Frontier Airlines 2007 Annual Report Download - page 79

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Future minimum payments under non-cancelable operating leases are as follows for the years ending December 31:
Aircraft Other Total
2008 $ 138,733 $ 12,168 $ 150,901
2009 121,257 11,613 132,870
2010 107,447 11,522 118,969
2011 99,067 11,533 110,600
2012 96,562 11,559 108,121
Thereafter 563,942 74,723 638,665
Total $ 1,127,008 $ 133,118 $ 1,260,126
As of December 31, 2007, the Company had firm orders to purchase 29 ERJ-170/175 aircraft all of which are currently
allocated to code-share agreements. The current total list price of the 29 aircraft is $899,000. The Company has received commitments
from third parties to finance all of these aircraft. During the year ended December 31, 2007, the Company paid aircraft deposits
totaling $51,414 in accordance with the aircraft commitments. Aircraft deposits are included in intangible and other assets. The
Company also has a commitment to acquire nine spare aircraft engines with a current list price of approximately $40,500. These
commitments are subject to customary closing conditions.
The Company’s firm orders and options with an aircraft manufacturer are shown below as of December 31, 2007:
Commitments as of December 31, 2007
Firm Options Total
Aircraft Orders with Aircraft Manufacturer:
ERJ-170/175 29 74 103
8. CONTINGENCIES
The Company is subject to certain legal and administrative actions which management considers routine to their business
activities. As of December 31, 2007, management believes, after consultation with legal counsel, the ultimate outcome of any pending
legal matters will not have a material adverse effect on the Company's financial position, liquidity or results of operations.
American may terminate the code-share agreement without cause upon 180 days notice, provided that such notice may not be
given prior to September 30, 2008. If American exercises this right, it is required to reimburse us for certain costs and the Company
and American have certain "put" and "call" rights with respect to the aircraft we operate for them.
If Delta exercises its partial termination right or if we terminate the code-share agreement because of Delta's bankruptcy or
insolvency, a breach of the agreement by Delta or because of an event of force majeure has occurred that continues for at least two
consecutive months, we may require Delta to either purchase or sublease any of the terminated aircraft we own at a specified price or
to assume the lease of any aircraft that we lease. If we choose not to exercise this "put" right upon any termination by Delta, Delta has
the right to require us to sell or sublease to them the terminated aircraft we own for a specified amount or to assume the leases of the
terminated aircraft that we lease. Delta may also exercise this "call" right if it terminates the code-share agreement for any of the
reasons set forth above.
United has a call option to assume our ownership or leasehold interest in certain aircraft if we wrongfully terminate the
code-share agreements or if United terminates the agreements for our breach of certain reasons.
As of December 31, 2007, approximately 77% of the Company's workforce is employed under union contracts. The union
contract for Pilots is currently amendable.
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 21, 2008 Powered by Morningstar® Document Research℠