Frontier Airlines 2007 Annual Report Download - page 16

Mark L. Plaumann has been a director since June 2002. He is presently a Managing-Member of Greyhawke Capital Advisors
LLC, which he co-founded in 1998. From 1995 to 1998, Mr. Plaumann was a Senior Vice President of Wexford Capital LLC. From
1990 to 1995, Mr. Plaumann was employed by Alvarez & Marsal, Inc. as a Managing Director. From 1985 to 1990, Mr. Plaumann
worked for American Healthcare Management, Inc., where he attained the position of President. From 1974 to 1985, Mr. Plaumann
worked in both the audit and consulting divisions of Ernst & Young, where he attained the position of Senior Manager and he is a
certified public accountant. Mr. Plaumann is the Chair of our Audit Committee, is an “audit committee financial expert” and is
independent as defined under applicable SEC and Nasdaq rules.
On December 3, 2007 Jay L. Maymudes resigned as a director and committee member of the Company. There were no
disagreements with the Company.
Code-Share Agreements
Through our subsidiaries, we have entered into code-share agreements with US Airways, American, Delta, United,
Continental and Frontier that authorize us to use their two-character flight designator codes (“US,” “AA,” “DL,” “UA,” “CO” and
“F9”) to identify our flights and fares in their computer reservation systems, to paint our aircraft with their colors and/or logos, to use
their service marks and to market and advertise our status as US Airways Express, AmericanConnection, Delta Connection, United
Express, Continental Express and Frontier Airlines, respectively. In connection with a marketing agreement among Delta, Continental
and Northwest Airlines, certain of the routes that we fly using Delta's and Continental’s flight designator codes are also flown under
Northwest's designator code. Under the code-share agreements between our subsidiaries and each of US Airways, American, Delta,
United, Continental and Frontier, we are compensated on a fixed-fee basis on all of our US Airways Express, AmericanConnection,
Delta Connection, United Express, Continental Express and Frontier Airlines flights. In addition, under our code-share agreements,
our passengers participate in frequent flyer programs of the Partners, and the Partners provide additional services such as reservations,
ticket issuance, ground support services, commuter slot rights and airport facilities.
US Airways Code-Share Agreements
We have entered into an Amended and Restated Jet Services Agreement with US Airways, dated April 26, 2005. The
code-share agreement provides that we will operate these aircraft to provide US Airways Express service between US Airways hubs
and cities designated by US Airways. On July 21, 2006, we amended this agreement and agreed to remove 20 ERJ-145 aircraft from
US Airways operations and transition them into operation under the Continental code-share agreement during 2007. As of December
31, 2007, all 20 aircraft have been transitioned from US Airways to Continental. As of December 31, 2007, we operated 10 ERJ-145
aircraft under this agreement.
In September 2005, we entered into a code-share agreement with US Airways to operate 28 ERJ-170 aircraft on terms
substantially similar to those of the ERJ-145 code-share agreement between us and US Airways. On July 24, 2006, we amended this
agreement to operate an additional 30 ERJ-175 aircraft. The ERJ-175 aircraft have a term of twelve years for each aircraft. As of
December 31, 2007, 20 of the ERJ-175 aircraft were in service for US Airways; the remaining 10 will be placed into service in
2008. We further amended this agreement in December 2006 to allow us the option to replace up to eight ERJ-170 aircraft with eight
ERJ-175 aircraft. As of December 31, 2007, we replaced five of the eight, such that, 23 ERJ-170 and 25 ERJ-175 aircraft were in
operation under this agreement. By the end of 2008 we anticipate having 20 ERJ-170 aircraft and 38 ERJ-175 aircraft in operation
under this agreement.
In exchange for providing the designated number of flights and performing our other obligations under the code-share
agreements, we receive compensation from US Airways three times each month in consideration for the services provided under the
code-share agreements. We receive an additional amount per available seat mile flown and may also receive incentives or pay
penalties based upon our performance, including fleet launch performance, on-time departure performance and completion percentage
rates. In addition certain of our operating costs are considered "pass through" costs whereby US Airways has agreed to reimburse us
the actual amount of costs we incur for these items. Landing fees, passenger catering, passenger liability insurance and aircraft
property tax costs are pass through costs and included in our regional airline services revenue. Beginning in May 2005, US Airways
elected to provide fuel directly for all of our US Airways operations. This change eliminated fuel expense and the related fuel
reimbursement (previously recorded as revenue). Operating margins were not affected by this change.
As of December 31, 2007, we were providing 320 flights per day as US Airways Express between New York, Boston,
Philadelphia, Pittsburgh, Indianapolis, Washington, D.C. and designated outlying cities.
The code-share agreement for the ERJ-145 aircraft terminates in March 2013. The code-share agreement for the ERJ-170
aircraft and the ERJ-175 aircraft terminates in September 2015 with respect to the ERJ-170 aircraft and twelve years from the
in-service date for each ERJ-175 aircraft. US Airways may terminate the code-share agreements at any time for cause upon not less
than 90 days notice and subject to our right to cure under the following conditions:
• if we fail to perform or observe any material covenant or condition or agreement to be performed or observed by us,
provided that if we breach any payment obligation, US Airways has the right to terminate the agreement on 10 days’ prior written
notice unless we cure such breach prior to the expiration of 10 days;
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 21, 2008 Powered by Morningstar® Document Research℠