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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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Or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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(Do not check if a smaller reporting company)
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Table of Contents
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Page
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Atlanta, Georgia
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/s/ Ernst & Young LLP
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July 14, 2016
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(in millions, except share data)
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June 30,
2016 |
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December 31,
2015 |
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ASSETS
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|||||||
Current Assets:
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||||
Cash and cash equivalents
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$
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1,662
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$
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1,972
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Short-term investments
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1,289
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1,465
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Accounts receivable, net of an allowance for uncollectible accounts of $11 and $9 at June 30, 2016 and
December 31, 2015, respectively
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2,102
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2,020
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Fuel inventory
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455
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379
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Expendable parts and supplies inventories, net of an allowance for obsolescence of $103 and $114 at June 30, 2016
and December 31, 2015, respectively
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340
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318
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Hedge derivatives asset
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773
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1,987
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Prepaid expenses and other
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1,017
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915
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Total current assets
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7,638
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9,056
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Property and Equipment, Net:
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Property and equipment, net of accumulated depreciation and amortization of $11,711 and $10,871
at June 30, 2016 and December 31, 2015, respectively
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23,975
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23,039
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Other Assets:
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Goodwill
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9,794
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9,794
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Identifiable intangibles, net of accumulated amortization of $820 and $811 at June 30, 2016
and December 31, 2015, respectively
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4,852
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4,861
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Deferred income taxes, net
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3,797
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4,956
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Other noncurrent assets
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1,578
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1,428
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Total other assets
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20,021
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21,039
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Total assets
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$
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51,634
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$
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53,134
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LIABILITIES AND STOCKHOLDERS' EQUITY
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|||||||
Current Liabilities:
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||||
Current maturities of long-term debt and capital leases
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$
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1,115
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$
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1,563
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Air traffic liability
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5,955
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4,503
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Accounts payable
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2,956
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2,743
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Accrued salaries and related benefits
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2,237
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3,195
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Hedge derivatives liability
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895
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2,581
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Frequent flyer deferred revenue
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1,589
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1,635
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Other accrued liabilities
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1,503
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1,306
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Total current liabilities
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16,250
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17,526
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Noncurrent Liabilities:
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Long-term debt and capital leases
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6,689
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6,766
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Pension, postretirement and related benefits
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12,576
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13,855
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Frequent flyer deferred revenue
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2,294
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2,246
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Other noncurrent liabilities
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2,015
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1,891
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Total noncurrent liabilities
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23,574
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24,758
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Commitments and Contingencies
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Stockholders' Equity:
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Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 762,988,573 and 799,850,675
shares issued at June 30, 2016 and December 31, 2015, respectively
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—
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—
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Additional paid-in capital
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9,361
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10,875
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Retained earnings
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10,000
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7,623
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Accumulated other comprehensive loss
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(7,279
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)
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(7,275
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)
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Treasury stock, at cost, 14,080,895 and 21,066,684 shares at June 30, 2016 and December 31, 2015, respectively
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(272
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)
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(373
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)
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Total stockholders' equity
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11,810
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10,850
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Total liabilities and stockholders' equity
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$
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51,634
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$
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53,134
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The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
(in millions, except per share data)
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2016
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2015
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2016
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2015
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||||||||
Operating Revenue:
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Passenger:
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Mainline
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$
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7,471
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$
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7,587
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$
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13,915
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$
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14,136
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Regional carriers
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1,499
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1,552
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2,817
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2,926
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Total passenger revenue
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8,970
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9,139
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16,732
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17,062
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Cargo
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165
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207
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327
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424
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Other
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1,312
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1,361
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2,639
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2,609
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Total operating revenue
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10,447
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10,707
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19,698
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20,095
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Operating Expense:
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Salaries and related costs
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2,391
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2,195
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4,702
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4,287
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Aircraft fuel and related taxes
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1,228
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1,457
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2,455
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3,292
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Regional carriers expense
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1,096
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1,097
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2,102
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2,150
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Contracted services
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484
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457
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960
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898
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Depreciation and amortization
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470
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448
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956
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918
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Aircraft maintenance materials and outside repairs
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446
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499
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895
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951
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Passenger commissions and other selling expenses
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437
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421
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825
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807
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Landing fees and other rents
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376
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388
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724
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761
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Profit sharing
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324
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|
|
411
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596
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|
547
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|
||||
Passenger service
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221
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|
|
227
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|
|
410
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|
|
417
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|
||||
Aircraft rent
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66
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|
|
60
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132
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|
|
120
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|
||||
Other
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485
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|
|
573
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|
|
978
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|
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1,075
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|
||||
Total operating expense
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8,024
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8,233
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15,735
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16,223
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Operating Income
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2,423
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|
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2,474
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3,963
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3,872
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Non-Operating Expense:
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||||||||
Interest expense, net
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(93
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)
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(127
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)
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(200
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)
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(258
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)
|
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Miscellaneous, net
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20
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19
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21
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(62
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)
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Total non-operating expense, net
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(73
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)
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(108
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)
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(179
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)
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(320
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)
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Income Before Income Taxes
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2,350
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|
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2,366
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3,784
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|
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3,552
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|
||||
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||||||||
Income Tax Provision
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(804
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)
|
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(881
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)
|
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(1,292
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)
|
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(1,321
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)
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||||
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|
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|
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||||||||
Net Income
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$
|
1,546
|
|
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$
|
1,485
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|
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$
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2,492
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|
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$
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2,231
|
|
|
|
|
|
|
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||||||||
Basic Earnings Per Share
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$
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2.04
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|
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$
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1.85
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|
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$
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3.25
|
|
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$
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2.75
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Diluted Earnings Per Share
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$
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2.03
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$
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1.83
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|
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$
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3.23
|
|
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$
|
2.72
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Cash Dividends Declared Per Share
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$
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0.135
|
|
|
$
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0.09
|
|
|
$
|
0.27
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
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||||||||
Comprehensive Income
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$
|
1,546
|
|
|
$
|
1,491
|
|
|
$
|
2,488
|
|
|
$
|
2,254
|
|
|
|
|
|
|
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The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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Six Months Ended June 30,
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||||||
(in millions)
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2016
|
|
2015
|
||||
Net Cash Provided by Operating Activities
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$
|
4,226
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|
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$
|
4,381
|
|
|
|
|
|
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Cash Flows from Investing Activities:
|
|
|
|
||||
Property and equipment additions:
|
|
|
|
||||
Flight equipment, including advance payments
|
(1,644
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)
|
|
(1,177
|
)
|
||
Ground property and equipment, including technology
|
(273
|
)
|
|
(328
|
)
|
||
Purchase of short-term investments
|
(866
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)
|
|
(613
|
)
|
||
Redemption of short-term investments
|
1,051
|
|
|
334
|
|
||
Other, net
|
19
|
|
|
17
|
|
||
Net cash used in investing activities
|
(1,713
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)
|
|
(1,767
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)
|
||
|
|
|
|
||||
Cash Flows from Financing Activities:
|
|
|
|
||||
Payments on long-term debt and capital lease obligations
|
(1,149
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)
|
|
(634
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)
|
||
Repurchase of common stock
|
(1,801
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)
|
|
(1,350
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)
|
||
Cash dividends
|
(210
|
)
|
|
(147
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)
|
||
Fuel card obligation
|
4
|
|
|
(320
|
)
|
||
Payments on hedge derivative contracts
|
(205
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)
|
|
—
|
|
||
Proceeds from hedge derivative contracts
|
46
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|
|
—
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|
||
Proceeds from short-term obligations
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68
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|
|
—
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|
||
Proceeds from long-term obligations
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450
|
|
|
41
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|
||
Other, net
|
(26
|
)
|
|
1
|
|
||
Net cash used in financing activities
|
(2,823
|
)
|
|
(2,409
|
)
|
||
|
|
|
|
||||
Net (Decrease) Increase in Cash and Cash Equivalents
|
(310
|
)
|
|
205
|
|
||
Cash and cash equivalents at beginning of period
|
1,972
|
|
|
2,088
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,662
|
|
|
$
|
2,293
|
|
|
|
|
|
||||
Non-Cash Transactions:
|
|
|
|
||||
Treasury stock contributed to our qualified defined benefit pension plans
|
$
|
350
|
|
|
$
|
—
|
|
Flight equipment acquired under capital leases
|
50
|
|
|
65
|
|
||
|
|
|
|
||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
|
(in millions)
|
June 30,
2016 |
Level 1
|
Level 2
|
||||||
Cash equivalents
|
$
|
1,058
|
|
$
|
1,058
|
|
$
|
—
|
|
Short-term investments
|
|
|
|
||||||
U.S. government and agency securities
|
191
|
|
167
|
|
24
|
|
|||
Asset- and mortgage-backed securities
|
252
|
|
—
|
|
252
|
|
|||
Corporate obligations
|
785
|
|
—
|
|
785
|
|
|||
Other fixed income securities
|
61
|
|
—
|
|
61
|
|
|||
Restricted cash equivalents and investments
|
62
|
|
62
|
|
—
|
|
|||
Long-term investments
|
154
|
|
128
|
|
26
|
|
|||
Hedge derivatives, net
|
|
|
|
||||||
Fuel hedge contracts
|
(239
|
)
|
11
|
|
(250
|
)
|
|||
Interest rate contract
|
11
|
|
—
|
|
11
|
|
|||
Foreign currency exchange contracts
|
(79
|
)
|
—
|
|
(79
|
)
|
(in millions)
|
December 31,
2015 |
Level 1
|
Level 2
|
||||||
Cash equivalents
|
$
|
1,543
|
|
$
|
1,543
|
|
$
|
—
|
|
Short-term investments
|
|
|
|
|
|||||
U.S. government and agency securities
|
151
|
|
74
|
|
77
|
|
|||
Asset- and mortgage-backed securities
|
380
|
|
—
|
|
380
|
|
|||
Corporate obligations
|
896
|
|
—
|
|
896
|
|
|||
Other fixed income securities
|
38
|
|
—
|
|
38
|
|
|||
Restricted cash equivalents and investments
|
49
|
|
49
|
|
—
|
|
|||
Long-term investments
|
155
|
|
130
|
|
25
|
|
|||
Hedge derivatives, net
|
|
|
|
||||||
Fuel hedge contracts
|
(672
|
)
|
65
|
|
(737
|
)
|
|||
Interest rate contract
|
(3
|
)
|
—
|
|
(3
|
)
|
|||
Foreign currency exchange contracts
|
94
|
|
—
|
|
94
|
|
•
|
Fuel Contracts.
Our fuel hedge portfolio consists of options, swaps and futures. The hedge contracts include crude oil, diesel fuel and jet fuel, as these commodities are highly correlated with the price of jet fuel that we consume. Option contracts are valued under an income approach using option pricing models based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets. Volatilities used in these valuations ranged from
21%
to
49%
depending on the maturity dates, underlying commodities and strike prices of the option contracts. Swap contracts are valued under an income approach using a discounted cash flow model based on data either readily observable or provided by counterparties who regularly trade in public markets. Discount rates used in these valuations vary with the maturity dates of the respective contracts and are based on the London interbank offered rate ("LIBOR"). Futures contracts and options on futures contracts are traded on a public exchange and valued based on quoted market prices.
|
•
|
Interest Rate Contract.
Our interest rate derivative is a swap contract, which is valued based on data readily observable in public markets.
|
•
|
Foreign Currency Exchange Contracts.
Our foreign currency derivatives consist of Japanese yen and Canadian dollar forward contracts and are valued based on data readily observable in public markets.
|
(in millions)
|
Available-For-Sale
|
||||
Due in one year or less
|
$
|
231
|
|
||
Due after one year through three years
|
854
|
|
|||
Due after three years through five years
|
164
|
|
|||
Due after five years
|
40
|
|
|||
Total
|
$
|
1,289
|
|
•
|
Aeroméxico
. We own
4.1%
of the outstanding shares of Grupo Aeroméxico and we have a derivative contract that may be settled for the underlying shares representing an additional
8.1%
of Grupo Aeroméxico outstanding shares.
During 2015, we announced our intention to acquire additional shares of the capital stock of Grupo Aeroméxico through a cash tender offer, subject to regulatory approvals. If approved, the tender offer is expected to occur during the second half of 2016.
As a result of this tender offer, when combined with our current holdings, we would own up to 49% of the outstanding capital stock of Grupo Aeroméxico.
Based on current exchange rates, the total amount to be paid for the additional shares and the shares underlying the derivative would be approximately $700 million.
|
•
|
GOL.
During 2015, we acquired
preferred shares of GOL's parent company
, increasing our ownership to
9.5%
of GOL's outstanding capital stock.
Additionally, GOL entered into a
$300 million
five
-year term loan facility with third parties,
which we have guaranteed.
Our entire guaranty is secured by GOL's ownership interest in Smiles, GOL's publicly traded loyalty program.
Because GOL remains in compliance with the terms of its loan facility, we have not recorded a liability on our Consolidated Balance Sheet as of
June 30, 2016
.
|
•
|
China Eastern.
During 2015, we acquired shares of China Eastern
, which provided us with a
3.5%
stake in the airline
. In conjunction with this transaction, we and China Eastern entered into a new commercial agreement to expand our relationship and better connect the networks of the two airlines.
As the investment agreement restricts our sale or transfer of these shares for a period of
three
years, we will account for the investment at cost during this period. Although China Eastern shares are actively traded on a public exchange, it is not practicable to estimate the fair value of the investment due to the restriction on our ability to sell or transfer the shares.
|
(1)
|
As discussed above, we have early settled $455 million of our airline segment's 2016 hedge positions and entered into hedges designed to offset and effectively terminate our 2017 airline segment hedge positions. The dollar amounts shown above primarily represent the offsetting derivatives that were used to neutralize the 2016 and 2017 hedge portfolio.
|
(in millions)
|
Hedge Derivatives Asset
|
Other Noncurrent Assets
|
Hedge Derivatives Liability
|
Other Noncurrent Liabilities
|
Hedge Derivatives, net
|
||||||||||
June 30, 2016
|
|
|
|
|
|
||||||||||
Net derivative contracts
|
$
|
42
|
|
$
|
8
|
|
$
|
(164
|
)
|
$
|
(193
|
)
|
$
|
(307
|
)
|
December 31, 2015
|
|
|
|
|
|
||||||||||
Net derivative contracts
|
$
|
143
|
|
$
|
21
|
|
$
|
(737
|
)
|
$
|
(8
|
)
|
$
|
(581
|
)
|
|
Effective Portion Reclassified from AOCI to Earnings
|
|
Effective Portion Recognized in Other Comprehensive Income
|
||||||||||
(in millions)
|
2016
|
2015
|
|
2016
|
2015
|
||||||||
Three Months Ended June 30,
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
12
|
|
$
|
41
|
|
|
$
|
(63
|
)
|
$
|
(36
|
)
|
Six Months Ended June 30,
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
36
|
|
$
|
92
|
|
|
$
|
(145
|
)
|
$
|
(52
|
)
|
(in millions)
|
June 30,
2016 |
December 31,
2015 |
||||
Total debt at par value
|
$
|
7,609
|
|
$
|
8,098
|
|
Unamortized discount and debt issue cost, net
|
(117
|
)
|
(152
|
)
|
||
Net carrying amount
|
$
|
7,492
|
|
$
|
7,946
|
|
|
|
|
||||
Fair value
|
$
|
7,900
|
|
$
|
8,400
|
|
|
Pension Benefits
|
Other Postretirement and Postemployment Benefits
|
||||||||||
(in millions)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Three Months Ended June 30,
|
|
|
|
|
||||||||
Service cost
|
$
|
—
|
|
$
|
—
|
|
$
|
17
|
|
$
|
16
|
|
Interest cost
|
229
|
|
221
|
|
37
|
|
35
|
|
||||
Expected return on plan assets
|
(226
|
)
|
(220
|
)
|
(18
|
)
|
(20
|
)
|
||||
Amortization of prior service credit
|
—
|
|
—
|
|
(7
|
)
|
(7
|
)
|
||||
Recognized net actuarial loss
|
59
|
|
58
|
|
6
|
|
6
|
|
||||
Net periodic cost
|
$
|
62
|
|
$
|
59
|
|
$
|
35
|
|
$
|
30
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30,
|
|
|
|
|
||||||||
Service cost
|
$
|
—
|
|
$
|
—
|
|
$
|
34
|
|
$
|
32
|
|
Interest cost
|
458
|
|
442
|
|
74
|
|
70
|
|
||||
Expected return on plan assets
|
(452
|
)
|
(440
|
)
|
(36
|
)
|
(40
|
)
|
||||
Amortization of prior service credit
|
—
|
|
—
|
|
(14
|
)
|
(14
|
)
|
||||
Recognized net actuarial loss
|
118
|
|
116
|
|
12
|
|
12
|
|
||||
Net periodic cost
|
$
|
124
|
|
$
|
118
|
|
$
|
70
|
|
$
|
60
|
|
(in millions)
|
Total
|
||
Six months ending December 31, 2016
|
$
|
1,050
|
|
2017
|
2,720
|
|
|
2018
|
3,270
|
|
|
2019
|
3,140
|
|
|
2020
|
2,320
|
|
|
Thereafter
|
3,480
|
|
|
Total
|
$
|
15,980
|
|
Aircraft Type
|
|
Purchase Commitments
|
|
B-737-900ER
|
|
60
|
|
B-787-8
|
|
18
|
|
A321-200
|
|
77
|
|
A330-300
|
|
2
|
|
A330-900neo
|
|
25
|
|
A350-900
|
|
25
|
|
CS100
|
|
75
|
|
E190-100
|
|
16
|
|
Total
|
|
298
|
|
(in millions)
|
Pension and Other Benefits Liabilities
(2)
|
Derivative Contracts
|
Investments
|
Total
|
||||||||
Balance at January 1, 2016 (net of tax effect of $1,222)
|
$
|
(7,354
|
)
|
$
|
140
|
|
$
|
(61
|
)
|
$
|
(7,275
|
)
|
Changes in value (net of tax effect of $42)
|
—
|
|
(69
|
)
|
16
|
|
(53
|
)
|
||||
Reclassifications into earnings (net of tax effect of $29)
(1)
|
72
|
|
(23
|
)
|
—
|
|
49
|
|
||||
Balance at June 30, 2016 (net of tax effect of $1,235)
|
$
|
(7,282
|
)
|
$
|
48
|
|
$
|
(45
|
)
|
$
|
(7,279
|
)
|
(in millions)
|
Pension and Other Benefits Liabilities
(2)
|
Derivative Contracts
|
Investments
|
Total
|
||||||||
Balance at January 1, 2015 (net of tax effect of $1,279)
|
$
|
(7,517
|
)
|
$
|
222
|
|
$
|
(16
|
)
|
$
|
(7,311
|
)
|
Changes in value (net of tax effect of $15)
|
—
|
|
25
|
|
(19
|
)
|
6
|
|
||||
Reclassifications into earnings (net of tax effect of $10)
(1)
|
75
|
|
(58
|
)
|
—
|
|
17
|
|
||||
Balance at June 30, 2015 (net of tax effect of $1,254)
|
$
|
(7,442
|
)
|
$
|
189
|
|
$
|
(35
|
)
|
$
|
(7,288
|
)
|
(1)
|
Amounts reclassified from AOCI for pension and other benefits liabilities are recorded in salaries and related costs in the Condensed Consolidated Statements of Operations and Comprehensive Income. Amounts reclassified from AOCI for derivative contracts designated as foreign currency cash flow hedges are recorded in passenger revenue in the Condensed Consolidated Statements of Operations and Comprehensive Income.
|
(2)
|
Includes $
1.9 billion
of deferred income tax expense primarily related to pension obligations that will not be recognized in net income until the pension obligations are fully extinguished.
|
(in millions)
|
Airline
|
Refinery
|
|
Intersegment Sales/Other
|
|
Consolidated
|
||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
10,398
|
|
$
|
1,027
|
|
|
|
|
$
|
10,447
|
|
||
Sales to airline segment
|
|
|
|
$
|
(178
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(745
|
)
|
(2)
|
|
|||||||
Sales of refined products to third parties
|
|
|
|
(55
|
)
|
(3)
|
|
|||||||
Operating income
|
2,433
|
|
(10
|
)
|
|
—
|
|
|
2,423
|
|
||||
Interest expense, net
|
92
|
|
1
|
|
|
—
|
|
|
93
|
|
||||
Depreciation and amortization
|
461
|
|
9
|
|
|
—
|
|
|
470
|
|
||||
Total assets, end of period
|
50,213
|
|
1,421
|
|
|
—
|
|
|
51,634
|
|
||||
Capital expenditures
|
1,026
|
|
20
|
|
|
—
|
|
|
1,046
|
|
||||
|
|
|
|
|
|
|
||||||||
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
10,592
|
|
$
|
1,357
|
|
|
|
|
$
|
10,707
|
|
||
Sales to airline segment
|
|
|
|
$
|
(292
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(858
|
)
|
(2)
|
|
|||||||
Sales of refined products to third parties
|
|
|
|
(92
|
)
|
(3)
|
|
|||||||
Operating income
(4)
|
2,384
|
|
90
|
|
|
—
|
|
|
2,474
|
|
||||
Interest expense, net
|
127
|
|
—
|
|
|
—
|
|
|
127
|
|
||||
Depreciation and amortization
|
440
|
|
8
|
|
|
—
|
|
|
448
|
|
||||
Total assets, end of period
|
51,508
|
|
1,173
|
|
|
—
|
|
|
52,681
|
|
||||
Capital expenditures
|
906
|
|
13
|
|
|
—
|
|
|
919
|
|
(1)
|
Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery.
|
(2)
|
Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.
|
(3)
|
Represents sales of refined products to third parties. These sales were at or near cost; accordingly, the margin on these sales is de minimis.
|
(4)
|
Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk.
|
(in millions)
|
Airline
|
Refinery
|
|
Intersegment Sales/Other
|
|
Consolidated
|
||||||||
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
19,570
|
|
$
|
1,792
|
|
|
|
|
$
|
19,698
|
|
||
Sales to airline segment
|
|
|
|
$
|
(322
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(1,271
|
)
|
(2)
|
|
|||||||
Sales of refined products to third parties
|
|
|
|
(71
|
)
|
(3)
|
|
|||||||
Operating income
(4)
|
4,001
|
|
(38
|
)
|
|
—
|
|
|
3,963
|
|
||||
Interest expense, net
|
199
|
|
1
|
|
|
—
|
|
|
200
|
|
||||
Depreciation and amortization
|
938
|
|
18
|
|
|
—
|
|
|
956
|
|
||||
Capital expenditures
|
1,884
|
|
33
|
|
|
—
|
|
|
1,917
|
|
||||
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
19,906
|
|
$
|
2,497
|
|
|
|
|
$
|
20,095
|
|
||
Sales to airline segment
|
|
|
|
$
|
(525
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(1,640
|
)
|
(2)
|
|
|||||||
Sales of refined products to third parties
|
|
|
|
(143
|
)
|
(3)
|
|
|||||||
Operating income
(4)
|
3,696
|
|
176
|
|
|
—
|
|
|
3,872
|
|
||||
Interest expense, net
|
258
|
|
—
|
|
|
—
|
|
|
258
|
|
||||
Depreciation and amortization
|
903
|
|
15
|
|
|
—
|
|
|
918
|
|
||||
Capital expenditures
|
1,485
|
|
20
|
|
|
—
|
|
|
1,505
|
|
(1)
|
Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery.
|
(2)
|
Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.
|
(3)
|
Represents sales of refined products to third parties. These sales were at or near cost; accordingly, the margin on these sales is de minimis.
|
(4)
|
Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk.
|
(in millions)
|
Severance and Related Costs
|
Lease Restructuring
|
||||
Liability as of January 1, 2016
|
$
|
52
|
|
$
|
415
|
|
Additional costs and expenses
|
8
|
|
—
|
|
||
Payments
|
(46
|
)
|
(44
|
)
|
||
Liability as of June 30, 2016
|
$
|
14
|
|
$
|
371
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
(in millions, except per share data)
|
2016
|
2015
|
|
2016
|
2015
|
||||||||
Net income
|
$
|
1,546
|
|
$
|
1,485
|
|
|
$
|
2,492
|
|
$
|
2,231
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
758
|
|
803
|
|
|
766
|
|
811
|
|
||||
Dilutive effect of share-based awards
|
5
|
|
8
|
|
|
6
|
|
8
|
|
||||
Diluted weighted average shares outstanding
|
763
|
|
811
|
|
|
772
|
|
819
|
|
||||
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
2.04
|
|
$
|
1.85
|
|
|
$
|
3.25
|
|
$
|
2.75
|
|
Diluted earnings per share
|
$
|
2.03
|
|
$
|
1.83
|
|
|
$
|
3.23
|
|
$
|
2.72
|
|
|
Three Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2016
|
2015
|
|||||||||
Passenger:
|
|
|
|
|
|||||||
Mainline
|
$
|
7,471
|
|
$
|
7,587
|
|
$
|
(116
|
)
|
(1.5
|
)%
|
Regional carriers
|
1,499
|
|
1,552
|
|
(53
|
)
|
(3.4
|
)%
|
|||
Total passenger revenue
|
8,970
|
|
9,139
|
|
(169
|
)
|
(1.8
|
)%
|
|||
Cargo
|
165
|
|
207
|
|
(42
|
)
|
(20.3
|
)%
|
|||
Other
|
1,312
|
|
1,361
|
|
(49
|
)
|
(3.6
|
)%
|
|||
Total operating revenue
|
$
|
10,447
|
|
$
|
10,707
|
|
$
|
(260
|
)
|
(2.4
|
)%
|
|
|
Increase (Decrease)
vs. Three Months Ended June 30, 2015
|
||||||||||||||
(in millions)
|
Three Months Ended June 30, 2016
|
Passenger Revenue
|
RPMs
(1)
(Traffic)
|
ASMs
(2)
(Capacity)
|
Passenger Mile Yield
|
PRASM
|
Load Factor
|
|||||||||
Mainline
|
$
|
4,721
|
|
0.2
|
%
|
4.8
|
%
|
5.6
|
%
|
(4.4
|
)%
|
(5.2
|
)%
|
(0.7
|
)
|
pts
|
Regional carriers
|
1,499
|
|
(3.4
|
)%
|
2.1
|
%
|
3.2
|
%
|
(5.4
|
)%
|
(6.4
|
)%
|
(0.8
|
)
|
pts
|
|
Domestic
|
6,220
|
|
(0.7
|
)%
|
4.3
|
%
|
5.2
|
%
|
(4.8
|
)%
|
(5.6
|
)%
|
(0.8
|
)
|
pts
|
|
Atlantic
|
1,511
|
|
(2.6
|
)%
|
1.1
|
%
|
2.0
|
%
|
(3.6
|
)%
|
(4.4
|
)%
|
(0.7
|
)
|
pts
|
|
Pacific
|
662
|
|
(8.3
|
)%
|
(1.4
|
)%
|
(3.4
|
)%
|
(7.0
|
)%
|
(5.1
|
)%
|
1.8
|
|
pts
|
|
Latin America
|
577
|
|
(4.0
|
)%
|
4.1
|
%
|
0.9
|
%
|
(7.8
|
)%
|
(4.9
|
)%
|
2.6
|
|
pts
|
|
Total
|
$
|
8,970
|
|
(1.8
|
)%
|
3.0
|
%
|
3.2
|
%
|
(4.7
|
)%
|
(4.9
|
)%
|
(0.1
|
)
|
pts
|
(1)
|
Revenue passenger miles (“RPMs”)
|
(2)
|
Available seat miles (“ASMs”)
|
|
Three Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2016
|
2015
|
|||||||||
Salaries and related costs
|
$
|
2,391
|
|
$
|
2,195
|
|
$
|
196
|
|
8.9
|
%
|
Aircraft fuel and related taxes
|
1,228
|
|
1,457
|
|
(229
|
)
|
(15.7
|
)%
|
|||
Regional carriers expense
|
1,096
|
|
1,097
|
|
(1
|
)
|
(0.1
|
)%
|
|||
Contracted services
|
484
|
|
457
|
|
27
|
|
5.9
|
%
|
|||
Depreciation and amortization
|
470
|
|
448
|
|
22
|
|
4.9
|
%
|
|||
Aircraft maintenance materials and outside repairs
|
446
|
|
499
|
|
(53
|
)
|
(10.6
|
)%
|
|||
Passenger commissions and other selling expenses
|
437
|
|
421
|
|
16
|
|
3.8
|
%
|
|||
Landing fees and other rents
|
376
|
|
388
|
|
(12
|
)
|
(3.1
|
)%
|
|||
Profit sharing
|
324
|
|
411
|
|
(87
|
)
|
(21.2
|
)%
|
|||
Passenger service
|
221
|
|
227
|
|
(6
|
)
|
(2.6
|
)%
|
|||
Aircraft rent
|
66
|
|
60
|
|
6
|
|
10.0
|
%
|
|||
Other
|
485
|
|
573
|
|
(88
|
)
|
(15.4
|
)%
|
|||
Total operating expense
|
$
|
8,024
|
|
$
|
8,233
|
|
$
|
(209
|
)
|
(2.5
|
)%
|
|
Three Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2016
|
2015
|
|||||||||
Aircraft fuel and related taxes
(1)
|
$
|
1,228
|
|
$
|
1,457
|
|
$
|
(229
|
)
|
|
|
Aircraft fuel and related taxes included within regional carriers expense
|
219
|
|
295
|
|
(76
|
)
|
|
||||
Total fuel expense
|
$
|
1,447
|
|
$
|
1,752
|
|
$
|
(305
|
)
|
(17.4
|
)%
|
(1)
|
Includes the impact of fuel hedging and refinery results described further in the table below.
|
|
|
Average Price Per Gallon
|
||||||||||||||||
|
Three Months Ended June 30,
|
Change
|
Three Months Ended June 30,
|
Change
|
||||||||||||||
(in millions, except per gallon data)
|
2016
|
2015
|
2016
|
2015
|
||||||||||||||
Fuel purchase cost
(1)
|
$
|
1,440
|
|
$
|
1,968
|
|
$
|
(528
|
)
|
$
|
1.37
|
|
$
|
1.91
|
|
$
|
(0.54
|
)
|
Airline segment fuel hedge gains
(2)
|
(3
|
)
|
(126
|
)
|
123
|
|
—
|
|
(0.12
|
)
|
0.12
|
|
||||||
Refinery segment impact
(2)
|
10
|
|
(90
|
)
|
100
|
|
0.01
|
|
(0.09
|
)
|
0.10
|
|
||||||
Total fuel expense
|
$
|
1,447
|
|
$
|
1,752
|
|
$
|
(305
|
)
|
$
|
1.38
|
|
$
|
1.70
|
|
$
|
(0.32
|
)
|
MTM adjustments and settlements
(3)
|
617
|
|
720
|
|
(103
|
)
|
0.59
|
|
0.70
|
|
(0.11
|
)
|
||||||
Total fuel expense, adjusted
|
$
|
2,064
|
|
$
|
2,472
|
|
$
|
(408
|
)
|
$
|
1.97
|
|
$
|
2.40
|
|
$
|
(0.43
|
)
|
(1)
|
Market price for jet fuel at airport locations, including related taxes and transportation costs.
|
(2)
|
For additional information regarding the refinery segment impact, see "Refinery Segment" below.
|
(3)
|
MTM adjustments and settlements include the effects of the derivative transactions discussed in Note 4 of the Notes to the Condensed Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below.
|
|
Six Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2016
|
2015
|
|||||||||
Passenger:
|
|
|
|
|
|||||||
Mainline
|
$
|
13,915
|
|
$
|
14,136
|
|
$
|
(221
|
)
|
(1.6
|
)%
|
Regional carriers
|
2,817
|
|
2,926
|
|
(109
|
)
|
(3.7
|
)%
|
|||
Total passenger revenue
|
16,732
|
|
17,062
|
|
(330
|
)
|
(1.9
|
)%
|
|||
Cargo
|
327
|
|
424
|
|
(97
|
)
|
(22.9
|
)%
|
|||
Other
|
2,639
|
|
2,609
|
|
30
|
|
1.1
|
%
|
|||
Total operating revenue
|
$
|
19,698
|
|
$
|
20,095
|
|
$
|
(397
|
)
|
(2.0
|
)%
|
|
|
Increase (Decrease)
vs. Six Months Ended June 30, 2015
|
||||||||||||||
(in millions)
|
Six Months Ended June 30, 2016
|
Passenger Revenue
|
RPMs
(Traffic)
|
ASMs
(Capacity)
|
Passenger Mile Yield
|
PRASM
|
Load Factor
|
|||||||||
Mainline
|
$
|
8,932
|
|
1.6
|
%
|
5.9
|
%
|
6.7
|
%
|
(4.1
|
)%
|
(4.8
|
)%
|
(0.7
|
)
|
pts
|
Regional carriers
|
2,817
|
|
(3.7
|
)%
|
1.3
|
%
|
1.7
|
%
|
(5.0
|
)%
|
(5.3
|
)%
|
(0.3
|
)
|
pts
|
|
Domestic
|
11,749
|
|
0.3
|
%
|
5.1
|
%
|
5.8
|
%
|
(4.6
|
)%
|
(5.3
|
)%
|
(0.6
|
)
|
pts
|
|
Atlantic
|
2,430
|
|
(5.4
|
)%
|
(0.6
|
)%
|
(0.3
|
)%
|
(4.8
|
)%
|
(5.1
|
)%
|
(0.3
|
)
|
pts
|
|
Pacific
|
1,299
|
|
(11.1
|
)%
|
(3.2
|
)%
|
(6.2
|
)%
|
(8.2
|
)%
|
(5.3
|
)%
|
2.7
|
|
pts
|
|
Latin America
|
1,254
|
|
(4.4
|
)%
|
5.5
|
%
|
3.0
|
%
|
(9.4
|
)%
|
(7.2
|
)%
|
2.0
|
|
pts
|
|
Total
|
$
|
16,732
|
|
(1.9
|
)%
|
3.1
|
%
|
3.0
|
%
|
(4.9
|
)%
|
(4.8
|
)%
|
0.1
|
|
pts
|
|
Six Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2016
|
2015
|
|||||||||
Salaries and related costs
|
$
|
4,702
|
|
$
|
4,287
|
|
$
|
415
|
|
9.7
|
%
|
Aircraft fuel and related taxes
|
2,455
|
|
3,292
|
|
(837
|
)
|
(25.4
|
)%
|
|||
Regional carriers expense
|
2,102
|
|
2,150
|
|
(48
|
)
|
(2.2
|
)%
|
|||
Contracted services
|
960
|
|
898
|
|
62
|
|
6.9
|
%
|
|||
Depreciation and amortization
|
956
|
|
918
|
|
38
|
|
4.1
|
%
|
|||
Aircraft maintenance materials and outside repairs
|
895
|
|
951
|
|
(56
|
)
|
(5.9
|
)%
|
|||
Passenger commissions and other selling expenses
|
825
|
|
807
|
|
18
|
|
2.2
|
%
|
|||
Landing fees and other rents
|
724
|
|
761
|
|
(37
|
)
|
(4.9
|
)%
|
|||
Profit sharing
|
596
|
|
547
|
|
49
|
|
9.0
|
%
|
|||
Passenger service
|
410
|
|
417
|
|
(7
|
)
|
(1.7
|
)%
|
|||
Aircraft rent
|
132
|
|
120
|
|
12
|
|
10.0
|
%
|
|||
Other
|
978
|
|
1,075
|
|
(97
|
)
|
(9.0
|
)%
|
|||
Total operating expense
|
$
|
15,735
|
|
$
|
16,223
|
|
$
|
(488
|
)
|
(3.0
|
)%
|
|
Six Months Ended June 30,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2016
|
2015
|
|||||||||
Aircraft fuel and related taxes
(1)
|
$
|
2,455
|
|
$
|
3,292
|
|
$
|
(837
|
)
|
|
|
Aircraft fuel and related taxes included within regional carriers expense
|
386
|
|
559
|
|
(173
|
)
|
|
||||
Total fuel expense
|
$
|
2,841
|
|
$
|
3,851
|
|
$
|
(1,010
|
)
|
(26.2
|
)%
|
(1)
|
Includes the impact of fuel hedging and refinery results described further in the table below.
|
|
|
Average Price Per Gallon
|
||||||||||||||||
|
Six Months Ended June 30,
|
Change
|
Six Months Ended June 30,
|
Change
|
||||||||||||||
(in millions, except per gallon data)
|
2016
|
2015
|
2016
|
2015
|
||||||||||||||
Fuel purchase cost
(1)
|
$
|
2,533
|
|
$
|
3,686
|
|
$
|
(1,153
|
)
|
$
|
1.28
|
|
$
|
1.89
|
|
$
|
(0.61
|
)
|
Airline segment fuel hedge losses
(2)
|
270
|
|
341
|
|
(71
|
)
|
0.14
|
|
0.18
|
|
(0.04
|
)
|
||||||
Refinery segment impact
(2)
|
38
|
|
(176
|
)
|
214
|
|
0.02
|
|
(0.09
|
)
|
0.11
|
|
||||||
Total fuel expense
|
$
|
2,841
|
|
$
|
3,851
|
|
$
|
(1,010
|
)
|
$
|
1.44
|
|
$
|
1.98
|
|
$
|
(0.54
|
)
|
MTM adjustments and settlements
(3)
|
462
|
|
1,309
|
|
(847
|
)
|
0.23
|
|
0.67
|
|
(0.44
|
)
|
||||||
Total fuel expense, adjusted
|
$
|
3,303
|
|
$
|
5,160
|
|
$
|
(1,857
|
)
|
$
|
1.67
|
|
$
|
2.65
|
|
$
|
(0.98
|
)
|
(1)
|
Market price for jet fuel at airport locations, including related taxes and transportation costs.
|
(2)
|
Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk.
For additional information regarding the refinery segment impact, see "Refinery Segment" below.
|
(3)
|
MTM adjustments and settlements include the effects of the derivative transactions discussed in Note 4 of the Notes to the Condensed Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below.
|
Non-Operating Results
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
||||||||||||||
(in millions)
|
2016
|
2015
|
Favorable
|
|
2016
|
2015
|
Favorable
|
||||||||||||
Interest expense, net
|
$
|
(93
|
)
|
$
|
(127
|
)
|
$
|
34
|
|
|
$
|
(200
|
)
|
$
|
(258
|
)
|
$
|
58
|
|
Miscellaneous, net
|
20
|
|
19
|
|
1
|
|
|
21
|
|
(62
|
)
|
83
|
|
||||||
Total non-operating expense, net
|
$
|
(73
|
)
|
$
|
(108
|
)
|
$
|
35
|
|
|
$
|
(179
|
)
|
$
|
(320
|
)
|
$
|
141
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
Consolidated
(1)
|
2016
|
2015
|
|
2016
|
2015
|
||||||||
Revenue passenger miles (in millions)
|
56,415
|
|
54,755
|
|
|
104,140
|
|
100,976
|
|
||||
Available seat miles (in millions)
|
65,979
|
|
63,937
|
|
|
124,124
|
|
120,534
|
|
||||
Passenger mile yield
|
|
15.90
|
¢
|
|
16.69
|
¢
|
|
|
16.07
|
¢
|
|
16.90
|
¢
|
PRASM
|
|
13.59
|
¢
|
|
14.29
|
¢
|
|
|
13.48
|
¢
|
|
14.16
|
¢
|
CASM
|
|
12.16
|
¢
|
|
12.88
|
¢
|
|
|
12.68
|
¢
|
|
13.46
|
¢
|
CASM-Ex, including profit sharing
(2)
|
|
9.54
|
¢
|
|
9.55
|
¢
|
|
|
9.91
|
¢
|
|
9.70
|
¢
|
Passenger load factor
|
85.5
|
%
|
85.6
|
%
|
|
83.9
|
%
|
83.8
|
%
|
||||
Fuel gallons consumed (in millions)
|
1,046
|
|
1,029
|
|
|
1,976
|
|
1,947
|
|
||||
Average price per fuel gallon
(3)
|
$
|
1.38
|
|
$
|
1.70
|
|
|
$
|
1.44
|
|
$
|
1.98
|
|
Average price per fuel gallon, adjusted
(3)(4)
|
$
|
1.97
|
|
$
|
2.40
|
|
|
$
|
1.67
|
|
$
|
2.65
|
|
Full-time equivalent employees, end of period
|
84,791
|
|
83,247
|
|
|
|
|
(1)
|
Includes the operations of our regional carriers under capacity purchase agreements. Full-time equivalent employees exclude employees of non-owned regional carriers.
|
(2)
|
Non-GAAP financial measure defined in "
June 2016
Quarter Financial Highlights" above. See reconciliation to CASM in "Supplemental Information" below.
|
(3)
|
Includes the impact of fuel hedge activity and refinery segment results.
|
(4)
|
Non-GAAP financial measure defined and reconciled to average fuel price per gallon in "Results of Operations" for the three and six months ended June 30, 2016 and 2015.
|
|
Current Fleet
(1)
|
|
Commitments
|
||||||||||
Aircraft Type
|
Owned
|
Capital Lease
|
Operating Lease
|
Total
|
Average Age
|
Purchase
|
Options
|
||||||
B-717-200
|
3
|
|
13
|
|
75
|
|
91
|
|
14.8
|
—
|
|
—
|
|
B-737-700
|
10
|
|
—
|
|
—
|
|
10
|
|
7.4
|
—
|
|
—
|
|
B-737-800
|
73
|
|
—
|
|
—
|
|
73
|
|
15.4
|
—
|
|
—
|
|
B-737-900ER
|
41
|
|
—
|
|
19
|
|
60
|
|
1.5
|
60
|
|
—
|
|
B-747-400
|
4
|
|
5
|
|
—
|
|
9
|
|
24.2
|
—
|
|
—
|
|
B-757-200
|
79
|
|
17
|
|
6
|
|
102
|
|
19.1
|
—
|
|
—
|
|
B-757-300
|
16
|
|
—
|
|
—
|
|
16
|
|
13.3
|
—
|
|
—
|
|
B-767-300
|
12
|
|
—
|
|
—
|
|
12
|
|
24.7
|
—
|
|
—
|
|
B-767-300ER
|
54
|
|
4
|
|
—
|
|
58
|
|
20.3
|
—
|
|
—
|
|
B-767-400ER
|
21
|
|
—
|
|
—
|
|
21
|
|
15.3
|
—
|
|
—
|
|
B-777-200ER
|
8
|
|
—
|
|
—
|
|
8
|
|
16.4
|
—
|
|
—
|
|
B-777-200LR
|
10
|
|
—
|
|
—
|
|
10
|
|
7.2
|
—
|
|
—
|
|
B-787-8
(2)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
18
|
|
—
|
|
A319-100
|
55
|
|
—
|
|
2
|
|
57
|
|
14.4
|
—
|
|
—
|
|
A320-200
|
58
|
|
—
|
|
11
|
|
69
|
|
21.3
|
—
|
|
—
|
|
A321-200
|
5
|
|
—
|
|
—
|
|
5
|
|
0.1
|
77
|
|
—
|
|
A330-200
|
11
|
|
—
|
|
—
|
|
11
|
|
11.2
|
—
|
|
—
|
|
A330-300
|
26
|
|
—
|
|
3
|
|
29
|
|
8.0
|
2
|
|
—
|
|
A330-900neo
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
25
|
|
—
|
|
A350-900
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
25
|
|
—
|
|
CS100
(3)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
75
|
|
50
|
|
E190-100
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
16
|
|
—
|
|
MD-88
|
93
|
|
23
|
|
—
|
|
116
|
|
25.9
|
—
|
|
—
|
|
MD-90
|
63
|
|
2
|
|
—
|
|
65
|
|
19.4
|
—
|
|
—
|
|
Total
|
642
|
|
64
|
|
116
|
|
822
|
|
17.0
|
298
|
|
50
|
|
(1)
|
Excludes certain aircraft we own or lease, which are operated by regional carriers on our behalf and are shown in the table below.
|
(2)
|
Our purchase commitment for the
18
B-787-8 aircraft provides for certain substitution rights, including for our current orders of B-737-900ER aircraft.
|
(3)
|
During the June 2016 quarter, we reached an agreement with Bombardier to acquire
75
CS100 aircraft with deliveries beginning in 2018 and continuing through 2022. Delta has flexibility under the purchase agreement with respect to deferral, acceleration, conversion and a limited number of cancellation rights.
The agreement also includes options to purchase
50
additional aircraft.
|
(4)
|
Following the CS100 purchase agreement, we have separately entered into an agreement to sell for our acquisition cost the E190-100 fleet following their delivery to us.
|
|
Fleet Type
|
|
||||||||||||
Carrier
|
CRJ-200
|
CRJ-700
|
CRJ-900
|
Embraer 145
|
Embraer 170
|
Embraer 175
|
Total
|
|||||||
Endeavor Air, Inc.
(1)
|
41
|
|
—
|
|
81
|
|
—
|
|
—
|
|
—
|
|
122
|
|
ExpressJet Airlines, Inc.
|
40
|
|
38
|
|
28
|
|
—
|
|
—
|
|
—
|
|
106
|
|
SkyWest Airlines, Inc.
|
59
|
|
23
|
|
36
|
|
—
|
|
—
|
|
—
|
|
118
|
|
Compass Airlines, Inc.
|
—
|
|
—
|
|
—
|
|
—
|
|
6
|
|
36
|
|
42
|
|
Shuttle America
|
—
|
|
—
|
|
—
|
|
13
|
|
14
|
|
16
|
|
43
|
|
GoJet Airlines, LLC
|
—
|
|
22
|
|
7
|
|
—
|
|
—
|
|
—
|
|
29
|
|
Total
|
140
|
|
83
|
|
152
|
|
13
|
|
20
|
|
52
|
|
460
|
|
(1)
|
Endeavor Air, Inc. is a wholly owned subsidiary of Delta.
|
Rating Agency
|
Current Rating
|
Outlook
|
Moody's
|
Baa3
|
Stable
|
Fitch
|
BBB-
|
Stable
|
Standard & Poor's
|
BB+
|
Stable
|
(in millions, except dividends per share)
|
Dividends per Share
|
Share Repurchase Authorization
|
Average Repurchase Price
|
Completion Date
|
Authorization Remaining
|
|||||||||
May 2013 Program
|
$
|
0.060
|
|
$
|
500
|
|
$
|
28.43
|
|
June 30, 2016
|
Completed June 2014
|
|||
May 2014 Program
|
$
|
0.090
|
|
$
|
2,000
|
|
$
|
42.86
|
|
December 31, 2016
|
Completed June 2015
|
|||
May 2015 Program
|
$
|
0.135
|
|
$
|
5,000
|
|
$
|
44.85
|
|
December 31, 2017
|
|
$
|
2,150
|
|
•
|
MTM adjustments and settlements.
MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. Settlements represent cash received or paid on hedge contracts settled during the period. These items adjust fuel expense to show the economic impact of hedging, including cash received or paid on hedge contracts during the period. Adjusting for these items allows investors to better understand and analyze our core operational performance in the periods shown.
|
•
|
Restructuring and other.
Because of the variability in restructuring and other, the adjustment for this item is helpful to investors to analyze our recurring core performance in the period shown.
|
•
|
Virgin Atlantic MTM adjustments
. We record our proportionate share of earnings from our equity investment in Virgin Atlantic in non-operating expense. We adjust for Virgin Atlantic's MTM adjustments to allow investors to better understand and analyze our core financial performance in the periods shown.
|
|
Three Months Ended June 30,
|
|||||
(in millions)
|
2016
|
2015
|
||||
Pre-tax income
|
$
|
2,350
|
|
$
|
2,366
|
|
Adjusted for:
|
|
|
||||
MTM adjustments and settlements
|
(617
|
)
|
(720
|
)
|
||
Restructuring and other
|
—
|
|
25
|
|
||
Virgin Atlantic MTM adjustments
|
(51
|
)
|
(31
|
)
|
||
Pre-tax income, adjusted
|
$
|
1,682
|
|
$
|
1,640
|
|
•
|
Aircraft fuel and related taxes.
The volatility in fuel prices impacts the comparability of year-over-year financial performance. The adjustment for aircraft fuel and related taxes (including our regional carriers) allows investors to better understand and analyze our non-fuel costs and year-over-year financial performance.
|
•
|
Restructuring and other.
Because of the variability in restructuring and other, the adjustment for this item is helpful to investors to analyze our recurring core performance in the periods shown.
|
•
|
Other expenses.
Other expenses include aircraft maintenance and staffing services we provide to third parties, our vacation wholesale operations and refinery cost of sales to third parties. Because these businesses are not related to the generation of a seat mile, we adjust for the costs related to these sales to provide a more meaningful comparison of the costs of our airline operations to the rest of the airline industry.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
|
2016
|
2015
|
|
2016
|
2015
|
||||||||
CASM
|
|
12.16
|
¢
|
|
12.88
|
¢
|
|
|
12.68
|
¢
|
|
13.46
|
¢
|
Adjusted for:
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes
|
(2.19
|
)
|
(2.74
|
)
|
|
(2.29
|
)
|
(3.19
|
)
|
||||
Restructuring and other
|
—
|
|
(0.04
|
)
|
|
—
|
|
(0.03
|
)
|
||||
Other expenses
|
(0.43
|
)
|
(0.55
|
)
|
|
(0.48
|
)
|
(0.54
|
)
|
||||
CASM-Ex
|
|
9.54
|
¢
|
|
9.55
|
¢
|
|
|
9.91
|
¢
|
|
9.70
|
¢
|
(in millions, except for percentages)
|
(Increase) Decrease
(1)
|
||
+ 40%
|
$
|
(3,580
|
)
|
+ 20%
|
(1,790
|
)
|
|
- 20%
|
1,790
|
|
|
- 40%
|
3,580
|
|
(1)
|
Projections based upon the (increase) decrease to unhedged fuel cost as compared to the jet fuel price per gallon of $1.38, excluding transportation costs and taxes, at
June 30, 2016
and estimated fuel consumption of 6.1 billion gallons for the period from July 1, 2016 to December 31, 2017.
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Approximate Dollar Value (in millions) of Shares That May
Yet be Purchased Under the
Plan or Programs
|
|||||||
April 2016
|
2,412,755
|
|
$
|
45.70
|
|
2,412,755
|
|
|
$
|
3,065
|
|
May 2016
|
13,481,271
|
|
$
|
42.49
|
|
13,481,271
|
|
|
$
|
2,420
|
|
June 2016
|
8,449,238
|
|
$
|
40.79
|
|
8,449,238
|
|
|
$
|
2,150
|
|
Total
|
24,343,264
|
|
|
24,343,264
|
|
|
|
10.1
|
Airbus A321 Aircraft and A330 Aircraft Purchase Agreement dated as of September 3, 2013 between Airbus S.A.S. and Delta Air Lines, Inc., as amended through April 29, 2016*
|
10.2
|
Delta Air Lines, Inc. Performance Compensation Plan (as amended and restated)
|
10.3
|
Delta Air Lines, Inc. Officer and Director Severance Plan as amended and restated
|
10.4
|
Terms of 2016 Restricted Stock Awards for Non-Employee Directors
|
15
|
Letter from Ernst & Young LLP regarding unaudited interim financial information
|
31.1
|
Certification by Delta's Chief Executive Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2016
|
31.2
|
Certification by Delta's Executive Vice President and Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2016
|
32
|
Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code by Delta's Chief Executive Officer and Executive Vice President and Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2016
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Delta Air Lines, Inc.
|
|
(Registrant)
|
|
|
|
/s/ Craig M. Meynard
|
|
Craig M. Meynard
|
|
Vice President and Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
July 14, 2016
|
|
EXHIBIT A-3
|
CHANGE ORDERS TO A321 AIRCRAFT STANDARD SPECIFICATION (SCNs)
|
EXHIBIT A-4
|
CHANGE ORDERS TO A330 AIRCRAFT STANDARD SPECIFICATION (SCNs)
|
EXHIBIT B-1
|
FORM OF SPECIFICATION CHANGE NOTICE
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
i
|
EXHIBIT B-2
|
FORM OF MANUFACTURER’S SPECIFICATION CHANGE NOTICE
|
EXHIBIT B-3
|
FORM OF [***]
|
EXHIBIT C-2
|
CFM INTERNATIONAL PROPULSION SYSTEMS PRICE REVISION FORMULA
|
EXHIBIT C-3
|
GENERAL ELECTRIC PROPULSION SYSTEMS PRICE REVISION FORMULA
|
EXHIBIT D
|
FORM OF CERTIFICATE OF ACCEPTANCE
|
EXHIBIT E
|
FORM OF BILL OF SALE
|
EXHIBIT G
|
TECHNICAL DATA INDEX
|
EXHIBIT H
|
MATERIAL SUPPLY AND SERVICES
|
EXHIBIT I
|
INDEX OF LETTER AGREEMENTS
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
ii
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
1
|
0
|
DEFINITIONS
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
2
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
3
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
4
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
5
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
6
|
2
|
SPECIFICATIONS
|
2.1.1
|
The A321 Aircraft shall be manufactured in accordance with the A321 Standard Specification, as may already have been modified or varied prior to the date of the Agreement by the Specification Change Notices listed in Exhibit A-3.
|
2.1.2
|
The A330 Aircraft shall be manufactured in accordance with the A330 Standard Specification, as may already have been modified or varied prior to the date of the Agreement by the Specification Change Notices listed in Exhibit A-4.
|
2.2
|
Specification Amendment
|
2.2.1
|
Specification Change Notice
|
2.2.2
|
Development Changes
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
7
|
2.2.2.1
|
Manufacturer Specification Changes Notices
|
2.2.2.2
|
In the event of the Seller revising the Specification to incorporate Development Changes which have no adverse effect on any of the elements as set forth in Subclause 2.2.2.1 above, such revision will be performed by the Seller without the Buyer’s consent.
|
2.2.2.3
|
The Seller is considering turning certain items, which are currently BFE in the Specification, into SFE and the parties agree that such BFE items shall be excluded from the provisions of Subclauses 2.2.2.1 and 2.2.2.2 above and, should they become SFE, shall furthermore be chargeable to the Buyer.
|
2.3
|
Propulsion Systems
|
2.3.1
|
Each A321 Airframe shall be equipped with a set of two (2) CFM CFM56-5B3/3 propulsion systems [***] (such set, an “
A321 Propulsion System
”).
|
2.3.2
|
Each A330 Airframe shall be equipped with a set of two (2) GE CF6-80E1A4[***] propulsion systems with an [***] (such set, an “
A330 Propulsion System
”).
|
2.4
|
Milestones
|
2.4.1
|
Customization Milestones Chart
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
8
|
2.4.2
|
Contractual Definition Freeze
|
3
|
PRICE
|
3.1
|
Base Price of the Aircraft
|
3.1.1
|
Base Price of the Airframe
|
3.1.1.1
|
Base Price of the A321 Airframe
|
(i)
|
the base price of the A321 Airframe corresponding to the A321 Standard Specification, including nacelles and thrust reversers, and excluding BFE, which is:
|
(ii)
|
the sum of the base prices of any and all SCNs set forth in Exhibit A-3, which is:
|
3.1.1.2
|
Base Price of the A330 Airframe
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
9
|
(i)
|
the base price of the A330 Airframe corresponding to the A330 Standard Specification and excluding BFE, which is:
|
(ii)
|
the sum of the base prices of any and all SCNs set forth in Exhibit A-4, which is:
|
3.1.2
|
Base Price of Propulsion Systems
|
3.1.2.1
|
The base price of a set of two (2) CFM CFM56-5B3/3 propulsion systems (the “
Propulsion System A Base Price
”) is:
|
3.1.2.2
|
The base price of a set of two (2) GE CF6-80E1A4[***] Propulsion systems, including nacelles and thrust reversers (the “
Propulsion System B Base Price
”), is:
|
3.2
|
Final Contract Price
|
(i)
|
the Base Price of the Airframe constituting a part of such Aircraft, as adjusted to the Delivery Date of such Aircraft in accordance with Subclause 4.1 of the Agreement;
|
(ii)
|
the price (as of delivery conditions prevailing in [***] of any SCNs constituting a part of such Aircraft that are entered into pursuant to Subclause 2.2 after the date of
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
10
|
(iii)
|
the Propulsion System Reference Price constituting a part of such Aircraft, as adjusted to the Delivery Date of such Aircraft in accordance with Subclause 4.2 of the Agreement; and
|
(iv)
|
the aggregate of all increases or decreases to the Propulsion System Reference Price as agreed in any Specification Change Notice or part thereof applicable to the Propulsion System subsequent to the date of the Agreement as adjusted to the Delivery Date in accordance with Subclause 4.2; and
|
(v)
|
any other amount resulting from any other provisions of the Agreement and/or any other written agreement between the Buyer and the Seller relating to the Aircraft and specifically making reference to the Final Contract Price of an Aircraft.
|
3.3
|
Taxes
|
3.3.1
|
The amounts stated in this Agreement to be payable by the Buyer are exclusive of value added tax (“
VAT
”) chargeable under the laws of any jurisdiction and accordingly the Buyer shall pay any VAT chargeable with respect to any Aircraft, component, accessory, equipment, part or service delivered or furnished under this Agreement
|
3.3.2
|
The Seller will pay all other Taxes (except for Taxes based on or measured by the income of the Buyer or any Taxes levied against the Buyer for the privilege of doing business in any jurisdiction), levied, assessed, charged or collected, on or prior to Delivery of any Aircraft, for or in connection with the manufacture, assembly, sale and delivery under this Agreement of such Aircraft or any parts, instructions or data installed thereon or incorporated therein (except Buyer Furnished Equipment referred to in Clause 18).
|
3.3.3
|
The Buyer will pay all Taxes not assumed by the Seller under Clause 3.3.2, except for Taxes based on or measured by the income of the Seller or any Taxes levied against the Seller for the privilege of doing business in any jurisdiction.
|
4
|
PRICE REVISION
|
4.1
|
Airframe Price Revision Formula
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
11
|
4.2
|
Propulsion System Price Revision Formula
|
5
|
PAYMENT TERMS
|
5.1
|
The Buyer shall pay all sums due hereunder in immediately available funds in United States dollars by credit to:
|
5.2
|
Predelivery Payments
|
5.2.1
|
Predelivery Payments are non-refundable (although amounts equal to Predelivery Payments may be paid to the Buyer pursuant to Subclauses 10.2, 10.3, 10.5, 11.4, 11.5 and 21.2) and shall be paid by the Buyer to the Seller for the Aircraft.
|
5.2.2
|
The Predelivery Payment Reference Price for an Aircraft to be delivered in calendar year T is determined in accordance with the following formula:
|
5.2.3
|
Predelivery Payments shall be paid according to the following schedule.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
12
|
5.2.4
|
The Seller shall be entitled to hold and use any Predelivery Payment as absolute owner thereof, subject only to the obligation to deduct an amount equal to Predelivery Payments from the Final Contract Price of the Aircraft, when calculating the balance of the Final Contract Price of such Aircraft. The Seller shall be under no obligation to segregate any Predelivery Payment, or any amount equal thereto, from the Seller’s funds generally.
|
5.4
|
Payment of Other Amounts
|
5.4.1
|
Application of Payments
|
5.4.2
|
Setoff Payments
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
13
|
5.5
|
Overdue Payments
|
5.6
|
Refund of Predelivery Payments
|
5.7
|
Proprietary Interest
|
5.8
|
Tender of Delivery
|
5.9
|
Payment in Full
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
14
|
6
|
PLANT REPRESENTATIVES - INSPECTION
|
6.1
|
Manufacture Procedures
|
6.2
|
Inspection Procedures
|
6.2.1
|
All work to be carried out on the Aircraft and all materials and parts thereof shall at all reasonable times during business hours be open to inspection by duly authorized representatives of the Buyer or its designee at the works of the Seller and, if possible, at the works of their respective subcontractors, and such representatives (subject to the indemnities set forth in Clause 20 herein) shall, to carry out the aforesaid inspection, have access to such relevant technical data as is reasonably necessary for this purpose (except that, if access to any part of the respective works where construction is in progress or materials or parts are stored is restricted for security reasons, the Seller shall be allowed a reasonable time to make the items available for inspection elsewhere).
|
6.2.2
|
For the purposes of Subclause 6.2.1 above and commencing with the date of the Agreement until the Delivery of the last Aircraft, [***].
|
6.2.3
|
All inspections, examinations and discussions with the Seller or its subcontractors’ engineering or other personnel by the Buyer and its said representatives shall be performed in such manner as not to unreasonably delay or hinder the work to be carried out on the Aircraft or the proper performance of the Agreement. In no event shall the Buyer or its representatives be permitted to inspect any aircraft other than the Aircraft.
|
7
|
CERTIFICATION
|
7.1
|
Type Certification
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
15
|
7.2
|
Export Certificate of Airworthiness
|
7.3
|
Specification Changes before Aircraft Ready for Delivery
|
7.3.1
|
If, any time before the date on which the Aircraft is Ready for Delivery, any law, rule or regulation is enacted, promulgated, becomes effective and/or an interpretation of any law, rule or regulation is issued by the EASA that requires any change to the Specification for the purposes of obtaining the Export Certificate of Airworthiness (a “
Change in Law
”), the Seller shall make the required modification and the parties hereto shall sign an SCN.
|
7.3.2
|
The Seller shall as far as practicable, but at its sole discretion and without prejudice to Subclause 7.3.3, take into account the information available to it concerning any proposed law, rule or regulation or interpretation that could become a Change in Law, in order to minimize the costs of changes to the Specification as a result of such proposed law, regulation or interpretation becoming effective before the applicable Aircraft is Ready for Delivery.
|
7.3.3
|
The cost of implementing the required modifications referred to in Subclause 7.3.1 will be:
|
[***]
|
[***], and
|
[***]
|
[***]
|
7.3.4
|
Notwithstanding the provisions of Subclause 7.3.3, if a Change in Law relates to an item of BFE or to the Propulsion System the costs related thereto shall be borne in accordance with such arrangements as may be made separately between the Buyer and the manufacturer of the BFE or the Propulsion System, as applicable, and the Seller shall have no obligation with respect thereto.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
16
|
7.4
|
Specification Changes after Aircraft Ready For Delivery
|
8
|
THE BUYER’S ACCEPTANCE
|
8.1
|
Acceptance Procedures
|
8.1.1
|
The Seller or any Affiliate thereof acting as the Seller’s designee shall give to the Buyer not less than [***] of the proposed time when acceptance tests of an Aircraft shall be conducted, and, in the event that the Buyer elects to attend such tests, the Buyer shall comply with the reasonable requirements of the Seller with the intention of completing all tests within [***] after commencement. The tests shall take place at the Delivery Location, and shall be carried out by the personnel of the Seller (accompanied, if the Buyer so wishes, by representatives of the Buyer [***] shall have access to the cockpit at any one time). During flight tests, these representatives shall comply with the instructions of the Seller’s representatives. The Seller shall not normally be required in the course of such tests to fly any of the Aircraft for more than [***].
|
8.1.2
|
[INTENTIONALLY LEFT BLANK]
|
8.1.3
|
The acceptance tests must demonstrate the satisfactory functioning of the Aircraft at the time of delivery in accordance with the Specification (except for immaterial variances from the Specification). In the event that the Buyer, after having received proper notice in accordance with Subclause 8.1.1, does not attend the tests scheduled for an Aircraft or fails to so cooperate, the Seller may complete them in the absence of the Buyer, whereupon the Buyer shall be deemed to have accepted the tests, if such tests demonstrate the satisfactory functioning of the Aircraft as aforesaid, and the Seller shall furnish such data with respect to such tests as the Buyer may reasonably request.
|
8.1.4
|
If the acceptance tests for an Aircraft are not successfully completed or there is a defect, the Seller, [***], shall give notice to the Buyer specifying such unsuccessful completion or defect. Thereafter the Seller shall, without hindrance from the Buyer, carry out any necessary changes and, as soon as practicable thereafter, resubmit the Aircraft for new acceptance tests to demonstrate the elimination of the defect, such tests to be held and carried out in accordance with Subclause 8.1, provided, however, that rather than accept a delay in Delivery of any such Aircraft, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense in accordance with the provisions of Clause 12 herein.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
17
|
8.2
|
Aircraft Utilization
|
8.3
|
Certificate of Acceptance
|
8.4
|
Finality of Acceptance
|
9
|
DELIVERY
|
9.1
|
Delivery Schedule
|
9.1.1
|
Subject to the provisions of the Agreement, the Seller shall have the Aircraft Ready For Delivery at the Delivery Location, and the Buyer shall accept the same, during the quarters set forth in the table below (each, a “
Scheduled Delivery Quarter
”).
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
18
|
Rank
|
Aircraft Type
|
Scheduled Delivery Month or Quarter / Year
|
Rank
|
Aircraft Type
|
Scheduled Delivery Quarter / Year
|
1
|
A330-300
|
May 2015
|
21
|
[***]
|
[***]
|
2
|
A330-300
|
June 2015
|
22
|
[***]
|
[***]
|
3
|
A330-300
|
4
th
Quarter 2015
|
23
|
[***]
|
[***]
|
4
|
A330-300
|
4
th
Quarter 2015
|
24
|
[***]
|
[***]
|
5
|
A321-200
|
1
st
Quarter 2016
|
25
|
[***]
|
[***]
|
6
|
A321-200
|
1
st
Quarter 2016
|
26
|
[***]
|
[***]
|
7
|
A321-200
|
1
st
Quarter 2016
|
27
|
[***]
|
[***]
|
8
|
A330-300
|
1
st
Quarter 2016
|
28
|
[***]
|
[***]
|
9
|
A321-200
|
2
nd
Quarter 2016
|
29
|
[***]
|
[***]
|
10
|
A321-200
|
2
nd
Quarter 2016
|
30
|
[***]
|
[***]
|
11
|
A321-200
|
2
nd
Quarter 2016
|
31
|
[***]
|
[***]
|
12
|
A321-200
|
2
nd
Quarter 2016
|
32
|
[***]
|
[***]
|
13
|
A330-300
|
2
nd
Quarter 2016
|
33
|
[***]
|
[***]
|
14
|
[***]
|
[***]
|
34
|
[***]
|
[***]
|
15
|
[***]
|
[***]
|
35
|
[***]
|
[***]
|
16
|
[***]
|
[***]
|
36
|
[***]
|
[***]
|
17
|
[***]
|
[***]
|
37
|
[***]
|
[***]
|
18
|
[***]
|
[***]
|
38
|
[***]
|
[***]
|
19
|
[***]
|
[***]
|
39
|
[***]
|
[***]
|
20
|
[***]
|
[***]
|
40
|
[***]
|
[***]
|
9.1.2
|
Not later than [***] prior to the start of the relevant quarter, the Seller shall give the Buyer notice of the anticipated month within the Scheduled Delivery Quarter during which each Aircraft shall be Ready for Delivery (the “
Scheduled Delivery Month
”) provided that no more than [***] shall be scheduled for Delivery pursuant to this Subclause 9.1.2 in any calendar month. Until such notice for the purpose of this Agreement, the middle month of the Scheduled Delivery Quarter shall be deemed to be the Scheduled Delivery Month.
|
9.1.3
|
Not later than [***] prior to the date scheduled for the acceptance tests set forth in Subclause 8.1.1 for a particular Aircraft, the Seller shall give the Buyer notice of whether it anticipates each Aircraft shall be Ready for Delivery in the first half or second half of the Scheduled Delivery Month.
|
9.1.4
|
Not later than [***] prior to the date scheduled for the acceptance tests set forth in Subclause 8.1.1 for a particular Aircraft, the Seller shall give the Buyer notice of the anticipated date on which each Aircraft shall be Ready for Delivery.
|
9.2
|
Title
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
19
|
9.3
|
Overdue Payment or Flyaway
|
(i)
|
the Delivery of and payment of the Final Contract Price for the Aircraft is delayed more than [***] after the firm delivery date established pursuant to Subclause 9.1 due to the fault of the Buyer, or
|
(ii)
|
within [***] Delivery of the Aircraft the Buyer has failed to remove such Aircraft from the place of Delivery for whatever reason (except for reasons attributable to the Seller),
|
9.4
|
Flyaway
|
9.4.1
|
The Buyer and the Seller will cooperate to obtain any licenses that may be required by the Aviation Authority of the Delivery Location for the purpose of exporting the Aircraft.
|
9.4.2
|
All expenses of, or connected with, flying the Aircraft from the Delivery Location after Delivery will be borne by the Buyer. The Buyer will make direct arrangements with the supplying companies for the fuel and oil required for all post-Delivery flights.
|
10
|
EXCUSABLE DELAY AND TOTAL LOSS
|
10.1
|
Scope of Excusable Delay
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
20
|
10.2
|
Consequences of Excusable Delay
|
10.2.1
|
If an Excusable Delay occurs:
|
(i)
|
the Seller will notify the Buyer of such Excusable Delay as soon as practicable after becoming aware of the same;
|
(ii)
|
the Seller will not be responsible for any damages arising from or in connection with such Excusable Delay suffered or incurred by the Buyer;
|
(iii)
|
the Seller will not be deemed to be in default in the performance of its obligations hereunder as a result of such Excusable Delay;
|
(iv)
|
the Seller will as soon as practicable after the removal of the cause of such delay resume performance of its obligations under this Agreement and in particular will notify the Buyer of the revised Scheduled Delivery Month.
|
10.3
|
Termination on Excusable Delay
|
10.3.1
|
If any Delivery is delayed as a result of an Excusable Delay for a period of more than [***] after the last day of the Scheduled Delivery Month, then [***] may terminate this Agreement with respect to the affected Aircraft, by giving written notice to the [***] within [***] after the expiration of such [***]. However, the Buyer will not be entitled to terminate this Agreement pursuant to this Subclause 10.3.1 if the Excusable Delay is caused directly or indirectly by the action or inaction of the Buyer.
|
10.3.2
|
If the Seller advises the Buyer in its notice of a revised Scheduled Delivery Month pursuant to Subclause 10.2.1(iv) that there will be a delay in Delivery of an Aircraft of more than [***] after the last day of the Scheduled Delivery Month, then [***] may terminate this Agreement with respect to the affected Aircraft. Termination will be made by giving written notice to the [***] within [***] after the Buyer's receipt of the notice of a revised Scheduled Delivery Month.
|
10.3.3
|
If this Agreement is not terminated under the terms of Subclause 10.3.1 or 10.3.2, then the Seller will be entitled to reschedule Delivery. The Seller will notify the Buyer of the new Scheduled Delivery Month after [***] referred to in Subclause 10.3.1 or 10.3.2, and this new Scheduled Delivery Month will be deemed to be an amendment to the applicable Scheduled Delivery Month in Subclause 9.1.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
21
|
10.4
|
Total Loss, Destruction or Damage
|
(i)
|
the Buyer notifies the Seller within [***] of the date of receipt of the Seller's notice that it desires the Seller to provide a replacement aircraft during the month quoted in the Seller’s notice; and
|
(ii)
|
the parties execute an amendment to this Agreement recording the change in the Scheduled Delivery Month.
|
10.5
|
Termination Rights Exclusive
|
10.6
|
Remedies
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
22
|
11
|
INEXCUSABLE DELAY
|
11.1
|
Liquidated Damages
|
11.2
|
Renegotiation
|
11.3
|
Termination
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
23
|
12
|
WARRANTIES AND SERVICE LIFE POLICY
|
12.1
|
Standard Warranty
|
12.1.1
|
Nature of Warranty
|
(i)
|
be free from defects in material,
|
(ii)
|
be free from defects in workmanship, including, without limitation, processes of manufacture,
|
(iii)
|
be free from defects in design (including, without limitation, selection of materials) having regard to the state of the art at the date of such design, and
|
(iv)
|
be free from defects arising from failure to conform to the Specification, except as to those portions of the Specification relating to performance or where it is expressly stated that such portions of the Specification are estimates or approximations or design aims.
|
12.1.2
|
Exceptions
|
(i)
|
any defect in the Seller’s workmanship in respect of the installation of such items in the Aircraft, including any failure by the Seller to conform to the installation instructions of the manufacturers of such items that invalidates any applicable warranty from such manufacturers, shall constitute a defect in workmanship for the purpose of this Subclause 12.1 and be covered by the warranty set forth in Subclause 12.1.1(ii), and
|
(ii)
|
any defect inherent in the Seller’s design of the installation, in view of the state of the art at the date of such design, that impairs the use of such items shall constitute
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
24
|
12.1.3
|
Warranty Period
|
12.1.4
|
Buyer’s Remedy and Seller’s Obligation
|
12.1.4.1
|
The Buyer’s remedy and the Seller’s obligation and liability under Subclauses 12.1.1 and 12.1.2 hereinabove are limited to, at the Seller’s expense and option, the repair, replacement or correction of, or the supply of modification kits rectifying the defect to, any defective Warranted Part. Alternatively, the Seller may at its sole option furnish a credit to the Buyer for the future purchase of Material equal to the price at which the Buyer is then entitled to acquire a replacement for the defective Warranted Part. Nothing herein contained shall obligate the Seller to correct any failure to conform to the Specification with respect to components, equipment, accessories or parts that the parties agree in writing at the time of delivery of the affected Aircraft are acceptable deviations or have no material adverse effect on the use, operation or performance of an Aircraft.
|
12.1.4.2
|
In the event a defect covered by Subclause 12.1.1(iii) becomes apparent within the applicable period set forth in Subclause 12.1.3, and the Seller is obligated to correct such defect, the Seller shall also, if so requested by the Buyer in writing, make such correction in any Aircraft that has not already been delivered to the Buyer. However, the Seller shall not be responsible nor deemed to be in default on account of any delay in delivery of any Aircraft or otherwise, in respect of performance of the Agreement, due to the Seller’s undertaking to make such correction and, rather than accept a delay in delivery of any such Aircraft, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept delivery and thereafter file a Warranty Claim as though the defect had become apparent immediately after delivery of such Aircraft.
|
12.1.5
|
Warranty Claim Requirements
|
(i)
|
the existence of a defect covered by the provisions of this Subclause 12.1,
|
(ii)
|
the defect’s having become apparent within the applicable warranty period, as set forth in Subclause 12.1.3,
|
(iii)
|
the Buyer’s having submitted to the Seller proof reasonably satisfactory to the Seller that the claimed defect is due to a matter embraced within this Subclause 12.1, and that such defect did not result from any act or omission of the Buyer, including, but not limited to, any failure to operate and maintain the affected Aircraft or part thereof
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
25
|
(iv)
|
the Buyer’s having returned as soon as reasonably practicable the Warranted Part claimed to be defective to such repair facilities as may be designated by the Seller, except where the Buyer elects to repair a defective Warranted Part in accordance with the provisions of Subclause 12.1.7, and
|
(v)
|
the Seller’s having received a Warranty Claim fulfilling the conditions of and in accordance with the provisions of Subclause 12.1.6 below.
|
12.1.6
|
Warranty Administration
|
(i)
|
Claim Determination
|
(ii)
|
Transportation and Insurance Costs
|
(iii)
|
Return of an Aircraft
|
(iv)
|
On-Aircraft Work by the Seller
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
26
|
(a)
|
[***], such work must require the technical expertise of the Seller, or
|
(b)
|
both of
|
(i)
|
[***], and
|
(ii)
|
[***]
|
(a)
|
description of defect and action taken, if any,
|
(b)
|
date of incident and/or of removal,
|
(c)
|
description of the defective part,
|
(d)
|
part number,
|
(e)
|
serial number (if applicable),
|
(f)
|
position on Aircraft,
|
(g)
|
total flying hours or calendar times, as applicable, at the date of appearance of a defect,
|
(h)
|
time since last shop visit at the date of defect appearance,
|
(i)
|
Manufacturer’s serial number of the Aircraft and/or its registration number,
|
(j)
|
Aircraft total flying hours and/or number of landings at the date of defect appearance,
|
(k)
|
claim number,
|
(l)
|
date of claim, and
|
(m)
|
date of delivery of an Aircraft or part to the Buyer.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
27
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
28
|
12.1.7
|
In-house Warranty
|
|
(a) only if adequate facilities and qualified personnel are available to the Buyer,
|
(b)
|
in accordance with the Seller’s written instructions set forth in documents such as the Aircraft Maintenance Manual, Component Maintenance Manual (Manufacturer), Component Maintenance Manual (Vendor) and Structural Repair Manual, and
|
|
(c) only to the extent specified by the Seller, or, in the absence of such specification, to the extent reasonably necessary to correct the defect, in accordance with the standards set forth in Subclause 12.1.10.
|
(a)
|
a report of technical findings with respect to the defect,
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
29
|
(b)
|
for parts required to remedy the defect:
|
(c)
|
detailed number of labor hours,
|
(d)
|
agreed In-house Warranty Labor Rate (defined below in
|
(e)
|
total claim value.
|
(a)
|
To determine direct labor costs, only man hours spent [***] of the Warranted Part alone shall be counted. Man hours required for maintenance work concurrently being carried out on the Aircraft or Warranted Part shall not be included.
|
(b)
|
Direct material costs are determined by the prices at which the Buyer acquired such material, excluding any parts and materials used for overhaul and furnished free of charge by the Seller.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
30
|
12.1.8
|
Standard Warranty Transferability
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
31
|
12.1.9
|
Warranty for Corrected, Replacement or Repaired Warranted Parts
|
(i)
|
any Aircraft or component, equipment, accessory or part thereof that has been repaired, altered or modified after delivery by a party other than the Seller or in a manner other than that set forth in Subclause 12.1.7 or otherwise approved by the Seller;
|
(ii)
|
any Aircraft or component, equipment, accessory or part thereof that has been operated in a damaged state; or
|
(iii)
|
any component, equipment, accessory or part from which the trademark, trade name, part or serial number or other identification marks have been removed.
|
12.2.
|
Seller Service Life Policy
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
32
|
12.2.1
|
Definitions
|
12.2.1.1
|
“
Item
” means any of the Seller components, equipment, accessories or parts listed in Exhibit F hereto which are installed on an Aircraft at any time during the period of effectiveness of the Service Life Policy as defined below in Subclause 12.2.2.
|
12.2.1.2
|
“
Failure
” means any breakage of, or defect in, an Item that has occurred, that can reasonably be expected to occur on a repetitive or fleetwide basis, and that materially impairs the utility or safety of the Item, [***].
|
12.2.2
|
Periods and Seller’s Undertaking
|
12.2.2.1
|
design and furnish to the Buyer a correction for such Item subject to a Failure and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts unless a part of an Item), or,
|
12.2.2.2
|
replace such Item.
|
12.2.3
|
Seller’s Participation in the Cost
|
12.2.4
|
General Conditions and Limitations
|
12.2.4.1
|
Notwithstanding Subclause 12.2.3, the undertakings given in this Subclause 12.2 shall not be valid during the period applicable to an Item under Subclause 12.1.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
33
|
12.2.4.2
|
The Buyer’s remedy and the Seller’s obligation and liability under this Service Life Policy are subject to compliance by the Buyer with the following conditions precedent:
|
(i)
|
The Buyer shall maintain log books and other historical records with respect to each Item adequate to enable determination as to whether the alleged Failure is covered by this Service Life Policy and, if so, to define the portion of the cost to be borne by the Seller in accordance with Subclause 12.2.3 above.
|
(ii)
|
The Buyer shall keep the Seller informed of any significant incidents relating to an Aircraft, howsoever occurring or recorded, if the failure to so inform the Seller materially prejudices the Seller’s position.
|
(iii)
|
The conditions of Subclause 12.1.10 shall have been complied with.
|
(iv)
|
The Buyer shall carry out specific structural inspection programs for monitoring purposes as may be established from time to time by the Seller. Such programs shall be, to the extent possible, compatible with the Buyer’s operational requirements and shall be carried out at the Buyer’s expense. Reports relating thereto shall be regularly furnished to the Seller.
|
(v)
|
In the case of any breakage or defect, the Buyer shall report the same in writing to the Seller within [***] after any breakage or defect in an Item becomes apparent, whether or not said breakage or defect can reasonably be expected to occur in any other Aircraft, and the Buyer shall inform the Seller in sufficient detail about the breakage or defect to enable the Seller to determine whether said breakage or defect is subject to this Service Life Policy.
|
12.2.4.3
|
Except as otherwise provided in this Subclause 12.2, any claim under this Service Life Policy shall be administered as provided in, and shall be subject to the terms and conditions of, Subclause 12.1.6.
|
12.2.4.4
|
In the event that the Seller shall have issued a modification applicable to an Aircraft, the purpose of which is to avoid a Failure, the Seller may elect to offer to supply to the Buyer the necessary modification kit free of charge or under a pro rata formula established by mutual agreement between the Buyer and the Seller. If such a kit is so offered to the Buyer, then, in respect of such Failure and any Failures that could ensue therefrom, the validity of the Seller’s commitment under this Subclause 12.2 shall be subject to the Buyer’s incorporating such modification in the relevant Aircraft, within a reasonable time, as promulgated by the Seller and in accordance with the Seller’s instructions.
|
12.2.4.5
|
THIS SERVICE LIFE POLICY IS NEITHER A WARRANTY, PERFORMANCE GUARANTEE, NOR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME COMPONENTS TO CONFORM TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF AIRFRAME DESIGN AND MANUFACTURING ART. THE SELLER’S OBLIGATION UNDER THIS SUBCLAUSE 12.2 IS TO MAKE ONLY THOSE CORRECTIONS TO THE ITEMS OR FURNISH REPLACEMENTS THEREFOR AS PROVIDED IN THIS SUBCLAUSE 12.2. THE BUYER’S SOLE REMEDY AND RELIEF
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
34
|
12.2.5
|
Transferability
|
12.3
|
Supplier Warranties
|
12.3.1
|
Seller’s Support
|
12.3.2
|
Supplier’s Default
|
12.3.2.1
|
In the event that any Supplier under any standard warranty or indemnity against patent infringements obtained by the Seller pursuant to Subclause 12.3.1 or Clause 13 hereof
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
35
|
12.3.2.2
|
In the event that any Supplier under any Supplier service life policy obtained by the Seller pursuant to Subclause 12.3.1 hereof defaults in the performance of any material obligation with respect thereto, and the Buyer submits within reasonable time to the Seller reasonable proof that such default has occurred, then Subclause 12.2 of the Agreement shall apply to the extent the same would have been applicable had such component, equipment, accessory or part been listed in Exhibit F hereto.
|
12.3.2.3
|
At the Seller’s request, the Buyer shall assign to the Seller, and the Seller shall be subrogated to, all of the Buyer’s rights against the relevant Supplier, with respect to and arising by reason of such default and the Buyer shall provide reasonable assistance to enable the Seller to enforce the rights so assigned.
|
12.4
|
Interface Commitment
|
12.4.1
|
Interface Problem
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
36
|
12.4.2
|
Seller’s Responsibility
|
12.4.3
|
Supplier’s Responsibility
|
12.4.4
|
Joint Responsibility
|
12.4.5
|
General
|
12.4.5.1
|
All requests under this Subclause 12.4 shall be directed both to the Seller and the affected Suppliers.
|
12.4.5.2
|
Except as specifically set forth in this Subclause 12.4, this Subclause 12.4 shall not be deemed to impose on the Seller any obligations not expressly set forth elsewhere in the Agreement.
|
12.4.5.3
|
All reports, recommendations, data and other documents furnished by the Seller to the Buyer pursuant to this Subclause 12.4 shall be deemed to be delivered under the Agreement and shall be subject to the terms, covenants and conditions set forth in this Clause 12 and in Subclause 22.7.
|
12.5
|
EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
37
|
(1)
|
ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;
|
(2)
|
ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
|
(3)
|
ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;
|
(4)
|
ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;
|
(5)
|
ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;
|
(6)
|
ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;
|
(7)
|
ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:
|
(a)
|
LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;
|
(b)
|
LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
38
|
(c)
|
LOSS OF PROFITS AND/OR REVENUES;
|
(d)
|
ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.
|
12.6
|
Duplicate Remedies
|
12.7
|
Negotiated Agreement
|
13
|
PATENT INDEMNITY
|
13.1
|
Scope
|
(i)
|
any British, French, German, Spanish or US patent, or
|
(ii)
|
any patent issued under the laws of any other country in which the Buyer may lawfully operate the Aircraft, provided that:
|
(a)
|
from the time of design of such Aircraft, accessory, equipment or part and until infringement claims are resolved, such country and the flag country of the Aircraft is each a party to the Chicago Convention on International Civil
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
39
|
(b)
|
from such time of design and until infringement claims are resolved, such country and the flag country of the Aircraft is each a party to the International Convention for the Protection of Industrial Property of March 20, 1883 (known as the “
Paris Convention”
).
|
13.2
|
Seller’s Action
|
13.3
|
Seller’s Obligation
|
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|
13.4
|
WAIVER
|
14
|
TECHNICAL PUBLICATIONS
|
14.1
|
Scope
|
14.1.1
|
Except as otherwise set forth in this Clause 14, the Technical Data shall be supplied in the English language using the aeronautical terminology in common use.
|
14.1.2
|
Range, form, type, format, quantity and delivery schedule of the Technical Data to be provided under the Agreement are outlined in Exhibit G hereto.
|
14.2
|
Aircraft Identification for Technical Data
|
14.2.1
|
For those Technical Data that are customized to the Buyer’s Aircraft, the Buyer agrees to the allocation of fleet serial numbers (“
Fleet Serial Numbers
”) in the form of a block of numbers selected in the range from 0001 to 9999.
|
14.2.2
|
The sequence shall not be interrupted unless two (2) different Propulsion System or two (2) different models of Aircraft are selected.
|
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14.2.3
|
The Buyer shall indicate to the Seller the Fleet Serial Number allocated to each Aircraft corresponding to the delivery schedule set forth in Subclause 9.1 no later [***] before the Scheduled Delivery Month of the first Aircraft. Neither the designation of such Fleet Serial Numbers nor the subsequent allocation of the Fleet Serial Numbers to Manufacturer Serial Numbers for the purpose of producing certain customized Technical Data shall constitute any property, insurable or other interest of the Buyer in any Aircraft prior to the Delivery of such Aircraft as provided for in the Agreement.
|
14.3
|
Integration of Equipment Data
|
14.3.1
|
Supplier Equipment
|
14.3.2
|
Buyer Furnished Equipment
|
14.3.2.1
|
The Seller shall introduce Buyer Furnished Equipment data for Buyer Furnished Equipment that is installed on the Aircraft by the Seller (hereinafter “
BFE Data
”) into the customized Technical Data, at no additional charge to the Buyer for the initial issue of the Technical Data provided at or before Delivery of the first Aircraft provided such BFE Data is provided in accordance with the conditions set forth in Subclauses [***] through [***].
|
14.3.2.2
|
The Buyer shall supply the BFE Data to the Seller at least [***] prior to the Scheduled Delivery Month of the first Aircraft. If the Buyer does not supply such BFE Data to the Seller by such time, then the Seller shall, at no additional cost to the Buyer, incorporate such BFE Data at the first scheduled revision following [***] after the date the BFE Data is provided.
|
14.3.2.3
|
The Buyer shall supply the BFE Data to the Seller in English and in compliance with the then applicable revision of ATA Specification 2200 (iSpec 2200), Information Standards for Aviation Maintenance.
|
14.3.2.4
|
The Buyer and the Seller shall agree on the requirements for the provision to the Seller of BFE Data for “on-aircraft maintenance”, such as but not limited to timeframe,
|
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|
14.3.2.5
|
The BFE Data shall be delivered in digital format (SGML) and/or in Portable Document Format (PDF), as agreed between the Buyer and the Seller.
|
14.3.2.6
|
[***]
|
14.4
|
Supply
|
14.4.1
|
Technical Data shall be supplied on-line and/or off-line, as set forth in Exhibit G hereto.
|
14.4.2
|
[***]
|
14.5
|
Delivery
|
14.5.1
|
For Technical Data provided off-line, such Technical Data and corresponding revisions shall be sent to up to two (2) addresses as indicated by the Buyer.
|
14.5.2
|
Technical Data provided off-line shall be delivered by the Seller at the Buyer’s named place of destination under DAP conditions. The term Delivered At Place (DAP) is defined in the Incoterms 2010 publication issued by the International Chamber of Commerce, (the “
DAP – Incoterm
”).
|
14.5.3
|
The Technical Data shall be delivered according to a mutually agreed schedule to correspond with the Deliveries of Aircraft. The Buyer shall provide no less than [***] notice when requesting a change to such delivery schedule.
|
14.5.4
|
It shall be the responsibility of the Buyer to coordinate and satisfy local Aviation Authorities’ requirements with respect to Technical Data. Reasonable quantities of such Technical Data shall be supplied by the Seller [***] to the Buyer at the Buyer’s named place of destination.
|
14.6
|
Revision Service
|
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|
14.7
|
Service Bulletins (SB) Incorporation
|
14.8
|
Technical Data Familiarization
|
14.9
|
Customer Originated Changes
|
14.10
|
AirN@v Family Products
|
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|
14.11
|
On-Line Technical Data
|
14.11.1
|
The Technical Data defined in Exhibit G as being provided on-line shall be made available to the Buyer through AirbusWorld, as set forth in a separate agreement which shall be executed by the parties the prior to Delivery of the first Aircraft.
|
14.11.2
|
Such provision shall be [***] for the duration of the corresponding Revision Service Period.
|
14.11.3
|
Access to AirbusWorld shall be subject to the General Terms and Conditions of Access to and Use of AirbusWorld (hereinafter the “
GTC
”), as set forth in a separate agreement which shall be executed by the parties prior to Delivery of the first Aircraft.
|
14.11.4
|
The list of the Technical Data provided on-line may be extended from time to time.
|
14.11.5
|
Access to AirbusWorld shall be granted [***] for [***] Buyer’s users (including [***] Buyer’s Administrators) for the Technical Data related to the Aircraft which shall be operated by the Buyer.
|
14.11.6
|
For the sake of clarification, it is hereby specified that Technical Data accessed through AirbusWorld - which access shall be covered by the terms and conditions set forth in the GTC – shall remain subject to the conditions of this Clause 14.
|
14.12
|
Waiver, Release and Renunciation
|
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|
(1)
|
ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;
|
(2)
|
ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
|
(3)
|
ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;
|
(4)
|
ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;
|
(5)
|
ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;
|
(6)
|
ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;
|
(7)
|
ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:
|
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|
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|
(a)
|
LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;
|
(b)
|
LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;
|
(c)
|
LOSS OF PROFITS AND/OR REVENUES;
|
(d)
|
ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.
|
14.13
|
Proprietary Rights
|
14.14
|
Performance Engineer’s Program
|
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|
14.15
|
Future Developments
|
14.16
|
Confidentiality
|
14.17
|
Transferability
|
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|
15
|
FIELD ASSISTANCE
|
15.1
|
Customer Support Representative(s)
|
15.1.1
|
In addition to the services of Seller customer support representative(s) (each a “
Seller Representative
”), provided by the Seller in prior agreement between the Seller and the Buyer, the Seller shall provide [***] to the Buyer [***] of exclusive services of a Seller Representative(s) at the Buyer’s main base or such other locations as the parties may agree at Delivery of the first Aircraft.
|
15.1.2
|
In providing the services as described hereabove, any Seller Representatives, or any Seller employee(s) providing services to the Buyer hereunder, are deemed to be acting in an advisory capacity only and at no time shall they be deemed to be acting as Buyer’s employees or agents, either directly or indirectly.
|
15.1.3
|
The Seller shall cause similar services to be provided by representatives of the Propulsion System Manufacturer and Suppliers, when necessary and applicable.
|
15.2
|
Buyer’s Support
|
15.2.1
|
From the date of arrival of the first Seller Representative and for the duration of the assignment, the Buyer shall provide [***] a suitable lockable office, conveniently located with respect to the Buyer’s maintenance facilities, with complete office furniture and equipment including telephone, internet, email and facsimile connections for the sole use of the Seller Representative(s). All related communication costs shall be borne by [***].
|
15.2.2
|
[***]
|
15.2.3
|
INTENTIONALLY LEFT BLANK
|
15.2.4
|
Should the Buyer request any Seller Representative referred to in Subclause 15.1 above to travel on business to a city other than his usual place of assignment, [***].
|
15.2.5
|
The Buyer shall assist the Seller in obtaining from the civil authorities of the Buyer’s country those documents that are necessary to permit the Seller Representative to live and work in the Buyer’s country. Failure of the Seller to obtain the necessary documents shall relieve the Seller of any obligation to the Buyer under the provisions of Subclause 15.1.
|
15.2.6
|
INTENTIONALLY LEFT BLANK
|
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|
15.2.7
|
In the event that the Buyer elects to relocate one of the Seller Representatives on a temporary basis, [***].
|
15.3
|
Withdrawal of the Seller Representative
|
16
|
TRAINING
|
16.1
|
General
|
16.1.1
|
This Clause 16 sets forth the terms and conditions for the supply of training support and services for the Buyer’s personnel to support the Aircraft operation.
|
16.1.2
|
The range, quantity and validity of training to be provided free of charge under the Agreement are covered in Appendix A to this Clause 16.
|
16.1.3
|
Scheduling of training courses covered in Appendix A shall be mutually agreed during a training conference (the “
Training Conference
”) that shall be held no later than [***] prior to Delivery of the first Aircraft.
|
16.2
|
Training Location
|
16.2.1
|
The Seller shall provide training at an affiliated training center in Miami, U.S.A. or such other of its training centers as agreed upon by the Seller and the Buyer (individually a “
Seller’s Training Center
” and collectively, the “
Seller’s Training Centers
”).
|
16.2.2
|
If the unavailability of facilities or scheduling difficulties make training by the Seller at any Seller’s Training Center impractical, the Seller shall ensure that the Buyer is provided with such training at another location designated by the Seller.
|
16.2.3
|
Upon the Buyer’s request, the Seller may also provide certain training at a location other than the Seller’s Training Centers, including one of the Buyer’s bases, if and when practicable for the Seller, under terms and conditions to be mutually agreed upon. In such event, all additional charges listed in Subclauses 16.5.2 and 16.5.3 shall be borne by the Buyer.
|
16.2.4
|
If the Buyer requests training at a location as indicated in Subclause 16.2.3 and requires such training to be an Airbus approved course, the Buyer undertakes that the training facilities shall be approved prior to the performance of such training. The Buyer shall, as necessary and in due time prior to the performance of such training, provide access to the training facilities set forth in Subclause 16.2.3 to the Seller’s and the competent Aviation Authority’s representatives for approval of such facilities.
|
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|
16.3
|
Training Courses
|
16.3.1
|
Training courses shall be as described in the Seller’s customer services catalog (the “
Seller’s Customer Services Catalog
”). The Seller’s Customer Services Catalog also sets forth the minimum and maximum number of trainees per course.
|
16.3.2
|
The following terms and conditions shall apply to training performed by the Seller:
|
(i)
|
Training courses shall be the Seller’s standard courses as described in the Seller’s Customer Services Catalog valid at the time of execution of the course. The Seller shall be responsible for all training course syllabi, training aids and training equipment necessary for the organization of the training courses; for the avoidance of doubt, for the purpose of performing training, such training equipment does not include aircraft.
|
(ii)
|
The training equipment and the training curricula used for the training of flight, cabin and maintenance personnel shall not be fully customized but shall be configured in order to obtain the relevant Aviation Authority’s approval and to support the Seller’s training programs.
|
(iii)
|
Training data and documentation for trainees receiving the training at the Seller’s Training Centers shall be provided [***]. Training data and documentation shall be marked “FOR TRAINING ONLY” and as such are supplied for the sole and express purpose of training; training data and documentation shall not be revised.
|
16.3.3
|
When the Seller’s training courses are provided by the Seller’s instructors (individually an “
Instructor
” and collectively “
Instructors
”) the Seller shall deliver a Certificate of Recognition or a Certificate of Course Completion (each a “
Certificate
”) or an attestation (an “
Attestation
”), as applicable, at the end of any such training course. Any such Certificate or Attestation shall not represent authority or qualification by any Aviation Authority but may be presented to such Aviation Authority in order to obtain relevant formal qualification.
|
16.3.4
|
[***]
|
(i)
|
[***];
|
(ii)
|
[***];
|
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|
(iii)
|
[***]
|
16.3.5
|
Rescheduling and Cancellation
|
16.3.5.1
|
Should the Buyer use none or only part of the training to be provided pursuant to this Clause 16, [***].
|
16.3.5.2
|
Should the Buyer decide to cancel or reschedule, fully or partially, and irrespective of the location of the training, a training course, a minimum advance notification of at least [***] prior to the relevant training course start date is required. Any later cancellation or change, when courses cannot be allocated to other customers, shall be deducted from the training allowances defined herein or shall be charged to the Buyer, as applicable.
|
16.3.5.3
|
If the notification occurs less than [***] but more than [***] prior to such training, when courses cannot be allocated to other customers, a cancellation fee corresponding to [***] of such training shall be, as applicable, either deducted from the training allowance defined in Appendix A or invoiced at the Seller’s then applicable price, provided that the courses cannot be allocated to other customers.
|
16.3.5.4
|
If the notification occurs less than [***] prior to such training, when courses cannot be allocated to other customers, a cancellation fee corresponding to [***] of such training shall be, as applicable, either deducted from the training allowance defined in Appendix A or invoiced at the Seller’s then applicable price. provided that the courses cannot be allocated to other customers.
|
16.3.5.5
|
All courses exchanged under Subclause 16.3.4 shall remain subject to the provisions of this Subclause 16.3.5.
|
16.4
|
Prerequisites and Conditions
|
16.4.1
|
Training shall be conducted in English and all training aids used during such training shall be written in English using common aeronautical terminology.
|
16.4.2
|
The Buyer hereby acknowledges that all training courses conducted pursuant to this Clause 16 are “Standard Transition Training Courses” and not “Ab Initio Training Courses”.
|
16.4.3
|
Trainees shall have the prerequisite knowledge and experience specified for each course in the Seller’s Customer Services Catalog.
|
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|
16.4.4
|
The Buyer shall be responsible for the selection of the trainees and for any liability with respect to the entry knowledge level of the trainees.
|
16.4.5
|
The Seller reserves the right to verify the trainees’ proficiency and previous professional experience.
|
16.4.6
|
The Seller shall provide to the Buyer during the Training Conference an “Airbus Pre-Training Survey” for completion by the Buyer for each trainee.
|
16.4.7
|
If the Seller determines at any time during the training that a trainee lacks the required level, following consultation with the Buyer, such trainee shall be withdrawn from the program or, upon the Buyer’s request, the Seller may be consulted to direct the above mentioned trainee(s), if possible, through any other required additional training, which shall be at the Buyer’s expense.
|
16.4.8
|
The Seller shall in no case warrant or otherwise be held liable for any trainee’s performance as a result of any training provided.
|
16.5
|
Logistics
|
16.5.1
|
Trainees
|
16.5.1.1
|
Living and travel expenses for the Buyer’s trainees shall be borne by the Buyer.
|
16.5.1.2
|
Notwithstanding the above, when training is done at the Seller’s affiliated training center in Miami, U.S.A, [***].
|
16.5.1.3
|
It shall be the responsibility of the Buyer to make all necessary arrangements relative to authorizations, permits and/or visas necessary for the Buyer’s trainees to attend the training courses to be provided hereunder. Rescheduling or cancellation of courses due to the Buyer’s failure to obtain any such authorizations, permits and/or visas shall be subject to the provisions of Subclauses 16.3.5.1 thru 16.3.5.4.
|
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|
16.5.2
|
Training at External Location - Seller’s Instructors
|
16.5.2.1
|
In the event of training being provided at the Seller’s request at any location other than the Seller’s Training Centers, as provided for in Subclause 16.2.2, [***].
|
16.5.2.2
|
In the event of training being provided by the Seller’s Instructor(s) at any location other than the Seller’s Training Centers at the Buyer’s request, [***].
|
16.5.2.3
|
Living Expenses
|
16.5.2.4
|
Air Travel
|
16.5.2.5
|
Buyer’s Indemnity
|
16.5.3
|
Training Material and Equipment Availability - Training at External Location
|
16.6
|
Flight Operations Training
|
16.6.1
|
Flight Crew Training Course
|
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|
16.6.2
|
Flight Crew Line Initial Operating Experience
|
16.6.3
|
Type Specific Cabin Crew Training Course
|
16.6.4
|
Training on Aircraft
|
16.7
|
Performance / Operations Courses
|
16.8
|
Maintenance Training
|
16.8.1
|
The Seller shall provide maintenance training for the Buyer’s ground personnel as further set forth in Appendix A to this Clause 16.
|
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|
16.8.2
|
Practical Training on Aircraft
|
16.9
|
Supplier and Propulsion System Manufacturer Training
|
16.10
|
Proprietary Rights
|
16.11
|
Confidentiality
|
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|
16.12
|
Transferability
|
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|
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|
1
|
FLIGHT OPERATIONS TRAINING
|
2
|
PERFORMANCE / OPERATIONS COURSE(S)
|
3
|
MAINTENANCE TRAINING
|
3.1
|
The Seller shall provide to the Buyer [***] of maintenance training [***] for the Buyer’s personnel.
|
3.2
|
The Seller shall provide to the Buyer [***].
|
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|
4
|
TRAINEE DAYS ACCOUNTING
|
4.1
|
For instruction at the Seller’s Training Centers: [***]. The number of trainees originally registered at the beginning of the course shall be counted as the number of trainees to have taken the course.
|
4.2
|
For instruction outside of the Seller’s Training Centers: [***] Seller Instructor equals the actual number of trainees attending the course or a [***], except for structure maintenance training course(s).
|
4.3
|
For structure maintenance training courses outside the Seller’s Training Center(s), [***].
|
4.4
|
For practical training, whether on training devices or on aircraft, [***].
|
17
|
SUPPLIERS’ PRODUCT SUPPORT
|
17.1
|
Supplier Product Support Agreements
|
17.1.1
|
The Seller has obtained enforceable and transferable product support agreements from Suppliers of Supplier Parts listed in the Specification, the benefit of which is hereby accepted by the Buyer. Said agreements become enforceable as soon as and for as long as one or more commercial airlines anywhere in the world operate Airbus aircraft.
|
17.1.2
|
These agreements are based on the “
World Airlines Suppliers Guide
” and include Supplier commitments as contained in the “
Supplier Product Support
Agreements
” which include the following provisions:
|
17.1.2.1
|
Technical data and manuals required to operate, maintain, service and overhaul the Supplier Parts. Such technical data and manuals shall be prepared in accordance with the applicable provisions of ATA Specification including revision service and be published in the English language. The Seller shall recommend that a software user guide, where applicable, be supplied in the form of an appendix to the Component Maintenance Manual, such data shall be provided in compliance with the applicable ATA Specification;
|
17.1.2.2
|
Warranties and guarantees, including standard warranties. In addition, landing gear Suppliers shall provide service life policies for selected structural landing gear elements;
|
17.1.2.3
|
Training to ensure efficient operation, maintenance and overhaul of the Supplier Parts for the Buyer’s instructors, shop and line service personnel;
|
17.1.2.4
|
Spares data in compliance with ATA iSpecification 2200, initial provisioning recommendations, spare parts and logistic service including routine and expedite deliveries;
|
17.1.2.5
|
Technical service to assist the Buyer with maintenance, overhaul, repair, operation and inspection of Supplier Parts as well as required tooling and spares provisioning.
|
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|
17.1.3
|
Upon the Buyer’s request, the Seller shall provide the Buyer with Supplier Product Support Agreements familiarization training at no additional charge to the Buyer at the Seller’s facilities in Blagnac, France. An on-line training module shall be further available, at no additional charge to the Buyer, through AirbusWorld, access to which shall be subject to the GTC.
|
17.2
|
Supplier Compliance
|
17.3
|
Supplier Part Repair Stations
|
18
|
BUYER FURNISHED EQUIPMENT
|
18.1
|
Administration
|
18.1.1
|
In accordance with the Specification, the Seller shall install those items of equipment that are identified in the Specification as being furnished by the Buyer (“
Buyer Furnished Equipment
” or “
BFE
”), provided that the BFE and the supplier of such BFE (the “
BFE Supplier
”) are referred to in the Airbus BFE Product Catalog valid at the time the BFE Supplier is selected.
|
18.1.2
|
[***]
|
18.1.3
|
The Seller shall advise the Buyer of the dates, [***] from the date of signature of the Agreement, by which, in the planned release of engineering for the Aircraft, the Seller requires a written detailed engineering definition encompassing a Declaration of Design and Performance (the “
BFE Engineering Definition
”). The Seller shall provide to the Buyer and/or the BFE Supplier(s), within an appropriate timeframe, the necessary interface documentation to enable the development of the BFE Engineering Definition.
|
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|
18.1.4
|
The Seller shall also provide [***] to the Buyer a schedule of dates and the shipping addresses for delivery of the BFE and, where requested by the Seller, additional spare BFE to permit installation in the Aircraft and Delivery of the Aircraft in accordance with the Aircraft delivery schedule. The Buyer shall provide, or cause the BFE Suppliers to provide, the BFE by such dates in a serviceable condition, in order to allow performance of any assembly, installation, test or acceptance process in accordance with the Seller’s industrial schedule. In order to facilitate the follow-up of the timely receipt of BFE, the Buyer shall, upon the Seller’s request, provide to the Seller dates and references of all BFE purchase orders placed by the Buyer.
|
18.1.5
|
Without prejudice to the Buyer’s obligations hereunder, in order to facilitate the development of the BFE Engineering Definition, the Seller shall organize meetings between the Buyer and BFE Suppliers. The Buyer hereby agrees to participate in such meetings and to provide adequate technical and engineering expertise to reach decisions within the defined timeframe.
|
(i)
|
to monitor the BFE Suppliers and ensure that they shall enable the Buyer to fulfill its obligations, including but not limited to those set forth in the Customization Milestone Chart;
|
(ii)
|
that, should a timeframe, quality or other type of risk be identified at a given BFE Supplier, the Buyer shall allocate resources to such BFE Supplier so as not to jeopardize the industrial schedule of the Aircraft;
|
(iii)
|
for major BFE, including, but not being limited to, seats, galleys and IFE (“
Major BFE
”) to participate on a mandatory basis in the specific meetings that take place between BFE Supplier selection and BFE delivery, namely:
|
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|
(iv)
|
to attend the First Article Inspection (“
FAI
”) for the first shipset of all Major BFE. Should the Buyer not attend such FAI, the Buyer shall delegate the FAI to the BFE Supplier and confirmation thereof shall be supplied to the Seller in writing;
|
(v)
|
to attend the Source Inspection (“
SI
”) that takes place at the BFE Supplier’s premises prior to shipping, for each shipset of all Major BFE. Should the Buyer not attend such SI, the Buyer shall delegate the SI to the BFE Supplier and confirmation thereof shall be brought to the Seller in writing. Should the Buyer not attend the SI, the Buyer shall be deemed to have accepted the conclusions of the BFE Supplier with respect to such SI.
|
18.1.6
|
The BFE shall be imported into FRANCE or into GERMANY by the Buyer under a suspensive customs system (“
Régime de l’entrepôt douanier ou régime de perfectionnement actif
“ or “
Zollverschluss
”) without application of any French or German tax or customs duty, [***] according to the Incoterms, to the following shipping addresses:
|
18.2
|
Applicable Requirements
|
(i)
|
be manufactured by a qualified BFE Supplier, and
|
(ii)
|
meet the requirements of the applicable Specification of the Aircraft, and
|
(iii)
|
be delivered with the relevant certification documentation, including but not limited to the DDP, and
|
(iv)
|
comply with the BFE Engineering Definition, and
|
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|
62
|
(v)
|
comply with applicable requirements incorporated by reference to the Type Certificate and listed in the Type Certificate Data Sheet, and
|
(vi)
|
be approved by the Aviation Authority issuing the Export Airworthiness Certificate and by the Buyer’s Aviation Authority for installation and use on the Aircraft at the time of Delivery of the Aircraft, and
|
(vii)
|
not infringe any patent, copyright or other intellectual property right of the Seller any third party, and
|
(viii)
|
not be subject to any legal obligation or other encumbrance that may prevent, hinder or delay the installation of the BFE in the Aircraft and/or the Delivery of the Aircraft.
|
18.3
|
Buyer’s Obligation and Seller’s Remedies
|
18.3.1
|
Any delay or failure by the Buyer or the BFE Suppliers in:
|
(i)
|
complying with the foregoing warranty or in providing the BFE Engineering Definition or field service mentioned in Subclause 18.1.4, or
|
(ii)
|
furnishing the BFE in a serviceable condition at the requested delivery date, or
|
(iii)
|
obtaining any required approval for such BFE equipment under the above mentioned Aviation Authorities’ regulations,
|
18.3.2
|
In addition, in the event of any delay or failure mentioned in 18.3.1 above, the Seller may:
|
(i)
|
select, purchase and install equipment similar to the BFE at issue, in which event the Final Price of the affected Aircraft [***]; or
|
(ii)
|
if the BFE is delayed by more than [***].
|
18.4
|
Title and Risk of Loss
|
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|
63
|
18.5
|
Disposition of BFE Following Termination
|
18.5.1
|
If a termination of the Agreement pursuant to the provisions of Clause 21 occurs with respect to an Aircraft in which all or any part of the BFE has been installed prior to the date of such termination, [***].
|
18.5.2
|
[***]
|
18.5.3
|
The Seller shall notify the Buyer as to those items of BFE [***]. The Buyer shall have no claim against the Seller for damage, loss or destruction of any item of BFE removed from the Aircraft and not removed from Seller’s facility within such period.
|
18.5.4
|
The Buyer shall have no claim against the Seller for damage to or destruction of any item of BFE damaged or destroyed in the process of being removed from the Aircraft, provided that the Seller shall use reasonable care in such removal.
|
18.5.5
|
The Buyer shall grant the Seller title to any BFE items that cannot be removed from the Aircraft [***].
|
19
|
ASSIGNMENT
|
19.1
|
Successors and Assigns
|
19.2
|
Seller’s Designations
|
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64
|
19.3
|
Assignment in Case of Resale or Lease
|
19.4
|
[***]
|
20
|
INDEMNITIES AND INSURANCE
|
20.1
|
Seller’s Indemnities
|
(a)
|
claims for injuries to, or death of, the Seller’s directors, officers, agents or employees, or loss of, or damage to, property of the Seller or its employees when such Losses occur during or are incidental to either party’s exercise of any right or performance of any obligation under this Agreement, and
|
(b)
|
claims for injuries to, or death of, third parties, or loss of, or damage to, property of third parties, occurring during or incidental to the Technical Acceptance Flights.
|
20.2
|
Buyer’s Indemnities
|
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|
65
|
(a)
|
claims for injuries to, or death of, the Buyer’s directors, officers, agents or employees, or loss of, or damage to, property of the Buyer or its employees, when such Losses occur during or are incidental to either party’s exercise of any right or performance of any obligation under this Agreement, and
|
(b)
|
claims for injuries to, or death of, third parties, or loss of, or damage to, property of third parties, occurring during or incidental to (i) the provision of Seller Representatives services under Clause 15 including services performed on board the aircraft or (ii) the provision of Aircraft Training Services to the Buyer.
|
20.3
|
Notice and Defense of Claims
|
20.4
|
Insurance
|
(a)
|
cause the Seller, its Affiliates, its subcontractors and each of their respective directors, officers, agents and employees to be named as additional insured under the Buyer’s Comprehensive Aviation Legal Liability insurance policies, including War Risks and Allied Perils (such insurance to include the AVN 52E Extended Coverage Endorsement Aviation Liabilities or any further Endorsement replacing AVN 52E as may be available as well as any excess coverage in respect of War and Allied Perils Third Parties Legal Liabilities Insurance), and
|
(b)
|
with respect to the Buyer’s Hull All Risks and Hull War Risks insurances and Allied Perils, cause the insurers of the Buyer’s hull insurance policies to waive all rights of subrogation against the Seller, its Affiliates, its subcontractors and each of their respective directors, officers, agents, employees and insurers.
|
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|
66
|
(i)
|
under the Comprehensive Aviation Legal Liability Insurances, the Buyer’s policies are primary and non-contributory to any insurance maintained by the Seller,
|
(ii)
|
such insurance can only be cancelled or materially altered by the giving of not less than [***] days or such lesser period as may be customarily available in respect of War Risks and Allied Perils) prior written notice thereof to the Seller, and
|
(iii)
|
under any such cover, all rights of subrogation against the Seller, its Affiliates, its subcontractors and each of their respective directors, officers, agents, employees and insurers have been waived.
|
21
|
TERMINATION
|
21.1
|
Termination Events
|
(1)
|
The Buyer or any of its Affiliates commences in any jurisdiction any case, proceeding or other action with respect to the Buyer or any of its Affiliates or their properties relating to bankruptcy, insolvency, reorganization, winding-up, liquidation, dissolution or other relief from, or with respect to, or readjustment of, its debts or obligations.
|
(2)
|
An action is commenced in any jurisdiction seeking the appointment of a receiver, trustee, custodian or other similar official for the Buyer or any of its respective Affiliates or for all or any substantial part of their respective assets, and such action remains unstayed, undismissed or undischarged for [***], or the Buyer or any of its Affiliates makes a general assignment for the benefit of its creditors.
|
(3)
|
An action is commenced in any jurisdiction against the Buyer or any of its respective Affiliates seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of their respective assets, and such action remains unstayed, undismissed or undischarged for [***].
|
(4)
|
The Buyer or any of its Affiliates becomes the object, in any jurisdiction, of a case, proceeding or action similar or analogous to any of the events mentioned in Subclause 21.1(1), (2) or (3).
|
(5)
|
The Buyer or any of its Affiliates is generally not able, or is expected to be unable to, or will admit in writing its inability to, pay its debts as they become due.
|
(6)
|
The Buyer or any of its Affiliates commences negotiations with significant creditors, existing or potential, either with the intention of restructuring all or a substantial part of all of its outstanding obligations or in preparation for a bankruptcy filing under the U.S. Bankruptcy Code.
|
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|
67
|
(7)
|
The Buyer or any of its Affiliates fails to make (i) any payment required to be made under this Agreement or any other material agreement between the Buyer or any of its Affiliates and the Seller or any of its Affiliates when such payment is due, (ii) any Predelivery Payment required to be made under this Agreement when such payment is due, (iii) payment of all or part of the Final Price of any Aircraft required to be made under this Agreement; (iv) any payment to a Lessor with respect to any Leased Aircraft.
|
(8)
|
The Buyer repudiates, cancels or terminates this Agreement in whole or in part.
|
(9)
|
The Buyer defaults in its obligation to take delivery of an Aircraft as provided in the Agreement.
|
(10)
|
The Buyer or any of its Affiliates defaults in the observance or performance of any other covenant, undertaking or obligation contained in this Agreement or any other material agreement between the Buyer or its Affiliates, on the one hand, and the Seller or its Affiliates on the other hand, provided that, if such breach or default is capable of being cured and such breach or default is not cured within any specified cure period.
|
(11)
|
Any other event that the parties agree in writing constitutes a Termination Event.
|
21.2
|
Remedies in Event of Termination
|
21.2.1
|
If a Termination Event occurs, the Buyer will be in material breach of this Agreement, and the Seller can elect any of the following remedies under the applicable law:
|
A.
|
[***];
|
B.
|
[***];
|
C.
|
[***]; and/or
|
D.
|
[***]
|
21.2.2
|
In the event Seller elects a remedy under any of Subclauses 21.2.1(A)(B) or (C), above:
|
A.
|
[***];
|
B.
|
[***]; and
|
C.
|
[***]
|
21.2.3
|
If the Seller elects a Termination under Subclause 21.2.1(D) above:
|
A.
|
[***]
|
i.
|
[***];
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
68
|
ii.
|
[***];
|
iii.
|
[***];
|
iv.
|
[***];
|
v.
|
[***];
|
vi.
|
[***]; and
|
vii.
|
[***]
|
B.
|
[***]
|
21.2.4
|
The parties to this Agreement are commercially sophisticated parties acting within the same industry, and represented by competent counsel and the parties expressly agree and declare as follows:
|
A.
|
[***];
|
B.
|
[***]; and
|
C.
|
[***]
|
21.3
|
Definitions
|
i.
|
“
Affected Aircraft
” – any or all Aircraft with respect to which the Seller has cancelled or terminated this Agreement pursuant to Subclause 21.2.1 D,
|
ii.
|
“
Applicable Date
” – for any Affected Aircraft, the date the Seller issues the notice [***] pursuant to Subclause 21.2.3 B.
|
iii.
|
[***] - will have the same meaning as the “Final Contract Price” of the Aircraft as that term is defined in Subclause 3.2, [***].
|
21.4
|
Notice of Termination Event
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
69
|
21.5
|
Information Covenants
|
a.
|
Annual Financial Statements.
As soon as available and in any event no later than the date that the Buyer furnishes such annual statements to the Securities and Exchange Commission or successor thereto (the “
SEC
”) (i) a copy of the SEC Form 10-K filed by the Buyer with the SEC for such fiscal year, or, if no such Form 10-K was filed by the Buyer for such a fiscal year, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such fiscal year and the related consolidated statements of operations, of common stockholders’ equity (deficit) (in the case of the Buyer and its Subsidiaries) and of cash flows for such fiscal year, setting forth comparative consolidated figures as of the end of and for the preceding fiscal year, and examined by any firm of independent public accountants of recognized standing selected by the Buyer and reasonably acceptable to the Seller, whose opinion will not be qualified as to the scope of audit or as to the status of the Buyer as a going concern, and (ii) a certificate of such accounting firm stating that its audit of the business of the Buyer was conducted in accordance with generally accepted auditing standards.
|
b.
|
Quarterly Financial Statements
. As soon as available and in any event no later than the date that the Buyer furnishes such quarterly statements to the Securities and Exchange Commission or successor thereto, a copy of the SEC Form 10-Q filed by the Buyer with the SEC for such quarterly period, or, if no such Form 10-Q was filed by the Buyer with respect to any such quarterly period, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such quarterly period and the related consolidated statements of operations for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period and in each case setting forth comparative consolidated figures as of the end of and for the related periods in the prior fiscal year, all of which will be certified by an Authorized Officer of the Buyer, subject to changes resulting from audit and normal year-end audit adjustments.
|
c.
|
Debt Rescheduling
. (i) Promptly upon the Buyer commencing negotiations with one or more of its significant creditors with a view to general readjustment or rescheduling of all or any material part of its indebtedness under circumstances in which a reasonable business person, in the exercise of prudent business judgment, would conclude that the Buyer would otherwise not be able to pay such indebtedness as it falls due, notice of commencement of such negotiations, and (ii) thereafter timely advice of the progress of such negotiations until such negotiations are terminated or completed.
|
d.
|
Acceleration of other indebtedness
. Immediately upon knowledge by the Buyer that the holder of any bond, debenture, promissory note or any similar evidence of indebtedness of the Buyer or Affiliate thereof (“
Other Indebtedness
”) has
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
70
|
e.
|
Other Information
. Promptly upon transmission thereof, copies of any filings and registrations with, and reports to, the SEC by the Buyer or any of its Subsidiaries, and, with reasonable promptness, such other information or documents (financial or otherwise) as the Seller may reasonably request from time to time.
|
21.6
|
Nothing contained in this Clause 21 will be deemed to waive or limit the Seller’s rights or ability to request adequate assurance under Article 2, Section 609 of the Uniform Commercial Code (the “
UCC”
). It is further understood that any commitment of the Seller or the Propulsion Systems manufacturer to provide financing to the Buyer will not constitute adequate assurance under Article 2, Section 609 of the UCC.
|
22
|
MISCELLANEOUS PROVISIONS
|
22.1
|
Data Retrieval
|
22.2
|
Notices
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
71
|
22.3
|
Waiver
|
22.4
|
INTENTIONALLY LEFT BLANK
|
22.5
|
Certain Representations of the Parties
|
22.5.1
|
Buyer's Representations
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
72
|
(i)
|
the Buyer is a corporation organized and existing in good standing under the laws of the State of Delaware and has the corporate power and authority to enter into and perform its obligations under this Agreement;
|
(ii)
|
neither the execution and delivery by the Buyer of this Agreement, nor the consummation of any of the transactions by the Buyer contemplated thereby, nor the performance by the Buyer of the obligations thereunder, constitutes a breach of any agreement to which the Buyer is a party or by which its assets are bound; and
|
(iii)
|
this Agreement has been duly authorized, executed and delivered by the Buyer and constitutes the legal, valid and binding obligation of the Buyer enforceable against the Buyer in accordance with its terms.
|
22.5.2
|
Seller's Representations
|
(i)
|
the Seller is organized and existing in good standing under the laws of the Republic of France and has the corporate power and authority to enter into and perform its obligations under the Agreement;
|
(ii)
|
neither the execution and delivery by the Seller of this Agreement, nor the consummation of any of the transactions by the Seller contemplated thereby, nor the performance by the Seller of the obligations thereunder, constitutes a breach of any agreement to which the Seller is a party or by which its assets are bound; and
|
(iii)
|
this Agreement has been duly authorized, executed and delivered by the Seller and constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms.
|
22.6
|
INTERPRETATION AND LAW
|
22.6.1
|
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
73
|
22.6.2
|
The Buyer for itself and its successors and assigns hereby designates and appoints the Secretary of the Buyer duly elected from time to time as its legal agent and attorney-in-fact upon whom all processes against the Buyer in any suit, action or proceeding in respect of any matter as to which it has submitted to jurisdiction under Subclause 22.6 may be served with the same effect as if the Buyer were a corporation organized under the laws of the State of New York and had lawfully been served with such process in such state, it being understood that such designation and appointments shall become effective without further action on the part of its Secretary.
|
22.6.3
|
The assumption in Subclause 22.6.1 made for the purpose of effecting the service of process shall not affect any assertion of diversity by either party hereto initiating a proceeding in the New York Federal Courts or seeking transfer to the New York Federal Courts on the basis of diversity.
|
22.6.4
|
Service of process in any suit, action or proceeding in respect of any matter as to which the Seller or the Buyer has submitted to jurisdiction under Subclause 22.6.1 may be made on the Seller by delivery of the same personally or by dispatching the same via Federal Express, UPS, or similar international air courier service prepaid to: CT Corporation, New York City offices as agent for the Seller, it being agreed that service upon CT Corporation shall constitute valid service upon the Seller or by any other method authorized by the laws of the State of New York, and (ii) may be made on the Buyer by delivery of the same personally or by dispatching the same by Federal Express, UPS, or similar international air courier service prepaid, return receipt requested to: Corporation Service Company, 80 State Street, Albany, New York 12207-2543, or by any other method authorized by the laws of the State of New York; provided in each case that failure to deliver or mail such copy shall not affect the validity or effectiveness of the service of process.
|
22.7
|
Confidentiality
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
74
|
22.8
|
[***]
|
22.9
|
Severability
|
22.10
|
Alterations to Contract
|
22.11
|
Inconsistencies
|
22.12
|
Language
|
22.13
|
Headings
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
75
|
22.14
|
Counterparts
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
76
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
77
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
3
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
3
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
AIRBUS
SPECIFICATION CHANGE NOTICE
(SCN)
|
For
SCN Number
Issue
Dated
Page
|
Title :
Description :
Effect on weight :
•
Manufacturer’s Weight Empty change :
•
Operational Weight Empty change :
•
Allowable Payload change :
Remarks / References
Specification changed by this SCN
This SCN requires prior or concurrent acceptance of the following SCN(s):
|
|
Price per aircraft
US DOLLARS:
AT DELIVERY CONDITIONS:
This change shall be effective on
AIRCRAFT N°
and subsequent,
provided approval is received by
.
Buyer approval Seller approval
By : By :
Date : Date :
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
AIRBUS
SPECIFICATION CHANGE NOTICE
(SCN)
|
For
SCN Number
Issue
Dated
Page
|
Specification repercussion:
After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording shall read as follows:
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
3
|
AIRBUS
SPECIFICATION CHANGE NOTICE
(SCN)
|
For
SCN Number
Issue
Dated
Page
|
Scope of change
(FOR INFORMATION ONLY)
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
4
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
AIRBUS
MANUFACTURER’S SPECIFICATION CHANGE NOTICE
(MSCN)
|
For
MSCN Number
Issue
Dated
Page
|
Title :
Description :
Effect on weight :
•
Manufacturer’s Weight Empty change :
•
Operational Weight Empty change :
•
Allowable Payload change :
Remarks / References
Specification changed by this MSCN
|
|
Price per aircraft
US DOLLARS:
AT DELIVERY CONDITIONS:
This change shall be effective on
AIRCRAFT N°
and subsequent,
provided MSCN is not rejected by
.
Buyer approval Seller approval
By : By :
Date : Date :
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
AIRBUS
MANUFACTURER’S SPECIFICATION CHANGE NOTICE
(MSCN)
|
For
MSCN Number
Issue
Dated
Page
|
Specification repercussion:
After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording shall read as follows:
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
3
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
4
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
(i)
|
[***], or
|
(ii)
|
[***], or
|
(iii)
|
[***];
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
3
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
3
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
AIRFRAME:
|
[ENGINES/PROPULSION SYSTEMS]:
|
AIRBUS Model A3[
•
]-[
•
]
|
[Insert name of engine or propulsion system manufacturer] Model [
•
]
|
MANUFACTURER’S
SERIAL NUMBER: [
•
]
|
ENGINE SERIAL NUMBERS:
LH: [
•
]
RH: [
•
]
|
REGISTRATION MARK: [
•
]
|
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
1
|
The Items covered by the Service Life Policy pursuant to Subclause 12.2 are those Seller Items of primary and auxiliary structure described hereunder.
|
2
|
WINGS - CENTER AND OUTER WING BOX (LEFT AND RIGHT)
|
2.1.1
|
[***]
|
2.1.2
|
[***]
|
2.1.3
|
[***]
|
2.2.1
|
[***]
|
2.2.2
|
[***]
|
2.2.3
|
[***]
|
2.2.4
|
[***]
|
2.3.1
|
[***]
|
2.3.1.1
|
[***]
|
2.3.1.2
|
[***]
|
2.3.2
|
[***]
|
2.3.2.1
|
[***]
|
2.3.2.2
|
[***]
|
2.3.3
|
[***]
|
2.3.3.1
|
[***]
|
2.3.3.2
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
2.4.1
|
[***]
|
2.4.1.1
|
[***]
|
2.4.1.2
|
Ribs
|
2.4.1.3
|
[***]
|
2.4.1.4
|
[***]
|
3
|
FUSELAGE
|
3.1.1
|
[***]
|
3.1.4
|
[***]
|
3.1.5
|
[***]
|
3.1.6
|
[***]
|
3.1.7
|
[***]
|
3.1.8
|
[***]
|
3.2.1
|
[***]
|
3.2.2
|
[***]
|
3.2.3
|
[***]
|
4
|
STABILIZERS
|
4.1.1
|
[***]
|
4.1.2
|
[***]
|
4.1.3
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
4.1.4
|
[***]
|
4.1.5
|
[***]
|
4.1.5.1
|
[***]
|
4.1.5.2
|
[***]
|
4.2.1
|
[***]
|
4.2.2
|
[***]
|
4.2.3
|
[***]
|
4.2.4
|
[***]
|
4.2.5
|
[***]
|
4.2.5.1
|
Hinge brackets
|
4.2.5.2
|
Servo control attachment brackets
|
5
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
3
|
•
|
[***]
|
•
|
[***]
|
•
|
[***]
|
•
|
[***]
|
•
|
[***]
|
•
|
[***]
|
•
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
OPERATIONAL MANUALS AND DATA
|
|||||||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
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|
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|
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|
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|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
OPERATIONAL MANUALS AND DATA
|
|
|
|
|
|
|
|
[***]
|
[***]
|
[***]
|
[***]
|
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|
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|
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|
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|
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|
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|
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|
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|
[***]
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
3
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
OPERATIONAL MANUALS AND DATA
|
|||||||
[***]
|
[***]
|
[***]
|
[***]
|
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|
[***]
|
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|
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|
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|
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|
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|
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|
[***]
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
4
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
MAINTENANCE AND ASSOCIATED MANUALS
|
|||||||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
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|
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|
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|
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|
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|
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[***]
|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
[***]
|
[***]
|
[***]
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
5
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
MAINTENANCE AND ASSOCIATED MANUALS
|
|||||||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
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|
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|
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|
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|
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|
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|
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|
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|
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[***]
|
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|
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|
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|
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|
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|
[***]
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
6
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
MAINTENANCE AND ASSOCIATED MANUALS
|
|||||||
[***]
|
[***]
|
[***]
|
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|
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|
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|
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|
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|
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|
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|
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|
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[***]
|
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|
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|
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|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
7
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
OFF
|
Advanced Consultation Tool on DVD
|
E
|
5
|
360
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
8
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
STRUCTURAL MANUALS
|
|||||||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
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|
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|
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|
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[***]
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|
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|
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|
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|
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|
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|
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|
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|
[***]
|
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|
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[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
OFF
|
SGML
|
E
|
1
|
90
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
9
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
OVERHAUL DATA
|
|||||||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
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|
[***]
|
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|
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|
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|
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|
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|
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|
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|
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|
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|
[***]
|
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|
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|
[***]
|
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|
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|
||
[***]
|
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|
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|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
10
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
ENGINEERING DOCUMENTS
|
|||||||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
11
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
MISCELLANEOUS PUBLICATIONS
|
|||||||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
12
|
NOMENCLATURE
|
Abbr
|
Avail
|
Form
|
Type
|
Qty
|
Deliv
|
Comments
|
MISCELLANEOUS PUBLICATIONS
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|||
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
13
|
1.1
|
Scope
|
1.1.1
|
This Exhibit H sets forth the terms and conditions for the support and services offered by the Seller to the Buyer with respect to Material (as defined below).
|
1.1.2
|
References made to Articles shall be deemed to refer to articles of this Exhibit H unless otherwise specified.
|
1.1.3
|
For purposes of this Exhibit H:
|
(i)
|
The term “
Supplier
” shall mean any supplier providing any of the Material listed in Article 1.2.1 and the term “
Supplier Part
” shall mean an individual item of Material.
|
(ii)
|
The term “
SPEC 2000
” means the “E-Business Specification for Materials Management” document published by the Air Transport Association of America.
|
1.2.1
|
Each of the following constitutes “
Material
” for purposes of this Exhibit H:
|
(i)
|
Seller parts;
|
(ii)
|
Supplier Parts classified as Repairable Line Maintenance Parts (as defined in SPEC 2000);
|
(iii)
|
Supplier Parts classified as Expendable Line Maintenance Parts (as defined in SPEC 2000);
|
(iv)
|
Seller and Supplier ground support equipment and specific-to-type tools.
|
1.2.2
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
1.4
|
Airbus Material Store
|
1.4.1
|
US Spares Center
|
1.4.2
|
Material Support Center, Germany
|
1.4.3
|
Other Points of Shipment
|
1.4.3.1
|
In addition to the US Spares Center and the Airbus Material Center, the Seller and its Affiliates operate a global network of regional satellite stores (the “
Regional Satellite Stores
”). A list of such stores shall be provided to the Buyer upon the Buyer’s request.
|
1.4.3.2
|
Subject to Article 1.4.1, the Seller reserves the right to effect deliveries from distribution centers other than the US Spares Center or the Airbus Material Center, which may include the Regional Satellite Stores or any other production or Supplier’s facilities.
|
1.5
|
Customer Order Desk
|
(i)
|
Management of order entries for all priorities, including Aircraft On Ground (“
AOG
”);
|
(ii)
|
Management of order changes and cancellations;
|
(iii)
|
Administration of Buyer’s routing instructions;
|
(iv)
|
Management of Material returns;
|
(v)
|
Clarification of delivery discrepancies;
|
(vi)
|
Issuance of credit and debt notes.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
2
|
1.7.1
|
During the Term, the Buyer [***]
|
(i)
|
[***], or
|
(ii)
|
[***].
|
1.7.2
|
[***]
|
(i)
|
[***]; and
|
(ii)
|
[***].
|
1.7.2.1
|
[***]
|
1.7.2.2
|
[***]
|
1.7.2.3
|
[***]
|
1.7.2.4
|
[***]
|
2.
|
INITIAL PROVISIONING
|
2.1
|
Period
|
2.2.1
|
The Seller shall organize a pre‑provisioning meeting at the US Spares Center or at the Airbus Material Center, or at any other agreed location, for the purpose of setting an acceptable schedule and working procedure for the preparation of the initial issue of the Provisioning Data and the Initial Provisioning Conference referred to in Articles 2.3 and 2.4 below (the “
Pre-Provisioning Meeting
”).
|
2.2.2
|
The Pre-Provisioning Meeting shall take place on an agreed date that is no later than [***] prior to Scheduled Delivery Month of the first Aircraft, allowing a minimum preparation time of [***] for the Initial Provisioning Conference.
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
3
|
2.4.1
|
Provisioning data generally in accordance with SPEC 2000, Chapter 1, for Material described in Articles 1.2.1 (i) through 1.2.1 (iii) (“
Provisioning Data
”) shall be supplied by the Seller to the Buyer in the English language, in a format and timeframe to be agreed during the Pre-Provisioning Meeting.
|
2.4.1.1
|
Unless a longer revision cycle has been agreed, the Provisioning Data shall be revised [***] up to the end of the Initial Provisioning Period.
|
2.4.1.2
|
The Seller shall ensure that Provisioning Data is provided to the Buyer in time to permit the Buyer to perform any necessary evaluation and to place orders in a timely manner.
|
2.4.1.3
|
Provisioning Data generated by the Seller shall comply with the configuration of the Aircraft as documented [***] before the date of issue.
|
2.4.3
|
Supplementary Data
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
4
|
2.6
|
Delivery of Initial Provisioning Material
|
2.6.1
|
During the Initial Provisioning Period, Initial Provisioning Material shall conform to the latest known configuration standard of the Aircraft for which such Material is intended as reflected in the Provisioning Data transmitted by the Seller.
|
2.6.2
|
The delivery of Initial Provisioning Material shall take place (i) according to the conditions specified in the commercial offer mentioned in Article 2.5 and (ii) at a location designated by the Buyer.
|
2.6.3
|
All Initial Provisioning Material shall be packaged in accordance with ATA 300 Specification.
|
(a)
|
[***]
|
(b)
|
[***]
|
(i)
|
[***];
|
(ii)
|
[***];
|
(iii)
|
[***];
|
(iv)
|
[***];
|
(v)
|
[***];
|
(vi)
|
[***];
|
(vii)
|
[***]
|
(d)
|
[***]:
|
(i)
|
[***];
|
(ii)
|
[***]
|
(e)
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
5
|
(f)
|
[***]
|
(g)
|
[***]
|
4.
|
WARRANTIES
|
(i)
|
be free from defects in material.
|
(ii)
|
be free from defects in workmanship, including without limitation processes of manufacture.
|
(iii)
|
be free from defects in design having regard to the state of the art of such design; and
|
(iv)
|
be free from defects arising from failure to conform to the applicable specification for such part.
|
4.1.1
|
Warranty Period
|
4.1.1.1
|
The warranty period for Seller Parts [***]for new Seller Parts and eighteen (18) months for used Seller Parts from delivery of such parts to the Buyer.
|
4.1.1.2
|
Whenever any Seller Part that contains a defect for which the Seller is liable under Article 4.1 has been corrected, replaced or repaired pursuant to the terms of this Article 4.1, the period of the Seller’s warranty with respect to such corrected, repaired or replacement Seller Part, as the case may be, [***].
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
6
|
4.2
|
Supplier Parts
|
4.3
|
Waiver, Release and Renunciation
|
(1)
|
ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;
|
(2)
|
ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
|
(3)
|
ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;
|
(4)
|
ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE,
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
7
|
(5)
|
ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;
|
(6)
|
ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;
|
(7)
|
ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:
|
(a)
|
LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THE AGREEMENT;
|
(b)
|
LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THE AGREEMENT;
|
(c)
|
LOSS OF PROFITS AND/OR REVENUES;
|
(d)
|
ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.
|
4.4
|
Duplicate Remedies
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
8
|
5.4
|
[***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
9
|
1.
|
Letter Agreement No. 1 – [***]
|
2.
|
Letter Agreement No. 2 – [***]
|
3.
|
Letter Agreement No. 3 – [***]
|
4.
|
Letter Agreement No. 4 – [***]
|
5.
|
Letter Agreement No. 5 –
Reserved
|
6.
|
Letter Agreement No. 6A –[***]
|
7.
|
Letter Agreement No. 6B –[***]
|
8.
|
Letter Agreement No. 7A – [***]
|
9.
|
Letter Agreement No. 7B – [***]
|
10.
|
Letter Agreement No. 8 – [***]
|
11.
|
Letter Agreement No. 9 – [***]
|
12.
|
Letter Agreement No. 10 – [***]
|
CT1301535_PA_DAL_A321 A330 EXECUTION
|
Exh
1
|
1.
|
Definitions
|
1.1
|
Clause 0 of the Agreement is hereby amended to add the following terms :
|
1.2
|
Clause 0 of the Agreement is hereby amended to replace the following terms:
|
2.
|
DELIVERY SCHEDULE
|
2.1
|
The Buyer and the Seller agree to (i) advance the Scheduled Delivery Month for the A330-300 Aircraft bearing CAC ID No. 468259 (the “
Certification Aircraft
”), originally scheduled for Delivery in October 2015, to July 2015 and (ii) add the 2014 A321 Aircraft to the delivery schedule in Clause 9.1.1 of the Agreement.
|
2.2
|
In consideration of Clause 2.1 above, Clause 9.1.1 of the Agreement is hereby deleted in its entirety and is replaced with the following:
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Month/Quarter/Year
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Quarter/Year
|
468257
|
2013 A330
|
May 2015
|
468286
|
[***]
|
[***]
|
468258
|
2013 A330
|
June 2015
|
468287
|
[***]
|
[***]
|
468259
|
2013 A330
|
July 2015
|
468288
|
[***]
|
[***]
|
468260
|
2013 A330
|
December 2015
|
468266
|
[***]
|
[***]
|
468267
|
2013 A321
|
January 2016
|
468289
|
[***]
|
[***]
|
468268
|
2013 A330
|
January 2016
|
468290
|
[***]
|
[***]
|
468269
|
2013 A321
|
March 2016
|
468291
|
[***]
|
[***]
|
468261
|
2013 A321
|
February 2016
|
468292
|
[***]
|
[***]
|
468270
|
2013 A321
|
April 2016
|
468293
|
[***]
|
[***]
|
468271
|
2013 A321
|
May 2016
|
468294
|
[***]
|
[***]
|
468272
|
2013 A321
|
June 2016
|
468295
|
[***]
|
[***]
|
468273
|
2013 A321
|
June 2016
|
468296
|
[***]
|
[***]
|
468262
|
2013 A330
|
2
nd
Quarter 2016
|
Rank 41
|
[***]
|
[***]
|
468263
|
[***]
|
[***]
|
Rank 42
|
[***]
|
[***]
|
468274
|
[***]
|
[***]
|
Rank 43
|
[***]
|
[***]
|
468275
|
[***]
|
[***]
|
Rank 44
|
[***]
|
[***]
|
468276
|
[***]
|
[***]
|
Rank 45
|
[***]
|
[***]
|
468277
|
[***]
|
[***]
|
Rank 46
|
[***]
|
[***]
|
468264
|
[***]
|
[***]
|
Rank 47
|
[***]
|
[***]
|
468278
|
[***]
|
[***]
|
Rank 48
|
[***]
|
[***]
|
468279
|
[***]
|
[***]
|
Rank 49
|
[***]
|
[***]
|
468280
|
[***]
|
[***]
|
Rank 50
|
[***]
|
[***]
|
468281
|
[***]
|
[***]
|
Rank 51
|
[***]
|
[***]
|
468282
|
[***]
|
[***]
|
Rank 52
|
[***]
|
[***]
|
468283
|
[***]
|
[***]
|
Rank 53
|
[***]
|
[***]
|
468284
|
[***]
|
[***]
|
Rank 54
|
[***]
|
[***]
|
468265
|
[***]
|
[***]
|
Rank 55
|
[***]
|
[***]
|
468285
|
[***]
|
[***]
|
|
|
|
3.
|
EXHIBIT A-3 (CHANGE ORDERS TO A321 AIRCRAFT STANDARD SPECIFICATION)
|
4.
|
FIELD ASSISTANCE
|
5.
|
EFFECT OF THE AMENDMENT
|
6.
|
CONFIDENTIALITY
|
7.
|
GOVERNING LAW
|
8.
|
ASSIGNMENT
|
9.
|
COUNTERPARTS
|
1.
|
AMENDMENT
|
1.1
|
The Buyer and the Seller agree to advance the Scheduled Delivery Month of the A330-300 Aircraft bearing [***].
|
1.2
|
Clause 9.1.1 of the Agreement is hereby deleted in its entirety and is replaced with the following:
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Month/Quarter/Year
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Quarter/Year
|
468257
|
2013 A330
|
May - 2015
|
468286
|
[***]
|
[***]
|
468258
|
2013 A330
|
June - 2015
|
468287
|
[***]
|
[***]
|
468259
|
2013 A330
|
July - 2015
|
468288
|
[***]
|
[***]
|
468260
|
2013 A330
|
November - 2015
|
468266
|
[***]
|
[***]
|
468267
|
2013 A321
|
January - 2016
|
468289
|
[***]
|
[***]
|
468268
|
2013 A330
|
January - 2016
|
468290
|
[***]
|
[***]
|
468261
|
2013 A321
|
February - 2016
|
468291
|
[***]
|
[***]
|
468269
|
2013 A321
|
March - 2016
|
468292
|
[***]
|
[***]
|
468270
|
2013 A321
|
April - 2016
|
468293
|
[***]
|
[***]
|
468262
|
2013 A330
|
April - 2016
|
468294
|
[***]
|
[***]
|
468271
|
2013 A321
|
May - 2016
|
468295
|
[***]
|
[***]
|
468263
|
2013 A330
|
May - 2016
|
468296
|
[***]
|
[***]
|
468272
|
2013 A321
|
June - 2016
|
10017657
|
[***]
|
[***]
|
468273
|
2013 A321
|
June - 2016
|
10017658
|
[***]
|
[***]
|
468274
|
[***]
|
[***]
|
10017659
|
[***]
|
[***]
|
468264
|
[***]
|
[***]
|
10017660
|
[***]
|
[***]
|
468275
|
[***]
|
[***]
|
10017661
|
[***]
|
[***]
|
468276
|
[***]
|
[***]
|
10017662
|
[***]
|
[***]
|
468277
|
[***]
|
[***]
|
10017663
|
[***]
|
[***]
|
468278
|
[***]
|
[***]
|
10017664
|
[***]
|
[***]
|
468279
|
[***]
|
[***]
|
10017665
|
[***]
|
[***]
|
468280
|
[***]
|
[***]
|
10017666
|
[***]
|
[***]
|
468281
|
[***]
|
[***]
|
10017667
|
[***]
|
[***]
|
468282
|
[***]
|
[***]
|
10017668
|
[***]
|
[***]
|
468283
|
[***]
|
[***]
|
10017669
|
[***]
|
[***]
|
468284
|
[***]
|
[***]
|
10017670
|
[***]
|
[***]
|
468265
|
[***]
|
[***]
|
10017671
|
[***]
|
[***]
|
468285
|
[***]
|
[***]
|
|
|
|
2.
|
EFFECT OF THE AMENDMENT
|
2.1
|
The Agreement will be deemed amended to the extent herein provided, and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment.
|
2.2
|
Both Parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement and be governed by its provisions, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern.
|
3.
|
CONFIDENTIALITY
|
4.
|
GOVERNING LAW
|
4.1
|
THIS AMENDMENT AND THE AGREEMENTS CONTEMPLATED HEREIN WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 22.6 OF THE AGREEMENT.
|
4.2
|
It is agreed that the united nations convention on contracts for the international sale of goods will not apply to this amendment.
|
5.
|
ASSIGNMENT
|
6.
|
COUNTERPARTS
|
1.
|
AMENDMENT
|
2.
|
EFFECT OF THE AMENDMENT
|
2.1
|
The Agreement will be deemed amended to the extent herein provided, and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment.
|
2.2
|
Both Parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement and be governed by its provisions, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern.
|
3.
|
CONFIDENTIALITY
|
4.
|
GOVERNING LAW
|
4.1
|
THIS AMENDMENT AND THE AGREEMENTS CONTEMPLATED HEREIN WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 22.6 OF THE AGREEMENT.
|
4.2
|
It is agreed that the united nations convention on contracts for the international sale of goods will not apply to this amendment.
|
5.
|
ASSIGNMENT
|
6.
|
COUNTERPARTS
|
1.
|
AMENDMENT
|
1.1
|
The Buyer and the Seller agree to (i) defer the Scheduled Delivery Month of [***] and (ii) advance the Scheduled Delivery Month of the [***].
|
1.2
|
Clause 9.1.1 of the Agreement is hereby deleted in its entirety and is replaced with the following:
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Month/Quarter/Year
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Quarter/Year
|
468257
|
2013 A330
|
May - 2015
|
468286
|
[***]
|
[***]
|
468258
|
2013 A330
|
June - 2015
|
468287
|
[***]
|
[***]
|
468259
|
2013 A330
|
July - 2015
|
468288
|
[***]
|
[***]
|
468260
|
2013 A330
|
November - 2015
|
468266
|
[***]
|
[***]
|
468261
|
2013 A330
|
January - 2016
|
468289
|
[***]
|
[***]
|
468268
|
2013 A321
|
February - 2016
|
468290
|
[***]
|
[***]
|
468269
|
2013 A321
|
March - 2016
|
468291
|
[***]
|
[***]
|
468270
|
2013 A321
|
April - 2016
|
468292
|
[***]
|
[***]
|
468262
|
2013 A330
|
April - 2016
|
468293
|
[***]
|
[***]
|
468271
|
2013 A321
|
May - 2016
|
468294
|
[***]
|
[***]
|
468263
|
2013 A330
|
May - 2016
|
468295
|
[***]
|
[***]
|
468264
|
2013 A330
|
May - 2016
|
468296
|
[***]
|
[***]
|
468272
|
2013 A321
|
June - 2016
|
10017657
|
[***]
|
[***]
|
468273
|
[***]
|
[***]
|
10017658
|
[***]
|
[***]
|
468274
|
[***]
|
[***]
|
10017659
|
[***]
|
[***]
|
468267
|
[***]
|
[***]
|
10017660
|
[***]
|
[***]
|
468275
|
[***]
|
[***]
|
10017661
|
[***]
|
[***]
|
468276
|
[***]
|
[***]
|
10017662
|
[***]
|
[***]
|
468277
|
[***]
|
[***]
|
10017663
|
[***]
|
[***]
|
468278
|
[***]
|
[***]
|
10017664
|
[***]
|
[***]
|
468279
|
[***]
|
[***]
|
10017665
|
[***]
|
[***]
|
468280
|
[***]
|
[***]
|
10017666
|
[***]
|
[***]
|
468281
|
[***]
|
[***]
|
10017667
|
[***]
|
[***]
|
468282
|
[***]
|
[***]
|
10017668
|
[***]
|
[***]
|
468283
|
[***]
|
[***]
|
10017669
|
[***]
|
[***]
|
468284
|
[***]
|
[***]
|
10017670
|
[***]
|
[***]
|
468265
|
[***]
|
[***]
|
10017671
|
[***]
|
[***]
|
468285
|
[***]
|
[***]
|
|
|
|
2.
|
EFFECT OF THE AMENDMENT
|
2.1
|
The Agreement will be deemed amended to the extent herein provided, and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment.
|
2.2
|
Both Parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement and be governed by its provisions, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern.
|
3.
|
CONFIDENTIALITY
|
4.
|
GOVERNING LAW
|
4.1
|
THIS AMENDMENT AND THE AGREEMENTS CONTEMPLATED HEREIN WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 22.6 OF THE AGREEMENT.
|
4.2
|
It is agreed that the united nations convention on contracts for the international sale of goods will not apply to this amendment.
|
5.
|
ASSIGNMENT
|
6.
|
COUNTERPARTS
|
1.
|
AMENDMENTS
|
1.1
|
Definitions
|
1.2
|
Specification
|
2.3.1
|
Each A321 Airframe shall be equipped with a set of two (2) CFM CFM56-5B3/3 propulsion systems with [***] (such set, an “
A321 Propulsion System
”).
|
2.3.2
|
Each A330 Airframe shall be equipped with a set of two (2) GE CF6-80E1A4 propulsion systems [***] (such set, an “
A330 Propulsion System
”).”
|
1.3
|
Price
|
(i)
|
the base price of the A321 Airframe corresponding to the A321 Standard Specification, including nacelles and thrust reversers, and excluding BFE, which is:
|
(ii)
|
the sum of the base prices of any and all SCNs set forth in Exhibit A-3, which is:
|
(i)
|
the base price of the A330 Airframe corresponding to the A330 Standard Specification and excluding BFE, which is:
|
(ii)
|
the sum of the base prices of any and all SCNs (excluding one-time charges) set forth in Exhibit A-4, which is:
|
3.1.2.1
|
The base price of a set of two (2) CFM CFM56-5B3/3 propulsion systems (the “
Propulsion System A Base Price
”) is:
|
3.1.2.2
|
The base price of a set of two (2) GE CF6-80E1A4 Propulsion systems, including nacelles and thrust reversers (the “
Propulsion System B Base Price
”), is:
|
1.4
|
Tech Data
|
1.5
|
Exhibits
|
1.5.1
|
Exhibit A-4 to the Agreement is hereby deleted in its entirety and is replaced with the Exhibit A-4 set forth in Appendix 1.
|
1.5.2
|
Exhibit C-2 to the Agreement is hereby deleted in its entirety and is replaced with the Exhibit C-2 as set forth in Appendix 2.
|
1.5.3
|
Exhibit C-3 to the Agreement is hereby deleted in its entirety and is replaced with the Exhibit C-3 as set forth in Appendix 3.
|
1.6
|
End-User License Agreement for Airbus Software
|
(i)
|
“
Agreement
” means the Airbus A321 Aircraft and A330 Aircraft Purchase Agreement, dated as of September 3
rd
, 2013.
|
(ii)
|
“
Aircraft
” means the A321 Aircraft and A330 Aircraft
|
2.
|
EFFECT OF THE AMENDMENT
|
2.1
|
The Agreement will be deemed amended to the extent herein provided, and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment.
|
2.2
|
Both Parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement and be governed by its provisions, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern.
|
3.
|
CONFIDENTIALITY
|
4.
|
GOVERNING LAW
|
4.1
|
THIS AMENDMENT AND THE AGREEMENTS CONTEMPLATED HEREIN WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 22.6 OF THE AGREEMENT.
|
4.2
|
It is agreed that the United Nations convention on contracts for the international sale of goods will not apply to this amendment.
|
5.
|
ASSIGNMENT
|
6.
|
COUNTERPARTS
|
SCN/MSCN/MISC
|
EPAC TDU
|
Title
|
Price (USD) per A/C
[***]
|
ATA 02 CERTIFICATION - EXTERNAL LIVERY
|
1.
|
AMENDMENTS
|
1.1
|
Clause 0 of the Agreement is amended to modify the following term and corresponding definition:
|
1.2
|
Letter Agreement No. 10 to the Agreement is deleted in its entirety and is replaced by the Letter Agreement No. 10 dated as of the date hereof.
|
1.3
|
Letter Agreement No. 11 dated as of the date hereof is hereby added to the Agreement.
|
2.
|
EFFECT OF THE AMENDMENT
|
3.
|
CONFIDENTIALITY
|
4.
|
GOVERNING LAW
|
5.
|
ASSIGNMENT
|
6.
|
COUNTERPARTS
|
1.
|
DEFINITIONS
|
1.1
|
Clause 0 of the Agreement is hereby amended to add the following terms:
|
1.2
|
Clause 0 of the Agreement is hereby amended to replace the following terms:
|
2.
|
PRICE
|
2.1
|
Clause 3.1.1.1 of the Agreement is deleted in its entirety and is replaced with the following:
|
(i)
|
the base price of the A321 Airframe corresponding to the A321 Standard Specification, including nacelles and thrust reversers, and excluding BFE, which is:
|
(ii)
|
the sum of the base prices of any and all SCNs set forth in Exhibit A-3, which is:
|
2.2
|
Exhibit A-3
|
3.
|
DELIVERY SCHEDULE
|
3.1
|
Clause 9.1.1 of the Agreement is hereby deleted in its entirety and is replaced with the following:
|
9.1.1
|
Subject to the provisions of the Agreement, the Seller shall have the Aircraft Ready for Delivery at the Delivery Location, and the Buyer shall accept the same, during the months (each a “
Scheduled Delivery Month
”) and quarters (each, a “
Scheduled Delivery Quarter
”) set forth in the table below.
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Month/Quarter/Year
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Month/Quarter/Year
|
468257
|
2013 A330
|
May-15
|
Rank 58
|
2016 A321
|
Feb-18
|
[***]
|
2013 A330
|
Jun-15
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A330
|
Jul-15
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A330
|
Nov-15
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A330
|
Jan-16
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A321
|
Feb-16
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A321
|
Mar-16
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A321
|
Apr-16
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A330
|
Apr-16
|
[***]
|
[***]
|
[***]
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Month/Quarter/Year
|
CAC ID
|
Aircraft Type
|
Scheduled Delivery Month/Quarter/Year
|
[***]
|
2013 A321
|
May-16
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A330
|
May-16
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A330
|
May-16
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A321
|
Jun-16
|
[***]
|
[***]
|
[***]
|
[***]
|
2013 A321
|
Jun-16
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
4.
|
MOBILE DELIVERIES
|
4.1
|
Certificate of Acceptance
|
8.3
|
When the Aircraft is Ready For Delivery, the Buyer shall forthwith give to the Seller a signed Certificate of Acceptance in (a) the form set forth in Exhibit D-1, if the Delivery Location is in Mobile, Alabama and (b) in the form set forth in Exhibit D-2, if the Delivery Location is in any place other than Mobile, Alabama, in respect of the relevant Aircraft. Should the Buyer fail to so deliver the said Certificate, then the Buyer shall be deemed to be in default as though it had without cause rejected Delivery of such Aircraft when duly tendered to it hereunder and shall thereafter bear all costs and expenses resulting from such delay in Delivery.
|
4.2
|
Bill of Sale
|
4.3
|
BFE
|
4.4
|
Exhibits
|
i.
|
Exhibit D is deleted in its entirety and replaced with Exhibits D-1 and D-2 attached hereto.
|
ii.
|
Exhibit E is deleted in its entirety and replaced with Exhibits E-1 and E-2 attached hereto.
|
iii.
|
Exhibit J attached hereto, is hereby added to the Agreement.
|
4.5
|
Table of Contents
|
4.5.1
|
The reference to Exhibit D in the Table of Contents to the Agreement is deleted in its entirety and replaced with the following:
|
EXHIBIT D-1
|
FORM OF CERTIFICATE OF ACCEPTANCE (MOBILE DELIVERIES)
|
EXHIBIT D-2
|
FORM OF CERTIFICATE OF ACCEPTANCE (BLAGNAC/HAMBURG DELIVERIES)
|
4.5.2
|
The reference to Exhibit E in the Table of Contents to the Agreement is deleted in its entirety and replaced with the following:
|
EXHIBIT E-2
|
FORM OF BILL OF SALE (BLAGNAC/HAMBURG DELIVERIES)
|
4.5.3
|
A new reference to Exhibit J is added to the Table of Contents to the Agreement in appropriate alphabetical order with the following:
|
5.5
|
Letter Agreements
|
i.
|
Letter Agreement No. 1 to the Agreement is deleted in its entirety and is replaced with Letter Agreement No. 1 dated as of the date hereof.
|
ii.
|
Letter Agreement No. 2 to the Agreement is deleted in its entirety and is replaced with Letter Agreement No. 2 dated as of the date hereof.
|
iii.
|
Letter Agreement No. 8 to the Agreement is deleted in its entirety and is replaced with Letter Agreement No. 8 dated as of the date hereof.
|
iv.
|
Letter Agreement No. 10 to the Agreement is deleted in its entirety and is replaced with Letter Agreement No. 10 dated as of the date hereof.
|
v.
|
Letter Agreement No. 12 is hereby added to the Agreement.
|
vi.
|
The Financing Letter Agreement to the Agreement is deleted in its entirety and is replaced with the Financing Letter Agreement, dated as of the date hereof.
|
vii.
|
Letter Agreement No. 1 to the 2014 Agreement is deleted in its entirety and is replaced with Letter Agreement No. 1 to the 2014 Agreement.
|
5.
|
EFFECT OF THE AMENDMENT
|
6.
|
CONFIDENTIALITY
|
7.
|
GOVERNING LAW
|
8.
|
ASSIGNMENT
|
9.
|
COUNTERPARTS
|
18.1
|
Administration
|
18.1.1
|
In accordance with the Specification, the Seller shall install those items of equipment that are identified in the Specification as being furnished by the Buyer (“
Buyer Furnished Equipment
” or “
BFE
”), provided that the BFE and the supplier of such BFE (the “
BFE Supplier
”) are referred to in the Airbus BFE Product Catalog valid at the time the BFE Supplier is selected.
|
18.1.2
|
Notwithstanding the foregoing and without prejudice to Subclause 2.4, if the Buyer wishes to install BFE manufactured by a supplier who is not referred to in the Airbus BFE Product Catalog, the Buyer shall so inform the Seller [***].
|
18.1.3
|
The Seller shall advise the Buyer of the dates, [***] from the date of signature of the Agreement, by which, in the planned release of engineering for the Aircraft, the Seller requires a written detailed engineering definition encompassing a Declaration of Design and Performance (the “
BFE Engineering Definition
”). The Seller shall provide to the Buyer and/or the BFE Supplier(s), within an appropriate timeframe, the necessary interface documentation to enable the development of the BFE Engineering Definition.
|
18.1.4
|
The Seller shall also provide in [***] to the Buyer a schedule of dates and the shipping addresses for delivery of the BFE and, where requested by the Seller, additional spare BFE to permit installation in the Aircraft and Delivery of the Aircraft in accordance with the Aircraft delivery schedule. The Buyer shall provide, or cause the BFE Suppliers to provide, the BFE by such dates in a serviceable condition, in order to allow performance of any assembly, installation, test or acceptance process in accordance with the Seller’s industrial schedule. In order to facilitate the follow-up of the timely receipt of BFE, the Buyer shall, upon the Seller’s request, provide to the Seller dates and references of all BFE purchase orders placed by the Buyer.
|
18.1.5
|
Without prejudice to the Buyer’s obligations hereunder, in order to facilitate the development of the BFE Engineering Definition, the Seller shall organize meetings between the Buyer and BFE Suppliers. The Buyer hereby agrees to participate in such meetings and to provide adequate technical and engineering expertise to reach decisions within the defined timeframe.
|
(i)
|
to monitor the BFE Suppliers and ensure that they shall enable the Buyer to fulfill its obligations, including but not limited to those set forth in the Customization Milestone Chart;
|
(ii)
|
that, should a timeframe, quality or other type of risk be identified at a given BFE Supplier, the Buyer shall allocate resources to such BFE Supplier so as not to jeopardize the industrial schedule of the Aircraft;
|
(iii)
|
for major BFE, including, but not being limited to, seats, galleys and IFE (“
Major BFE
”) to participate on a mandatory basis in the specific meetings that take place between BFE Supplier selection and BFE delivery, namely:
|
(iv)
|
Preliminary Design Review (“
PDR
”),
|
(v)
|
Critical Design Review (“
CDR
”);
|
(vi)
|
to attend the First Article Inspection (“
FAI
”) for the first shipset of all Major BFE. Should the Buyer not attend such FAI, the Buyer shall delegate the FAI to the BFE Supplier and confirmation thereof shall be supplied to the Seller in writing;
|
(vii)
|
to attend the Source Inspection (“
SI
”) that takes place at the BFE Supplier’s premises prior to shipping, for each shipset of all Major BFE. Should the Buyer not attend such SI, the Buyer shall delegate the SI to the BFE Supplier and confirmation thereof shall be brought to the Seller in writing. Should the Buyer not attend the SI, the Buyer shall be deemed to have accepted the conclusions of the BFE Supplier with respect to such SI.
|
18.1.6.1
|
The BFE shall be imported into FRANCE or into GERMANY by the Buyer under a suspensive customs system (“Régime de l’entrepôt douanier ou régime de perfectionnement actif “or “Zollverschluss”) without application of any French or German tax or customs duty, [***] according to the Incoterms, to the following shipping addresses:
|
18.1.6.2
|
BFE delivered to the Seller’s Affiliate in Mobile, Alabama, as may be specified by the Seller pursuant to Clause 18.1.6.1, will be shipped according to [***].
|
18.2
|
Applicable Requirements
|
(i)
|
be manufactured by a qualified BFE Supplier, and
|
(ii)
|
meet the requirements of the applicable Specification of the Aircraft, and
|
(iii)
|
be delivered with the relevant certification documentation, including but not limited to the DDP, and
|
(iv)
|
comply with the BFE Engineering Definition, and
|
(v)
|
comply with applicable requirements incorporated by reference to the Type Certificate and listed in the Type Certificate Data Sheet, and
|
(vi)
|
be approved by the Aviation Authority issuing the Export Airworthiness Certificate and by the Buyer’s Aviation Authority for installation and use on the Aircraft at the time of Delivery of the Aircraft, and
|
(vii)
|
not infringe any patent, copyright or other intellectual property right of the Seller any third party, and
|
(viii)
|
not be subject to any legal obligation or other encumbrance that may prevent, hinder or delay the installation of the BFE in the Aircraft and/or the Delivery of the Aircraft.
|
18.3
|
Buyer’s Obligation and Seller’s Remedies
|
18.3.1
|
Any delay or failure by the Buyer or the BFE Suppliers in:
|
(i)
|
complying with the foregoing warranty or in providing the BFE Engineering Definition or field service mentioned in Subclause 18.1.4, or
|
(ii)
|
furnishing the BFE in a serviceable condition at the requested delivery date, or
|
(iii)
|
obtaining any required approval for such BFE equipment under the above mentioned Aviation Authorities’ regulations,
|
18.3.2
|
In addition, in the event of any delay or failure mentioned in 18.3.1 above, the Seller may:
|
(i)
|
select, purchase and install equipment similar to the BFE at issue, in which event the Final Price of the affected Aircraft [***]
|
(ii)
|
if the BFE is delayed by more [***].
|
18.4
|
Title and Risk of Loss
|
18.5
|
Disposition of BFE Following Termination
|
18.5.1
|
If a termination of the Agreement pursuant to the provisions of Clause 21 occurs with respect to an Aircraft in which all or any part of the BFE has been installed prior to the date of such termination, [***].
|
18.5.2
|
[***]
|
18.5.3
|
The Seller shall notify the Buyer as to those items of BFE [***]. The Buyer shall have no claim against the Seller for damage, loss or destruction of any item of BFE removed from the Aircraft and not removed from Seller’s facility within such period.
|
18.5.4
|
The Buyer shall have no claim against the Seller for damage to or destruction of any item of BFE damaged or destroyed in the process of being removed from the Aircraft, provided that the Seller shall use reasonable care in such removal.
|
18.5.5
|
The Buyer shall grant the Seller title to any BFE items that cannot be removed from the Aircraft [***].
|
1
|
CREDIT MEMORANDA
|
1.1
|
A321 Aircraft
|
1.1.1
|
In respect of each A321 Aircraft, the Seller shall provide to the Buyer the following [***]:
|
(i)
|
[***]
,
|
(ii)
|
[***],
|
(iii)
|
[***],
|
(iv)
|
[***],
|
(v)
|
[***],
|
(vi)
|
[***],
|
(vii)
|
[***],
|
(viii)
|
[***],
|
(ix)
|
[***],
|
(x)
|
[***],
|
(xi)
|
[***],
|
(xii)
|
[***],
|
(xiii)
|
[***];
|
(xiv)
|
[***].
|
1.1.2
|
The A321 Aircraft [***].
|
1.1.3
|
The A321 Aircraft [***].
|
1.2
|
[***]
|
1.3
|
[***]
|
1.3.1
|
[***]
|
1.3.2
|
[***]
|
1.4
|
[***]
|
1.4.1
|
[***]
|
1.4.2
|
[***]
|
1.4.3
|
[***]
|
•
|
|
1.5
|
[***]
|
1.5.1
|
[***]
|
1.5.2
|
[***]
|
(i)
|
[***]
|
a)
|
[***]
|
b)
|
[***]
|
(ii)
|
[***]
|
1.5.3
|
[***]
|
1.5.4
|
[***]
|
(ii)
|
[***]
|
(ii)
|
[***]
|
1.5.5
|
[***]
|
1.5.6
|
[***]
|
1.5.7
|
[***]
|
1.5.8
|
[***]
|
1.6
|
A330 Aircraft
|
1.6.1
|
In respect of each A330 Aircraft, [***]
|
(i)
|
[***],
|
(ii)
|
[***],
|
(iii)
|
[***],
|
(iv)
|
[***],
|
(v)
|
[***]
,
|
(vi)
|
[***]
|
1.6.2
|
[***]
|
1.6.3
|
[***]
|
1.6.4
|
[***]
|
1.7
|
[***]
|
1.7.1
|
[***]
|
1.7.2
|
[***]
|
1.7.3
|
[***]
|
2
|
[***]
|
2.1
|
A321 Aircraft
|
2.1.1
|
[***]:
|
(i)
|
[***]
,
|
(ii)
|
[***]
,
|
(iii)
|
[***]
,
|
(iv)
|
[***]
.
|
2.1.2
|
[***]
|
(a)
|
[***]
|
(i)
|
[***]
,
|
(ii)
|
[***]
,
|
(iii)
|
[***]
,
|
(iv)
|
[***]
|
(b)
|
[***]
|
(i)
|
[***]
,
|
(ii)
|
[***]
,
|
(iii)
|
[***]
,
|
(iv)
|
[***]
|
2.2
|
A330 Aircraft
|
2.2.1
|
[***]
|
(a)
|
[***]
|
(i)
|
[***]
,
|
(ii)
|
[***]
,
|
(iii)
|
[***]
,
|
(iv)
|
[***]
|
(b)
|
[***]
|
(i)
|
[***]
,
|
(ii)
|
[***]
,
|
(iii)
|
[***],
|
(iv)
|
[***]
|
2.2.2
|
[***]
|
(a)
|
[***]
,
|
(b)
|
[***]
|
(c)
|
[***]
|
(i)
|
[***]
,
|
(ii)
|
[***]
,
|
(iii)
|
[***]
|
3
|
[***]
|
3.1
|
[***]
|
3.2
|
[***]
|
3.3
|
[***]
|
4
|
ASSIGNMENT
|
5
|
CONFIDENTIALITY
|
6
|
COUNTERPARTS
|
CT1301535_LA 1_TO_AMD 7_[***]_EXECUTION
PRIVILEGED AND CONFIDENTIAL
|
|
1
|
[***]
|
5.2.1
|
[***] to Clauses 10 and 11) and shall be paid by the Buyer to the Seller for the Aircraft.
|
5.2.2
|
INTENTIONALLY LEFT BLANK
|
5.2.3.1
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
5.2.3.3
|
[***]
|
5.2.3.4
|
[***]
|
2
|
[***]
|
2.1
|
[***]
|
2.2
|
PDP Deferral
|
2.2.1
|
[***]
|
(i)
|
[***],
|
(ii)
|
[***]),
|
(iii)
|
[***]
|
2.2.2
|
[***]
|
3
|
ASSIGNMENT
|
4
|
CONFIDENTIALITY
|
5
|
COUNTERPARTS
|
CT1301535_LA 2_TO_AMD 7_
[***]
_EXECUTION
PRIVILEGED AND CONFIDENTIAL
|
|
1
|
DEFINITIONS
|
2
|
[***]
|
2.1
|
The Seller grants the Buyer [***] (as applicable) of certain A330 Aircraft (the “[***]”), subject to the following:
|
(i)
|
[***]
|
(iii)
|
[***]
|
(iv)
|
[***]
|
(v)
|
[***]
|
(vi)
|
[***]
|
2.2
|
[***]
|
(i)
|
[***]
|
(ii)
|
[***]
|
(iii)
|
[***]
|
(iv)
|
[***]
|
(v)
|
[***]
|
2.3
|
[***]
|
(i)
|
[***];
|
(ii)
|
[***]
|
3
|
[***]
|
4
|
ASSIGNMENT
|
5
|
CONFIDENTIALITY
|
6
|
COUNTERPARTS
|
CT1301535_LA 3_DAL_A321 A330 EXECUTION
|
|
1
|
[***]
|
2
|
ASSIGNMENT
|
3
|
CONFIDENTIALITY
|
4
|
COUNTERPARTS
|
CT1301535_LA 4_DAL_A321 A330 EXECUTION
|
|
(i)
|
[***]
,
|
(ii)
|
[***]
,
|
(iii)
|
[***]
|
2.1
|
[***]
|
2.1.1
|
[***]
|
2.1.2
|
[***]
|
2.1.3
|
[***]
|
2.2
|
[***]
|
2.2.1
|
[***]
|
2.2.2
|
[***]
|
2.3
|
[***]
|
2.4
|
[***]
|
2.5
|
[***]
|
(i)
|
[***]
|
(ii)
|
[***]
|
(iii)
|
[***]
|
2.6
|
[***]
|
2.6.1
|
[***]
|
2.6.2
|
[***]
|
2.6.3
|
[***]
|
2.7
|
[***]
|
2.7.1
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
2.7.2
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
2.7.3
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
2.7.4
|
[***]
|
(i)
|
[***]
|
(ii)
|
[***]
|
3.1
|
[***]
|
3.2
|
[***]
|
4.1
|
Community Sound Levels
|
4.2
|
[***]
|
4.2.1
|
[***]
|
4.2.2
|
[***]
|
4.2.3
|
[***]
|
(i)
|
[***]
|
(ii)
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
5.1
|
In the event that any change to any law, governmental regulation or requirement or interpretation thereof by any governmental agency (a “
Rule Change
”) is made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance, or both, that is required to obtain Type Certification, the Performance Guarantees shall be appropriately modified to reflect the effect of any such Rule Change.
|
5.2
|
The Performance Guarantees may be adjusted in the event of:
|
(i)
|
any configuration change which is the subject of an SCN and is not set forth in Paragraph 1 herein, and
|
(ii)
|
changes required to obtain the Type Certificate which require changes to the performance or weight of the Aircraft.
|
6.1
|
All guaranteed performance data are based on the International Standard Atmosphere (ISA) and specified variations therefrom; altitudes are pressure altitudes.
|
6.2
|
[***]
|
6.3
|
[***]
|
6.4
|
[***]
|
6.5
|
[***]
|
(i)
|
[***]
|
(ii)
|
[***]
|
6.6
|
[***]
|
7.1
|
Compliance with the Performance Guarantees set forth in Paragraphs 2, 3 and 4 shall be based on the conditions specified in such paragraphs, adjustments pursuant to Paragraph 5 herein and the conditions set forth in Paragraph 6 herein.
|
7.2
|
[***]
|
7.3
|
[***]
|
7.4
|
[***]
|
7.5
|
[***]
|
7.6
|
[***]
|
7.7
|
[***]
|
7.8
|
[***]
|
7.9
|
[***]
|
9.1
|
In the event that one or more A321 Aircraft fails to comply with any of the Performance Guarantees, the Seller shall
[***]
.
|
9.2
|
In the event of non-compliance with any of the guarantees set forth in
[***]
:
|
(i)
|
[***]
;
|
(ii)
|
[***]
; and
|
(iii)
|
[***]
.
|
9.3
|
In the event the Seller
[***]
|
9.4
|
The Seller’s maximum liability in respect of deficiency in performance of any A321 Aircraft shall be
[***]
.
|
[***]
|
|
||
[***]
|
Pounds
|
||
|
|
||
[***]
|
[***]
|
||
[***]
|
[***]
|
||
[***]
|
[***]
|
||
|
|
||
[***]
|
|
||
[***]
|
[***]
|
||
[***]
|
[***]
|
||
[***]
|
[***]
|
||
|
|
||
[***]
|
[***]
|
||
|
|
||
[***]
|
[***]
|
||
|
|
||
[***]
|
[***]
|
||
Operational Items Allowance
|
|
|
|
[***]
|
|
Pounds
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
|
|
|
|
[***]
|
|
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
1
|
AIRCRAFT MODEL APPLICABILITY
|
(i)
|
[***],
|
(ii)
|
[***], and
|
(iii)
|
[***], and
|
(iv)
|
[***]
|
2
|
FLIGHT PERFORMANCE
|
2.1
|
[***]
|
2.1.1
|
[***]
|
2.1.2
|
[***]
|
2.2
|
[***]
|
2.3
|
[***]
|
2.3.1
|
[***]
|
2.3.2
|
[***]
:
|
2.3.3
|
[***]
|
2.4
|
[***]
|
2.4.1
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
2.4.2
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
2.4.3
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
2.4.4
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
2.5
|
[***]
|
2.5.1
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
2.5.2
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
|
[***]
|
2.5.3
|
[***]
|
-
|
[***]
|
-
|
[***]
|
3
|
[***]
|
4
|
SOUND LEVELS
|
4.1
|
Exterior Noise - Acoustic Certification Levels
|
4.2
|
Interior Noise During Flight
|
4.2.1
|
Cockpit
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
4.2.2
|
Cabin
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
5
|
[***]
|
5.1
|
The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Standard Specification.
|
5.2
|
For the determination of take-off performance, [***].
|
5.3
|
When establishing take-off [***].
|
5.4
|
[***]
|
5.5
|
The engines will be operated [***].
|
5.6
|
Speech Interference Level (“SIL”) is defined as the [***].
|
5.7
|
All guaranteed interior noise levels refer to [***].
|
5.8
|
Where applicable, the Performance Guarantees assume the use of an approved fuel having a density of [***].
|
6
|
GUARANTEE COMPLIANCE
|
6.1
|
Compliance with the Performance Guarantees shall be demonstrated [***].
|
6.2
|
Compliance with the take-off and certification noise levels classification elements of the guarantees set forth in Paragraph 4.1 herein will be demonstrated with [***].
|
6.3
|
Compliance with [***].
|
6.4
|
Compliance with the [***] guarantee shall be demonstrated with [***].
|
6.5
|
Compliance with the [***].
|
6.6
|
The Seller undertakes to furnish the Buyer [***].
|
7
|
ADJUSTMENT OF GUARANTEES
|
7.1
|
In the event that any change to any law, governmental regulation or requirement or interpretation thereof by any governmental agency (a “Rule Change”) is made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance, or both, that is required to obtain Type Certificate, the Performance Guarantees shall be appropriately modified to reflect the effect of any such Rule Change.
|
7.2
|
The Performance Guarantees may be adjusted in the event of:
|
(i)
|
any configuration change which is the subject of an SCN and is not set forth in Paragraph 1 above, and
|
(ii)
|
changes required to obtain the Type Certificate which require changes to the performance or weight of the Aircraft.
|
8
|
EXCLUSIVE GUARANTEES
|
9
|
REMEDIES
|
9.1
|
In the event that any one or more of the A330 Aircraft fails to comply with any of the Performance Guarantees, the Seller shall [***].
|
9.2
|
In the event of non-compliance with any of the guarantees set forth in [***]:
|
(i)
|
[***]
|
(ii)
|
[***]
|
(iii)
|
[***]
|
9.3
|
In the event the Seller [***].
|
9.4
|
The Seller’s maximum liability in respect of deficiency in performance of any A330 Aircraft will be [***].
|
10
|
ASSIGNMENT
|
11
|
CONFIDENTIALITY
|
12
|
COUNTERPARTS
|
1
|
DEFINITIONS
|
2
|
[***]
|
2.1
|
[***]
|
(a)
|
[***]
,
|
2.2
|
[***]
|
3
|
[***]
|
3.1
|
[***]
|
3.2
|
[***]
|
(a)
|
[***]
;
|
(b)
|
[***]
.
|
4
|
[***]
|
4.1
|
[***]
|
(a)
|
[***]
;
|
(b)
|
[***]
;
|
(c)
|
[***]
;
|
(d)
|
[***]
;
|
(e)
|
[***]
;
|
(f)
|
[***]
.
|
4.2
|
[***]
|
4.3
|
[***]
|
4.4
|
[***]
|
(a)
|
[***]
;
|
(b)
|
[***]
;
|
(c)
|
[***]
;
|
(d)
|
[***]
.
|
4.5
|
[***]
|
4.6
|
[***]
|
5
|
[***]
|
5.1
|
[***]
|
5.2
|
[***]
|
5.3
|
[***]
|
5.4
|
[***]
|
5.5
|
[***]
|
5.6
|
[***]
|
a)
|
[***]
|
b)
|
[***]
|
c)
|
[***]
|
5.7
|
[***]
|
5.7.1
|
[***]
|
5.7.2
|
[***]
|
5.8
|
[***]
|
5.9
|
[***]
|
(a)
|
[***]
,
|
(b)
|
[***]
,
|
(c)
|
[***]
|
5.10
|
[***]
|
(a)
|
[***]
,
|
(b)
|
[***]
,
|
(c)
|
[***]
,
|
(d)
|
[***]
,
|
(e)
|
[***]
,
|
(f)
|
[***]
,
|
(g)
|
[***]
,
|
(h)
|
[***]
|
(i)
|
[***]
,
|
(j)
|
[***]
,
|
(k)
|
[***]
,
|
(l)
|
[***]
,
|
(m)
|
[***]
,
|
(n)
|
[***]
|
(o)
|
[***]
,
|
(p)
|
[***]
,
|
(q)
|
[***]
.
|
5.11
|
[***]
|
(a)
|
[***]
,
|
(b)
|
[***]
,
|
6
|
[***]
|
6.1
|
[***]
|
6.2
|
[***]
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
6.3
|
[***]
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
6.4
|
[***]
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
6.5
|
[***]
|
(a)
|
[***]
|
(b)
|
[***]
|
7
|
[***]
|
(i)
|
[***]
|
(ii)
|
[***]
|
(iii)
|
[***]
|
8
|
[***]
|
8.1
|
[***]
|
8.2
|
[***]
|
8.3
|
[***]
|
9
|
[***]
|
9.1
|
[***]
|
9.2
|
[***]
|
9.3
|
[***]
|
(a)
|
[***]
,
|
(b)
|
[***]
.
|
9.4
|
[***]
|
10
|
[***]
|
11
|
[***]
|
12
|
[***]
|
12.1
|
[***]
|
12.2
|
[***]
|
13
|
ASSIGNMENT
|
14
|
CONFIDENTIALITY
|
15
|
COUNTERPARTS
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
1
|
DEFINITIONS
|
2
|
[***]
|
2.1
|
[***]
|
(a)
|
[***]
|
2.2
|
[***]
|
3
|
[***]
|
3.1
|
[***]
|
3.2
|
[***]
|
(a)
|
[***]
;
|
(b)
|
[***]
.
|
4
|
[***]
|
4.1
|
[***]
|
(a)
|
[***]
;
|
(b)
|
[***]
;
|
(c)
|
[***]
;
|
(d)
|
[***]
;
|
(e)
|
[***]
;
|
(f)
|
[***]
.
|
4.2
|
[***]
|
4.3
|
[***]
|
4.4
|
[***]
|
(a)
|
[***]
;
|
(b)
|
[***]
;
|
(c)
|
[***]
;
|
(d)
|
[***]
.
|
4.5
|
[***]
|
4.6
|
[***]
|
5
|
[***]
|
5.1
|
[***]
|
5.2
|
[***]
|
5.3
|
[***]
|
5.4
|
[***]
|
5.5
|
[***]
|
5.6
|
[***]
|
(a)
|
[***]
|
(b)
|
[***]
|
(c)
|
[***]
|
5.7
|
[***]
|
5.7.1
|
[***]
|
5.7.2
|
[***]
|
5.7.3
|
[***]
|
(a)
|
[***]
|
(b)
|
[***]
|
(c)
|
[***]
|
5.8
|
[***]
|
5.9
|
[***]
|
(a)
|
[***]
,
|
(b)
|
[***]
,
|
(c)
|
[***]
.
|
5.10
|
[***]
|
(a)
|
[***]
,
|
(b)
|
[***]
,
|
(c)
|
[***]
,
|
(d)
|
[***]
,
|
(e)
|
[***]
,
|
(f)
|
[***]
,
|
(g)
|
[***]
,
|
(h)
|
[***]
|
(i)
|
[***]
,
|
(j)
|
[***]
,
|
(k)
|
[***]
|
(l)
|
[***]
,
|
(m)
|
[***]
,
|
(n)
|
[***]
,
|
(o)
|
[***]
,
|
(p)
|
[***]
,
|
(q)
|
[***]
.
|
5.11
|
[***]
|
(a)
|
[***]
,
|
(b)
|
[***]
,
|
6
|
[***]
|
6.1
|
[***]
|
6.2
|
[***]
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
6.3
|
[***]
|
[***]
|
[***]
|
[***]
|
|
|
|
[***]
|
[***]
|
[***]
|
6.4
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
6.5
|
[***]
|
(a)
|
[***]
|
(b)
|
[***]
|
7
|
[***]
|
(a)
|
[***]
|
(b)
|
[***]
|
(c)
|
[***]
|
8
|
[***]
|
8.1
|
[***]
|
8.2
|
[***]
|
8.3
|
[***]
|
9
|
[***]
|
9.1
|
[***]
|
9.2
|
[***]
|
9.3
|
[***]
|
(a)
|
[***]
,
|
(b)
|
[***]
.
|
9.4
|
[***]
|
10
|
[***]
|
11
|
[***]
|
12
|
[***]
|
12.1
|
[***]
|
12.2
|
[***]
|
13
|
ASSIGNMENT
|
14
|
CONFIDENTIALITY
|
15
|
COUNTERPARTS
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
-
|
[***]
|
(i)
|
design and furnish to the Buyer a correction for such Item subject to a Failure and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts unless a part of an Item), or
|
3.2
|
Appendix A to Clause 16 of the Agreement is deleted in its entirety and replaced with the following text:
|
1.1
|
For [***] (the “
Term
”), the Seller shall (i) maintain, or cause to be maintained, a stock of Seller Parts (as defined below), reasonably adequate to meet the requirements of the Buyer for the Aircraft, and (ii) sell and deliver such Seller Parts (in each case, together with all necessary documentation and data) in accordance with the provisions of this Letter Agreement.
|
1.2
|
For the purposes of this Letter Agreement, the term “
Seller Parts
” means the Seller's proprietary parts bearing a part number of the Seller or for which the Seller has the exclusive sales rights.
|
2.4
|
The above commitments from the Seller are subject to the Buyer not being in default under [***] or the Agreement. Further, it is agreed and understood by the parties that any amounts that adjust in accordance with the Airframe Price Revision Formula or the Propulsion System Price Revision Formula shall be adjusted to the actual month and year of Delivery of such Undelivered Aircraft.
|
3.1
|
Clause 0 of the Agreement is amended to delete the following defined term and replace it as follows:
|
7.1
|
Subclause 7.3.3 of the Agreement is deleted in its entirety and replaced with the following:
|
8.1
|
Subclause 8.1.2 of the Agreement is deleted in its entirety and replaced with the following:
|
2.2.2.1
|
In the event that the Buyer requests a change to the Specification, the Seller shall issue a request for change substantially in the form set out in Exhibit B-3 (“
RFC
”) and carry out a feasibility study of such change. If the Seller determines that such RFC is feasible to incorporate, the Seller shall produce an SCN and submit such SCN to the Buyer for the Buyer’s approval. If such SCN is rejected by the Buyer, such RFC and proposed SCN shall be cancelled without charge to the Buyer.
|
2.2.2.2
|
In the event that the Buyer requests the Seller in writing to incorporate a proposed change (excluding Development Changes) in an Aircraft and the Seller agrees to such request but the change is not subsequently made the subject of an SCN for any reason (other than the Seller’s unreasonable refusal to sign the SCN or otherwise acting in bad faith), [***] and incurred by the Seller, provided that in the event the Seller’s reasonable estimate of the cost of developing such proposed change [***] after the Seller’s receipt of the Buyer’s request to incorporate a proposed change and secured the Buyer’s agreement prior to incurring any such costs.
|
2.2.3.2
|
In the event of the Seller revising the Specification to incorporate Development Changes which have no adverse effect on the performance, weight, Base Price, Delivery Date of the Aircraft affected thereby or the interchangeability or replaceability requirements under the Specification, such revision shall be performed by the Seller without the Buyer’s consent. In such cases, the Buyer shall have access to the details of such changes through the relevant application in AirbusWorld.
|
2.2.3.3
|
The Seller is considering turning certain items, which are currently BFE in the Specification, into Seller Furnished Equipment. If such BFE becomes Seller Furnished Equipment, it shall be excluded from the provisions of Subclauses 2.2.3.1 and 2.2.3.2 above and be chargeable to the Buyer, however, the price of such Seller Furnished Equipment shall not exceed the price of such BFE.
|
10.6
|
[***]
|
(i)
|
[***],
|
(ii)
|
[***].
|
20.1
|
[***]
|
20.2
|
[***]
|
(A)
|
[***],
|
(B)
|
[***].
|
20.3
|
[***]
|
(A)
|
[***],
|
(B)
|
[***].
|
20.4
|
[***] Upon receipt of such notice, the Indemnitor (unless otherwise agreed by the Indemnified Party and the Indemnitor) shall assume and conduct the defense, or settlement, of such claim or suit. [***] Notice of the claim or suit shall be accompanied by all information pertinent to the matter as is reasonably available to the Indemnified Party and shall be followed by such cooperation by the Indemnified Party as the Indemnitor or its counsel may reasonably request, at the expense of the Indemnitor.
|
(A)
|
[***],
|
(B)
|
[***].
|
(i)
|
[***],
|
(ii)
|
[***],
|
(iii)
|
[***].
|
21.1
|
Any of the following shall be considered a material breach of, [***] (“
Material Breach
”):
|
(1)
|
[***], the Buyer [***] shall commence any case, proceeding or other action with respect [***] the Buyer in any jurisdiction relating to bankruptcy, insolvency, reorganization or relief from debtors or seeking a reorganization, arrangement, winding-up, liquidation, dissolution or other relief with respect to its debts and such case, proceeding or action is not dismissed [***].
|
(2)
|
An action is commenced seeking the appointment of a receiver, trustee, custodian or other similar official for [***] or the Buyer for all or substantially all of its assets and such action is not stayed or dismissed [***], or the Seller or the Buyer makes a general assignment for the benefit of its creditors.
|
(6)
|
The Buyer fails to make any [***] Payment required to be made pursuant to the Agreement when such payment comes due or fails to make payment [***] required to be made pursuant to Subclause 5.3 of the Agreement.
|
1.
|
[***]
|
2.
|
[***]
|
3.
|
[***]
|
(a)
|
[***], or
|
(b)
|
[***], or
|
(c)
|
[***], or
|
(d)
|
[***], or
|
(e)
|
[***].
|
4.
|
[
***]
|
5.
|
[***]
|
6.
|
ASSIGNMENT
|
7.
|
CONFIDENTIALITY
|
8.
|
COUNTERPARTS
|
Reference:
|
Letter Agreement No. 11 to the Airbus A321 Aircraft and A330 Aircraft Purchase Agreement, dated as of September 3, 2013, between Delta Air Lines, Inc. and Airbus S.A.S.
|
Reference:
|
Letter Agreement No. 11 to the Airbus A321 Aircraft and A330 Aircraft Purchase Agreement, dated as of September 3, 2013, between Delta Air Lines, Inc. and Airbus S.A.S.
|
1.
|
[***]
|
1.1
|
[***]
|
1.1.1
|
[***]
|
1.1.2
|
[***]
|
1.2
|
[***]
|
1.2.1
|
[***]
|
1.2.2
|
[***]
|
1.3
|
[***]
|
(i)
|
[***];
|
(ii)
|
[***],
|
(iii)
|
[***].
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
2.
|
ASSIGNMENT
|
3.
|
CONFIDENTIALITY
|
4.
|
COUNTERPARTS
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
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[***]
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(A)
|
in the case of a Participant who is an Executive Vice President or more senior executive of the Company, a material diminution of such Participant’s authorities, duties or responsibilities, other than an insubstantial and inadvertent act that is promptly remedied by the Company after written notice by such Participant to the Chief Executive Officer of the Company;
|
(B)
|
the Participant’s office is relocated by more than 50 miles;
|
(C)
|
a material reduction of Participant’s base salary or target annual bonus opportunities, in either case other than pursuant to a uniform percentage salary or target annual bonus reduction for similarly-situated Participants; or
|
(D)
|
a material breach by the Company or an Affiliate of any binding obligation to the Participant relating to a material term of the Participant’s employment, including, but not limited to, indemnification or the terms of an Award hereunder, or any
|
(A)
|
a material diminution of the Participant’s authorities, duties or responsibilities, other than an insubstantial and inadvertent act that is promptly remedied by the Company or an Affiliate after written notice by such Participant to the Chief Executive Officer of the Company;
|
(B)
|
the Participant’s office is relocated by more than 50 miles;
|
(C)
|
a material reduction of Participant’s base salary or target annual bonus opportunities, in either case other than pursuant to a uniform percentage salary or target annual bonus reduction for similarly-situated Participants; or
|
(D)
|
a material breach by the Company or an Affiliate of any binding obligation to the Participant relating to a material term of the Participant’s employment, including, but not limited to, indemnification or the terms of an Award hereunder, or any failure of a successor to the Company to assume and agree to perform such obligation.
|
3.
|
TERMINATION OF EMPLOYMENT AND ELIGIBILITY
|
(A)
|
Payment of COBRA Premiums
. Delta will pay the premiums for medical, dental and/or vision COBRA coverage (but not for any portion of the COBRA premium for any Healthcare Flexible Spending Account) for which a Participant and his eligible dependents may be eligible;
provided
such COBRA coverage is properly elected by the Participant or his eligible dependents. Eligibility for such payments shall continue until the earlier of: (i) the end of the Severance Period or (ii) the date the Participant’s or the Participant’s dependents’ eligibility for COBRA coverage ceases as provided under COBRA and the terms of the Delta Account-Based Healthcare Plan (or corresponding pilot or Affiliate plan, if applicable).
|
(B)
|
Payment of Retiree Medical Premiums.
To the extent applicable, if a Participant is eligible for special early, early or normal retirement under the Company’s retirement plan or policy at the time of the Severance Event, and the Participant or one or more of his eligible dependents elects COBRA coverage instead of retiree medical and/or dental coverage, the above section entitled “Payment of COBRA Premiums” will apply with respect to any Delta-paid COBRA premium. If the Participant or an eligible dependent instead elects retiree medical and/or dental coverage, Delta will, in lieu of paying COBRA premiums as described above, pay the retiree medical and/
|
(d) |
Financial Planning Services.
Participants who are classified as Directors or Managing Directors of the Company at the time of their Separation Event are eligible for continuation of the financial planning services for which they are eligible at the time of their separation from Delta. A Participant shall be reimbursed for any covered expenses; Delta shall not provide direct payments to the vendor for such services. The eligibility to receive such reimbursement will expire at the conclusion of the calendar year in which the Participant
|
(vi)
|
24 months after the termination date for Senior Executive Vice Presidents, the President or Chief Executive Officer.
|
Participants:
|
All members of Delta’s Board of Directors (the “
Board
”) who are not employees of Delta (“
Non-Employee Directors
”). These directors are:
|
Francis S. Blake
|
Shirley C. Franklin
|
Daniel A. Carp
|
George N. Mattson
|
David G. DeWalt
|
Sergio A. L. Rial
|
Thomas E. Donilon
|
Kathy N. Waller
|
William H. Easter III
|
Kenneth B. Woodrow
|
Mickey P. Foret
|
|
Type of Award:
|
Restricted Stock, as defined and granted under the Delta Air Lines, Inc. 2007 Performance Compensation Plan (the “
2007 Plan
”).
|
Grant Date:
|
June 10, 2016
|
Shares:
|
The number of shares of Restricted Stock granted to each
Non-Employee Director equals the result of the following formula: $160,000 divided by Y, where |
Partial Shares:
|
Any partial shares resulting from the above formula will be ignored and the aggregate shares of Restricted Stock for each Non-Employee Director will be rounded up to the nearest whole ten shares.
|
Vesting:
|
Each grant awarded to a Non-Employee Director under the terms of this Attachment A (a “
2016 Grant
”) will vest (the “
Vesting Date
”) on the earlier of (1) June 10, 2017 and (2) the date of Delta’s 2017 Annual Meeting of Stockholders, subject to such Non-Employee Director’s continued service as a member of the Board on the Vesting Date.
|
Vesting:
|
Notwithstanding the foregoing, accelerated vesting will occur prior to the Vesting Date as follows: individual 2016 Grants will immediately vest on the date such Non-Employee Director ceases to be a member of the Board due to death, Disability or Retirement. For purposes of the 2016 Grant, (1) “
Disability
” means the Non-Employee Director’s inability to perform his or her duties as a member of the Board for a period of 180 or more days as a result of a demonstrable injury or disease and (2) “
Retirement
” means retiring from the Board (i) at or after age 52 with at least ten years of service as a director; (ii) at or after age 68 w
|
Forfeiture:
|
Except as expressly set forth above, a Non-Employee Director will immediately forfeit any unvested Restricted Stock on the date such Non-Employee Director ceases to be a member of the Board for any reason, other than due to death, Disability or Retirement.
|
Dividends:
|
In the event a cash dividend is paid with respect to shares of Delta Common Stock at a time during which the 2016 Grant is unvested, the Non-Employee Director will be eligible to receive the dividend when the 2016 Grant vests.
|
1.
|
I have reviewed this
quarterly report
on Form
10-Q
of Delta Air Lines, Inc. (“Delta”) for the
quarterly period
ended
June 30, 2016
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report;
|
4.
|
Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of Delta's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in Delta's internal control over financial reporting that occurred during Delta's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta's internal control over financial reporting; and
|
5.
|
Delta's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta's auditors and the Audit Committee of Delta's Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta's internal control over financial reporting.
|
July 14, 2016
|
/s/ Edward H. Bastain
|
|
Edward H. Bastain
|
|
Chief Executive Officer
|
1.
|
I have reviewed this
quarterly report
on Form
10-Q
of Delta Air Lines, Inc. (“Delta”) for the
quarterly period
ended
June 30, 2016
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report;
|
4.
|
Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of Delta's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in Delta's internal control over financial reporting that occurred during Delta's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta's internal control over financial reporting; and
|
5.
|
Delta's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta's auditors and the Audit Committee of Delta's Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta's internal control over financial reporting.
|
July 14, 2016
|
/s/ Paul A. Jacobson
|
|
Paul A. Jacobson
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
such Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Delta.
|
|
/s/ Edward H. Bastain
|
|
Edward H. Bastain
|
|
Chief Executive Officer
|
|
|
|
/s/ Paul A. Jacobson
|
|
Paul A. Jacobson
|
|
Executive Vice President and Chief Financial Officer
|
|
|