Frontier Airlines 2007 Annual Report Download - page 69

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The Delta Code-Share Agreements
The code-share agreements for the ERJ-135/145 and ERJ-170 aircraft terminate in May 2016 and January 2019, respectively.
Delta may terminate the code-share agreements at any time, with or without cause, if it provides the Company 180 days written notice,
provided that such notice shall not be given prior to November 2009 for the ERJ-145 regional jet code-share agreement and July 2015
for the ERJ-170 regional jet code-share agreement. If Delta does choose to eliminate any aircraft at that time, it may not reduce the
number of aircraft in service to less than 12 during the 12-month period following the 180 day initial notice period unless it
completely terminates the code-share agreement.
If Delta exercises this right under either agreement or if the Company terminates either agreement for cause, the Company
has the right to require Delta either to purchase, sublease or assume the lease of aircraft leased by the Company with respect to any of
the aircraft the Company previously operated for Delta under that agreement. If the Company chooses not to exercise this right, or if
Delta terminates either agreement for cause, Delta may require the Company to sell or sublease to it or Delta may assume the lease of
aircraft leased by the Company with respect to any of the aircraft the Company previously operated for it under that agreement.
The United Code-Share Agreements
The ERJ-145 and ERJ-170 code-share agreements terminate on June 30, 2014 and June 30, 2019, respectively. United has the
option of extending each agreement for five years or less; however, the ERJ-145 code-share agreement may be terminated by United
or the Company upon 18 months prior written notice provided that such notice shall not be delivered by United prior to December 31,
2007, and by the Company prior to December 31, 2008. In addition, under certain conditions, United may terminate the code-share
agreements.
United has a call option to assume the Company’s ownership or leasehold interest in certain aircraft if the Company
wrongfully terminates the code-share agreements or if United terminates the agreements for the Company’s breach for certain reasons.
The Continental Code-Share Agreements
The CRJ-200 aircraft are operated under the code-share agreement on terms generally equivalent to the CRJ-200 leases,
which vary from two to five years. The ERJ-145 aircraft have a term of three to five years. Under certain circumstances, Continental
may extend the term on the aircraft up to five additional years. The term of the agreement is effective as of January 8, 2007 and,
unless earlier terminated or extended, will continue until July, 2012.
The Frontier Code-Share Agreements
On January 11, 2007, we entered into an air services agreement with Frontier. Under the agreement, we will provide and
operate 17 ERJ-170 aircraft for Frontier. The first aircraft was placed into service in March 2007 and the last aircraft is expected to be
placed into service in December 2008. The agreement has a term of eleven years from the date of the last aircraft delivery. Frontier
has the option to extend the agreement for up to six additional years. The term of the agreement became effective as of March 2007,
and, unless earlier terminated or extended, will continue until December 2019.
Concentrations
The following sets forth our Partners’ regional airline services revenue and accounts receivable as a percentage of total
regional airline services revenue and net receivables:
Regional airline services
revenues for the years ended: Delta United
US
Airways American Continental Frontier
December 31, 2007 33% 24% 22% 9% 10% 2%
December 31, 2006 35 30 24 11 — —
December 31, 2005 34 32 21 13 — —
Receivables as of:
December 31, 2007 3% 18% 18% 18% 4% 2%
December 31, 2006 4 19 31 16 — —
For the years ended December 31, 2007, 2006 and 2005, substantially all of the Company's revenue is derived from
agreements with its Partners. Termination of any of these code-share agreements could have a material adverse effect on the
Company's financial position, results of operations and cash flows.
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 21, 2008 Powered by Morningstar® Document Research℠