Frontier Airlines 2008 Annual Report Download - page 23

•if there is a change in control of us.
The Frontier Code-Share Agreement
On January 11, 2007, we entered into a fixed-fee code-share agreement with Frontier. Under the terms of the agreement, we
were to provide and operate 17 E170 aircraft for Frontier.
On April 22, 2008, Frontier rejected the Airline Services Agreement. Frontier's rejection of the agreement was prompted by
its filing for Chapter 11 bankruptcy protection on April 11, 2008. As of the bankruptcy date, we were operating 12 of the 17 E170
aircraft. All 12 aircraft were removed during the second quarter of 2008.
On March 5, 2009, we agreed to a firm commitment for $40 million in post-petition debtor-in-possesion (DIP) financing to
Frontier. This new DIP facility refinances the existing DIP loan that matures in April 2009. The DIP facility is subject to approval by
the United States Bankruptcy Court for the Southern District of New York and other pre-closing conditions. Frontier and its
subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 10, 2008. As a
condition to the loan, Frontier has agreed to allow the Company's damage claim in the amount of $150 million arising out of Frontier's
rejection of the Airline Services Agreement, dated January 11, 2007.
The Midwest Code-Share Agreement
On September 3, 2008, we entered into a fixed-fee code-share agreement with Midwest Airlines. Under the terms of the
agreement, we operate 12 E170 aircraft. As of December 31, 2008, we had all 12 E170 aircraft placed into service and we provided
65 flights per day as Midwest Airlines.
Midwest purchases all capacity at predetermined rates and reimburses Republic Airline for industry standard pass through
costs. All fuel is purchased directly by Midwest and is not charged back to Republic Airline. Republic Airline was responsible for all
costs and expenses of preparing each covered aircraft prior to its being placed into service.
The term of the agreement became effective as of September 2008, and, unless earlier terminated or extended, will continue
until December 2018. Midwest has the option to extend the agreement for up to six additional years.
The agreement may be subject to early termination under various circumstances including:
• immediately, by Midwest, upon the occurrence of an event that constitutes cause, subject to prior written notice to us; or
• if either Midwest or we commit a material breach of the code-share agreement, subject to two business days notice if
we breach the agreement and five business days notice if Midwest breaches the agreement; or
• if there is a change in control of us or Midwest without the other party's prior written consent.
Midwest may elect to operate the 12 aircraft on its own operating certificate pursuant to a long-term operating lease, which
would be for a term equal to the remaining term of the airline services agreement.
-12-
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 16, 2009 Powered by Morningstar® Document Research℠