SkyWest Airlines 2015 Annual Report Download - page 14

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10
E175 aircraft to be flown for Delta will begin in August 2016, with all 19 aircraft being delivered by mid-2017. The
E175 agreement has a nine-year term for each of the aircraft subject to the agreement.
The ExpressJet Delta Connection Agreement is scheduled to terminate on December 31, 2022, subject to certain
Delta extension rights. The ExpressJet Delta Connection Agreement is subject to early termination in various
circumstances including:
• if ExpressJet or Delta commits a material breach of the ExpressJet Delta Connection Agreement, subject to
30-day notice and cure rights;
• if ExpressJet fails to conduct all flight operations and maintain all aircraft under the ExpressJet Delta
Connection Agreement in compliance in all material respects with applicable government regulations;
• if ExpressJet fails to satisfy certain performance and safety requirements;
• if, under certain circumstances, Delta has a right to terminate the SkyWest Airlines Delta Connection
Agreement;
• if the other party files for bankruptcy, reorganization or similar action (subject to limitations imposed by
the U.S. Bankruptcy Code) or if either party makes an assignment for the benefit of creditors; or
• if ExpressJet fails to maintain competitive base rate costs (provided, however, that ExpressJet has the right
to adjust its rates prior to any such termination).
SkyWest Airlines United Express Agreements
SkyWest Airlines and United are parties to two United Express agreements: a United Express agreement to
operate certain CRJ200s and CRJ700s, and a United Express agreement to operate E175 aircraft (collectively, the
“SkyWest Airlines United ExpressJet Agreements”). Under the E175 agreement, SkyWest Airlines began service in May
2014 and 40 E175 aircraft had been delivered as of December 31, 2015. We anticipate deliveries of the remaining 25
E175 aircraft will continue through 2017. The E175 agreement has a 12-year term for each of the aircraft subject to the
agreement.
The SkyWest Airlines United Express Agreements have a latest scheduled termination date in 2027. The
SkyWest Airlines United Express Agreements are subject to early termination in various circumstances including:
• if SkyWest Airlines or United fails to fulfill an obligation under the SkyWest Airlines United Express
Agreements for a period of 60 days after written notice to cure;
• if SkyWest Airlines’ operations fall below certain performance levels for a period of three consecutive
months;
• subject to limitations imposed by the U.S. Bankruptcy Code, if the other party becomes insolvent, fails to
pay its debts when due, takes action leading to its cessation as a going concern, makes an assignment of
substantially all of its assets, or ceases or suspends operations; or
• if bankruptcy proceedings are commenced against the other party (subject to limitations imposed by the
U.S. Bankruptcy Code) and certain specified conditions are not satisfied.
ExpressJet United ERJ Agreement
Effective November 12, 2010, ExpressJet Delaware and Continental entered into the ExpressJet United ERJ
Agreement, whereby ExpressJet Delaware agreed to provide regional airline service in the Continental flight system. The