Frontier Airlines 2008 Annual Report Download - page 67

to that date.
The Delta Code-Share Agreements
As of December 31, 2008, the Company operated 24 E145 aircraft, 3 E170 aircraft, and 13 E175 aircraft for Delta. The
fixed-fee code-share agreements for the E135/145 and E170 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 E145 regional jet code-share agreement and July 2015 for the E170
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.
In July 2008, the Company entered into a letter agreement with Delta to remove the final 11 E135 aircraft from the Delta
Connection program effective September 30, 2008. The aircraft were originally scheduled to be removed between November 2008
and April 2009. Two of these aircraft were sold in 2008, and of the remaining nine E135 aircraft, eight are under an agreement to be
sold in 2009 at a specified price. The Company has classified all nine of the E135 aircraft as held for sale at their current estimated
sales price less costs to sell.
The United Code-Share Agreements
As of December 31, 2008, the Company operated seven E145 aircraft and 33 E170 aircraft for United. The E145 and E170
fixed-fee 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. In addition, under certain conditions, United may terminate the code-share agreements. In July 2008,
the Company received notice from United of their intent to terminate the E145 code-share agreement effective December 31, 2009.
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.
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 16, 2009 Powered by Morningstar® Document Research℠