer than 90 days prior to the inservice date of the aircraft to be designated as the Spare Aircraft.
(2) The Spare Aircraft will be in a neutral livery as set forth in Exhibit C to this Agreement and
configured in accordance with the Frontier specifications set forth in Exhibit C and its principal base of operations will be
Denver International Airport.
(3) The Spare Aircraft will be pooled with other neutral spare aircraft operated by RAI for other air
carriers (the “Pool Participants”) and will be available for use by RAI to cover flying for Pool Participants due to irregular
operations, aircraft damage, or maintenance events incurred by Pool Participants. RAI shall give Frontier notice of its intent
to use the Spare Aircraft as early as operationally possible. If necessary, Frontier will apprise RAI of its operational situation
related to re-deployment of the Spare Aircraft. Nothwithstanding the above, Frontier acknowledges and agrees that RAI will
at all times retain operational control of the Spare Aircraft.
(4) Regardless of RAI’s use of the Spare Aircraft to cover flights of Pool Participants, the Spare Aircraft
will be considered a Covered Aircraft for purposes of calculating Frontier’s Fixed Costs. Frontier will not be obligated to pay
or reimburse RAI for any Variable Costs or Pass-Thru Costs relating to (i) the ferrying of the Spare Aircraft to and from
locations necessary to cover flying for other Pool Participants, or (ii) the covered flying itself. Fixed Costs, Variable Costs
and Pass-Thru Costs as used in this paragraph are as described on Exhibit D.
(5) In consideration of Frontier making the Spare Aircraft available for flights operated by Pool
Participants according to this Section, Frontier will be entitled to use the neutral spare aircraft contributed to the pool by other
Pool Participants, provided, Frontier will be responsible for the payment of Variable Costs and Pass-Thru Costs relating to (i)
the ferrying of the neutral spare aircraft to and from the location necessary to cover for Frontier Scheduled Flights, and (ii)
the covered Scheduled Flights, provided further, Frontier will not be responsible under Section 2.01 (e)(5)(i) if the neutral
aircraft is being ferried to cover for flights canceled or delayed due to aircraft damage caused by RAI, its agents, contractors
or employees.
(6) Frontier will have the right, in its sole discretion, to remove the Spare Aircraft from the neutral spare
pool at any time during the period from the date the Spare Aircraft first entered the neutral aircraft pool until the first
anniversary thereof by providing RAI with 30 days advance written notice. Should the Spare Aircraft be removed from the
neutral aircraft pool, (i) RAI will incur all costs to convert the aircraft livery to the Frontier livery set forth in Exhibit C, and
(ii) from and after the date of removal, the Spare Aircraft will be dedicated to supporting Frontier’s Scheduled Flights and
will no longer be available for use by RAI to cover flights for itself or any other airline and Frontier shall no longer have the
use of the neutral spare aircraft of any Pool Participant for Regional Airline Services.
(f) Fleet Expansion. During the term of this Agreement, RAI will advise Frontier of any regional jet aircraft that
RAI believes will become available, whether due to RAI option positions, the return of aircraft previously in service for another
airline, or the removal of the aircraft from RAI's own fleet, or otherwise, for potential inclusion in the Frontier fleet of Covered
Aircraft. Notwithstanding the foregoing, such regional jet aircraft shall only be deemed a Covered Aircraft upon an amendment to this
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 15, 2007 Powered by Morningstar® Document Research℠