Frontier Airlines 2008 Annual Report Download - page 78
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Commitments as of December 31, 2008
Firm Options Total
Aircraft Orders with Aircraft Manufacturer:
E170/175 3 54 57
10. CONTINGENCIES
The Company is subject to certain legal and administrative actions which management considers routine to their business
activities. As of December 31, 2008, 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 on or after September 30, 2011. 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, 2008, approximately 74% of the Company's workforce is employed under union contracts. The union
contract for pilots is currently amendable and the union contract for our flight attendants is amendable in September 2009.
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 16, 2009 Powered by Morningstar® Document Research℠