HAWAIIAN HOLDINGS INC (Form: 10-K, Received: 02/13/2019 16:17:21)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_______________________________________

FORM 10-K



(Mark One)
x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .

Commission file number 1-31443

HAWAIIAN HOLDINGS, INC.

(Exact name of registrant as specified in its charter)



Delaware (State or other jurisdiction of incorporation or organization)		71-0879698 (I.R.S. employer identification no.)
3375 Koapaka Street, Suite G-350 Honolulu, Hawai'i (Address of principal executive offices)		96819 (Zip code)

Registrant's telephone number, including area code: (808) 835-3700

Securities registered pursuant to Section 12(b) of the Act:



Title of each class		Name of each exchange on which registered
Common Stock ($0.01 par value)		NASDAQ Stock Market, LLC (NASDAQ Global Select Market)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Rule Act 12b-2). Yes o No x

The aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the registrant was approximately $1.8 billion, computed by reference to the closing sale price of the Common Stock on the NASDAQ Global Select Market, on June 29, 2018, the last business day of the registrant's most recently completed second fiscal quarter.

As of February 8, 2019 , 48,421,855 shares of Common Stock of the registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on May 15, 2019 will be incorporated by reference into Part III of this Form 10-K.



___________________________________________________________________________________________

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TABLE OF CONTENTS



		Page
PART I		3
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	8
ITEM 1B.	UNRESOLVED STAFF COMMENTS	19
ITEM 2.	PROPERTIES	19
ITEM 3.	LEGAL PROCEEDINGS	21
ITEM 4.	MINE SAFETY DISCLOSURES	21
PART II		22
ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	22
ITEM 6.	SELECTED FINANCIAL DATA	24
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	43
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	44
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	92
ITEM 9A.	CONTROLS AND PROCEDURES	92
ITEM 9B.	OTHER INFORMATION	95
PART III		95
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	95
ITEM 11.	EXECUTIVE COMPENSATION	95
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	95
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	95
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	95
PART IV		95
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	95
SIGNATURES		100

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views with respect to certain current and future events and financial performance. Such forward-looking statements include, without limitation, statements related to our financial statements and results of operations; any expectations of operating expenses, deferred revenue, interest rates, tax rates, income taxes, deferred tax assets, valuation allowances or other financial items; expectations regarding our operating performance for the first quarter and full year of 2019 ; statements regarding factors that may affect our operating results; statements regarding our goals, mission and areas of focus; statements regarding our working capital, and capital expenditures; statements related to funding our aircraft orders, growth strategy and market opportunities; statements regarding the effect of fleet changes on our business, operations and cost structure; statements regarding our ability to pay taxes with working capital; estimates of fair value measurements; statements related to aircraft maintenance and repair; statements related to cash flow from operations and seasonality; statements regarding our intention to pay quarterly dividends and the amounts thereof, if any; statements regarding our ability and intention to repurchase our shares; estimates of required funding of and contributions to our defined benefit pension and disability plans; estimates of annual fuel expenses and measure of the effects of fuel prices on our business; statements regarding our wages and benefits and labor costs and agreements; statements regarding the status and effects of federal and state legislation and regulations promulgated by the Federal Aviation Administration (FAA), U.S. Department of Transportation (DOT) and other regulatory agencies; statements related to airport rent rates and landing fees; statements related to our lease of the cargo and maintenance hangar at the Daniel K. Inouye International Airport; statements regarding a joint venture with Japan Airlines; statements regarding aircraft rent expense; statements regarding our total capacity and yields on routes; statements regarding potential dilution of our securities; statements related to our frequent flyer program; statements related to our hedging program; statements concerning accounting principles, policies, standards, estimates, and the effect of the adoption thereof; statements regarding our net operating loss carryforwards; statements regarding our credit card holdback; statements regarding our debt or lease obligations and financing arrangements; statements regarding our financing needs; statements related to risk management, credit risks, and air traffic liability; statements related to future U.S. and global economic conditions or performance; statements related to changes in our fleet plan and related cash outlays; statements related to expected delivery of new aircraft and associated costs; statements related to the effects of any litigation on our operations or business; statements related to competition on our routes; statements related to continuous investments in technology and systems; and statements as to other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Words such as "expects," "anticipates," "projects," "intends," "plans," "believes," "estimates," "could," "may," variations of such words, and similar expressions are also intended to identify such forward-looking statements. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties, and assumptions relating to our operations and business environment, all of which may cause our actual results to be materially different from any future results, expressed or implied, in these forward-looking statements.

Factors that could affect such forward-looking statements include, but are not limited to: our ability to accurately forecast quarterly and annual results; global economic volatility; macroeconomic developments; political developments; our dependence on the tourism industry; the price and availability of fuel; foreign currency exchange rate fluctuations; competitive pressures, including the potential impact of increasing industry capacity between North America and Hawai’i; fluctuations in demand for transportation in the markets in which we operate, including due to the occurrence of natural disasters, such as hurricanes, volcanic eruptions, earthquakes, and tsunamis; maintenance of privacy and security of customer-related information and compliance with applicable federal and foreign privacy or data security regulations or standards; our dependence on technology and automated systems; our reliance on third-party contractors; satisfactory labor relations; our ability to attract and retain qualified personnel and key executives; successful implementation of growth strategy and cost reduction goals; adverse publicity; risks related to the airline industry; our ability to obtain and maintain adequate facilities and infrastructure; seasonal and cyclical volatility; the effect of applicable state, federal and foreign laws and regulations; increases in insurance costs or reductions in coverage; the limited number of suppliers for aircraft, aircraft engines and parts; our existing aircraft purchase agreements; delays in aircraft or engine deliveries or other loss of fleet capacity; our ability to continue to generate sufficient cash flow to support the payment of a quarterly dividend; changes in our future capital needs; fluctuations in our share price; our financial liquidity; and our ability to implement our growth strategy. The risks, uncertainties, and assumptions referred to above that could cause our results to differ materially from the results expressed or implied by such forward-looking statements also include those discussed under the heading "Risk Factors" in Item 1A in this Annual Report on Form 10-K and the risks, uncertainties and assumptions discussed from time to time in our public filings and public announcements. All forward-looking statements included in this report are based on information available to us as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.

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PART I

ITEM 1. BUSINESS.

Overview

Hawaiian Holdings, Inc. (the Company, Holdings, we, us, and our) is a holding company incorporated in the State of Delaware. The Company's primary asset is sole ownership of all issued and outstanding shares of common stock of Hawaiian Airlines, Inc. (Hawaiian). Hawaiian was originally incorporated in January 1929 under the laws of the Territory of Hawai'i and became our indirect wholly-owned subsidiary pursuant to a corporate restructuring that was consummated in August 2002. Hawaiian became a Delaware corporation and the Company's direct wholly-owned subsidiary concurrent with its reorganization and reacquisition by the Company in June 2005.

Our Business

We are engaged in the scheduled air transportation of passengers and cargo amongst the Hawaiian Islands (the Neighbor Island routes) and between the Hawaiian Islands and certain cities in the United States (the North America routes together with the Neighbor Island routes, the Domestic routes), and between the Hawaiian Islands and the South Pacific, Australia, New Zealand and Asia (the International routes), collectively referred to as our Scheduled Operations. We offer non-stop service to Hawai'i from more U.S. gateway cities ( 13 ) than any other airline, and also provide approximately 180 daily flights between the Hawaiian Islands. In addition, we operate various charter flights.

We are the longest serving airline, as well as the largest airline headquartered, in the State of Hawai'i, and the 10th largest domestic airline in the United States based on revenue passenger miles (RPMs) reported by the Research and Innovative Technology Administration Bureau of Transportation Services as of September 2018 , the latest data available.

At December 31, 2018 , our fleet consisted of 20 Boeing 717-200 aircraft for the Neighbor Island routes, four Boeing 767-300 aircraft, 24 Airbus A330-200 aircraft, and eleven Airbus A321-200 for the North America, International, and charter routes. We also own four ATR42 aircraft for the "Ohana by Hawaiian" Neighbor Island service and three ATR71 aircraft for our Neighbor Island cargo operations. During the first quarter of 2019, we expect to retire all four of our remaining Boeing 767-300 aircraft, completing the transition to our A321 aircraft, allowing for optimization of our products and increased management of capacity.

Our goal is to be the number one destination carrier serving Hawai'i. We are devoted to the travel needs of the residents of and visitors to Hawai'i and we offer a unique travel experience. We are strongly rooted in the culture and people of Hawai'i and we seek to provide quality service to our customers that exemplifies the spirit of Aloha.

Outlook

Our mission is to continue to grow a profitable airline with a passion for excellence, our customers, our people and the spirit of Hawai'i. In 2019 , we will continue to focus on strengthening our competitive position in the markets that we serve primarily by continuing to mature the routes we launched over the past decade, improving our long term competitive cost structure, improving the guest experience by making travel effortless and furthering our segmentation efforts through our offering of additional value-added products and services, including the introduction of our Main Cabin Basic product in 2019.

Flight Operations

Our flight operations are based in Honolulu, Hawai'i. At December 31, 2018 , we operated 246 scheduled flights with:


•	Daily service on our North America routes between the State of Hawai'i and Long Beach, Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and San Jose, California; Las Vegas, Nevada; Phoenix, Arizona; Portland, Oregon; Seattle, Washington; and New York City, New York.


•	Daily service on our Neighbor Island routes among the six major islands of the State of Hawai'i.


•	Daily service on our International routes between the State of Hawai'i and Sydney, Australia; and Tokyo (Haneda and Narita); and Osaka, Japan; and scheduled service between the State of Hawai'i and Pago Pago, American Samoa; Papeete, Tahiti; Brisbane, Australia; Auckland, New Zealand; Sapporo, Japan; and Seoul, South Korea.


•	Various ad hoc charters.

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Fuel

Our results of operations are significantly impacted by changes in the price and availability of aircraft fuel. The following table shows our aircraft fuel consumption and costs:



Year	Gallons consumed	Total cost, including taxes		Average cost per gallon		Percent of operating expenses
	(in thousands)
2018	273,783	$	599,544	$	2.19	23.8	%
2017	259,915	$	440,383	$	1.69	19.9	%
2016	244,118	$	344,322	$	1.41	16.9	%

As illustrated by the table above, fuel costs constitute a significant portion of our operating expenses. We purchase aircraft fuel at prevailing market prices, and seek to manage economic risks associated with fluctuations in aircraft fuel prices by entering into various derivative financial instruments.

Aircraft Maintenance

Our aircraft maintenance programs consist of a series of phased or continuous checks for each aircraft type. These checks are performed at specified intervals measured by calendar months, time flown, and by the number of takeoffs and landings, or cycles operated. In addition, we perform inspections, repairs, and modifications of our aircraft in response to Federal Aviation Administration (FAA) directives. We perform checks ranging from "walk around" inspections before each flight's departure to major overhauls of the airframes which can take several weeks to complete. Aircraft engines are subject to phased maintenance programs designed to detect and remedy potential problems before they occur. The service lives of certain airframe and engine parts and components, which are time or cycle controlled, are replaced or refurbished prior to the expiration of their time or cycle limits. We have contracts with third parties to provide certain maintenance on our aircraft and aircraft engines.

Marketing and Ticket Distribution

We utilize various distribution channels including our website www.hawaiianairlines.com , primarily for our North America and Neighbor Island routes, and travel agencies and wholesale distributors for our International routes.

Our website is available in English, Japanese, Korean, and Chinese and offers our customers information on our flight schedules, information on our HawaiianMiles frequent flyer program, the ability to book reservations on our flights or connecting flights with any of our code-share partners, the status of our flights as well as the ability to purchase hotels, cars and vacation packages. We also distribute our fares through online travel agencies.

Frequent Flyer Program

The HawaiianMiles frequent flyer program was initiated in 1983 to encourage and develop customer loyalty. HawaiianMiles allows passengers to earn mileage credits by flying with us and our partner carriers. In addition, members earn mileage credits for patronage with our other program partners, including credit card issuers, hotels, car rental firms, and general merchants pursuant to our exchange partnership agreements. We also sell mileage credits to other companies participating in the program.

HawaiianMiles members have a choice of various awards based on accumulated mileage credits, with most of the awards being redeemed for free air travel on Hawaiian.

HawaiianMiles accounts with no activity (frequent flyer miles earned or redeemed) for 18 months automatically expire. The number of free travel awards used for travel on Hawaiian was approximately 685,000 in 2018 . The number of free travel awards as a percentage of total revenue passengers was approximately 6% in 2018 . We believe displacement of revenue passengers is minimal due to our ability to manage frequent flyer seat inventory, and the relatively low ratio of free award usage to total revenue passengers.

Code-Share and Other Alliances

Together with Japan Airlines, we filed an application with the U.S. Department of Transportation (DOT) and Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) seeking antitrust immunity to create a joint venture that promises significant consumer benefits and the opportunity for service expansion. We further enhanced our comprehensive partnership with Japan Airlines with the announcement of reciprocal frequent flyer benefits for HawaiianMiles and JAL Mileage Bank members in October 2018. The initial partnership launched in March 2018 with codeshare flights between Japan and Hawaii. We have not yet received approval and we do not anticipate operations commencing under the joint venture until late 2019.

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We also have marketing alliances with other airlines that provide reciprocal frequent flyer mileage accrual and redemption privileges and code-shares on certain flights (one carrier placing its name and flight numbers, or code, on flights operated by the other carrier). These programs enhance our revenue opportunities by:


•	increasing value to our customers by providing easier access to more travel destinations and better mileage accrual/redemption opportunities;


•	gaining access to more connecting traffic from other airlines; and


•	providing members of our alliance partners' frequent flyer programs an opportunity to travel on our system while earning mileage credit in the alliance partners' programs.

Our marketing alliances with other airlines as of December 31, 2018 were as follows:



	Hawaiian Miles Frequent Flyer Agreement	Other Airline Frequent Flyer Agreement	Code-share—Hawaiian Flight # on Flights Operated by Other Airline	Code-share—Other Airline Flight # on Flights Operated by Hawaiian
Air China	No	No	No	Yes
American Airlines	No	Yes	No	Yes
China Airlines	Yes	Yes	Yes	Yes
Delta Air Lines	No	Yes	No	Yes
JetBlue	Yes	Yes	Yes	Yes
Korean Air	Yes	Yes	Yes	Yes
Philippine Airlines	No	No	No	Yes
Turkish Airlines	No	No	No	Yes
United Airlines	No	Yes	No	Yes
Virgin Atlantic Airways	Yes	Yes	No	No
Virgin Australia	Yes	Yes	No	Yes

Although these programs and services increase our ability to be more competitive, they also increase our reliance on third parties.

Competition

The airline industry is highly competitive. We believe that the principal competitive factors in the airline industry are:


•	Fares;


•	Flight frequency and schedule;


•	Customer service;


•	On-time performance and reliability;


•	Name recognition;


•	Marketing affiliations;


•	Frequent flyer benefits;


•	Aircraft type;


•	Safety record; and


•	In-flight services.

Domestic —We face multiple competitors on our North America routes including major network carriers such as Alaska (AS), American Airlines (AA), United Airlines (UA), and Delta Airlines (DL). In addition, Southwest Airlines (WN) announced their intent to launch service to and from (and possibly within the islands of) Hawai'i in 2018. Various charter companies also provide non-scheduled service to Hawai'i, mostly under public charter arrangements. Our Neighbor Island competitors consist of regional carriers, which include Mokulele Airlines and a number of other "air taxi" companies.

International —Currently, we are the only provider of direct service between Honolulu and each of Sapporo, Japan; Pago Pago, American Samoa; and Papeete, Tahiti. However, we face multiple competitors from both domestic and foreign carriers on our other international routes.

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Employees

As of December 31, 2018 , we had 7,244 active employees, of whom approximately 84% were covered by labor agreements with the following organized labor groups:



Employee Group	Represented by	Number of Employees	Agreement amendable on (*)
Flight deck crew members	Air Line Pilots Association (ALPA)	800	July 1, 2022
Cabin crew members	Association of Flight Attendants (AFA)	2,101	January 1, 2017 (**)
Maintenance and engineering personnel	International Association of Machinists and Aerospace Workers (IAM-M)	1,111	January 1, 2021
Clerical	IAM-C	2,031	January 1, 2021
Flight dispatch personnel	Transport Workers Union (TWU)	52	August 1, 2021

(*) Our relations with labor unions representing our airline employees are governed by the Railway Labor Act of 1926. Under the Railway Labor Act, a collective bargaining agreement between us and the labor unions does not expire, but instead becomes amendable as of a stated date if either party wishes to modify the terms of the agreement.

(**) As of December 31, 2018 , contract negotiations are ongoing with the AFA.

Seasonality

Hawai'i is a popular vacation destination for travelers. For that reason, our operations and financial results are subject to substantial seasonal and cyclical volatility, primarily due to leisure and holiday travel patterns. Demand levels are typically weaker in the first quarter of the year with stronger demand periods occurring during June, July, August, and December. We may adjust our pricing or the availability of particular fares to obtain an optimal passenger load factor depending on seasonal demand differences.

Customers

Our business is not dependent upon any single customer or a few customers. The loss of any one customer would not have a material adverse effect on our business.

Regulation

Our business is subject to extensive and evolving international, federal, state and local laws and regulations. Many governmental agencies regularly examine our operations to monitor compliance with applicable laws and regulations. Governmental authorities can enforce compliance with applicable laws and regulations and obtain injunctions or impose civil or criminal penalties or modify, suspend, or revoke our operating certificates in case of violations.

Industry Regulations

We are subject to the regulatory jurisdiction of the U.S. Department of Transportation (DOT) and the Federal Aviation Administration (FAA). The DOT has jurisdiction over international routes and fares for some countries (based upon treaty relations with those countries), consumer protection policies including baggage liability, denied boarding compensation, and unfair competitive practices as set forth in the Airline Deregulation Act of 1978. The FAA has regulatory jurisdiction over flight operations, including equipment, ground facilities, security systems, maintenance, and other safety matters. Pursuant to these regulations, we have established, and the FAA has approved, a maintenance program for each type of aircraft we operate that provides for the ongoing maintenance of our aircraft, ranging from frequent routine inspections to major overhauls.

Maintenance Directives

The FAA approves all airline maintenance programs, including modifications to the programs. In addition, the FAA licenses the repair stations and mechanics that perform inspections, repairs and overhauls, as well as the inspectors who monitor the work.

The FAA frequently issues airworthiness directives in response to specific incidents or reports by operators or manufacturers, requiring operators of specified equipment types to perform prescribed inspections, repairs or modifications within stated time periods or numbers of cycles. In the last several years, the FAA has issued a number of maintenance directives and other regulations relating to, among other things, wiring requirements for aging aircraft, fuel tank flammability, cargo compartment fire detection/suppression systems, collision avoidance systems, airborne windshear avoidance systems, noise abatement, and increased inspection requirements.

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Airport Security

The Aviation and Transportation Security Act (ATSA) mandates that the Transportation Security Administration (TSA) provide screening of all passengers and property, including mail, cargo, carry-on and checked baggage, and other articles that will be carried aboard a passenger aircraft. Under the ATSA, substantially all security screeners at airports are federal employees and airline and airport security is overseen and performed by federal employees, including security managers, law enforcement officers, and Federal Air Marshals. The ATSA also provides for increased security on flight decks of aircraft (and requires Federal Air Marshals to be present on certain flights), improved airport perimeter access security, airline crew security training, enhanced security screening of passengers, baggage, cargo, mail, employees and vendors, enhanced training and qualifications of security screening personnel, provision of passenger data to U.S. Customs and Border Protection and enhanced background checks.

The TSA also has the authority to impose additional fees on air carriers, if necessary, to cover additional federal aviation security costs.

Environmental and Employee Safety and Health

We are subject to various laws and regulations concerning environmental matters and employee safety and health in the U.S. and other countries in which we do business. Many aspects of airlines' operations are subject to increasingly stringent federal, state, local, and foreign laws protecting the environment. U.S. federal laws that have a particular impact on us include the Airport Noise and Capacity Act of 1990, the Clean Air Act, the Resource Conservation and Recovery Act, the Clean Water Act, the Safe Drinking Water Act, and the Comprehensive Environmental Response, Compensation, and Liability Act. Certain of our operations are also subject to the oversight of the Occupational Safety and Health Administration (OSHA) concerning employee safety and health matters. The U.S. Environmental Protection Agency (EPA), OSHA, and other federal agencies have been authorized to promulgate regulations that affect our operations. In addition to these federal activities, states have been delegated certain authority under the aforementioned federal statutes. Many state and local governments have adopted environmental and employee safety and health laws and regulations, some of which are similar to or stricter than federal requirements, such as California.

The EPA is authorized to regulate aircraft emissions and has historically implemented emissions control standards previously adopted by the International Civil Aviation Organization. Our aircraft comply with the existing EPA standards as applicable by engine design date.

We seek to minimize the impact of carbon emissions from our operations through reductions in our fuel consumption and other efforts. We have reduced the fuel needs of our aircraft fleet through the retirement and replacement of certain aircraft in our fleet with newer, more fuel efficient aircraft. In addition, we have implemented fuel saving procedures in our flight and ground support operations that further reduce carbon emissions. In 2012, we earned the first-ever aviation based carbon credits through the reduction of carbon dioxide emissions with the use of an eco-friendly engine washing technology. We are also supporting initiatives to develop alternative fuels and efforts to modernize the air traffic control system in the U.S. as part of our efforts to reduce our emissions and minimize our impact on the environment.

Noise Abatement

Under the Airport Noise and Capacity Act, the DOT allows local airport authorities to implement procedures designed to abate special noise problems, provided such procedures do not unreasonably interfere with interstate and foreign commerce, or the national transportation system. Certain airports, including the major airports at Los Angeles, San Diego, San Francisco, and San Jose, California; Sydney, Australia; and Tokyo, Japan, have established airport restrictions to limit noise, including restrictions on aircraft types to be used and limits on the number of hourly or daily operations or the time of such operations. Local authorities at other airports could consider adopting similar noise restrictions. In some instances, these restrictions have caused curtailments in services or increases in operating costs, and such restrictions could limit our ability to expand our operations.

Civil Reserve Air Fleet Program

The U.S. Department of Defense regulates the Civil Reserve Air Fleet (CRAF) and government charters. We have elected to participate in the CRAF program by agreeing to make aircraft available to the federal government for use by the U.S. military under certain stages of readiness related to national emergencies. The program is a standby arrangement that allows the U.S. Department of Defense U.S. Transportation Command to call on as many as 12 contractually committed Hawaiian aircraft and crews to supplement military airlift capabilities. None of our aircraft are presently mobilized under this program.

Other Regulations

The State of Hawai'i is uniquely dependent upon air transportation. The Hawai'i state legislature has enacted legislation that reflects and attempts to address its concerns. For example, House Bill 2250 HD1, Act 1 of the 2008 Special Session, establishes

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a statutory scheme for the regulation of Hawai'i neighbor island air carriers, provided that federal legislation is enacted to permit its implementation. The U.S. Congress has yet to enact legislation that would allow this proposed legislation to go into effect.

Additionally, several aspects of airline operations are subject to regulation or oversight by federal agencies other than the FAA and the DOT. Federal antitrust laws are enforced by the U.S. Department of Justice. The U.S. Postal Service has jurisdiction over certain aspects of the transportation of mail and related services provided by our cargo services. Labor relations in the air transportation industry are generally regulated under the Railway Labor Act. We and other airlines certificated prior to October 24, 1978 are also subject to preferential hiring rights granted by the Airline Deregulation Act to certain airline employees who have been furloughed or terminated (other than for cause). The Federal Communications Commission issues licenses and regulates the use of all communications frequencies assigned to us and other airlines. There is increased focus on consumer protection both on the federal and state level. We cannot always accurately predict the cost of such requirements on our operations.

Additional laws and regulations are proposed from time to time, which could significantly increase the cost of airline operations by imposing additional requirements or restrictions. U.S. law restricts the ownership of U.S. airlines to corporations where no more than 25% of the voting stock may be held by non-U.S. citizens and the airline must be under the actual control of U.S. citizens. The President and two thirds of the Board of Directors and other managing officers must also be U.S. citizens. Regulations also have been considered from time to time that would prohibit or restrict the ownership and/or transfer of airline routes or takeoff and landing slots and authorizations. Also, the award of international routes to U.S. carriers (and their retention) is regulated by treaties and related agreements between the U.S. and foreign governments, which are amended from time to time. We cannot predict what laws and regulations will be adopted or what changes to international air transportation treaties will be adopted, if any, or how we will be affected by those changes.

Available Information

General information about us, including the charters for the committees of our Board of Directors can be found at https://www.hawaiianairlines.com . Our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, as well as any amendments and exhibits to those reports that we file with the Securities and Exchange Commission (SEC) are available free of charge through our website. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov .

We also use the investor relations section of our website https://newsroom.hawaiianairlines.com/investor-relations and our website ( https://www.hawaiianairlines.com ), as a means of disclosing material information and for complying with our disclosure obligations under Regulation FD.

Information on our website is not incorporated into this Annual Report on Form 10-K or our other securities filings and is not a part of such filings.

ITEM 1A. RISK FACTORS.

In addition to the risks identified elsewhere in this report, the following risk factors apply to our business, results of operations, and financial conditions.

ECONOMIC RISKS

Our business is affected by global economic volatility.

Our business and results of operations are significantly impacted by general world-wide economic conditions. Demand for discretionary purchases including air travel and vacations to Hawai'i remains unpredictable. Deterioration in demand resulting from economic uncertainty or another recession may result in a reduction in our passenger traffic and/or increased competitive pressure on fares in the markets we serve, which would negatively impact our results of operations and financial condition. We cannot assure that we would be able to offset such revenue reductions by reducing our costs.

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Our business is highly dependent on tourism to, from, and amongst the Hawaiian Islands and our financial results could suffer if there is a downturn in tourism levels.

Our principal base of operations is in Hawai'i and our revenue is linked primarily to the number of travelers (mainly tourists) to, from and amongst the Hawaiian Islands. Hawai'i tourism levels are affected by the political and economic climate in Hawai'i's main tourism markets, the availability of hotel accommodations, the popularity of Hawai'i as a tourist destination relative to other vacation destinations, and other global factors, including natural disasters, safety, and security. From time to time, various events and industry specific problems such as labor strikes have had a negative impact on tourism in Hawai'i. The occurrence of natural disasters, such as hurricanes, earthquakes, volcanic eruptions, and tsunamis, in Hawai'i or other parts of the world, could also have a material adverse effect on Hawai'i tourism. In addition, the potential or actual occurrence of terrorist attacks, wars, and the threat of other negative world events have had, and may in the future have, a material adverse effect on Hawai'i tourism. A decline in the level of Hawai'i passenger traffic could have a material adverse effect on our results of operations and financial condition.

Our business is highly dependent on the price and availability of fuel.

Our results and operations are heavily impacted by the price and availability of jet fuel. While we have benefited in the past from lower fuel costs, fuel costs increased in 2017 and 2018 and we cannot assure that fuel costs will not increase further in the future. The cost and availability of jet fuel remains volatile and is subject to political, economic, and market factors that are generally outside of our control. Prices may be affected by many factors including, without limitation, the impact of political instability, crude oil production and refining capacity, unexpected changes in the availability of petroleum products due to disruptions to distribution systems or refineries, unpredicted increases in demand due to weather or the pace of global economic growth, inventory reserve levels of crude oil and other petroleum products, the relative fluctuation between the U.S. dollar and other major currencies, and the actions of speculators in commodity markets. Because of the effects of these factors on the price and availability of jet fuel, the cost and future availability of fuel cannot be predicted with any degree of certainty. Also, due to the competitive nature of the airline industry, there can be no assurance that we will be able to increase our fares or other fees to sufficiently offset any increase in fuel prices.

We enter into derivative agreements to protect against the volatility of fuel costs. There is no assurance that such agreements will protect us during unfavorable market conditions or that our counterparties will be able to perform under these hedge arrangements.

See Item 7A, Quantitative and Qualitative Disclosures About Market Risk , for further information regarding our exposure to the price of fuel.

Our business is exposed to foreign currency exchange rate fluctuations.

Our business is expanding internationally with an increasing percentage of our passenger revenue generated from our International routes. The fluctuation of the U.S. dollar relative to foreign currencies can significantly affect our results of operations and financial condition. To manage the effects of fluctuating exchange rates, we periodically enter into foreign currency forward contracts, execute payment of expenditures in those locations in local currency, and recently entered into $86.5 million in Japanese Yen denominated debt in connection with two aircraft financing transactions. There is no assurance that such agreements will protect us against foreign currency exchange rate fluctuations during unfavorable market conditions or that our counterparties will be able to perform under these hedge arrangements.

See Item 7A, Quantitative and Qualitative Disclosures About Market Risk , for further information regarding our exposure to the foreign currency exchange rates.

COMPETITIVE ENVIRONMENT RISKS

We operate in an extremely competitive environment.

The airline industry is characterized by low profit margins, high fixed costs, and significant price competition. We compete with other airlines on all of our Domestic and International routes. The commencement of, or increase in, service on our routes by existing or new carriers could negatively impact our operating results. Many of our competitors on our North America and International routes are much larger and have greater financial resources and brand recognition than we do. Aggressive marketing tactics or a prolonged fare war initiated by one or more of these competitors could adversely affect our financial resources and our ability to compete in these markets. Since airline markets have few natural barriers to entry, we also face the constant threat of new entrants in all of our markets.

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Additional capacity to Hawai'i, whether from network carriers or LCCs, could decrease our share of the markets in which we operate, could cause a decline in our yields, or both, which could have a material adverse effect on our results of operations and financial condition.

The concentration of our business in Hawai'i, and between Hawai'i and the U.S. mainland, provides little diversification of our revenue.

During 2018 , approximately 74% of our passenger revenue was generated from our Domestic routes. Many of our competitors, particularly major network carriers with whom we compete on our North America routes, enjoy greater geographical diversification of their revenue. A reduction in the level of demand for travel within Hawai'i, or to Hawai'i from the U.S. mainland, or an increase in the level of industry capacity on these routes, may reduce the revenue we are able to generate and adversely affect our financial results. As these routes account for a significantly higher proportion of our revenue than they do for many of our competitors, such a reduction would have a relatively greater adverse effect on our financial results.

Our business is affected by the competitive advantages held by network carriers in the North America market.

During 2018 , approximately 52% of our passenger revenue was generated from our North America routes. The majority of competition on our North America routes is from network carriers such as Alaska Airlines, American Airlines, Delta Air Lines, and United Airlines, all of whom have a number of competitive advantages. Primarily, network carriers generate passenger traffic from and throughout the U.S. mainland, which enable them to attract higher customer traffic levels as compared to us. Also, there have been recent announcements by other carriers, such as Southwest Airlines, that there will be an increase in capacity to and from Hawai'i, and possibly amongst the Hawaiian Islands.

In contrast, we lack a comparable direct network to feed passengers to our North America flights and are therefore more reliant on passenger demand in the specific cities we serve. We also rely on our code-share partner agreements (e.g. with JetBlue) to provide customers access to and from North American destinations currently unserved by us. Most network carriers operate from hubs, which can provide a built-in market of passengers depending on the economic strength of the hub city and the size of the customer group that frequent the airline. Our Honolulu and Maui hubs do not originate a large proportion of North American travel, nor do they have the population or potential customer franchise of a larger city to provide us with a built-in market. Passengers in the North American market, for the most part, do not originate in Honolulu, but on the U.S. mainland, making Honolulu primarily a destination rather than an origin of passenger traffic.

Our Neighbor Island routes are affected by increased capacity provided by our competitors.

During 2018 , approximately 22% of our passenger revenue was generated from our Neighbor Island routes. Although we enjoy a strong competitive position on our Neighbor Island routes, our competitors could increase capacity to Hawai'i either by introducing new routes or increasing the frequency of existing routes from North America to the Neighbor Islands or by the introduction of additional flights within the Neighbor Islands. This additional capacity could have the effect of decreasing our share of traffic on our Neighbor Island routes, which could have a material adverse effect on our results of operations and financial condition.

Our International routes are affected by competition from domestic and foreign carriers.

During 2018 , approximately 26% of our passenger revenue was generated from our International routes. Our competitors on these routes include both domestic and foreign carriers. Both domestic and foreign competitors have a number of competitive advantages that may enable them to attract higher customer traffic levels as compared to us.

Many of our domestic competitors have joined airline alliances, which provide customers access to each participating airline's international network, allowing for convenience and connectivity to their destinations. These alliances formed by our domestic competitors have increased in recent years. In some instances our domestic competitors have been granted antitrust exemptions to form joint venture arrangements in certain geographies, further deepening their cooperation on certain routes. To mitigate this risk, we rely on code-share agreements with partner airlines to provide customers access to international destinations currently unserved by us.

Many of our foreign competitors are network carriers that benefit from network feed to support International routes on which we compete. In contrast, we lack a comparable direct network to feed passengers to our International flights, and are therefore more reliant on passenger demand in the specific destinations that we serve. Most network carriers operate from hubs, which can provide a built-in home base market of passengers. Passengers on our International routes, for the most part, do not originate in Hawai'i, but rather internationally, in these foreign carriers' home bases. We also rely on our code-share agreements

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and our relationships with travel agencies and wholesale distributors to provide customers access to and from International destinations currently unserved by us.

INFORMATION TECHNOLOGY AND THIRD-PARTY RISKS

If we do not maintain the privacy and security of customer-related information or fail to comply with applicable U.S. and foreign privacy or data security regulations or security standards imposed by our commercial partners, our reputation could be damaged, we could incur substantial additional costs, and we could become subject to litigation or regulatory penalties.

We receive, retain, and transmit personal information about our customers and we are subject to increasing legislative, regulatory and customer focus on privacy and data security both domestically and internationally. A number of our commercial partners, including credit card companies, have imposed data security standards that we are obligated to meet and these standards continue to evolve. We will continue our efforts to meet new and increasing privacy and security standards; however, it is possible that such new standards may prove difficult to meet, require us to expend additional resources, and result in us being unable to process credit card transactions if determined to be non-compliant. Additionally, any compromise of our technology systems could result in the loss, disclosure, misappropriation of or access to our customers’, employees’ or business partners’ information. Any such loss, disclosure, misappropriation or access could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information. Any significant data breach or our failure to comply with applicable U.S. and foreign privacy or data security regulations or security standards imposed by our commercial partners may adversely affect our reputation, business, results of operations and financial condition, and may require that we expend significant additional resources related to the security of information systems.

We are increasingly dependent on technology and automated systems to operate our business.

We depend heavily on technology and automated systems to effectively operate our business. These systems include flight operations systems, communications systems, airport systems, reservations systems, management and accounting systems, commercial websites, including www.hawaiianairlines.com , and other systems, all of which must be able to accommodate high traffic volumes, maintain secure information and provide accurate flight information, as well as process critical financial related transactions. Any substantial or repeated failures of these systems could negatively affect our customer service, compromise the security of customer information, result in the loss of important data, loss of revenue and increased costs, and generally harm our business. Like other companies, our systems may be vulnerable to disruptions due to events beyond our control, including natural disasters, power disruptions, software or equipment failures, terrorist attacks, cybersecurity threats, computer viruses and hackers. There can be no assurance that the measures we have taken to reduce the adverse effects of certain potential failures or disruptions are adequate to prevent or remedy disruptions of our systems. In addition, we will need to continuously make significant investments in technology to periodically upgrade and replace existing systems. If we are unable to make these investments or fail to successfully implement, upgrade or replace our systems, our business could be adversely impacted.

We are highly reliant on third-party contractors to provide certain facilities and services for our operations, and termination of our third-party agreements could have a potentially adverse effect on our financial results.

There are a limited number of qualified employees and personnel in the airline and information technology industry, especially within the Hawai'i market. Due to these limitations, we historically relied on outside vendors for a variety of services and functions critical to our business, including aircraft maintenance and parts, code-sharing, reservations, computer services including hosting and software maintenance, accounting, frequent flyer programs, passenger processing, ground facilities, baggage and cargo handling, personnel training, and the distribution and sale of airline seats. Our reliance on outside vendors may continue to increase in the future.

The failure of any of our third-party service providers to adequately perform their service obligations, or other interruptions of services may reduce our revenues, increase expenses, and/or prevent us from operating our flights and providing other services to our customers. Our business and financial performance would be materially harmed if our customers believe that our services are unreliable or unsatisfactory.

LABOR RELATIONS AND RELATED COSTS RISKS

We are dependent on satisfactory labor relations.

Labor costs are a significant component of airline expenses and can substantially impact an airline's results of operations. A significant portion of our workforce is represented by labor unions. We may make strategic and operational decisions that may

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require the consent of one or more of these labor unions, and these labor unions could demand additional wages, benefits or other consideration in return for their consent.

In addition, we have entered into collective bargaining agreements with our pilots, mechanical group employees, clerical group employees, flight attendants, and dispatchers. We cannot ensure that future agreements with our employees' labor unions will be on terms in line with our expectations or comparable to agreements entered into by our competitors, and any future agreements may increase our labor costs or otherwise adversely affect our business. We are currently in labor negotiations with our flight attendants' union, AFA, whose contract became amendable on January 1, 2017. If we are unable to reach an agreement with any unionized work group, we may be subject to future work interruptions and/or stoppages, which may hamper or halt operations. In addition, the threat of future work interruptions and/or stoppages may cause a decline in our passenger traffic, negatively impacting our results of operations and financial condition.

Our operations may be adversely affected if we are unable to attract and retain qualified personnel and key executives.

We believe that our future success is dependent on the knowledge and expertise of our key executives and highly qualified management, technical, and other personnel. Attracting and retaining such personnel in the airline industry is highly competitive. We cannot be certain that we will be able to retain our key executives or attract other qualified personnel in the future. Any inability to retain our key executives, or attract and retain additional qualified executives, could have a negative impact on our operations.

In addition, as we continue to expand our operations through the acquisition of new aircraft and introduction of service to new markets, it may be challenging to attract a sufficient number of qualified personnel including pilots, mechanics and other skilled labor. As we compete with other carriers for qualified personnel, we also face the challenge of attracting individuals who embrace our team-oriented, friendly and customer-driven corporate culture. Our inability to attract and retain qualified personnel who embrace our corporate culture could have a negative impact on our reputation and overall operations.

STRATEGY AND BRAND RISKS

Our failure to successfully implement our route and network strategy could harm our business.

Our route and network strategy (how we determine to deploy our fleet) includes initiatives to increase revenue, decrease costs, mature our network, and improve distribution of our sales channels. It is critical that we execute upon our planned strategy in order for our business to attain economies of scale and to sustain or improve our results of operations. If we are unable to utilize and fill increased capacity provided by additional aircraft entering our fleet, hire and retain skilled personnel, or secure the required equipment and facilities in a cost-effective manner, we may be unable to successfully develop and grow our new and existing markets, which may adversely affect our business and operations.

We continue to strive toward aggressive cost-containment goals which are an important part of our business strategy to offer the best value to passengers through competitive fares while maintaining acceptable profit margins and return on capital. We believe a lower cost structure will better position us to fund our strategy and take advantage of market opportunities. If we are unable to adequately contain our non-fuel unit costs, our financial results may suffer.

Our reputation and financial results could be harmed in the event of adverse publicity, including the event of an aircraft accident or incident.

Our customer base is broad and our business activities have significant prominence, particularly in Hawai'i and other destinations we serve. Consequently, negative publicity resulting from real or perceived shortcomings in our customer service, employee relations, business conduct, or other events affecting our operations could negatively affect the public image of our company and the willingness of customers to purchase services from us, which could affect our financial results.

Additionally, we are exposed to potential losses that may be incurred in the event of an aircraft accident or incident. Any such accident or incident involving our aircraft or an aircraft operated by one of our code-share partners could involve not only the repair or replacement of a damaged aircraft and its consequential temporary or permanent loss of revenue, but also significant claims of injured passengers and others. We are required by the U.S. Department of Transportation (DOT) to carry liability insurance, and although we currently maintain liability insurance in amounts consistent with the industry, we cannot be assured that our insurance coverage will adequately cover us from all claims and we may be forced to bear substantial losses incurred with an accident. In addition, any aircraft accident or incident could cause a public perception that we are less safe or reliable than other airlines, which would harm our business.

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AIRLINE INDUSTRY, REGULATION AND RELATED COSTS RISKS

The airline industry has substantial operating leverage and is affected by many conditions that are beyond its control, which could harm our financial condition and results of operations.

Due to the substantial fixed costs associated with operating an airline, there is a disproportionate relationship between the cost of operating each flight and the number of passengers carried. However, the revenue generated from a particular flight is directly related to the number of passengers carried and the respective average fares applied. Accordingly, a decrease in the number of passengers carried would cause a corresponding decrease in revenue (if not offset by higher fares), and it may result in a disproportionately greater decrease in profits. Therefore, any general reduction in airline passenger traffic as a result of any of the following or other factors, which are largely outside of our control, could harm our business, financial condition, and results of operations:


•	decline in general economic conditions;


•	continued threat of terrorist attacks and conflicts overseas;


•	actual or threatened war and political instability;


•	increased security measures or breaches in security;


•	adverse weather and natural disasters;


•	changes in consumer preferences, perceptions, or spending patterns;


•	increased costs related to security and safety measures;


•	increased fares as a result of increases in fuel costs;


•	outbreaks of contagious diseases or fear of contagion; and


•	congestion at airports and actual or potential disruptions in the air traffic control system.

Our results of operations may be volatile due to the conditions identified above. We cannot ensure that our financial resources will be sufficient to absorb the effects of any of these unexpected factors should they occur.

Our financial results and operations may be negatively affected by the State of Hawai'i's airport modernization plan.

The State of Hawai'i has begun to implement a modernization plan encompassing the airports we serve within the State. Our landing fees and airport rent rates have increased to fund the modernization program. Additionally, we expect the costs for our Neighbor Island operations to increase more than the costs related to our North America and International operations due to phased adjustments of the airports' funding mechanism. Therefore, costs related to the modernization program will have a greater impact on our operations as compared to our competitors, who do not have significant Neighbor Island operations. We can offer no assurance that we will be successful in offsetting these cost increases through other cost reductions or increases in our revenue and, therefore, can offer no assurance that our future financial results will not be negatively affected by them.

Our operations may be disrupted if we are unable to obtain and maintain adequate facilities and infrastructure at airports within the State of Hawai'i.

We must be able to maintain and/or obtain adequate gates, maintenance capacity, office space, operations areas, and ticketing facilities at the airports within the State of Hawai'i to be able to operate our existing and proposed flight schedules. Failure to maintain such facilities and infrastructure may adversely impact our operations and financial performance.

Our business is subject to substantial seasonal and cyclical volatility.

Our results of operations reflect the impact of seasonal volatility primarily due to passenger leisure and holiday travel patterns. As Hawai'i is a popular vacation destination, demand from North America, our largest source of visitors, is typically stronger during June, July, August and December and considerably weaker at other times of the year. Because of fluctuations in our results from seasonality, operating results for a historical period are not necessarily indicative of operating results for a future period and operating results for an interim period are not necessarily indicative of operating results for an entire year.

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Terrorist attacks or international hostilities, or the fear of terrorist attacks or hostilities, even if not made directly on the airline industry, could negatively affect us and the airline industry.

Terrorist attacks, even if not made directly on the airline industry, or the fear of such attacks, hostilities or act of war, could adversely affect the airline industry, including us, and could result in a significant decrease in demand for air travel, increased security costs, increased insurance costs covering war-related risks, and increased flight operational loss due to cancellations and delays. Any future terrorist attacks or the implementation of additional security-related fees could have a material adverse effect on our business, financial condition and results of operations, and on the airline industry in general.

The airline industry is subject to extensive government regulation, new regulations, and taxes which could have an adverse effect on our financial condition and results of operations.

Airlines are subject to extensive regulatory requirements that result in significant costs. New, and modifications to existing, laws, regulations, taxes and airport rates, and charges imposed by domestic and foreign governments have been proposed from time to time that could significantly increase the cost of airline operations, restrict operations or reduce revenue. The FAA from time to time issues directives and other regulations relating to the maintenance and operation of aircraft that require significant expenditures. Some FAA requirements cover, among other things, retirement of older aircraft, security measures, collision avoidance systems, airborne windshear avoidance systems, noise abatement and other environmental concerns, commuter aircraft safety and increased inspections, and maintenance procedures to be conducted on older aircraft. A failure to be in compliance, or a modification, suspension or revocation of any of our DOT/FAA authorizations or certificates, would have a material adverse impact on our operations.

We cannot predict the impact that laws or regulations may have on our operations, nor can we ensure that laws or regulations enacted in the future will not adversely affect our business. Further, we cannot guarantee that we will be able to obtain or maintain necessary governmental approvals. Once obtained, operating permits are subject to modification and revocation by the issuing agencies. Compliance with these and any future regulatory requirements could require us to incur significant capital and operating expenditures.

In addition to extensive government regulations, the airline industry is dependent on certain services provided by government agencies (DOT, FAA, CBP, TSA, etc.). Furthermore, because of significantly higher security and other costs incurred by airports since September 11, 2001, many airports have significantly increased their rates and charges to airlines, including us, and may do so again in the future.

Federal budget constraints or federally imposed furloughs due to budget negotiation deadlocks may adversely affect our industry, business, results of operations and financial position.

Many of our airline operations are regulated by governmental agencies, including the FAA, the DOT, the CBP, the TSA, and others. If the federal government operations were to experience issues in reaching budgetary consensus in the future resulting in mandatory furloughs and/or other budget constraints, our business and results of operations could be materially negatively impacted.

The airline industry is required to comply with various environmental laws and regulations, which could inhibit our ability to operate and could also have an adverse effect on our results of operations.

Many aspects of airlines' operations are subject to increasingly stringent federal, state, local, and foreign laws protecting the environment. U.S. federal laws that have a particular impact on us include the Airport Noise and Capacity Act of 1990, the Clean Air Act, the Resource Conservation and Recovery Act, the Clean Water Act, the Safe Drinking Water Act, the Comprehensive Environmental Response Act and the Compensation and Liability Act. Compliance with these and other environmental laws and regulations can require significant expenditures, and violations can lead to significant fines and penalties. Governments globally are increasingly focusing on the environmental impact caused by the consumption of fossil fuels and as a result have proposed or enacted legislation which may increase the cost of providing airline service or restrict its provision. We expect the focus on environmental matters to increase.

Concern about climate change and greenhouse gases may result in additional regulation of aircraft emissions in the U.S. and abroad. In addition, other legislative or regulatory action to regulate greenhouse gas emissions is possible. At this time, we cannot predict whether any such legislation or regulation would apportion costs between one or more jurisdictions in which we operate flights. We are monitoring and evaluating the potential impact of such legislative and regulatory developments.

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In addition to direct costs, such regulation may have a greater effect on the airline industry through increases in fuel costs. The impact to us and our industry from such actions is likely to be adverse and could be significant, particularly if regulators were to conclude that emissions from commercial aircraft cause significant harm to the atmosphere or have a greater impact on climate change than other industries.

Our operations may be adversely affected by our expansion into non-U.S. jurisdictions and the related laws and regulations to which we are subject.

The expansion of our operations into non-U.S. jurisdictions has expanded the scope of the laws and regulations to which we are subject, both domestically and internationally. Compliance with the laws and regulations of foreign jurisdictions and the restrictions on operations that these laws, regulations or other government actions may impose could significantly increase the cost of airline operations or reduce revenue. For example, a number of our destinations in Asia have been revising their privacy and consumer laws and regulations. Failure to comply with these evolving laws or regulations could result in significant penalties, criminal charges, costs to defend in a foreign jurisdiction, restrictions on operations and reputational damage. In addition, we operate flights on international routes regulated by treaties and related agreements between the U.S. and foreign governments, which are subject to change as they may be amended from time to time. Modifications of these arrangements could result in an inability to obtain or retain take-off or landing slots for our routes, route authorization and necessary facilities. Any limitations, additions or modifications to government treaties, agreements, regulations, laws or policies related to our international routes could have a material adverse impact on our financial position and results of operations.

We may be party to litigation or regulatory action in the normal course of business or otherwise, which could have an adverse effect on our operations and financial results.

From time to time, we are a party to or otherwise involved in legal or regulatory proceedings, claims, government inspections, investigations or other legal matters, both domestically and in foreign jurisdictions. Resolving or defending legal matters can take months or years. The duration of such matters can be unpredictable with many variables that we do not control including adverse party or government responses. Litigation and regulatory proceedings are subject to significant uncertainty and may be expensive, time-consuming and disruptive to our operations. In addition, an adverse resolution of a lawsuit, regulatory matter, investigation or other proceeding could have a material adverse effect on our financial condition and results of operations. We may be required to change or restrict our operations or be subject to injunctive relief, significant compensatory damages, punitive damages, penalties, fines or disgorgement of profits, none of which may be covered by insurance. We may have to pay out settlements that also may not be covered by insurance. There can be no assurance that any of these payments or actions will not be material. In addition, publicity of ongoing legal and regulatory matters may adversely affect our reputation.

Our insurance costs are susceptible to significant increases, and further increases in insurance costs or reductions in coverage could have an adverse effect on our financial results.

We carry types and amounts of insurance customary in the airline industry, including coverage for general liability, passenger liability, property damage, aircraft loss or damage, baggage and cargo liability, and workers' compensation. We are required by the DOT to carry liability insurance on each of our aircraft. We currently maintain commercial airline insurance with a major group of independent insurers that regularly participate in world aviation insurance markets, including public liability insurance and coverage for losses resulting from the physical destruction or damage to our aircraft. However, there can be no assurance that the amount of such coverage will not change or that we will not bear substantial losses from accidents or damage to, or loss of, aircraft or other property due to other factors such as natural disasters. We could incur substantial claims resulting from an accident or damage to, or loss of, aircraft or other property due to other factors such as natural disasters in excess of related insurance coverage that could have a material adverse effect on our results of operations and financial condition.

Extended interruptions or disruptions in service could have a material adverse impact on our operations.

Our financial results may be adversely affected by factors outside our control, including, but not limited to, flight cancellations, significant delays in operations, and facility disruptions. Our principal base of operations is in Hawai'i and a significant interruption or disruption in service could have a serious impact on our business and results of operations. Natural disasters, such as hurricanes, earthquakes and tsunamis, may impact the demand for transportation in the markets in which we operate. In 2018 , we faced the impacts of two hurricanes within the vicinity of the State of Hawai'i as well as increased volcanic activity on the Big Island of Hawai'i. There may be a lingering impact to demand on Hawai'i tourism and aviation transportation following weather-related events.

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FLEET AND FLEET-RELATED RISKS

We are dependent on a limited number of suppliers for aircraft, aircraft engines and parts.

We are dependent on a limited number of suppliers (e.g. Airbus, Boeing, Rolls Royce, Pratt & Whitney) for aircraft, aircraft engines, and aircraft-related items. As a result, we are vulnerable to any problems associated with the supply of those aircraft and parts and/or operational disruptions, which could result in increased parts and maintenance costs in future years.

Our agreements to purchase Airbus A321neo aircraft and Boeing 787-9 aircraft represent significant future financial commitments and operating costs.

As of December 31, 2018 , we had the following firm order commitments and purchase rights for additional aircraft:



Aircraft Type	Firm Orders	Purchase Rights	Expected Delivery Dates
A321neo aircraft	7	3	Between 2019 and 2020
B787-9 aircraft	10	10	Between 2021 and 2025

We have made substantial pre-delivery payments for Airbus and Boeing aircraft under existing purchase agreements and are required to continue these pre-delivery payments as well as make payments for the balance of the purchase price through delivery of each aircraft. These commitments substantially increase our future capital spending requirements and may require us to increase our level of debt in future years. In 2019, we have significant obligations in order to fund our current aircraft orders and we are continuing to evaluate our options to finance these orders via our operating cash flows and debt financing. There can be no assurance that we will be able to obtain such financing on favorable terms, or at all.

Delays in scheduled aircraft deliveries or other loss of fleet capacity may adversely impact our operations and financial results.

The success of our business depends on, among other things, the ability to effectively operate a certain number and type of aircraft. As noted above, we have contractual commitments to purchase and integrate additional Airbus aircraft or Boeing aircraft into our fleet. If for any reason we are unable to secure deliveries of the Airbus aircraft or Boeing aircraft on the contractually scheduled delivery dates and successfully introduce these aircraft into our fleet, then our business, operations, and financial performance could be negatively impacted. Delays in scheduled aircraft deliveries or our failure to integrate newly purchased aircraft into our fleet as planned may require us to utilize our existing fleet longer than expected. Such extensions may require us to operate existing aircraft beyond the point at which it is economically optimal to retire them, resulting in increased maintenance costs.

We may never realize the full value of our long-lived assets, resulting in impairment and other related charges that may negatively impact our financial position and results of operations.

Economic and intrinsic triggers, which include extreme fuel price volatility, an uncertain economic and credit environment, unfavorable trends in historical or forecasted results of operations and cash flows, as well as other uncertainties, may cause us to record material impairments of our long-lived assets. We could be subject to impairment charges in the future that could have an adverse effect on our financial position and results of operations in future periods.

COMMON STOCK RISKS

Our share price is subject to fluctuations and stockholders could have difficulty trading shares.

The market price of our stock is influenced by many factors, many of which are outside of our control, and include the following:


•	operating results and financial condition;


•	changes in the competitive environment in which we operate;


•	fuel price volatility including the availability of fuel;

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•	announcements concerning our competitors including bankruptcy filings, mergers, restructurings or acquisitions by other airlines;


•	increases or changes in government regulation;


•	general and industry specific market conditions;


•	changes in financial estimates or recommendations by securities analysts; and


•	sales of our common stock or other actions by investors with significant shareholdings.

In recent years the stock market has experienced volatile price and volume fluctuations that often have been unrelated to the operating performance of individual companies. These market fluctuations, as well as general economic conditions, may affect the price of our common stock.

In the past, securities class action litigation has often been instituted against a company following periods of volatility in its stock price. This type of litigation, if filed against us, could result in substantial costs and divert our management's attention and resources. In addition, the future sale of a substantial number of shares of common stock by us or by our existing stockholders may have an adverse impact on the market price of our common stock. There can be no assurance that the trading price of our common stock will remain at or near its current level.

Certain provisions of our certificate of incorporation and bylaws may delay or prevent a change of control, which could materially adversely affect the price of our common stock.

Our certificate of incorporation and bylaws contain provisions that may make it difficult to remove our Board of Directors and management, and may discourage or delay a change of control, which could materially and adversely affect the price of our common stock. These provisions include, among others:


•	the ability of our Board of Directors to issue, without further action by the stockholders, series of undesignated preferred stock , or rights to acquire preferred stock, that could dilute the interest of, or impair the voting power of, holders of our common stock or could also be used as a method of discouraging, delaying or preventing a change of control ;


•	advance notice procedures for stockholder proposals to be considered at stockholders’ meetings and for nominations of candidates for election to our Board of Directors;


•	the ability of our Board of Directors to fill vacancies on the board;


•	a prohibition against stockholders taking action by written consent;


•	a prohibition against stockholders calling special meetings of stockholders; and


•	super-majority voting requirements to modify or amend specified provisions of our certificate of incorporation.

Our certificate of incorporation includes a provision limiting voting and ownership by non-U.S. citizens and our bylaws include a provision specifying an exclusive forum for stockholder disputes.

To comply with restrictions imposed by federal law on foreign ownership of U.S. airlines, our certificate of incorporation restricts voting of shares of our common stock by non-U.S. citizens. Our certificate of incorporation provides that the failure of non-U.S. citizens to register their shares on a separate stock record, which we refer to as the “foreign stock record,” would result in a suspension of their voting rights in the event that the aggregate foreign ownership of the outstanding common stock exceeds the foreign ownership restrictions imposed by federal law.

Our certificate of incorporation further provides that no shares of our common stock will be registered on the foreign stock record if the amount so registered would exceed the foreign ownership restrictions imposed by federal law. If it is determined that the amount registered in the foreign stock record exceeds the foreign ownership restrictions imposed by federal law, shares will be removed from the foreign stock record in reverse chronological order based on the date of registration therein, until the number of shares registered therein does not exceed the foreign ownership restrictions imposed by federal law. As of December 31, 2018 , we believe we were in compliance with the foreign ownership rules.

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Our bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware or, if such court lacks jurisdiction, any other state or federal court located in the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of us; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders; (iii) any action asserting a claim against us or any of our directors, officers or other employees arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws (as each may be amended or restated from time to time); or (iv) any action asserting a claim against us or any of our directors, officers or other employees governed by the internal affairs doctrine. Accordingly, stockholders may be limited in the forum in which they are able to pursue legal actions against us.

We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase program or continue to pay dividends on our common stock.

Our intent to continue to repurchase our shares pursuant to our stock repurchase program and to continue to pay quarterly dividends is subject to capital availability, market and economic conditions, applicable legal requirements, and other relevant factors. The stock repurchase program may be limited, suspended, or discontinued at any time without prior notice.

In 2018, we initiated the quarterly issuance of dividends to our stockholders of record. We cannot provide any assurance that we will continue to declare dividends for any fixed period, and the payment of dividends may be suspended or adjusted at any time at our discretion. We will evaluate, on a quarterly basis, the amount and timing of future dividends based on our operating results, financial condition, capital requirements, and general business conditions.

LIQUIDITY RISKS

See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations , for further information regarding our liquidity.

Our financial liquidity could be adversely affected by credit market conditions.

Our business requires access to capital markets to finance equipment purchases, including aircraft, and to provide liquidity in seasonal or cyclical periods of weaker revenue generation. In particular, we will face specific funding requirements with respect to our obligation under purchase agreements with Airbus and Boeing to acquire new aircraft. We may finance these upcoming aircraft deliveries; however, the unpredictability of global credit market conditions may adversely affect the availability of financing or may result in unfavorable terms and conditions. We can offer no assurance that the financing we need will be available when required or that the economic terms on which it is available will not adversely affect our financial condition. If we cannot obtain financing or we cannot obtain financing on commercially reasonable terms, our business and financial condition may be adversely affected.

Our debt could adversely affect our liquidity and financial condition, and include covenants that impose restrictions on our financial and business operations.

As of December 31, 2018 , we had $468 million in outstanding debt. Our debt and related covenants could:


•	require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for other operational purposes;


•	limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;


•	limit, along with the financial and other restrictive covenants in the agreements governing our debt, our ability to borrow additional funds;


•	place us at a competitive disadvantage compared to other less leveraged competitors and competitors with debt agreements on more favorable terms than us; and


•	adversely affect our ability to secure additional financing in the future on acceptable terms or at all, which would impact our ability to fund our working capital, capital expenditures, acquisitions or other general purpose needs.

These agreements require us to meet certain covenants. If we breach any of these covenants we could be in a default under these facilities, which could cause our outstanding obligations under these facilities to accelerate and become due and payable immediately, and could also cause us to default under our other debt or lease obligations and lead to an acceleration of the

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obligations related to such other debt or lease obligations. The existence of such a default could also preclude us from borrowing funds under our credit facilities.

Our ability to comply with the provisions of financing agreements can be affected by events beyond our control and a default under any such financing agreements if not cured or waived, could have a material adverse effect on us. In the event our debt is accelerated, we may not have sufficient liquidity to repay these obligations or to refinance our debt obligations, resulting in a material adverse effect on our financial condition.

We are required to maintain reserves under our credit card processing agreements which could adversely affect our financial and business operations.

Under our bank-issued credit card processing agreements, certain proceeds from advance ticket sales may be held back to serve as collateral to cover any possible chargebacks or other disputed charges that may occur. These holdbacks, which are included in restricted cash of our consolidated balance sheets, totaled $1.0 million as of December 31, 2017 . As of December 31, 2018 , there were no holdbacks held with our credit card processors.

In the event of a material adverse change in our business, the holdback could incrementally increase to an amount up to 100% of the applicable credit card activity for all unflown flights, which would also cause an increase in the level of restricted cash. If we are unable to obtain a waiver, or otherwise mitigate the increase in restricted cash, it could adversely affect our liquidity and also cause a covenant violation under other debt or lease obligations and have a material adverse effect on our financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

Aircraft

The table below summarizes our total fleet as of December 31, 2017 and 2018 , and anticipated fleet as of December 31, 2019 (based on existing agreements):



	December 31, 2017			December 31, 2018			December 31, 2019			Seating Capacity (Per Aircraft)	Simple Average Age (In Years)
Aircraft Type	Leased (6)	Owned	Total	Leased (6)	Owned	Total	Leased (6)	Owned	Total	Seating Capacity (Per Aircraft)	Simple Average Age (In Years)
A330-200 ⁽¹⁾	11	13	24	12	12	24	12	12	24	278	5.5
A321-200 ⁽²⁾	—	2	2	2	9	11	2	15	17	189	.5
767-300 ⁽³⁾	7	1	8	3	1	4	—	—	—	252 - 264	23.3
717-200	5	15	20	5	15	20	5	15	20	128	16.7
ATR 42-500 ⁽⁴⁾	—	3	3	—	4	4	—	4	4	48	15.7
ATR 72-200 ⁽⁵⁾	—	3	3	—	3	3	—	3	3	—	25.4
Total	23	37	60	22	44	66	19	49	68


(1)	In 2018 , we entered into a sale leaseback transaction with an independent third party for one A330-200 aircraft under an operating lease for a term of 12 years.


(2)	In 2018, we took delivery of nine Airbus A321-200 aircraft. In 2019, we expect to take delivery of an additional six Airbus A321-200 aircraft.


(3)	The decrease in leased Boeing 767-300 from 2017 to 2018 is due to the retirement of four aircraft. In the first quarter of 2019, we retired our remaining four aircraft, thereby completing our exit from the Boeing 767-300 fleet.


(4)	The ATR 42-500 turboprop aircraft are owned by Airline Contract Maintenance & Equipment, Inc., a wholly-owned subsidiary of the Company. In 2018, we took delivery of one ATR 42-500 turboprop aircraft.


(5)	The ATR 72-200 turboprop aircraft are used for our cargo operations.

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(6)	Leased aircraft include both aircraft under capital and operating leases. See Note 9 to the consolidated financial statements for further discussion regarding our aircraft leases.

At December 31, 2018 , we had firm aircraft orders as detailed below:



Delivery Year	A321neo Aircraft(1)	B787-9 Aircraft(2)	Total
2019	6	—	6
2020	1	—	1
2021	—	2	2
2022	—	3	3
2023	—	1	1
2024	—	3	3
2025	—	1	1
	7	10	17

(1)

In 2013, we entered into an agreement for the purchase of 16 new Airbus A321neo aircraft with purchase rights for an additional nine aircraft with scheduled for deliveries from 2017 to 2020. In 2018 , we took delivery of seven firm ordered aircraft, bringing our total delivered aircraft to nine. We have seven additional A321neo deliveries scheduled in 2019 and 2020 as reflected above, bringing the total purchased A321neo aircraft to 16. The Airbus A321neo narrow-body aircraft will be used to complement Hawaiian's existing fleet of wide-body aircraft for travel to and from the West Coast on our North America routes.

(2)

In February 2018, we exercised our right to terminate our aircraft purchase agreement with Airbus for six Airbus A330-800neo aircraft and the purchase rights for an additional six A330-800neo aircraft. Refer to Note 11 to the consolidated financial statements for discussion of the contract termination charge. In July 2018, we entered into a purchase agreement for the purchase of 10 Boeing 787-9 "Dreamliner" aircraft with purchase rights for an additional 10 aircraft with scheduled deliveries from 2021 to 2025. These fuel efficient, long-range aircraft will complement our existing fleet of wide-body for long-haul Asia/Pacific and North America routes.

See Note 9 to the consolidated financial statements for additional information regarding our aircraft lease agreements.

Ground Facilities

Our principal terminal facilities, cargo facilities and hangar and maintenance facilities are located at the Daniel K. Inouye International Airport (HNL). The majority of the facilities at HNL are leased on a month-to-month basis. We are also charged for the use of terminal facilities at other Neighbor Island airports owned by the State of Hawai'i. Some terminal facilities, including gates and holding rooms, are considered by the State of Hawai'i to be common areas and thus are not exclusively controlled by us. We also utilize other State of Hawai'i facilities, including station managers' offices, Premier Club lounges, and operations support space.

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The table below sets forth the airport locations we utilize pursuant to various agreements as of December 31, 2018 :



Name of Airport	Location
Phoenix Sky Harbor International Airport		Phoenix	Arizona
Long Beach Airport		Long Beach	California
Los Angeles International Airport		Los Angeles	California
Oakland International Airport		Oakland	California
Sacramento International Airport		Sacramento	California
San Diego International Airport		San Diego	California
San Francisco International Airport		San Francisco	California
Norman Y. Mineta San Jose International Airport		San Jose	California
Hilo International Airport		Hilo	Hawai'i
Daniel K. Inouye International Airport		Honolulu	Hawai'i
Kahului Airport		Kahului	Hawai'i
Kapalua Airport		Lahaina	Hawai'i
Ellison Onizuka Kona International Airport		Kailua-Kona	Hawai'i
Lana'i Airport		Lana'i	Hawai'i
Lihu'e Airport		Lihu'e	Hawai'i
Moloka'i Airport		Moloka'i	Hawai'i
McCarran International Airport		Las Vegas	Nevada
John F. Kennedy International Airport		New York	New York
Portland International Airport		Portland	Oregon
Seattle-Tacoma International Airport		Seattle	Washington
Pago Pago International Airport		Pago Pago	American Samoa
Brisbane International Airport		Brisbane	Australia
Sydney International Airport		Sydney	Australia
Haneda International Airport		Tokyo	Japan
Kansai International Airport		Osaka	Japan
Narita International Airport		Tokyo	Japan
New Chitose International Airport		Sapporo	Japan
Auckland Airport		Auckland	New Zealand
Incheon International Airport		Seoul	South Korea
Faa'a International Airport		Papeete	Tahiti

Our corporate headquarters are located in leased premises adjacent to the Daniel K. Inouye International Airport.

ITEM 3. LEGAL PROCEEDINGS.

We are subject to legal proceedings arising in the normal course of our operations. We do not anticipate that the disposition of any currently pending proceeding will have a material effect on our operations, business or financial condition.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is traded on the NASDAQ Global Select Market under the symbol "HA."

Holders

There were 749 stockholders of record of our common stock as of February 8, 2019, which does not reflect those shares held beneficially or those shares held in "street" name.

Dividends and Other Restrictions

We paid dividends of $24.2 million to shareholders of record during 2018 and $6.3 million during 2017 . In February 2019, our Board of Directors declared a quarterly cash dividend of $0.12 per share payable on February 22, 2019 to stockholders of record as of February 8, 2019 .

Our dividend payments may change from time to time. We cannot provide assurance that we will continue to declare dividends for any fixed period and payment of dividends may be suspended at any time at our discretion.

United States law prohibits non-U.S. citizens from owning more than 25% of the voting interest of a U.S. air carrier or controlling a U.S. air carrier. Our certificate of incorporation prohibits the ownership or control of more than 25% (to be increased or decreased from time to time, as permitted under the laws of the U.S.) of our issued and outstanding voting capital stock by persons who are not "citizens of the U.S." As of December 31, 2018 , we believe we are in compliance with the law as it relates to voting stock held by non-U.S. citizens.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table displays information with respect to our repurchases of shares of our common stock during the three months ended December 31, 2018 :



Period	Total number of shares purchased (i)	Average price paid per share (ii)		Total number of shares purchased as part of publicly announced plans or programs (i)	Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) (i)
October 1, 2018 - October 31, 2018	1,083,195	$	34.68	1,083,195
November 1, 2018 - November 30, 2018	179,738	35.26		179,738
December 1, 2018 - December 31, 2018	158,595	29.65		158,595
Total	1,421,528			1,421,528	$	97.5

(i)

In November 2017, our Board of Directors approved the repurchase of up to $100.0 million of our outstanding common stock over a two-year period through December 2019 via the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules and regulations, which stock repurchase program was completed in December 2018. In November 2018, our Board of Directors approved the repurchase of up to an additional $100 million of our outstanding common stock through December 2020. The new stock repurchase program is subject to modification or termination at any time.


(ii)	Weighted average price paid per share is calculated on a settlement basis and excludes commission.

Stockholder Return Performance Graph

The following graph compares cumulative total stockholder return on our common stock, the S&P 500 Index and the AMEX Airline Index from December 31, 2013 to December 31, 2018 . The comparison assumes $100 was invested on December 31, 2013 in our common stock and each of the foregoing indices and assumes reinvestment of dividends before consideration of income taxes.

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The stock performance depicted in the graph above is not to be relied upon as indicative of future performance. The stock performance graph shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate the same by reference, nor shall it be deemed to be "soliciting material" or to be "filed" with the SEC or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the Exchange Act.

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ITEM 6. SELECTED FINANCIAL DATA.

The Selected Financial Data should be read in conjunction with our accompanying audited consolidated financial statements and the notes related thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" below.

Hawaiian Holdings, Inc.

Selected Financial Data



	Year ended December 31,
	2018		2017			2016		2015		2014
	(in thousands, except per share data)
Summary of Operations: ^(a)
Operating revenue	$	2,837,411	$	2,675,145		$	2,432,413	$	2,317,467	$	2,314,879
Operating expenses	2,523,043		2,211,107			2,034,926		1,868,837		2,060,922
Operating income	314,368		464,038			397,487		448,630		253,957
Net Income	233,200		330,610			224,120		182,646		68,926
Net Income Per Common Stock Share:
Basic	$	4.63	$	6.23	^(c)	$	4.19	$	3.38	$	1.29
Diluted	4.62		6.19			4.15		2.98		1.10
Cash dividends declared per common share	0.48		0.12			0.00		0.00		0.00
Balance Sheet Items as of December 31:
Total assets	$	3,196,646	$	2,873,821		$	2,720,346	$	2,489,922	$	2,554,112
Long-term debt, less discount, and capital lease obligations, excluding current maturities ^(b)	608,684		511,201			497,908		677,915		870,946


(a)	We adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (ASC 606), and restated the consolidated financial results as of and for the years ended December 31, 2017 and 2016. Results from periods prior to 2016 have not been restated for the adoption of this standard. See Note 1 to the consolidated financial statements for additional information.

(b)

In 2018, we entered into two Japanese Yen denominated debt agreements for a total value of $86.5 million to finance a portion of the purchase price of two Airbus A321neo aircraft. Additionally, we took delivery of two A321neo aircraft accounted for as a capital lease. In 2016, we extinguished $140.5 million of existing debt under three secured financing agreements, which were originally scheduled to mature in 2022 and 2023. In 2015, we extinguished $123.9 million of existing debt under four secured financing agreements, which were originally scheduled to mature in 2018, 2023, and 2024. We also repurchased $70.8 million in principal of our convertible notes. In 2014, we received proceeds of $368.4 million in connection with the EETC financing for the purchase of five Airbus A330-200 aircraft. See further discussion at Note 8 to the consolidated financial statements.


(c)	We recognized a one-time benefit of $83.0 million , or $1.55 per common stock share, during the year ended December 31, 2017 as a result of the Tax Reform Act enacted in December 2017. During the year ended December 31, 2018, we completed our accounting for the effects of the Tax Act and recorded an additional tax benefit of $9.3 million .

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the Company and its operations. This discussion and analysis of our financial condition and results of operations contains forward-looking statements that involve risks and uncertainties. We have based these forward-looking statements on our current expectations and projections of future events. However, our actual results could differ materially from those discussed herein as a result of the risks that we face, including but not limited to those risks stated in the "Risk Factors" section of this report. See "Cautionary Note Regarding Forward-Looking Statements" above. In addition, the following discussion should be read in conjunction with the audited consolidated financial statements and the related notes thereto included elsewhere in this report.

Year in Review

2018 Financial Highlights


•	Operating income of $314 million compared to $464 million in the prior-year period.


•	Pre-tax income of $301 million compared to $391 million in the prior-year period.


•	GAAP net income of $233 million or $4.62 per diluted share compared to $331 million or $6.19 per diluted share in the prior year period.


•	Adjusted net income of $275 million or $5.44 per diluted share compared to $289 million or $5.41 per share in the prior year period.


•	Unrestricted cash and cash equivalents and short-term investments of $501 million compared to $460 million in the prior year period.

See "Non-GAAP Financial Measures" below for our reconciliation of non-GAAP measures.

Outlook

Looking ahead, capacity increases in North America and parts of our International network are expected to increase in the first half of 2019. We expect our capacity to grow between 1.5% to 3.0% in the first quarter of 2019 as compared to the first quarter of 2018. For the first quarter of 2019, we expect the aforementioned increases in capacity will result in operating revenue per available seat mile to decrease between 3.0% to 6.0% as compared to the first quarter of 2018. We also expect that our operating costs per available seat mile will decrease by 3.8% to 7.1% during the first quarter of 2019, while our operating costs per available seat mile excluding fuel will increase by 1.0% to 4.0%.

For 2019, we expect the corporate federal tax rate will result in an all-in book tax rate for us of 25% to 27%.

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Selected Consolidated Statistical Data

Below are the operating statistics we use to measure our operating performance.



	Year ended December 31,
	2018			2017 (a)			2016 (a)
	(in thousands, except as otherwise indicated)
Scheduled Operations (b) :
Revenue passengers flown	11,830			11,498			11,044
Revenue passenger miles (RPM)	17,198,985			16,307,344			15,484,369
Available seat miles (ASM)	20,158,139			18,991,566			18,371,544
Passenger revenue per RPM (Yield)		15.13	¢		15.25	¢		14.67	¢
Passenger load factor (RPM/ASM)	85.3		%	85.9		%	84.3		%
Passenger revenue per ASM (PRASM)		12.91	¢		13.09	¢		12.37	¢
Total Operations (b) :
Revenue passengers flown	11,840			11,505			11,051
RPM	17,206,703			16,316,739			15,492,509
ASM	20,171,911			19,006,682			18,384,637
Operating revenue per ASM (RASM)		14.07	¢		14.07	¢		13.23	¢
Operating cost per ASM (CASM)		12.51	¢		11.63	¢		11.07	¢
CASM excluding aircraft fuel, loss on sale of aircraft, contract terminations expense, and special items (c)		9.36	¢		9.19	¢		8.60	¢
Aircraft fuel expense per ASM (d)		2.97	¢		2.32	¢		1.87	¢
Revenue block hours operated	208,809			189,881			179,254
Gallons of jet fuel consumed	273,783			259,915			244,118
Average cost per gallon of jet fuel (actual) (d)	$	2.19		$	1.69		$	1.41


(a)	Amounts adjusted due to the adoption of ASC 606. See Note 1 to consolidated financial statements for additional information.


(b)	Includes the operations of our contract carrier under a capacity purchase agreement. Total Operations includes both scheduled and chartered operations.


(c)	Represents adjusted unit costs, a non-GAAP measure. We believe this is a useful measure because it better reflects our controllable costs. See "Non-GAAP Financial Measures" below for our reconciliation of non-GAAP measures.


(d)	Includes applicable taxes and fees.

Operating Revenue

Our revenue is derived primarily from transporting passengers on our aircraft. We record passenger revenue when the transportation is provided or upon scheduled flight for tickets expected to expire unused. We measure capacity in terms of available seat miles, which represent the number of seats available for passengers multiplied by the number of miles the seats are flown. Yield, or the average amount one passenger pays to fly one mile, is calculated by dividing passenger revenue by RPMs. We strive to increase passenger revenue primarily by increasing our yield per flight or by filling a higher proportion of available seats, which produces higher operating revenue per available seat mile. Other revenue primarily consists of cargo revenue, incidental services revenue, marketing component related to the sale of frequent flyer miles, contract services and charter services revenue.

Operating revenue was $2.84 billion , $2.68 billion and $2.43 billion for the years ended December 31, 2018 , 2017 and 2016 , respectively. The increase in operating revenue in 2018 from 2017 was driven primarily by an increase in passenger revenue and is discussed below:

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2018 vs. 2017

Passenger Revenue

Passenger revenue was $2.60 billion and $2.49 billion for the years ended December 31, 2018 and 2017 , respectively. Details of these changes are described in the table below:



	Year Ended December 31, 2018 as compared to Year Ended December 31, 2017
	Change in scheduled passenger revenue		Change in Yield		Change in RPM		Change in ASM
	(in millions)
Domestic	$	58.9	(2.8	)%	6.1	%	8.4	%
International	57.0		5.1		4.1		1.9
Total scheduled	$	115.9	(0.8	)%	5.5	%	6.1	%

Domestic revenue increased by $58.9 million driven by a 2.7% increase in passengers flown on our domestic routes, partially offset by a 1.2% decline in average fares. Unit revenue declines primarily resulted from capacity growth in the region, specifically between Hawai'i and North America, combined with a reduction in travel attributed to weather-related events impacting the State of Hawai'i.

International revenue increased by $57.0 million for the year ended December 31, 2018 as compared to the prior year period driven by a combination of increased passenger counts and average fares, which outpaced capacity growth. In 2017, we completed the upgrade of our first class cabin and extra comfort seating products on our A330 aircraft, which are driving improvements in profitability and unit revenue growth.

During the year we expanded our operations and now have direct routes between Maui, Hawai'i and Portland, Oregon (January 2018), Kona, Hawai'i and Los Angeles, California (March 2018), Lihue, Hawai'i and Los Angeles, California (May 2018), Honolulu, Hawai'i and Long Beach, California (May 2018), Maui, Hawai'i and San Diego, California (June 2018), and Lihue, Hawai'i and Oakland, California (July 2018 - expansion to daily service). In October 2018, we suspended our thrice-weekly nonstop service between Honolulu, Hawai'i and Beijing, China. In September 2018, we announced our new direct route between Honolulu, Hawai'i and Boston, Massachusetts, which will commence in April 2019. During the first quarter of 2019, we will have retired our last Boeing 767-300 aircraft, completing the transition to our A321 aircraft, allowing for optimization of our products and better capacity management.

Other Operating Revenue

Other operating revenue increased by $46.3 million , or 24.6% , in 2018 , as compared to 2017 , primarily due to an increase in loyalty program revenue of $31.8 million related to brand usage associated with our co-brand credit card partnership with Barclays, which was amended in the first quarter of 2018. Refer to Note 1 in the consolidated financial statements for additional information. Cargo revenue was up $9.0 million as a result of increased freight volumes and the introduction of our inter-island cargo freighter operation in the fourth quarter of 2018.

Operating Expenses

During the year ended December 31, 2018 , total operating expense increased $311.9 million or 14.1% to $2.5 billion as compared to the same period in 2017. The largest components of our operating expenses are wages and benefits provided to our

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employees and aircraft fuel (including taxes and delivery). Increases (decreases) in operating expenses are detailed below.



	Changes for the year ended December 31, 2018 as compared to year ended December 31, 2017
	$			%
	(in thousands)
Operating expense:
Aircraft fuel, including taxes and delivery	$	159,161		36.1	%
Wages and benefits	51,722			8.2
Aircraft rent	(11,803		)	(8.6	)
Maintenance materials and repairs	20,206			9.2
Aircraft and passenger servicing	12,943			8.9
Commissions and other selling	2,565			2.0
Depreciation and amortization	26,589			23.5
Other rentals and landing fees	10,140			8.7
Purchased services	20,864			18.8
Contract terminations expense	35,322			NM
Special items	(23,450		)	NM
Other	7,677			5.3
Total	$	311,936		14.1	%

Aircraft fuel

The price and availability of aircraft fuel is volatile due to global economic and geopolitical factors that we can neither control nor accurately predict. The increases in aircraft fuel expense are illustrated in the following table:



	Year Ended December 31,
	2018		2017		% Change
	(in thousands, except per-gallon amounts)
Aircraft fuel expense, including taxes and delivery	$	599,544	$	440,383	36.1	%
Fuel gallons consumed	273,783		259,915		5.3	%
Average fuel price per gallon, including taxes and delivery	$	2.19	$	1.69	29.6	%

The increase in fuel expense from 2017 to 2018 is due to an increase in average fuel price per gallon and increased fuel consumption driven by capacity growth.

We believe economic fuel expense is the best measure of the effect of fuel prices on our business as it most closely approximates the net cash outflow associated with the purchase of fuel for our operations and is consistent with how management manages our business and assesses our operating performance. We define economic fuel expense as GAAP fuel expense plus (gains)/losses realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled in the period inclusive of costs related to hedging premiums.

Economic fuel expense is calculated as follows:



	Year Ended December 31,
	2018			2017		% Change
	(in thousands, except per-gallon amounts)
Aircraft fuel expense, including taxes and delivery	$	599,544		$	440,383	36.1	%
Realized losses (gains) on settlement of fuel derivative contracts	(25,563		)	534		(4,887.1	)%
Economic fuel expense	$	573,981		$	440,917	30.2	%
Fuel gallons consumed	273,783			259,915		5.3	%
Economic fuel costs per gallon	$	2.10		$	1.70	23.5	%

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See Item 7A, Quantitative and Qualitative Disclosures about Market Risk , for additional discussion of our jet fuel costs and related derivative program.

Wages and benefits

Wages and benefits expense increased by $51.7 million , or 8.2% , in 2018 , as compared to 2017 , primarily driven by increased overall headcount (up 8.8% in 2018 ). The higher wages and benefits expenses also reflected an increase in cost incurred for training to prepare for the induction of our A321neo fleet which entered service during 2018.

Maintenance materials and repairs

Maintenance materials and repairs increased $20.2 million , or 9.2% , in 2018, as compared to 2017. On a per ASM basis, maintenance, materials, and repairs expense increased 2.9% as compared to the prior year, primarily due to an increase in the number of airframe and engine maintenance events, higher cost of materials for aging aircraft, and an increase in rates on our power by hour contract.

Aircraft and passenger servicing

Aircraft and passenger servicing expenses increased $12.9 million , or 8.9% , in 2018 , as compared to 2017 , resulting from higher food and beverage expenses attributed to increased passenger counts (up 2.9% in 2018) and an increase in ground handling services reflective of increased operations in domestic and international markets.

Depreciation and amortization

Depreciation and amortization increased $26.6 million , or 23.5% , in 2018, as compared to 2017 primarily due to additions of new aircraft, aircraft improvements and increases in information technology infrastructure and development projects.

Purchased services

Purchased services expense increased by $20.9 million , or 18.8% , in 2018 , as compared to 2017 . The increase was primarily attributed to an increase in third party expenses including, outsourced web and IT fees and services associated with our increased cargo operations.

Contract terminations expense

During the year ended December 31, 2018 , we terminated two contracts which incurred a total of $35.3 million in expense. The transactions are described below:

In January 2018, we entered into a transaction with a lessor to early terminate three Boeing 767-300 aircraft leases and concurrently entered into a forward sale agreement for the same three Boeing 767-300 aircraft, including two Pratt & Whitney 4060 engines for each aircraft. These aircraft were previously accounted for as operating leases. In order to exit the lease and purchase the aircraft, we agreed to pay a total of $67.1 million (net of all deposits) of which a portion was expensed immediately and recognized as a contract termination fee. The expensed amount represents the total purchase price amount over fair value of the aircraft purchased as of the date of the transaction.

In February 2018, we exercised our right to terminate the aircraft purchase agreement with Airbus for six Airbus A330-800neo aircraft and the purchase rights for an additional six Airbus A330-800neo aircraft. To terminate the purchase agreement, we were obligated to repay Airbus for concessions received relating to a prior firm order, training credits, as well as forfeit the pre-delivery progress payments made towards the flight equipment. We recorded a contract terminations expense to reflect the termination penalty within our consolidated statements of operations.

Nonoperating expense, net

Net nonoperating expense decreased by $60.0 million in 2018 , as compared to 2017 , primarily as a result of a $35.2 million loss on plan termination and a $10.4 million partial settlement and curtailment loss, which were recorded in Other nonoperating special items in 2017. Additionally, Other components of net periodic benefit costs decreased by approximately $15.9 million during the year ended December 31, 2018 , as compared to the same period in 2017, primarily as a result of strategic initiatives and favorable market trends.

Income taxes

Our effective tax rate was 22.6% for 2018, compared with 15.4% for 2017. In December 2017, Congress enacted the Tax Cuts and Jobs Act (Tax Act), which resulted in a reduction of the federal corporate tax rate from 35% to 21% and the re-measurement of our deferred tax assets and liabilities as of December 31, 2017. We recorded a tax benefit of $83.0 million

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during 2017 to record the impact of the Tax Act. During the year ended December 31, 2018 , we completed our accounting for the effects of the Tax Act and recorded an additional tax benefit of $9.3 million , the majority of which related to pension contributions made in 2018 for the 2017 plan year deductible at the higher 2017 tax rate. Refer to Note 10 in the consolidated financial statements for additional discussion.

2017 vs. 2016

Passenger Revenue

Passenger revenue was $2.49 billion and $2.27 billion for the years ended December 31, 2017 and 2016 , respectively. Details of these changes are described in the table below:



	Year Ended December 31, 2017 as compared to Year Ended December 31, 2016
	Change in scheduled passenger revenue		Change in Yield		Change in RPM		Change in ASM
	(in millions)
Domestic	$	86.1	5.3	%	(0.5	)%	(2.3	)%
International	129.0		6.3		19.2		15.6
Total scheduled	$	215.1	4.0	%	5.3	%	3.4	%

Domestic revenue increased $86.1 million on yield improvement of 5.3% . North America routes drove the yield improvement as a result of strong demand and the relatively steady industry capacity environment in 2017 , which resulted in higher unit prices.

International revenue increased $129.0 million in 2017 , as compared to 2016 . A 19.2% increase in RPM along with yield improvement of 6.3% drove the strong revenue performance. The increase in RPM flown is attributed to the expansion of Hawai'i to Japan service in 2016 , which was fully realized in 2017 and includes; the expansion of service between Honolulu and Tokyo/Narita (July 2016 start), Kona and Tokyo/Haneda (December 2016 start), and expansion of existing Honolulu and Tokyo/Haneda, Japan service (December 2016 start).

Other Operating Revenue

Other operating revenue increased by $27.6 million , or 17.2% , in 2017 , as compared to 2016 , due to an increase in cargo revenue of $19.7 million, or 26.7%, attributable to increased freight volumes. The increase was also due to a $2.7 million increase in contract services revenue (e.g. ground handling). Other components within our Other operating revenue line include, but are not limited to, loyalty brand and marketing revenue, and other miscellaneous items.

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Operating Expenses

During the year ended December 31, 2017 , total operating expense increased $176.2 million or 8.7% to $2.2 billion as compared to the same period in 2016. The largest components of our operating expenses are wages and benefits provided to our employees and aircraft fuel (including taxes and delivery). Increases (decreases) in operating expenses are detailed below.



	Changes for the year ended December 31, 2017 as compared to year ended December 31, 2016
	$			%
	(in thousands)
Operating expense:
Aircraft fuel, including taxes and delivery	$	96,061		27.9	%
Wages and benefits	97,733			18.3
Aircraft rent	13,199			10.6
Maintenance materials and repairs	(9,491		)	(4.1	)
Aircraft and passenger servicing	14,954			11.5
Commissions and other selling	3,963			3.2
Depreciation and amortization	5,149			4.8
Other rentals and landing fees	8,676			8.0
Purchased services	14,588			15.2
Special items	(85,692		)	(78.5	)
Other	17,041			13.4
Total	$	176,181		8.7	%



	Year Ended December 31,
	2017		2016		% Change
	(in thousands, except per-gallon amounts)
Aircraft fuel expense, including taxes and delivery	$	440,383	$	344,322	27.9	%
Fuel gallons consumed	259,915		244,118		6.5	%
Average fuel price per gallon, including taxes and delivery	$	1.69	$	1.41	19.9	%

The increase in fuel expense from 2016 to 2017 is due to an increase in average fuel price per gallon and increased fuel consumption due to added capacity.

Economic fuel expense is calculated as follows:



	Year Ended December 31,
	2017		2016		% Change
	(in thousands, except per-gallon amounts)
Aircraft fuel expense, including taxes and delivery	$	440,383	$	344,322	27.9	%
Realized losses (gains) on settlement of fuel derivative contracts	534		27,572		(98.1	)%
Economic fuel expense	$	440,917	$	371,894	18.6	%
Fuel gallons consumed	259,915		244,118		6.5	%
Economic fuel costs per gallon	$	1.70	$	1.52	11.8	%

Wages and benefits

Wages and benefits expense increased by $97.7 million , or 18.3% , in 2017 , as compared to 2016 , of which approximately $43.4 million was due to the Air Line Pilots Association (ALPA) contract amendment effective April 1, 2017. In addition, employee benefits expenses (including health insurance) increased by $18.4 million for the year. The higher wages and benefits expenses also reflected an increase in the number of flight crew and training to prepare for the induction of our A321neo fleet, in addition

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to an overall increase in employee headcount by approximately 7.4% as compared to December 31, 2016, which includes flight attendants, machinists, and non-contract employees.

Aircraft rent

Aircraft rent increased by $13.2 million , or 10.6% , in 2017 , as compared to 2016 , due to a sale leaseback transaction for three Boeing 767-300 aircraft in April 2017 and the addition of two leased Boeing 717-200 aircraft in November 2016.

Aircraft and passenger servicing

Aircraft and passenger servicing expenses increased $15.0 million , or 11.5% , in 2017 , as compared to 2016 , resulting directly from higher passenger counts, specifically a 21.5% increase in international passengers flown which generally have a higher associated food and handling cost per passenger. This increase resulted in an overall increase of $5.4 million in food and beverage costs and $5.6 million in ground handling costs.

Purchased services

Purchased services expense increased by $14.6 million , or 15.2% , in 2017 , as compared to 2016 , due to an increase of $8.6 million in various third party expenses including: outsourced web and IT fees and outsourced labor resources associated with the maintenance hangar project.

Special items

Special items expense decreased by $85.7 million, or 78.5%, in 2017, as compared to 2016. See Note 11 to the consolidated financial statements for further discussion surrounding both 2017 and 2016 Special items.

Other expenses

Other expenses increased by $17.0 million , or 13.4% , in 2017 , as compared to 2016 , due to an increase of $3.8 million in hotel and personnel related expenses for our crew members (e.g. meals and entertainment), as well as a $4.1 million increase in other supplies expenses. Other components of our Other expense line item include, but are not limited to, communication costs, professional and technical fees, insurance costs, legal fees, and other miscellaneous expenses.

Nonoperating expense, net

Net nonoperating expense increased by $36.9 million in 2017 , as compared to 2016 , due to a $35.2 million loss on plan termination and a $10.4 million partial settlement and curtailment loss, which were recorded in Other nonoperating special items in 2017. These expenses were partially offset by an $11.7 million fluctuation in fuel hedge gains during the same period.

In 2016, the Hawaiian Airlines, Inc. Pension Plan for Salaried Employees (the Salaried Plan) was consolidated into the Hawaiian Airlines, Inc. Pension Plan for Employees Represented by the International Association of Machinists (IAM), which established the Hawaiian Airlines, Inc. Salaried & IAM Merged Pension Plan (the Merged Plan). At that time, the net liabilities of the Salaried Plan were transferred to the Merged Plan. In August 2017, we completed the termination of the Merged Plan by transferring the assets and liabilities to a third-party insurance company. The Merged Plan was fully funded and we recognized a one-time Other nonoperating special item expense of $35.2 million as an Other nonoperating special item in our Consolidated Statement of Operations.

In 2017, we recognized a one-time Other nonoperating special item expense of $10.4 million related to the settlement of a portion of our pilots' other post-retirement medical plan liability, pursuant to which the parties agreed to eliminate the post-65 post-retirement medical benefit for all active pilots and to replace the benefit with a health retirement account (HRA) managed by ALPA. This transaction represented a curtailment and partial settlement of the pilots' other post-retirement benefit plan. In August 2017, we made a one-time cash payment of approximately $101.9 million to fund the HRA and settle the post-65 post-retirement medical plan obligation. The cash contributed was distributed to the trust funding the individual health retirement notional accounts of the participants.

Income Tax Expense

Our effective tax rate was 15.4% percent for 2017, compared with 38.0% for 2016. The decrease in rate was driven by a $83.0 million reduction in provision for income taxes related to the Tax Act enacted in December 31, 2017, which resulted in re-measurement of our deferred tax assets and liabilities at the new federal corporate tax rate of 21.0% .

Liquidity and Capital Resources

Our primary sources of liquidity are:

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•	Our existing cash and cash equivalents and short-term investments of $500.8 million , and our expected cash from operations;


•	Our 21 unencumbered aircraft in our aircraft fleet as of December 31, 2018 , that could be financed, if necessary; and


•	Our $235.0 million revolving credit facility with no outstanding borrowing. Information about this facility can be found in Note 8 to the consolidated financial statements.

At December 31, 2018 , we had $709.8 million of debt and capital lease obligations, including $101.1 million classified as a current liability in the Consolidated Balance Sheets. As of December 31, 2018 , our current liabilities exceeded our current assets by approximately $301.0 million . However, approximately $603.7 million of our current liabilities are related to our advanced ticket sales and frequent flyer deferred revenue, both of which largely represent revenue to be recognized for travel within the next 12 months and not actual cash outlays. The deficit in working capital does not have an adverse impact to our cash flows, liquidity, or operations.

Cash Flows

Net cash provided by operating activities was $508.5 million , $331.1 million , and $437.0 million in 2018 , 2017 , and 2016 , respectively. Operating cash flows are primarily derived from providing air transportation to customers. The vast majority of tickets are purchased in advance of when travel is provided, and in some cases, several months before the anticipated travel date. Operating cash outflows are related to the recurring expenses of the airline operations. The operating cash flows for 2018, 2017, and 2016 were impacted primarily by our results of operations, adjusted for non-cash items as well as changes in the Air traffic liability, Accounts receivables and Other asset and liabilities, net. Net cash provided by operating activities is primarily used to finance capital expenditures, including pre-delivery payments for future aircraft deliveries, repayment of debt and capital lease obligations, fund stock repurchases, pay dividends, and provide working capital.

Cash used in investing activities was $316.5 million , $294.7 million , and $154.1 million for 2018 , 2017 , and 2016 , respectively. Investing activities in 2018, 2017, and 2016 included Capital expenditures, primarily related to aircraft and other equipment, and the purchases and sales of short-term investments. During 2018, Capital expenditures were $486.8 million , the majority of which were payments for new A321 aircraft delivered to us. This compared with $341.5 million and $178.8 million in Capital expenditures during 2017 and 2016, respectively. We currently estimate our 2019 capital expenditures will range between approximately $380 million to $430 million . During 2018, our purchases and sales of short-term investments resulted in net cash inflow of $36.6 million . During 2017 and 2016, purchases and sales of short-term investments resulted in net cash outflows of $12.9 million and $7.1 million , respectively. During 2018, we received proceeds of $46.7 million as a result of the sale of three Boeing 767-300 aircraft and $87.0 million as a result of the completion of the sale and subsequent leaseback of an A330-200 aircraft accounted for as an operating lease.

Net cash used in financing activities was $115.4 million , $175.5 million , and $238.5 million for 2018 and 2017 , and 2016 , respectively. During 2018, we repaid $68.2 million in debt and capital lease obligations, compared with $61.5 million and $214.0 million during 2017 and 2016, respectively. During 2018, we entered into two Japanese Yen denominated notes, totaling $86.5 million , collateralized by the aircraft financed. See Note 8 to the consolidated financial statements for further information. We repurchased $102.5 million of our outstanding common stock through authorized share repurchases during 2018, compared with repurchases of $100.0 million and $13.8 million in 2017 and 2016 , respectively. We also paid $24.2 million in dividends to Shareholders during 2018, compared with $6.3 million in 2017. Although we currently intend to continue paying dividends on a quarterly basis for the foreseeable future, our Board of Directors may change the timing, amount, and payment of dividends on the basis of the results of operations, financial condition, cash requirements, future prospects, and other factors deemed relevant by our Board of Directors.

Credit Card Holdbacks

Under our bank-issued credit card processing agreements, certain proceeds from advance ticket sales may be held back to serve as collateral to cover any possible chargebacks or other disputed charges that may occur. These holdbacks, are reported as restricted cash in our Consolidated Balance Sheets. As of December 31, 2018 , there were no holdbacks held with our credit card processors.

In the event of a material adverse change in our business, the holdback could increase to an amount up to 100% of the applicable credit card activity for all unflown tickets, which would also result in an increase in the required level of restricted cash. If we are unable to obtain a waiver of, or otherwise mitigate the increase in the restriction of cash, it could have a material adverse impact on our operations.

Pension and Other Postretirement Benefit Plan Funding

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As of December 31, 2018 , the excess of the projected benefit obligations over the fair value of plan assets was approximately $186.3 million . We voluntarily contributed $50.0 million , $30.2 million , and $57.8 million to our defined benefit pension plans (excluding one-time settlement payments) and disability plan during 2018 , 2017 , and 2016 , respectively. Future funding requirements for our defined benefit and other postretirement plans are dependent upon many factors such as interest rates, funded status, applicable regulatory requirements, and the level and timing of asset returns. We have made significant contributions (above the minimum required) to our defined benefit pension and disability plans in the past few years. In 2019 , our minimum required contribution has been estimated to be approximately $7.8 million.

Stock Repurchase Program and Dividends

During the year ended December 31, 2018 , we used $102.5 million to repurchase 2.8 million shares of our common stock, completing our November 2017 repurchase authorization. In November 2018, our Board of Directors approved a new stock repurchase program pursuant to which we may repurchase up to $100 million of our outstanding common stock over a two-year period through December 2020. The stock repurchase program is subject to further modification or termination at any time.

The following table displays information with respect to our stock repurchase programs as of December 31, 2018 :



(in thousands, except repurchase price)	Share Repurchase Authorization (in '000s)		Weighted Average Repurchase Price		Planned Completion Date	Authorization Remaining
April 2015 Program	$	100,000	$	25.75	April 2017	Completed April 2017
April 2017 Program	100,000		39.85		May 2019	Completed December 2017
November 2017 Program	100,000		36.71		December 2019	Completed December 2018
November 2018 Program	100,000		27.11		December 2020	$97,500

During 2018, we declared and paid cash dividends of $24.2 million . In February 2019, our Board of Directors declared a $0.12 per share payable on February 22, 2019 to stockholders of record as of February 8, 2019 .

Off-Balance Sheet Arrangements

An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has (i) made guarantees, (ii) retained a contingent interest in transferred assets, (iii) an obligation under derivative instruments classified as equity or (iv) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the company, or that engages in leasing, hedging or research and development arrangements with the company. We have no arrangements of the types described in the first three categories that we believe may have a current or future material effect on our financial condition, liquidity or results of operations. We do have obligations arising out of variable interests in unconsolidated entities related to certain aircraft leases. To the extent our leases and related guarantees are with a separate legal entity other than a governmental entity, we are not the primary beneficiary because the lease terms are consistent with market terms at the inception of the lease, and the lease does not include a residual value guarantee, fixed price purchase option, or similar feature.

Contractual Obligations

Our estimated contractual obligations as of December 31, 2018 are summarized in the following table:



Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
	(in thousands)
Debt and capital lease obligations, including principal and interest(1)	$	882,998	$	130,744	$	172,412	$	168,115	$	411,727
Operating leases—aircraft and related equipment(2)	558,584		106,448		164,732		128,133		159,271
Operating leases—non-aircraft	118,888		5,730		11,554		11,905		89,699
Purchase commitments—capital(3)	1,941,180		330,089		465,454		667,849		477,788
Other commitments(4)	487,155		74,621		135,833		111,856		164,845
Projected employee benefit contributions(5)	44,355		3,755		10,800		17,800		12,000
Total contractual obligations	$	4,033,160	$	651,387	$	960,785	$	1,105,658	$	1,315,330

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(1)	Amounts reflect capital lease obligations for one Airbus A330-200 aircraft, two Airbus A321-200 aircraft, two Boeing 717-200 aircraft, one Airbus A330 flight simulator, aircraft and IT related equipment, and the building component of the cargo and maintenance hangar (within the capital commitments section).


(2)	Amounts reflect leases for eleven Airbus A330-200 aircraft, three Boeing 767-300 aircraft which end during the first quarter of 2019, and three Boeing 717-200 aircraft as of December 31, 2018 .


(3)	Amounts include our firm commitments for aircraft and aircraft related equipment. See Note 14 to the consolidated financial statements for a discussion of our purchase commitments.

(4)

Amounts include commitments for services provided by third-parties for aircraft maintenance for our fleet, capacity purchases, IT, and reservations. Total contractual obligations do not include long-term contracts where the commitment is variable in nature (with no minimum guarantee), such as aircraft maintenance deposits due under operating leases and fees due under certain other agreements such as aircraft maintenance power-by-the-hour, computer reservation systems and credit card processing agreements, or when the agreements contain short-term cancellation provisions.

(5)

Amounts include our estimated contributions to our pension plans (based on actuarially determined estimates) and our pilots' disability plan. Amounts are subject to change based on numerous factors, including interest rate levels, the amount and timing of asset returns and the impact of future legislation. We are currently unable to estimate the projected contributions beyond 2025. See "Critical Accounting Policies" below for a discussion of our current year assumption regarding our employee benefit plans.

Capital Commitments

As of December 31, 2018 , we had the following capital commitments consisting of firm aircraft and engine orders and purchase rights:



Aircraft Type	Firm Orders	Purchase Rights	Expected Delivery Dates
A321neo aircraft	7	3	Between 2019 and 2020
B787-9 aircraft	10	10	Between 2021 and 2025
Pratt & Whitney spare engines:
A321neo spare engines	1	2	In 2019
General Electric GEnx spare engines:
B787-9 spare engines	2	2	Between 2021 and 2025

Committed expenditures for these aircraft, engines, and related flight equipment are approximately $330 million in 2019 , $162 million in 2020 , $303 million in 2021 , $431 million in 2022 , $237 million in 2023 , and $478 million thereafter.

In order to complete the purchase of these aircraft and fund related costs, we may need to secure acceptable financing. We have backstop financing available from aircraft and engine manufacturers, subject to certain customary conditions. Financing may be necessary to satisfy our capital commitments for firm order aircraft and other related capital expenditures. We can provide no assurance that any financing not already in place for aircraft and spare engine deliveries will be available to us on acceptable terms when necessary or at all.

Non-GAAP Financial Measures

We believe the disclosure of non-GAAP financial measures is useful information to readers of our financial statements because:


•	We believe it is the basis by which we are evaluated by industry analysts and investors;


•	These measures are often used in management and board of directors' decision making analysis;


•	It improves a reader's ability to compare our results to those of other airlines; and


•	It is consistent with how we present information in our quarterly earnings press releases.

See table below for reconciliation between GAAP consolidated net income to adjusted consolidated net income, including per share amounts (in thousands unless otherwise indicated). The adjustments are described below:


•	As a result of the Tax Act, we recognized a one-time benefit of $83.0 million in the fourth quarter of 2017 from the estimated impact of the revaluation of deferred tax assets and liabilities. This tax benefit is being excluded from our

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results as a Special item. We excluded the Tax Act effect (on the financial statements) in order to allow investors to better analyze our core results and allow the information to be presented on a comparative basis to the prior year.

•

Changes in fair value of derivative contracts, net of tax, are based on market prices for open contracts as of the end of the reporting period. This adjustment includes the unrealized gains and losses on fuel and interest rate derivatives (not designated as hedges) that will settle in future periods and the reversal of prior period unrealized amounts. Excluding the impact of these derivative adjustments allows investors to analyze our core operational performance and compare our results to other airlines in the periods presented below.


•	Unrealized loss (gain) on foreign debt is based on fluctuations in foreign exchanges rates related to foreign-denominated debt agreements we executed in 2018. We believe that excluding the impact of these amounts helps investors analyze our operational performance and compare our results to other airlines in the periods presented below.


•	Loss on extinguishment of debt, net of tax, is excluded to allow investors to analyze our core operational performance and compare our results to other airlines in the periods presented below.


•	Loss (gain) on sale of aircraft is the result of adjustments to the final purchase price for three of our Boeing 767-300 aircraft included in a forward sale agreement we entered into in January 2018 and described below. During the twelve months ended December 31, 2018, we recorded a loss of $0.3 million .

2016 Special Items


•	An impairment analysis and ultimate charge was triggered by the decision in the fourth quarter of 2016 to exit our Boeing 767-300 fleet in 2018. We estimated the fair value of the owned Boeing 767-300 fleet assets using third party pricing information and quotes from potential buyers, which resulted in a $49.4 million impairment charge.


•	In 2016, we accrued $34.0 million associated with the tentative agreement with ALPA related to past service (prior to January 1, 2017) and also elected to pay a $4.8 million profit sharing bonus payment to other labor groups related to prior period service.


•	In connection with the decision to exit the Boeing 767-300 fleet, we negotiated a termination of our Boeing 767-300 maintenance agreement and recorded a $21.0 million charge related to the amount paid to terminate the contract.

2017 Special Items

•

In August 2017, we terminated the Hawaiian Airlines, Inc. Salaried & IAM Merged Pension Plan (the Merged Plan) and settled a portion of our pilots' other post-retirement medical plan liability. In connection with the reduction of these liabilities we recorded one-time Other nonoperating special charges of $35.2 million related to the Merged Plan termination and $10.4 million related to the other post-retirement (OPEB) medical plan partial settlement.


•	In April 2017, we executed a sale leaseback transaction with an independent third party for three Boeing 767-300 aircraft. The lease terms for the three aircraft commenced in April 2017 and end between November 2018 and January 2019. During the twelve months ended December 31, 2017, we recorded a loss on sale of aircraft of $4.8 million.

•

In February 2017, we reached a tentative agreement with ALPA, covering our pilots. In March 2017, we received notice from ALPA that the agreement was ratified by ALPA's members. The agreement became effective April 1, 2017 and has a term of 63 months. The agreement includes, among other various benefits, a pay adjustment and ratification bonus computed based on previous service. During the twelve months ended December 31, 2017, we expensed $18.7 million primarily related to a one-time payment to reduce our future 401K employer contribution for certain pilot groups, which is not recoverable once paid.

2018 Contract Terminations Expense


•	During the twelve months ended December 31, 2018, we terminated two contracts which incurred a total of $35.3 million in contract terminations expense. The transactions are described below:

◦

In February 2018, we exercised our right to terminate our aircraft purchase agreement with Airbus for six Airbus A330-800neo aircraft and the purchase rights for an additional six Airbus A330-800neo aircraft. To terminate the purchase agreement, we were obligated to repay Airbus for concessions received relating to a prior firm order, training credits, as well as forfeit the pre-delivery progress payments made towards the flight equipment. We recorded a contract terminations expense to reflect the termination penalty in our consolidated statements of operations.

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◦

In January 2018, we entered into a transaction with our lessor to early terminate and purchase three Boeing 767-300 aircraft leases and concurrently entered into a forward sale agreement for the same three Boeing 767-300 aircraft, including two Pratt & Whitney 4060 engines for each aircraft. These aircraft were previously accounted for as operating leases. In order to exit the lease and purchase the aircraft, we agreed to pay a total of $67.1 million (net of all deposits) of which a portion was expensed immediately and recognized as a contract termination fee. The expensed amount represents the total purchase price amount over fair value of the aircraft purchased as of the date of the transaction.

We believe that excluding such special items helps investors analyze our operational performance and compare our results to other airlines in the periods presented below.



	Year Ended December 31,
	2018						2017						2016
	Total			Diluted Per Share			Total			Diluted Per Share			Total			Diluted Per Share
	(in thousands, except for per share data)
GAAP net income, as reported	$	233,200		$	4.62		$	330,610		$	6.19		$	224,120		$	4.15
Add: impact of tax reform	—			—			(82,978		)	(1.55		)	—			—
Add: changes in fair value of derivative contracts	19,973			0.39			(3,845		)	(0.07		)	(47,678		)	(0.88		)
Add: unrealized loss on foreign debt	380			0.01			—			—			—			—
Add: loss on extinguishment of debt	—			—			—			—			10,473			0.19
Add: loss on sale of aircraft	309			0.01			—			—			—			—
Add: contract terminations expense	35,322			0.70			—			—			—			—
Add: special items
Operating
Loss on sale of aircraft	—			—			4,771			0.09			—			—
Collective bargaining charge	—			—			18,679			0.35			38,781			0.72
Impairment charge	—			—			—			—			49,361			0.92
Termination charge	—			—			—			—			21,000			0.39
Nonoperating
Partial settlement and curtailment loss	—			—			10,384			0.19			—			—
Loss on plan termination	—			—			35,201			0.66			—			—
Tax effect of adjustments	(14,365		)	(0.29		)	(23,886		)	(0.45		)	(27,307		)	(0.51		)
Adjusted net income	$	274,819		$	5.44		$	288,936		$	5.41		$	268,750		$	4.98

Operating Costs per Available Seat Mile (CASM)

We have separately listed in the table below our fuel costs per ASM and non-GAAP unit costs, excluding fuel and special items. These amounts are included in CASM, but for internal purposes we consistently use cost metrics that exclude fuel and special items (if applicable) to measure and monitor its costs.

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CASM and CASM, excluding fuel, loss on sale of aircraft, contract terminations expense, and special items, are summarized in the table below:



	Year Ended December 31,
	2018			2017			2016
	(in thousands, except for CASM figures)
GAAP operating expenses	$	2,523,043		$	2,211,107		$	2,034,926
Less: aircraft fuel, including taxes and delivery	(599,544		)	(440,383		)	(344,322		)
Less: contract terminations expense	(35,322		)	—			—
Less: loss on sale of aircraft	(309		)	—			—
Less: special items
Loss on sale of aircraft	—			(4,771		)	—
Collective bargaining charge	—			(18,679		)	(38,781		)
Impairment charge	—			—			(49,361		)
Termination of Boeing 767-300 engine maintenance contract	—			—			(21,000		)
Adjusted operating expenses—excluding aircraft fuel, loss on sale of aircraft, contract terminations expense, and special items	$	1,887,868		$	1,747,274		$	1,581,462
Available Seat Miles	20,171,911			19,006,682			18,384,637
CASM—GAAP		12.51	¢		11.63	¢		11.07	¢
Less: aircraft fuel, including taxes and delivery	(2.97		)	(2.32		)	(1.87		)
Less: contract terminations expense	(0.18		)	—			—
Less: loss on sale of aircraft	0.00			—			—
Less: special items
Loss on sale of aircraft	—			(0.02		)	—
Collective bargaining charge	—			(0.10		)	(0.21		)
Impairment charge	—			—			(0.28		)
Termination of Boeing 767-300 engine maintenance contract	—			—			(0.11		)
CASM—excluding aircraft fuel, loss on sale of aircraft, contract terminations expense, and special items		9.36	¢		9.19	¢		8.60	¢

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon financial statements that have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amount of assets and liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates.

Critical accounting policies and estimates are defined as those accounting policies and accounting estimates that are reflective of significant judgments and uncertainties, and that potentially result in materially different results under different assumptions and conditions. Our most critical accounting policies and estimates are described below. See the summary of significant accounting policies included in Note 1 to the consolidated financial statements for additional discussion of the application of these estimates and other accounting policies.

Revenue Recognition

We adopted the new revenue standard (ASC 606) as of January 1, 2018, utilizing the full retrospective option. The adoption of the standard has had a significant impact on our financial statements and our critical accounting policies. See Note 1 to the consolidated financial statements for additional information including quantification of the overall impact of adoption.

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Passenger revenue. We record passenger ticket sales and tickets sold by other airlines for use on Hawaiian as passenger revenue when the transportation is provided or upon scheduled flight for tickets expected to expire unused. The value of unused passenger tickets is included in current liabilities as Air Traffic Liability. Non-refundable tickets generally expire 13 months from the date of flight. We record an estimate of breakage revenue on the scheduled flight date for tickets that will expire unused. These estimates are based on the evaluation of actual historical results and forecasted trends. Ticket change fees are recorded in air traffic liability and recognized when the related transportation is provided.

Frequent flyer revenue. HawaiianMiles, Hawaiian's frequent flyer travel award program, provides a variety of awards to program members based on accumulated mileage. ASC 606, Revenue from Contracts with Customers, and created Accounting Standards Codification (ASC 606) requires us to account for miles earned by passengers in the HawaiianMiles program through flight activity as a component of the passenger revenue ticket transaction at the estimated selling price of the miles. Ticket consideration received is allocated between the performance obligations, primarily travel and miles earned by passengers. The allocated value of the miles is deferred until the free travel or other award is used by the passenger, at which time it is included in passenger revenue. The value of the ticket used in the determination of the estimated selling price is based on the historical value of equivalent flights to those provided for loyalty awards and the related miles redeemed to obtain that award adjusted for breakage or fulfillment. The equivalent ticket value (ETV) includes a fulfillment discount (breakage) to reflect the value of the award ticket over the number of miles that, based on historical experience, will be needed to obtain the award. On a quarterly basis, we calculate the ETV by analyzing the fares of similar tickets for the prior 12 months, considering cabin class and geographic region.

We also sell mileage credits to companies participating in our frequent flyer program. These contracts generally include multiple performance obligations, including the transportation that will ultimately be provided when the mileage credits are redeemed and marketing and brand related activities.

During the first quarter of 2018, we amended our partnership with Barclaycard US, Hawaiian's co-branded credit card partner. Management determined that the amendment should be accounted for as a termination of the existing contract and the creation of a new contract under ASC 606 and the relative selling price was determined for each performance obligation of the new agreement. The new agreement continues through 2024 and includes improved economics and enhanced product offerings for our Barclay's co-branded cardholders. The amended agreement did not change, and includes the following performance obligations; (i) transportation that will ultimately be provided when mileage credits are redeemed (transportation), (ii) the Hawaiian Airlines brand and access to its members lists (collectively, brand performance), (iii) marketing, and (iv) airline benefits to cardholders, including discounts and anniversary travel benefits, baggage waivers and inflight purchase credits. We determined the relative fair value of each performance obligation by estimating the selling prices of the deliverables by considering discounted cash flows using multiple inputs and assumptions, including: (1) the expected number of miles to be awarded and redeemed; (2) the estimated weighted average equivalent ticket value, adjusted by a fulfillment discount; (3) the estimated total annual cardholder spend; (4) an estimated royalty rate for the Hawaiian portfolio; and (5) the expected use of each of the airline benefits. The overall consideration received is allocated to the performance obligations based on their relative selling prices.

The transportation performance obligation is deferred and recognized as passenger revenue when the transportation is provided. The value to the financial institution is provided each time a new cardholder chooses the Hawaiian branded credit card and each time a cardholder chooses to use the co-branded credit card. Therefore, we recognize revenue for the brand performance obligation as members use their co-brand credit card and the resulting mileage credits are issued to them, which best correlates with our performance toward satisfying the obligation.

Accounting for frequent flyer revenue involves the use of various techniques to estimate revenue. To determine the total estimated transaction price, we forecast future credit card activity based on historical data. The relative selling price is determined using management’s estimated standalone selling price of each performance obligation. The objective of using the estimated selling price based methodology is to determine the price at which we would transact a sale if the product or service were sold on a standalone basis. Accordingly, we determine our best estimate of selling price by considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, number of miles awarded and number of miles redeemed. We estimate the selling price of miles using an ETV adjusted for a fulfillment discount as described above.

Miles expire after 18 months of member account inactivity. We review our breakage estimates annually based upon the latest available information regarding redemption and expiration patterns (e.g., credit card and non-credit card holders). Our estimate of the expected expiration of miles requires significant management judgment. Current and future changes to expiration assumptions or to the expiration policy, or to program rules and program could affect the estimated value of a mile.

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Pension and Other Postretirement and Postemployment Benefits

The calculation of pension and other postretirement and postemployment benefit expenses and its corresponding liabilities require the use of significant assumptions, including the assumed discount rate, the expected long-term rate of return on plan assets, expected mortality rates of the plan participants, and the expected health care cost trend rate. Changes in these assumptions will impact the expense and liability amounts, and future actual experience may differ from these assumptions.

The significant assumptions as of December 31, 2018 are as follows:



Pension:
Discount rate to determine projected benefit obligation	4.35	%
Expected return on plan assets	7.33	%	^
Postretirement:
Discount rate to determine projected benefit obligation	4.36	%
Expected return on plan assets	N/A
Expected health care cost trend rate:
Initial	6.75	%
Ultimate	4.75	%
Years to reach ultimate trend rate	4
Disability:
Discount rate to determine projected benefit obligation	4.39	%
Expected return on plan assets	4.90	%	^

N/A Not Applicable


^	Expected return on plan assets used to determine the net periodic benefit expense for 2019 is 6.91% for the pension plans and 4.90% for the disability plan.

The expected long-term rate of return assumption is developed by evaluating input from the trustee managing the plans' assets, including the trustee's review of asset class return expectations by several consultants and economists, as well as long-term inflation assumptions. Our expected long-term rate of return on plan assets is based on a target allocation of assets, which is based on our goal of earning the highest rate of return while maintaining risk at acceptable levels. The Retirement Plan for Pilots of Hawaiian Airlines, Inc. and the Pilot's Voluntary Employee Beneficiary Association Disability and Survivor's Benefit Plan strive to have assets sufficiently diversified so that adverse or unexpected results from any one security class will not have an unduly detrimental impact on the entire portfolio. We believe that our long-term asset allocation on average will approximate the targeted allocation. We periodically review our actual asset allocation and rebalance the pension plan's investments to our targeted allocation when considered appropriate. Pension expense increases as the expected rate of return on plan assets decreases. Lowering the expected long-term rate of return by 100 basis points will have the following effects on our estimated 2019 pension and disability benefit expense recorded in wages and benefits and nonoperating expense:



	100 Basis Point Decrease
	(in millions)
Increase in estimated 2019 pension expense	$	3.0
Increase in estimated 2019 disability benefit expense	0.3

We determine the appropriate discount rate for each of our plans based on current rates on high quality corporate bonds that would generate the cash flow necessary to pay plan benefits when due. The pension and other postretirement benefit liabilities and future expense both increase as the discount rate is reduced. Lowering the discount rate by 100 basis points would have the following effects:

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	100 Basis Point Decrease
	(in millions)
Increase in pension obligation as of December 31, 2018	$	46.8
Increase in other postretirement benefit obligation as of December 31, 2018	15.0
Decrease in estimated 2019 pension expense (operating and nonoperating)	(0.3		)
Increase in estimated 2019 other postretirement benefit expense (operating and nonoperating)	1.2

The health care cost trend rate is based upon an evaluation of our historical trends and experience taking into account current and expected market conditions. Changes in the assumed current health care cost trend rate by year by 100 basis points would have the following annual effects:



	100 Basis Point Increase
	(in millions)
Increase in other postretirement benefit obligation as of December 31, 2018	$	8.0
Increase in estimated 2019 other postretirement benefit expense (operating and nonoperating)	1.0



	100 Basis Point Decrease
	(in millions)
Decrease in other postretirement benefit obligation as of December 31, 2018	$	(6.9	)
Increase in estimated 2019 other postretirement benefit expense (operating and nonoperating)	1.2

In 2017, we recognized a one-time Other nonoperating special item expense of $10.4 million related to the settlement of a portion of our pilots' other post-retirement medical plan liability, pursuant to which the parties agreed to eliminate the post-65 post-retirement medical benefit for all active pilots and to replace the benefit with a health retirement account (HRA) managed by ALPA. We evaluated the accounting for the transaction in accordance with ASC 715-60 Compensation-Retirement Benefits - Defined Benefit Plans-Other Postretirement, and determined that it represented a curtailment and partial settlement of the pilots' other post-retirement benefit plan.

Long-Lived Assets

Long-lived assets used in operations, consisting principally of property and equipment. Depreciable life is determined through economic analysis, such as reviewing existing fleet plans, obtaining appraisals and comparing estimated lives to other airlines that operate similar fleets. Residual values are estimated based on historical experience and are based on when the aircraft are acquired and typically reflect asset values that have not reached the end of their physical life.

When testing for impairment management considers market trends, the expected useful lives of the assets, changes in economic conditions, recent transactions involving sales of similar assets and, if necessary, estimates of future undiscounted cash flows. To determine whether impairment exists for aircraft used in operations, assets are grouped at the fleet-type level (the lowest level for which there are identifiable cash flows) and future cash flows are estimated based on projections of capacity, passenger mile yield, fuel costs, labor costs and other relevant factors. If, at any time, management determines the net carrying value of an asset is not recoverable, the amount is reduced to its fair value during the period in which such determination is made. Any changes in the estimated useful lives of these assets will be accounted for prospectively.

The impairment analysis and ultimate charge in 2016 was triggered by the decision in the fourth quarter of 2016 to exit the Boeing 767-300 fleet in 2018. The early exit of the Boeing 767-300 fleet was made possible by our decision to acquire one Airbus A330 (delivered in 2017), lease two additional Airbus A321s (to be delivered in 2018 in addition to our existing aircraft orders), and our ability to early terminate our long-term power-by-the-hour maintenance contract for the Boeing 767-300 fleet. This fleet change allows us to streamline our fleet, simplify our operations, and reduce our cost structure in the future. In order to assess whether there was an impairment of the Boeing 767-300 asset group, we compared the projected undiscounted cash flows of the fleet to the book value of the assets and determined the book value was in excess of the undiscounted cash flows. We estimated the fair value of our owned Boeing 767-300 fleet assets using third party pricing information and quotes from potential buyers of our owned aircraft, which resulted in a $49.4 million impairment charge. Our determination of fair value considered attributes specific to our Boeing 767-300 fleet and aircraft condition (e.g. age, maintenance requirements, cycles, etc.). The Boeing 767-300 asset group consisted of both owned and leased (at the time of the assessment) aircraft.

Income Taxes

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The Tax Act, enacted in December 2017, significantly changed existing U.S. tax law and reduces the U.S. federal corporate tax from 35% to 21%. We recognized a one-time benefit of $83.0 million during the year ended December 31, 2017 from the impact of the revaluation of deferred tax assets and liabilities. During the year ended December 31, 2018 , we completed our accounting for the effects of the Tax Act and recorded an additional tax benefit of $9.3 million , primarily related to deductions for additional pension contributions made in 2018 for the 2017 Plan year.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are subject to certain market risks, including commodity price risk (i.e. jet fuel prices) and foreign currency risk. We have market-sensitive instruments in the form of financial derivatives used to offset Hawaiian's exposure to jet fuel price increases, and financial hedge instruments used to hedge Hawaiian's exposure to foreign currency exchange risk. The adverse effects of potential changes in these market risks are discussed below.

The sensitivity analyses presented do not consider the effects that such adverse changes may have on overall economic activity nor do they consider additional actions we might undertake to mitigate our exposure to such changes. Actual results may differ.

Aircraft Fuel

Aircraft fuel costs constitute a significant portion of our operating expense. Fuel costs represented 24% of our operating expenses for the year ended December 31, 2018 . Approximately 71% of our fuel is based on Singapore jet fuel prices, 26% is based on U.S. West Coast jet fuel prices, and 3% on other jet fuel prices. We periodically enter into derivative financial instruments to manage our exposure to changes in the price of jet fuel. As of December 31, 2018 , we hedged approximately 34% of our projected fuel requirements for 2019 . As of December 31, 2018 , the fair value of these fuel derivative agreements reflected a net asset of $1.6 million that is recorded as prepaid assets in the Consolidated Balance Sheets. Based on gallons expected to be consumed in 2019 , for every one cent increase in the cost of a gallon of jet fuel, our annual fuel expense would increase by approximately $2.7 million .

We expect to continue our program of offsetting some of our exposure to future changes in the price of jet fuel with a combination of fixed forward pricing contracts, swaps, puts and other option-based structures.

We continue to believe that our fuel derivative program is an important part of our strategy to reduce our exposure to volatile fuel prices. We expect to continue to enter into these types of contracts prospectively, although significant changes in market conditions could affect our decisions. For more discussion, see Note 6 to our consolidated financial statements.

Interest Rates

We have exposure to market risk associated with changes in interest rates related to our pre-tax earnings and cash flows associated with our interest-bearing cash equivalent accounts and short-term investments. Based on the balances of our cash and cash equivalents, and short-term investments as of December 31, 2018 , a change in interest rates is unlikely to have a material impact on our results of operations.

Our variable-rate debt agreements include the Revolving Credit Facility and secured loan agreements, the terms of which are discussed in Note 8 to our consolidated financial statements. At December 31, 2018 , we had $720.3 million of fixed-rate debt including capital lease obligations, facility agreements for aircraft purchases, and the outstanding notes related to the aircraft purchase financing. As of December 31, 2018, we have no variable-rate debt. An increase of 100 basis points in average annual interest rates would have decreased the estimated fair value of our fixed-rate long-term debt by $6.9 million at December 31, 2018 .

Foreign Currency

We have exposure to market risk associated with changes in foreign currency exchange rates because we generate sales, incur expenses, and have debt denominated and paid in foreign currencies, predominantly in Japanese Yen and to a lesser extent, the Australian Dollar.

To mitigate the exchange rate risk, we transact our international sales and expenditures in the same foreign currency, to the extent practical. Additionally, our Yen denominated debt serves as a natural hedge against the volatility of exchange rates against cash inflows. We also have an established foreign currency derivative program, where we periodically enter into foreign currency forward contracts. At December 31, 2018 , the fair value of our foreign currency forwards reflected a net asset of $3.2 million ( $2.9 million and $0.3 million recorded in Prepaid expenses and other (short-term) and Long-term prepayments and other (long-term), respectively) in the consolidated balance sheet.

Based on forecasted transactions in foreign currency, a 10% depreciation in the U.S. dollar, relative to the Japanese Yen and Australian Dollar, would result in a decrease in annual net income, net of the impact of foreign currency hedges, of approximately $21.9 million .

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTS



	Page
Hawaiian Holdings, Inc.
Report of Independent Registered Public Accounting Firm	45
Consolidated Statements of Operations for the years ended December 31, 2018, 2017, and 2016	46
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017, and 2016	47
Consolidated Balance Sheets as of December 31, 2018 and 2017	48
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2018, 2017, and 2016	49
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017, and 2016	50
Notes to Consolidated Financial Statements	51

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Hawaiian Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Hawaiian Holdings, Inc. (the Company) as of December 31, 2018 and 2017, and the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2018 and 2017, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the PCAOB, the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 13, 2019 expressed an unqualified opinion thereon.

Adoption of ASU No. 2014-09

As discussed in Note 1 to the consolidated financial statements, the Company retrospectively changed its method of accounting for recognizing revenue as a result of the adoption of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), and the amendments in ASUs 2015-14, 2016-08, 2016-10 and 2016-12 effective January 1, 2016.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.



/s/ ERNST & YOUNG LLP

We have served as the Company's auditor since 1999.

Honolulu, Hawai‘i

February 13, 2019

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Hawaiian Holdings, Inc.

Consolidated Statements of Operations

For the Years ended December 31, 2018 , 2017 and 2016



	2018			2017 (a)			2016 (a)
	(in thousands, except per share data)
Operating Revenue:
Passenger	$	2,602,793		$	2,486,827		$	2,271,687
Other	234,618			188,318			160,726
Total	2,837,411			2,675,145			2,432,413
Operating Expenses:
Wages and benefits	684,719			632,997			535,264
Aircraft fuel, including taxes and delivery	599,544			440,383			344,322
Aircraft rent	125,961			137,764			124,565
Maintenance materials and repairs	239,759			219,553			229,044
Aircraft and passenger servicing	157,796			144,853			129,899
Commissions and other selling	129,315			126,750			122,787
Depreciation and amortization	139,866			113,277			108,128
Other rentals and landing fees	126,903			116,763			108,087
Purchased services	131,651			110,787			96,199
Contract terminations expense	35,322			—			—
Special items	—			23,450			109,142
Other	152,207			144,530			127,489
Total	2,523,043			2,211,107			2,034,926
Operating Income	314,368			464,038			397,487
Nonoperating Income (Expense):
Other nonoperating special items	—			(45,585		)	—
Interest expense and amortization of debt discounts and issuance costs	(33,001		)	(30,901		)	(36,612		)
Interest income	9,242			6,132			4,007
Capitalized interest	7,887			8,437			2,651
Other components of net periodic benefit cost, excluding settlements	(825		)	(16,713		)	(20,270		)
Gains on fuel derivatives	5,590			3,312			20,106
Loss on extinguishment of debt	—			—			(10,473		)
Other, net	(2,103		)	2,101			4,323
Total	(13,210		)	(73,217		)	(36,268		)
Income Before Income Taxes	301,158			390,821			361,219
Income tax expense	67,958			60,211			137,099
Net Income	$	233,200		$	330,610		$	224,120
Net Income Per Common Stock Share:
Basic	$	4.63		$	6.23		$	4.19
Diluted	$	4.62		$	6.19		$	4.15
Weighted Average Number of Common Stock Shares Outstanding:
Basic	50,338			53,074			53,502
Diluted	50,488			53,413			53,958
Cash Dividends Declared Per Common Share	$	0.48		$	0.12		$	—

(a) Amounts adjusted for the adoption of Accounting Standards Codification (ASC) No. 606, Revenue from Contracts with Customers . See Note 1 to Consolidated Financial Statements for additional information.

See accompanying Notes to Consolidated Financial Statements.

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Hawaiian Holdings, Inc.

Consolidated Statements of Comprehensive Income

For the Years ended December 31, 2018 , 2017 and 2016



	Year Ended December 31,
	2018			2017 (a)			2016 (a)
	(in thousands)
Net Income	$	233,200		$	330,610		$	224,120
Other Comprehensive Income (Loss), net:
Net change related to employee benefit plans, net of tax benefit of $2,414 for 2018, net of tax expense of $22,321 for 2017, and tax benefit of $3,588 for 2016	(7,243		)	34,249			(6,337		)
Net change in derivative instruments, net of tax expense of $586 for 2018, tax benefit of $3,548 for 2017, and tax expense of $1,290 for 2016	1,799			(5,822		)	2,111
Net change in available-for-sale investments, net of tax expense of $25 for 2018, tax benefit of $120 for 2017, and tax expense of $6 for 2016	78			(198		)	10
Total Other Comprehensive Income (Loss)	(5,366		)	28,229			(4,216		)
Total Comprehensive Income	$	227,834		$	358,839		$	219,904

(a) Amounts adjusted for the adoption of ASC No. 606, Revenue from Contracts with Customers . See Note 1 to Consolidated Financial Statements for additional information.

See accompanying Notes to Consolidated Financial Statements.

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Hawaiian Holdings, Inc.

Consolidated Balance Sheets

December 31, 2018 and 2017



	2018			2017 (a)
	(in thousands, except share data)
ASSETS
Current Assets:
Cash and cash equivalents	$	268,577		$	190,953
Restricted cash	—			1,000
Short-term investments	232,241			269,297
Accounts receivable, net	111,834			140,279
Spare parts and supplies, net	33,942			35,361
Prepaid expenses and other	58,573			79,186
Total	705,167			716,076
Property and equipment, net
Flight equipment	2,307,033			1,848,061
Pre-delivery deposits on flight equipment	119,957			150,652
Other property and equipment	421,582			402,098
	2,848,572			2,400,811
Less accumulated depreciation and amortization	(663,461		)	(558,548		)
Total	2,185,111			1,842,263
Other Assets:
Long-term prepayments and other	185,556			193,632
Intangible assets, net	14,149			15,187
Goodwill	106,663			106,663
Total Assets	$	3,196,646		$	2,873,821
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	143,146		$	140,805
Air traffic liability and current frequent flyer deferred revenue	603,736			589,093
Other accrued liabilities	158,154			147,593
Current maturities of long-term debt, less discount, and capital lease obligations	101,097			59,470
Total	1,006,133			936,961
Long-Term Debt and Capital Lease Obligations	608,684			511,201
Other Liabilities and Deferred Credits:
Accumulated pension and other postretirement benefit obligations	182,620			220,788
Other liabilities and deferred credits	119,826			75,841
Noncurrent frequent flyer deferred revenue	163,619			149,764
Deferred tax liability, net	167,770			134,141
Total	633,835			580,534
Commitments and Contingent Liabilities
Shareholders' Equity:
Special preferred stock, $0.01 par value per share, three shares issued and outstanding at December 31, 2018 and 2017	—			—
Common stock, $0.01 par value per share, 48,540,280 and 51,173,453 shares issued and outstanding as of December 31, 2018 and 2017, respectively	485			512
Capital in excess of par value	128,448			126,743
Accumulated income	912,201			793,134
Accumulated other comprehensive loss, net	(93,140		)	(75,264		)
Total	947,994			845,125
Total Liabilities and Shareholders' Equity	$	3,196,646		$	2,873,821

See accompanying Notes to Consolidated Financial Statements.

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Hawaiian Holdings, Inc.

Consolidated Statements of Shareholders' Equity

For the Years ended December 31, 2018 , 2017 and 2016



	Common Stock(*)			Special Preferred Stock(**)			Capital In Excess of Par Value			Accumulated Income			Accumulated Other Comprehensive Loss			Total
						(in thousands)
Balance at December 31, 2015	$	534		$	—		$	124,091		$	420,714		$	(99,277	)	$	446,062
Net Income	—			—			—			224,120			—			224,120
Other comprehensive loss	—			—			—			—			(4,216		)	(4,216		)
Issuance of 412,857 shares of common stock, net of shares withheld for taxes	4			—			(7,589		)	—			—			(7,585		)
Repurchase and retirement of 379,062 shares common stock	(4		)	—			(13,759		)	—			—			(13,763		)
Share-based compensation expense	—			—			6,005			—			—			6,005
Excess tax benefits from stock issuance	—			—			19,656			—			—			19,656
Reacquisition of equity component of convertible notes	—			—			(1,138		)	—			—			(1,138		)
Cumulative effect of accounting change (ASC 606), net of tax	—			—			—			(76,074		)	—			(76,074		)
Balance at December 31, 2016	$	534		$	—		$	127,266		$	568,760		$	(103,493	)	593,067
Net Income	—			—			—			330,610			—			330,610
Dividends declared on common stock	—			—			—			(6,261		)	—			(6,261		)
Other comprehensive income	—			—			—			—			28,229			28,229
Issuance of 247,852 shares of common stock, net of shares withheld for taxes	3			—			(7,535		)	—			—			(7,532		)
Repurchase and retirement of 2,509,633 shares common stock	(25		)	—			—			(99,975		)	—			(100,000		)
Share-based compensation expense	—			—			7,012			—			—			7,012
Balance at December 31, 2017	$	512		$	—		$	126,743		$	793,134		$	(75,264	)	845,125
Net Income	—			—			—			233,200			—			233,200
Dividends declared on common stock	—			—			—			(24,171		)	—			(24,171		)
Other comprehensive loss	—			—			—			—			(5,366		)	(5,366		)
Issuance of 182,843 shares of common stock, net of shares withheld for taxes	1			—			(3,645		)	—			—			(3,644		)
Repurchase and retirement of 2,816,016 shares common stock	(28		)	—			—			(102,472		)	—			(102,500		)
Share-based compensation expense	—			—			5,350			—			—			5,350
Cumulative effect of accounting change (ASU 2018-02)	—			—			—			12,510			(12,510		)	—
Balance at December 31, 2018	$	485		$	—		$	128,448		$	912,201		$	(93,140	)	$	947,994

(*) Common Stock—$0.01 par value; 118,000,000 authorized as of December 31, 2018 and 2017 .

(**) Special Preferred Stock—$0.01 par value; 2,000,000 shares authorized as of December 31, 2018 and 2017

See accompanying Notes to Consolidated Financial Statements.

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Hawaiian Holdings, Inc.

Consolidated Statements of Cash Flows

For the Years ended December 31, 2018 , 2017 and 2016



	2018			2017 (a)			2016 (a)
	(in thousands)
Cash Flows From Operating Activities:
Net Income	$	233,200		$	330,610		$	224,120
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets	1,038			1,224			2,322
Depreciation and amortization of property and equipment	139,401			112,627			107,041
Deferred income taxes, net	35,433			(1,095		)	29,439
Impairment of assets	—			—			49,361
Stock compensation	5,349			7,286			8,424
Loss on termination of lease	(1,201		)	—			—
Loss on extinguishment of debt	—			—			10,473
Amortization of debt discounts and issuance costs	4,482			5,252			5,579
Post retirement payments	(56,663		)	(153,959		)	(60,931		)
Pension and postretirement benefit cost	9,350			29,580			34,569
Partial settlement and curtailment loss	—			45,585			—
Change in unrealized (gain) loss on fuel derivative contracts	19,973			(3,845		)	(47,678		)
Foreign currency debt remeasurement (gain)/loss	380			—			—
Other, net	8,610			11,170			2,172
Changes in operating assets and liabilities:
Accounts receivable, net	21,132			(40,782		)	(18,954		)
Spare parts and supplies, net	(4,701		)	(21,964		)	(5,259		)
Prepaid expenses and other current assets	(149		)	1,915			(13,138		)
Accounts payable	2,926			21,964			12,306
Air traffic liability	7,830			57,474			35,311
Other accrued liabilities	18,329			(24,629		)	47,183
Frequent flyer deferred revenue	20,668			28,662			36,290
Other assets and liabilities, net	43,121			(75,940		)	(21,586		)
Net cash provided by operating activities	508,508			331,135			437,044
Cash Flows From Investing Activities:
Additions to property and equipment, including pre-delivery deposits	(486,777		)	(341,515		)	(178,838		)
Proceeds from purchase assignment and leaseback transactions	87,000			33,000			31,851
Proceeds from disposition of equipment	46,714			941			16
Purchases of investments	(210,836		)	(231,393		)	(260,987		)
Sales of investments	247,423			244,261			253,855
Net cash used in investing activities	(316,476		)	(294,706		)	(154,103		)
Cash Flows From Financing Activities:
Long-term borrowings	86,500			—			—
Repayments of long-term debt and capital lease obligations	(68,245		)	(61,486		)	(214,025		)
Dividend payments	(24,171		)	(6,261		)	—
Repurchases and conversion of convertible notes	—			—			(1,426		)
Repurchases of common stock	(102,500		)	(100,000		)	(13,763		)
Debt issuance costs	(3,350		)	(188		)	(1,653		)
Payment for taxes withheld for stock compensation	(3,642		)	(7,532		)	(7,585		)
Net cash used in financing activities	(115,408		)	(175,467		)	(238,452		)
Net increase (decrease) in cash and cash equivalents	76,624			(139,038		)	44,489
Cash, cash equivalents, and restricted cash—Beginning of Year	191,953			330,991			286,502
Cash, cash equivalents, and restricted cash—End of Year	$	268,577		$	191,953		$	330,991

See accompanying Notes to Consolidated Financial Statements.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Basis of Presentation

Hawaiian Holdings, Inc. (the Company, Holdings, we, us and our) and its direct wholly-owned subsidiary, Hawaiian Airlines, Inc. (Hawaiian), are incorporated in the State of Delaware. The Company's primary asset is its sole ownership of all issued and outstanding shares of common stock of Hawaiian.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including its principal subsidiary, Hawaiian, through which the Company conducts substantially all of its operations. All significant inter-company balances and transactions have been eliminated upon consolidation.

The Company reclassified certain prior period amounts to conform to the current period presentation. Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.

Cash Equivalents

Cash equivalents consist of short-term, highly liquid investments with an original maturity of three months or less at the date of purchase.

Restricted Cash

Restricted cash consists of cash held as collateral by institutions that process our credit card transactions for advanced ticket sales.

Short Term Investments

Investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. All short-term investments, which consists of debt securities, are classified as available-for-sale, and realized gains and losses are recorded using the specific identification method. Changes in market value, excluding other-than-temporary impairments, are reflected in accumulated other comprehensive income (loss).

Spare Parts and Supplies

Spare parts and supplies are valued at average cost, and primarily consist of expendable parts for flight equipment and other supplies. An allowance for obsolescence of expendable parts is provided over the estimated useful lives of the related aircraft and engines for spare parts expected to be on hand at the date the aircraft are retired from service. These allowances are based on management's estimates and are subject to change.

Property, Equipment and Depreciation

Property and equipment are stated at cost and depreciated on a straight-line basis to their estimated residual values over the asset's estimated useful life. Depreciation begins when the asset is placed into service. Aircraft and related parts begin depreciating on the aircraft's first revenue flight.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Estimated useful lives and residual values of property and equipment are as follows:



Boeing 717-200 aircraft and engines	7 - 11 years, 7 - 34% residual value
Boeing 767-300 aircraft and engines ⁽¹⁾	Through retirement in 2019
Airbus A330-200 aircraft and engines	25 years, 10% residual value
Airbus A321neo aircraft and engines	25 years, 10% residual value
ATR turboprop aircraft and engines	10 years, 15% residual value
Flight and ground equipment under capital lease	Shorter of lease term or useful life
Major rotable parts	Average lease term or useful life for related aircraft, 10% - 15% residual value
Improvements to leased flight equipment and the cargo maintenance hangar	Shorter of lease term or useful life
Facility leasehold improvements	Shorter of lease term, including assumed lease renewals when renewal is economically compelled at key airports, or useful life
Furniture, fixtures and other equipment	3 - 7 years, no residual value
Capitalized software	3 - 7 years, no residual value

(1) The Company will retire its Boeing 767-300 aircraft and flight equipment in the first quarter of 2019.

Additions and modifications that significantly enhance the operating performance and/or extend the useful lives of property and equipment are capitalized and depreciated over the lesser of the remaining useful life of the asset or the remaining lease term, as applicable. Expenditures that do not improve or extend asset lives are charged to expense as incurred. Pre-delivery deposits are capitalized when paid.

Aircraft under capital leases are recorded at an amount equal to the present value of minimum lease payments utilizing the Company's incremental borrowing rate at lease inception and amortized on a straight-line basis over the lesser of the remaining useful life of the aircraft or the lease term. The amortization is recorded in depreciation and amortization expense on the Consolidated Statement of Operations. Accumulated amortization of aircraft and other capital leases was $90.5 million and $70.9 million as of December 31, 2018 and 2017 , respectively.

The Company capitalizes certain costs related to the acquisition and development of computer software and amortizes these costs using the straight-line method over the estimated useful life of the software. The net book value of computer software, which is included in Other property and equipment on the consolidated balance sheets, was $27.9 million and $34.6 million at December 31, 2018 and 2017 , respectively. The value of construction in progress, primarily consisting of aircraft in 2018 and aircraft facilities in 2017 , which is included in property and equipment on the consolidated balance sheets, was $47.3 million and $135.3 million as of December 31, 2018 and 2017 , respectively. Amortization expense related to computer software was $14.6 million , $12.3 million and $9.7 million for the years ended December 31, 2018 , 2017 , and 2016 respectively.

Aircraft Maintenance and Repair Costs

Maintenance and repair costs for owned and leased flight equipment, including the overhaul of aircraft components, are charged to operating expenses as incurred. Engine overhaul costs covered by power-by-the-hour arrangements are paid and expensed as incurred or expensed on a straight-line basis and are based on the amount of hours flown per contract. Under the terms of these power-by-the-hour agreements, the Company pays a set dollar amount per engine hour flown on a monthly basis and the third-party vendor assumes the obligation to repair the engines at no additional cost, subject to certain specified exclusions. As of December 31, 2018 and 2017, the Company had approximately $95.0 million and $109.3 million , respectively in prepayments to one of its power-by-the-hour vendors, which is recoverable over the next four years .

Additionally, although the Company's aircraft lease agreements specifically provide that it is responsible for maintenance of the leased aircraft, the Company pays maintenance reserves to the aircraft lessors that are applied toward the cost of future maintenance events. These reserves are calculated based on a performance measure, such as flight hours, and are available for reimbursement to the Company upon the completion of the maintenance of the leased aircraft. However, reimbursements are limited to the available reserves associated with the specific maintenance activity for which the Company requests reimbursement.

Under certain aircraft lease agreements, the lessor is entitled to retain excess amounts on deposit at the expiration of the lease, if any; whereas at the expiration of certain other existing aircraft lease agreements any such excess amounts are returned to the

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Company, provided that it has fulfilled all of its obligations under the lease agreements. The maintenance reserves paid under the lease agreements do not transfer either the obligation to maintain the aircraft or the cost risk associated with the maintenance activities to the aircraft lessor. In addition, the Company maintains the right to select any third-party maintenance provider.

Maintenance reserve payments that are expected to be recovered from lessors are recorded as deposits in the Consolidated Balance Sheets as an asset until it is less than probable that any portion of the deposit is recoverable. In addition, payments of maintenance reserves that are not substantially and contractually related to the maintenance of the leased assets are expensed as incurred. Any costs that are substantially and contractually unrelated to the maintenance of the leased asset are considered to be unrecoverable. In order to properly account for the costs that are related to the maintenance of the leased asset, the Company bifurcates its maintenance reserves into two groups and expenses the proportionate share that is expected to be unrecoverable.

Goodwill and Indefinite-lived Intangible Assets

Goodwill and intangible assets with indefinite lives are not amortized. We apply a fair value-based impairment test to the carrying value of goodwill and indefinite-lived intangible assets on an annual basis and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. We assess the value of our goodwill and indefinite-lived assets under either a qualitative or quantitative approach.

Goodwill. When the Company evaluates goodwill for impairment using a quantitative approach, it estimates the fair value of the reporting unit by considering the market capitalization. If the reporting unit's fair value exceeds its carrying value, no further testing is required. If, however, the reporting unit's carrying value exceeds its fair value, the Company then determines the amount of the impairment charge, if any. The Company recognizes an impairment charge if the carrying value of the reporting unit's goodwill exceeds its estimated fair value.

Intangible Assets. The Company assesses its indefinite-lived assets under a qualitative approach. The Company analyzes market factors to determine if events and circumstances have affected the fair value of the indefinite-lived intangible assets. If the Company determines that it is more likely than not that the asset value may be impaired, it then uses the quantitative approach to assess the asset's fair value and the amount of the impairment. The Company performs the quantitative impairment test for indefinite-lived intangible assets by comparing the asset's fair value to its carrying value.

Impairment of Long-Lived Assets and Finite-lived Intangible Assets

Long-lived assets used in operations, consisting principally of property and equipment and finite-lived intangible assets, are tested for impairment when events or changes in circumstances indicate, in management's judgment, that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amount. When testing for impairment management considers market trends, the expected useful lives of the assets, changes in economic conditions, recent transactions involving sales of similar assets and, if necessary, estimates of future undiscounted cash flows. To determine whether impairment exists for aircraft used in operations, assets are grouped at the fleet-type level (the lowest level for which there are identifiable cash flows) and future cash flows are estimated based on projections of capacity, passenger mile yield, fuel costs, labor costs and other relevant factors. If, at any time, management determines the net carrying value of an asset is not recoverable, the amount is reduced to its fair value during the period in which such determination is made. Any changes in the estimated useful lives of these assets will be accounted for prospectively. In 2016, a $49.4 million impairment charge was recorded as the Company determined that the Boeing 767-300 fleet and related assets were impaired. See Note 11 for further details.

Operating Leases

The Company leases aircraft, engines, airport terminal facilities, office space, and other equipment under operating leases. Some of these lease agreements include escalation clauses and renewal options. For scheduled rent escalation clauses during the lease terms or for rental payments commencing at a date other than the date of initial occupancy, the Company records minimum rental expenses on a straight-line basis over the terms of the leases in the Consolidated Statements of Operations. Rental expense for operating leases totaled $201.1 million , $208.0 million , and $193.0 million for the years ended December 31, 2018 , 2017 and 2016 , respectively.

Leased Aircraft Return Costs

Costs associated with the return of leased aircraft are accrued when it is probable that a payment will be made and that amount is reasonably estimable, usually no sooner than after the last scheduled maintenance event prior to lease return. Any accrual is

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

based on the time remaining on the lease, planned aircraft usage, and the provisions included in the lease agreement, although the actual amount due to any lessor upon return will not be known with certainty until lease termination.

As leased aircraft are returned, any payments are charged against the established accrual. The accrual is part of current and long-term liabilities and was not material as of December 31, 2018 and 2017. The expense is included in Aircraft rent in the consolidated statements of operations.

Revenue Recognition

Passenger revenue. The majority of the Company's revenue is derived from transporting passengers on our aircraft. The Company accounts for revenue in accordance with ASC 606, which was adopted on January 1, 2018, using the full retrospective method. See Recently Adopted Accounting Pronouncements section below for further discussion of adoption, including the impact on our previously issued financial statements.

The Company's primary operations are that of its wholly-owned subsidiary, Hawaiian. Principally all operations of Hawaiian either originate and/or end in the State of Hawai'i. The management of such operations is based on a system-wide approach due to the interdependence of Hawaiian's route structure in its various markets. As Hawaiian offers only one significant line of business (i.e., air transportation), management has concluded that it has only one segment. The Company's operating revenues by geographic region (as defined by the Department of Transportation, DOT) are summarized below:



	Year Ended December 31,
	2018		2017		2016
	(in thousands)
Domestic	$	2,071,861	$	1,976,971	$	1,874,039
Pacific	765,550		698,174		558,374
Total operating revenue	$	2,837,411	$	2,675,145	$	2,432,413

Hawaiian attributes operating revenue by geographic region based on the destination of each flight segment. Hawaiian's tangible assets consist primarily of flight equipment, which are mobile across geographic markets, and, therefore, have not been allocated to specific geographic regions.

Passenger & Other revenue - Generally, the Company’s contracts with customers have two principal performance obligations, which are the promise to provide transportation to the passenger and the frequent flyer miles earned on the flight. In addition, the Company often charges additional fees for items such as baggage and in-flight entertainment. Such items are not capable of being distinct from the transportation provided because the customer can only benefit from the services during the flight. The transportation performance obligation, including the redemption of HawaiianMiles awards for flights, is satisfied, and revenue is recognized, as transportation is provided. In some instances, tickets sold by the Company can include a flight segment on another carrier which is referred to as an interline segment. In this situation, the Company acts as an agent for the other carrier and revenue is recognized net of cost in other revenue. Tickets sold by other airlines where the Company provides the transportation are recognized as passenger revenue at the estimated value to be billed to the other airline when travel is provided. Differences between amounts billed and the actual amounts may be rejected and rebilled or written off if the amount recorded was different from the original estimate.

Other operating revenue consists of cargo revenue, ground handling fees, commissions, and fees earned under certain joint marketing agreements with other companies. These amounts are recognized when the service is provided.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)



	Year Ended December 31,
	2018		2017		2016
Passenger Revenue by Type	(in thousands)
Passenger revenue, excluding frequent flyer	$	2,454,811	$	2,351,062	$	2,146,258
Frequent flyer revenue, transportation component	147,982		135,765		125,429
Passenger Revenue	$	2,602,793	$	2,486,827	$	2,271,687

Other revenue (e.g. cargo and other miscellaneous)	$	163,140	$	142,172	$	115,379
Frequent flyer revenue, marketing and brand component	71,478		46,146		45,347
Other Revenue	$	234,618	$	188,318	$	160,726

For the twelve months ended December 31, 2018 , 2017 , and 2016 , the Company's total revenue was $2.8 billion , $2.7 billion , and $2.4 billion , respectively. As of December 31, 2018 and 2017 , the Company's Air traffic liability balance as it relates to passenger tickets (excluding frequent flyer) was $427.8 million and $421.6 million , respectively, which represents future revenue that is expected to be realized over the next 12 months . During the twelve months ended December 31, 2018 , 2017 , and 2016 , the amount of revenue recognized that was included in Air traffic liability as of the beginning of the respective period was $421.0 million , $363.9 million , and $328.7 million , respectively.

Passenger revenue associated with unused tickets, which represent unexercised passenger rights, is recognized in proportion

to the pattern of rights exercised by related passengers (e.g. scheduled departure dates). To calculate the portion to be recognized as revenue in the period, the Company utilizes historical information and applies the trend rate to the current air traffic liability balances for that specific period.

Certain governmental taxes are imposed on the Company's ticket sales through a fee included in ticket prices. The Company collects these fees and remits them to the appropriate government agency. Management has elected (via a practical expedient election) to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer, e.g., sales, use, value added, and certain excise taxes. These fees have been presented on a net basis in the accompanying Consolidated Statements of Operations and recorded as a liability until remitted.

Frequent Flyer Revenue. Hawaiian's frequent flyer travel award program provides a variety of awards to program members based on accumulated mileage. ASC 606 requires the Company to account for miles earned by passengers in the HawaiianMiles program through flight activity as a component of the passenger revenue ticket transaction at the estimated selling price of the miles. Ticket consideration received is allocated between the performance obligations, primarily travel and miles earned by passengers. The allocated value of the miles is deferred until the free travel or other award is used by the passenger, at which time it is included in passenger revenue. The value of the ticket used in the determination of the estimated selling price is based on the historical value of equivalent flights to those provided for loyalty awards and the related miles redeemed to obtain that award adjusted for breakage or fulfillment. The equivalent ticket value (ETV) includes a fulfillment discount (breakage) to reflect the value of the award ticket over the number of miles that, based on historical experience, will be needed to obtain the award. On a quarterly basis, the Company calculates the ETV by analyzing the fares of similar tickets for the prior 12 months, considering cabin class and geographic region.

The Company also sells mileage credits to companies participating in our frequent flyer program These contracts generally include multiple performance obligations, including the transportation that will ultimately be provided when the mileage credits are redeemed and marketing and brand related activities. The marketing and brand performance obligations are effectively provided each time a HawaiianMiles member uses the co-branded credit card and monthly access to customer lists and marketing is provided, which corresponds to the timing of when the Company issues or is obligated to issue the mileage credits to the HawaiianMiles member. Therefore, the Company recognizes revenue for the marketing and brand performance obligations when HawaiianMiles members use their co-brand credit card and the resulting mileage credits are issued to them, which best correlates with the Company’s performance in satisfying the obligation.

During the first quarter of 2018, the Company amended its partnership with Barclaycard US, Hawaiian's co-branded credit card partner. Management determined that the amendment should be accounted for as a termination of the existing contract and the creation of a new contract under ASC 606 and the relative selling price was determined for each performance obligation of the new agreement. The new agreement continues through 2024 and includes improved economics and enhanced product offerings

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

for our Barclay's co-branded cardholders. The amended agreement did not change, and includes the following performance obligations; (i) transportation that will ultimately be provided when mileage credits are redeemed (transportation), (ii) the Hawaiian Airlines brand and access to its members lists (collectively, brand performance), (iii) marketing, and (iv) airline benefits to cardholders, including discounts and anniversary travel benefits, baggage waivers and inflight purchase credits. The Company determined the relative fair value of each performance obligation by estimating the selling prices of the deliverables by considering discounted cash flows using multiple inputs and assumptions, including: (1) the expected number of miles to be awarded and redeemed; (2) the estimated weighted average equivalent ticket value, adjusted by a fulfillment discount; (3) the estimated total annual cardholder spend; (4) an estimated royalty rate for the Hawaiian portfolio; and (5) the expected use of each of the airline benefits. The overall consideration received is allocated to the performance obligations based on their relative selling prices.

The transportation performance obligation is deferred and recognized as passenger revenue when the transportation is expected to be provided.

Accounting for mileage sales to co-branded partners involves the use of various techniques to estimate revenue. To determine the total estimated transaction price, the Company forecasts future credit card activity using historical information. The relative selling price is determined using management’s standalone estimated selling price of each performance obligation. The objective of using the estimated selling price based methodology is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. Accordingly, the Company determines the best estimate of selling price by considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, published selling prices, number of miles awarded and number of miles redeemed. The Company estimates the selling price of miles using an ETV adjusted for a fulfillment discount as described above.

The Company's frequent flyer liability is recorded in Air traffic liability (short-term) and Noncurrent frequent flyer deferred revenue in the Company's consolidated balance sheet based on estimated and expected redemption patterns using historical data and analysis. As of December 31, 2018 and 2017 , the balances were as follows:



	As of December 31,
	2018		2017
	(in thousands)
Air traffic liability (current portion of frequent flyer deferred revenue)	$	168,570	$	161,757
Noncurrent frequent flyer deferred revenue	163,619		149,764
Total frequent flyer liability	$	332,189	$	311,521

Miles expire after 18 months of member account inactivity. The Company reviews its breakage estimates annually based upon the latest available information regarding redemption and expiration patterns (e.g., credit card and non-credit card holders). The Company’s estimate of the expected expiration of miles requires significant management judgment. Current and future changes to expiration assumptions or to the expiration policy, or to program rules and program could affect the estimated value of a mile.

Accounts Receivable

Accounts receivable primarily consist of amounts due from credit card companies, non-airline partners, and cargo transportation customers. The Company provides an allowance for uncollectible accounts equal to the estimated losses expected to be incurred based on historical chargebacks, write-offs, bankruptcies and other specific analyses. Bad debt expense was not material in any period presented.

Costs to obtain or fulfill a contract

In order for the Company to provide transportation to its customers, the Company incurs fulfillment costs (booking fees, credit card fees, and commission/selling costs), which are deferred until the period in which the flight occurs. As of December 31, 2018 and 2017 , the Company's asset balance associated with these costs were $16.3 million and $16.7 million , respectively. During the twelve months ended December 31, 2018 , 2017 , and 2016 , expenses related to these costs totaled to $96.0 million , $95.5 million , and $94.3 million , respectively. To determine the amount to capitalize and expense at the end of each period, the Company uses historical sales data and estimates the amount associated with unflown tickets.

Pension and Postretirement and Postemployment Benefits

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The Company accounts for its defined benefit pension and other postretirement and postemployment plans in accordance with ASC 715, Compensation—Retirement Benefits (ASC 715), which requires companies to measure their plans' assets and obligations to determine the funded status at fiscal year-end, reflect the funded status in the statement of financial position as an asset or liability, and recognize changes in the funded status of the plans in comprehensive income during the year in which the changes occur. Pension and other postretirement and postemployment benefit expenses are recognized on an accrual basis over each employee's service periods. Pension expense is generally independent of funding decisions or requirements.

The Company uses the corridor approach in the valuation of its defined benefit pension and other postretirement and postemployment plans. The corridor approach defers all actuarial gains and losses resulting from variances between actual results and actuarial assumptions. These unrecognized actuarial gains and losses are amortized when the net gains and losses exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation at the beginning of the year. The amount in excess of the corridor is amortized over the expected average remaining service period of active plan participants for the open plans and is amortized over the expected average remaining lifetime of inactive participants for plans whose population is “all or almost all” inactive.

Advertising Costs

Advertising costs are expensed when incurred. Advertising expense was $19.3 million , $16.6 million and $18.3 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively.

Capitalized Interest

Interest is capitalized upon the payment of predelivery deposits for aircraft and engines, and is depreciated over the estimated useful life of the asset from service inception date.

Share-Based Compensation

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The fair value of the awards are estimated using the following: (1) option-pricing models for grants of stock options or (2) fair value at the measurement date (usually the grant date) for awards of stock subject to service and / or performance-based vesting. The resulting cost is recognized as compensation expense over the period of time during which an employee is required to provide services to the Company (the service period) in exchange for the award, the service period generally being the vesting period of the award. The Company's policy is to recognize forfeitures as they occur.

Financial Derivative Instruments

The Company uses derivatives to manage risks associated with certain assets and liabilities arising from the potential adverse impact of fluctuations in global aircraft fuel prices, interest rates and foreign currency exchange rates.

The following table summarizes the accounting treatment of the Company's derivative contracts:



			Classification of Unrealized Gains (Losses)
Derivative Type	Accounting Designation	Classification of Realized Gains and Losses	Effective Portion	Ineffective Portion
Interest rate contracts	Designated as cash flow hedges	Interest expense and amortization of debt discounts and issuance costs	AOCI	Nonoperating income (expense)
Foreign currency exchange contracts	Designated as cash flow hedges	Passenger revenue	AOCI	Nonoperating income (expense)
Fuel hedge contracts	Not designated as hedges	Gains (losses) on fuel derivatives	Change in fair value is recorded in nonoperating income (expense)
Foreign currency exchange contracts	Not designated as hedges	Nonoperating income (expense), Other	Change in fair value is recorded in nonoperating income (expense)

If the Company terminates a derivative designated for hedge accounting under ASC 815, prior to its contractual settlement date, then the cumulative gain or loss recognized in AOCI at the termination date remains in AOCI until the forecasted transaction occurs. In a situation where it becomes probable that a hedged forecasted transaction will not occur, any gains and/or losses that have been recorded to AOCI would be required to be immediately reclassified into earnings. All cash flows associated with purchasing and settling derivatives are classified as operating cash flows in the Consolidated Statements of Cash Flows.

Recently Adopted Accounting Pronouncements

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard focuses on a targeted improvement to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act (the Tax Act) enacted on December 22, 2017 from accumulated other comprehensive income to retained earnings. The Company elected to early adopt the standard in the year ended December 31, 2018 and reclassified tax benefit of $12.5 million from accumulated other comprehensive income to accumulated income in the Consolidated Balance Sheets.

In May 2014, the Financial Accounting Standards Board (FASB) issued ASC 606, requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASC 606 replaced most existing revenue recognition guidance in GAAP and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017.

The Company adopted the standard as of January 1, 2018, utilizing the full retrospective transition method, which required the Company to restate prior reporting periods presented.

The most significant impact of the standard relates to the accounting for the Company's frequent flyer travel award program. This change, as well as other less significant changes, are described below:

•

Frequent flyer - The standard requires the Company to account for miles earned by passengers in the HawaiianMiles program through flight activity as a component of the passenger revenue ticket transaction at the estimated selling price of the miles, effectively eliminating the incremental cost accounting previously applied. The allocated value of miles earned through flights and sold to partners is recognized at the time the free travel or other award is redeemed by the passenger. Previously, the transportation element associated with sold miles was deferred and recognized as passenger revenue over the period when the transportation was expected to be provided ( 23 months).

•

Passenger revenue - Prior to the adoption of ASC 606, the Company recorded revenue for unused tickets when the tickets expired. Ticket change fees were previously recognized at the time the fees were assessed. Further, the Company reclassified revenue items such as checked baggage, charter, ticket change and cancellation fees, in flight revenue, and other incidental sales to passenger revenue (from other operating revenue), as these items do not represent distinct performance obligations separate from the transportation provided to the passenger.


•	Selling Costs - Prior to ASC 606, the Company recognized the costs associated with credit card and booking fees as they were incurred.

Adoption of the revenue recognition standard impacted our previously reported results as follows:



	Year Ended December 31, 2016
	As Previously Reported			Adjustments			As Restated
	(in thousands)
Operating Revenue:
Passenger	$	2,145,742		$	125,945		$	2,271,687
Other	304,838			(144,112		)	160,726
Total	$	2,450,580		$	(18,167	)	$	2,432,413
Operating Expenses	2,034,848			78			2,034,926
Operating Income	415,732			(18,245		)	397,487
Nonoperating Income (Expense)	(36,268		)	—			(36,268		)
Income tax expense	144,032			(6,933		)	137,099
Net Income	$	235,432		$	(11,312	)	$	224,120
Net Income Per Common Stock Share:
Basic	$	4.40		$	(0.21	)	$	4.19
Diluted	$	4.36		$	(0.21	)	$	4.15

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)



	Year Ended December 31, 2017
	As Previously Reported			Adjustments			As Restated
	(in thousands)
Operating Revenue:
Passenger	$	2,362,076		$	124,751		$	2,486,827
Other	333,552			(145,234		)	188,318
Total	$	2,695,628		$	(20,483	)	$	2,675,145
Operating Expenses	2,211,856			(749		)	2,211,107
Operating Income	483,772			(19,734		)	464,038
Nonoperating Income (Expense)	(73,217		)	—			(73,217		)
Income tax expense	46,514			13,697			60,211
Net Income	$	364,041		$	(33,431	)	$	330,610
Net Income Per Common Stock Share:
Basic	$	6.86		$	(0.63	)	$	6.23
Diluted	$	6.82		$	(0.63	)	$	6.19



	December 31, 2017
	As Previously Reported		Adjustments			As Restated
	(in thousands)
ASSETS
Prepaid expenses and other	$	65,196	$	13,990		$	79,186
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Air traffic liability	545,362		43,731			589,093
Other accrued liabilities	146,283		1,310			147,593
Noncurrent Liabilities:
Other liabilities and deferred credits	95,636		(19,795		)	75,841
Noncurrent frequent flyer deferred revenue	—		149,764			149,764
Deferred tax liability	174,344		(40,203		)	134,141
Shareholders' Equity:
Accumulated income	913,951		(120,817		)	793,134

Recently Issued Accounting Pronouncements

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging , which better aligns a company's risk management activities and financial reporting for hedging relationships and is intended to simplify the hedge accounting requirements. ASU 2017-12 is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the components and options within ASU 2017-12. The adoption of this standard is not expected to have an impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (codified within ASC 842, Leases ). ASC 842 requires a lessee to recognize a right-of-use asset and a lease liability in the statement of financial position for all leases (with the exception of short-term leases) at the lease commencement date and recognize expenses similar to the current ASC 840, Leases. ASC 842 is effective for fiscal years, and interim periods beginning after December 15, 2018, and early adoption is permitted. The Company currently plans to utilize the optional transition method for adoption of ASC 842, which allows entities to continue to apply the legacy guidance in Topic 840, including its disclosure requirements, in the comparative periods presented in the year of adoption. The Company plans to adopt ASU 2016-02 on January 1, 2019, as required.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Under ASU 2016-02, the lease liability will be measured at the present value of remaining lease payments and the right-of-use (ROU) asset will be derived from the calculation of the lease liability, adjusted for any historically recorded amounts under Topic 840 for rent leveling and certain other adjustments (ROU Asset). Lease payments, which are comparable to the minimum lease payments included in the Company's existing lease commitments disclosure, include fixed and in-substance fixed payments, variable payments based on an index or rate, reasonably certain purchase options, termination penalties and probable amounts the lessee will owe under a residual value guarantee. Lease payments exclude variable payments other than those based on an index or rate or any amount allocated to non-lease components (unless the practical expedient is elected on an asset class level to combine components). Variable lease payments will continue to be expensed as incurred.

The Company completed its preliminary evaluation of implementing ASU 2016-02 and believes that the most significant impact on its financial statements will be the consolidated balance sheet impact of recording the ROU Asset and Operating Lease Liability for existing aircraft and engine leases, its Maintenance Hangar lease with the State of Hawaii, and certain real estate leases. As of December 31, 2018, the Company had 17 aircraft and 5 engines under operating lease in its fleet. The net present value of future lease payments for the aforementioned leases range between $550 million and $650 million . The Company also has operating leases related to terminal operations and office space, which are not included in the range provided, because the majority of these leases have variable payments and are not expected to be included in the Operating Lease Liability at adoption. Management does not believe that the impact of adopting ASC 842 will be significant to the consolidated statement of operations and consolidated statements of cash flows.

ASC 842 also eliminates the current build-to-suit lease accounting guidance and is expected to result in derecognition of build-to-suit assets and liabilities that remained on the balance sheet after the end of the construction period and then the application of lease accounting to the agreement. See Note 9 for additional discussion on the Company's build-to-suit project. Management concluded that the lease will be accounted for as an operating lease under ASC 842, which will result in operating lease expense being recognized equally over the lease term, which is a change from the current treatment as a financing, similar to capital lease treatment. The present value of the Operating Lease Liability, including the amount previously recognized as a financing liability of $73.0 million , is included in the range discussed above.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

2. Accumulated Other Comprehensive Loss

Reclassifications out of accumulated other comprehensive loss by component is as follows:



	Year ended December 31,
Details about accumulated other comprehensive loss components	2018			2017			2016			Affected line items in the statement where net income is presented
	(in thousands)
Derivatives designated as hedging instruments under ASC 815
Foreign currency derivative (gains) losses, net	$	(1,380	)	$	(2,391	)	$	196		Passenger revenue
Interest rate derivative losses, net	—			—			944			Interest expense
Total before tax	(1,380		)	(2,391		)	1,140
Tax expense (benefit)	339			906			(438		)
Total, net of tax	$	(1,041	)	$	(1,485	)	$	702
Amortization of defined benefit pension items
Actuarial loss	$	2,708		$	8,792		$	7,730		Nonoperating Income (Expense), Other, net
Prior service cost	225			254			227			Nonoperating Income (Expense), Other, net
Partial settlement and curtailment loss	—			10,384			—			Other nonoperating special items
Loss on plan termination	—			35,201			—			Other nonoperating special items
Total before tax	2,933			54,631			7,957
Tax benefit	(671		)	(21,519		)	(3,048		)
Total, net of tax	$	2,262		$	33,112		$	4,909
Short-term investments
Realized (gain) loss on sales of investments, net	107			(32		)	(108		)	Nonoperating Income (Expense), Other, net
Total before tax	107			(32		)	(108		)
Tax expense	(26		)	12			41
Total, net of tax	81			(20		)	(67		)
Total reclassifications for the period	$	1,302		$	31,607		$	5,544

A rollforward of the amounts included in accumulated other comprehensive loss, net of taxes, is as follows:



Year ended December 31, 2018	Foreign Currency Derivatives			Defined Benefit Pension Items			Short-Term Investments			Total
	(in thousands)
Beginning balance	$	1,249		$	(75,953	)	$	(560	)	$	(75,264	)
Reclassification of stranded tax effects (a)	269			(12,659		)	(120		)	(12,510		)
Other comprehensive income (loss) before reclassifications, net of tax	2,840			(9,505		)	(3		)	(6,668		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	(1,041		)	2,262			81			1,302
Net current-period other comprehensive income (loss), net of tax	1,799			(7,243		)	78			(5,366		)
Ending balance	$	3,317		$	(95,855	)	$	(602	)	$	(93,140	)

(a) Amounts represent the reclassification from AOCI to RE of the stranded tax effectives resulting from the enactment of the Tax Act and adoption of ASU 2018-02.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)



Year ended December 31, 2017	Foreign Currency Derivatives			Defined Benefit Pension Items			Short-Term Investments			Total
	(in thousands)
Beginning balance	$	7,071		$	(110,202	)	$	(362	)	$	(103,493	)
Other comprehensive income (loss) before reclassifications, net of tax	(4,337		)	1,137			(178		)	(3,378		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	(1,485		)	33,112			(20		)	31,607
Net current-period other comprehensive income (loss), net of tax	(5,822		)	34,249			(198		)	28,229
Ending balance	$	1,249		$	(75,953	)	$	(560	)	$	(75,264	)

3. Earnings Per Share

Basic earnings per share, which excludes dilution, is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material. The following table shows our computation of basic and diluted earnings per share:



	Year Ended December 31,
	2018		2017		2016
	(in thousands, except for per share data)
Numerator:
Net Income	$	233,200	$	330,610	$	224,120
Denominator:
Weighted average common shares outstanding—Basic	50,338		53,074		53,502
Assumed exercise of stock options and awards	150		339		450
Assumed exercise of convertible note premium	—		—		6
Weighted average common shares outstanding—Diluted	50,488		53,413		53,958
Net Income Per Common Stock Share:
Basic	$	4.63	$	6.23	$	4.19
Diluted	$	4.62	$	6.19	$	4.15

4. Short-Term Investments

Debt securities that are not classified as cash equivalents are classified as available-for-sale investments and are stated at fair value. Realized gains and losses on sales of investments are reflected in nonoperating income (expense).

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The following is a summary of short-term investments held as of December 31, 2018 and 2017 :



December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Corporate debt	$	142,748	$	49	$	(695	)	$	142,102
U.S. government and agency debt	37,163		3		(59		)	37,107
Municipal bonds	9,903		—		(32		)	9,871
Other fixed income securities	43,183		2		(24		)	43,161
Total short-term investments	$	232,997	$	54	$	(810	)	$	232,241



December 31, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Corporate debt	$	165,610	$	8	$	(535	)	$	165,083
U.S. government and agency debt	59,054		1		(215		)	58,840
Municipal bonds	21,517		—		(104		)	21,413
Other fixed income securities	23,973		1		(13		)	23,961
Total short-term investments	$	270,154	$	10	$	(867	)	$	269,297

Contractual maturities of short-term investments as of December 31, 2018 are shown below.



	Under 1 Year		1 to 5 Years		Total
	(in thousands)
Corporate debt	$	69,957	$	72,145	$	142,102
U.S. government and agency debt	28,164		8,943		37,107
Municipal bonds	8,288		1,583		9,871
Other fixed income securities	35,990		7,171		43,161
Total short-term investments	$	142,399	$	89,842	$	232,241

The Company classifies investments as current assets as these securities are available for use in its current operations.

5. Fair Value Measurements

ASC 820 defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 - Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term for the assets or liabilities; and

Level 3 - Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The following tables present information about the Company's financial assets and liabilities measured at fair value on a recurring basis:



	Fair Value Measurements as of December 31, 2018
	Total		Level 1		Level 2		Level 3
	(in thousands)
Cash equivalents	$	121,154	$	42,175	$	78,979	$	—
Restricted cash	—		—		—		—
Short-term investments	232,241		—		232,241		—
Fuel derivative contracts:	1,572		—		1,572		—
Foreign currency derivatives	4,579		—		4,579		—
Total assets measured at fair value	$	359,546	$	42,175	$	317,371	$	—
Foreign currency derivatives	1,347		—		1,347		—
Total liabilities measured at fair value	$	1,347	$	—	$	1,347	$	—



	Fair Value Measurements as of December 31, 2017
	Total		Level 1		Level 2		Level 3
	(in thousands)
Cash equivalents	$	62,310	$	27,807	$	34,503	$	—
Restricted cash	1,000		1,000		—		—
Short-term investments	269,297		—		269,297		—
Fuel derivative contracts:
Crude oil call options	20,272		—		20,272		—
Jet fuel swaps	336		—		336		—
Foreign currency derivatives	4,300		—		4,300		—
Total assets measured at fair value	$	357,515	$	28,807	$	328,708	$	—
Foreign currency derivatives	1,713		—		1,713		—
Total liabilities measured at fair value	$	1,713	$	—	$	1,713	$	—

Cash equivalents. The Company’s Level 1 cash equivalents consist of money market securities. The carrying amounts approximate fair value because of the short-term maturity of these assets and Level 2 cash equivalents consist of U.S. agency bonds, mutual funds, and commercial paper. These instruments are valued using quoted prices for similar assets in active markets.

Restricted cash . The Company’s restricted cash consist of money market securities.

Short-term investments. Short-term investments include corporate debt, U.S. government and agency debt, municipal bonds, and other fixed income securities. These instruments are valued using quoted prices for similar assets in active markets or other observable inputs.

Fuel derivative contracts. The Company’s fuel derivative contracts consist of crude oil call options, which are not traded on a public exchange. The fair value of these instruments are determined based on inputs available or derived from public markets including contractual terms, market prices, yield curves, fuel price curves and measures of volatility, among others.

Foreign currency derivatives. The Company’s foreign currency derivatives consist of Japanese Yen and Australian Dollar forward contracts and are valued based primarily on data readily observable in public markets.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The table below presents the Company's debt (excluding obligations under capital leases and financing obligations) measured at fair value:



Fair Value of Debt
December 31, 2018										December 31, 2017
Carrying Amount		Fair Value								Carrying Amount		Fair Value
Carrying Amount		Total		Level 1		Level 2		Level 3		Carrying Amount		Total		Level 1		Level 2		Level 3
(in thousands)										(in thousands)
$	467,760	$	461,805	$	—	$	—	$	461,805	$	433,072	$	444,099	$	—	$	—	$	444,099

The fair value estimates of the Company's debt were based on the discounted amount of future cash flows using the Company's current incremental rate of borrowing for similar obligations.

The carrying amounts of cash, other receivables, and accounts payable approximate fair value due to the short-term nature of these financial instruments.

6. Financial Derivative Instruments

The Company uses derivatives to manage risks associated with certain assets and liabilities arising from the potential adverse impact of fluctuations in global fuel prices, interest rates and foreign currencies.

Fuel Risk Management

The Company's operations are inherently dependent upon the price and availability of aircraft fuel. To manage economic risks associated with fluctuations in aircraft fuel prices, the Company periodically enters into derivative financial instruments. The Company uses a combination of derivative contracts to hedge its aircraft fuel expense. As of December 31, 2018 , the Company's portfolio comprised of crude oil call options, which were not designated as hedges under ASC Topic 815, Derivatives and Hedging (ASC 815), for hedge accounting treatment. As a result, any changes in fair value of these derivative instruments are adjusted through other nonoperating income (expense) in the period of change.

The following table reflects the amount of realized and unrealized gains and losses recorded as nonoperating income (expense) in the Consolidated Statements of Operations.



	Year Ended December 31,
	2018			2017			2016
	(in thousands)
Gains (losses) realized at settlement	$	25,563		$	(534	)	$	(27,572	)
Prior period unrealized amounts	(11,792		)	(7,946		)	39,731
Unrealized gains (losses) that will settle in future periods	(8,181		)	11,792			7,947
Gains on fuel derivatives recorded as Nonoperating income (expense)	$	5,590		$	3,312		$	20,106

Foreign Currency Exchange Rate Risk Management

The Company is subject to foreign currency exchange rate risk due to revenues and expenses denominated in foreign currencies, with the primary exposures being the Japanese Yen and Australian Dollar. To manage exchange rate risk, the Company executes its international revenue and expense transactions in the same foreign currency to the extent practicable. The Company enters into foreign currency forward contracts to further manage the effects of fluctuating exchange rates. The effective portion of the gain or loss is reported as a component of AOCI and reclassified into earnings in the same period in which the related sales are recognized as passenger revenue. The effective portion of the foreign currency forward contracts represents the change in fair value of the hedge that offsets the change in the fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized as nonoperating income (expense).

The Company believes that its foreign currency forward contracts will continue to be effective in offsetting changes in cash flow attributable to the hedged risk. The Company expects to reclassify a net gain of approximately $3.9 million into earnings over the next 12 months from AOCI based on the values at December 31, 2018 .

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The following tables present the gross fair value of asset and liability derivatives that are designated as hedging instruments under ASC 815 and derivatives that are not designated as hedging instruments under ASC 815, as well as the net derivative positions and location of the asset and liability balances within the Consolidated Balance Sheets.

Derivative positions as of December 31, 2018



	Balance Sheet Location	Notional Amount	Final Maturity Date	Gross fair value of assets		Gross fair value of (liabilities)			Net derivative position
		(in thousands)		(in thousands)
Derivatives designated as hedges
Foreign currency derivatives	Prepaid expenses and other	15,933,550 Japanese Yen 48,709 Australian Dollars	December 2019	$	3,922	$	(915	)	$	3,007
	Long-term prepayments and other	4,491,350 Japanese Yen 9,419 Australian Dollars	December 2020	633		(292		)	341
Derivatives not designated as hedges
Foreign currency derivatives	Other accrued liabilities	832,900 Japanese Yen 2,785 Australian Dollars	March 2019	24		(140		)	(116		)
Fuel derivative contracts	Prepaid expenses and other	95,256 gallons	December 2019	1,572		—			1,572

Derivative positions as of December 31, 2017



	Balance Sheet Location	Notional Amount	Final Maturity Date	Gross fair value of assets		Gross fair value of (liabilities)			Net derivative position
		(in thousands)		(in thousands)
Derivatives designated as hedges
Foreign currency derivatives	Prepaid expenses and other	16,732,375 Japanese Yen 47,805 Australian Dollars	December 2018	$	3,737	$	(1,441	)	$	2,296
	Long-term prepayments and other	4,666,700 Japanese Yen 9,180 Australian Dollars	December 2019	546		(195		)	351
Derivatives not designated as hedges
Foreign currency derivatives	Other accrued liabilities	866,150 Japanese Yen 3,148 Australian Dollars	March 2018	17		(77		)	(60		)
Fuel derivative contracts	Prepaid expenses and other	94,332 gallons	December 2018	20,608		—			20,608

The following table reflects the impact of cash flow hedges designated for hedge accounting treatment and their location within the Consolidated Statements of Comprehensive Income.



	(Gain) Loss recognized in AOCI on derivatives (effective portion)								(Gain) Loss reclassified from AOCI into income (effective portion)								Gain recognized in nonoperating (income) expense (ineffective portion)
	Year ended December 31,								Year ended December 31,								Year ended December 31,
	2018			2017		2016			2018			2017			2016		2018		2017		2016
	(in thousands)
Foreign currency derivatives	$	(3,766	)	$	6,983	$	(3,350	)	$	(1,380	)	$	(2,391	)	$	196	$	—	$	—	$	—
Interest rate derivatives	—			—		923			—			—			944		—		—		—

Risk and Collateral

The financial derivative instruments expose the Company to possible credit loss in the event the counterparties to the agreements fail to meet their obligations. To manage such credit risks, the Company (1) selects its counterparties based on past experience and credit ratings, (2) limits its exposure to any single counterparty, and (3) periodically monitors the market position and credit rating of each counterparty. Credit risk is deemed to have a minimal impact on the fair value of the

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

derivative instruments as cash collateral would be provided to or by the counterparties based on the current market exposure of the derivative.

The Company's agreements with its counterparties also require the posting of cash collateral in the event the aggregate value of the Company's positions exceeds certain exposure thresholds. The aggregate fair value of the Company's derivative instruments that contain credit-risk related contingent features that are in a net asset position was $4.8 million and a net asset position of $23.2 million as of December 31, 2018 and December 31, 2017 , respectively.

ASC 815 requires a reporting entity to elect a policy of whether to offset rights to reclaim cash collateral or obligations to return cash collateral against derivative assets and liabilities executed with the same counterparty under a master netting agreement, or present such amounts on a gross basis. The Company's accounting policy is to present its derivative assets and liabilities on a net basis, including any collateral posted with the counterparty. The Company had no collateral posted with its counterparties as of December 31, 2018 and December 31, 2017 .

The Company is also subject to market risk in the event these financial instruments become less valuable in the market. However, changes in the fair value of the derivative instruments will generally offset the change in the fair value of the hedged item, limiting the Company's overall exposure.

7. Intangible Assets

The following tables summarize the gross carrying values of intangible assets less accumulated amortization, and the useful lives assigned to each asset.



	As of December 31, 2018
	Gross carrying value		Accumulated amortization			Net book value		Approximate useful life (years)
	(in thousands)
Favorable aircraft maintenance contracts	$	8,740	$	(8,284	)	$	456	14	^(*)
Trade name	13,500		—			13,500		Indefinite
Other	1,388		(1,195		)	193		3
Total intangible assets	$	23,628	$	(9,479	)	$	14,149



	As of December 31, 2017
	Gross carrying value		Accumulated amortization			Net book value		Approximate useful life (years)
	(in thousands)
Favorable aircraft maintenance contracts	$	8,740	$	(7,708	)	$	1,032	14	^(*)
Trade name	13,500		—			13,500		Indefinite
Other	1,388		(733		)	655		3
Total intangible assets	$	23,628	$	(8,441	)	$	15,187

_______________________________________________________________________________

(*) Weighted average is based on the gross carrying values and estimated useful lives as of June 2, 2005 (the date Hawaiian emerged from bankruptcy).

Amortization expense related to the above intangible assets was $1.0 million , $1.2 million , and $2.3 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. Amortization of the favorable aircraft maintenance contracts are included in maintenance materials and repairs in the accompanying Consolidated Statements of Operations. As of December 31, 2018 , the estimated future amortization expense for intangible assets was $0.6 million , which will be recognized in 2019 .

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

8. Debt

Long-term debt (including capital and financing lease obligations) net of unamortized discounts is outlined as follows:



	2018			2017
	(in thousands)
Class A EETC, fixed interest rate of 3.9%, semiannual principal and interest payments, remaining balance due at maturity in January 2026(1)	$	245,845		$	263,864
Class B EETC, fixed interest rate of 4.95%, semiannual principal and interest payments, remaining balance of due at maturity in January 2022(1)	88,608			94,580
Boeing 717-200 Aircraft Facility Agreements, fixed interest rate of 8%, monthly principal and interest payments, remaining balance due at maturity in June 2019(2)	50,376			74,629
Japanese Yen denominated financing, fixed interest rate of 1.05%, quarterly principal and interest payments, remaining balance due at maturity in May 2030	42,116			—
Japanese Yen denominated financing, fixed interest rate of 1.01%, semiannual principal and interest payments, remaining balance due at maturity in June 2030	40,815			—
Capital & Financing lease obligations (see Note 9)	252,517			149,039
Total debt, capital, and financing lease obligations	$	720,277		$	582,112
Less:
Unamortized debt discount and debt issuance costs	(10,496		)	(11,441		)
Current maturities	(101,097		)	(59,470		)
Long-Term Debt, less discount, Capital, and Financing Lease Obligations	$	608,684		$	511,201

_______________________________________________________________________________

(1) The equipment notes underlying these EETCs are the direct obligations of Hawaiian.

(2) Aircraft Facility Agreements are secured by aircraft.

Enhanced Equipment Trust Certificates (EETC)

In 2013, Hawaiian consummated an EETC financing, whereby it created two pass-through trusts, each of which issued pass-through certificates. The proceeds of the issuance of the pass-through certificates were used to purchase equipment notes issued by the Company to fund a portion of the purchase price for six Airbus aircraft, all of which were delivered in 2013 and 2014. The equipment notes are secured by a lien on the aircraft, and the payment obligations of Hawaiian under the equipment notes will be fully and unconditionally guaranteed by the Company. The Company issued the equipment notes to the trusts as aircraft were delivered to Hawaiian. Hawaiian received all proceeds from the pass-through trusts by 2014 and recorded the debt obligation upon issuance of the equipment notes rather than upon the initial issuance of the pass-through certificates.

The Company evaluated whether the pass-through trusts formed are variable interest entities ("VIEs") required to be consolidated by the Company under applicable accounting guidance, and determined that the pass-through trusts are VIEs. The Company determined that it does not have a variable interest in the pass-through trusts. Neither the Company nor Hawaiian invested in or obtained a financial interest in the pass-through trusts. Rather, Hawaiian has an obligation to make interest and principal payments on it equipment notes held by the pass-through trusts, which are fully and unconditionally guaranteed by the Company. Neither the Company nor Hawaiian intends to have any voting or non-voting equity interest in the pass-through trusts or to absorb variability from the pass-through trusts. Based on this analysis, the Company determined that it is not required to consolidate the pass-through trusts.

Foreign Denominated Financing

In 2018, the Company entered into two Japanese Yen denominated financings with a total value of approximately $86.5 million ( ¥9.6 billion ), collateralized by the aircraft financed. Each financing is for a term of 12 years with quarterly or semiannual principal and interest payments, respectively, at fixed installment coupon rates of 1.01% and 1.05% , respectively. The fluctuation in foreign exchange rates at each balance sheet date is reflected within the nonoperating income (expense) line item

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

in the Consolidated Statements of Operations. During 2018, the Company recorded foreign currency unrealized losses of $0.4 million.

Debt Extinguishment

In 2018 and 2017, the Company had no debt extinguishment activity. In 2016, Hawaiian extinguished $140.5 million of its existing debt under secured financing agreements, which were originally scheduled to mature in 2022 and 2023. This debt extinguishment resulted in a loss of $10.0 million , which is reflected in nonoperating income (expense) in the Consolidated Statement of Operations.

Revolving Credit Facility

In December 2018, Hawaiian amended and restated the existing credit agreement with Citigroup Global Markets Inc., increasing the secured revolving credit and letter (Revolving Credit Facility) from $225 million to $235 million . This Revolving Credit Facility will mature in December 2022 and has a 12 -month renewal option. This was accounted for as a modification of the existing agreement and approximately $0.6 million in unamortized costs will be amortized over the amended term along with additional issuance costs for the renewal of $2.0 million . Hawaiian may, from time to time, grant liens on certain eligible account receivables, aircraft, spare engines, ground support equipment and route authorities, as well as cash and certain cash equivalents, in order to secure its outstanding obligations under the Revolving Credit Facility. Indebtedness under the Revolving Credit Facility will bear interest, at a per annum rate based on, at Hawaiian's option: (1) a variable rate equal to the London interbank offer rate plus a margin of 2.0% ; or (2) Alternate base rate (as defined in the Revolving Credit Facility) plus a margin of 1.0% . Hawaiian is also subject to compliance and liquidity covenants under the Revolving Credit Facility. As of December 31, 2018 , the Company had no outstanding borrowing under the Revolving Credit Facility.

Schedule of Maturities of Long-Term Debt

As of December 31, 2018 , the scheduled maturities of long-term debt are as follows (in thousands):



2019	$	81,075
2020	29,597
2021	56,557
2022	63,665
2023	28,466
Thereafter	208,400
	$	467,760

9. Leases

As of December 31, 2018 , the Company had lease contracts for 22 of its 66 aircraft. Of the 22 lease contracts, 5 aircraft lease contracts were accounted for as capital leases, with the remaining 17 lease contracts accounted for as operating leases. These aircraft leases have remaining lease terms ranging from approximately less than 1 year to 10 years .

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

As of December 31, 2018 , the scheduled future minimum rental payments under capital leases and operating leases with non-cancellable basic terms of more than one year are as follows:



	Capital & Financing Leases						Operating Leases
	Aircraft			Other			Aircraft		Other
	(in thousands)
2019	$	24,850		$	7,909		$	106,448	$	5,730
2020	24,850			5,908			90,417		5,709
2021	24,850			4,630			74,315		5,846
2022	24,705			4,870			68,208		5,930
2023	21,370			8,207			59,925		5,975
Thereafter	75,891			111,651			159,271		89,699
	196,516			143,175			$	558,584	$	118,889
Less amounts representing interest	(35,502		)	(51,672		)
Present value of minimum capital & financing lease payments	$	161,014		$	91,503

Maintenance Hangar

In November 2016, the Company entered into a lease agreement with the Department of Transportation of the State of Hawai'i to lease a cargo and maintenance hangar at the Daniel K. Inouye International Airport with a lease term of 35 years. As the hangar was not fully constructed, the Company took responsibility of the construction and was responsible for the remainder of the construction costs of $33.3 million . In accordance with the applicable accounting guidance, specifically as it relates to the Company's involvement in the construction of the hangar, the Company was considered the owner of the asset under construction and has recognized an additional $73.0 million asset, with a corresponding lease liability, for the amount previously spent by the lessor.

The Company placed the hangar into service in late 2017. The $73.0 million liability is relieved as the Company makes rental payments under the agreement and the $106.3 million asset (the original $73.0 million plus an additional $33.3 million of asset additions), is depreciated over the lease term.

10. Income Taxes

On December 22, 2017, the Tax Act was enacted into law, which significantly changed existing U.S. tax law and reduced the U.S. federal corporate tax from 35% to 21%. The Company recognized a one-time benefit of $83.0 million during the year ended December 31, 2017 from the impact of the revaluation of deferred tax assets and liabilities. During the year ended December 31, 2018 , the Company completed its accounting for the effects of the Tax Act and recorded an additional tax benefit of $9.3 million primarily related to deductions for additional pension contributions made in 2018 for the 2017 Plan year.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The significant components of income tax expense are as follows:



	Years Ended December 31,
	2018		2017			2016
	(in thousands)
Current
Federal	$	23,438	$	49,835		$	94,459
State	9,087		11,471			13,201
	$	32,525	$	61,306		$	107,660
Deferred
Federal	$	29,782	$	(7,017	)	$	25,948
State	5,651		5,922			3,491
	$	35,433	$	(1,095	)	$	29,439
Income tax expense	$	67,958	$	60,211		$	137,099

The income tax expense differed from amounts computed at the statutory federal income tax rate as follows:



	Years Ended December 31,
	2018			2017			2016
	(in thousands)
Income tax expense computed at the statutory federal rate	$	63,243		$	136,788		$	126,427
Increase (decrease) resulting from:
State income taxes, net of federal tax effect	11,643			11,095			10,714
Nondeductible meals	797			1,146			1,100
Tax Cuts and Jobs Act impact	(9,333		)	(82,978		)	—
Excess tax benefits from stock issuance	(188		)	(5,288		)	—
Other	1,796			(552		)	(1,142		)
Income tax expense	$	67,958		$	60,211		$	137,099

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income (including the reversal of deferred tax liabilities) during the periods in which those deferred tax assets will become deductible. The Company's management assesses the realizability of its deferred tax assets, and records a valuation allowance when it is more likely than not that a portion, or all, of the deferred tax assets will not be realized.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The components of the Company's deferred tax assets and liabilities were as follows:



	December 31,
	2018			2017
	(in thousands)
Deferred tax assets:
Accumulated pension and other postretirement benefits	$	45,663		$	54,784
Leases	3,515			4,490
Air traffic liability and frequent flyer liability	70,206			53,102
Partnership deferred revenue	9,697			2,455
State net operating loss carryforwards	2,547			2,547
Accrued compensation	15,843			7,627
Other accrued assets	11,758			11,661
Fuel derivative contracts	2,390			2,156
Other assets	14,031			10,187
Total gross deferred tax assets	175,650			149,009
Less: Valuation allowance	(2,547		)	(2,547		)
Net deferred tax assets	$	173,103		$	146,462
Deferred tax liabilities:
Intangible assets	$	(3,297	)	$	(3,432	)
Property and equipment, principally accelerated depreciation	(324,614		)	(265,293		)
Other liabilities	(12,962		)	(11,878		)
Total deferred tax liabilities	(340,873		)	(280,603		)
Net deferred tax liability	$	(167,770	)	$	(134,141	)

As of December 31, 2018 and 2017, the Company had available for state income tax purposes net operating loss carryforwards of $73.3 million , respectively. The tax benefit of the net operating loss carryforwards as of December 31, 2018 was $2.5 million , all of which has a valuation allowance.

In accordance with ASC 740, the Company reviews its uncertain tax positions on an ongoing basis. The Company may be required to adjust its liability as these matters are finalized, which could increase or decrease its income tax expense and effective income tax rates or result in an adjustment to the valuation allowance. The Company does not expect that the unrecognized tax benefit related to uncertain tax positions will significantly change within the next 12 months.

The table below reconciles beginning and ending amounts of unrecognized tax benefits related to uncertain tax positions:



	2018		2017		2016
	(in thousands)
Balance at January 1	$	4,081	$	3,329	$	—
Increases related to prior year tax positions	336		253		2,830
Increases related to current year tax positions	669		499		499
Balance at December 31	$	5,086	$	4,081	$	3,329

The Company's policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes. No interest or penalties related to these positions were accrued as of December 31, 2018 .

The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The Company's federal and state income tax returns for tax years 2015 and beyond remain subject to examination by the Internal Revenue Service.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

11. Contract Terminations Expense and Special Items

Contract terminations expense and special items in the statements of consolidated operations consisted of the following:



	Year Ended December 31,
	2018		2017		2016
	(in thousands)
Operating
Contract terminations expense ⁽¹⁾	$	35,322	$	—	$	—
Operating special items:
Loss on sale of aircraft ⁽³⁾	—		4,771		—
Collective bargaining agreement ⁽⁴⁾⁽⁶⁾	—		18,679		38,781
Impairment charge in connection with its owned Boeing 767-300 fleet and related assets ⁽⁵⁾	—		—		49,361
Termination of Boeing 767-300 engine maintenance contract ⁽⁷⁾	—		—		21,000
Total Contract terminations expense and Operating special items	$	35,322	$	23,450	$	109,142
Nonoperating
Other nonoperating special items:
Partial settlement and curtailment loss ⁽²⁾	$	—	$	10,384	$	—
Loss on plan termination ⁽²⁾	—		35,201		—
Total Other nonoperating special items	$	—	$	45,585	$	—

Contract terminations expense

(1) During the twelve months ended December 31, 2018, the Company terminated two contracts which incurred a total of $35.3 million in contract terminations expense. The transactions are described below:

In February 2018, the Company exercised its right to terminate the aircraft purchase agreement between the Company and Airbus for six Airbus A330-800neo aircraft and the purchase rights for an additional six Airbus A330-800neo aircraft. To terminate the purchase agreement, the Company was obligated to repay Airbus for concessions received relating to a prior firm order, training credits, as well as forfeit the pre-delivery progress payments made towards the flight equipment. The Company recorded a contract terminations expense to reflect a portion of the termination penalty within the Consolidated Statements of Operations.

In January 2018, the Company entered into a transaction with its lessor to early terminate and purchase three Boeing 767-300 aircraft leases and concurrently entered into a forward sale agreement for the same three Boeing 767-300 aircraft, including two Pratt & Whitney 4060 engines for each aircraft. These aircraft were previously accounted for as operating leases. In order to exit the lease and purchase the aircraft, the Company agreed to pay a total of $67.1 million (net of all deposits) of which a portion was expensed immediately and recognized as a contract termination fee. The expensed amount represents the total purchase price amount over fair value of the aircraft purchased as of the date of the transaction.

Special items

(2) In August 2017, the Company terminated the Hawaiian Airlines, Inc. Salaried & IAM Merged Pension Plan (the Merged Plan) and settled a portion of its pilots' other post-retirement medical plan liability. In connection with the reduction of these liabilities, the Company recorded one-time Other nonoperating special charges of $35.2 million related to the Merged Plan termination and $10.4 million related to the other post-retirement (OPEB) medical plan partial settlement.

(3) In April 2017, the Company executed a sale leaseback transaction with an independent third party for three Boeing 767-300 aircraft. The lease terms for the three aircraft commenced in April 2017 and end between November 2018 through January 2019. During the twelve months ended December 31, 2017, the Company recorded a loss on sale of aircraft of $4.8 million .

(4) In February 2017, the Company reached a tentative agreement with ALPA, covering the Company's pilots. In March 2017, the Company received notice from ALPA that the agreement was ratified by ALPA's members. The agreement became effective April 1, 2017 and has a term of 63 months. The agreement includes, among other various benefits, a pay adjustment and ratification bonus computed based on previous service. During the twelve months ended December 31, 2017, the Company

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

expensed $18.7 million principally related to a one-time payment to reduce the Company's future 401K employer contribution for certain pilot groups, which is not recoverable once paid.

(5) The impairment analysis and ultimate charge was triggered by the decision in the fourth quarter of 2016 to exit the Boeing 767-300 fleet in 2018. The early exit of the Boeing 767-300 fleet was made possible by the Company's decision to acquire one Airbus A330-200 (delivered in 2017), lease two additional Airbus A321neo's (delivered in 2018 and in addition to the Company's existing aircraft orders), and the Company's ability to early terminate its long-term power-by-the-hour maintenance contract for the Boeing 767-300 fleet. This fleet change allows the Company to streamline the fleet, simplify operations, and potentially reduce costs in the future. In order to assess whether there was an impairment of the Boeing 767-300 asset group, the Company compared the projected undiscounted cash flows of the fleet to the book value of the assets and determined the book value was in excess of the undiscounted cash flows. The Company estimated the fair value of the owned Boeing 767-300 fleet assets using third party pricing information and quotes from potential buyers, which resulted in a $49.4 million impairment charge ( $0.92 per diluted share). The Company's determination of fair value considered attributes specific to the owned Boeing 767-300 fleet and aircraft condition (e.g. age, maintenance requirements, cycles, etc.).

(6) In 2016, the Company accrued $34.0 million associated with the tentative agreement with ALPA related to past service (prior to January 1, 2017) and also elected to pay a $4.8 million profit sharing bonus payment to other labor groups related to prior period service.

(7) In connection with the decision to exit the Boeing 767-300 fleet, the Company negotiated a termination of its Boeing 767-300 maintenance agreement and recorded a $21.0 million charge related to the amount paid to terminate the contract.

12. Employee Benefit Plans

Defined Benefit Plans

Hawaiian sponsors a defined benefit pension plan covering the Air Line Pilots Association (ALPA) and prior to August 2017, sponsored the defined benefit pension plans for the International Association of Machinists and Aerospace Workers (AFL-CIO) (IAM) and other personnel (salaried, Transport Workers Union, Network Engineering Group). The plans for the IAM and other employees were frozen in September 1993. Effective January 1, 2008, benefit accruals for pilots under age 50 as of July 1, 2005 were frozen (with the exception of certain pilots who were both age 50 and older and participants of the plan on July 1, 2005) and Hawaiian began making contributions to an alternate defined contribution retirement program for its pilots. All of the pilots' accrued benefits under their defined benefit plan at the date of the freeze were preserved. In addition, Hawaiian sponsors four unfunded defined benefit postretirement medical and life insurance plans and a separate plan to administer the pilots' disability benefits.

In 2016, the Hawaiian Airlines, Inc. Pension Plan for Salaried Employees (Salaried Plan) was consolidated into the Hawaiian Airlines, Inc. Pension Plan for Employees Represented by the International Association of Machinists (IAM), which established the Hawaiian Airlines, Inc. Salaried & IAM Merged Pension Plan (the Merged Plan). At that time, the net liabilities of the Salaried Plan were transferred to the Merged Plan. In August 2017, the Company completed the termination of the plan by transferring the assets and liabilities to a third-party insurance company. In 2017, the Company contributed a total of $18.5 million in cash to fully fund the plan and recognized a one-time financial loss of $35.2 million as an Other nonoperating special item on the Company's Consolidated Statement of Operations. The Company no longer has any expected contributions to the Merged Plan due to the final settlement.

In March 2017, the Company announced the ratification of a 63 -month contract amendment with its pilots as represented by the Air Line Pilots Association (ALPA). In connection with the ratification of the agreement, the parties agreed to eliminate the post-65 post-retirement medical benefit for all active pilots, and replace the benefit with a heath retirement account (HRA) managed by ALPA, which represented a curtailment and partial settlement of the pilots' other post-retirement benefit plan. In August 2017, the Company made a one-time cash payment of $101.9 million to fund the HRA and settle the post-65 post-retirement medical plan obligation (for active pilots as of April 1, 2017). The cash contributed was distributed to the trust funding the individual health retirement notional accounts of the participants. In connection with the settlement of the liability, the discount rate was updated to 3.86% . The Company recognized a one-time settlement loss of $10.4 million . The obligation recorded for the unsettled portion of this plan was $73.4 million as of the partial settlement date.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The following tables summarize changes to projected benefit obligations, plan assets, funded status and applicable amounts included in the Consolidated Balance Sheets:



	2018						2017
	Pension			Other			Pension			Other
	(in thousands)
Change in benefit obligations
Benefit obligations, beginning of year	$	(426,066	)	$	(120,417	)	$	(462,762	)	$	(224,316	)
Service cost	(352		)	(8,119		)	(480		)	(12,403		)
Interest cost	(15,599		)	(4,708		)	(18,042		)	(8,022		)
Actuarial gains (losses)	22,677			6,007			(42,775		)	17,484
Benefits paid	21,253			4,639			23,999			4,587
Less: federal subsidy on benefits paid	N/A			(50		)	N/A			(57		)
Plan amendments	—			—			—			381
Settlements	—			—			73,994			101,929
Benefit obligation at end of year ^(a)	$	(398,087	)	$	(122,648	)	$	(426,066	)	$	(120,417	)
Change in plan assets
Fair value of assets, beginning of year	$	296,386		$	26,078		$	302,982		$	24,751
Actual return on plan assets	(17,339		)	(1,697		)	42,652			2,629
Employer contribution	50,230			6,621			48,745			3,285
Benefits paid	(21,253		)	(4,639		)	(23,999		)	(4,587		)
Settlements	—			—			(73,994		)	—
Fair value of assets at end of year	$	308,024		$	26,363		$	296,386		$	26,078
Unfunded status at December 31	$	(90,063	)	$	(96,285	)	$	(129,680	)	$	(94,339	)
Amounts recognized in the statement of financial position consist of:
Current benefit liability	$	(386	)	$	(3,342	)	$	(214	)	$	(3,017	)
Noncurrent benefit liability	(89,677		)	(92,943		)	(129,466		)	(91,322		)
	$	(90,063	)	$	(96,285	)	$	(129,680	)	$	(94,339	)
Amounts recognized in accumulated other comprehensive loss
Unamortized actuarial loss (gain)	$	124,560		$	(15,606	)	$	112,417		$	(13,521	)
Prior service cost (credit)	—			1,737			—			1,962
	$	124,560		$	(13,869	)	$	112,417		$	(11,559	)

_______________________________________________________________________________


(a)	The accumulated pension benefit obligation as of December 31, 2018 and 2017 was $397.5 million and $424.2 million , respectively.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The following table sets forth the net periodic benefit cost:



	2018						2017						2016
	Pension			Other			Pension			Other			Pension			Other
	(in thousands)
Components of Net Periodic Benefit Cost
Service cost	$	352		$	8,119		$	480		$	12,403		$	681		$	13,618
Other cost:
Interest cost	15,599			4,708			18,042			8,022			19,969			10,227
Expected return on plan assets	(20,948		)	(1,413		)	(17,291		)	(1,106		)	(16,746		)	(1,137		)
Recognized net actuarial loss (gain)	3,482			(774		)	9,033			(241		)	7,526			204
Prior service cost (credit)	—			225			(28		)	282			(2		)	229
Total other components of the net periodic benefit cost	$	(1,867	)	$	2,746		$	9,756		$	6,957		$	10,747		$	9,523
Settlement and curtailment loss	—			—			35,201			10,384			—			—
Net periodic benefit cost	$	(1,515	)	$	10,865		$	45,437		$	29,744		$	11,428		$	23,141
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss
Current year actuarial (gain) loss	$	15,625		$	(2,858	)	$	17,414		$	(18,972	)	$	25,559		$	(7,677	)
Current year prior service cost	—			—			—			(381		)	(932		)	—
Amortization of actuarial gain (loss)	(3,482		)	774			(9,033		)	241			(7,526		)	(204		)
Amortization of prior service credit (cost)	—			(225		)	28			(282		)	2			(229		)
Settlement and curtailment loss	—			—			(35,201		)	(10,384		)	—			—
Total recognized in other comprehensive loss	$	12,143		$	(2,309	)	$	(26,792	)	$	(29,778	)	$	17,103		$	(8,110	)
Total recognized in net periodic benefit cost and other comprehensive loss	$	10,628		$	8,556		$	18,645		$	(34	)	$	28,531		$	15,031

The weighted average actuarial assumptions used to determine the net periodic benefit expense and the projected benefit obligation were as follows:



	Pension						Postretirement				Disability
	2018			2017			2018		2017		2018			2017
Discount rate to determine net periodic benefit expense	3.70	%		4.19	%		3.71	%	4.29	%	3.72	%		4.24	%
Discount rate to determine projected benefit obligation	4.35	%		3.70	%		4.36	%	3.71	%	4.39	%		3.72	%
Expected return on plan assets	7.33	%	^**	6.34	%		N/A		N/A		4.90	%	^**	4.60	%
Rate of compensation increase	Various		^*	Various		^*	N/A		N/A		Various		^*	Various		^*
Health care trend rate to determine net periodic benefit expense	N/A			N/A			7.25	%	7.75	%	N/A			N/A
Ultimate trend rate	N/A			N/A			4.75	%	7.25	%	N/A			N/A
Years to reach ultimate trend rate	N/A			N/A			5		6		N/A			N/A
Health care trend rate to determine projected benefit obligation	N/A			N/A			6.75	%	7.25	%	N/A			N/A
Ultimate trend rate	N/A			N/A			4.75	%	4.75	%	N/A			N/A
Years to reach ultimate trend rate	N/A			N/A			4		5		N/A			N/A

_______________________________________________________________________________

* Differs for each pilot based on current fleet and seat position on the aircraft and seniority service. Negotiated salary increases and expected changes in fleet and seat positions on the aircraft are included in the assumed rate of compensation increase, which ranged from 2.0% to 7.3% in both 2018 and 2017 ).

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

** Expected return on plan assets used to determine the net periodic benefit expense for 2019 is 6.91% for Pension and 4.90% for Disability.

A change in the assumed health care cost trend rates would have the following effects:



	100 Basis Point Increase		100 Basis Point Decrease
	(in thousands)
Effect on postretirement benefit obligation at December 31, 2018	$	8,048	$	(6,916	)
Effect on total service and interest cost for the year ended December 31, 2018	892		(744		)

Estimated amounts that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2019 are as follows:



	Pension		Other
	(in thousands)
Actuarial (gain) loss	$	4,031	$	(707	)
Amortization of prior service cost	—		225
To be recognized in net periodic benefit cost from accumulated other comprehensive (gain) loss	$	4,031	$	(482	)

Plan Assets

The Company develops the expected long-term rate of return assumption based on historical experience and by evaluating input from the trustee managing the plan's assets, including the trustee's review of asset class return expectations by several consultants and economists, as well as long-term inflation assumptions. The Company's expected long-term rate of return on plan assets is based on a target allocation of assets, which is based on the goal of earning the highest rate of return while maintaining risk at acceptable levels. The Retirement Plan for Pilots of Hawaiian Airlines, Inc. and the Pilot's Voluntary Employee Beneficiary Association Disability and Survivor's Benefit Plan (VEBA) strive to have assets sufficiently diversified so that adverse or unexpected results from any one security class will not have an unduly detrimental impact on the entire portfolio. Prior to termination, the Merged Plan targeted to have its assets align with the potential liability as of the expected settlement date. The actual allocation of the Company's pension and disability plan assets and the target allocation of assets by category at December 31, 2018 are as follows:



	Asset Allocation for Pilots pension and VEBA Plans
	2018		Target
Equity securities	57	%	60	%
Fixed income securities	39	%	35	%
Real estate investment trusts	4	%	5	%
	100	%	100	%

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The table below presents the fair value of the Company's pension plan and other postretirement plan investments (excluding cash and receivables):



	Fair Value Measurements as of December 31,
	2018		2017
	(in thousands)
Pension Plan Assets:
Equity index funds	$	175,583	$	177,252
Fixed income funds	110,650		100,504
Real estate investment fund	14,718		14,587
Insurance company pooled separate account	7,076		4,044
Total	$	308,027	$	296,387
Postretirement Assets:
Common collective trust fund	$	26,217	$	25,973

The fair value of the investments in the table above have been estimated using the net asset value per share, and in accordance with subtopic ASC 820-10, Fair Value Measurement and Disclosures , are not required to be presented in the fair value hierarchy.

Equity index funds. The investment objective of these funds are to obtain a reasonable rate of return while investing principally or entirely in foreign or domestic equity securities. There are currently no redemption restrictions on these investments.

Fixed income funds. The investment objective of these funds are to obtain a reasonable rate of return while principally investing in foreign and domestic bonds, mortgage-backed securities, and asset-backed securities. There are currently no redemption restrictions on these investments.

Real estate investment fund. The investment objective of this fund is to obtain a reasonable rate of return while principally investing in real estate investment trusts. There are currently no redemption restrictions on these investments.

Insurance Company Pooled Separate Account. The investment objective of the Insurance Company Pooled Separate Account is to invest in short-term cash equivalent securities to provide a high current income consistent with the preservation of principal and liquidity.

Common collective trust (CCT). The postretirement plan's CCT investment consists of a balanced profile fund and a conservative profile fund. These funds primarily invest in mutual funds and exchange-traded funds. The balanced profile fund is designed for participating trusts that seek substantial capital growth, place modest emphasis on short-term stability, have long-term investment objectives, and accept short-term volatility in the value of the fund's portfolio. The conservative profile fund is designed for participating trusts that place modest emphasis on capital growth, place moderate emphasis on short-term stability, have intermediate-to-long-term investment objectives, and accept moderate short-term volatility in the value of the fund's portfolio. There are currently no redemption restrictions on these investments.

Based on current legislation and current assumptions, the contribution that the Company expects to have a minimum contribution requirement of nil for 2019 . The Company projects that Hawaiian's pension plans and other postretirement benefit plans will make the following benefit payments, which reflect expected future service, during the years ending December 31:

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)



			Other Benefits
	Pension Benefits		Gross		Expected Federal Subsidy
	(in thousands)
2019	$	23,343	$	5,254	$	(47	)
2020	24,471		6,040		(51		)
2021	25,252		6,848		(54		)
2022	25,730		7,425		(56		)
2023	26,189		8,051		(58		)
2024 - 2028	132,395		47,804		(304		)
	$	257,380	$	81,422	$	(570	)

Defined Contribution Plans

The Company also sponsors separate defined contribution plans for its pilots, flight attendants and ground, and salaried personnel. Contributions to the Company's defined contribution plans were $42.0 million , $39.1 million and $31.6 million for the years ended December 31, 2018 , 2017 and 2016 , respectively.

13. Capital Stock and Share-based Compensation

Common Stock

The Company has one class of common stock issued and outstanding. Each share of common stock is entitled to one vote per share.

Special Preferred Stock

The IAM, AFA, and ALPA each hold one share of Special Preferred Stock, which entitles each union to nominate one director to the Company's Board of Directors. In addition, each series of the Special Preferred Stock, unless otherwise specified: (i) ranks senior to the Company's common stock and ranks pari passu with each other series of Special Preferred Stock with respect to liquidation, dissolution and winding up of the Company and will be entitled to receive $0.01 per share before any payments are made, or assets distributed to holders of any stock ranking junior to the Special Preferred Stock; (ii) has no dividend rights unless a dividend is declared and paid on the Company's common stock, in which case the Special Preferred Stock would be entitled to receive a dividend in an amount per share equal to two times the dividend per share paid on the common stock; (iii) is entitled to one vote per share of such series and votes with the common stock as a single class on all matters submitted to holders of the Company's common stock; and (iv) automatically converts into the Company's common stock on a 1 :1 basis, at such time as such shares are transferred or such holders are no longer entitled to nominate a representative to the Company's Board of Directors pursuant to their respective collective bargaining agreements.

Dividends

The Company paid dividends of $24.2 million and $6.3 million during the years ended December 31, 2018 and 2017 , respectively, and no dividends were paid by the Company during year ended December 31, 2016 . In February 2019, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.12 per share payable on February 22, 2019 , to stockholders of record as of February 8, 2019 . The Company's dividend payments may change from time to time. The Company cannot provide assurance that it will continue to declare dividends for any fixed period and payment of dividends may be suspended at any time at its discretion.

Stock Repurchase Program

In November 2017, the Company's Board of Directors approved the repurchase of up to $100 million of its outstanding common stock over a two -year period through December 2019 via the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules and regulations, which was completed in December 2018. In November 2018, the Company's Board of Directors approved a new stock repurchase program pursuant to which the Company

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

may repurchase up to an additional $100 million of its outstanding common stock over a two -year period through December 2020. The stock repurchase program is subject to modification or termination at any time.

In 2018 , the Company spent $102.5 million to repurchase approximately 2.8 million shares of the Company's common stock in open market transactions, completing its November 2017 repurchase authorization. In 2017 , the Company spent $100.0 million to repurchase approximately 2.5 million shares of the Company's common stock in open market transactions. As of December 31, 2018 , the Company has $97.5 million remaining to spend under its stock repurchase program. See Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of this report for additional information on the stock repurchase program.

Share-Based Compensation

Total share-based compensation expense recognized by the Company under ASC 718 was $5.3 million , $7.3 million and $8.4 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. As of December 31, 2018 , $5.4 million of share-based compensation expense related to unvested stock options and other stock awards (inclusive of $0.4 million for stock awards granted to non-employee directors) attributable to future performance and has not yet been recognized. The related expense will be recognized over a weighted average period of approximately 1.3 years.

Performance-Based Stock Awards

During 2018 , the Company granted performance-based stock awards covering 83,293 shares of common stock (the Target Award) with a maximum payout of 166,586 shares of common stock (the Maximum Award) to employees pursuant to the Company's 2015 Stock Incentive Plan. These awards vest over a three year period. The Company valued the performance-based stock awards using grant date fair values equal to the Company's share price on the measurement date.

The following table summarizes information about performance-based stock awards:



	Number of units		Weighted average grant date fair value
Non-vested at January 1, 2016	678,742		$	10.53
Granted	117,849		33.94
Vested	(349,403	)	7.32
Forfeited	(24,891	)	13.45
Non-vested at December 31, 2016	422,297		$	14.00
Granted	355,897		43.51
Vested	(358,619	)	12.71
Forfeited	(37,619	)	27.60
Non-vested at December 31, 2017	381,956		$	28.03
Granted	160,348		39.09
Vested	(211,053	)	26.28
Forfeited	(69,399	)	39.42
Non-vested at December 31, 2018	261,852		$	33.01

In 2018 , there were 77,055 additional shares from a prior year grant that the performance metric was achieved and vested, thus included in the 2018 amounts. The fair value of performance-based stock awards vested in the years ended December 31, 2018 , 2017 and 2016 was $8.2 million , $17.9 million and $11.3 million , respectively. Fair value of the awards are based on the stock price on date of vest.

Service-Based Stock Awards

During 2018 , the Company awarded 128,617 service-based stock awards to employees and non-employee directors, pursuant to the Company's 2015 Stock Incentive Plan. These stock awards vest over one , two , or three year periods and have a grant date fair value equal to the Company's share price on the measurement date.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

The following table summarizes information about outstanding service-based stock awards:



	Number of units		Weighted average grant date fair value
Non-vested at January 1, 2016	270,721		$	15.02
Granted	110,276		37.08
Vested	(169,218	)	16.32
Forfeited	(16,330	)	20.46
Non-vested at December 31, 2016	195,449		$	24.29
Granted	22,898		49.95
Vested	(110,575	)	23.80
Forfeited	(16,394	)	26.71
Non-vested at December 31, 2017	91,378		$	28.12
Granted	128,617		38.71
Vested	(68,803	)	38.98
Forfeited	(8,241	)	38.03
Non-vested at December 31, 2018	142,951		$	38.77

The fair value of service-based stock awards vested in 2018 , 2017 , and 2016 was $2.7 million , $5.6 million and $6.1 million , respectively. Fair value of the awards are based on the stock price on date of vest.

14. Commitments and Contingent Liabilities

Commitments

The Company has commitments with a third-party to provide aircraft maintenance services which include fixed payments as well as variable payments based on flight hours for the Company's Airbus fleet through 2027. The Company also has commitments with third-party service providers for reservations, IT, and accounting services through 2024. Committed capital and other expenditures include escalation and variable amounts based on estimated forecasts.

The gross committed expenditures for upcoming aircraft deliveries and other commitments for the next five years and thereafter are detailed below:



	Aircraft and aircraft related		Other		Total Committed Expenditures
	(in thousands)
2019	$	330,089	$	74,621	$	404,710
2020	162,270		69,729		231,999
2021	303,184		66,104		369,288
2022	431,210		58,499		489,709
2023	236,639		53,357		289,996
Thereafter	477,788		164,846		642,634
	$	1,941,180	$	487,156	$	2,428,336

As of December 31, 2018 , the Company had the following capital commitments consisting of firm aircraft and engine orders and purchase rights:

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)



Aircraft Type	Firm Orders	Purchase Rights	Expected Delivery Dates
A321neo aircraft	7	3	Between 2019 and 2020
B787-9 aircraft	10	10	Between 2021 and 2025
Pratt & Whitney spare engines:
A321neo spare engines	1	2	In 2019
General Electric GEnx spare engines:
B787-9 spare engines	2	2	Between 2021 and 2025

In February 2018, the Company exercised its right to terminate its aircraft purchase agreement between the Company and Airbus for six Airbus A330-800neo aircraft and the purchase rights for an additional six Airbus A330-800neo aircraft. Refer to Note 11 below for discussion on the contract termination charge.

In July 2018, the Company entered into a purchase agreement for the purchase of ten Boeing 787-9 "Dreamliner" aircraft with purchase rights for an additional 10 aircraft with scheduled delivery from 2021 to 2025. In October 2018, the Company entered into a definitive agreement for the selection of GEnx engines to power its Boeing 787-9 fleet. The agreement provides for the purchase of 20 GEnx engines, the right to purchase an additional 20 GEnx engines and the purchase of up to four spare engines. In December 2018, the Company entered into an amendment to the purchase agreement with Boeing, which includes an option for the Company to accelerate delivery of B787-9 aircraft from 2024 and 2025 to 2023; however, the Company does not currently expect to execute the option to accelerate its planned delivery schedule. The committed expenditures under these agreements are reflected in the table above. The Company also intends to enter into additional related agreements in connection with the Boeing 787-9 purchases, including for the purchase of a flight simulator, spare parts and materials, and related services.

In order to complete the purchase of these aircraft and fund related costs, the Company may need to secure acceptable financing. The Company has backstop financing available from aircraft and engine manufacturers, subject to certain customary conditions. Financing may be necessary to satisfy our capital commitments for firm order aircraft and other related capital expenditures. The Company can provide no assurance that any financing not already in place for aircraft and spare engine deliveries will be available to us on acceptable terms when necessary or at all.

Litigation and Contingencies

The Company is subject to legal proceedings arising in the normal course of its operations. Management does not anticipate that the disposition of any currently pending proceeding will have a material effect on the Company's operations, business or financial condition.

General Guarantees and Indemnifications

In the normal course of business, the Company enters into numerous aircraft financing and real estate leasing arrangements that have various guarantees included in the contract. It is common in such lease transactions for the lessee to agree to indemnify the lessor and other related third-parties for tort liabilities that arise out of or relate to the lessee's use of the leased aircraft or occupancy of the leased premises. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by their gross negligence or willful misconduct. Additionally, the lessee typically indemnifies such parties for any environmental liability that arises out of or relates to its use of the real estate leased premises. The Company believes that it is insured (subject to deductibles) for most tort liabilities and related indemnities described above with respect to the aircraft and real estate that it leases. The Company cannot estimate the potential amount of future payments, if any, under the foregoing indemnities and agreements.

Credit Card Holdback

Under the Company's bank-issued credit card processing agreements, certain proceeds from advance ticket sales may be held back to serve as collateral to cover any possible chargebacks or other disputed charges that may occur. These holdbacks, which are included in restricted cash in the Company's Consolidated Balance Sheets, totaled $1.0 million at December 31, 2017 . As of December 31, 2018 , there were no holdbacks held with the Company's credit card processors.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

In the event of a material adverse change in the business, the holdback could increase to an amount up to 100% of the applicable credit card air traffic liability, which would also cause an increase in the level of restricted cash.

Labor Negotiations

As of December 31, 2018 , approximately 84% of employees were represented by unions. Additionally, the collective bargaining agreement for the Association of Flight Attendants (AFA), which represents 29% of employees became amendable on January 1, 2017, the Company is currently in negotiations with the AFA. The Company can provide no assurance that a successful or timely resolution of these labor negotiations will be achieved.

15. Supplemental Cash Flow Information

Supplemental disclosures of cash flow information and non-cash investing and financing activities were as follows:



	Year Ended December 31,
	2018		2017			2016
	(in thousands)
Cash payments for interest (net of amounts capitalized)	$	24,343	$	23,134		$	29,751
Cash payments for income taxes	16,063		65,812			92,934
Investing and Financing Activities Not Affecting Cash:
Property and equipment acquired through a capital or financing lease	119,530		72,996		*	6,092
Maintenance hangar project (see Note 9)	—		—			72,996		*

* Amount was reclassified from an other liability as of December 31, 2016 to a financing (lease) liability when completed and placed into service as of December 31, 2017.

16. Condensed Consolidating Financial Information

The following condensed consolidating financial information is presented in accordance with Regulation S-X paragraph 210.3-10 because, in connection with the issuance by two pass-through trusts formed by Hawaiian (which is also referred to in this Note 16 as Subsidiary Issuer / Guarantor) of pass-through certificates, as discussed in Note 8 , the Company (which is also referred to in this Note 16 as Parent Issuer / Guarantor), is fully and unconditionally guaranteeing the payment obligations of Hawaiian, which is a 100% owned subsidiary of the Company, under equipment notes to be issued by Hawaiian to purchase new aircraft.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Condensed consolidating financial statements are presented in the following tables:

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2018



	Parent Issuer / Guarantor			Subsidiary Issuer / Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Operating Revenue	$	—		$	2,827,215		$	10,601		$	(405	)	$	2,837,411
Operating Expenses:
Aircraft fuel, including taxes and delivery	—			599,544			—			—			599,544
Wages and benefits	—			684,719			—			—			684,719
Aircraft rent	—			125,883			78			—			125,961
Maintenance materials and repairs	—			233,503			6,256			—			239,759
Aircraft and passenger servicing	—			157,796			—			—			157,796
Commissions and other selling	(5		)	129,332			128			(140		)	129,315
Depreciation and amortization	—			134,651			5,215			—			139,866
Other rentals and landing fees	—			126,509			394			—			126,903
Purchased services	195			130,665			852			(61		)	131,651
Contract terminations expense	—			35,322			—			—			35,322
Other	6,527			142,125			3,759			(204		)	152,207
Total	6,717			2,500,049			16,682			(405		)	2,523,043
Operating Income (Loss)	(6,717		)	327,166			(6,081		)	—			314,368
Nonoperating Income (Expense):
Undistributed net income of subsidiaries	238,365			—			—			(238,365		)	—
Other nonoperating special items	—			—			—			—			—
Interest expense and amortization of debt discounts and issuance costs	(3		)	(32,861		)	(137		)	—			(33,001		)
Interest income	185			9,057			—			—			9,242
Capitalized interest	—			7,887			—			—			7,887
Other components of net periodic benefit cost	—			(825		)	—			—			(825		)
Gains on fuel derivatives	—			5,590			—			—			5,590
Other, net	(4		)	(2,117		)	18			—			(2,103		)
Total	238,543			(13,269		)	(119		)	(238,365		)	(13,210		)
Income (Loss) Before Income Taxes	231,826			313,897			(6,200		)	(238,365		)	301,158
Income tax expense (benefit)	(1,374		)	70,634			(1,302		)	—			67,958
Net Income (Loss)	$	233,200		$	243,263		$	(4,898	)	$	(238,365	)	$	233,200
Comprehensive Income (Loss)	$	227,834		$	237,897		$	(4,898	)	$	(232,999	)	$	227,834

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2017 ^(a)



	Parent Issuer / Guarantor			Subsidiary Issuer / Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Operating Revenue	$	—		$	2,667,435		$	8,102		$	(392	)	$	2,675,145
Operating Expenses:
Aircraft fuel, including taxes and delivery	—			440,383			—			—			440,383
Wages and benefits	—			632,997			—			—			632,997
Aircraft rent	—			137,289			475			—			137,764
Maintenance materials and repairs	—			215,473			4,080			—			219,553
Aircraft and passenger servicing	—			144,853			—			—			144,853
Commissions and other selling	84			126,674			129			(137		)	126,750
Depreciation and amortization	—			109,458			3,819			—			113,277
Other rentals and landing fees	—			116,763			—			—			116,763
Purchased services	478			109,436			933			(60		)	110,787
Special items	—			23,450			—			—			23,450
Other	5,393			137,494			1,838			(195		)	144,530
Total	5,955			2,194,270			11,274			(392		)	2,211,107
Operating Income (Loss)	(5,955		)	473,165			(3,172		)	—			464,038
Nonoperating Income (Expense):
Undistributed net income of subsidiaries	333,476			—			—			(333,476		)	—
Other nonoperating special items	—			(45,585		)	—			—			(45,585		)
Interest expense and amortization of debt discounts and issuance costs	—			(30,901		)	—			—			(30,901		)
Interest income	—			5,830			302			—			6,132
Capitalized interest	—			8,437			—			—			8,437
Other components of net periodic benefit cost	—			(16,713		)	—			—			(16,713		)
Gains on fuel derivatives	—			3,312			—			—			3,312
Other, net	—			2,101			—			—			2,101
Total	333,476			(73,519		)	302			(333,476		)	(73,217		)
Income (Loss) Before Income Taxes	327,521			399,646			(2,870		)	(333,476		)	390,821
Income tax expense (benefit)	(3,089		)	63,300			—			—			60,211
Net Income (Loss)	$	330,610		$	336,346		$	(2,870	)	$	(333,476	)	$	330,610
Comprehensive Income (Loss)	$	358,841		$	364,575		$	(2,870	)	$	(361,707	)	$	358,839

(a) Amounts adjusted due to the adoption of ASC No. 606, Revenue from Contracts with Customers . See Note 1 to Consolidated Financial Statements for additional information.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2016 ^(a)



	Parent Issuer / Guarantor			Subsidiary Issuer / Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Operating Revenue	$	—		$	2,426,479		$	6,297		$	(363	)	$	2,432,413
Operating Expenses:
Aircraft fuel, including taxes and delivery	—			344,322			—			—			344,322
Wages and benefits	—			535,264			—			—			535,264
Aircraft rent	—			124,521			44			—			124,565
Maintenance materials and repairs	—			225,707			3,337			—			229,044
Aircraft and passenger servicing	—			129,899			—			—			129,899
Commissions and other selling	72			122,717			124			(126		)	122,787
Depreciation and amortization	—			104,689			3,439			—			108,128
Other rentals and landing fees	—			108,087			—			—			108,087
Purchased services	149			95,450			660			(60		)	96,199
Special items	—			109,142			—			—			109,142
Other	5,300			121,104			1,262			(177		)	127,489
Total	5,521			2,020,902			8,866			(363		)	2,034,926
Operating Income (Loss)	(5,521		)	405,577			(2,569		)	—			397,487
Nonoperating Income (Expense):
Undistributed net income of subsidiaries	226,561			—			—			(226,561		)	—
Interest expense and amortization of debt discounts and issuance costs	117			(36,729		)	—			—			(36,612		)
Interest income	265			3,742			—			—			4,007
Capitalized interest	—			2,651			—			—			2,651
Other components of net periodic benefit cost	—			(20,270		)	—			—			(20,270		)
Gains on fuel derivatives	—			20,106			—			—			20,106
Loss on extinguishment of debt	—			(10,473		)	—			—			(10,473		)
Other, net	—			4,323			—			—			4,323
Total	226,943			(36,650		)	—			(226,561		)	(36,268		)
Income (Loss) Before Income Taxes	221,422			368,927			(2,569		)	(226,561		)	361,219
Income tax expense (benefit)	(2,698		)	139,797			—			—			137,099
Net Income (Loss)	$	224,120		$	229,130		$	(2,569	)	$	(226,561	)	$	224,120
Comprehensive Income (Loss)	$	219,903		$	224,914		$	(2,569	)	$	(222,344	)	$	219,904

(a) Amounts adjusted due to the adoption of ASC No. 606, Revenue from Contracts with Customers . See Note 1 to Consolidated Financial Statements for additional information.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Condensed Consolidating Balance Sheets

December 31, 2018



	Parent Issuer / Guarantor		Subsidiary Issuer / Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	5,154	$	255,279		$	8,144		$	—		$	268,577
Restricted cash	—		—			—			—			—
Short-term investments	—		232,241			—			—			232,241
Accounts receivable, net	—		109,499			2,569			(234		)	111,834
Spare parts and supplies, net	—		33,942			—			—			33,942
Prepaid expenses and other	165		58,296			112			—			58,573
Total	5,319		689,257			10,825			(234		)	705,167
Property and equipment at cost	—		2,756,551			92,021			—			2,848,572
Less accumulated depreciation and amortization	—		(648,111		)	(15,350		)	—			(663,461		)
Property and equipment, net	—		2,108,440			76,671			—			2,185,111
Long-term prepayments and other	62,990		185,161			899			(63,494		)	185,556
Deferred tax assets, net	—		—			—			—			—
Goodwill and other intangible assets, net	—		120,119			693			—			120,812
Intercompany receivable	—		456,338			—			(456,338		)	—
Investment in consolidated subsidiaries	1,325,380		—			—			(1,325,380		)	—
TOTAL ASSETS	$	1,393,689	$	3,559,315		$	89,088		$	(1,845,446	)	$	3,196,646
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	665	$	139,552		$	3,163		$	(234	)	$	143,146
Air traffic liability and current frequent flyer deferred revenue	—		598,387			5,349			—			603,736
Other accrued liabilities	—		157,842			312			—			158,154
Current maturities of long-term debt, less discount, and capital lease obligations	—		101,052			45			—			101,097
Total	665		996,833			8,869			(234		)	1,006,133
Long-term debt and capital lease obligations	—		604,089			4,595			—			608,684
Intercompany payable	445,030		—			11,308			(456,338		)	—
Other liabilities and deferred credits:
Accumulated pension and other postretirement benefit obligations.	—		182,620			—			—			182,620
Other liabilities and deferred credits	—		118,682			1,144			—			119,826
Noncurrent frequent flyer deferred revenue	—		163,619			—			—			163,619
Deferred tax liabilities, net	—		167,770			—			—			167,770
Total	—		632,691			1,144			—			633,835
Shareholders' equity	947,994		1,325,702			63,172			(1,388,874		)	947,994
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,393,689	$	3,559,315		$	89,088		$	(1,845,446	)	$	3,196,646

Table of Contents

Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Condensed Consolidating Balance Sheets

December 31, 2017 ^(a)



	Parent Issuer / Guarantor		Subsidiary Issuer / Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	57,405	$	125,861		$	7,687		$	—		$	190,953
Restricted cash	—		1,000			—			—			1,000
Short-term investments	—		269,297			—			—			269,297
Accounts receivable, net	25		139,008			1,455			(209		)	140,279
Spare parts and supplies, net	—		35,361			—			—			35,361
Prepaid expenses and other	171		78,933			82			—			79,186
Total	57,601		649,460			9,224			(209		)	716,076
Property and equipment at cost	—		2,326,249			74,562			—			2,400,811
Less accumulated depreciation and amortization	—		(546,831		)	(11,717		)	—			(558,548		)
Property and equipment, net	—		1,779,418			62,845			—			1,842,263
Long-term prepayments and other	—		193,449			183			—			193,632
Deferred tax assets, net	31,845		—			—			(31,845		)	—
Goodwill and other intangible assets, net	—		120,695			1,155			—			121,850
Intercompany receivable	—		392,791			—			(392,791		)	—
Investment in consolidated subsidiaries	1,137,941		—			—			(1,137,941		)	—
TOTAL ASSETS	$	1,227,387	$	3,135,813		$	73,407		$	(1,562,786	)	$	2,873,821
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	622	$	138,818		$	1,574		$	(209	)	$	140,805
Air traffic liability and current frequent flyer deferred revenue	—		584,366			4,727			—			589,093
Other accrued liabilities	32		147,211			350			—			147,593
Current maturities of long-term debt, less discount, and capital lease obligations	—		59,470			—			—			59,470
Total	654		929,865			6,651			(209		)	936,961
Long-term debt and capital lease obligations	—		511,201			—			—			511,201
Intercompany payable	381,608		—			11,183			(392,791		)	—
Other liabilities and deferred credits:
Accumulated pension and other postretirement benefit obligations.	—		220,788			—			—			220,788
Other liabilities and deferred credits	—		74,736			1,105						75,841
Noncurrent frequent flyer deferred revenue	—		149,764			—			—			149,764
Deferred tax liabilities, net	—		165,986			—			(31,845		)	134,141
Total	—		611,274			1,105			(31,845		)	580,534
Shareholders' equity	845,125		1,083,473			54,468			(1,137,941		)	845,125
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,227,387	$	3,135,813		$	73,407		$	(1,562,786	)	$	2,873,821

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

(a) Amounts adjusted due to the adoption of ASC No. 606, Revenue from Contracts with Customers . See Note 1 to Consolidated Financial Statements for additional information.

Condensed Consolidating Statements of Cash Flows

Year Ended December 31, 2018



	Parent Issuer / Guarantor			Subsidiary Issuer / Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net Cash Provided By (Used In) Operating Activities:	$	(2,773	)	$	509,405		$	1,876		$	—		$	508,508
Cash Flows From Investing Activities:
Net payments to affiliates	(14,400		)	(91,515		)	—			105,915			—
Additions to property and equipment, including pre-delivery deposits	—			(470,970		)	(15,807		)	—			(486,777		)
Proceeds from purchase assignment and leaseback transactions	—			87,000			—			—			87,000
Proceeds from disposition of property and equipment	—			46,714			—			—			46,714
Purchases of investments	—			(210,836		)	—			—			(210,836		)
Sales of investments	—			247,423			—			—			247,423
Net cash used in investing activities	(14,400		)	(392,184		)	(15,807		)	105,915			(316,476		)
Cash Flows From Financing Activities:
Long-term borrowings	—			86,500			—			—			86,500
Repayments of long-term debt and capital lease obligations	—			(68,233		)	(12		)	—			(68,245		)
Dividend payments	(24,171		)	—			—			—			(24,171		)
Repurchases of common stock	(102,500		)	—			—			—			(102,500		)
Debt issuance costs	—			(3,350		)	—			—			(3,350		)
Net payments from affiliates	91,515			—			14,400			(105,915		)	—
Other	78			(3,720		)	—						(3,642		)
Net cash provided by (used in) financing activities	(35,078		)	11,197			14,388			(105,915		)	(115,408		)
Net increase (decrease) in cash and cash equivalents	(52,251		)	128,418			457			—			76,624
Cash, cash equivalents, and restricted cash—Beginning of Period	57,405			126,861			7,687			—			191,953
Cash, cash equivalents, and restricted cash—End of Period	$	5,154		$	255,279		$	8,144		$	—		$	268,577

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Condensed Consolidating Statements of Cash Flows

Year Ended December 31, 2017



	Parent Issuer / Guarantor			Subsidiary Issuer / Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net Cash Provided By (Used In) Operating Activities:	$	(4,803	)	$	334,433		$	1,505		$	—		$	331,135
Cash Flows From Investing Activities:
Net payments to affiliates	(2,500		)	(103,254		)	—			105,754			—
Additions to property and equipment, including pre-delivery deposits	—			(336,820		)	(4,695		)	—			(341,515		)
Proceeds from purchase assignment and leaseback transactions	—			33,000			—			—			33,000
Proceeds from disposition of property and equipment	—			941			—			—			941
Purchases of investments	—			(231,393		)	—			—			(231,393		)
Sales of investments	—			244,261			—			—			244,261
Net cash used in investing activities	(2,500		)	(393,265		)	(4,695		)	105,754			(294,706		)
Cash Flows From Financing Activities:
Repayments of long-term debt and capital lease obligations	—			(61,486		)	—			—			(61,486		)
Dividend payments	(6,261		)	—			—			—			(6,261		)
Repurchases of common stock	(100,000		)	—			—			—			(100,000		)
Debt issuance costs	—			(188		)	—			—			(188		)
Net payments from affiliates	103,254			—			2,500			(105,754		)	—
Other	86			(7,618		)	—						(7,532		)
Net cash provided by (used in) financing activities	(2,921		)	(69,292		)	2,500			(105,754		)	(175,467		)
Net decrease in cash and cash equivalents	(10,224		)	(128,124		)	(690		)	—			(139,038		)
Cash, cash equivalents, and restricted cash—Beginning of Period	67,629			254,985			8,377			—			330,991
Cash, cash equivalents, and restricted cash—End of Period	$	57,405		$	126,861		$	7,687		$	—		$	191,953

Table of Contents

Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

Condensed Consolidating Statements of Cash Flows

Year Ended December 31, 2016



	Parent Issuer / Guarantor			Subsidiary Issuer / Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net Cash Provided By (Used In) Operating Activities:	$	(4,954	)	$	440,203		$	1,795		$	—		$	437,044
Cash Flows From Investing Activities:
Net payments to affiliates	—			(28,927		)	—			28,927			—
Additions to property and equipment, including pre-delivery deposits	—			(165,710		)	(13,128		)	—			(178,838		)
Proceeds from purchase assignment and leaseback transactions	—			31,851			—			—			31,851
Net proceeds from disposition of equipment	—			15			1			—			16
Purchases of investments	—			(260,987		)	—			—			(260,987		)
Sales of investments	—			253,855			—			—			253,855
Net cash provided by (used in) investing activities	—			(169,903		)	(13,127		)	28,927			(154,103		)
Cash Flows From Financing Activities:
Repayments of long-term debt and capital lease obligations	—			(214,025		)	—			—			(214,025		)
Repurchases and conversion of convertible notes	(1,426		)	—			—			—			(1,426		)
Repurchases of common stock	(13,763		)	—			—			—			(13,763		)
Debt issuance costs	—			(1,653		)	—			—			(1,653		)
Net payments from affiliates	17,894			—			11,033			(28,927		)	—
Other	458			(8,043		)	—			—			(7,585		)
Net cash provided by (used in) financing activities	3,163			(223,721		)	11,033			(28,927		)	(238,452		)
Net increase (decrease) in cash and cash equivalents	(1,791		)	46,579			(299		)	—			44,489
Cash, cash equivalents, and restricted cash—Beginning of Period	69,420			208,406			8,676			—			286,502
Cash, cash equivalents, and restricted cash—End of Period	$	67,629		$	254,985		$	8,377		$	—		$	330,991

Income Taxes

The income tax expense (benefit) is presented as if each entity that is part of the consolidated group files a separate return.

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Hawaiian Holdings, Inc.

Notes to Consolidated Financial Statements (Continued)

17. Supplemental Financial Information (unaudited)

Unaudited Quarterly Financial Information:



	First Quarter			Second Quarter			Third Quarter				Fourth Quarter
	(in thousands, except per share data)
2018:
Operating revenue	$	665,412		$	715,447		$	759,087			$	697,465
Operating income	36,265			92,928			115,826				69,349
Nonoperating income (loss)	830			12,859			931				(27,830		)
Net income	28,542			79,480			93,542			**	31,636			**
Net Income Per Common Stock Share:
Basic	$	0.56		$	1.57		$	1.85			$	0.65
Diluted	0.56			1.56			1.84				0.64
2017: ^(a)
Operating revenue	$	606,209		$	670,116		$	716,216			$	682,604
Operating income	62,030			136,840			169,002				96,166
Nonoperating income (loss)	(15,813		)	(13,191		)	(54,113		)		9,899			*
Net income	33,645			76,894			71,622				148,448			**
Net Income Per Common Stock Share:
Basic	$	0.63		$	1.43		$	1.35			$	2.86
Diluted	0.62			1.43			1.34				2.84

* During the fourth quarter of 2017, the Company recorded a $4.6 million reduction in its OPEB settlement related to the third quarter of 2017 revising the settlement from $15.0 million to $10.4 million .

** Amounts reflect the impact of the Tax Act enacted in 2017. See Note 10 for further discussion.

The sum of the quarterly net income (loss) per common stock share amounts does not equal the annual amount reported since per share amounts are computed independently for each quarter and for the full year based on respective weighted-average common shares outstanding and other dilutive potential common shares.

The Company's quarterly financial results are subject to seasonal fluctuations. Historically its second and third quarter financial results, which reflect periods of higher travel demand, are better than its first and fourth quarter financial results.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Management's Evaluation of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), performed an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of December 31, 2018 , and provide reasonable assurance that the information required to be disclosed by the Company in reports it files under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

Table of Contents

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Under the supervision and with the participation of our management, including our CEO and CFO, an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2018 was conducted. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 framework). Based on their assessment, we concluded that, as of December 31, 2018 , the Company's internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. We reviewed the results of management's assessment with the Audit Committee of our Board of Directors.

The effectiveness of our internal control over financial reporting as of December 31, 2018 , has been audited by Ernst & Young LLP, the independent registered public accounting firm who also has audited our consolidated financial statements included in this Annual Report on Form 10-K. Ernst & Young's report on our internal control over financial reporting appears below.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2018 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Hawaiian Holdings, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Hawaiian Holdings Inc.’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Hawaiian Holdings Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Hawaiian Holdings, Inc. as of December 31, 2018 and 2017, and the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedules listed in the Index at Item 15(a)(collectively referred to as the “financial statements”) of the Company and our report dated February 13, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying “Management’s Annual Report on Internal Control Over Financial Reporting”. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



/s/ ERNST & YOUNG LLP

Honolulu, Hawai'i

February 13, 2019

Table of Contents

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The information required by this item is incorporated herein by reference from our definitive proxy statement relating to our 2019 Annual Meeting of Stockholders.

ITEM 11. EXECUTIVE COMPENSATION.

The information required by this item is incorporated herein by reference from our definitive proxy statement relating to our 2019 Annual Meeting of Stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required by this item is incorporated herein by reference from our definitive proxy statement relating to our 2019 Annual Meeting of Stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The information required by this item is incorporated herein by reference from our definitive proxy statement relating to our 2019 Annual Meeting of Stockholders.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information required by this item is incorporated herein by reference from our definitive proxy statement relating to our 2019 Annual Meeting of Stockholders.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.


(a)	Financial Statements and Financial Statement Schedules:

(1) Financial Statements of Hawaiian Holdings, Inc.

i. Report of Ernst & Young LLP, Independent Registered Public Accounting Firm.

ii. Consolidated Statements of Operations for the Years ended December 31, 2018 , 2017 and 2016 .

iii. Consolidated Statements of Comprehensive Income, December 31, 2018 , 2017 and 2016 .

iv. Consolidated Balance Sheets, December 31, 2018 and 2017 .

v. Consolidated Statements of Shareholders' Equity, Years ended December 31, 2018 , 2017 and 2016 .

vi. Consolidated Statements of Cash Flows for the Years ended December 31, 2018 , 2017 and 2016 .

vii. Notes to Consolidated Financial Statements.

(2) Schedule of Valuation and Qualifying Accounts of Hawaiian Holdings, Inc.

The information required by Schedule I, "Condensed Financial Information of Registrant" has been provided in Note 16 to the consolidated financial statements. All other schedules have been omitted because they are not required.

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(b) Exhibits:



3.1		Amended and Restated Certificate of Incorporation of Hawaiian Holdings, Inc. (filed as Exhibit 3.1 to the Form S-1, File No. 333-129503, filed by Hawaiian Holdings, Inc. on November 7, 2005).*
3.2		Amended and Restated By-Laws of Hawaiian Holdings, Inc. (filed as Exhibit 3.2 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 24, 2016).*
10.1		Form of Hawaiian Holdings, Inc. Stock Option Agreement for certain employees and executive officers (filed as Exhibit 10.14 to the Form 10-K filed by Hawaiian Holdings, Inc. on February 25, 2009).*+
10.2		Hawaiian Holdings, Inc. 2005 Stock Incentive Plan (incorporated by reference to the Registrant’s Definitive Proxy Statement on Schedule 14A as filed with the Commission on March 26, 2010, File No. 001-31443).*+
10.3		Hawaiian Holdings, Inc. 2016 Management Incentive Plan (filed as Exhibit 10.9 to the Form 10-K filed by Hawaiian Holdings, Inc. on February 16, 2017).*+
10.4		Hawaiian Holdings, Inc. Outside Director Compensation Policy (filed as Exhibit 10.10 to the Form 10-K filed by Hawaiian Holdings, Inc. on February 16, 2017).*+
10.5		Hawaiian Holdings, Inc. 2015 Stock Incentive Plan (filed as Exhibit 10.1 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 12, 2015).*+
10.6		Form of Hawaiian Holdings, Inc. Restricted Stock Unit Agreement (filed as Exhibit 10.2 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 28, 2015).*+
10.7		Form of Hawaiian Holdings, Inc. Performance Restricted Stock Unit Agreement (filed as Exhibit 10.3 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 28, 2015).*+
10.8		Form of Hawaiian Holdings, Inc. Stock Option Agreement (filed as Exhibit 10.4 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 28, 2015).*+
10.9		Form of Hawaiian Holdings, Inc. Indemnification Agreement for directors and executive officers (filed as Exhibit 10.20 to the Form 10-K filed by Hawaiian Holdings, Inc. on February 16, 2017).*+
10.10		Form of Change in Control and Severance Agreement for executive officers (filed as Exhibit 10.21 to the Form 10-K filed by Hawaiian Holdings, Inc. on February 16, 2017).*+
10.11		Purchase Agreement, dated as of June 27, 2011, by and among Wells Fargo Bank Northwest, National Association, solely as owner trustee of trusts beneficially owned by BCC Equipment Leasing Corporation and MDFC Spring Company, and Hawaiian Airlines, Inc. (filed as Exhibit 10.2 to the Form 10-Q filed by Hawaiian Holdings, Inc. on July 27, 2011 in redacted form since confidential treatment has been granted for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended).*‡
10.12		Facility Agreement [Hawaiian 717-200 [55001]], dated as of June 27, 2011 by and between Hawaiian Airlines, Inc. and Boeing Capital Loan Corporation (filed as Exhibit 10.3 to the Form 10-Q/A filed by Hawaiian Holdings, Inc. on December 14, 2011 in redacted form since confidential treatment has been granted for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended). Hawaiian Airlines, Inc. also entered into Facility Agreement [Hawaiian 717-200 [55002]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55118]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55121]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55122]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55123]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55124]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55125]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55126]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55128]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55129]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55130]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55131]], dated as of June 27, 2011; Facility Agreement [Hawaiian 717-200 [55132]], dated as of June 27, 2011; and Facility Agreement [Hawaiian 717-200 [55151]], dated as of June 27, 2011, which facility agreements are substantially identical to Facility Agreement 55001, and pursuant to Regulation S-K Item 601, Instruction 2, these facility agreements were not filed.*‡
10.13		Lease Agreement 491HA, dated as of June 28, 2011, by and between Wells Fargo Bank Northwest, National Association, a national banking association organized under the laws of the United States of America, not in its individual capacity, but solely as owner trustee of a trust beneficially owned by BCC Equipment Leasing Corporation, and Hawaiian Airlines, Inc. (filed as Exhibit 10.5 to Form 10-Q/A filed by Hawaiian Holdings, Inc. on December 14, 2011 in redacted form since confidential treatment has been granted for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended). Hawaiian Airlines, Inc. also entered into Lease Agreement 492HA, dated as of June 28, 2011; and Lease Agreement 493HA, dated as of June 28, 2011, which lease agreements are substantially identical to Lease Agreement 491HA, and pursuant to Regulation S-K Item 601, Instruction 2, these lease agreements were not filed.*‡

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10.14		Contract Services Agreement, dated as of June 29, 2011, by and between Hawaiian Airlines, Inc. and Airline Contract Maintenance and Equipment, Inc. (filed as Exhibit 10.7 to the Form 10-Q filed by Hawaiian Holdings, Inc. on July 27, 2011 in redacted form since confidential treatment has been granted for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended).*‡
10.15		Airbus A320 Family Purchase Agreement, dated as of March 18, 2013, between Airbus S.A.S. and Hawaiian Airlines, Inc. (filed as Exhibit 10.1 to Form 10-Q/A filed by Hawaiian Holdings, Inc. on October 17, 2013 in redacted form since confidential treatment has been granted for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended).*‡
10.15.1		Amendment #1 to Airbus A320 Family Purchase Agreement, dated as of March 18, 2013, between Airbus S.A.S. and Hawaiian Airlines, Inc. (filed as Exhibit 10.62.1 to the Form 10-K filed by Hawaiian Holdings, Inc. on February 9, 2015).*
10.15.2		Amendment #2 to Airbus A320 Family Purchase Agreement, dated as of March 18, 2013, between Airbus S.A.S. and Hawaiian Airlines, Inc. (filed as Exhibit 10.62.2 to the Form 10-K filed by Hawaiian Holdings, Inc. on February 9, 2015 in redacted form since confidential treatment has been granted for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended).*‡
10.16		Pass Through Trust Agreement, dated May 29, 2013, between Hawaiian Airlines, Inc. and Wilmington Trust, National Association, as trustee (filed as Exhibit 4.1 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.17		Trust Supplement No. 2013-1A-O, dated as of May 29, 2013, between Wilmington Trust, National Association, as Trustee, and Hawaiian Airlines, Inc. to Pass Through Trust Agreement, dated as of May 29, 2013 (filed as Exhibit 4.2 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.18		Trust Supplement No. 2013-1A-S, dated as of May 29, 2013, between Wilmington Trust, National Association, as Trustee, and Hawaiian Airlines, Inc. to Pass Through Trust Agreement, dated as of May 29, 2013 (filed as Exhibit 4.3 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.19		Trust Supplement No. 2013-1B-O, dated as of May 29, 2013, between Wilmington Trust, National Association, as Trustee, and Hawaiian Airlines, Inc. to Pass Through Trust Agreement, dated as of May 29, 2013 (filed as Exhibit 4.4 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.20		Trust Supplement No. 2013-1B-S, dated as of May 29, 2013, between Wilmington Trust, National Association, as Trustee, and Hawaiian Airlines, Inc. to Pass Through Trust Agreement, dated as of May 29, 2013 (filed as Exhibit 4.5 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.21		Revolving Credit Agreement (2013-1A), dated as of May 29, 2013, between Wilmington Trust, National Association, as subordination agent, as agent and trustee, and as borrower, and Natixis S.A., acting via its New York Branch, as liquidity provider (filed as Exhibit 4.6 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.22		Revolving Credit Agreement (2013-1B), dated as of May 29, 2013, between Wilmington Trust, National Association, as subordination agent, as agent and trustee, and as borrower, and Natixis S.A., acting via its New York Branch, as liquidity provider (filed as Exhibit 4.7 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.23		Intercreditor Agreement, dated as of May 29, 2013, among Wilmington Trust, National Association, as trustee, Natixis S.A., acting via its New York Branch, as liquidity provider, and Wilmington Trust, National Association, as subordination agent and trustee (filed as Exhibit 4.8 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.24		Deposit Agreement (Class A), dated as of May 29, 2013, between Wells Fargo Bank Northwest, National Association, as escrow agent, and Natixis S.A., acting via its New York Branch, as depositary (filed as Exhibit 4.9 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.25		Deposit Agreement (Class B), dated as of May 29, 2013, between Wells Fargo Bank Northwest, National Association, as escrow agent, and Natixis S.A., acting via its New York Branch, as depositary (filed as Exhibit 4.10 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.26		Escrow and Paying Agent Agreement (Class A), dated as of May 29, 2013, among Wells Fargo Bank Northwest, National Association, as escrow agent, Citigroup Global Markets Inc., Goldman, Sachs & Co. and Morgan Stanley & Co. LLC, for themselves and on behalf of the several Underwriters of the Certificates, Wilmington Trust, National Association, as trustee, and Wilmington Trust, National Association, as paying agent (filed as Exhibit 4.11 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.27		Escrow and Paying Agent Agreement (Class B), dated as of May 29, 2013, among Wells Fargo Bank Northwest, National Association, as escrow agent, Citigroup Global Markets Inc., Goldman, Sachs & Co. and Morgan Stanley & Co. LLC, for themselves and on behalf of the several Underwriters of the Certificates, Wilmington Trust, National Association, as trustee, and Wilmington Trust, National Association, as paying agent (filed as Exhibit 4.12 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*

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10.28		Note Purchase Agreement, dated as of May 29, 2013, among Hawaiian Airlines, Inc., Wilmington Trust, National Association, as trustee, Wilmington Trust, National Association, as subordination agent, Wells Fargo Bank Northwest, National Association, as escrow agent, and Wilmington Trust, National Association, as paying agent (filed as the Exhibit 4.13 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.29		Form of Participation Agreement (Participation Agreement between Hawaiian Airlines, Inc. and Wilmington Trust, National Association, as mortgagee, subordination agent and trustee) (Exhibit B to Note Purchase Agreement) (filed as Exhibit 4.14 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.30		Form of Indenture (Trust Indenture and Mortgage between Hawaiian Airlines, Inc. and Wilmington Trust, National Association, as mortgagee and securities intermediary) (Exhibit C to Note Purchase Agreement) (filed Exhibit 4.15 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.31		Form of Hawaiian Airlines Pass Through Certificate, Series 2013-1A-O (filed as Exhibit 4.16 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.32		Form of Hawaiian Airlines Pass Through Certificate, Series 2013-1B-O (filed as Exhibit 4.17 to the Form 8-K filed by Hawaiian Holdings, Inc. on May 31, 2013).*
10.33		Lease Agreement, dated as of November 15, 2016 between Hawaiian Airlines, Inc. and the Department of Transportation of the State of Hawai'i (filed as Exhibit 10.45 to the Form 10-K filed by Hawaiian Holdings, Inc. on February 16, 2017).*
10.34		Aircraft General Terms Agreement Number AGTA-HWI, dated as of July 18, 2018 between The Boeing Company and Hawaiian Airlines, Inc. (filed as Exhibit 10.1 to the Form 10-Q filed by Hawaiian Holdings, Inc. on October 24, 2018 in redacted form since confidential treatment has been granted for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended).‡
10.35		Purchase Agreement No. PA-04749, dated as of July 18, 2018, between the Boeing Company and Hawaiian Airlines, Inc. (filed as Exhibit 10.2 to the Form 10-Q filed by Hawaiian Holdings, Inc. on October 24, 2018 in redacted for since confidential treatment has been granted for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended).‡
10.36		General Terms Agreement No. 1-1026296, dated as of October 1, 2018, among General Electric Company, GE Engine Services Distribution, LLC and Hawaiian Airlines, Inc.‡
10.37		Letter Agreement No. 1 to General Terms Agreement No. 1-1026296, dated as of October 1, 2018, among General Electric Company, GE Engine Services Distribution, LLC and Hawaiian Airlines, Inc.‡
10.38		Flight Hour Agreement, dated as of October 1, 2018, between GE Engine Services, LLC and Hawaiian Airlines, Inc.‡
10.39		Amended and Restated Credit and Guaranty Agreement, dated as of December 11, 2018, among Hawaiian Airlines, Inc., Hawaiian Holdings, Inc., certain other subsidiaries of Hawaiian Holdings, Inc., the lenders party thereto and Citibank, N.A.
21.1		List of Subsidiaries of Hawaiian Holdings, Inc.
23.1		Consent of Ernst & Young LLP.
31.1		Rule 13a-14(a) Certification of Chief Executive Officer.
31.2		Rule 13a-14(a) Certification of Chief Financial Officer.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Valuation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

+ These exhibits relate to management contracts or compensatory plans or arrangements.

* Previously filed; incorporated herein by reference.

‡ Confidential treatment has been requested for a portion of this exhibit.

Table of Contents

Schedule II—Hawaiian Holdings, Inc.

Valuation and Qualifying Accounts

Years Ended December 31, 2018 , 2017 and 2016



COLUMN A	COLUMN B		COLUMN C ADDITIONS			COLUMN D			COLUMN E
Description	Balance at Beginning of Year		(1) Charged to Costs and Expenses		(2) Charged to Other Accounts	Deductions			Balance at End of Year
	(in thousands)
Allowance for Doubtful Accounts
2018	$	12	1,527		—	(1,485	)	(a)	$	54
2017	$	34	1,810		—	(1,832	)	(a)	$	12
2016	$	166	2,896		—	(3,028	)	(a)	$	34
Allowance for Obsolescence of Flight Equipment Expendable Parts and Supplies
2018	$	21,446	5,463	(b)	—	(4,321	)	(c)	$	22,588
2017	$	17,358	6,276	(b)	—	(2,188	)	(c)	$	21,446
2016	$	16,454	3,301	(b)	—	(2,397	)	(c)	$	17,358
Valuation Allowance on Deferred Tax Assets
2018	$	2,547	—		—	—			$	2,547
2017	$	1,992	555		—	—			$	2,547
2016	$	3,912	—		—	(1,920	)	(d)	$	1,992

_______________________________________________________________________________


(a)	Doubtful accounts written off, net of recoveries.


(b)	Obsolescence reserve for Hawaiian flight equipment expendable parts and supplies.


(c)	Spare parts and supplies written off against the allowance for obsolescence.


(d)	Re-classified to uncertain tax position.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	HAWAIIAN HOLDINGS, INC.
February 13, 2019	By	/s/ SHANNON L. OKINAKA
		Shannon L. Okinaka Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 13, 2019 .



Signature		Title

/s/ PETER R. INGRAM		President and Chief Executive Officer, and Director (Principal Executive Officer)
Peter R. Ingram
/s/ SHANNON L. OKINAKA		Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
Shannon L. Okinaka
/s/ LAWRENCE S. HERSHFIELD		Chair of the Board of Directors
Lawrence S. Hershfield
/s/ DONALD J. CARTY		Director
Donald J. Carty
/s/ ABHINAV DHAR		Director
Abhinav Dhar
/s/ EARL E. FRY		Director
Earl E. Fry
/s/ JOSEPH GUERRIERI, JR.		Director
Joseph Guerrieri, Jr.
/s/ RANDALL L. JENSON		Director
Randall L. Jenson
/s/ CRYSTAL K. ROSE		Director
Crystal K. Rose
/s/ WILLIAM S. SWELBAR		Director
William S. Swelbar
/s/ DUANE E. WOERTH		Director
Duane E. Woerth
/s/ RICHARD N. ZWERN		Director
Richard N. Zwern

100

CONFIDENTIAL TREATMENT REQUESTED

Certain portions of this document have been omitted pursuant to a request for Confidential Treatment and, where applicable, have been marked with “[***]” to indicate where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission.

GENERAL TERMS AGREEMENT NO. 1-1026296



	GE
	Aviation

General Terms Agreement

No. 1-1026296

October 1, 2018

CONFIDENTIAL NOTICE

The information contained in this document is General Electric Company acting through its GE Aviation business unit("GE") designated Confidential and is disclosed in confidence. It is the property of GE and will not be used, disclosed to others or reproduced without the express written consent of GE. If consent is given for reproduction in whole or in part, this notice and the notice set forth on each page of this document will appear in any such reproduction. U.S. export control laws may also control the information contained in this document. Unauthorized export or re-export is prohibited.

GE Designated: -CONFIDENTIAL-

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Table of Contents


•	Agreement

SECTION I - DEFINITIONS

SECTION II – TERMS & CONDITIONS

ARTICLE 1 - PRODUCTS

ARTICLE 2 - PRODUCT PRICES

ARTICLE 3 - PRODUCT ORDER PLACEMENT

ARTICLE 4 - DELIVERY, TITLE, TRANSPORTATION, RISK OF

LOSS, PACKAGING OF GE PRODUCTS

ARTICLE 5 - PAYMENT FOR PRODUCTS

ARTICLE 6 - GENERAL

ARTICLE 7 - TAXES AND DUTIES

ARTICLE 8 - WARRANTIES AND PRODUCT SUPPORT PLAN ARTICLE 9 - EXCUSABLE DELAY

ARTICLE 10 - INTELLECTUAL PROPERTY RIGHTS

ARTICLE 11 - DATA

ARTICLE 12 - LIMITATION OF LIABILITY

ARTICLE 13 - GOVERNMENT AUTHORIZATION, EXPORT SHIPMENT ARTICLE 14 - PERSONAL DATA PROTECTION

ARTICLE 15 - NOTICES

ARTICLE 16 - MISCELLANEOUS


•	Exhibit A - Engine Warranty Plan

SECTION I - WARRANTIES

SECTION II - GENERAL CONDITIONS


•	Exhibit B - Product Support Plan

SECTION I - SPARE PARTS PROVISIONING SECTION SECTION II - TECHNICAL PUBLICATIONS AND DATA SECTION III - TECHNICAL TRAINING

SECTION IV - CUSTOMER SUPPORT AND SERVICE SECTION V - ENGINEERING SUPPORT

SECTION VI - SUPPORT EQUIPMENT

SECTION VII - PERFORMANCE TREND MONITORING

SECTION VIII - GENERAL CONDITIONS - PRODUCT SUPPORT PLAN


•	Exhibit C - Payment Terms


•	Exhibit D – Standard Diagnostics Services


•	Exhibit E – [***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

THIS GENERAL TERMS AGREEMENT NO. 1-1026296 (hereinafter referred to as this “ Agreement ”), dated as of October 1, 2018 by and between General Electric Company, a corporation organized under the law of the State of New York, U.S.A., (including its successors and assigns), acting through its GE-Aviation business unit located in Evendale, Ohio, U.S.A. (hereinafter referred to as “ GE” ), GE Engine Services Distribution, LLC, a Delaware limited liability company having its principal office at One Neumann Way MD 111, Cincinnati, Ohio 45215 (hereinafter referred to as “ GE-LLC ”) and HAWAIIAN AIRLINES, INC , a corporation organized and existing under the laws of Delaware, having an office and place of business at 3375 Koapaka St, Suite G350, Honolulu, HI 96819, United States (hereinafter referred to as “ Airline ”). GE, GE- LLC and Airline are also referred to in this Agreement as the “ Parties ” or individually as a “ Party ”.

WITNESSETH

WHEREAS , Airline has acquired, or is in the process of acquiring a certain number of aircraft equipped with installed Engines (as defined below), and

WHEREAS , GE, GE-LLC and Airline desire to enter into this Agreement to establish the terms and conditions governing the sale, from time to time, by GE and GE-LLC and the purchase by Airline of Spare Engines (as defined below), related equipment and spare parts therefor and the product services to be supplied by GE in support of such installed and Spare Engines for use by Airline with respect to its commercial passenger service purposes (“Activities”), and

FURTHER , GE acknowledges that GE-LLC is a 100% owned subsidiary of GE.

NOW, THEREFORE , in consideration of the mutual covenants herein contained, the respective Parties hereto agree as follows to the respective Sections of this Agreement. Capitalized terms used herein that are otherwise undefined shall have the meanings ascribed to them in Section I (“ Definitions ”), unless the context requires otherwise.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		1

SECTION I - DEFINITIONS

These definitions shall apply for all purposes of this Agreement unless the context otherwise requires.

“ Aircraft ” means the aircraft on which the Engine(s) listed in the applicable letter agreement to this Agreement is (are) installed.

“ Agreement ” means this General Terms Agreement (together with all exhibits, and specific transaction agreements (“Letter Agreements”) and attachments) between GE and Airline, as the same may be amended or supplemented from time to time.

“ Airworthiness Authority ” means the Federal Aviation Administration of the United States (“FAA”), or if applicable, the European Aviation Safety Agency (“EASA”), or such other foreign equivalent aviation authority as agreed in writing by GE and Airline.

“ Airworthiness Directive ” means a requirement for the inspection, repair or modification of the Engine or any portion thereof as issued by the Airworthiness Authority.

“ ATA ” means the Air Transport Association of America.

“ Basic Engine ” means the Engine Assembly, which includes the Fan Module Assembly and the Propulsor Assembly including the FADEC, EMU and the other parts listed in the Engine section of Exhibit E.

“ Campaign Change ” means any new Part design introduction, Part modification, Part Inspection, or premature replacement of an Engine or Module required by a time compliance GE Service Bulletin implementing an Airworthiness Directive.

“ Data ” means all information and data of any type, form or nature (including, but not limited to, designs, drawings, blueprints, tracings, plans, models, layouts, software, specifications, technical publications, electronic transmittals, customer website data and memoranda) which may be furnished or made available to Airline, directly or indirectly, as the result of this Agreement.

“ EMU ” means the Engine Monitoring Unit.

“ Engine ” means the Airworthiness Authority certified Engine(s) as described and referred to in the applicable Letter Agreement(s) to this Agreement or covered under this Agreement pursuant to Article 8 hereof.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		2

“ Expendable Parts ” means those parts which must routinely be replaced during inspection, repair, or maintenance, whether or not such parts have been damaged, and other parts which are customarily replaced at each such inspection and maintenance period such as filter inserts and other short-lived items which are not dependent on wear out but replaced at predetermined intervals.

“ FADEC ” means the Full Authority Digital Engine Control system.

“ Failed Parts ” means those Parts and Expendable Parts suffering a Failure, including Parts suffering Resultant Damage.

“ Failure ” means the breakage of a Part, malfunction of a Part, or damage to a Part, rendering it not Serviceable and such breakage, malfunction or damage is not due to causes excluded by Exhibit A Section II Subsection B, including, but not limited to, any defect in design. Failure shall also include Resultant Damage and any defect in material or workmanship. Failure does not include any such breakage, malfunction or damage that is due to normal wear and tear.

“ Flight Cycle ” means the complete running of an Engine from start through any condition of flight and ending at Engine shutdown. A “touch and go landing” used during pilot training shall be considered as a “Flight Cycle”.

“ Flight Hours ” means the cumulative number of airborne hours in operation of each Engine computed from the time an aircraft leaves the ground until it touches the ground at the end of a flight.

“ Foreign Object Damage ” means any damage to the Engine caused by objects that are not part of the Engine and Engine optional equipment.

“ GE Products ” means Spare Engines, related optional equipment, technical data, and other products offered from time to time, as may be offered for sale and/or provided by GE.

“ GE-LLC Products ” means spare Parts, Expendable Parts, Modules, and other products offered from time to time, as may be offered for sale and/or provided by GE-LLC.

“ Labor Allowance ” means a GE credit calculated by multiplying the established labor rate by man-hours allowed for disassembly, reassembly (when applicable), and for Parts repair. If a Labor Allowance is granted for a repair, it shall not exceed the credit that would have been quoted if the Part had not been repairable. The established labor rate means either (a) the then current labor rate mutually agreed between GE and Airline if the work has been performed by Airline, or (b) the then current labor rate agreed between GE and the third party repair and overhaul shop if the work has been performed by such repair and overhaul shop.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		3

“LLP Influencing Part” is a part that experience has shown can directly or indirectly influence the boundary conditions of the lifing system used to determine the LLP airworthiness limitations.

“ Module ” means a major sub-assembly of any of the Engines described in the applicable letter agreements or covered under this Agreement pursuant to Article 8 hereof.

“ Original Equipment ” means Engines sold by GE to the airframe manufacturer for installation on Airline’s Aircraft.

“ Part ” means Engine parts and Module parts sold by GE and delivered as Original Equipment in an Engine or Module, or Engine parts and Module parts sold and delivered by GE as new spare parts in support of an Engine or Module. The term excludes parts furnished on new Engines and Modules procured directly from vendors. Such parts are covered by the vendor warranty and the GE “Vendor Warranty Back Up in Exhibit A, Section I, Subsection F.” Also excluded are Expendable Parts and customary short-lived items such as igniters and filter inserts.

“ Parts Credit Allowance ” means the credit granted by GE to Airline, in connection with either a GE-declared campaign change or a Failed Part, based on the price of a replacement Part at the time the Part is removed. This credit may take the form of a replacement Part at GE’s option.

“ Part Cycles ” means the total number of Flight Cycles accumulated by a Part.

“ Parts Repair ” means the GE recommended rework or restoration of Failed Parts to a Serviceable condition.

“ Part Time ” means the total number of Flight Hours accumulated by a Part.

“ Performance Restoration Shop Visit ” - A shop visit in which, at a minimum, the combustor and high-pressure turbine are exposed and subsequently refurbished.

“ Propulsor ” or “Propulsor Assembly” is a subset of an Engine comprised of the HPC, Combustor, HPT, TCF, LPT and AGB Modules.

“Product(s) ” has the meaning ascribed to it in Article 1A.

“ Resultant Damage ” means the damage suffered by a Part in warranty because of a Failure of another Part or Expendable Part within the same engine, provided the Part or Expendable Part causing the damage was in warranty.

“ Serviceable ” when used to describe an Engine or Part, means in an airworthy condition within the limits defined in the applicable Engine manuals, specification and/or publications by the

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		4

type certificate holder as approved by the Airworthiness Authorities and documented by FAA Form 8130.

“ Scrapped Parts ” means those Parts determined by GE to be un-Serviceable and not repairable by virtue of reliability, performance or repair costs. Such Parts shall be considered as scrapped if they bear a scrap tag duly countersigned by a GE representative. Such Parts shall be destroyed and disposed of by Airline unless requested by GE for engineering analysis, in which event any handling and shipping shall be at GE’s expense.

“ Spare Engine ” means a Basic Engine or Propulsor acquired in support of Airline's fleet of Aircraft for use as a spare Engine when another Engine in such fleet is not Serviceable.

“ Ultimate Life ” of a rotating Part means the approved limitation on use of a rotating Part, in cumulative Flight Hours or Flight Cycles, which the FAA establishes as the maximum period of allowed operational time for such rotating Parts in Airline service, with periodic repair and restoration.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		5

SECTION II - TERMS AND CONDITIONS

ARTICLE 1 - PRODUCTS

Airline may purchase under the terms and subject to the conditions hereinafter set forth, Spare Engines, Propulsors, Modules, spare Parts, Expendable Parts, related optional equipment, technical data and other products offered from time to time, as may be offered for sale by GE and GE- LLC (hereinafter referred to as “Product(s)”) in quantities and in configurations reasonably required to support Airline’s Activities and the aircraft applications operated by Airline in connection therewith.


B.	In order to assure that an adequate supply of GE Spare Engines are available to support the worldwide operating fleet of GE powered aircraft, GE reserves the option, for a limited period of time following the sale of Engines to Airline, to repurchase Engines which Airline proposes to utilize for other than its own operating purposes .

Accordingly, if within the first [***] on any Engine sold hereunder, Airline elects to a) offer such Engine for resale or b) undertake action to cause components or parts of such Engine to be made available for sale, Airline shall give GE prompt advanced written notice of such determination (“Airline’s Notice”).

Promptly upon receipt of such notice, GE shall have first option to repurchase the Engine from Airline (the “GE Repurchase Option”) If requested by GE, an independent expert, jointly designated by GE and Airline, shall verify such offer while maintaining in confidence the identity of such third party.

GE shall give Airline notice of its decision to decline or to exercise such GE Repurchase Option within twenty (20) business days of its receipt of Airline’s Notice. Fulfillment by GE of the GE Repurchase Option shall be conditional upon technical inspection, review and acceptance of the Engine and its records by GE and the execution of a mutually acceptable purchase agreement.

For the avoidance of doubt, such GE Repurchase Option shall not apply to any sale of an Engine intended to secure sale/leaseback financing in connection therewith.

ARTICLE 2 - PRODUCT PRICES


A.	In General . The selling price of GE-LLC Products or GE Products will be the respective prices which are quoted in GE-LLC’s Spare Parts Price Catalog, as revised from time to time (the “ Spare Parts Catalog ” or “ Catalog ”) or in GE’s written quotation or proposal from time to time and confirmed in a Letter Agreement for the purchase of Spare Engines or in a

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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HAWAIIAN AIRLINES, INC - 1-1026296		6

purchase order placed by Airline and accepted by GE-LLC or GE. All prices shall be in U.S. Dollars and Airline shall pay for GE-LLC Products or GE Products in U.S. Dollars. All Product prices include the cost of GE’s standard tests, inspection and commercial packaging, but exclude, in the case of Spare Engines, shipping stands, containers and engine covers. Transportation costs and costs resulting from special inspection, packaging, testing or other special requirements, requested by Airline, will be paid for by Airline. GE-LLC will advise Airline in writing ninety (90) days in advance of any changes in prices affecting a significant portion of the prices in the Catalog. During such ninety (90) day period, GE- LLC shall not be obligated to accept Airline purchase orders for quantities of spare Parts in excess of up to ninety (90) days of Airline’s normal usage beyond the effective date of the announced price change.

Spare Engines . Spare Engine prices will be quoted as base prices, subject to escalation using the appropriate GE Engine escalation provisions then in effect. The appropriate GE escalation provisions will be set forth in each applicable Letter Agreement to this Agreement. No change to such escalation provisions will apply to Airline until GE provides Airline at least ninety (90) days prior written notice. However, GE cannot change an escalation formula during any price protection period set forth in an applicable Letter Agreement.

ARTICLE 3 - GE PRODUCT ORDER PLACEMENT


A.	The terms and conditions set forth herein are in lieu of all printed terms and conditions appearing on Airline’s purchase orders.


B.	For each purchase order placed by Airline, GE shall promptly respond by confirming, modifying or rejecting it.


C.	For all Products, except Spare Engines, Customer may place purchase orders, in preference, through the CWC, or EDI network (Spec2200), or any other electronic mean, or as prescribed in said Catalog or GE’s quotation, facsimile transmission, or telephone with written confirmation.

For Spare Engines, Propulsors and Modules, Airline may place a purchase order reflecting the Airline commitment to purchase such Spare Engine, Propulsor or Module as contained in the applicable Letter Agreement. For avoidance of doubt, placement of such purchase order will be considered solely for administrative purposes (including shipping, export and taxation requirements) and shall not affect the payment obligation of Airline, or the shipment obligation of GE as set forth in the applicable Letter Agreement. GE will invoice Airline for Spare Engines, Propulsors and Modules in accordance with “Exhibit C: Payment Terms”.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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HAWAIIAN AIRLINES, INC - 1-1026296		7


E.	If Airline elects to place a purchase order for a Spare Engine, Propulsor or Module, it shall be in a mutually agreed upon format and shall include the information listed below in this sub- section E, in this Article 3. An original version shall be sent to Airline’s assigned CSM email address. Purchase orders shall include at a minimum the following information:


1)	Customer IATA Code;


2)	GTA Number;


3)	Customer headquarters address;


4)	Invoicing address;


5)	V.A.T. Number (if appropriate);


6)	Description of Product;


7)	Price;


8)	Quantity;


9)	Delivery date (in accordance with the applicable Letter Agreement schedule);


10)	Shipping instructions;


11)	Freight forwarder address including contact name, phone, fax email and address;


12)	Address for Spare Engine logbook (if for a Spare Engine);


13)	Bill of Sale address including name, phone, fax, email and address;


14)	Delivery address.

ARTICLE 4 - DELIVERY, TITLE, TRANSPORTATION, RISK OF LOSS, PACKAGING OF PRODUCTS


A.	Shipment of GE Products and GE-LLC Products shall be from GE’s facility in Evendale, Ohio, U.S.A., Peebles, Ohio, U.S.A., or Erlanger, Kentucky, U.S.A., or point of manufacture, or other facility at GE’s option.


B.	Delivery of all GE Products and GE-LLC Products shall be as follows (hereinafter “ Delivery ”):


(i)	For GE Products and GE-LLC Products shipped from the U.S. to a domestic U.S. destination, Delivery of such GE Products and GE-LLC Products shall be Ex Works (Incoterms 2000) at the point of shipment described in Paragraph A of this Article;

(ii)

For GE Products and GE-LLC Products shipped from the U.S. to a destination outside the U.S., Delivery of such GE Products and GE-LLC Products shall be to Airline once the GE Product or GE-LLC Product is over international waters (i.e., 12 miles offshore of the U.S.), or, if the GE Product or GE-LLC Product does not cross international waters during transport, at the frontier of the destination country. Unless otherwise agreed, Airline shall be responsible for exporting the GE Products and GE-LLC Products out of the U.S.;

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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(iii)	For GE Products and GE-LLC Products shipped from a location outside the U.S., Delivery of such GE Products and GE-LLC Products shall be Ex Works (Incoterms 2000) from such foreign GE facility.

Upon Delivery, title to GE Products and GE-LLC Products as well as risk of loss thereof or damage thereto shall pass to Airline. Airline shall be responsible for all risk and expense in obtaining any required licenses and carrying out all customs formalities for the exportation and importation of goods in accordance with the Article titled “Government Authorization” of this Agreement.


C.	Airline shall arrange and pay for transportation of such GE and GE-LLC Products from the point of shipment described in Paragraph A of this Article until Delivery in accordance with Paragraph B of this Article.

Airline understands that from time to time GE will make design improvements to the Engine. GE may elect to issue a Service Bulletin in order to improve the in-service Engines before new production design has cleared production line at the airframer. Airline agrees that it shall not refuse delivery of an Engine from GE or airframer if it does not have the latest design improvement so long as the improvement does not impact safety and is not the sole resolution to an Airworthiness Directive. At the time of delivery, GE will work with the Airline to determine the timing for incorporation of the Service Bulletins.

ARTICLE 5 - PAYMENT FOR PRODUCTS

Payment terms are set forth in the attached Exhibit C.

ARTICLE 6 - GENERAL

Solely for purposes of Articles 7-16 of the Agreement, the abbreviation “ Seller ” shall refer to both GE and GE-LLC since each entity will be subject to these terms. In addition, again solely for purposes of Articles 7-16 of the Agreement, the term “ Product(s )” shall refer to both GE Product(s) and GE-LLC Product(s).

ARTICLE 7 – TAXES AND DUTIES

Seller shall be responsible for and pay directly all corporate and individual taxes measured by net income or profit. Together with any imposts, duties, fees, taxes, dues or any other charges whatsoever imposed or levied by any governmental authority on Seller, its employees or subcontractors related to or in connection with the Products prior to Delivery to the Airline.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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HAWAIIAN AIRLINES, INC - 1-1026296		9

Once Delivery has occurred, the Airline shall be responsible for and pay directly all taxes, imposts, duties, fees, dues or any other charges whatsoever imposed or levied in connection with the Products.

All payments due and payable to Seller by Airline under this Agreement shall be made without deduction or withholding. In the event Airline shall be required by law to deduct or withhold any amount payable to Seller the amount payable shall be increased so that Seller receives the same amount that it would have received if no deduction or withholding had been made. Airline shall provide to Seller, on a timely basis, official receipts for deducted or withheld taxes.

Seller and Airline shall cooperate and take reasonable steps to minimize the taxes applicable to the transactions contemplated by this Agreement.

ARTICLE 8 - WARRANTY AND PRODUCT SUPPORT PLAN

Applicable warranties are set forth in Exhibit A relating to all Engines or Parts, including Expendable Parts, either purchased by Airline directly from GE or GE-LLC or installed on Airline’s Aircraft as Original Equipment. Product support activities are set forth in Exhibit B.

ARTICLE 9 - EXCUSABLE DELAY

Neither Party shall be liable or in breach of its obligations under this Agreement to the extent performance of such obligations is delayed or prevented, directly or indirectly, by causes beyond its reasonable control, including acts of God, fire, terrorism, war (declared or undeclared), severe weather conditions, earthquakes, epidemics, material shortages, insurrection, acts or omissions of the other Party or the other Party’s suppliers or agents, any act or omission by any governmental authority, strikes, acts or threats of vandalism or terrorism (including disruption of technology resources), transportation shortages, or vendor’s failure to perform, as a result of one of the events listed in this Article(each an “Excusable Delay”). The delivery or performance date shall be extended for a period equal to the time lost by reason of delay, including time to overcome the effect of the delay. The Party claiming an Excusable Delay shall use best efforts to avoid or remove such causes and continue performance whenever such causes are removed. If Seller is experiencing an Excusable Delay caused by any acts or omissions of Airline or Airline’s other contractors or suppliers, Seller shall be entitled to an equitable adjustment in price and time for performance.

In the event an Excusable Delay continues for a period of six (6) months or more beyond the scheduled delivery or performance date, Airline may, upon sixty (60) days written notice to the other, cancel the part of this Agreement so delayed and Seller shall return to Airline all payments relative to the canceled part of this Agreement. If the Excusable Delay is caused by acts or omissions of the Airline and the Airline elects to cancel the part of this Agreement so delayed

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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HAWAIIAN AIRLINES, INC - 1-1026296		10

then Airline shall pay Seller its reasonable cancellation charges directly arising from such cancellation.

ARTICLE 10 – INTELLECTUAL PROPERTY RIGHTS

Seller shall at its sole cost (i) indemnify Airline against any loss or damage incurred and (ii) handle all claims and defend any suit or proceeding brought against Airline insofar as based on a claim that any Engine or Part thereof or any Product (which terms include without limitation any software) to which this Agreement relates, without any alteration or further combination, constitutes an infringement of any Intellectual Property Right of any other party. The indemnity applies to any such claim arising in any country that is signatory to Article 27 of the Convention on International Civil Aviation signed by the United States at Chicago on December 7, 1944, in which Airline is authorized to operate or in which another airline pursuant to lawful interchange, lease or similar arrangement, operates aircraft of Airline.

Seller’s liability hereunder is conditioned upon Airline promptly notifying Seller in writing and giving Seller authority, information and assistance (at Seller’s expense) for the defense of any suit or proceeding. In case such Engine or Part thereof or Product is held in such suit or proceeding to constitute infringement and the use of said Product is enjoined, Seller shall, at its own expense and at its option, either (1) procure for Airline the right to continue using such Engine or Part thereof or Product; (2) replace same with satisfactory and non-infringing Engine or Part thereof or Product; or (3) modify same so it becomes satisfactory and non-infringing Engine or Part thereof or Product. Seller shall not be responsible to Airline or to any third party, for incidental or consequential damage, including, but not limited to, costs, expenses, liabilities or loss of profits resulting from loss of use.

The remedies described in Paragraphs (A) and (B) above do not apply to any Engine or part thereof or Product: (1) not purchased by Airline from Seller or a supplier of certified GE parts (except for any Engine or part thereof or Product installed as Original Equipment on aircraft owned, leased or operated by Airline); (2) that was changed, modified, or not used for its intended purpose; or (3) that was manufactured by Seller to Airline’s unique specifications or directions.

The obligations recited in this Article shall constitute the sole and exclusive liability of Seller for actual or alleged infringement of Intellectual Property Rights and the remedies of Airline shall not be subject to the limitation of liability set out in Article 12 “Limitation of Liability”.

In this Article 10 the term “Intellectual Property Right” means any patent, copyright, trademark, design right or any other intellectual property right arising under applicable law.

ARTICLE 11 – DATA

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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HAWAIIAN AIRLINES, INC - 1-1026296		11

All Data is proprietary to and shall remain the property of Seller. All Data is provided to or disclosed to Airline in confidence, and shall neither (1) be used by Airline or be furnished by Airline to any other person, firm or corporation for the design or manufacture or repair of any products, articles, compositions of matter, or processes, nor (2) be permitted out of Airline’s possession, or divulged to any other person, firm or corporation, nor (3) be used in the creation, manufacture, development, or derivation of any repairs, modifications, spare parts, designs or configuration changes, or to obtain FAA or any other government or regulatory approval of any of the foregoing. Data shall not be used for the maintenance, repair, or assessment of continued airworthiness of any products not supplied or covered under this Agreement. If GE’s written consent is given for reproduction in whole or in part, any existing notice or legend shall appear in any such reproduction. Nothing in this Agreement shall preclude Airline from using such Data for the modification, overhaul, or maintenance work performed by Airline on GE and GE-LLC Products purchased by Airline; except that all repairs or repair processes that are not disclosed in the Engine manuals (including, but not limited to, high technology repairs) will be the subject of a separate license and substantiated repair agreement between Seller and Airline.

Seller warrants that it either owns or will secure the right for Airline to use, as set forth in this Paragraph, software delivered as part of an Engine by Seller to Airline under this Agreement. [***]. Airline agrees that it shall have no rights to sublicense, decompile or modify any software provided by Seller without the prior express written consent of the owner of such software. Airline shall be solely responsible for negotiating any licenses necessary to secure for Airline any additional rights in any software.


C.	Customer shall provide GE with access to continuous data generated by the Electronic Engine Control (EEC) or by any device providing similar data, related to engine parameters (the “Continuous Engine Operational Data” or “CEOD”).

At least thirty (30) calendar days prior to Customer’s first Engine delivery, Customer and GE shall agree on the amount and transfer method of recorded CEOD to be downloaded in order to be representative of Customer operations with the common goal of improving Aircraft operations. This initial amount may be further modified to be representative of future Customer operations and GE program needs subject to Customer agreement. The list of agreed parameters will be captured in a side-letter agreement.

Notwithstanding the preceding paragraph, for the period of ninety (90) calendar days following the start of flight operations for each Aircraft that enters the fleet, starting with the first Engine of each model in operation, [***].

For the period after the first ninety (90) calendar days of operation of each Aircraft, Customer shall make its best efforts to download and timely send to GE the percentage of

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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HAWAIIAN AIRLINES, INC - 1-1026296		12

CEOD representative of Customer flight operations determined above, provided however that in case of operational events, squawks or alerts, Customer shall download recorded CEOD for both Engines of the affected Aircraft within twenty-four (24) hours, provided sufficient downtime is available, following such event and promptly transfer to GE such recorded CEOD.

GE agrees to protect CEOD from unauthorized use or unauthorized or accidental disclosure. Any CEOD may be used by GE, its parent companies and their affiliates, and its subcontractors, for 1) technical fleet and engine analysis, and/or 2) development of and improvements to CFM products and services, provided that GE parent companies and their affiliates are subject to the same confidentially obligations as GE. Notwithstanding any provision to the contrary, it is expressly understood and agreed that any Derivative Data generated by GE is and will remain the property of GE. GE will not provide Customer identification of Derivative Data to any third party.

ARTICLE 12 - LIMITATION OF LIABILITY

The liability of Seller to Airline arising out of, connected with, or resulting from the manufacture, sale, design, possession, use or handling of any Product (including Engines installed on Airline’s owned or leased aircraft as Original Equipment and engines obtained, acquired, leased or operated before or after the execution of this Agreement) or Parts thereof or therefor or furnishing of services pursuant to this Agreement, whether in contract, warranty, tort (including, without limitation, negligence, but excluding willful misconduct or gross negligence) or otherwise, shall be as set forth in this Agreement or in Exhibit A or B or in the applicable Letter Agreements to the Agreement and shall not in any event in relation to any individual claim exceed [***], at the time the claim arises. In no event shall Seller be liable for incidental, punitive, special, indirect or consequential damages, including but not limited to, damage to, or loss of use, revenue or profit with respect to any aircraft, Engine, or part thereof.

THE WARRANTIES AND GUARANTEES SET FORTH IN EXHIBIT A AND ANY APPLICABLE LETTER AGREEMENTS ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES AND GUARANTEES WHETHER WRITTEN, STATUTORY, ORAL, OR IMPLIED (INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE OF TRADE).

For the purpose of this Article, the term “ Seller ” shall be deemed to include General Electric Company, its subsidiaries (including but not limited to GE Engine Services Distribution, LLC), assigns, subcontractors, suppliers, Product co-producers, and the respective directors, officers, employees, and agents of each.

ARTICLE 13 - GOVERNMENT AUTHORIZATION, EXPORT SHIPMENT

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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HAWAIIAN AIRLINES, INC - 1-1026296		13

The Parties agree to comply with all applicable U.S. export control laws and regulations, including but not limited to the requirements of Arms Export Control Act, 22 U.S.C.2751- 2794, including the International Traffic in Arms Regulation (ITAR), 22 CFR 120 et seq,; the Export Administration Act, 50 U.S.C. App. 2401-2420, including the Export Administration Regulations, 15 C.F.R. 730-774; and the requirement for obtaining any export license or agreement, if applicable. Without limiting the foregoing, Airline agrees that it shall not transfer any export controlled item, data, information or services, to include transfer to foreign persons, including those foreign persons employed by or associated with, or under contract to the receiving Party, without the authority of an applicable export license, agreement, or applicable exemption or exception.


B.	Export Shipment. GE and Airline agree that the export shall be treated as a routed transaction pursuant to 15 CFR 748.3(b) and 15 CFR 30.3(e).

(i)

Export License Determination. Airline agrees that all provisions of the US EAR, including the end-use and end-user controls found in part 744 of the EAR, and the General Prohibitions found in part 736 of the EAR, apply to this routed export transaction. The Airline (or Airline’s designated agent) shall be the exporter and must determine licensing authority (License, License Exception, or NLR), and obtain the appropriate license or other authorization. Airline shall be responsible for obtaining any required licenses or any other required governmental authorization and shall be responsible for complying with all US and foreign government licensing requirements. Airline shall restrict disclosure of all information and data furnished in connection with such authorization and shall ship the subject matter of the authorization to only those destinations that are authorized by the US Government.

(ii)

Export Reporting. Pursuant to 15 CFR 30.3(e), Airline hereby authorizes GE, upon request of GE, (or GE’s designated agent) to file all required Electronic Export Information (EEI) reports via the U.S. Automated Export System (i.e. "AES records") prior to export from the US. GE (or GE’s designated agent) shall retain documentation to support the EEI filed and provide documentation to Airline upon request.

All rights to drawback on customs duties paid by GE with respect to Products, (or material or components thereof), belong to and shall remain in GE. If Airline arranges for export shipment, Airline agrees to furnish without charge evidence of exportation or other evidence of tax or duty exemption acceptable to the taxing or customs authorities when requested by GE.

ARTICLE 14 – PERSONAL DATA PROTECTION


A.	“Personal Data” is any information relating to an identified or identifiable natural person or to any legal entity if such legal entity is subject to data protection legislation in their country of incorporation (“Data Subject”).

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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HAWAIIAN AIRLINES, INC - 1-1026296		14


B.	Airline and Seller each agree that any Personal Data obtained from the other Party will be deemed Data of the other Party as defined in this Agreement whether or not the Personal Data is publicly available.


C.	Airline and Seller each represent that in providing Personal Data to one another they will comply with all applicable laws and regulations, including but not limited to providing notices to or obtaining consents from the Data Subjects when required.

Steps shall be taken to implement and maintain physical, technical and organizational measures to ensure the security and confidentiality of Personal Data in order to prevent accidental, unauthorized or unlawful access, use, modification, disclosure, loss or destruction of Personal Data. The security measures taken shall be in compliance with applicable data protection laws and shall be adapted to the risks represented by the processing and the nature of the personal data to be collected and/or stored.

ARTICLE 15 - NOTICES

Any notices under this Agreement shall become effective upon receipt and shall be in writing and be delivered or sent by mail, courier service, personal service or fax to the respective Parties at the following addresses, which may be changed by written notice:



If to:	HAWAIIAN AIRLINES, INC	If to:	General Electric Company
			GE-Aviation
	3375 KOAPAKA ST STE G350 P.O. BOX 30008 HONOLULU HI 96819-1804 USA		One Neumann Way, M.D. F-108 Cincinnati Ohio 45215-1988 USA

Attn:	General Counsel	Attn:	Customer Support Manager
	With an email copy to:		Facsimile Number:________________
	MEvendorperformance@hawaiianair.com		Telephone Number:________________

		If to:	GE Engine Services Distribution, LLC
			One Neumann Way, MD 111 Cincinnati, OH 452-156301
		Attn:	President
			Facsimile Number: (513) 552-2144
			Telephone Number: (513) 552-2278

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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Notice sent by the U.S. mail, postage prepaid, shall be deemed received within seven (7) days after deposit.

ARTICLE 16 - MISCELLANEOUS

Assignment of Agreement . Save as specifically provided for pursuant to this Agreement, this Agreement, any related purchase order or any rights or obligations hereunder may not be assigned without the prior written consent of the other Party. Such consent shall not to be unreasonably withheld or delayed, except that Customer’s consent will not be required for an assignment by Seller to one of Seller’s affiliates provided the rights and interests of Airline are not adversely affected and provided Seller remains liable in the event the assignee fails to perform the obligations in accordance with this Agreement. In the event of any such substitution, Customer will be so advised in writing. Any assignment in contradiction of this clause will be considered null and void. Notwithstanding, GE may assign any of its accounts receivable under this Agreement to any party without Customer’s consent.

Governing Law and Waiver of Immunity . The Agreement will be interpreted and applied in accordance with the substantive laws of the State of New York, U.S.A. without giving effect to its choice of law or conflict of law provisions, rules or procedures (except to the extent that the validity, perfection or creation of any lien or security interest hereunder and the exercise of rights or remedies with respect of such lien or security for particular items of equipment are governed by the laws of jurisdiction other than New York) and excluding the UN Convention on Contracts for the International Sale of Goods. With respect to any Customer who is incorporated or based outside of the United States, to the extent that such Customer or any of its property becomes entitled at any time to any immunity on the grounds of sovereignty or otherwise from any legal action, suit or processing of any nature, Customer hereby irrevocably waives the application of such immunity and particularly, the U.S. Foreign Sovereign Immunities Act, 28 U.S.C.1602, et. Seq., insofar as such immunity relates to Customer’s rights and obligations in connection with this Agreement.

Entire Agreement; Modification . This Agreement contains the entire and only agreement between the Parties, and it supersedes all pre-existing agreements between such Parties, respecting the subject matter hereof; and any representation, promise or condition in connection therewith not incorporated herein shall not be binding upon either Party. No modification or termination of this Agreement or any of the provisions herein contained shall be binding upon the Party against whom enforcement of such modification or termination is sought, unless it is made in writing and signed on behalf of Seller and Airline by duly authorized executives.


D.	Confidentiality of Information . This Agreement and Letter Agreements contain information specifically for Airline and Seller, and nothing herein contained shall be divulged by Airline

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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or Seller to any third person, firm or corporation, without the prior written consent of the other Parties, which consent shall not be unreasonably withheld or delayed; except (i) that Airline’s consent shall not be required for disclosure by Seller of this Agreement and Letter Agreements, and related information given by Airline to Seller, to an Engine program participant, joint venture participant, engineering service provider or consultant to Seller so as to enable Seller to perform its obligations under this Agreement or letter agreements or to build the Engine or to provide informational data; (ii) to the extent required by Government agencies, by law, or to enforce this Agreement; and (iii) to the extent necessary for disclosure to the Parties’ respective insurers, accountants or other professional advisors who must likewise agree to be bound by the provisions of this Article. In the event (i) or (iii) occur, suitable restrictive legends limiting further disclosure shall be applied. In the event the Agreement, or other Seller information or data is required to be disclosed or filed by government agencies by law, or by court order, Airline shall, to the extent legally permissible, use its best efforts to notify Seller at least thirty (30) days in advance of such disclosure or filing and shall cooperate fully with Seller in seeking confidential treatment of sensitive terms of the Agreement or such information and data.

Duration of Agreement . This Agreement shall remain in full force and effect until (i) Airline operates zero (0) aircraft powered by Products set forth herein, or (ii) less than five (5) aircraft powered by such Products are in commercial airline service globally, or (iii) the occurrence of a material breach of the obligations set forth in Article 11 “Data”. Nothing herein shall affect the rights and obligations and limitations set forth in this Agreement as to Products ordered for delivery and work performed prior to termination of this Agreement.


F.	Survival Of Certain Clauses . The rights and obligations of the Parties under the following Articles and related Exhibits shall survive the expiration, termination, completion or cancellation of this Agreement:

Article 5 - Payment for Products

Article 7 -Taxes and Duties

Article 10 - Intellectual Property Rights

Article 11 - Data

Article 12 - Limitation of Liability

Article 13 - Governmental Authorization, Export Shipment

Article 16 - Miscellaneous


G.	Language . This Agreement, orders, Data, notices, shipping invoices, correspondence and other writings furnished hereunder shall be in the English language.


H.	Severability . The invalidity or un-enforceability of any part of this Agreement, or the invalidity of its application to a specific situation or circumstance, shall not affect the validity of the remainder of this Agreement, or its application to other situations or circumstances. In addition, if a part of this Agreement becomes invalid, the Parties will endeavor in good faith

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

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to reach agreement on a replacement provision that will reflect, as nearly as possible, the intent of the original provision.


I.	Waiver . The waiver by any Party of any provision, condition, or requirement of this Agreement, shall not constitute a waiver of any subsequent obligation to comply with such provision, condition, or requirement.

Dispute Resolution . Each of the Seller and the Airline (i) hereby irrevocably submits itself to the nonexclusive jurisdiction of the courts of the State of New York, New York County, of the United States District Court for the Southern District of New York, located in the Borough of Manhattan, for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any Party hereto, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense or otherwise, in any such suit, action or proceeding, to the extent permitted by applicable law, any defense based on sovereign or other immunity or that the suit, action or proceeding which is referred to in sub-clause (i) above is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this Agreement or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by these courts.


K.	Electronic Transactions .


(i)	Seller may grant Airline access to and use of the GE Customer Web Center (“ CWC ”) and/or other GE web sites (collectively, “ GE Sites ”). Airline agrees that such access and use shall be governed by the applicable GE Site Terms and Conditions, provided, however, that in the event of a conflict with the provisions of this Agreement, this Agreement shall govern.


(ii)	Seller may permit Airline to place purchase orders for certain Products on the GE Sites by various electronic methods (“Electronic POs”). The Parties agree that such Electronic POs a) constitute legally valid, binding agreements; b) have the same force and effect as purchase orders placed in paper format signed by Airline in ink; and c) are subject to the terms and conditions hereof.


(iii)	Seller may permit Airline to access certain technical Data through the CWC, including, but not limited to GE technical publications under the terms and conditions of this Agreement. Airline shall be responsible for contacting its FAA representative or the relevant local airworthiness authority, for guidelines on the use of such electronic technical Data.


(iv)	Airline represents and warrants that any employee or representative who places Electronic POs or accesses Data through the CWC is authorized by Airline to do so and has obtained a login name(s) and password(s) through the GE Site registration process.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		18

Seller shall be entitled to rely on the validity of a login name or password unless notified otherwise in writing by Airline.

Parties, Recourse and Guarantee. GE and GE-LLC shall be jointly and severally liable for the obligations contained in this Agreement and any Letter Agreements hereto. Airline shall have recourse to GE for any dealings with GE-LLC which incorporate these terms and conditions. Further, GE agrees that in the event its subsidiary, GE Engine Services, LLC (“GEES”) fails to perform its obligations under the TrueChoice Flight Hour Agreement, No. 1-1026570, between GEES and Airline, GE will either (i) cause GEES to perform or (ii) perform such obligations on behalf of GEES.

Counterparts: This Agreement may be signed by the Parties in separate counterparts, and any single counterpart or set of counterparts, when signed and delivered to the other Parties shall together constitute one and the same document and be an original Agreement for all purposes.

IN WITNESS WHEREOF , the Parties hereto have executed this Agreement as of the day and the year first above written.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		19



HAWAIIAN AIRLINES, INC		GENERAL ELECTRIC COMPANY
By: _______________________________		By: _______________________________
Typed Name:		Typed Name:
___________________________________		___________________________________
Title:_______________________________		Title:_______________________________
___________________________________		___________________________________
___________________________________		___________________________________
Date: ______________________________		Date: ______________________________

		GE ENGINE SERVICES DISTRIBUTION, LLC
		By: _______________________________
		Typed Name:
		___________________________________
		Title:_______________________________
		___________________________________
		___________________________________

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		20

EXHIBIT A

GEnx ENGINE WARRANTY PLAN

SECTION I - WARRANTIES


A.	New Engine Warranty


1.	GE warrants each new Engine and Module against Failure for [***] Engine Flight Hours (“EFH”) as follows:


a.	[***] .


b.	[***] .


c.	[***] .


2.	[***] :


a.	[***] .


B.	New Parts Warranty

In addition to the warranty granted for new Engines and Modules GE warrants Parts as follows:


1.	[***] .


2.	[***] .


C.	Ultimate Life Warranty


1.	GE warrants Ultimate Life limits on a rotating Part for which a FAA imposed Ultimate Life limitation is published provided the Part has always been operated in GE approved configurations and has been maintained in accordance with GE technical documents and recommendations.


2.	[***].


D.	Campaign Change Warranty


1.	In the event of a Campaign Change, GE will grant the following [***]:

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		21


(i)	[*] for Parts in inventory or removed from service when new or with [*] Part Time.


(ii)	[*] for Parts in inventory or removed from service [*] or the applicable hours designated in the applicable Engine Parts Table set forth in Attachment I to this GTA, whichever is earlier.


2.	[*] - GE will grant [*] for disassembly, reassembly, modification, testing, or Inspection of GE-supplied Engines, Modules or Parts therefor when such action is required to comply with a mandatory time compliance GE Service Bulletin implementing an Airworthiness Directive.


3.	Life controlled Parts which are set forth in the Ultimate Life Warranty and which are retired by Ultimate Life limits including FAA Airworthiness Directive, are excluded from Campaign Change Warranty.


E.	Warranty Pass-On

If requested by Airline and consented to by GE in writing, which consent will not be unreasonably withheld or delayed, GE will permit assignment of the warranty support for Engines sold by Airline to commercial Airline operators, or to other aircraft operators or lessors. Such warranty support will be limited to Engines or Parts which were purchased under this Agreement or to initially installed Engines purchased by Airline from the Aircraft manufacturer and apply to the unexpired portion of the New Engine Warranty, New Parts Warranty, Ultimate Life Warranty, Campaign Change Warranty, Vendor Back-Up Warranty, and Vendor Interface Warranty (collectively, the “Engine Warranties”), and will require such operator(s) to agree in writing to be bound by and comply with all the terms and conditions, including the limitations, applicable to the Engine Warranties.

Seller's consent shall not be required for the assignment by Airline to one or more financing institutions of Airline's rights to the Engine Warranties, each such assignment made in respect to Airline's initial financing of one or more new Aircraft or Spare Engine(s), as the case may be. In exercising any rights under such Engine Warranties, such assignee shall be conclusively deemed to have accepted the applicable terms and conditions of this GTA, including the limitations, applicable to the Engine Warranties. The exercise by such assignee of any rights to the Engine Warranties shall not release Airline from any of its duties or obligations to Seller under this GTA except to the extent of actual performance by the assignee. Seller’s liability to either or both Airline and its assignee shall not be increased, duplicated or multiplied in any way by reason of such assignment. Airline shall provide the assignee an extracted copy of the terms and conditions of this GTA (including a copy of this paragraph) applicable to the Engines Warranties. Seller’s consent to the assignment under the foregoing terms shall be deemed fulfilled, without further action by the Seller, upon receipt by Seller of Airline’s written notice identifying the assignee of the Engine Warranties.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		22


F.	Vendor Back-Up Warranty

GE controls and accessories vendors provide a warranty on their products installed on Engines. This warranty applies to controls and accessories sold to GE for delivery on installed or Spare Engines and controls and accessories sold by the vendor to Airline on a direct purchase basis. In the event the controls and accessories suffer a failure during the vendor’s warranty period, Airline will submit a claim directly to the vendor in accordance with the terms and conditions of the vendor’s warranty.

In the event a controls and accessories vendor fails to provide a warranty at least as favorable as the GE New Engine Warranty (for complete controls and accessories) or New Parts Warranty (for components thereof), or if provided, rejects a proper claim from Airline, GE will intercede on behalf of Airline to resolve the claim with the vendor. In the event GE is unable to resolve a proper claim with the vendor, GE will honor a claim from Airline under the provisions and subject to the limitations of GE’s New Engine or New Parts Warranty, as applicable. Settlements under Vendor Back-Up Warranty will exclude credits for resultant damage to or from controls and accessories procured directly by Airline from vendors.


G.	Vendor Interface Warranty

Should any control or accessory, for which GE is responsible, develop a problem due to its environment or interface with other controls and accessories or with an Engine, Module or equipment supplied by the aircraft manufacturer, GE will be responsible for initiating corrective action. If the vendor disclaims warranty responsibility for Parts requiring replacement, GE will apply the provisions of its New Parts Warranty to such Part whether it was purchased originally from GE or directly from the vendor.


H.	THE WARRANTIES SET FORTH HEREIN ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER WRITTEN, STATUTORY, ORAL, OR IMPLIED (INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE OF TRADE) UNLESS AS OTHERWISE AGREED IN A LETTER AGREEMENT.

SECTION II - GENERAL CONDITIONS


A.	Airline will maintain adequate operational and maintenance records and make these available for GE inspection.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		23


B.	GE will deny a claim under any of the Warranty provisions, and the Warranty provisions will not apply if it has been reasonably determined by GE that:


(1)	such claim resulted from the subject Engine, Module or any Parts thereof:


•	Not being properly installed or maintained unless such has been performed by or on behalf of GE; or


•	Being operated contrary to the Aircraft Maintenance Manual, GE Engine Manuals or GE Engine Bulletins; or


•	Being operated contrary to applicable written instructions provided to Airline by GE subject to Airline following such instructions as soon as reasonably practicable taking into account operational constraints; or


•	Being repaired or altered in such a way as to impair its safety of operation or efficiency unless such has been performed by or on behalf of GE; or


•	Being subjected to misuse, neglect or accident; or


•	Being subjected to Foreign Object Damage; or


•	Being subjected to any other defect or cause (whether sole or contributory) not attributable to the acts or omissions of GE; or


•	Not incorporating a service bulletin related to the cause or failure in accordance with the requirements of such service bulletin unless the failure to incorporate is attributable to GE.


•	Being maintained and/or operated with parts and repairs not approved by GE, which includes, but is not limited to, any Parts and/or Modules that may be impacted by LLP Influencing Parts not approved by GE or LLP Influencing Parts repaired by processes not approved by GE.

The express provisions herein set forth the maximum liability of GE with respect to all claims of any kind under this Exhibit A, including, without limitation, contracts, warranty, tort and negligence (but excluding gross negligence and willful misconduct) arising out of the manufacture, design, sale, possession, use or handling of the Products (including Engines installed on Airline’s owned or leased aircraft as Original Equipment and engines obtained, acquired, leased or operated before or after the execution of this Agreement) or Parts thereof or therefor, and in no case shall GE’s liability to Airline in relation to any individual claim exceed [***] at the time the claim arises. In no event shall GE be liable for incidental, special, punitive or consequential damages. For the purpose of this Section II, the term “ GE ” shall be deemed to include the General Electric Company, its subsidiaries, assigns, subcontractors, suppliers, Product co-producers, and the respective directors, officers, employees, and agents of each. If Airline uses non- GE Parts or non- GE approved repairs and such parts or repairs cause personal injury, death or property damage to third parties, Airline shall indemnify and hold harmless GE from all claims and liabilities connected therewith. This indemnification shall survive termination of this Agreement.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		24

Airline shall apprise GE of any Failure within [***] after the discovery of such Failure. Any Part for which a [***] is requested by Airline shall be returned to GE upon specific request by GE and must be accompanied by sufficient information to identify the Part and the reason for its return. In such event, upon return to GE, such Part shall become the property of GE unless GE directs otherwise. Transportation expenses shall be borne by GE.


D.	The warranty applicable to a replacement Part provided under the terms of the New Engine Warranty or New Parts Warranty shall be the same as the warranty on the original Part. The unexpired portion of the applicable warranty will apply to Parts repaired under the terms of such warranty.


E.	Airline will cooperate with GE in the development of Engine operating practices, repair procedures, and the like with the objective of improving Engine operating costs.


F.	If compensation becomes available to Airline under more than one warranty or other Engine program consideration, Airline will not receive duplicate compensation but will receive the compensation most beneficial to Airline under a single warranty or other program consideration.


G.	Any repair which is performed without the prior authorization of GE will not be covered by the applicable warranty.


H.	[***] .

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		25

EXHIBIT B

PRODUCT SUPPORT PLAN SECTION I - SPARE PARTS PROVISIONING


A.	Provisioning Data

In connection with Airline’s initial provisioning of spare Parts, GE or GE-LLC shall furnish Airline with data in accordance with ATA Specification 2000 using a revision mutually agreed to in writing by GE and Airline.


B.	Return Of Parts

Airline shall have the right to return to GE - LLC , at GE-LLC ’s expense, any new or unused Part which has been shipped in excess of the quantity ordered or which is not the part number ordered or which is in a discrepant condition except for damage in transit.


C.	Parts Buy-Back

Within the first [***] after delivery of the first aircraft to Airline, GE-LLC will agree (i) to repurchase at the invoiced price, any initially provisioned spare Parts purchased from GE-LLC which GE-LLC recommended that Airline purchase, in the event Airline finds such Parts to be surplus to Airline’s needs; or (ii) to exchange with Airline the equivalent value thereof in other spare Parts. Such Parts must be new and unused, in original GE packaging, and shall meet GE inspection requirements. Parts which become surplus to Airline’s needs by reason of Airline’s decision to upgrade or dispose of Products are excluded from this provision. Airline will deliver such Parts DDP (Incoterms 2010, whereby Airline acts as “Seller” and GE as “Buyer”), to GE or GE-LLC’s facility in the United States, and GE shall reimburse Airline the reasonable shipping costs incurred for the returned Parts.


D.	Parts of Modified Design


1.	GE-LLC shall have the right to make modifications to design or changes in the spare Parts sold to Airline hereunder.


2.	GE-LLC will from time to time inform Airline in accordance with the means set forth in ATA Specification 2000, when such spare Parts of modified design become available for shipment hereunder.


3.	Spare Parts of the modified design will be supplied unless Airline advises GE-LLC in writing of its contrary desire within ninety (90) days of the issuance of the Service Bulletin specifying the change to the modified Parts. In such event, Airline may negotiate for the continued supply of spare Parts of the pre-modified design at a rate of delivery and price to be agreed upon.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		26


E.	Spare Parts Availability


1.	GE-LLC will maintain a stock of spare Parts to cover Airline’s emergency needs. For purposes of this Paragraph, emergency is understood by GE-LLC and Airline to mean the occurrence of any one of the following conditions:

AOG - Aircraft on Ground

Critical - Imminent AOG or Work Stoppage Expedite - Less than Normal Lead Time

Airline will order spare Parts according to lead-time but should Airline’s spare Parts requirements arise as a result of an emergency, Airline can draw such spare Parts from GE-LLC’s stock. A 24-hour, 7 days a week, Customer Response Center is available to Airline for this purpose. If an emergency does exist, GE-LLC will use its best efforts to ship required spare Part(s) within the time period set forth below following receipt of an acceptable purchase order from Airline:

AOG - 4 Hours

Critical - 24 Hours

Expedite - 7 Days


3.	Airline shall provide GE with spare Parts provisioning forecasts, updated as mutually agreed, specifying projected requirements to cover at least the following twelve

(12) months period. Airline agrees to promptly notify GE in the event the Airline will not achieve such projected requirements. If Airline does not supply such forecast provisioning then GE may modify the spare Part lead-time currently defined in the Spare Parts Catalog.

SECTION II - TECHNICAL PUBLICATIONS AND DATA

Upon execution of this Agreement, GE will furnish to Airline, at no additional charge, technical manuals and Service Bulletins, including any revisions thereof. GE will furnish these via a USB drive and access through the following link: “ https://www.geaviation.com/support/technical-manuals-indexes ”. All technical manuals and Service Bulletins provided by GE shall be in the English language and in accordance with mutually agreed upon provisions of the ATA Specification.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		27

SECTION III - TECHNICAL TRAINING


A.	Introduction

GE shall make technical training available to Airline, at GE’s designated facilities. Details on scope, quantity, materials, and planning shall be as mutually agreed.


B.	Scope

The training furnished under this Agreement shall be as follows:


•	Product – as previously defined in this Agreement.


•	Quantity – [***].


•	Courses – detailed in training catalog ( www.geaviation.com/services/customer- training ).

* Student-Days = the number of students multiplied by the number of class days The Customer Support Manager, in conjunction with appropriate GE Training

representatives, will be available to conduct a review session with Airline to schedule required training. To assure training availability, such review shall be conducted six (6) to twelve (12) months prior to the delivery date of the first aircraft.


C.	Training Location

Unless arranged otherwise with GE concurrence, training shall be provided by GE in English at one or more of the GE designated facilities identified in the training catalog.

If an alternate site is desired, GE will furnish a quotation with following minimum conditions that must be met in order to deliver “equivalent” training at the alternate site.


1.	Airline will be responsible for providing acceptable classroom space and equipment

– including engines, special tools, and hand tools required to conduct the training.


2.	Airline will pay GE’s travel and living charges for each GE instructor for each day, or fraction thereof, such instructor is away from GE’s designated facility, including travel time.


3.	Airline will pay for round-trip transportation for GE’s instructors and shipment of training materials between the designated facility and such alternate training site.


D.	Airline Responsibility

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		28

During engine maintenance training at any of the GE designated facilities, Airline shall be responsible for its personnel’s typical expenses such as:


•	Air and ground transportation expenses


•	Lodging (hotel accommodations)


•	Meals


•	All Medical – physicians, medication, emergencies, etc.


•	Other various and sundry expenses (visits to other businesses, entertainment, etc.).

Airline will be responsible for shipping costs of training materials in all cases.

SECTION IV - CUSTOMER SUPPORT AND SERVICE


A.	Customer Support Manager

GE shall assign to Airline at no charge, a Customer Support Manager to provide and coordinate appropriate liaison between the Airline and GE’s factory personnel.


B.	Field Support

GE will make available to Airline, at no charge, field service engineering support to assist Airline’s operations of Engines including scheduled consultative reviews. The field service engineer will assist with the introduction of new aircraft/Engines into Airline’s fleet; with the resolution of technical issues; communication between Airline and GE factory; and the effective maintenance and operations of Engines.

Throughout the operation of these Engines, the GE Aviation Operations Center (“ AOC ”) and the customer web portal will augment support at no additional charge to Airline.

SECTION V - ENGINEERING SUPPORT

GE shall make factory-based engineering support available, at no charge, to Airline, for typical powerplant issues

SECTION VI – SUPPORT EQUIPMENT

Support equipment includes tools required to support the line maintenance, removal/installation, transportation, overhaul (assembly/ disassembly/inspection) and test of the Engine. This equipment is offered for sale by Rhinestahl CTS (Customer Tooling Solutions) or through a GE licensee.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		29

Rhinestahl CTS – Customer Tooling Solutions 7687 Innovation Way

Mason, Ohio USA, 45040 aviation.toolingorder@rhinestahl.com

Piece part component repair tooling is dependent on the specific equipment and repair methods/process and therefore is often locally manufactured to non-standard designs. As such it is generally not offered for sale.

SECTION VII - PERFORMANCE TREND MONITORING

GE will also provide the standard diagnostics services set forth in Exhibit D.

SECTION VIII - GENERAL CONDITIONS - PRODUCT SUPPORT PLAN

All support provided by GE above, is provided to Airline exclusively for the maintenance and overhaul by Airline of Airline’s Products provided that such Products are operated in the original Engine configuration, or in a modified Engine configuration which does not, directly or indirectly, affect such Products or in an Engine configuration that has been approved by GE. The support provided herein may not be utilized for any other purpose, or assigned or otherwise transferred to any third party, without the written consent of GE, which consent may be exercised by GE in its sole discretion. Technical support for shops offering engine maintenance and overhaul services to third party customers is available from GE directly.


B.	Airline will maintain adequate operational and maintenance records and make these available for GE inspection.


C.	This Product Support Plan is subject to the provisions of the Article titled “Limitation of Liability” of the Agreement to which this Exhibit B is attached.


D.	Airline will cooperate with GE in the development of Engine operating practices, repair procedures, and the like with the objective of improving Engine operating costs.


E.	Except as provided in the Warranty Pass-On provisions in Paragraph E of Exhibit A of the Agreement to which this Exhibit B is attached, this Product Support Plan applies only to the original purchaser of the Engine except that installed Engines supplied to Airline through the aircraft manufacturer shall be considered as original Airline purchases covered by this Product Support Plan.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		30

EXHIBIT C

PAYMENT TERMS


A.	Airline shall make payment in United States Dollars and in immediately available funds. Payment will be effective upon receipt thereof.


•	For Spare Engines and Modules:


-	Twelve (12) months prior to a scheduled delivery date, GE shall render to Airline an invoice for [*] of the base price (unescalated) which Airline shall pay within [*] of the date of the invoice; and


-	Payment of the balance, including amount for price escalation to the month of scheduled delivery, if any, shall be made at time of delivery of each item.

Solely for administrative purposes (including shipping, export and taxation requirements), Airline shall have the right to place, and GE shall have the right to require, a purchase order reflecting the Airline commitment to purchase a Spare Engine or Module as contained in the applicable Letter Agreement. For avoidance of doubt, placement of such purchase order shall not affect the payment obligation of Airline specified above, or the shipment obligation of GE as set forth in the applicable Letter Agreement.


•	For spare Parts including Expendable Parts, invoice will be issued at time of Delivery. Airline shall pay within [***] of invoice receipt.


B.	All invoicing and payments (including payment details) hereunder shall be transmitted electronically to GE’s bank account as notified by GE on its invoices.


C.	If delivery hereunder is delayed by Airline, payment shall be made based on the delivery schedule set forth in the applicable Letter Agreement.


D.	GE may, by giving reasonable written notice to Airline, establish different payment terms in the event Airline consistently fails to make payment according to the terms set forth above.

In the event that the Airline has a bona fide dispute regarding any part or amount contained within an invoice, Airline shall within fifteen (15) calendar days of receipt of the invoice give written notice to GE of that portion of the invoice in dispute, with their substantiated reasons, together with any supporting documentation. GE and Airline shall use their respective best endeavors and allocate sufficient resources to settle any part of an invoice disputed by Customer in accordance with this Article 16 J within fifteen (15) calendar days or as soon as possible thereafter. Should the Parties fail to reach resolution of any disputed

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		31

invoice within such period, the disputed invoice shall be resolved by designating senior managers to resolve the dispute in accordance with Article 16 J. On resolution of the dispute GE shall credit Airline or Airline shall pay to GE, as applicable, the disputed portion of the invoice within seven (7) calendar days.

Airline shall be required to pay the undisputed portion of any invoice in accordance with the payment terms set forth above. Provided that Airline complies with these requirements, no late payment charges, as set forth in paragraph F below, shall be levied on the disputed amount, for the time that such amount is disputed by the Parties.

If Airline fails to make any of the foregoing payments when due, Airline will also pay to GE, without prejudice to any other rights available to GE under this Agreement, interest on any late payment, calculated from the payment due date to the date of actual remittance. Interest will be computed at [***] , but in no event will the rate of interest be greater than the highest rate then permitted under applicable law.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		32

EXHIBIT D

STANDARD DIAGNOSTICS SERVICES


1.	DIAGNOSTICS SERVICE ELEMENTS

Diagnostics Services. GE shall provide the following services (hereinafter “Services”) to Airline in support of the Engines with no charge to the Airline:

[***]


2.	[***]


3.	[***]


4.	[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		33

EXHIBIT E

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		34

ATTACHMENT I

GEnx Engine WARRANTY PARTS LIST *



		[***]
		[***]	[***]	[***]
Fan Rotor
	Blade, 1st Stage	[***]	[***]	[***]
	Blade, Platforms	[***]	[***]	[***]
	Blade, Booster Stages 2-4	[***]	[***]	[***]
	Disk, 1st Stage	[***]	[***]	[***]
	Spool, Booster	[***]	[***]	[***]
	Forward Fan Shaft	[***]	[***]	[***]
	Spinner	[***]	[***]	[***]
Fan Stator
	Forward Case	[***]	[***]	[***]
	Booster Vanes	[***]	[***]	[***]
	Booster Case rings	[***]	[***]	[***]
	Outlet Guide Vane (OGV)	[***]	[***]	[***]
	Aft Acoustic Panels	[***]	[***]	[***]
	Bleed Valve System	[***]	[***]	[***]
	Aft Case	[***]	[***]	[***]
Compressor Rotor
	Blades	[***]	[***]	[***]
	Disks, Spools, and Shafts	[***]	[***]	[***]
Compressor Stator
	Cases	[***]	[***]	[***]
	Vane Shrouds	[***]	[***]	[***]
	Vanes	[***]	[***]	[***]
	Variable Stator Actuating Rings	[***]	[***]	[***]
Combustor
	Inner/Outer Liners & Dome	[***]	[***]	[***]
	Case	[***]	[***]	[***]
HPT Rotor

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		35



	Blades	[***]	[***]	[***]
	Retaining Rings	[***]	[***]	[***]
	Stg 1&2 Disks	[***]	[***]	[***]
	Midseal	[***]	[***]	[***]
	Forward Outer Seal	[***]	[***]	[***]
	Aft seal	[***]	[***]	[***]
HPT Stator
	Vane Assemblies	[***]	[***]	[***]
	Vane Support	[***]	[***]	[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		36



	Shrouds	[***]	[***]	[***]
	Shroud Support	[***]	[***]	[***]
LPT Rotor
	Blades	[***]	[***]	[***]
	Interstage Seals	[***]	[***]	[***]
	Disks	[***]	[***]	[***]
	LP Cone Shaft	[***]	[***]	[***]
	LP Mid Shaft	[***]	[***]	[***]
LPT Stator
	Case	[***]	[***]	[***]
	Vane Assemblies	[***]	[***]	[***]
	Shrouds	[***]	[***]	[***]
Fan Frame
	Fan Hub Frame	[***]	[***]	[***]
	All Supports	[***]	[***]	[***]
	“A” Sump	[***]	[***]	[***]
Turbine Center Frame
	Frame	[***]	[***]	[***]
	“B” Sump	[***]	[***]	[***]
Turbine Rear Frame
	Frame	[***]	[***]	[***]
	#5 Bearing Support	[***]	[***]	[***]
	“C” Sump	[***]	[***]	[***]
Main Engine Bearings		[***]	[***]	[***]
Gearboxes
	Cases	[***]	[***]	[***]
	Shafts, Drive	[***]	[***]	[***]
	Gears	[***]	[***]	[***]
	Bearings	[***]	[***]	[***]
Air Duct		[***]	[***]	[***]
Sump Air and Oil Seals		[***]	[***]	[***]
Controls & Accessories-Engine
	[***]	[***]	[***]	[***]

* Warranty Parts List may change as Engine program evolves

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- _______________________________________________________________________________________________________________________________________

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)



HAWAIIAN AIRLINES, INC - 1-1026296		37

CONFIDENTIAL TREATMENT REQUESTED

GE - Aviation

LETTER AGREEMENT NO. 1

TO GTA No. 1-1026296

HAWAIIAN AIRLINES, INC

3375 KOAPAKA ST STE G350

P.O. BOX 30008

HONOLULU, HI

96819-1804

WHEREAS, General Electric Company, acting through its GE – Aviation business unit (hereinafter individually referred to as “GE”), GE Engine Services Distribution, LLC (hereinafter individually referred to as “GE-LLC”), and HAWAIIAN AIRLINES, INC (hereinafter individually referred to as “Airline”) (GE, GE-LLC and Airline being hereinafter collectively referred to as the “Parties”) have entered into General Terms Agreement 1-1026296 dated October 1, 2018 (hereinafter referred to as “GTA”); and

WHEREAS, the GTA contains the applicable terms and conditions governing the sale by GE and GE-LLC and the purchase by Airline of Spare Engines, related equipment and spare parts therefor in support of Airline’s GE powered fleet of aircraft from The Boeing Company (“Airframer”).

NOW THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree as follows:

Airline has entered into an agreement with Airframer to take delivery of ten (10) new firm GEnx-1B powered [***], 787-9, or [***] aircraft (the “Firm Aircraft”) and up to ten (10) Option Aircraft or Purchase Right Aircraft (the “Future Option Aircraft”, jointly the “Aircraft”) delivered direct from Airframer in accordance with the delivery schedule set forth in Attachment A hereto (the “Delivery Schedule”). Airline agrees to purchase and

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

take delivery of [***] Basic Engine and [***] Propulsor. However, as an alternative to [***] Basic Engine and [***] Propulsor, Airline may, in satisfaction of this initial requirement, elect to purchase and take delivery of [***] Basic Engines and [***] Propulsors from GE. In either case, Airline (starting with a spare Basic Engine) will maintain a Spare Engine to installed Engine ratio of not less than [***] in support of the Aircraft and Leased Aircraft (as defined in paragraph 2 below). Specifically, Airline will take delivery of first spare Basic Engine with delivery of the [***] Aircraft or Leased Aircraft, take delivery of second Spare Engine with delivery of the [***] Aircraft or Leased Aircraft, and providing Airline takes delivery of additional Aircraft or Leased Aircraft, Airline will take delivery of third Spare Engine with delivery of the [***] Aircraft or Leased Aircraft and a fourth Spare Engine with delivery of the [***] Aircraft or Leased Aircraft.

Airline may lease from lessor(s) additional new GEnx-1B powered [***], 787-9, or [***] aircraft (“Leased Aircraft”), which Airline will add to this Letter Agreement unless otherwise prohibited by the lessor. Paragraph B, Special Guarantees, are extended for up to [***] Leased Aircraft. If more than [***] Leased Aircraft are leased, then the [***] for those Leased Aircraft above the cap of [***] Leased Aircraft will be covered in a separate amendment to this Letter Agreement. [***]

A. Special Allowances

In addition to the allowances passed to Airline by Airframer on GE’s behalf, GE agrees to provide the following allowances to Airline subject to the conditions set forth in Attachment B hereto:


1.	Aircraft Allowance

For each of the Aircraft delivered to Airline [***] , GE will provide Airline with a per aircraft allowance for each such Aircraft in the amount of:

[***] for each shipset of GEnx-1B67 Engines purchased

[***] for each shipset of GEnx-1B70 Engines purchased

[***] for each shipset of GEnx-1B74/75 Engines purchased

(“Aircraft Allowance”)

Such per Aircraft Allowance is stated in January [***] and shall be subject to adjustment for escalation to the date of the scheduled Aircraft delivery to Airline in accordance with

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

the escalation formula set forth in Attachment D and subject to the Escalation Cap set forth in paragraph 4 below.

Each per Aircraft Allowance will be earned by Airline upon delivery of Aircraft to Airline. If Airline provides the Aircraft delivery date at least fifteen (15) business days prior to scheduled Aircraft delivery date for the first Aircraft delivery and at least five (5) business days for subsequent Aircraft, GE will provide the Aircraft Allowance directly to the Airframer. Airline shall continue to advise GE of any delivery date changes.

Otherwise, Aircraft Allowance will be made available to Airline within five (5) business days following receipt of written notice from Airline that it has taken delivery of each Aircraft in accordance with its purchase agreement with Airframer.

If GE provides the Aircraft Allowance to the Airframer and the actual delivery date is delayed more than 2 business days from the scheduled delivery date, and Airline has notified GE that it has requested Airframer to refund the Aircraft Allowance, and during such time GE has not received refund of the Aircraft Allowance from the Airframer and so notified Airline, then Airline will pay to GE interest on such amount, unless the delay is caused by GE. Interest will be calculated from the date of scheduled delivery to the actual delivery date of the Aircraft. Interest will be computed at [***] .


2.	Spare Engine Allowance

In support of the required [***] Spare Engine to installed Engine ratio, GE agrees to provide Airline an allowance [***] of either [***] or [***] the invoice issued by GE for each Spare Engine purchased by Airline.

The [***] will be made available for Spare Engines resulting from the firm order of Aircraft.

The [***] will be made available for the purchase of Spare Engines required due to the acquisition of Leased Aircraft.

The Spare Engine Allowance [***] will be made available to Airline [***] . For the avoidance of doubt, the [***] only applies to the Spare Engine and not to any other items which may appear on the invoice.

While Airline has ten Firm Aircraft on order with the Airframer or delivered, [***] Spare Engines.

At any time that Airline has eleven and up to fifteen Aircraft on order or delivered, [***] Spare Engine. At any time Airline has [***] on order or delivered, [***] Spare Engine.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-


3.	Price Protection for Future Option Aircraft

Airline has entered into an agreement with Airframer to take delivery the Firm Aircraft and up to ten (10) Future Option Aircraft. If Airline confirms any Future Option Aircraft with Airframer, GE agrees that, if requested by the Airframer, the applicable installed Engine price for such Future Option Aircraft will be the same as applicable January 2017 installed Engine price of the Firm Aircraft. The only adjustment to such Engine price will be in accordance with the terms of the [***] below. This [***] subject to the provisions in Attachment A.

[***] , or such later date as may be agreed between Airline and Airframer. The total amount due will be calculated at the time of Airline’s notification to GE and will be due within five (5) days of such notification. [***].


4.	Rating Thrust Plug Loan

[***].


5.	Escalation Cap Installed Engines and Allowances

[***].


6.	Escalation Cap Spare Engines

[***].

B. Special Support

GE agrees to provide the following special support to the Airline:


1.	EIS Support

In preparation for Airlines entry into service (“EIS”), GE will assign a customer support manager and a field service engineer to help lead Airline through the checklist of items to be accomplished prior to first delivery. [***], Airline and GE will develop and complete a checklist which may include a product support plan, training plan, flight ops briefing, initial provisioning plan, tooling list, development of the MPD, stress test, systems readiness test and more. [***], the customer support manager and the field service engineer will conduct on-site visits to ensure Airline is progressing to the agreed plan. [***], GE will provide support in Honolulu to ensure that Airline has access to the necessary product support tools and online ordering systems, as well as ensuring a smooth EIS experience. Airline will ensure adequate work space and access during this period. Following the initial delivery period, the Parties will mutually agree on the necessary support during the entry into revenue service [***].

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-


2.	Enhanced Training Days

Section III of Exhibit B to the GTA will be modified as follows. The quantity of student days furnished to Airline will be [***]. [***].

C. Special Guarantees

GE agrees to provide the following special guarantees to Airline in support of the Aircraft, up to 10 additional Leased Aircraft, and Spare Engines described in this Letter Agreement [***] . These Special Guarantees are subject to the Basis and Conditions for Special Guarantees set forth in Attachment E hereto. Terms which are capitalized but not otherwise defined herein shall have the meaning ascribed to them in Section I of the GTA. If an Engine covered by any Special Guarantee delineated below, exhibits performance that is worse than the guaranteed performance value contained in such Special Guarantee, and such Engine has been retrofitted to incorporate non-GE approved life limited, flow path, or fuel delivery parts, or non-GE approved engine controls, it shall be the responsibility of GE to demonstrate that such part(s) has contributed to the performance deterioration for that Engine. In the event such demonstration has been made by GE, such Engine will be removed from the event calculation used to determine total fleetwide performance under the applicable Special Guarantee. Unless otherwise specifically indicated all of the Special Guarantees set forth below shall be effective [***] commencing upon the entry into revenue service of each Aircraft or Leased Aircraft (the “Guarantee Period”). None of the remedies or caps specified below are subject to escalation. These Special Guarantees are exclusively offered and administered by GE.

[***]. [***] .

The obligations set forth in this Letter Agreement are in addition to the obligations set forth in the GTA. In the event of conflict between the terms of this Letter Agreement and the terms of the GTA, the terms of this Letter Agreement shall take precedence. Terms which are capitalized but not otherwise defined herein shall have the meaning given to them in Article I of the GTA.

Confidentiality of Information. This Letter Agreement contains information specifically for Airline and GE, and nothing herein contained shall be divulged by Airline or GE to any third person, firm or corporation, without the prior written consent of the other Parties, which consent shall not be unreasonably withheld; except (i) that Airline’s consent shall not be required for disclosure by GE of this Letter Agreements, to an Engine program participant, joint venture participant, engineering service provider or consultant to GE so as to enable GE to perform its obligations under this Letter Agreement or to provide informational data; (ii) to the extent

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

required by Government agencies, by law, or to enforce this Letter Agreement; and (iii) to the extent necessary for disclosure to the Parties’ respective insurers, accountants or other professional advisors who must likewise agree to be bound by the provisions of this paragraph. In the event (i) or (iii) occur, suitable restrictive legends limiting further disclosure shall be applied. In the event this Letter Agreement, or other GE information or data is required to be disclosed or filed by government agencies by law, or by court order, Airline shall notify GE at least thirty (30) days in advance of such disclosure or filing and shall cooperate fully with GE in seeking confidential treatment of sensitive terms of this Letter Agreement.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

CONFIDENTIAL TREATMENT REQUESTED

Please indicate your agreement with the foregoing by signing two (2) duplicate originals as provided below.

Very truly yours,



HAWAIIAN AIRLINES, INC		GENERAL ELECTRIC COMPANY


By:		By:
Typed Name:		Typed Name:
Title:		Title:
Date:		Date:


GE ENGINE SERVICES DISTRIBUTION, LLC


By:
Typed Name:
Title:
Date:

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

GE PROPRIETARY INFORMATION

LA -1 HAWAIIAN AIRLINES, INC - 1-1026296

(subject to restrictions on cover page)

ATTACHMENT A – Delivery Schedule


1.	Aircraft Delivery Schedule

Firm Aircraft Installs

[***] [***]

Spare Engine Delivery Schedule

[***]


2.	Aircraft/Engine Delivery Flexibility

[***]


3.	Delivery Delays and Cancellation Rights

[***]


4.	Options or Purchase Rights

Airline has the right with Airframer to purchase up to a total of ten (10) additional Option Aircraft or Purchase Right Aircraft [***].


5.	[***]

[***]

In the case where Airline exercises any of its rights in this Attachment A, Airline will not be detrimentally affected or incur any penalties, under the terms of this Letter Agreement.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

ATTACHMENT B

CONDITIONS FOR SPECIAL ALLOWANCES/DELAY/CANCELLATION


1.	Installed Engine Allowances

Installed engine allowance described herein apply to the Aircraft together with the Engines purchased by Airline directly from the Airframer. For the avoidance of doubt, this includes Aircraft subject to a sale lease back transaction.


2.	Allowance Not Paid

Allowances described herein will become unearned and will not be paid if Engines have been delivered to the Airframer for installation in Airline's Aircraft and, thereafter, for any reason, Airline's purchase order with the Airframer is terminated, canceled or revoked. Also, Allowances described herein will become unearned and will not be paid if Engines have been delivered to the Airframer for installation in Airline’s Aircraft and for any reason delivery of the Aircraft has been prevented or delayed (unless Airframer has failed to install the Engines on Airline’s Aircraft) [***].


3.	[***]

[***]


4.	[***]

[***]


5.	Assignability of Allowance

Any allowance described herein is exclusively for the benefit of Airline and is not assignable without GE's written consent, which should not be unreasonably withheld or delayed.


6.	Set Off for Outstanding Balance

[***].


7.	Cancellation of Installed or Spare Engines

Airline recognizes that harm or damage will be sustained by GE if Airline fails to accept delivery of the Spare Engines or the Engines installed on the Aircraft when duly tendered. Within thirty (30) days of any such cancellation or failure to accept delivery occurs, Airline shall remit to GE a cancellation charge [***] , determined as of the date of scheduled Spare

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

Engine delivery to Airline. or to the aircraft manufacturer whichever is applicable. For Installed Engines, the [***]

The parties acknowledge such minimum cancellation charge to be a reasonable estimate of the minimum harm or damage to GE in such circumstances. Such minimum cancellation charge shall be deemed liquidated damages for such harm or damage.

GE shall retain any progress payments or other deposits made to GE for any such Engine. Such progress payments will be applied first to the minimum cancellation charge for such Engine. Progress payments held by GE in respect of any such Engine which are in excess of such amounts will be refunded to Airline, provided Airline is not then in arrears on other amounts owed to GE.


8.	Delay Charge for Installed or Spare Engines

In the event Airline is responsible, excluding any Excusable Delay, for a delay to the scheduled delivery date of a Spare Engine , or causes the delay of the scheduled delivery date of an installed Engine, [***], such delay shall be considered a cancellation and the applicable provisions hereof regarding the effect of cancellation shall apply.

[***]


9.	[***]

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

Attachment C



BASE PRICES FOR SPARE ENGINES AND ASSOCIATED EQUIPMENT Prices Applicable to Deliveries [***]

	Item		[***]

	1.	[*] [*]	[***]
	2.	[*] [*]	[***]
	3	[*] [*]	[*] [*]
		[*] [*]	[*] [*]
		[*] [*]	[*] [*]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-



	A.	Base prices are effective for Spare Engines (including associated equipment and maximum climb thrust increase), Optional Equipment and Modules delivered to "AIRLINE" by GE on or [***]. The base prices are subject to adjustment for escalation.
	B.	The selling price of GEnx-1B Spare Engines, Optional Equipment and Modules ordered for delivery after the period set forth in Paragraph A above shall be the base price then in effect, which base price shall be subject to adjustment for escalation in accordance with GE's then-current escalation provisions.
	C.	*The Required Airframer Furnished Equipment pricing is for reference only. Actual price will be based on vendor catalog price.
	D.	Required engine equipment definition subject to change by GE based on modifications in configuration, assembly processes, and/or shipping requirements.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

ATTACHMENT D – ESCALATION OF INSTALLED ENGINES, SPARE ENGINES AND ALLOWANCES

GEnx-1B Escalation Formula

GEnx Engines and modules base prices are subject to adjustment for escalation in accordance with the escalation formula set forth below.

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

ATTACHMENT E

BASIS AND CONDITIONS FOR SPECIAL GUARANTEES

[***]

In this section “Acts of God” means events which result from natural causes, external to the Engine, but excluding natural environmental conditions that the Engine is certified to withstand in normal operations consistent with the AMM.

Administration

The Parties shall agree regarding administration of the guarantees. Further, the guarantees are not assignable without the written consent of GE.

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

ATTACHMENT F

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

ATTACHMENT G

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

ATTACHMENT H

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL-

CONFIDENTIAL TREATMENT REQUESTED

TrueChoice ^tm

FLIGHT HOUR

AGREEMENT

BETWEEN

GE ENGINE SERVICES, LLC

AND

HAWAIIAN AIRLINES, INC

Agreement Number: 1-1026570 Dated:

October 1, 2018

This proposed Agreement will remain open until October 1, 2018 and will expire if not signed by all Parties on or before that date.

GE DESIGNATED CONFIDENTIAL

NOTICE

The information contained in this document is GE Engine Services, LLC ("GE") Designated Confidential Information and is disclosed in confidence. It is the property of GE and will not be used, disclosed to others or reproduced without the express written consent of GE. If consent is given for reproduction in whole or in part, this notice and the notice set forth on each page of this document will appear in any such reproduction. U.S. export control laws may also control the information contained in this document. Unauthorized export or re-export is prohibited.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL

TABLE OF CONTENTS



ARTICLE 1 – DEFINITIONS	3
ARTICLE 2 – TERM/ENGINES/SERVICES	3
ARTICLE 3 – COVERED SERVICES	3
ARTICLE 4 – SUPPLEMENTAL WORK SERVICES	4
ARTICLE 5 – PRICING	5
ARTICLE 6 – INVOICING AND PAYMENT	6
ARTICLE 7 – FLEET MANAGEMENT	8
ARTICLE 8 – WARRANTY	11
ARTICLE 9 – DELIVERY/REDELIVERY	12
ARTICLE 10 – ADDITION OF ENGINES	14
ARTICLE 11 – DELETION OF ENGINES	15
ARTICLE 12 – TERMINATION	16
ARTICLE 13 – REPRESENTATIONS	16
ARTICLE 14 – GENERAL TERMS AND CONDITIONS	17
EXHIBIT A: DEFINITIONS	20
EXHIBIT B: ENGINES COVERED	24
EXHIBIT C: RATE ADJUSTMENT	25
EXHIBIT D: PRICE ADJUSTMENT MATRIX	26
EXHIBIT E: SUPPLEMENTAL WORK SERVICES PRICING	27
EXHIBIT F: SUPPLEMENTAL WORK SERVICES PRICING – ANNUAL ADJUSTMENT	28
EXHIBIT G: SUPPLEMENTAL WORK SERVICES PRICING - FIXED PRICE LABOR SCHEDULE	29
EXHIBIT H: SUPPLEMENTAL ON-WING SUPPORT	30
EXHIBIT I: FLIGHT LINE REPLACEABLE UNITS	31
EXHIBIT J: GENERAL TERMS AND CONDITIONS	32
EXHIBIT K: GE APPROVED REPAIR STATIONS	37
EXHIBIT L: FLIGHTLINE LRU	38
EXHIBIT M: [***]	39
EXHIBIT N: INDIVIDUAL ENGINE PERFORMANCE RETENTION CALCULATION	40
EXHIBIT O: [***]	41

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 2

Subject to restrictions on the cover or first page

TrueChoice ^TM Flight Hour Agreement

THIS FLIGHT HOUR AGREEMENT is made and is effective as of this October 1, 2018 (the “Effective Date”) by and between HAWAIIAN AIRLINES, INC, a corporation organized and existing under the laws of Delaware, having its principal place of business at 3375 KOAPAKA ST STE G350 P.O. BOX 30008, HONOLULU, HI 96819-1804, US ("Customer") and GE Engine Services, LLC, having its principal place of business at One Neumann Way, Cincinnati, Ohio 45215 ("GE") (either a “Party” or collectively, the “Parties”).

ARTICLE 1 – DEFINITIONS

Capitalized terms used in this Agreement and not otherwise defined have the meaning set forth in Exhibit A.

ARTICLE 2 – TERM/ENGINES/SERVICES


2.1	Term . Each Party’s obligation to perform will commence upon entry into service of the first Aircraft (the “Commencement Date”) and such obligation will continue for each Engine, unless sooner terminated, for a period of ten (10) years per Engine from the point of each Engine’s entry into service (the “Initial Term”). [***].


2.2	Engines . The Engines covered by this Agreement are set forth in Exhibit B. During the term of this Agreement, GE shall be the exclusive provider of both Covered Services and Supplemental Work Services for the Engines.


2.3	Services Provided . GE will provide Services to restore Engines to Serviceable condition in accordance with the Repair Specification, the Workscope, all applicable technical and quality standards required by the Airworthiness Authority, the terms of this Agreement and in accordance with good industry practice and exercising reasonable skill and care.

For the number of Engines equivalent to the number of Customer’s Spare Engines, included in the Initial Term or Follow-On Term, which are last to receive a Performance Restoration shop visit during the Initial Term, such Engines shall receive Covered Services under this Agreement, except for the Performance Restoration shop visit, which will be performed per the terms of Exhibit M. For the avoidance of doubt, the Engine serial numbers may be different from term to term and from the Engine serial numbers of the delivered Spare Engines.


2.4	Eligibility . Engines installed on Aircraft at date of Delivery to the Customer will be eligible for Covered Services and Supplemental Work Services.

ARTICLE 3 – COVERED SERVICES


3.1	Qualified Shop Visit and Qualified Removal . A Qualified Shop Visit occurs when the Engine undergoes a shop visit for Services that are Covered Services following a Qualified Removal of the Engine. [***]:

[***]


3.2	Covered Shop Visit Services . GE will provide the following Covered Services at a Qualified Shop Visit subject to any of the provisions of Article 7 – Fleet Management as may be applicable.

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 3

Subject to restrictions on the cover or first page


3.3	Covered Flightline Services . GE will provide the following Flightline Services:


a.	Repair and scrap replacement of LRU’s identified in Exhibit I that are removed from an Engine at the flightline in accordance with the terms set forth in Exhibit L.


b.	[***].


3.4	Diagnostics . GE will provide to Customer comprehensive diagnostics services as Covered Services to identify and diagnose trend shifts as follows:

[***]


3.5	On Wing Support . GE On-Wing Support, Inc. (“OWS”) will provide scheduled, unscheduled, line or hospital shop maintenance Services which are not otherwise considered to be Services under Articles 3.1 or 3.2, [***].

3.6

Transportation . GE will arrange and pay for the costs of roundtrip transportation to and from the airport location(s) designated by Customer for the allocation and storage of Spare Engines, or from another mutually agreed location, to a GE Approved Repair Station for each Qualified Shop Visit. Engines will be shipped as Propulsors or with the fan case separated, as applicable, unless otherwise agreed by the Parties. Notwithstanding the referenced Incoterm, [***].


3.7	[***]

[***]


3.8	AOG Lease Engines Service


a.	[*] . [*].


b.	[*] . [*].

Return of Lease Engines . Customer will remove the AOG Lease Engine from an Aircraft and make available for collection by GE or GE’s nominated carrier FCA (Incoterms 2010), which GE acting as buyer, as soon as practicable after the AOG Condition has been resolved by a Customer Engine becoming available for installation as a spare Engine, but in no case later than ten (10) Days after the AOG Condition has been resolved by a Customer Engine becoming available for installation as a spare Engine (the “Lease Return Period”). GE will pay the daily engine rental fees, the hourly restoration charges and the LLP fees per flight cycle and Customer will pay the applicable Rate Per EFH for EFH incurred by the AOG Lease Engine during the Lease Return Period. Customer will commence paying any and all applicable lease fees on expiry of the Lease Return Period. [***].


d.	Sole Remedy . The foregoing provisions of this Article 3.4 will constitute the sole remedy of Customer and the sole liability of GE for lease engine availability and resolution of the AOG Engine conditions under this Agreement.


3.9	[***]

ARTICLE 4 – SUPPLEMENTAL WORK SERVICES


4.1	Supplemental Work Services . The following are Supplemental Work Services:

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 4

Subject to restrictions on the cover or first page


a.	An Unqualified Removal resulting in any and all Services; not covered under Article 3 as Covered Services;


b.	Any Services provided on Engines not eligible for Covered Services;


c.	Services, whether performed during a Qualified Shop Visit, or otherwise, that are required as a result of:

[***]


d.	[***].


e.	At Customer’s request, Services provided on-wing through OWS, above and beyond what is covered in Article 3, at the rates and in accordance with the terms set forth in Exhibit H;


f.	Repair and maintenance services for Engine transportation stands and containers during shop visits unless damaged by GE;


g.	Services provided at a shop visit for which Customer Delivered an Engine for Services against the advice and consent of GE’s Customer Program Manager or delegate, acting reasonably, unless it is mutually determined after Delivery of the Engine that such shop visit is a Qualified Shop Visit under Article 3.1; and

In the event a Departure Record is recommended to Customer and the Departure Record does not require any additional maintenance of the Engine when Redelivered, and Customer does not approve such Departure Record, Customer will pay for any incremental new material, labor or repair costs which GE incurs as a result of such refusal (such as, by way of example, as a result of having to replace a part, utilize a more complex repair or increase a Workscope) on a Supplemental Work basis.


4.2	Supplemental Work Services Workscope Approval: All Supplemental Work Services Workscopes require the approval of Customer prior to the commencement of any Supplemental Work Services. Customer will provide a response to GE within three (3) business days, but no longer than five (5) calendar days.


4.3	Subject to the provisions in 4.1, if an Engine requires Supplemental Work Services that results in a Performance Restoration shop visit, GE will propose, subject to Customer’s consent which shall not be unreasonably withheld: [***].

ARTICLE 5 – PRICING


5.1	Rate Per EFH Pricing. Unless otherwise stated, all rates and prices are in 2017 US Dollars. Covered Services for the first ten (10) years for each Engine will be performed by GE at the Rate Per EFH as follows.

[***]

The above Rate Per EFH is applicable to all EFH incurred since the Commencement Date.

For the Follow-on Term per Article 2.1 above, beginning in year eleven (11) for each Engine, the Rate Per EFH shall be adjusted as follows:

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[***]


5.2	Rate Per EFH Parameters . The Rate Per EFH is predicated on the following base operating parameters below:



[***]	[***]	[***]	[***]


5.3	Rate Per EFH Adjustment


a.	Escalation . The Rate Per EFH shall adjust on an annual basis in accordance with the escalation formula set forth in Exhibit C.


b.	Severity Table . When there is a deviation from the parameters in Article 5.2, the Rate Per EFH will be adjusted per the Price Adjustment Matrix set out in Exhibit D.


c.	Customer will provide information regarding the above parameters on a monthly basis and in a mutually agreed upon format in accordance with Article 6.

Water Wash . Customer agrees that it shall, after informing GE of the dates and Engine serial numbers in writing every quarter during the term of this Agreement, undertake water wash for each Engine listed in Exhibit B using equipment and procedures approved by GE, such approval not to be unreasonably withheld, [***]. Customer and GE will work mutually to verify the effectiveness of water wash performed by Customer by exhaust gas temperature recovery and/or borescope inspections, and adjust the frequency to optimize such effectiveness. The Rate per EFH set out in Article 5.1 above is subject to a corresponding revision should the Customer fail, or otherwise be unable, to perform the water wash in the manner stated in this Article 5.3(c),

Where this Agreement provides for rate adjustments, other than as adjusted pursuant to Article 5.3.b, such rate adjustments are to be by mutual agreement and based on appropriate documentation and reasonable business practices taking into consideration the totality of the circumstances, with both Parties agreeing to negotiate in good faith and in commercially reasonable manners with respect thereto. Any disagreement by the Parties with respect to rate adjustments will be handled pursuant to the Dispute Resolution terms and conditions set forth in Article 5.0 of Exhibit J.


5.4	Supplemental Pricing . Supplemental Work Services will be performed by GE in accordance with pricing provisions set forth in Exhibit E. Such pricing shall adjust on an annual basis in accordance with the escalation formula set forth in Exhibit F.


5.5	Service Credits

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ARTICLE 6 – INVOICING AND PAYMENT

6.1

Rate Per EFH Payments . Customer will make reasonable efforts to provide to GE the flight hours and cycles flown by each Engine serial number for the previous month by the fifth (5 ^th ) Day of each month, but no later than the tenth (10 ^th ) Day of each month. Concurrently, GE and/or the Customer will provide to the other Party data on the Take-off Derate, Climb Derate, Adaptive Derate, and the Static Temperature Adjusted to Sea Level temperature for each flight for each Engine in the previous month.

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Using this data, GE will determine the average flight leg, annualized utilization, average Static Temperature Adjusted to Sea Level, and average Adaptive Derate for each Engine for the previous month.

The Current Escalated Rate Per EFH for each Engine will be adjusted in accordance with the Price Adjustment Matrix based on these parameters. This rate, multiplied by the total EFH for each Engine elapsed in the prior month, will be provided to the Customer in the monthly invoice and Customer will make payment no later than [***], whichever is sooner.

6.1.1

Adaptive Derate – For the purposes of this provision, the Adaptive Derate is derived from the Take-off Derate and Climb Derate at 20,000 feet altitude for each flight using the Table 6.1 below. The average of all Adaptive Derate values for each Engine shall be used in determining the adjusted Rate Per EFH Payments in 6.1. When the actual operating parameters do not precisely equal the values on the tables, Adaptive Derate will be calculated by performing linear interpolation within the tables’ closest stated values to the actual derate values. Two-dimensional linear interpolation will be applied, as necessary, and the resultant Adaptive Derate value will be rounded to 2 decimal places.

[***]

6.1.2

Annualized Utilization - For the purposes of this provision the “annualized utilization” for a particular month will be calculated by (i) dividing the hours flown by the relevant Engine in the relevant month by the days in that particular month and (ii) multiplying that figure by three hundred and sixty-five point two five (365.25). In no event will Customer be charged Rate Per Flight Hour payments for Engines that are uninstalled, installed on Aircraft in maintenance per Customer’s maintenance program, undergoing modification or unable to be flown due to AAA restriction. Additionally, the annualized utilization calculation will be prorated for Engines that enter commercial revenue service for any day other than the 1st of the month.


6.1.3	Static Air Temperature adjusted to Sea Level shall be collected for every available takeoff using GE flight diagnostics data. If takeoff flight diagnostics data is not available for a given flight, static airport temperature and airport altitude shall be obtained from the ADM database using Customer airport city-pair data.


6.2	Annual EFH Minimum . [***].


6.3	Supplemental Work Services Payments .


a.	Initial Invoice . Upon completion of Supplemental Work Services, GE will issue an initial invoice for the estimated cost of the Services which Customer will pay [***] of the date of invoice. All invoices shall be payable by Customer in arrears in satisfaction of GE’s performance of Supplemental Work Services.

Final Invoice . Following Redelivery, GE will issue a final invoice for Supplemental Work Services based on actual charges to complete the Services, including any credits due Customer. Such invoice will be reconciled with the initial invoice and Customer’s payment. Customer will pay the final invoice within [***] of the date of the invoice. All invoices shall be payable by Customer in arrears in satisfaction of GE’s performance of Supplemental Work Services.


6.4	Additional Payment Terms . Should Customer fail to make any payment when due, GE may charge a fee for late payment at a rate equal to the [***] , compounded daily on any unpaid balance commencing on the next Day after the payment due date until such time as the payment

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plus the late payment charges are received by GE in full. Payments will be applied to any late payment fees then to the oldest outstanding amounts in order of succession. If Customer fails to make payment, which is not the subject of a good faith dispute, and does not cure such failure within ten (10) business Days of a notice to cure received from GE, GE may terminate or suspend performance of all or any portion of this Agreement. In the event Customer’s account becomes delinquent or Customer’s credit status negatively changes, different terms of payment or other commercially acceptable assurances of payment may be agreed by the Parties. In the event of a bona fide dispute regarding any amount to be paid pursuant to any invoice, or any portion thereof, Customer shall within fifteen (15) business Days of receipt of such invoice give written notice to GE of such disputed invoice, or dispute portion thereof, together with reasonable substantiation of such dispute and any supporting documentation. GE and Customer shall use their respective best efforts and allocate sufficient resources to resolve such dispute within fifteen (15) business Days or as soon as practicable thereafter. In the event the Parties fail to resolve any such disputed invoice within such period, the dispute shall be resolved by designating senior managers to reach a resolution. Upon resolution, GE shall credit Customer, or Customer shall pay to GE, as applicable, the settled amount of the disputed portion of the invoice within seven (7) business Days. For clarification, Customer shall be required to pay the undisputed portion of any invoice in accordance with the payment terms for undisputed invoices set forth in this Agreement. To the extent Customer complies with the requirements of this Article 6.4, GE shall not charge a fee for late payment, as set forth above, during that period of time such amount is disputed by the Parties.


6.5	Remittance . All payments under this Agreement will be made in United States Dollars, immediately available for use, without any right of set-off or deduction, via wire transfer by Customer to the bank account and address designated below:

[***]

ARTICLE 7 – FLEET MANAGEMENT


7.1	Program Manager . GE will assign a Customer Program Manager who will be the point of contact for Customer with respect to Services and who will:


a.	Work with Customer to draft a Procedures Manual and Continuous Engine Operational Data procedures for mutual approval within 6 months prior to entry into service of the first Aircraft., Such Procedures Manual to serve as a working guideline. In the event of any inconsistency between this Agreement and the Procedures Manual, this Agreement shall prevail;

Work with the Customer, on a monthly basis, to maintain a mutually agreeable Removal Schedule which will identify by serial number the Engine(s) to be removed during the following six (6) month period, the anticipated reason for removal of each, and the schedule for Delivery; The Removal Schedule shall also take into account that some Engines may require a forced first Performance Restoration shop visit within the Initial Term of this Agreement; and

Work with the Customer to develop a Repair Specification six (6) months prior to the Commencement Date of this Agreement which is consistent with the GE Workscope Planning Guide. Such Repair Specification will be periodically updated and must remain consistent with the Workscope Planning Guide. Customization or any subsequent changes or amendments to the Repair Specification beyond the recommendations in the Workscope Planning Guide can be addressed but may result in an adjustment in the pricing set forth in Article 5, per the terms in Article 5.3(e). Note that the Workscope

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Planning Guide and associated Repair Specification will ensure consistency of the work performed throughout the term of the agreement.


7.2	Workscope . Prior to Induction, GE will prepare a Workscope and provide it to Customer. All Shop Visit Workscopes require the approval of Customer prior to the commencement of any Services. Approval to be provided within three (3) business days, but no longer than five (5) calendar days

7.3

Supplement Workscope Approval . Any Services that are to be charged as Supplemental Work Services must be clearly identified in the applicable Workscope or any amendments thereto and must be approved by the Customer in writing within three (3) business days. Any invoiced amount for any Supplemental Work Services where this Workscope approval process has not been followed shall be invalid with respect to such charges and shall not be payable by the Customer.


7.4	Line Maintenance . Customer will provide all Line Maintenance and repair and line station support, consistent with industry standard maintenance practices and OEM recommendations.

7.5

Monitoring Equipment . Customer will provide an automated method to transfer operational and maintenance data to GE for the monitoring and diagnosis of Engine condition. If the aircraft is equipped with air-to-ground equipment such as ACARS, the Customer will forward the data directly to the GE SITA/ARINC address. If air-to-ground equipment is not available, GE will work with Customer to establish an alternate electronic means of providing this data.

7.6

GE Approved Repair Station . The GE Approved Repair Station (“ARS”) will be any GE owned or GE approved Repair Station as set forth in Exhibit K. GE may add or remove Repair Stations on this list at its discretion. GE may change the Repair Station upon Customer’s consent which shall not be unreasonably withheld or delayed. GE may provide Services at a location other than a Repair Station including performance or repairs on-wing or on-site. If GE changes the Repair Station, Customer’s obligations under this Agreement will be no greater than if Services were performed at an ARS.


7.7	ARS and Repair Stations – Customer Approval . Any Repair Station, including any ARS, shall be approved by customer before any services are rendered.

7.8

Subcontracting . All Services performed under this Agreement will be performed by GE or its designated subcontractors at maintenance and repair facilities that are properly licensed and certified by the Approved Aviation Authority (AAA) to perform the Services. GE will obtain Customer’s consent which shall not be unreasonably withheld or delayed prior to subcontracting Services on an entire Engine assembly. However, GE shall not be required to obtain Customer’s consent to subcontract Services on individual components of an Engine. If GE does subcontract Services, the Customer obligations under this Agreement will be no greater than if such Services were performed at the ARS. Customer will, at its sole expense, have the right to review GE's quality system audit report(s) for such subcontractor(s). Subcontracting of any Services will not relieve GE of its performance obligations set forth in this Agreement.


7.9	Parts Replacement Procedures .


a.	Missing or Damaged Parts at Delivery . Upon Delivery, GE will notify Customer as soon as reasonably practical of any (A) components or LRU’s missing from Engines, and (B) parts found to have been damaged during transportation of the Engine.


b.	Parts Replacement . GE will determine which parts are required to perform the Services and will provide all parts and materials (new or used Serviceable, including use of Rotable Parts)

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required to accomplish the Services. Each used Serviceable part including Rotable Parts will be GE parts in compliance with the Repair Specification and of equal or better attributes (including but not limited to cycles, value and the same or higher configuration of the replaced part). GE may issue compatible parts from GE's Rotable Parts inventory to replace Customer's parts requiring Services. Customer agrees to accept compatible Rotable Parts that are in compliance with the Repair Specification.

Life Limited Parts . In the event missing information causes a work stoppage, GE will replace, as Supplemental Work Services, any LLP that GE receives without the required records, including but not limited to NIS (Non-Incident Statement), back to birth records, and transfer of ownership records. Prior to replacing such LLP, GE will notify Customer of any missing (or incomplete) records and allow Customer three (3) business days, but no longer than five (5) calendar days to acknowledge and forward such missing or incomplete records, or GE may immediately replace such LLP without additional notice.

Customer Furnished Equipment (“CFE”) . For Supplemental Work Services only, upon GE’s prior approval on a case-by-case basis, Customer may, at its cost, supply parts to GE as CFE, if such parts are:(A) GE parts; (B) consistent with the approved Workscope; (C) provided with an AAA serviceability tag; and (D) ready for immediate use. Such CFE is subject to a material handling fee in accordance with Supplemental Work Services pricing in Exhibit E.

Title to Parts or Material . GE furnished parts and material incorporated into an Engine will be deemed to have been sold to Customer and title to such parts and material will pass to Customer upon incorporation into such Engine. Risk of loss or damage to such parts and material will pass to Customer upon Redelivery of the Engine. Title to and risk of loss of any parts removed from the Engine that are replaced by other parts (including Repairable parts) will pass to GE upon incorporation of replacement parts into the Engine, except where such parts are replaced pursuant to Supplemental Work Services, in which case title to parts with a CLP in excess of $5,000 per part will remain with Customer. Prior to an Engine leaving the ARS, Customer must arrange for the transfer and/or disposition of such parts. Failure of Customer to arrange for the disposition of such parts will result in GE transporting such parts to Customer at Customer’s expense, or scrapping such parts.


f.	Scrapped Parts . GE will dispose of all Scrapped Parts (title to which has passed to GE in accordance with Article 7.7.e above) at its sole expense and without any further adjustment to Customer.

7.10

New Technology . Subject to Customer’s obligations under applicable Aviation Authority regulations and to Customer’s approval, which shall not be unreasonably withheld, Customer agrees that GE may install and/or incorporate new technology, Service Bulletins, and/or OEM-approved repairs and parts in Customer’s Engines which enhance Engine reliability or performance. Such reliability and performance enhancements will be installed and/or incorporated without additional cost to Customer.


7.11	Customer Fleet Data . Customer will provide, upon GE’s request, a summary of covered Engine Serial Numbers (ESNs), with information that includes, but is not limited to, the following: engine install position, spare engine status, TSN, CSN, TSO, CSO, TSLV, CSLV, on-wing complied SBs, current LLP configuration with CSN/ remaining, engine ownership (leased or owned), and engine retirement plans.


7.12	Continuous Engine Operational Data . Customer shall provide GE with access to CEOD on the following basis:


a.	At least thirty (30) calendar days prior to Customer’s first Engine delivery, Customer and GE shall agree on the amount and transfer method of recorded CEOD to be downloaded in order

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to be representative of Customer operations with the common goal of improving aircraft operations. This initial amount may be further modified to be representative of future Customer operations and GE program needs;


b.	Notwithstanding the preceding paragraph, for the period of ninety (90) calendar days following the start of flight operations for each aircraft that enters Customer’s fleet, powered by Engines covered by this Agreement, Customer shall download and transfer to GE [***];

For the period after the first ninety (90) calendar days of operation of each aircraft, Customer shall make its best efforts to download and timely send to GE the percentage of CEOD representative of Customer flight operations determined above, provided however that in case of operational events, squawks or alerts, Customer shall download recorded CEOD for all installed Engines on the affected aircraft within twenty-four (24) hours following such event and promptly transfer to GE such recorded CEOD.

GE agrees to protect CEOD in accordance with GE’s data protection plan, a copy of which is available on request. Subject to the foregoing, any CEOD may be used by GE, its parent companies, affiliates and subcontractors for internal purposes, including 1) technical fleet and engine analysis; and 2) development of and improvements to GE products and services, provided that the parent companies, affiliates and subcontractors of GE are subject to confidentiality obligations substantially similar to those specified in this Article. Notwithstanding any provision to the contrary, it is expressly understood and agreed that any Derivative Data generated by GE is and will remain the property of GE.

ARTICLE 8 – WARRANTY


8.1	Workmanship Warranties .


a.	Services Warranty . Subject to the terms of this Article 8.1, Covered Services and Supplemental Work Services performed shall be free from defects in workmanship appearing within [***] following Redelivery whichever comes first. The remedy for defects in workmanship for Engines Serviced are set out in paragraph b below, and subject to the following conditions:


i.	The Warranty is valid only if the Engine, following Redelivery (i) has been transported, stored, installed, operated, handled, maintained and repaired in accordance with the recommendations of the OEM as stated in its manuals, Airworthiness Directives (“AD”), Service Bulletins (“SB”) or other written instructions;

(ii) has been altered, modified or repaired only by the GE Approved Repair Station, and (iii) has not been subjected to accident, misuse, abuse or neglect.


ii.	Customer must preserve the Engine, at its sole expense, in accordance with the recommendations of the OEM as stated in its manuals if the Engine will be stored for twelve (12) months or longer following Redelivery.


iii.	Customer must provide GE written notice of a claim within sixty (60) Days of discovery.

GE shall respond and provide a decision to the warranty claim within 10 business days of warranty claim receipt.


b.	Remedy . Upon verification by GE of the claim, GE will repair or replace such defective workmanship using its own forces or subcontractor, or, upon GE’s prior written approval i) pay Customer’s reasonable, direct costs for such repairs, but in no event shall such costs

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exceed GE’s internal costs of repair and ii) reimburse Customer for transportation expenses reasonably incurred and adequately documented by Customer in connection with the warranty claim. The warranty period for the repaired or replaced workmanship will be the remainder of the original warranty period.


c.	Limitations – Applicable to Services Warranty . Any warranty for Engines or parts, LRU’s, components and material thereof, including the design, material or engineering defects of a manufacturer, will be the warranty, if any, of the manufacturer of such Engines or parts, LRU’s, components or material thereof.

The foregoing will constitute the sole remedy of Customer and the sole liability of GE for defective workmanship relative to Customer’s Engines. The liability of GE connected with or resulting from the Services warranty will not in any case exceed the cost of correcting the defect as provided above, and, upon the expiration of the shortest period described therein, all such liability will terminate. In no event will GE be liable for any special, expectation, consequential, incidental, resultant, indirect, punitive or exemplary damages (including loss of use, loss of profit or loss of revenue in connection with the Engines).

THE WARRANTIES SET FORTH HEREIN ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES RELATING TO THE SERVICES PROVIDED PURSUANT TO THIS AGREEMENT, WHETHER WRITTEN, ORAL, EXPRESSED, IMPLIED OR STATUTORY (INCLUDING ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE).


8.2	Designation of GE as Warranty Claims Administrator . Customer designates GE as a claims administrator for the Engine warranties set forth in Exhibit A of the GTA (‘Applicable Warranties’).

8.3

Beneficiary of Applicable Warranties . With respect to Engines repaired under the Services described in Article 3, Customer designates GE as the beneficiary of the Applicable Warranties and the benefit of the following GTA guarantees, set out in the Letter Agreement to the GTA, are assigned to GE for the term of this Agreement: the Extended New Engine and Module Guarantee, the Aircraft on Ground (“AOG”) Guarantee, the Extended Ultimate Life Guarantee, the Remote Site Removal Guarantee and the Shop Visit Rate Guarantee. In all other circumstances, Customer shall be the beneficiary of the Applicable Warranties.


8.4	Reassignment of Applicable Warranties . On the exit of any Engine from this Agreement, the residual benefit of any Applicable Warranties and the Letter Agreement Special Guarantees assigned to GE in Article 8.4 shall be reassigned to the Customer.

8.5

Pre-existing Warranties . Customer will assure that any requested repair of an Engine, accessory or component that is covered under a third-party warranty to which GE is not designated as the claims administrator and beneficiary will be performed directly by that person at no expense to GE. Notwithstanding the above, GE may accept a purchase order for the time and material repair of a warranted item from Customer or the person giving the warranty.


8.6	Assignment of Warranty . Customer may assign the Services warranty in Article 8.1 above, subject to GE’s consent, such consent not to be unreasonably withheld or delayed.

ARTICLE 9 – DELIVERY/REDELIVERY

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9.1	Delivery . Customer will Deliver to GE all Engines to be Serviced within ten (10) days following removal from the aircraft. Customer will not Deliver piece parts or components for repair separate from Customer’s Engine without GE’s written consent. Risk of loss to the Engines shall transfer to (i) GE upon Delivery and (ii) Customer upon Redelivery. [***].


9.2	External Engine Configuration . Prior to the first shop visit under this Agreement, the Parties shall agree upon an external Engine configuration specification. Upon Delivery of each Engine, GE will notify Customer of any deviations from the configuration specification of Engines Delivered for Service, and GE and Customer will work to resolve the deviations.


9.3	Engine Documentation . No later than the time of delivery of an Engine, Customer will provide to GE all information and records necessary for GE to establish the nature and extent of the Services required to be performed on the Engine and to perform such Services. Such information and records include, but are not limited to:


a.	The cause of Engine removal (reason for this shop visit);


b.	Applicable information as typically received in Engine log books detailing work performed at last shop visit, any reported defects or incidents during operation since last shop visit, with description of action taken, and significant operational characteristics experienced during last flight prior to shop visit;


c.	SB and AD status/requirements;


d.	Total engine operating time since new (“TSN”) for each Engine;


e.	Time since last shop visit (“TSLV”) for each Engine, module, component and accessory;


f.	Flight cycles since new (“CSN”);


g.	Flight cycles since last shop visit (“CSLV”);


h.	Record of change of parts during operating period prior to this shop visit (these records are limited to the previous ninety (90) days);


i.	TSN, CSN, TSLV, CSLV time since overhaul (“TSO”) and cycles since overhaul (“CSO”) on all LLP for each thrust rating utilized on all LLP;


j.	Back to birth history certificate indicating history from zero TSN/CSN on all LLPs;


k.	Customer inventory of equipment “as shipped”, including (when applicable) a description of the external Engine configuration;


l.	Engine oil used (for Engines);


m.	Historical log (for parts and accessories);


n.	Module log cards (if applicable);


o.	Engine on-wing performance trend data generated utilizing trend monitoring programs such as ADEPT or SAGE (if available);


p.	An external equipment configuration specification for any Engine to be Delivered for Service; and


q.	A Non-incident statement for each Engine, to the extent such statement is accurate and in a form to be mutually agreed upon by the Parties.

Customer’s failure to furnish necessary information and records as noted above shall result in a delay in Induction of the Engine for Service, and GE’s obligations relating to [***], and the provision of lease engines shall be suspended on a day for day basis for that shop visit delay and may necessitate premature LLP replacement at Customer’s expense.

9.4

Packaging . Customer is responsible for all packaging, labeling and associated documentation of the Engine at Delivery, in accordance with the International Civil Aviation Organizations (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Air, and if the Engine is to be transported over the United States of America, the US Department of Transport Regulations 48 CFR 171-180. If required by applicable law or regulations, Customer will further provide a material safety data sheet to GE at Delivery of the Engine indicating any substances contained within the Engine to be consigned.

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Customer will indemnify, defend and hold harmless GE from all or any claims, liabilities, damages, judgments, costs, penalties, fines and/or any punitive damages imposed, alleged, or assessed by any third party against GE and caused by and to the extent of Customer's non- compliance with this Article 9.4.


9.5	Shipping Stands . Customer will provide and maintain all shipping stands, shipping containers, mounting adapters, inlet plugs and covers, required to package the Engine for Redelivery.

Customer has overall responsibility for procurement, tracking, certification and maintenance of Customer-owned shipping stands, tooling and other ground handling equipment. Customer shall ensure shipping stands have been properly inspected, serviced and maintained before delivery to GE or shall be billed as Supplemental Work Services per Article 4.


9.6	Redelivery . After completion of Services, GE will prepare and package the Engine for Redelivery to Customer, Redeliver the Engine and provide a Services records package of the following:


a.	Major Repair/Altercation Certification FAA No. 337 (or equivalent foreign agency equivalent) including AD compliance;


b.	FAA Form 8130-3 (or Approved Aviation Authority equivalent) for accessories;


c.	Cycle limited parts log;


d.	Serviceable tag for Serviceable equipment;


e.	Original records and related documentation furnished by Customer;


f.	Incoming inspection report;


g.	Off/On log;


h.	Service Bulletin status report;


i.	Findings Report; and


j.	Test log.


k.	Within 30 days of shop visit, GE will provide electronic and hard copies of all Shop Visit task card paperwork, also known as dirty finger prints, to Airline.

In the event Customer pays for any transportation fees, GE will credit Customer within thirty (30) days of a substantiated claim.

ARTICLE 10 – ADDITION OF ENGINES


10.1.	Addition of Engines . If Future Option Aircraft and Leased Aircraft are added and delivered after the Commencement Date, Customer and GE will amend Exhibit B to add the engines to this Agreement.

10.2.

Customer and GE may agree to amend Exhibit B to add engines delivered on aircraft acquired by Customer that are not new Aircraft or Leased Aircraft. For each such added engine, Customer will provide the applicable documentation specified in Article 9.3, including, but not limited to, engine serial number, aircraft tail number, previous operator, current owner, operating time and flight cycles since new and, if applicable, operating time and flight cycles since last shop visit, shop visit reports, Static Temperature Adjusted to Sea Level information for the engine, historic derate information and thrust rating to be used.

a. [***]

b. [***]

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10.3.	Adjustment of Rate . GE will evaluate the effect of any engine’s addition on the Rate Per EFH taking into consideration effects on the fleet size, age and condition of the engines and other commercial considerations and may adjust the Rate Per EFH accordingly [***].

ARTICLE 11 – DELETION OF ENGINES


11.1.	Deletion of Engines . Customer and GE may agree to amend Exhibit B to remove Engines from the coverage of this Agreement upon Customer’s advance written notice, if Customer is no longer operating the Engines and is no longer responsible for maintenance of the Engines for the following reasons:


a.	Bona fide sale or other bona fide transfer to an unaffiliated third party;


b.	Return to lessor; or


c.	If the Engine has been reasonably determined to be BER.

In all cases, Customer will remove Engines from this Agreement that are representative of fleet average Engines in terms of expected remaining Time on Wing, EGT margin, Time Since Last Performance Restoration shop visit and other objective measures, unless Customer’s lessor dictates otherwise or otherwise mutually agreed by GE and Customer.


11.2.	Reconciliation .


1.	If an Engine, whether leased or owned, is removed prior to the end of its Initial Term, or if the Follow-on Term is executed, prior to the end of the Follow-on Term:

[***]


2.	[***]:


3.	[***]:

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ARTICLE 12 – TERMINATION

12.1

Insolvency . Either Party may terminate or suspend performance of all or any portion of this Agreement if the other Party: (A) is unable or admits its inability to pay its debts when they fall due, suspends making payments on any of its debts or by reason of actual or anticipated financial difficulties commences negotiations with one or more creditors to restructure any debt; (B) enters into bankruptcy, liquidation or administration, or any analogous proceeding under applicable law, whether compulsory or voluntary; (C) becomes insolvent; (D) becomes subject to the appointment of a receiver, administrator or other similar officer or to any action or proceedings in relation to the enforcement of security over, the whole or material part of its assets; (E) has assets valued at less than its liabilities (taking into account contingent and prospective liabilities) or (F) is subject to any expropriation, attachment, sequestration or distress affecting the whole or any material part of its assets.

12.2

Material Provisions . Either Party may terminate this Agreement upon ninety (90) Days written notice to the other for failure to comply with any material provision of this Agreement, except for Customer’s failure to make payment, which is addressed in Article 6.4, unless the failure will have been cured or the Party in breach has substantially effected all acts required to cure the failure prior to such ninety (90) Days.


12.3	[*] . [*].

12.4

Payment for Services Performed and Reconciliation . In the event of termination of this Agreement by GE pursuant to Article 12.1 or 12.2, Customer will pay GE, in addition to any other remedy allowable under this Agreement or applicable law, for all Services or work performed by GE up to the time of such termination under the applicable terms and prices of this Agreement. In addition, the terms of the reconciliation of Rate Per EFH Payments under the Deletion of Engines provisions of Article 11 will apply.


12.5	Termination by Customer . In the event of termination of this Agreement by Customer pursuant to Articles 12.1 or 12.2 by Customer, the reconciliation provisions of Article 11.2 will not apply, and Customer shall be entitled to, in addition to all other rights of Customer and obligations of GE provided herein, all rights and remedies available in law and in equity.

12.6

Work in Process, Redelivery of Customer’s Engines . Upon the termination or expiration of this Agreement, GE will complete all work in process in a diligent manner and Redeliver all Engines, parts and related documentation provided that Customer shall (a) pay or has paid in full all charges due for all such Services and material, plus all costs, fees and penalties, incurred by GE in providing support, including any lease engines, and (b) return all lease engines provided under this Agreement unless otherwise mutually agreed.

ARTICLE 13 – REPRESENTATIONS


13.1	Customer represents that it is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware. GE represents that it is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware.


13.2	Customer and GE each represent that the execution and delivery of this Agreement has been duly and validly authorized by all requisite action on their part. This Agreement has been duly executed and delivered on behalf of Customer and GE, and constitutes a legal, valid and binding obligation of Customer and GE enforceable in accordance with its terms.


13.3	Customer and GE each represent that they have had an opportunity to review this Agreement and consult with legal counsel prior to execution, and the final form of this Agreement is the result of good faith, arm’s length negotiations. Customer and GE each represent that this

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Agreement is fair and commercially reasonable, and is an ordinary maintenance agreement in their respective industries. Customer further represents that this Agreement is supported by mutual consideration and promises that benefit Customer even though GE may only be required to provide minimal Service during any given month. Similarly, GE represents that this Agreement is supported by mutual consideration and promises that benefit GE even though GE may be required to provide extensive Service during any given month.

ARTICLE 14 – GENERAL TERMS AND CONDITIONS

The General Terms and Conditions are set forth in Exhibit J.

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IN WITNESS WHEREOF , the Parties have executed this Agreement as of the day and the year first above written.



GE ENGINE SERVICES, LLC		HAWAIIAN AIRLINES, INC
BY: ___________________________________		BY: ___________________________________
Printed Name: _________________________		Printed Name: _________________________
Title: _________________________________		Title: _________________________________

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EXHIBIT A: DEFINITIONS

Capitalized terms used in the recitals and elsewhere in this Agreement but not otherwise defined in this Agreement will have the following meanings:

“Act of God” - an event that results from natural causes, external to the Engine, but excluding natural environmental conditions that the Engine is certified to withstand.

“Adaptive Derate” – The resultant value from Table 6.1 when Take-off Derate and Climb Derate are compared for each flight. When the actual operating parameters do not precisely equal the values on the tables, Adaptive Derate will be calculated by performing linear interpolation within the tables’ closest stated values to the actual derate values. Two-dimensional linear interpolation will be applied, as necessary, and the resultant Adaptive Derate value will be rounded to 2 decimal places.

“Agreement” - This TrueChoice Flight Hour Agreement, as the same may be amended or supplemented from time to time, including all its Exhibits.

“Aircraft” – Any GEnx powered Boeing 787 model aircraft operated by the Customer with Engines covered by this Agreement.

“Aircraft Accident” - An occurrence caused by the operation of an aircraft in which any person suffers a fatal injury or serious injury as a result of being in or upon the aircraft or by direct contact with the aircraft or anything attached to the aircraft, or in which the aircraft receives substantial damage or a third party’s property is damaged in any way.

“Aircraft Incident” - An occurrence, other than an Aircraft Accident, caused by the operation of an aircraft that affects or could affect the safety of operations and that is investigated and reported.

“Airframer” – The Boeing Company

“Airworthiness Directive” means a requirement for the inspection, repair or modification of the Engine or any portion thereof as issued by the Airworthiness Authority

“AOG” – means aircraft on ground

“Approved Aviation Authority” or “AAA” - As applicable, the Federal Aviation Administration of the United States (“FAA”), the European Aviation Safety Authority (“EASA”) or, as identified by Customer and agreed in writing by GE, such other equivalent foreign aviation authority having jurisdiction over the performance of Services provided hereunder.

“Approved Repair Station” or “ARS” - Any GE-owned or GE-approved Repair Station as set forth in Exhibit K where GE performs Services on Engines.

“Average Daily Maximum” or “ADM” - The Average Daily Maximum temperature by airport from Boeing Aircraft Company Red Book data.

“Beyond Economic Repair” or “BER” - When the cost, calculated on a Supplemental Work Services basis, to restore an Engine or LRU to the requirements of the Repair Specification exceeds 65.00% of the fair market value of a comparable Serviceable Engine or LRU.

“Climb Derate” – The calculated percentage of thrust reduction from the maximum available thrust at 20,000 feet altitude, derived from data collected throughout the climb phase of flight.

“Catalogue List Price” or “CLP” - The OEM’s Current catalog or OEM’s Current list price pertaining to a new Engine or part thereof.

“Continuous Engine Operational Data” or “CEOD” - Information generated by the Quick Access Recorder (QAR), Digital Flight Data Recorder (DFDR), or similar device, related to engine and aircraft flight and performance parameters.

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[***] .

“Covered Service(s)” - Those Services provided pursuant to Article 3.

“Current” - As of the time of the applicable Service or determination.

“Customer Furnished Equipment” – means parts that the Customer provides

“Day” - Calendar day unless expressly stated otherwise in writing. If performance is due on a recognized public holiday, performance will be postponed until the next business Day.

"Deliver" will mean the act by which Customer accomplishes Delivery.

“Delivery” - An Engine ready for collection together with all applicable records and required data: [***].

“Departure Record” - A document used to describe the nature and details of the departure from the Instructions for Continued Airworthiness, service documents, or other FAA-approved/accepted documentation. It consists of the requirements, condition, deviation, technical data/assessment, substantiation and approvals associated with the departure.

“Derivative Data” - Data generated from use of GE products and software or data created by GE that is anonymized, aggregated, de-identified or otherwise compiled on a generic basis from CEOD so as to not provide personal identification.

“Diagnostics” – means the identification of the nature of a problem by examination of the symptoms.

“Dollars” or "$" - The lawful currency of the United States of America.

“Engine” – Each Basic Engine as defined in the GTA or, as applicable, engine module(s), which is the subject of this Agreement and identified in Exhibit B, including all engine LRUs.

“Engine Flight Hour” or “EFH” - Engine flight hour expressed in hourly increments of aircraft flight from wheels up to wheels down.

“Engine on Watch” – As defined in Exhibit N

“Entry Shop Visit” or “ESV” - A Repair Station visit during which a Performance Restoration is performed on an Engine on a Supplemental Work Services basis and which includes the removal of all non-GE parts and non-GE approved LRU’s, parts and repairs. [***].

“Fault Isolation Manual” or “FIM” – means the Manual that deals with methods that can isolate the component, device or software module causing the error

“Fleet Support” - means a HUB staffed 24 hours a day, 7 days a week, for all customer facing processes where all inquiries routed to functional experts.

“Flightline LRU Turn Around Time” – the days measured from receipt of delivery at GE Aviation Materials to the date of return shipment from GE Aviation Materials to Customer.

“Foreign Object Damage” or "FOD" - Damage to any portion of the Engine caused by impact with or ingestion of a non-Engine object such as birds, hail, ice, or normal runway debris. FOD may be further classified as a “Major FOD," which means FOD that causes an out of limit condition per the Aircraft Maintenance Manual, and which, either immediately or over time, requires the Engine to be removed from service or prevents the reinstallation of the Engine.

“Future Option Aircraft” - up to ten (10), new option aircraft or purchase right aircraft delivered directly from Boeing [***] .

“GTA” – The General Terms Agreement entered into between the General Electric Company and Customer relating to the GEnx Engine and any Letter Agreements related thereto.

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“In-House Warranty Labor Rate” [***] and subject to the escalation formula in Exhibit F, [***].

“Induction” - The date work commences on the Engine at the ARS when all of the following have taken place: (i) GE’s receipt of the Engine and required data (ii) Customer’s approval of the Workscope (iii) Parties’ agreement on use of the Customer Furnished Equipment; and (iv) receiving inspection (including pre-testing if needed).

Leased Aircraft – [***] new GEnx-1B powered [***], 787-9, or [***] aircraft acquired from lessors.

“Life Limited Part” or "LLP" - A part with a limitation on use established by the OEM or the AAA, stated in cumulative EFH or cycles.

“Line Maintenance” - Any regular maintenance, repairs, or modifications Customer is able to perform on-wing per the AMM.

“Line Replaceable Unit” or “LRU” - A major control or accessory that is mounted on the external portion of an Engine, which can be replaced while the Engine is on-wing.

“OEM” - The original manufacturer of an Engine or part thereof, or if applicable, the Airframer.

“Performance Restoration” - The Services performed during a shop visit in which, at a minimum, the combustor and high-pressure turbine are exposed and subsequently refurbished, consistent with the Repair Specification.

“Premature Engine Deterioration” - an Engine that has deteriorated more than [***] after a Performance Restoration shop visit based on an average of GWFM data. GWFM is the corrected cruise fuel flow delta that is tracked in Remote Diagnostics. Exhibit N hereto describes the method to be used to determine the baseline and subsequent performance levels of individual Engine fuel consumption.

“Price Adjustment Matrix” - The matrix set forth in Exhibit D by which the Rate Per EFH is adjusted based on Customer’s operating parameters.

“Procedures Manual” - A separate document, not part of this Agreement, which provides detailed procedures and guidance for the administration of this Agreement. In case of conflict between the Procedures Manual and this Agreement, this Agreement will prevail.

“Qualified Removal” - The removal of an Engine from the Aircraft in accordance with the conditions set forth in Article 3.1 in order for the Engine to be eligible to receive Covered Services.

“Qualified Shop Visit” - An Engine shop visit for Services that are covered as Covered Services following a Qualified Removal of the Engine.

“Quick Engine Change” or “QEC” means accessories required to configure a basic engine for installation, typically to reduce the time needed to replace an engine.

“Rate Per EFH” – The Rate Per EFH as set forth in Article 5.

“Rate Per EFH Payments” - Any payments made pursuant to Article 6.

“Redelivery” - The delivery of a Serviceable Engine or LRU with any legally required documentation: [***].

“Removal Schedule” - The schedule jointly developed by GE and Customer in accordance with Article 7.1.b for Engine removals for Covered Services or Engine removal from operation.

“Repair Specification” - The mutually agreed repair specification which establishes the minimum baseline to which an Engine or part thereof will be inspected, repaired, modified, reassembled and tested to make and Engine Serviceable. Such Repair Specification will meet or exceed the recommendations of the OEM's operational specifications, applicable OEM maintenance or overhaul manuals, or other recommendations or methodologies as may be developed by the OEM based on data and analysis, and Customer's maintenance plan that has been approved by the AAA.

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“Repair Station” - One or more of the repair facilities owned by GE or its affiliates, now or in the future, which are certified by an appropriate AAA to perform the applicable Service hereunder. A list of such repair facilities will be provided upon request.

“Repairable” - Capable of being made Serviceable.

“Rotable Part” - A new or used Serviceable part drawn from a common pool of parts used to support one or more customers. A Rotable Part replaces a like part removed from an Engine when such removed part requires repair.

“Scrapped Parts” - Those parts determined by GE to be Unserviceable and BER.

“Service(s)” - With respect to an Engine or part thereof, all or any part of those maintenance, repair and overhaul services provided under this Agreement as either Covered Services or Supplemental Work Services. “Serviced” will be construed accordingly.

“Service Bulletin” or "SB" - The document issued and identified as a Service Bulletin by an OEM to notify the operator of modifications, substitution of parts, special inspections, special checks, amendment of existing life limits or establishment of first time life limits, or conversion of an Engine from one model to another.

“Serviceable” - Meeting all OEM and AAA specified standards for airworthiness and having been certified in accordance with applicable regulations.

“Static Temperature Adjusted to Sea Level” - The twelve (12) month rolling average of total air temperature data collected at every available take-off using snapshot data, adjusted in each case to zero aircraft speed and sea level elevation; provided that (i) in the event take-off snap shot data is not available, static airport temperature and airport altitude shall be obtained from the ADM database using Customer airport city-pair data, adjusted in each case to sea level elevation, and (ii) the ADM database shall be used for the first twelve (12) months of this Agreement or until twelve (12) months of take-off snapshot data is available, whichever is first to occur.

“Supplemental Work Services” - Those Services provided in accordance with Article 4.

“Take-Off Derate” - The calculated percentage of thrust reduction from the maximum available thrust at take-off for the ambient conditions at take-off. Calculated using the following formula:

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“Turn Around Time” – the days measured from the date upon Customer makes Engine available to GE for shipment to the Repair Station. until the Engine is Redelivered to the Customer.

“Unqualified Removal” – The removal of an Engine from an Aircraft which does not satisfy the conditions set forth in Article 3.1, unless the parties agree otherwise and is therefore not eligible to receive Covered Services. Any Services following an Unqualified Removal will be billed per Article 4.

“Unserviceable” - Not meeting all OEM and AAA specified standards for airworthiness.

“Used Engine” - An Engine which has undergone a shop visit or which has more than 100 EFH since new.

“Workscope” - The document written by GE describing the prescribed repair or approach to repair of an Engine to meet the requirements of the Repair Specification, including appropriate reliability and performance enhancements.

“Workscope Planning Guide” - Then-current version of the document published by the General Electric Company which describes the “on condition” maintenance concept for the engines. This document communicates the timing and extent of work required to enable operators to achieve reliability, performance, and maintenance cost goals.

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EXHIBIT B: ENGINES COVERED

[***].

Aircraft Delivery Schedule (as may be amended from time to time)



Date	Engine Series	Installs	ESN	ESN
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]

Aircraft/Engine Delivery Flexibility - GE acknowledges that while Aircraft delivery dates may change due to delays, or mutual agreement between Airframer and Airline; Airframer and Airline have certain pre-agreed rescheduling rights as follows:


•	[***]

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EXHIBIT C: RATE ADJUSTMENT

Economic Price Adjustment. The Base Prices shall be adjusted for fluctuation of the economy as described below:

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EXHIBIT D: PRICE ADJUSTMENT MATRIX

When the actual operating parameters do not precisely equal the values on the tables, severity will be calculated by performing linear interpolation within the tables’ closest stated values to the actual operating parameters. Two-dimensional linear interpolation will be applied, as necessary, to the Flight Leg and Derate tables and then between the Utilization tables and Static Temperature Adjusted to Sea Level Temperature tables. The resultant severity value will be rounded to 4 decimal places. The final severity applied will be the product of these severity values rounded to 4 decimal places.

Should Customer’s actual operating parameters go beyond the furthest points of the table provided, GE shall adjust the table to cover Customer’s updated operating parameters. Such adjusted table will be applied retroactively to the time Customer’s operating parameters moved beyond the points provided and, if applicable, GE shall invoice or provide a credit to Customer for any amounts that would have been applicable if the rates on such table had been in effect at the time the flight hours were incurred.

Should Customer’s actual operating parameters go beyond the furthest points of the table provided, Customer shall be invoiced in accordance with the furthest points on the table.

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EXHIBIT E: SUPPLEMENTAL WORK SERVICES PRICING

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EXHIBIT F: SUPPLEMENTAL WORK SERVICES PRICING – ANNUAL ADJUSTMENT

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EXHIBIT G: SUPPLEMENTAL WORK SERVICES PRICING - FIXED PRICE LABOR SCHEDULE

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EXHIBIT H: SUPPLEMENTAL ON-WING SUPPORT

SERVICES

GE On Wing Support, Inc., will provide on wing support technicians, along with special tooling, to perform flight-line services, on wing and off wing inspection, maintenance, and repair of Engines as specified in a mutually executed workorder by Customer. Such Engine support services may be provided, as designated by Customer and agreed by service provider at Customer’s facilities or at repair facilities owned by GE On Wing Support, Inc. or its affiliates. All Services provided shall be in accordance with its standard commercial quality control policies, procedures, and practices. A turn-time estimate for each Workscope for acceptance by Customer prior to beginning of work will be provided.

FIXED WORKSCOPE PRICING

Fixed Prices for Workscopes provided by GE On Wing Support, Inc. include the labor charges involved in preparation and execution of the Workscope requiring normal manpower and tooling in normal work conditions. It does not include consumables or other charges that may be applicable. Prices are stated in Year 2017 U.S. Dollars. After the initial term of one calendar year, GE On Wing Support Inc. will quote its Current list prices unless the Parties, in writing, agree to renew the provisions of this appendix annually.

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EXHIBIT I: FLIGHT LINE REPLACEABLE UNITS

The following list contains LRUs which when removed from an Engine on the flightline, will be repaired and replaced in accordance with the terms set forth in Exhibit L.

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EXHIBIT J: GENERAL TERMS AND CONDITIONS

1.1 LIMITATION OF LIABILITY AND INDEMNIFICATION

1.2 Total Liability . The total liability of GE for any and all claims, whether in contract, warranty, tort (including negligence but excluding gross negligence and willful misconduct), product liability, or otherwise, for any damages arising out of, connected with or resulting from the performance or non-performance of any Service will not, in relation to any individual claim, exceed the [***] . Notwithstanding the foregoing, in no event will GE have any liability hereunder, whether as a result of breach of contract, warranty, tort (including negligence but excluding willful misconduct or recklessness), product liability, or otherwise, for any special, consequential, incidental, resultant or indirect damages, (including, without limitation, loss of: use, profit revenue or goodwill) or punitive or exemplary damages.

In no event will GE have any liability hereunder, whether as a result of breach of contract, warranty, tort (including negligence), product liability, patent liability, or otherwise, for the design, material, workmanship, engineering defects or product liability and any damages whatsoever, including damages to personal property and for personal injury or death, caused in any way by the manufacture of an Engine, or the parts, LRU’s, components or material, thereof, or related thereto.

In the event Customer uses non-GE approved LRU’s, parts or repairs in an Engine and such LRU’s, parts or repairs cause personal injury, death or property damage to third parties, Customer shall indemnify and hold harmless GE from all claims and liabilities associated therewith. The preceding indemnity shall apply whether or not GE was provided a right under this Agreement to remove such LRU’s, parts or repairs, and irrespective of the exercise by GE of such right.

1.3 Definition . For the purpose of this Section 1, the term "GE" is deemed to include GE, the subcontractors and suppliers of any Services furnished hereunder, and the directors, officers, employees, agents and representatives of each.

2.1 EXCUSABLE DELAY

2.2 Excusable Delay . Neither Party shall be liable or in breach of its obligations under this Agreement to the extent performance of such obligations is delayed or prevented, directly or indirectly, by causes beyond its reasonable control, including acts of God, fire, terrorism, war (declared or undeclared), severe weather conditions, earthquakes, epidemics, material shortages, insurrection, acts or omissions of the other Party or the other Party’s suppliers or agents, any act or omission by any governmental authority, strikes, acts or threats of vandalism or terrorism (including disruption of technology resources), transportation shortages, or vendor’s failure to perform, as a result of one of the events listed in this Article(each an “Excusable Delay”). The delivery or performance date shall be extended for a period equal to the time lost by reason of delay, including time to overcome the effect of the delay.

2.3 Continuing Obligations . Section 2.1 will not, however, relieve either Party from using its best commercial efforts to avoid or remove such causes of delay and continue performance with reasonable dispatch when such causes are removed. During the period of an Excusable Delay, GE will have the right to invoice Customer for Services performed, and Customer will pay all such invoices net thirty (30) Days.

2.4 Extended Delay Termination . If delay resulting from any of the foregoing causes extends for more than six (6) months and the Parties have not agreed upon a revised basis for continuing the Services, including any adjustment of the price, then either Party, upon sixty (60) Days written notice to the other, may terminate the performance of Services with respect to the Engine for which Services were delayed.

2.5 Continuing Obligations . Section 2.1 will not, however, relieve either Party from using its best commercial efforts to avoid or remove such causes of delay and continue performance with reasonable dispatch when such causes are removed. During the period of an Excusable Delay, GE will have the right to invoice Customer for Services performed, and Customer will pay all such invoices net thirty (30) Days.

2.6 Extended Delay Termination . If delay resulting from any of the foregoing causes extends for more than six (6) months and the Parties have not agreed upon a revised basis for continuing the Services, including any adjustment of the price, then either Party, upon sixty (60) Days written notice to the other, may terminate the performance of Services with respect to the Engine for which Services were delayed.

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3.1 NOTICES

3.2 Acknowledgment . All notices required or permitted under this Agreement will be in writing and will be delivered personally, via first class return receipt requested mail, by facsimile, by courier service, or by express mail, addressed as follows, or to such other address as either Party may designate in writing to the other Party from time to time:



GE Engine Services, LLC Attn: Contract Performance Manager Copy to: Senior Counsel, GE Engine Services, Inc. Cincinnati, OH 45215	HAWAIIAN AIRLINES, INC 3375 Koapaka St Ste G350 P.O. Box 30008 Honolulu, HI 96819-1804 Attn: General Counsel Copy to: Senior Vice President of Technical Operations, And: MEVendorPerformance@hawaiianair.com

3.3 Effect of Notices . Notices will be effective and will be deemed to have been given to (or “received by”) the recipient: (A) upon delivery, if sent by courier, express mail, or delivered personally; (B) on the next business Day following receipt, if sent by facsimile; or (C) on the fifth (5th) Day after posting (or on actual receipt, if earlier) in the case of a letter sent prepaid first class mail.

4.1 TAXES AND OTHER

4.2 Taxes, Duties or Charges . In addition to the price for the Services, Customer agrees to pay, upon demand, all taxes (including, without limitation, sales, use, excise, turnover or value added taxes), duties, fees, charges or assessments of any nature (but excluding any income taxes) (“Taxes”) assessed or levied in connection with performance of this Agreement.

4.3 Withholdings . All payments by Customer to GE under this Agreement will be free of all withholdings of any nature whatsoever except to the extent otherwise required by law, and if any such withholding is so required, Customer will pay an additional amount such that after the deduction of all amounts required to be withheld, the net amount received by GE will equal the amount that GE would have received if such withholding had not been required.

5.1 DISPUTE RESOLUTION, ARBITRATION

5.2 Dispute Resolution . Each of the Parties (i) hereby irrevocably submits itself to the nonexclusive jurisdiction of the courts of the State of New York, New York County, of the United States District Court for the Southern District of New York, located in the Borough of Manhattan, for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any Party hereto, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense or otherwise, in any such suit, action or proceeding, to the extent permitted by applicable law, any defense based on sovereign or other immunity or that the suit, action or proceeding which is referred to in sub-clause (i) above is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this Agreement or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by these courts.

6.1 NONDISCLOSURE OF PROPRIETARY DATA

6.2

Non-Disclosure . Unless the Parties otherwise agree in writing, any knowledge, information or data which the Parties have or may disclose to each other shall be held in confidence and may not be either disclosed or used for any purpose, except that (i) GE may disclose the same to its affiliates, subsidiaries, joint venture participants, risk and revenue sharing participants, suppliers, engineering service providers, subcontractors or consultants as needed to perform the Services

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provided under this Agreement in accordance with the terms and pricing set forth herein; and (ii) Customer may disclose the same to its affiliates, subsidiaries and subcontractors, subject to obligations of confidentiality at least as restrictive as those in this Agreement and in no event shared with another aircraft engine manufacturer. The preceding clause will not apply to information which (1) is or becomes part of the general public knowledge or

literature otherwise than as a result of breach of any confidentiality obligation to GE, or (2) was, as shown by written records, known to the receiving Party prior to receipt from the disclosing Party, or (3) disclosure is required by government agencies or by law or court order. In the event the Agreement, or other GE information or data is required to be disclosed or filed by government agencies by law, or by court order, Customer shall notify GE at least thirty (30) days in advance of such disclosure or filing and shall cooperate fully with GE in seeking confidential treatment of sensitive terms of the Agreement or such information and data.

Intellectual Property. Nothing contained in this Agreement will convey to either Party the right to use the trademarks of the other, or convey or grant to Customer any license under any patent owned or controlled by GE

7.1 Intellectual Property

7.2 GE shall at its sole cost (i) indemnify Customer against any loss or damage incurred and (ii) handle all claims and defend any suit or proceeding brought against Customer insofar as based on a claim that any Engine or Part thereof or any Product (as defined in the GTA and which terms include without limitation any software) or any material or process used in the maintenance, repair or overhaul of any item to which this Agreement relates, without any alteration or further combination, constitutes an infringement of any Intellectual Property Right of any other party. The indemnity applies to any such claim arising in any country that is signatory to Article 27 of the Convention on International Civil Aviation signed by the United States at Chicago on December 7, 1944, in which Customer is authorized to operate or in which another airline pursuant to lawful interchange, lease or similar arrangement, operates aircraft of Customer.

7.3 Liability. GE's liability under this Section 7 is expressly conditioned upon Customer promptly notifying GE in writing and giving GE exclusive authority, information and assistance (at GE expense) for the handling, defense or settlement of any claim, suit or proceeding. In case such material or process is held in such suit to constitute infringement and the use of said material or process is enjoined, GE will, at GE's own expense and at GE's option, either, (1) settle or defend such claim or suit or proceeding arising therefrom, or (2) procure for Customer the right to continue using said material or process in the item repaired under this Agreement, or (3) replace or modify such item with an item incorporating non-infringing material or process.

7.4 Indemnification. The preceding Section 7.2 will not apply: (1) to any material or process or part thereof of Customer design or specification, or used at Customer’s direction in any repair under this Agreement, or (2) to the use of any material or process furnished under this Agreement in conjunction with any other apparatus, article, material or process. As to any material or process or use described in the preceding sentence, GE assumes no liability whatsoever for patent or copyright infringement, and Customer will, in the same manner as GE is obligated to Customer above, indemnify, defend and hold GE harmless from and against any claim or liability, including costs and expense in defending any such claim or liability in respect thereto.

7.5 Remedy . THE FOREGOING WILL CONSTITUTE CUSTOMER’S SOLE REMEDY AND GE’S SOLE LIABILITY FOR PATENT OR COPYRIGHT INFRINGEMENT BY ANY MATERIAL OR PROCESS AND IS NOT SUBJECT TO THE LIMITATION OF LIABILITY SET FORTH IN SECTION 1, “LIMITATION OF LIABILITY AND INDEMNIFICATION.”

7.6 In this Article 10 the term “Intellectual Property Right” means any patent, copyright, trademark, design right or any other intellectual property right arising under applicable law.

8.1 LIENS

8.2 Mechanics Lien . Customer hereby acknowledges that GE has the right to file a mechanic’s lien under applicable state law in the event Customer fails to make timely payment as required in this Agreement and fails to cure such failure as provided in the Agreement.

8.3 Enforcement . If Customer fails to tender any payment owing under this Agreement and GE initiates foreclosure with respect to any Engine, pursuant to a mechanic’s lien, then Customer agrees to supply to GE all records, log books and other documentation pertaining to the maintenance condition of the Engine, and a certificate either (i) certifying that the Engine has not been involved in any Aircraft Accident or Aircraft Incident or (ii) specifying the date and facts surrounding

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 34

Subject to restrictions on the cover or first page

any Aircraft Accident or Aircraft Incident in which the Engine has been involved and the nature and extent of the damage sustained (such records, log books, certificate and other documentation referred to hereinafter as the “Engine Documents”). The Parties recognize that the failure by Customer to deliver the Engine Documents may have a material, adverse effect on the value of any Engine with respect to which foreclosure has been initiated by GE and the ability of GE to sell or lease the Engine, and that the damages GE may sustain as a result are not readily calculable.

9.1 GENERAL PROVISIONS

9.2 Assignment . This Agreement, any related purchase order or any rights or obligations hereunder may not be assigned without the prior written consent of the other Party, except that Customer’s consent will not be required for an assignment by GE to one of GE’s affiliates. In the event of any such substitution, Customer will be so advised in writing. Any assignment in contradiction of this clause will be considered null and void. Notwithstanding the above, GE may assign any of its accounts receivable under this Agreement to any party without Customer’s consent.

9.3 Governing Law, Waiver of Immunity . The Agreement will be interpreted and applied in accordance with the substantive laws of the State of New York, without giving effect to its choice of law or conflict of law provisions, rules or procedures (except to the extent that the validity, perfection or creation of any lien or security interest hereunder and the exercise of rights or remedies with respect of such lien or security interest for a particular item of equipment are governed by the laws of a jurisdiction other than New York). With respect to any Customer who is incorporated or based outside the United States, to the extent that such Customer or any of its property becomes entitled at any time to any immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding of any nature, Customer hereby irrevocably waives the application of such immunity and particularly, the U.S. Foreign Sovereign Immunities Act, 28 U.S.C. 1602, et. seq., insofar as such immunity relates to Customer's rights and obligations in connection with this Agreement.

9.4 Savings Clause . If any portion of this Agreement will be determined to be a violation of or contrary to any controlling law, rule or regulation issued by a court of competent jurisdiction, then that portion will be unenforceable in such jurisdiction. However, the balance of this Agreement will remain in full force and effect.

9.5 Beneficiaries . Except as herein expressly provided to the contrary, the provisions of this Agreement are for the Parties’ mutual benefit and not for the benefit of any third party.

9.6 Controlling Language . The English language will be used in the interpretation and performance of this Agreement. All correspondence and documentation arising out of or connected with this Agreement and any related purchase order(s), including Engine records and Engine logs, will be in the English language.

9.7 Non-Waiver of Rights and Remedies . Any failure or delay in the exercise of rights or remedies hereunder will not operate to waive or impair such rights or remedies. Any waiver given will not be construed to require future or further waivers.

9.8 Titles/Subtitles . The titles and subtitles given to the articles and sections of this Agreement are for convenience. They do not limit or restrict the context of the article or section to which they relate.

9.9 Currency Judgment . This is an international transaction in which the specification of United States Dollars is of the essence. No payments required to be made under this Agreement will be discharged by payments in any currency other than United States Dollars, whether pursuant to a judgment, arbitration award or otherwise.

9.10 No Agency Fees . Customer represents and warrants that no officer, employee, representative or agent of Customer has been or will be paid a fee or otherwise has received or will receive any personal compensation or consideration by or from GE in connection with the obtaining, arranging or negotiation of this Agreement or other documents entered into or executed in connection herewith.

9.11 On-Site Representative . Subject to the following conditions, GE agrees to permit one Designated Representative, from time to time during the term of this Agreement, to enter onto its premises at an Approved Repair Station for the purpose of supporting the Services on Engines. GE will furnish such Designated Representative the use of a non-exclusive workspace, including the use of a local telephone line and parking accommodations. Costs incurred by such Designated Representative, including long distance telephone charges, fax or computer charges will be the responsibility of Customer, and if charged to GE in the first instance, will be invoiced to Customer.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 35

Subject to restrictions on the cover or first page

Customer agrees to ensure that adequate non-exclusive work space, parking, and local telephone and facsimile access are available for the GE technical representative assigned to Customer’s facility, as applicable. Costs incurred by such GE technical representative, including without limitation, long distance telephone charges, fax, or computer charges, shall be the responsibility of GE.

9.12 No Agency . Nothing in this Agreement will be interpreted or construed to create a partnership, agency or joint venture between GE and Customer.

9.13 Entire Agreement . This Agreement, together with its Exhibits, contains and constitutes the entire understanding and agreement between the Parties hereto respecting the subject matter hereof, and supersedes and cancels all previous negotiations, agreements, representations and writings in connection herewith. This Agreement may not be released, discharged, abandoned, supplemented, modified or waived, in whole or in part, in any manner, orally or otherwise, except by a writing of concurrent or subsequent date signed and delivered by a duly authorized officer or representative of each of the Parties hereto making specific reference to this Agreement and the provisions hereof being released, discharged, abandoned, supplemented, modified or waived.

9.14 Counterparts . This Agreement may be executed in one or more counterparts, all of which counterparts will be treated as the same binding agreement, which will be effective as of the date set forth on the first page hereof, upon execution and delivery by each Party hereto to the other Party of one or more such counterparts.

9.15 Governmental Authorization . Customer will be the importer and/or exporter of record and will be responsible for timely obtaining any import license, export license, exchange permit or other required governmental authorization relating to the Engine. At Customer’s request and expense, GE will assist Customer in its application for any required

U.S. export licenses. GE will not be liable if any authorization is not renewed or is delayed, denied, revoked or restricted, and Customer will not thereby be relieved of its obligation to pay for Services performed by GE. All transported Engines will be subject to the U.S. Export Administration Regulations and/or International Traffic in Arms Regulations. Customer agrees not to dispose of U.S. origin items provided by GE other than in and to the country of ultimate destination and/or as identified in an approved government license or authorization, except as said laws and regulations may permit.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 36

Subject to restrictions on the cover or first page

EXHIBIT K: GE APPROVED REPAIR STATIONS

GE Caledonian Limited Shawfarm Industrial Estate Monument Crescent Prestwick

KA9 2RX

Ayrshire

United Kingdom

GE CELMA LTDA

RUE ALICE HERVE, 356 - BINGEN PETROPOLIS - RJ

BRAZIL 25669-900

GE Evergreen Engine Services (EGAT)

Powerplant Maintenance Department (PMD)

6, Hang-Chan S Rd, Taiwan Taoyuan Int’l Airport Dayuan, Taouan Hsiang

Taiwan ZIP:337

Koninklijke Luchtvaart Mattschappij N.V.

KLM Engineering & Maintenance, Amsterdam-Bataviaweg, Gebouw 404 P.O. Box 7700

1117 ZL Schipol-Oost

CVG

3000 Earhart Ct

Hebron, KY 41048

USA

London Heathrow Airport

Unit 4, Radius Park, Faggs Road, Feltham

Middlesex

TW14 0NG

United Kingdom

Korean Repair Center

210 Cheonho-ro, Daegot Myun

Times Aerospace Korea within Gimpo Aviation Industry Complex

Gimpo 41

10050 KR

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 37

Subject to restrictions on the cover or first page

EXHIBIT L: FLIGHTLINE LRU

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 38

Subject to restrictions on the cover or first page

EXHIBIT M: [***]

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 39

Subject to restrictions on the cover or first page

EXHIBIT N: INDIVIDUAL ENGINE PERFORMANCE RETENTION CALCULATION

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 40

Subject to restrictions on the cover or first page

EXHIBIT O: [***]

[***]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GE Designated: -CONFIDENTIAL- 41

Subject to restrictions on the cover or first page

EXECUTION VERSION

AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT

dated as of December 11, 2018

among

HAWAIIAN AIRLINES, INC.,

as Borrower,

HAWAIIAN HOLDINGS, INC.,

as Parent and a Guarantor,

THE SUBSIDIARIES OF THE PARENT PARTY HERETO
OTHER THAN THE BORROWER,

as Guarantors,

THE LENDERS PARTY HERETO,

and

CITIBANK, N.A.,

as Administrative Agent

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Table of Contents



			Page
SECTION 1.	DEFINITIONS		2
	Section 1.01.	Defined Terms	2
	Section 1.02.	Terms Generally	42
	Section 1.03.	Accounting Terms; GAAP	42

SECTION 2.	AMOUNT AND TERMS OF CREDIT		43
	Section 2.01.	Commitments of the Lenders	43
	Section 2.02.	Letters of Credit	44
	Section 2.03.	Requests for Loans	48
	Section 2.04.	Funding of Loans	49
	Section 2.05.	Interest Elections	50
	Section 2.06.	Limitation on Eurodollar Tranches	51
	Section 2.07.	Interest on Loans	51
	Section 2.08.	Default Interest	51
	Section 2.09.	Alternate Rate of Interest	52
	Section 2.10.	Repayment of Loans; Evidence of Debt	52
	Section 2.11.	Optional Termination or Reduction of Revolving Commitments	53
	Section 2.12.	Mandatory Prepayment of Loans; Commitment Termination; Change of Control Offer	53
	Section 2.13.	Optional Prepayment of Loans	56
	Section 2.14.	Increased Costs	57
	Section 2.15.	Break Funding Payments	59
	Section 2.16.	Taxes	60
	Section 2.17.	Payments Generally; Pro Rata Treatment	63
	Section 2.18.	Mitigation Obligations; Replacement of Lenders	64
	Section 2.19.	[Reserved]	65
	Section 2.20.	Commitment Fee and Upfront Fee	65
	Section 2.21.	Letter of Credit Fees	66
	Section 2.22.	Nature of Fees	66
	Section 2.23.	Right of Set-Off	66
	Section 2.24.	Security Interest in Letter of Credit Account	67
	Section 2.25.	Payment of Obligations	67
	Section 2.26.	Defaulting Lenders	67
	Section 2.27.	Increase in Revolving Commitment	69
	Section 2.28.	Extension of the Revolving Facility	70
	Section 2.29.	Term Loan	73
	Section 2.30.	Illegality Event	74

SECTION 3.	REPRESENTATIONS AND WARRANTIES		75
	Section 3.01.	Organization and Authority	75
	Section 3.02.	Air Carrier Status	75

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	Section 3.03.	Due Execution	75
	Section 3.04.	Statements Made	76
	Section 3.05.	Financial Statements; Material Adverse Change	76
	Section 3.06.	Ownership of Subsidiaries	76
	Section 3.07.	Liens	77
	Section 3.08.	Use of Proceeds	77
	Section 3.09.	Litigation and Compliance with Laws	77
	Section 3.10.	Pledged Routes	77
	Section 3.11.	Margin Regulations; Investment Company Act	78
	Section 3.12.	Ownership of Collateral	78
	Section 3.13.	Perfected Security Interests	78
	Section 3.14.	Payment of Taxes	78
	Section 3.15.	Anti-Corruption Laws and Sanctions	78

SECTION 4.	CONDITIONS OF LENDING		79
	Section 4.01.	Conditions Precedent to Closing	79
	Section 4.02.	Conditions Precedent to Each Loan and Each Letter of Credit	81

SECTION 5.	AFFIRMATIVE COVENANTS		82
	Section 5.01.	Financial Statements, Reports, etc	82
	Section 5.02.	Taxes	85
	Section 5.03.	Stay, Extension and Usury Laws	85
	Section 5.04.	Corporate Existence	85
	Section 5.05.	Compliance with Laws	85
	Section 5.06.	[Intentionally Omitted]	86
	Section 5.07.	Delivery of Appraisals; Field Audits	86
	Section 5.08.	[Intentionally Omitted]	87
	Section 5.09.	Citizenship; Utilization; Collateral Requirements	87
	Section 5.10.	Collateral Ownership	88
	Section 5.11.	Insurance	88
	Section 5.12.	Additional Guarantors; Grantors; Collateral	89
	Section 5.13.	Access to Books and Records	90
	Section 5.14.	Further Assurances	91

SECTION 6.	NEGATIVE COVENANTS		91
	Section 6.01.	[Intentionally Omitted]	91
	Section 6.02.	[Intentionally Omitted]	91
	Section 6.03.	[Intentionally Omitted]	91
	Section 6.04.	Disposition of Collateral	91
	Section 6.05.	[Intentionally Omitted]	92
	Section 6.06.	Liens	92
	Section 6.07.	[Intentionally Omitted]	92
	Section 6.08.	Liquidity	92
	Section 6.09.	Collateral Coverage Ratio	92

ii 92544055_10



	Section 6.10.	Merger, Consolidation, or Sale of Assets	93
	Section 6.11.	Use of Proceeds	94

SECTION 7.	EVENTS OF DEFAULT		95
	Section 7.01.	Events of Default	95

SECTION 8.	THE AGENTS		98
	Section 8.01.	Administration by Agents	98
	Section 8.02.	Rights of Administrative Agent	99
	Section 8.03.	Liability of Agents	99
	Section 8.04.	Reimbursement and Indemnification	100
	Section 8.05.	Successor Agents	100
	Section 8.06.	Independent Lenders	101
	Section 8.07.	Advances and Payments	101
	Section 8.08.	Sharing of Setoffs	101
	Section 8.09.	Withholding Taxes	102
	Section 8.10.	Appointment by Secured Parties	102

SECTION 9.	GUARANTY		103
	Section 9.01.	Guaranty	103
	Section 9.02.	No Impairment of Guaranty	104
	Section 9.03.	Continuation and Reinstatement, etc	104
	Section 9.04.	Subrogation	104
	Section 9.05.	Discharge of Guaranty	105

SECTION 10.	MISCELLANEOUS		105
	Section 10.01.	Notices	105
	Section 10.02.	Successors and Assigns	106
	Section 10.03.	Confidentiality	110
	Section 10.04.	Expenses; Indemnity; Damage Waiver	111
	Section 10.05.	Governing Law; Jurisdiction; Consent to Service of Process	113
	Section 10.06.	No Waiver	114
	Section 10.07.	Extension of Maturity	114
	Section 10.08.	Amendments, etc	114
	Section 10.09.	Severability	117
	Section 10.10.	Headings	117
	Section 10.11.	Survival	117
	Section 10.12.	Execution in Counterparts; Integration; Effectiveness	117
	Section 10.13.	USA Patriot Act	117
	Section 10.14.	New Value	118
	Section 10.15.	WAIVER OF JURY TRIAL	118
	Section 10.16.	No Fiduciary Duty	118
	Section 10.17.	Intercreditor Agreements	118
	Section 10.18.	Registrations with International Registry	119
	Section 10.19.	Contractual Recognition of Bail-in	119

iii 92544055_10

INDEX OF APPENDICES

ANNEX A    –    Commitment Amounts
ANNEX B    –    List of Aircraft and Engine Appraisers
EXHIBIT A    –    Form of Instrument of Assumption and Joinder

EXHIBIT B – Form of Assignment and Acceptance

EXHIBIT C – Form of Loan Request

EXHIBIT D – Form of Aircraft and Spare Engine Mortgage

EXHIBIT E – Form of Spare Parts Security Agreement

EXHIBIT F – Form of SRG Security Agreement

EXHIBIT G – Form of Security Agreement

EXHIBIT H – Form of Other Aircraft Mortgage

SCHEDULE 3.06 – Subsidiaries

iv 92544055_10

AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT, dated as of December 11, 2018, among Hawaiian Airlines, Inc., a Delaware corporation (“the “ Borrower ”), Hawaiian Holdings, Inc., a Delaware corporation (“ Parent ”), the direct and indirect Domestic Subsidiaries of the Parent from time to time party hereto other than the Borrower, each of the several banks and other financial institutions or entities from time to time party hereto (the “ Lenders ”), and CITIBANK, N.A. (“ Citibank ”), as administrative agent for the Lenders (together with its permitted successors in such capacity, the “ Administrative Agent ”).

INTRODUCTORY STATEMENT

The Borrower entered into an Amended and Restated Credit and Guaranty Agreement, dated as of December 23, 2016 (the “ Previous Credit Agreement ”), among the Borrower, the Parent, the direct and indirect Domestic Subsidiaries of the Parent from time to time party thereto other than the Borrower, each of the several banks and other financial institutions or entities from time to time party thereto, and the Administrative Agent.

The Borrower and Lenders now desire to amend and restate the Previous Credit Agreement in its entirety as a revolving credit and revolving letter of credit facility with an aggregate principal amount not to exceed $235,000,000, subject to the conditions set forth herein.

The proceeds of the Loans will be used for working capital and other general corporate purposes of the Borrower and its Subsidiaries.

To provide guarantees and security for the repayment of the Loans, the reimbursement of any draft drawn under a Letter of Credit and the payment of the other obligations of the Borrower and the Guarantors hereunder and under the other Loan Documents, the Borrower and the Guarantors will, among other things, provide to the Administrative Agent and the Lenders the following (each as more fully described herein):

(a) a guaranty from each Guarantor of the due and punctual payment and performance of the Obligations of the Borrower pursuant to Section 9 hereof; and

(b) a security interest in or mortgages (or comparable Liens) with respect to the Collateral from the Borrower and each other Guarantor (if any) pursuant to the Collateral Documents.

Accordingly, the parties hereto hereby agree to amend and restate the Previous Credit Agreement as follows:

92544055_10

SECTION 1.

DEFINITIONS

Section 1.01. Defined Terms .

“ ABR ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, is bearing interest at a rate determined by reference to the Alternate Base Rate.

“ Account ” shall mean all “accounts” as defined in the UCC, and all rights to payment for interest (other than with respect to debt and credit card receivables).

“ Account Control Agreements ” shall mean each three-party security and control agreement entered into by any Grantor, the Administrative Agent and a financial institution which maintains one or more deposit accounts or securities accounts that have been pledged to the Administrative Agent as Collateral hereunder or under any other Loan Document, in each case giving the Administrative Agent exclusive control over the applicable account and in form and substance reasonably satisfactory to the Administrative Agent and as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

“ Account Debtor ” shall mean the Person obligated on an Account.

“ ACME ” shall mean Airline Contract Maintenance & Equipment, Inc.

“ Additional Collateral ” shall mean (a) cash that is denominated in Dollars and Cash Equivalents pledged to the Administrative Agent (and subject to an Account Control Agreement), (b) Eligible Accounts of the Borrower or any Grantor, (c) any Eligible Aircraft, Eligible Engines and Eligible Spare Parts of the Borrower or any Grantor, (d) Routes of the Borrower (which shall include any Slots and Gate Leaseholds necessary for servicing the scheduled air carrier service authorized by such Routes) and (e) Ground Support Equipment, and all of which assets shall (i) (other than with respect to Additional Collateral of the type described in clause (a) above and new spare Engines subject to proviso (iii) in the first sentence of Section 5.07) be valued by a new Appraisal (or, solely with respect to Additional Collateral of the type described in clause (b) above, by a new Officer’s Certificate setting forth the computed value of such Eligible Account) at the time the Borrower designates such assets as Additional Collateral and (ii) as of any date of addition of such assets as Collateral, be subject, to the extent purported to be created by the applicable Collateral Document, to a perfected first priority Lien and/or mortgage (or comparable Lien), in favor of the Administrative Agent and otherwise subject only to Permitted Liens (excluding those referred to in clauses (5) and (11) of the definition of “Permitted Lien” and, until the time such assets actually become subject to such Lien on such date, clause (2) of the definition of “Permitted Liens”).

“ Administrative Agent ” shall have the meaning set forth in the first paragraph of this Agreement.

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“ Administrator ” shall have the meaning given it in the Regulations and Procedures for the International Registry.

“ Affiliate ” shall mean, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person (a “ Controlled Person ”) shall be deemed to be “controlled by” another Person (a “ Controlling Person ”) if the Controlling Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of the Controlled Person whether by contract or otherwise.

“ Agency Fees ” shall mean the fees set forth in that certain fee letter between the Administrative Agent and the Borrower.

“ Agreement ” shall mean this Amended and Restated Credit and Guaranty Agreement, as the same may be amended, restated, modified, supplemented, extended or further amended and restated from time to time.

“ Aggregate Exposure ” shall mean, with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lender’s Commitments at such time and (b) thereafter, the amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding.

“ Aggregate Exposure Percentage ” shall mean, with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.

“ Aircraft ” means any contrivance invented, used, or designed to navigate, or fly in, the air.

“ Aircraft and Spare Engine Mortgage ” means the Mortgage and Security Agreement, in substantially the form of Exhibit D, entered into by the Borrower and the Administrative Agent, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

“ Aircraft Appraiser ” shall mean (i) ICF International, Inc. (ii) Morten, Beyer and Agnew (“MBA”) or (iii) any other independent appraisal firm appointed by the Borrower and reasonably satisfactory to the Administrative Agent.

“ Aircraft Protocol ” means the official English language text of the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment adopted on November 16, 2001, at a diplomatic conference in Cape Town, South Africa, and all amendments, supplements and revisions thereto, as in effect in the United States.

“ Airline/Parent Merger ” means the merger or consolidation, if any, of the Borrower and the Parent.

92544055_10

“ Airport Authority ” shall mean any city or any public or private board or other body or organization chartered or otherwise established for the purpose of administering, operating or managing airports or related facilities, which in each case is an owner, administrator, operator or manager of one or more airports or related facilities.

“ Alternate Base Rate ” shall mean, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the sum of the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the sum of the One-Month LIBOR in effect on such day plus 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the One-Month LIBOR shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the One-Month LIBOR, respectively.

“ Anti-Corruption Laws ” means all laws, rules and regulations of the United States or other applicable jurisdictions applicable to Parent or its Subsidiaries from time to time intended to prevent or restrict bribery or corruption.

“ Appliance ” shall mean any instrument, equipment, apparatus, part, appurtenance, or accessory used, capable of being used, or intended to be used, in operating or controlling Aircraft in flight, including a parachute, communication equipment, and another mechanism installed in or attached to Aircraft during flight, and not a part of an Aircraft, Engine, or Propeller.

“ Applicable Margin ” shall mean (i) in the case of Eurodollar Loans, 2.00% per annum and (ii) in the case of ABR Loans, 1.00% per annum; provided that, on any date that the outstanding Revolving Loans are in excess of 50% of the original aggregate Revolving Commitment (or if the Revolving Commitment is increased, the increased aggregate Revolving Commitment), the Utilization Fee shall be added to the Applicable Margin for each Eurodollar Loan and each ABR Loan, as applicable, and payable on the same basis as interest.

“ Appraised Collateral ” shall mean Collateral consisting of Eligible Aircraft, Eligible Engines, Eligible Spare Parts, Ground Support Equipment, Routes or any other individual asset that, in each case is included in an Appraisal.

“ Appraisal ” means any appraisal, dated the date of delivery thereof, prepared by (A) in the case of Aircraft or Engines, the Aircraft Appraiser, (B) in the case of Routes, MBA or another independent appraisal firm appointed by the Borrower and reasonable satisfactory to the Administrative Agent. or, (C) in the case of Spare Parts or Ground Support Equipment, MBA, ICF International or another independent appraisal firm appointed by the Borrower and reasonably satisfactory to the Administrative Agent, which certifies, at the time of determination, in reasonable detail the Appraised Value of Appraised Collateral and, (w) in the case of Aircraft or Engines, is a “desk-top” appraisal of the fair market value assuming half-life condition, except that any such equipment that is Stored shall have an assumed value of zero, (x) in the case of Spare Parts, whose methodology and form of presentation are reasonably satisfactory to the Administrative Agent and (y) in the case of any other Appraised Collateral, which is in form and substance reasonably satisfactory to the Administrative Agent.

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“ Appraised Value ” shall mean, as of any date of determination, with respect to any Appraised Collateral, the aggregate fair market value of such Appraised Collateral as reflected in the most recent Appraisal delivered to the Administrative Agent in respect of such Appraised Collateral in accordance with this Agreement as of that date (for the avoidance of doubt, except in the case of Pledged Spare Parts, calculated after giving effect to any additions to or eliminations from the Collateral since the date of delivery of such Appraisal), provided that:

(i) in the case of any Appraisal of Aircraft or Engines delivered after the Closing Date, (x) such Appraisal shall, at the Borrower’s expense, be prepared by the Aircraft Appraiser and (y) the Borrower shall have the right to obtain two additional Appraisals from two other appraisal firms named on Annex B (or other appraisal firms appointed by the Borrower and reasonably satisfactory to the Administrative Agent) no later than 30 days after the Appraisal referred to in the preceding clause (x) shall have been delivered to the Administrative Agent, in which case the Appraised Value of the applicable Aircraft or Engines shall be the average of the three Appraisals;

(ii) if any new spare Engine added to the Collateral within 90 days after delivery from the manufacturer to Borrower is an Existing Engine Type, the initial Appraised Value for such new spare Engine shall be the higher of (x) the highest Appraised Value for any pledged spare Engines then included in the Collateral of such Existing Engine Type, determined using the most recent Appraisal delivered to the Administrative Agent in respect of the applicable pledged spare Engine, or (y) if the Borrower elects to provide a new Appraisal with respect to any new spare Engine being added to the Collateral, the Appraised Value given to such new spare Engine in such initial Appraisal, in each case at the Borrower’s election; and

(iii) in the case of any Appraisal of the Pledged Routes prepared by MBA which provides a “Conclusion of Value” with a range based upon various assumed “Terminal Value growth rates” and assumed “discount rates”, the Appraised Value of such Pledged Routes based upon such Appraisal will be the Conclusion of Value which assumes a Terminal Value of 1.5% and a discount rate of 10.5%.

“ Approved Fund ” shall have the meaning given such term in Section 10.02(b).

“ ARB Indebtedness ” shall mean, with respect to the Borrower or any of its Subsidiaries, without duplication, all Indebtedness or obligations of the Borrower or such Subsidiary created or arising with respect to any limited recourse revenue bonds issued for the purpose of financing or refinancing improvements to, or the construction or acquisition of, airport and other related facilities and equipment, the use or construction of which qualifies and renders interest on such bonds exempt from certain federal or state taxes.

“ Assignment and Acceptance ” shall mean an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.02), and accepted by the Administrative Agent, substantially in the form of Exhibit B.

“ Bail-In Action ” means the exercise of any Write-down and Conversion Powers.

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“ Bail-In Legislation ” means:

(a) in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms , the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

(b) in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.

“ Banking Product Obligations ” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person in respect of any treasury, depository and cash management services, netting services and automated clearing house transfers of funds services, including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith.

“ Bankruptcy Code ” shall mean The Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.

“ Bankruptcy Event ” shall mean, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

“ Bankruptcy Law ” means the Bankruptcy Code or any similar federal or state law for the relief of debtors.

“ Beneficial Owner ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

“ Board ” shall mean the Board of Governors of the Federal Reserve System of the United States.

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“ Board of Directors ” means:

(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

(2) with respect to a partnership, the Board of Directors of the general partner of the partnership;

(3) with respect to a limited liability company, the managing member or members, manager or managers or any controlling committee of managing members or managers thereof; and

(4) with respect to any other Person, the board or committee of such Person serving a similar function.

“ Borrower ” shall have the meaning set forth in the first paragraph of this Agreement.

“ Borrowing ” shall mean the incurrence, conversion or continuation of Loans of a single Type made from all the Revolving Lenders on a single date and having, in the case of Eurodollar Loans, a single Interest Period.

“ Borrowing Base ” shall mean, as of any date of determination, the sum of:

(a) 85% of the aggregate Certified Value of the Pledged Accounts, plus

(b) 75% of the aggregate Appraised Value of the Pledged Engines, plus

(c) 75% of the aggregate Appraised Value of the Pledged Aircraft that are Class I Aircraft (other than Other Eligible Aircraft), plus

(e) 70% of the aggregate Appraised Value of the Pledged Aircraft that are Class II Aircraft (other than Other Eligible Aircraft), plus

(f) 65% of the aggregate Appraised Value of the Pledged Aircraft that are Other Eligible Aircraft, plus

(g) 75% of the aggregate Appraised Value of the Pledged Spare Parts, plus

(h) 60% of the aggregate Appraised Value of the Pledged Ground Support Equipment, plus

(i) 65% of the aggregate Appraised Value of the Pledged Routes, plus

(j) the sum of (i) 100% of the amount of cash and Cash Equivalents of the type described in clauses (1), (2), (4) through, (6) and (8) through (10) of the definitions thereof pledged at such time as Collateral and (ii) 62.5% of the amount of Cash Equivalents of the type described in clauses (3), (5) and (11) of the definition thereof pledged at such time as Collateral,

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in each case subject to an Account Control Agreement but excluding any cash used to Cash Collateralize LC Exposure pursuant to Section 2.02(j));

determined (i) in the case of clause (a) above, using most recent Officer’s Certificate delivered pursuant to Section 5.01(f) with respect to the applicable Pledged Accounts, (ii) in the case of clauses (b)-(i) above, using the most recent Appraisal delivered to the Administrative Agent in respect of the applicable Appraised Collateral and (iii) in each case, excluding the Appraised Value of any Appraised Collateral that is not Eligible Collateral; provided that for purposes of determining the Borrowing Base at any time (w) the Calculated Value of the Pledged Accounts included in the Borrowing Base shall be capped at 30% of the total Borrowing Base, (x) the Calculated Value of the Pledged Aircraft that are Other Eligible Aircraft included in the Borrowing Base shall be capped at 20% of the total Borrowing Base, (y) the Calculated Value of the Pledged Ground Support Equipment included in the Borrowing Base shall be capped at 20% of the total Borrowing Base and (z) the aggregate Calculated Value of the Pledged Accounts, Pledged Aircraft that are Other Eligible Aircraft and Pledged Ground Support Equipment included in the Borrowing Base shall be capped at 50% of the total Borrowing Base, provided further that the Pledged Routes shall only be included in the calculation of the Borrowing Base if at the time the Pledged Routes are pledged to secure the outstanding Obligations of the Borrower, (a) the Route between Honolulu and Haneda is a Pledged Route, and (b) either Pledged Spare Parts and/or at least two (2) Pledged Aircraft that are Class I Aircraft (other than Other Eligible Aircraft) are pledged to secure the outstanding Obligations of the Borrower. For purposes of this definition, each of the amounts determined pursuant to clauses (a)-(j) of this definition with respect to a particular type of Collateral shall be referred to as the “ Calculated Value ” of such type of Collateral.

“ Business Day ” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York City are required or authorized to remain closed (and, for a Letter of Credit, other than a day on which the Issuing Lender issuing such Letter of Credit is closed); provided , however , that when used in connection with the borrowing or repayment of a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits on the London interbank market.

“ Cape Town Convention ” shall mean the official English language text of the Convention on International Interests in Mobile Equipment, adopted on November 16, 2001 at a diplomatic conference in Cape Town, South Africa, and all amendments, supplements and revisions thereto, as in effect in the United States.

“ Cape Town Country ” shall mean any country which is a contracting party to, and has implemented, the Cape Town Convention.

“ Cape Town Treaty ” shall mean, collectively, (a) the Cape Town Convention, (b) the Aircraft Protocol, and (c) all rules and regulations (including but not limited to the Regulations and Procedures for the International Registry) adopted pursuant thereto and all amendments, supplements and revisions thereto.

“ Capital Lease Obligation ” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be

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capitalized and reflected as a liability on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

“ Capital Markets Offering ” means any offering of “securities” (as defined under the Securities Act) in (a) a public offering registered under the Securities Act, or (b) an offering not required to be registered under the Securities Act (including, without limitation, a private placement under Section 4(2) of the Securities Act, an exempt offering pursuant to Rule 144A and/or Regulation S of the Securities Act and an offering of exempt securities).

“ Capital Stock ” means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person,

but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

“ Cargo Receivable ” means any right of Borrower or another Grantor to payment of a monetary obligation for the provision of air transportation services related to passengers, freight and cargo by the Borrower or such Grantor in the ordinary course of business.

“ Cash Collateralization ” or “ Cash Collateralized ” shall have the meaning given such term in Section 2.02(j).

“ Cash Equivalents ” means:

(1) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof;

(2) direct obligations of state and local government entities, in each case maturing within one year from the date of acquisition thereof, which have a

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rating of at least A- (or the equivalent thereof) from S&P or A3 (or the equivalent thereof) from Moody’s;

(3) obligations of domestic or foreign companies and their subsidiaries (including, without limitation, agencies, sponsored enterprises or instrumentalities chartered by an Act of Congress, which are not backed by the full faith and credit of the United States), including, without limitation, bills, notes, bonds, debentures, and mortgage-backed securities, in each case maturing within one year from the date of acquisition thereof;

(4) Investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, a rating of at least A-2 (or the equivalent thereof) from S&P or P-2 (or the equivalent thereof) from Moody’s;

(5) Investments in certificates of deposit (including Investments made through an intermediary, such as the certificated deposit account registry service), banker’s acceptances, time deposits, eurodollar time deposits and overnight bank deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any other commercial bank of recognized standing organized under the laws of the United States or any State thereof that has a combined capital and surplus and undivided profits of not less than $100,000,000;

(6) fully collateralized repurchase agreements with a term of not more than six months for underlying securities that would otherwise be eligible for investment;

(7) Investments in money in an investment company registered under the Investment Company Act of 1940, as amended, or in pooled accounts or funds offered through mutual funds, investment advisors, banks and brokerage houses which invest its assets in obligations of the type described in clauses (1) through (6) above. This could include, but not be limited to, money market funds or short-term and intermediate bonds funds;

(8) money market funds that (A) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (B) are rated AAA (or the equivalent thereof) by S&P and Aaa (or the equivalent thereof) by Moody’s and (C) have portfolio assets of at least $5.0 billion;

(9) deposits available for withdrawal on demand with commercial banks organized in the United States or Japan having capital and surplus in excess of $100,000,000;

(10) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of

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the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A- by S&P or A3 by Moody’s; and

(11) any other securities or pools of securities that are classified under GAAP as cash equivalents or short-term investments on a balance sheet.

“ Certified Value ” means, with respect to any Pledged Account, the computed value of such Pledged Account as set forth in the most recent Officer’s Certificate delivered by the Borrower pursuant to Section 5.01(f) with respect to such Pledged Account.

“ Change in Law ” shall mean, after the date hereof, (a) the adoption of any law, rule or regulation after the date of this Agreement (including any request, rule, regulation, guideline, requirement or directive promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel II or Basel III) or (b) compliance by any Lender or Issuing Lender (or, for purposes of Section 2.14(b), by any lending office of such Lender or Issuing Lender through which Loans and/or Letters of Credit are issued or maintained or by such Lender’s or Issuing Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“ Change of Control ” means the occurrence of either of the following:

(1) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Parent and its Subsidiaries taken as a whole to any Person (including any “person” (as that term is used in Section 13(d)(3) of the Exchange Act)); or

(2) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any Person (including any “person” (as defined above)) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Parent (measured by voting power rather than number of shares), other than (A) any such transaction where the Voting Stock of the Parent (measured by voting power rather than number of shares) outstanding immediately prior to such transaction constitutes or is converted into or exchanged for a majority of the outstanding shares of the Voting Stock of such Beneficial Owner (measured by voting power rather than number of shares), or (B) any merger or consolidation of the Parent with or into any Person (including any “person” (as defined above)) which owns or operates (directly or indirectly through a contractual arrangement) a Permitted Business (a “Permitted Person”) or a Subsidiary of a Permitted Person, in each case, if immediately after such transaction no Person (including any “person” (as defined above)) is the Beneficial Owner, directly or indirectly, of more than 50%

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of the total Voting Stock of such Permitted Person (measured by voting power rather than number of shares).

“ Change of Control Offer ” shall have the meaning given such term in Section 2.12(g).

“ Citibank ” has the meaning set forth in the first paragraph of this Agreement.

“ Class I Aircraft ” means Eligible Aircraft of the type described in clauses (a), (b) and (c) of the definition of Section 1110 Eligible Aircraft.

“ Class II Aircraft ” means Eligible Aircraft of the type described in clause (d) of the definition of Section 1110 Eligible Aircraft.

“ Closing Date ” shall mean the date on which this Agreement has been executed and the conditions precedent set forth in Section 4.01 have been satisfied or waived.

“ Closing Date Transactions ” shall mean the Transactions other than (x) the borrowing of Loans after the Closing Date and the use of the proceeds thereof, and (y) the request for and issuance of Letters of Credit hereunder after the Closing Date.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ” means (i) the assets and properties of the Grantors upon which Liens have been granted to the Administrative Agent to secure the Obligations, including without limitation any Additional Collateral and all of the “Collateral” as defined in the Collateral Documents, but excluding all such assets and properties released from such Liens pursuant to the applicable Collateral Document, and (ii) each of the Letter of Credit Account and the Collateral Proceeds Account, together with all amounts on deposit therein and all proceeds thereof.

“ Collateral Coverage Ratio ” shall mean, as of any date, the ratio of (i) the total Borrowing Base of the Eligible Collateral as of such date to (ii) the sum, without duplication, of (x) the Total Revolving Extensions of Credit then outstanding (other than LC Exposure that has been Cash Collateralized in accordance with Section 2.02(j)), plus (y) the aggregate amount of the Term Loans then outstanding (if any are made pursuant to Section 2.29), plus (z) the aggregate amount of all Designated Hedging Obligations that constitute “Obligations” then outstanding (such sum, the “ Total Obligations ”).

“ Collateral Documents ” shall mean, collectively, the Aircraft and Spare Engine Mortgage, each Other Aircraft Mortgage, the Spare Parts Security Agreement, the Security Agreement, the SRG Security Agreement, the Account Control Agreements and other agreements, instruments or documents, in each case if executed and delivered by the applicable Grantor(s), that create or purport to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties, in each case so long as such agreement, instrument or document shall not have been terminated in accordance with its terms.

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“ Collateral Material Adverse Effect ” shall mean a material adverse effect on the value of the Collateral, taken as a whole.

“ Collateral Proceeds Account ” shall mean a segregated account or accounts held by or under the control of the Administrative Agent into which the Net Proceeds of any Collateral Sale or Recovery Event may be deposited in accordance with the provisions of this Agreement.

“ Collateral Sale ” shall mean any sale of Collateral or series of related sales of Collateral having an Appraised Value in excess of $25,000,000.

“ Commitment Fee ” shall have the meaning set forth in Section 2.20.

“ Commitment Fee Rate ” shall mean 0.350% per annum.

“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. §1 et seq.), as amended from time to time, and any successor statute.

“ Continuing Directors ” shall mean, as of any date or for any period of determination, any member of the Board of Directors of the Parent who:

(1) was a member of such Board of Directors on the first day of such period; or

(2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

“ Credit Facilities ” means, one or more debt facilities, commercial paper facilities, reimbursement agreements or other agreements (other than the Loan Documents) providing for the extension of credit, whether secured or unsecured, in each case, with banks, insurance companies, financial institutions or other lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), letters of credit, surety bonds or insurance products, in each case, as amended, restated, modified, renewed, extended, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities) in whole or in part from time to time.

“ Default ” means any event that, unless cured or waived, is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“ Defaulting Lender ” shall mean, at any time, any Revolving Lender that (a) has failed, within two (2) Business Day of the date required to be funded or paid by it hereunder, to fund or pay (x) any portion of the Revolving Loans or (y) any other amount required to be paid by it hereunder to the Administrative Agent or any other Lender (or its banking Affiliates), unless, in the case of clause (x) above, such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if

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any) has not been satisfied, (b) has notified the Borrower, the Administrative Agent or any other Lender in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations (i) under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or (ii) generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after request by the Administrative Agent, any other Lender or the Borrower, acting in good faith, to provide a confirmation in writing from an authorized officer or other authorized representative of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans under this Agreement, which request shall only have been made after the conditions precedent to borrowings have been met, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s, such other Lender’s or the Borrower’s, as applicable, receipt of such confirmation in form and substance satisfactory to it and the Administrative Agent, (d) has become, or has had its Parent Company become, the subject of a Bankruptcy Event or (e) has become subject to a Bail-In Action; provided that a Revolving Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Revolving Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Revolving Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Revolving Lender. If the Administrative Agent determines that a Revolving Lender is a Defaulting Lender under any of clauses (a) through (d) above, such Revolving Lender will be deemed to be a Defaulting Lender upon notification of such determination by the Administrative Agent to the Borrower, and the Revolving Lenders.

“ Designated Banking Product Agreement ” means any agreement evidencing Designated Banking Product Obligations entered into by the Parent or the Borrower and any Person that, at the time such Person entered into such agreement, was a Lender or a banking Affiliate of a Lender, in each case designated by the relevant Lender and the Borrower, by written notice to the Administrative Agent, as a “Designated Banking Product Agreement” provided that, so long as any Revolving Lender is a Defaulting Lender, such Revolving Lender shall not have any rights hereunder with respect to any Designated Banking Product Agreement entered into while such Revolving Lender was a Defaulting Lender.

“ Designated Banking Product Obligations ” means any Banking Product Obligations, in each case as designated by any Lender (or a banking Affiliate thereof) and the Parent or the Borrower from time to time and agreed to by the Administrative Agent as constituting “Designated Banking Product Obligations,” which notice shall include (i) a copy of an agreement providing an agreed-upon maximum amount of Designated Banking Product Obligations that can be included as Obligations, and (ii) the acknowledgment of such Lender (or such banking Affiliate) that its security interest in the Collateral securing such Designated Banking Product Obligations shall be subject to the Loan Documents.

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“ Designated Hedging Agreement ” means any Hedging Agreement entered into by the Parent or the Borrower and any Person that, at the time such Person entered into such Hedging Agreement, was a Lender or an Affiliate of a Lender, as designated by the relevant Lender (or Affiliate of a Lender) and the Parent or the Borrower, by written notice to the Administrative Agent, as a “Designated Hedging Agreement,” which notice shall include a copy of an agreement providing for (i) a methodology agreed to by the Parent or the Borrower, such Lender or Affiliate of a Lender, and the Administrative Agent for reporting the outstanding amount of Designated Hedging Obligations under such Designated Hedging Agreement from time to time, (ii) an agreed-upon maximum amount of Designated Hedging Obligations under such Designated Hedging Agreement that can be included as Obligations, and (iii) the acknowledgment of such Lender or Affiliate of a Lender that its security interest in the Collateral securing such Designated Hedging Obligations shall be subject to the Loan Documents; provided that, after giving effect to such designation, the aggregate agreed-upon maximum amount of all “Designated Hedging Obligations” included as Obligations shall not exceed 10% of the original Total Revolving Commitment in effect on the Closing Date in the aggregate; provided , further, that so long as any Revolving Lender is a Defaulting Lender, such Revolving Lender shall not have any rights hereunder with respect to any Designated Hedging Agreement entered into while such Revolving Lender was a Defaulting Lender.

“ Designated Hedging Obligations ” means, as applied to any Person, all Hedging Obligations of such Person under Designated Hedging Agreements after taking into account the effect of any legally enforceable netting arrangements included in such Designated Hedging Agreements; it being understood and agreed that, on any date of determination, the amount of such Hedging Obligations under any Designated Hedging Agreement shall be determined based upon the “settlement amount” (or similar term) as defined under such Designated Hedging Agreement or, with respect to a Designated Hedging Agreement that has been terminated in accordance with its terms, the amount then due and payable (exclusive of expenses and similar payments but including any termination payments then due and payable) under such Designated Hedging Agreement.

“ Disposition ” shall mean, with respect to any property, any sale, lease, sale and leaseback, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed of” shall have correlative meanings. For the avoidance of doubt, a reduction in frequency of flight operations over a Route shall not be a “Disposition” with respect to such Route.

“ Dollars ” and “ $ ” shall mean lawful money of the United States of America.

“ Domestic Subsidiary ” shall mean any Subsidiary of the Parent that was formed under the laws of the United States or any state of the United States or the District of Columbia or that guarantees, or pledges any property or assets to secure, any Obligations or Junior Secured Debt.

“ DOT ” shall mean the United States Department of Transportation and any successor thereto.

“ EEA Member Country ” means any member state of the European Union, Iceland, Liechtenstein and Norway.

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“ Eligible Accounts ” means, as of any date of determination, any Account (a) that is owned by the Borrower or another Grantor constituting Collateral, (b) that is shown on the most recent Officer’s Certificate delivered by the Borrower to the Administrative Agent pursuant to Section 5.01(f), net of, without duplication, all reserves against such Account, and (c) that is a Cargo Receivable or a Mileage Plan Receivable except, without duplication, any Account of the Borrower or any other Grantor, in each case, as of such date:

(1) with respect to which an invoice has not been sent to the applicable Account Debtor;

(2) that is in default and such default is reasonably likely to result in such Account Debtor’s failure to make payment with respect to such Account; provided, that, without limiting the generality of the foregoing, an Account shall be deemed in default upon the occurrence of any of the following: (i) the Account is not paid within ninety (90) days following its original invoice date (and in determining the aggregate amount from the same Account Debtor that is unpaid hereunder there shall be excluded the amount of any notes receivable held by an Account Debtor which are unpaid more than 90 days after the due date for payment), (ii) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due or (iii) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;

(3) that represents customer-level credit balances greater than ninety (90) days following its original invoice date;

(4) as to which the Lien of the Administrative Agent for the benefit of the Secured Parties is not a first priority perfected Lien (subject to Permitted Liens);

(5) in the case of any Cargo Receivable, to the extent that such Cargo Receivable, together with all other Cargo Receivables owing by such Account Debtor and its Affiliates exceeds 10% of all Cargo Receivables;

(6) in the case of any Mileage Plan Receivable, to the extent that such Mileage Plan Receivable, together with all other Mileage Plan Receivables owing by such Account Debtor and its Affiliates exceeds 10% of all Mileage Plan Receivables;

(7) to the extent such Account is a Mileage Plan Receivable relating to sales which have yet to be concluded or which is then subject to any netting arrangements, set-off or offsets by the Account Debtor or which do not directly relate to the sale of miles or credits; and

(8) for which the applicable Grantor has not been subject to a Field Audit.

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“ Eligible Aircraft ” shall mean (i) Section 1110 Eligible Aircraft and (ii) Other Eligible Aircraft.

“ Eligible Assignee ” shall mean (a) a commercial bank having total assets in excess of $1,000,000,000, (b) a finance company, insurance company or other financial institution or fund, in each case reasonably acceptable to the Administrative Agent, which in the ordinary course of business extends credit of the type contemplated herein or invests therein and has total assets in excess of $200,000,000 and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of the Code or Section 406 of ERISA, (c) any Lender or any Affiliate of any Lender, provided that, in the case of any assignment by a Lender that was not an initial Lender or an Affiliate of an initial Lender, such Affiliate has total assets in excess of $200,000,000, (d) an Approved Fund of any Lender, provided that such Approved Fund has total assets in excess of $200,000,000, and (e) any other financial institution reasonably satisfactory to the Administrative Agent, provided that such financial institution has total assets in excess of $200,000,000; provided , further , that so long as no Event of Default has occurred and is continuing, no (i) airline, commercial air freight carrier, air freight forwarder or entity engaged in the business of parcel transport by air or (ii) Affiliate of any Person described in clause (i) above (other than any Affiliate of such Person as a result of common control by a Governmental Authority or instrumentality thereof, any Affiliate of such Person who becomes a Lender with the consent of the Borrower in accordance with Section 10.02(b), and any Affiliate of such Person under common control with such Person which Affiliate is not actively involved in the management and/or operations of such Person), shall constitute an Eligible Assignee; provided ; further , that none of the Borrower, any Guarantor or any Affiliate of the Borrower or any Guarantor shall constitute an Eligible Assignee.

“ Eligible Collateral ” shall mean, on any date of determination, all Collateral on which the Administrative Agent shall, as of such date, have, to the extent purported to be created by the applicable Collateral Document, a valid and perfected first priority Lien and/or mortgage (or comparable Lien) and which is otherwise subject only to Permitted Liens; provided , with respect to any Appraised Collateral comprising 10% or more (determined on the date such Appraised Collateral was added as Collateral) of the total Borrowing Base of all Eligible Collateral on which the Administrative Agent shall have been granted a valid and perfected first priority Lien and/or mortgage (or comparable Lien) subject only to Permitted Liens after the Closing Date in any individual transaction or series of substantially simultaneous transactions, at any time when the Administrative Agent shall not have received Appraisals, pursuant to Section 5.07 or otherwise pursuant to this Agreement, with respect to substantially all of the existing Appraised Collateral included in the Eligible Collateral within the 180-day period preceding the date on which such Collateral is pledged (a “ 180-day Period ”), such Appraised Collateral shall not, solely for purposes of satisfying the conditions set forth in Section 6.09(c) in connection with any release of Collateral requested by the Borrower pursuant to Section 6.09(c), constitute Eligible Collateral until the earlier of (x) the date on which the Administrative Agent shall have held such Lien and/or mortgage (or comparable Lien) for at least ninety (90) continuous days from the grant or perfection thereof prior to its constituting Eligible Collateral or (y) the date on which the Administrative Agent shall have received Appraisals (including, for purposes of this clause (y), all Appraisals received during such 180-Day Period), as applicable, pursuant to

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Section 5.07 or otherwise pursuant to this Agreement, with respect to substantially all of the other Appraised Collateral.

“ Eligible Engine ” shall mean any Engine suitable for installation on an Eligible Aircraft or any other Engine reasonably acceptable to the Administrative Agent, in each case that are owned by the Borrower and that are eligible for the benefits of Section 1110.

“ Eligible Spare Parts ” shall mean any Spare Parts and Appliances, in each case that are owned by the Borrower and that are eligible for the benefits of Section 1110.

“ Engine ” shall mean an engine used, or intended to be used, to propel an Aircraft, including a part, appurtenance, and accessory of such Engine, except a Propeller.

“ Environmental Laws ” shall mean all applicable laws (including common law), statutes, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions or legally binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating to the environment, preservation or reclamation of natural resources, the handling, treatment, storage, disposal, Release or threatened Release of, or the exposure of any Person (including employees) to, any Hazardous Materials.

“ Environmental Liability ” shall mean any liability (including any liability for damages, natural resource damage, costs of environmental investigation, remediation or monitoring or costs, fines or penalties) resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment, disposal or the arrangement for disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement, lease or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Equity Interests ” shall mean Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.

“ Escrow Accounts ” shall mean accounts of the Parent or any Subsidiary, solely to the extent any such accounts hold funds set aside by the Parent or any Subsidiary to manage the collection and payment of amounts collected, withheld or incurred by the Parent or such Subsidiary for the benefit of third parties relating to: (a) federal income tax withholding and backup withholding tax, employment taxes, transportation excise taxes and security related charges, (b) any and all state and local income tax withholding, employment taxes and related charges and fees and similar taxes, charges and fees, including, but not limited to, state and local payroll withholding taxes, unemployment and supplemental unemployment taxes, disability taxes, workman’s or workers’ compensation charges and related charges and fees, (c) state and local taxes imposed on overall gross receipts, sales and use taxes, fuel excise taxes and hotel occupancy taxes, (d) passenger facility fees and charges collected on behalf of and owed to

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various administrators, institutions, authorities, agencies and entities, (e) other similar federal, state or local taxes, charges and fees (including without limitation any amount required to be withheld or collected under applicable law) and (f) other funds held in trust for, or otherwise pledged to or segregated for the benefit of, an identified beneficiary; or (2) accounts, capitalized interest accounts, debt service reserve accounts, escrow accounts and other similar accounts or funds established in connection with the ARB Indebtedness.

“ EU Bail-In Legislation Schedule ” means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

“ Eurodollar ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, is bearing interest at a rate determined by reference to the LIBO Rate.

“ Eurodollar Tranche ” shall mean the collective reference to Eurodollar Loans under the Facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

“ Event of Default ” shall have the meaning given such term in Section 7.

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

“ Excluded Subsidiary ” means each Subsidiary of the Parent that is a captive insurance company and is prohibited from becoming a Guarantor pursuant to applicable rules and regulations.

“ Excluded Swap Obligation ” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

“ Excluded Taxes ” shall mean, with respect to the Administrative Agent, any Lender, any Issuing Lender or any other recipient of any payment to be made by or on account of any Obligation of the Borrower or any Guarantor hereunder or under any Loan Document, (a) any Taxes based on (or measured by) its net income, profits or capital, or any franchise taxes, imposed (i) by the United States of America or any political subdivision thereof or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) as a

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result of a present or former connection between such recipient and the jurisdiction imposing such Taxes (other than a connection arising from such recipient’s having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, this Agreement or any Loan Document, or sold or assigned an interest in this Agreement or any Loan Document), (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in which such recipient is located, (c) in the case of a Lender, any withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.18) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.16(a), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (d) in the case of a Lender, any withholding Tax that is attributable to such Lender’s failure to comply with Section 2.16(f) or 2.16(g) and (e) any U.S. withholding Tax that is imposed by reason of FATCA.

“ Existing Engine Type ” shall have the meaning given to such term in Section 5.07.

“ Extended Revolving Commitment ” shall have the meaning given to such term in Section 2.28(a).

“ Extension ” shall have the meaning given to such term in Section 2.28(a).

“ Extension Amendment ” shall have the meaning given to such term in Section 2.28(c).

“ Extension Offer ” shall have the meaning given to such term in Section 2.28(a).

“ Extension Offer Date ” shall have the meaning given to such term in Section 2.28(a).

“ FAA ” shall mean the Federal Aviation Administration of the United States of America and any successor thereto.

“ FAA Slots ” shall mean, in the case of airports in the United States, at any time, the right and operational authority to conduct one Instrument Flight Rule (as defined in Title 14) scheduled landing or take-off operation at a specific time or during a specific time period at any airport at which landings or take-offs are restricted, including, without limitation, slots and operating authorizations, whether pursuant to FAA or DOT regulations or orders pursuant to Title 14, Title 49 or other federal statutes now or hereinafter in effect.

“ Facility ” or “ Revolving Facility ” shall mean the Revolving Commitments and the Revolving Loans made and Letters of Credit issued thereunder.

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“ FATCA ” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement, any amended or successor provisions that are substantively comparable thereto and not materially more onerous to comply with, any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“ Federal Funds Effective Rate ” shall mean, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“ Fees ” shall collectively mean the Commitment Fees, the Upfront Fees, the Letter of Credit Fees and the Agency Fees.

“ Field Audit ” shall mean a field examination conducted by a Field Auditor pursuant to Section 5.07(b) of the applicable accounts receivable constituting Collateral and books and records related thereto, the results of which shall be substantially similar to the initial Field Audit performed by Ernst & Young or in such other form as shall be reasonably satisfactory to the Administrative Agent in all material respects.

“ Field Auditor ” shall mean Ernst & Young or any other appraisers or other advisors who may be retained by the Administrative Agent and reasonably acceptable to the Borrower to conduct a Field Audit.

“ Foreign Aviation Authority ” shall mean any foreign governmental, quasi-governmental, regulatory or other agency, public corporation or private entity that exercises jurisdiction over the authorization (a) to serve any foreign point on the Pledged Routes that a Grantor is serving at any time and/or to conduct operations related to the Pledged Routes and related Pledged Gate Leaseholds and/or (b) to hold and operate any related Pledged Foreign Slots.

“ Foreign Lender ” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Foreign Slot ” means, in the case of airports outside the United States, at any time, the right and operational authority to conduct one landing or takeoff at a specific time or during a specific time period.

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“ GAAP ” shall mean generally accepted accounting principles in the United States of America, which are in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, statements and pronouncements of the Financial Accounting Standards Board, such other statements by such other entity as have been approved by a significant segment of the accounting profession and the rules and regulations of the SEC governing the inclusion of financial statements in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

“ Gate Leasehold ” means, at any time, all of the right, title, privilege, interest and authority, now held or hereafter acquired, of the Borrower or a Grantor in connection with the right to use or occupy space in an airport terminal at any airport.

“ Governmental Authority ” shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank organization, or other entity exercising executive, legislative, judicial, taxing or regulatory powers or functions of or pertaining to government. Governmental Authority shall not include any Person in its capacity as an Airport Authority.

“ Grantor ” shall mean the Borrower and any Guarantor that shall at any time pledge Collateral under a Collateral Document.

“ Ground Support Equipment ” shall mean the equipment owned by the Borrower or, if applicable, any other Grantor for crew and passenger ground transportation, cargo, mail and luggage handling, catering, fuel/oil servicing, de-icing, cleaning, aircraft maintenance and servicing, dispatching, security and motor vehicles.

“ Guarantee ” means a guarantee (other than (a) by endorsement of negotiable instruments for collection or (b) customary contractual indemnities, in each case in the ordinary course of business), direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions).

“ Guaranteed Obligations ” shall have the meaning given such term in Section 9.01(a).

“ Guarantors ” shall mean, collectively, the Parent and each Domestic Subsidiary of the Parent that becomes, pursuant to Section 5.12, a party to the Guarantee contained in Section 9. As of the Closing Date, Parent and ACME are the sole Guarantors.

“ Guaranty Obligations ” shall have the meaning given such term in Section 9.01(a).

“ Hawaiian ” means Hawaiian Airlines, Inc., a Delaware corporation.

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“ Hazardous Materials ” shall mean all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature that are regulated pursuant to, or could reasonably be expected to give rise to liability under any Environmental Law.

“ Hedging Agreement ” shall mean any agreement evidencing Hedging Obligations.

“ Hedging Obligations ” means, with respect to any Person, all obligations and liabilities of such Person under:

(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;

(2) other agreements or arrangements designed to manage interest rates or interest rate risk; and

(3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates, fuel prices or other commodity prices, but excluding (x) clauses in purchase agreements and maintenance agreements pertaining to future prices and (y) fuel purchase agreements and fuel sales that are for physical delivery of the relevant commodity.

“ IATA ” means the International Air Transport Association and any successor thereto.

“ Illegality Event ” shall have the meaning given to such term in Section 2.30.

“ Immaterial Subsidiaries ” shall mean one or more Subsidiaries, for which (a) the assets of all such Subsidiaries constitute, in the aggregate, no more than 5% of the total assets of the Parent and its Subsidiaries on a consolidated basis (determined as of the last day of the most recent fiscal quarter of the Parent for which financial statements are available to the Administrative Agent pursuant to Section 5.01), and (b) the revenues of all such Subsidiaries account for, in the aggregate, no more than 5% of the total revenues of the Parent and its Subsidiaries on a consolidated basis for the twelve-month period ending on the last day of the most recent fiscal quarter of the Parent for which financial statements are available to the Administrative Agent pursuant to Section 5.01; provided that a Subsidiary will not be considered to be an Immaterial Subsidiary if it (1) directly or indirectly guarantees, or pledges any property or assets to secure, any Obligations or Junior Secured Debt, or (2) owns any properties or assets that constitute Collateral.

“ Indebtedness ” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:

(1) in respect of borrowed money;

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(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

(3) in respect of banker’s acceptances;

(4) representing Capital Lease Obligations;

(5) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed, but excluding in any event trade payables arising in the ordinary course of business; or

(6) representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without giving effect to the effects of Financial Accounting Standards Board Accounting Standards Codification 815 – Derivatives and Hedging and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Agreement as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.

For the avoidance of doubt, Banking Product Obligations do not constitute Indebtedness.

“ Indemnified Taxes ” shall mean Taxes other than Excluded Taxes imposed on or with respect to any payments made by the Borrower or any Guarantor under this Agreement or any other Loan Document.

“ Indemnitee ” shall have the meaning given such term in Section 10.04(b).

“ Intercreditor Agreement ” shall have the meaning given such term in Section 10.17.

“ Interest Election Request ” shall mean a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.05.

“ Interest Payment Date ” shall mean (a) as to any Eurodollar Loan having an Interest Period of one, two or three months, the last day of such Interest Period, (b) as to any Eurodollar Loan having an Interest Period of more than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (c) with respect to ABR Revolving Loans, the last Business Day of each March, June, September and December.

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“ Interest Period ” shall mean, as to any Borrowing of Eurodollar Loans, the period commencing on the date of such Borrowing (including as a result of a conversion from ABR Loans) or on the last day of the preceding Interest Period applicable to such Borrowing and ending on (but excluding) the numerically corresponding day (or if there is no corresponding day, the last day) in the calendar month that is one, two, three or six months (or, if available to all applicable Lenders and agreed to by all Lenders, twelve months) thereafter, as the Borrower may elect in the related notice delivered pursuant to Section 2.03 or 2.05; provided that (i) if any Interest Period would end on a day which shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (ii) no Interest Period shall end later than the applicable Termination Date.

“ International Interest ” shall mean an “international interest” as defined in the Cape Town Treaty.

“ International Registry ” shall mean the “International Registry” as defined in the Cape Town Treaty.

“ Investments ” means, with respect to any Person, all direct or indirect investments made from and after the Closing Date by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances (but excluding advance payments and deposits for goods and services in the ordinary course of business) or capital contributions (excluding commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities of other Persons, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. Except as otherwise provided in this Agreement, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.

“ Issuing Lender ” shall mean (i) Citibank (or any of its Affiliates reasonably acceptable to the Borrower), in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.02(i), and (ii) if Citibank’s Revolving Commitment is at any time less than $35,000,000 or if Citibank and the Borrower shall agree, any other Lender agreeing to act in such capacity, which other Lender shall be reasonably satisfactory to the Borrower and the Administrative Agent. Each Issuing Lender may, in its reasonable discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Lender reasonably acceptable to the Borrower, which Affiliate shall agree in writing reasonably acceptable to the Borrower to be bound by the provisions of the Loan Documents applicable to an Issuing Lender, in which case the term “Issuing Lender” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

“ Junior Lien Cap ” means, as of any date of determination, the aggregate amount of Junior Secured Debt that may be incurred by the Borrower and any Guarantor such that, after giving pro forma effect to such incurrence and the application of the net proceeds therefrom the Total Collateral Coverage Ratio shall be no less than 1.0 to 1.0.

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“ Junior Secured Debt ” shall mean Indebtedness permitted to be secured by a Lien on Collateral under Section 6.06.

“ Junior Secured Debt Documents ” shall mean each indenture, credit agreement and other agreements, instruments and notes evidencing Junior Secured Debt, and each other agreement executed in connection therewith, as each may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

“ LC Disbursement ” shall mean a payment made by an Issuing Lender pursuant to a Letter of Credit issued by it.

“ LC Exposure ” shall mean, at any time, with respect to any Revolving Lender that is an Issuing Lender, the sum of (i) the aggregate maximum undrawn amount of all outstanding Letters of Credit issued by it at such time plus (ii) the aggregate amount of all LC Disbursements made by it that have not yet been reimbursed by or on behalf of the Borrower at such time; provided , that in the case of any escalating Letter of Credit where the face amount thereof is subject to escalation with no conditions, the applicable Issuing Lender’s LC Exposure with respect to such Letter of Credit shall be determined by referring to the maximum face amount to which such Letter of Credit may be so escalated.

“ Lenders ” shall have the meaning set forth in the first paragraph of this Agreement.

“ Letter of Credit ” shall mean any irrevocable letter of credit issued pursuant to Section 2.02, which letter of credit shall be (i) a standby letter of credit, (ii) issued for general corporate purposes of the Parent or any Subsidiary of the Parent; provided that in any case the account party of a Letter of Credit must be the Borrower, (iii) denominated in Dollars and (iv) otherwise in such form as may be reasonably approved from time to time by the Administrative Agent and the applicable Issuing Lender.

“ Letter of Credit Account ” shall mean the account established by the Borrower under the sole and exclusive control of the Administrative Agent maintained at the office of the Administrative Agent at: 388 Greenwich Street, 14th Floor, New York, NY 10013, designated as the “Hawaiian Airlines MOU Pledge Account” that shall be used solely for the purposes set forth herein.

“ Letter of Credit Fees ” shall mean the fees payable in respect of Letters of Credit pursuant to Section 2.21.

“ LIBO Rate ” shall mean, with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum appearing on Bloomberg Page BBAM1 (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for Dollar deposits with a maturity comparable to such Interest

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Period; provided that the LIBO Rate shall not be less than zero. In the event that the rate identified in the foregoing sentence is not available at such time for any reason (including as a result of the LIBO Rate generally no longer being used for determining interest rates for loans) and no alternate rate of interest has been established and agreed pursuant to Section 2.09(b) then, until such alternate rate of interest has been so established, such rate shall be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period; provided that the LIBO Rate shall not be less than zero; provided that, with respect to any Interest Period for which there is no corresponding LIBO Rate on the Bloomberg Page BBAM1 (or on any successor or substitute page), then the LIBO Rate shall be determined through the use of straight-line interpolation by reference to two such rates, one of which shall be determined as if the length of the period of such deposits were the period of time for which the rate for such deposits are available is the period next shorter than the length of such Interest Period and the other of which shall be determined as if the period of time for which the rate for such deposits are available is the period next longer than the length of such Interest Period as determined by the Administrative Agent.

“ Lien ” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (but excluding any lease, sublease, use or license agreement or swap agreement or similar arrangement by an Grantor described in clause (e) or (f) of the definition of “Permitted Disposition”), including any conditional sale or other title retention agreement, any option or other agreement to sell or give a security interest in and any agreement to give any financing statement under the UCC (or equivalent statutes) of any jurisdiction.

“ Liquidity ” shall mean the sum of (i) the aggregate amount of unrestricted cash and Cash Equivalents of the Borrower and Guarantors calculated as the sum of the line items “Cash and cash equivalents” plus “Short-Term Investments” plus securities classified as “Available for Sale” (as set forth in the current asset line of the balance sheet of the Parent (but excluding any such “Cash and cash equivalents” or “Short-Term Investments” or securities classified as “Available for Sale” that are not held by or on behalf of the Borrower or any Guarantor)) (excluding, for the avoidance of doubt, any Cash Equivalents held in accounts subject to Account Control Agreements or otherwise then pledged to secure revolving credit facilities referred to in clause (ii) below), (ii) the aggregate principal amount committed and available to be drawn by the Borrower and Guarantors (taking into account all borrowing base limitations, collateral coverage requirements or other restrictions on borrowing availability) under all revolving credit facilities (including the Revolving Facility) of the Borrower and Guarantors and (iii) to the extent not being used to repay other Indebtedness, the scheduled net proceeds of any Capital Markets Offering of the Borrower and Guarantors that has priced but has not yet closed (until the earliest of the closing thereof, the termination thereof without closing or the date that falls five (5) Business Days after the initial scheduled closing date thereof).

“ Loan Request ” shall mean a request by the Borrower, executed by a Responsible Officer of the Borrower, for a Loan in accordance with Section 2.03 in substantially the form of Exhibit C.

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“ Loans ” shall mean the Revolving Loans.

“ Loan Documents ” shall mean this Agreement, the Collateral Documents, any Intercreditor Agreement and any other instrument or agreement (which is designated as a Loan Document therein) executed and delivered by the Borrower or a Guarantor to the Administrative Agent, any Issuing Lender or any Lender, in each case, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time in accordance with the terms hereof.

“ Margin Stock ” shall have the meaning given such term in Section 3.11(a).

“ Material Adverse Change ” shall mean any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

“ Material Adverse Effect ” shall mean (i) a material adverse effect on (a) the consolidated business, operations or financial condition of the Parent and its Subsidiaries, taken as a whole, (b) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Administrative Agent and the Lenders thereunder, or (c) the ability of the Borrower and the Guarantors, collectively, to pay the Obligations or (ii) a Collateral Material Adverse Effect.

“ Material Eligible Account ” means, as of any date of determination, an Eligible Account for which, after excluding the Certified Value of such Eligible Account, as determined by the most recent Officer’s Certificate delivered by the Borrower pursuant to Section 5.01(f) with respect to such Eligible Account, from the aggregate Certified Value of all Pledged Accounts as of such date, the Borrower would not reasonably be expected to be in compliance with Section 6.09(a).

“ Material Indebtedness ” shall mean Indebtedness of the Borrower or one or more Guarantors (other than the Loans and obligations relating to Letters of Credit) outstanding under the same agreement in a principal amount exceeding $125,000,000.

“ Mileage Plan Receivable ” means any right of Borrower or another Grantor to payment of a monetary obligation, whether or not earned by performance, for the purchase of miles or credits.

“ Minimum Extension Condition ” shall have the meaning given such term in Section 2.28(b).

“ Moody’s ” shall mean Moody’s Investors Service, Inc.

“ Mortgage Supplement ” shall have the meaning set forth in the Aircraft and Spare Engine Mortgage and each Other Aircraft Mortgage, as the context may require.

“ Mortgaged Collateral ” shall mean all of the “Collateral” as defined in (i) the Aircraft and Spare Engine Mortgage (including as supplemented by any Mortgage Supplement relating thereto) and (ii) each Other Aircraft Mortgage (including as supplemented by any Mortgage Supplement relating thereto).

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“ Net Proceeds ” means the aggregate cash and Cash Equivalents received by the Parent or any of its Subsidiaries in respect of any Collateral Sale (including, without limitation, any cash or Cash Equivalents received in respect of or upon the sale or other disposition of any non-cash consideration received in any Collateral Sale) or Recovery Event, net of: (a) the direct costs and expenses relating to such Collateral Sale and incurred by the Parent or a Subsidiary (including the sale or disposition of such non-cash consideration) or any such Recovery Event, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Collateral Sale or Recovery Event, taxes paid or payable as a result of the Collateral Sale or Recovery Event, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements; (b) any reserve for adjustment or indemnification obligations in respect of the sale price of such asset or assets established in accordance with GAAP; ; and (c) any portion of the purchase price from a Collateral Sale placed in escrow pursuant to the terms of such Collateral Sale (either as a reserve for adjustment of the purchase price, or for satisfaction of indemnities in respect of such Collateral Sale) until the termination of such escrow.

“ Net Proceeds Amount ” shall have the meaning given such term in Section 2.12(a).

“ New Revolving Lender ” shall have the meaning given such term in Section 2.27(a).

“ Non-Defaulting Lender ” shall mean, at any time, a Revolving Lender that is not a Defaulting Lender.

“ Non-Extending Lender ” shall have the meaning given such term in Section 10.08(g).

“ Obligations ” shall mean the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition of bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), the Loans, the Designated Hedging Obligations, the Designated Banking Product Obligations, and all other obligations and liabilities of the Borrower to the Administrative Agent, any Issuing Lender or any Lender (or (i) in the case of Designated Hedging Obligations, any obligee with respect to such designated Hedging Obligations who was a Lender or an Affiliate of a Lender when the related Designated Hedging Agreement was entered into, or (ii) in the case of Designated Banking Product Obligations, any obligee with respect to such Designated Banking Product Obligations who was a Lender or a banking Affiliate of any Lender at the time the related Designated Banking Product Agreement was entered into), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which arise under this Agreement or any other Loan Document, whether on account of principal, interest, reimbursement obligations, fees, indemnities, out-of-pocket costs, and expenses (including all fees, charges and disbursements of counsel to the Administrative Agent, any Issuing Lender or any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise; provided , however , that the aggregate amount of all Designated Hedging Obligations (valued in accordance with the definition thereof) at any time outstanding that shall

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be included as “Obligations” shall not exceed 10% of the original Total Revolving Commitment in effect on the Closing Date; provided , further , that in no event shall the Obligations include Excluded Swap Obligations.

“ OFAC ” means the U.S. Department of Treasury’s Office of Foreign Assets Control.

“ Officer ” means, with respect to any Person, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.

“ Officer’s Certificate ” shall mean a certificate signed on behalf of the Borrower or the Parent by an Officer of the Borrower or the Parent, respectively.

“ One-Month LIBOR ” means, for any day, the rate for deposits in Dollars for a one-month period appearing on the Bloomberg Page BBAM1 as of 11:00 a.m., London time, on such day.

“ Other Aircraft Mortgage ” means the Mortgage and Security Agreement, in substantially the form of Exhibit H, entered into by an applicable Grantor and the Administrative Agent, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

“ Other Eligible Aircraft ” shall mean any aircraft (i) that is owned by any applicable Grantor (other than the Borrower) that is not a U.S. Air Carrier, (ii) that is leased to a U.S. Air Carrier, so long as such lease allows for such aircraft to be eligible for the benefits of Section 1110 with respect to such lease, or a lessee that is situated in a Cape Town Country and (iii) for which the conditions specified in the Other Aircraft Mortgage relating to the pledge of such aircraft have been satisfied.

“ Other Taxes ” shall mean any and all present or future court stamp, mortgage, intangible, recording, filing or documentary taxes or any other similar, charges or similar levies arising from any payment made hereunder or from the execution, performance, delivery, registration of or enforcement of this Agreement or any other Loan Document.

“ Outstanding Letters of Credit ” shall have the meaning given such term in Section 2.02(j).

“ Parent ” means Hawaiian Holdings, Inc., a Delaware corporation.

“ Parent Company ” means, with respect to a Revolving Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Revolving Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Revolving Lender.

“ Participant ” shall have the meaning given such term in Section 10.02(d).

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“ Participant Register ” shall have the meaning given such term in Section 10.02(d).

“ Patriot Act ” shall mean the USA PATRIOT Act, Title III of Pub. L. 107-56, signed into law on October 26, 2001 and any subsequent legislation that amends or supplements such Act or any subsequent legislation that supersedes such Act.

“ Payroll Accounts ” shall mean depository accounts used only for payroll.

“ Permitted Business ” means any business that is the same as, or reasonably related, ancillary, supportive or complementary to, the business in which the Parent and its Subsidiaries are engaged on the date of this Agreement.

“ Permitted Disposition ” shall mean any of the following:

(a) the Disposition of Collateral permitted under the applicable Collateral Documents;

(b) the Disposition of cash or Cash Equivalents constituting Collateral in exchange for other cash or Cash Equivalents constituting Collateral and having reasonably equivalent value therefor; provided that this clause (b) shall not permit any Disposition of the Letter of Credit Account or any amounts on deposit therein;

(c) sales or dispositions of surplus, obsolete, negligible or uneconomical assets no longer used in the business of the Borrower and the other Grantors, including returns of Slots to the FAA or to the applicable Foreign Aviation Authority;

(d) Dispositions of Collateral among the Grantors (including any Person that shall become a Grantor simultaneous with such Disposition in the manner contemplated by Section 5.12); provided that:

(i) such Collateral remains at all times subject to a Lien with the same priority and level of perfection as was the case immediately prior to such Disposition (and otherwise subject only to Permitted Liens) in favor of the Administrative Agent for the benefit of the Secured Parties following such Disposition,

(ii) concurrently therewith, the Grantors shall execute any documents and take any actions reasonably required to create, grant, establish, preserve or perfect such Lien in accordance with the other provisions of this Agreement or the Collateral Documents,

(iii) concurrently therewith or promptly thereafter, the Administrative Agent, for the benefit of the Secured Parties, shall receive an Officer’s Certificate, with respect to the matters described in clauses (i) and (ii) hereof and, if reasonably requested by the Administrative Agent, an opinion of counsel to the Borrower (which may be in-house counsel) as to the validity and perfection of such Lien on the Collateral, in each case in form and substance reasonably satisfactory to the Administrative Agent,

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(iv) concurrently with any Disposition of Collateral to any Person that shall become a Grantor simultaneous with such Disposition in the manner contemplated by Section 5.12, such Person shall have complied with the requirements of Section 5.12(b); provided further that this clause (d) shall not permit any Disposition of the Letter of Credit Account or any amounts on deposit therein, and

(v) the preceding provisions of clauses (i) through (iv) shall not be applicable to any Disposition resulting from a merger or consolidation permitted by Section 6.10; and

(e) (f) abandonment of Slots and Gate Leaseholds; provided that such abandonment is (A) in connection with the downsizing of any hub or facility which does not materially and adversely affect the business of the Grantors, taken as a whole, (B) in the ordinary course of business consistent with past practices and does not materially and adversely affect the business of the Grantors, taken as a whole, (C) reasonably determined by the Borrower to relate to Collateral of de minimis value or surplus to the Borrower’s needs or (D) required by the DOT, the FAA, Foreign Aviation Authorities or other Governmental Authority and, in the case of any such abandonment under this clause (i), does not have a Collateral Material Adverse Effect,

(i) exchange of Slots in the ordinary course of business that in the Borrower reasonable judgment are of reasonably equivalent value (so long as the Slots received in such exchange are concurrently pledged as Additional Collateral and constitute Eligible Collateral, and such exchange would not result in a Collateral Material Adverse Effect),

(ii) the termination of leases or subleases or airport use or license agreements in the ordinary course of business to the extent such terminations do not have a Collateral Material Adverse Effect, or

(iii) any other lease or sublease of, or use or license agreements with respect to, assets and properties that constitute Slots or Gate Leaseholds in the ordinary course of business and swap agreements or similar arrangements with respect to Slots in the ordinary course of business and which lease, sublease, use or license agreement or swap agreement or similar arrangement (A) has a term of one year or less, or does not extend beyond two comparable IATA traffic seasons (and contains no option to extend beyond either of such periods), (B) has a term (including any option period) longer than allowed in clause (A); provided , however , that in the case of each transaction pursuant to this clause (B), an Officer’s Certificate is delivered to the Administrative Agent concurrently with or promptly after the applicable Grantor’s entering into any such transaction that (1) immediately after giving effect to such transaction the Collateral Coverage Ratio (excluding, for purposes of calculating such ratio, the proceeds of such transaction and the intended use thereof) would be at least 1.0 to 1.0, (2) the Administrative Agent’s Liens on Collateral subject to such lease, sublease, use, license agreement or swap or similar arrangement are not materially adversely affected (it being understood that no Permitted Lien shall be deemed to have such an effect) and (3) no Event of Default exists at the time of such transaction, (C) is for purposes of operations by another airline operating under a brand associated with a Grantor or otherwise operating routes at the Borrower’s direction under a code share agreement, capacity purchase agreement, pro-

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rate agreement or similar arrangement between such airline and the Borrower or (D) is subject and subordinated to the rights (including remedies) of the Administrative Agent under the applicable Collateral Documents on terms reasonably satisfactory to the Administrative Agent;

(g) the lease or sublease of assets and properties in the ordinary course of business; provided that, the rights of the lessee or sublessee shall be subordinated to the rights (including remedies) of the Administrative Agent under the applicable Collateral Document on terms reasonably satisfactory to the Administrative Agent; and

(h) the sale or discount of Accounts to a collection agency in connection with collections of delinquent receivables.

“ Permitted Liens ” means:

(1) Liens held by the Administrative Agent securing the Obligations;

(2) Liens securing Junior Secured Debt in an aggregate principal amount (as of the date of incurrence of any such Junior Secured Debt and after giving pro forma effect to the application of the net proceeds therefrom), not exceeding the Junior Lien Cap, provided that such Liens shall (x) rank junior to the Liens in favor of the Administrative Agent securing the Obligations and (y) be subject to an Intercreditor Agreement reasonably acceptable to the Administrative Agent;

(3) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

(4) Liens imposed by law, including carriers’, warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred in the ordinary course of business;

(5) Liens arising by operation of law in connection with judgments, attachments or awards which do not constitute an Event of Default hereunder;

(6) Liens created for the benefit of (or to secure) the Obligations or any Guaranty Obligations;

(7) (A) any overdrafts and related liabilities arising from treasury, netting, depository and cash management services or in connection with any automated clearing house transfers of funds, in each case as it relates to cash or Cash Equivalents, if any, and (B) Liens arising by operation of law or that are contractual rights of set-off in favor of the depository bank or securities intermediary in respect of the Letter of Credit Account or the Collateral Proceeds Account;

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(8) licenses, sublicenses, leases and subleases by any Grantor as they relate to any aircraft, airframe, engine, Mortgaged Collateral or any Additional Collateral and to the extent (A) such licenses, sublicenses, leases or subleases do not interfere in any material respect with the business of the Parent and its Subsidiaries, taken as a whole, and in each case, such license, sublicense, lease or sublease is to be subject and subordinate to the Liens granted to the Administrative Agent pursuant to the Collateral Documents, and in each case, would not result in a Collateral Material Adverse Effect or (B) otherwise expressly permitted by the Collateral Documents;

(9) salvage or similar rights of insurers, in each case as it relates to any aircraft, airframe, engine, Mortgaged Collateral or any Additional Collateral, if any;

(10) in each case as it relates to any aircraft, Liens on appliances, parts, components, instruments, appurtenances, furnishings and other equipment installed on such aircraft and separately financed by a Grantor, to secure such financing;

(11) Liens incurred in the ordinary course of business of the Parent or any Subsidiary of the Parent with respect to obligations that do not exceed in the aggregate $7,500,000 at any one time outstanding; and

(12) Liens on Collateral permitted under the Collateral Document granting a Lien on such Collateral.

“ Person ” shall mean any natural person, corporation, division of a corporation, partnership, limited liability company, trust, joint venture, association, company, estate, unincorporated organization, Airport Authority or Governmental Authority or any agency or political subdivision thereof.

“ Pledged Accounts ” means, as of any date, the Eligible Accounts included in the Collateral as of such date.

“ Pledged Aircraft ” means, as of any date, the Eligible Aircraft included in the Collateral as of such date.

“ Pledged Cash and Cash Equivalents ” means, as of any date, the amount of cash and Cash Equivalents included in the Collateral as of such date.

“ Pledged Engines ” means, as of any date, the Eligible Engines included in the Collateral as of such date.

“ Pledged Foreign Slots ” means, as of any date, the Foreign Slots included in the Collateral as of such date.

“ Pledged Gate Leaseholds ” means, as of any date, the Gate Leaseholds included in the Collateral as of such date.

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“ Pledged Ground Support Equipment ” means, as of any date, the Ground Support Equipment included in the Collateral as of such date.

“ Pledged Routes ” means, as of any date, the Routes included in the Collateral as of such date.

“ Pledged Slots ” means, as of any date, the Slots included in the Collateral as of such date.

“ Pledged Spare Parts ” means, as of any date, the Eligible Spare Parts included in the Collateral as of such date.

“ Prime Rate ” shall mean the rate of interest per annum publicly announced from time to time by Citibank, as its prime rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged by Citibank in connection with extensions of credit to debtors); each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“ Professional User ” shall have the meaning given it in the Regulations and Procedures for the International Registry.

“ Propeller ” shall mean any propeller, including any part, appurtenance, and accessory of a propeller.

“ Put Exposure ” means the principal amount of Loans, LC Exposure and unused Revolving Commitments that Lenders have elected be prepaid, discharged and terminated, respectively, pursuant to Section 2.12(g) in response to a Change of Control Offer.

“ Qualified Replacement Assets ” means Additional Collateral of any of the types described in clauses (c), (d) and (e) of the definition of “Additional Collateral”.

“ Recovery Event ” shall mean any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any Collateral or any Event of Loss (as defined in the related Collateral Document pursuant to which a security interest in such Collateral is granted to the Administrative Agent, if applicable).

“ Register ” shall have the meaning set forth in Section 10.02(b)(iv).

“ Regulations and Procedures for the International Registry ” shall mean the official English language text of the International Registry Procedures and Regulations issued by the Supervisory Authority (as defined in the Cape Town Convention) pursuant to the Aircraft Protocol.

“ Related Parties ” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, partners, members, employees, agents and advisors of such Person and such Person’s Affiliates.

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“ Release ” shall have the meaning specified in Section 101(22) of the Comprehensive Environmental Response Compensation and Liability Act.

“ Required Lenders ” shall mean, at any time, Lenders holding more than 50% of (a) until the Closing Date, the Commitments then in effect and (b) thereafter, the Total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding. The Revolving Extensions of Credit, outstanding Loans and Commitments of any Defaulting Lender shall be disregarded in determining the “Required Lenders” at any time.

“ Resolution Authority ” means any body which has authority to exercise any Write-down and Conversion Powers.

“ Responsible Officer ” means an Officer.

“ Revolving Availability Period ” shall mean the period from and including the Closing Date to but excluding the Revolving Facility Termination Date with respect to the applicable Revolving Commitments.

“ Revolving Commitment ” or “ Commitment ” shall mean the commitment of each Revolving Lender to make Revolving Loans and, if such Revolving Lender is an Issuing Lender, to issue Letters of Credit, hereunder in an aggregate principal not to exceed the amount set forth under the heading “Revolving Commitment” opposite its name in Annex A hereto or in the Assignment and Acceptance pursuant to which such Revolving Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The original aggregate amount of the Total Revolving Commitments is $235,000,000.

“ Revolving Commitment Percentage ” shall mean, at any time, with respect to each Revolving Lender, the percentage obtained by dividing its Revolving Commitment at such time by the Total Revolving Commitment or, if the Revolving Commitments have been terminated, the Revolving Commitment Percentage of each Revolving Lender that existed immediately prior to such termination.

“ Revolving Extensions of Credit ” shall mean, as to any Revolving Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding and (b) if such Lender is an Issuing Lender, such Lender’s LC Exposure then outstanding.

“ Revolving Facility Maturity Date ” shall mean, with respect to (a) Revolving Commitments that have not been extended pursuant to Section 2.28, December 11, 2022 and (b) with respect to Extended Revolving Commitments, the final maturity date therefor as specified in the applicable Extension Offer accepted by the respective Revolving Lender or Revolving Lenders.

“ Revolving Facility Termination Date ” shall mean the earlier to occur of (a) the Revolving Facility Maturity Date with respect to the applicable Revolving Commitments, (b) the acceleration of the Loans (if any) and the termination of the Commitments in accordance with

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the terms hereof and (c) the termination of the applicable Revolving Commitments as a whole pursuant to Section 2.11.

“ Revolving Increase Effective Date ” shall have the meaning given such term in Section 2.27(a).

“ Revolving Increase Joinder ” shall have the meaning given such term in Section 2.27(c).

“ Revolving Lender ” shall mean each Lender having a Revolving Commitment.

“ Revolving Loan ” shall have the meaning set forth in Section 2.01(a).

“ Revolving Loan Percentage ” shall mean, with respect to each Revolving Lender, determined as of the date of each advance of a Revolving Loan and prior to giving effect thereto, the percentage determined by dividing (i) the Revolving Commitment of such Revolving Lender minus the Revolving Extensions of Credit of such Revolving Lender by (ii) the Total Revolving Commitments minus the Total Revolving Extensions of Credit.

“ Route ” means the authority of the Borrower or, if applicable, another Grantor, pursuant to Title 49 or other applicable law, to operate scheduled service between a specifically designated pair of terminal points and intermediate points, if any, including applicable frequencies, exemption and certificate authorities.

“ Sale of a Grantor ” means, with respect to any Collateral, an issuance, sale, lease, conveyance, transfer or other disposition of the Capital Stock of the applicable Grantor that owns such Collateral other than (1) an issuance of Equity Interests by a Grantor to the Parent or another Subsidiary of the Parent, and (2) an issuance of directors’ qualifying shares.

“ Sanctions ” means economic, trade or financial sanctions, restrictive measures or trade embargoes enacted, imposed, administered or enforced from time to time by (a) the United States government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) the United Nations Security Council, (c) the European Union or any of its member states, (d) Her Majesty’s Treasury of the United Kingdom, (e) Australia or (f) New Zealand.

“ Sanctioned Country ” means, at any time, a country, region or territory which is itself, or whose government is, the subject or target of any Sanctions.

“ Sanctioned Person ” means, at any time, (a) a Person which is subject or target of any Sanctions, (b) any Person owned or controlled by any such Person or Persons or (c) any Person organized or resident in a Sanctioned Country.

“ S&P ” shall mean S&P Global Ratings, a division of S&P Global, Inc., and any successor thereto.

“ SEC ” shall mean the United States Securities and Exchange Commission.

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“ Section 1110 ” means 11 U.S.C. Section 1110 of the Bankruptcy Code or any successor or analogous section of the federal bankruptcy law in effect from time to time.

“ Section 1110 Eligible Aircraft ” shall mean (a) Airbus model A320, A330 and A350 family aircraft, (b) Boeing model 737NG, 737MAX, 767 and 787 family aircraft, (c) ATR turboprop aircraft or (d) Boeing model 717 and 757 family aircraft, in each case that are owned by the Borrower or any other applicable Grantor that is a U.S. Air Carrier and that are eligible for the benefits of Section 1110.

“ Secured Parties ” shall mean the Administrative Agent, the Issuing Lenders, the Lenders and all other holders of Obligations.

“ Securities Act ” shall mean the Securities Act of 1933, as amended.

“ Security Agreement ” means the Security Agreement, in substantially the form of Exhibit G, entered into by the Borrower and the Agent, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

“ Significant Subsidiary ” means any Subsidiary of the Parent that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Agreement.

“ Slot ” means a Foreign Slot or an FAA Slot, as the case may be.

“ Spare Parts ” shall mean all accessories, appurtenances, or parts of an Aircraft (except an Engine or Propeller), Engine (except a Propeller), Propeller, or Appliance, that are to be installed at a later time in an Aircraft, Engine, Propeller or Appliance.

“ Spare Parts Security Agreement ” means the Mortgage and Security Agreement (Spare Parts), in substantially the form of Exhibit E, entered into by the Borrower and the Administrative Agent, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

“ SRG Security Agreement ” means the Security Agreement (Slots, Routes and Gates), in substantially the form of Exhibit F, entered into by the Borrower and the Administrative Agent, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

“ Stated Maturity ” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the Closing Date, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“ Statutory Reserve Rate ” shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the

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Administrative Agent is subject with respect to the LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in reserve percentage.

“ Stored ” shall mean, as to any Aircraft or Engine, that such Aircraft or Engine has been stored (a) with a low expectation of a return to service within the one year following commencement of such storage and (b) in a manner intended to minimize the rate of environmental degradation of the structure and components of such Aircraft or Engine (as the case may be) during such storage.

“ Subsidiary ” shall mean, with respect to any Person

(1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person (or a combination thereof); and

(2) any partnership, joint venture or limited liability company of which (A) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise and (B) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

“ Supermajority Lenders ” shall mean, at any time, Lenders holding more than 75% of (a) until the Closing Date, the Commitments then in effect and (b) thereafter, the Total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding. The Revolving Extensions of Credit, outstanding Loans and Commitments of any Defaulting Lender shall be disregarded in determining the “Supermajority Lenders” at any time.

“ Swap Obligation ” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

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“ Taxes ” shall mean any and all present or future taxes, levies, imposts, duties, assessments, fees, deductions, charges or withholdings imposed by any Governmental Authority including any interest, additions to tax or penalties applicable thereto.

“ Term Lender ” shall have the meaning given such term in Section 2.29(a).

“ Term Loan Effective Date ” shall have the meaning given such term in Section 2.29(b).

“ Term Loan Facility ” shall have the meaning given such term in Section 2.29(a).

“Term Loan Joinder ” shall have the meaning given such term in Section 2.29(b).

“ Term Loans ” shall have the meaning given such term in Section 2.29(a).

“ Termination Date ” shall mean, with respect to the Revolving Loans, the Revolving Facility Termination Date applicable to the related Revolving Commitments.

“ Title 14 ” means Title 14 of the U.S. Code of Federal Regulations, including Part 93, Subparts K and S thereof, as amended from time to time or any successor or recodified regulation.

“ Title 49 ” shall mean Title 49 of the United States Code, which, among other things, recodified and replaced the U.S. Federal Aviation Act of 1958, and the rules and regulations promulgated pursuant thereto, and any subsequent legislation that amends, supplements or supersedes such provisions.

“ Total Collateral Coverage Ratio ” shall mean the ratio of (i) the aggregate Appraised Value of all Appraised Collateral plus the Certified Value of all Pledged Accounts plus the Pledged Cash and Cash Equivalents to (ii) the sum, without duplication, of (w) the Total Revolving Extensions of Credit then outstanding (other than LC Exposure that has been Cash Collateralized in accordance with Section 2.02(j)), plus (x) the aggregate amount of the Term Loans then outstanding (if any are made pursuant to Section 2.29), plus (y) the aggregate amount of all Designated Hedging Obligations that constitute “Obligations” then outstanding, plus (z) the aggregate outstanding principal amount of Junior Secured Debt.

“ Total Obligations ” shall have the meaning provided in the definition of Collateral Coverage Ratio.

“ Total Revolving Commitment ” shall mean, at any time, the sum of the Revolving Commitments at such time.

“ Total Revolving Extensions of Credit ” shall mean, at any time, the aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders outstanding at such time.

“ Transactions ” shall mean the execution, delivery and performance by the Borrower and Guarantors of this Agreement and the other Loan Documents to which they may

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be a party, the creation of the Liens in the Collateral in favor of the Administrative Agent and/or the Administrative Agent for the benefit of the Secured Parties, the borrowing of Loans and the use of the proceeds thereof, and the request for and issuance of Letters of Credit hereunder.

“ Type ”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the LIBO Rate or the Alternate Base Rate.

“ UCC ” shall mean the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction.

“ United States Citizen ” shall have the meaning set forth in Section 3.02.

“ Unused Total Revolving Commitment ” shall mean, at any time, (a) the Total Revolving Commitment less (b) the Total Revolving Extensions of Credit.

“ Upfront Fee ” shall have the meaning set forth in Section 2.20.

“ Use or Lose Rule ” shall mean with respect to Slots, the terms of 14 C.F.R. Section 93.227 or other applicable utilization requirements issued by the FAA, other Governmental Authorities, any Foreign Aviation Authorities or any Airport Authorities.

“ Utilization Fee ” shall mean 0.25% per annum.

“ Voting Stock ” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“ Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1) the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

(2) the then outstanding principal amount of such Indebtedness.

“ Withholding Agent ” shall mean the Borrower, a Guarantor and the Administrative Agent.

“ Write-down and Conversion Powers ” means:

(a) in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

(b) in relation to any other applicable Bail-In Legislation:

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(i) any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

(ii) any similar or analogous powers under that Bail-In Legislation.

Section 1.02. Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented, extended, amended and restated or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, unless expressly provided otherwise, (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (f) “knowledge” or “aware” or words of similar import shall mean, when used in reference to the Borrower or the Guarantors, the actual knowledge of any Responsible Officer.

Section 1.03. Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Upon any such request for an amendment, the Borrower, the Required Lenders and the Administrative Agent agree to consider in good faith any such amendment in order to amend the provisions of this Agreement so as to reflect equitably such accounting changes so that the criteria for evaluating the Borrower’s consolidated

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financial condition shall be the same after such accounting changes as if such accounting changes had not occurred.

SECTION 2.

AMOUNT AND TERMS OF CREDIT

Section 2.01. Commitments of the Lenders .

(a) Revolving Commitments . (b) Each Revolving Lender severally, and not jointly with the other Revolving Lenders, agrees, upon the terms and subject to the conditions herein set forth, to make revolving credit loans denominated in Dollars (each a “ Revolving Loan ” and collectively, the “ Revolving Loans ”) to the Borrower at any time and from time to time during the Revolving Availability Period in an aggregate outstanding principal amount not to exceed, when added to such Revolving Lender’s LC Exposure (if any), the Revolving Commitment of such Revolving Lender, which Revolving Loans may be repaid and reborrowed in accordance with the provisions of this Agreement. At no time shall the sum of the then outstanding aggregate principal amount of the Revolving Loans plus the LC Exposure exceed the Total Revolving Commitment.

(i) Each Borrowing of a Revolving Loan shall be made from the Revolving Lenders based upon each Revolving Lender’s Revolving Loan Percentage of such Revolving Loan; provided , however, that the failure of any Revolving Lender to make any Revolving Loan shall not in itself relieve the other Revolving Lenders of their obligations to lend.

(c) Type of Borrowing . Each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(d) Amount of Borrowing . At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is in an integral multiple of $1,000,000 and not less than $1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $1,000,000; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire Unused Total Revolving Commitment or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.02(e). Borrowings of more than one Type may be outstanding at the same time.

(e) Limitation on Interest Period . Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing of a Revolving Loan if the Interest Period requested with respect thereto would end after the Revolving Facility Maturity Date with respect to the applicable Revolving Commitments.

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Section 2.02. Letters of Credit .

(a) General . Subject to the terms and conditions set forth herein, the Borrower may request the issuance of (and, subject to the penultimate sentence of clause (b) below, the applicable Issuing Lender shall issue) Letters of Credit in Dollars, at any time and from time to time during the Revolving Availability Period, in each case, for the Borrower’s own account or the account of any other Subsidiary of the Parent, in a form reasonably acceptable to the Administrative Agent, such Issuing Lender and the Borrower. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, an Issuing Lender relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall either provide (i) telephonic notice promptly followed by written notice or (ii) hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Lender (which approval shall not be unreasonably withheld, delayed or conditioned)) to the applicable Issuing Lender and the Administrative Agent (at least two (2) Business Days in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying (1) the date of issuance, amendment, renewal or extension (which shall be a Business Day), (2) the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), (3) the amount of such Letter of Credit, (4) the name and address of the beneficiary thereof and (5) such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the applicable Issuing Lender, the Borrower also shall submit a letter of credit application on such Issuing Lender’s standard form in connection with any request for a Letter of Credit; provided that, to the extent such standard form (and/or any related reimbursement agreement) is inconsistent with the Loan Documents, the Loan Documents shall control. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, the Revolving Extensions of Credit of such Issuing Lender shall not exceed its Revolving Commitment. No Issuing Lender (other than an Affiliate of the Administrative Agent) shall permit any such issuance, renewal, extension or amendment resulting in an increase in the amount of any Letter of Credit to occur without first obtaining written confirmation from the Administrative Agent that it is then permitted under this Agreement.

(c) Expiration Date . Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is one (1) Business Day prior to the earliest Revolving Facility Maturity Date with respect to the Revolving Commitments of the applicable Issuing Lender (provided that, to the extent that such Letter of Credit has been Cash Collateralized pursuant to

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the terms of any Extension Amendment, such Revolving Commitments shall be disregarded for purposes of this clause (ii)).

(d) [Reserved]

(e) Reimbursement . If an Issuing Lender shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to the amount of such LC Disbursement not later than the first Business Day following the date the Borrower receives notice from the Issuing Lender of such LC Disbursement; provided that, in the case of any LC Disbursement, to the extent not reimbursed and, subject to the satisfaction (or waiver) of the conditions to borrowing set forth herein, including, without limitation, making a request in accordance with Section 2.03(a) that such payment shall be financed with an ABR Revolving Borrowing, as the case may be, in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing; provided , further that for purposes of determining the Revolving Loan Percentage of each Revolving Lender with respect to such ABR Revolving Borrowing, such LC Disbursement shall not be deemed to be a Revolving Extension of Credit.

(f) Obligations Absolute . The Borrower’s obligation to reimburse LC Disbursements as provided in Section 2.02(e) shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the applicable Issuing Lender under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.02, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the Revolving Lenders, nor the applicable Issuing Lender, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the applicable Issuing Lender; provided that the foregoing shall not be construed to excuse an Issuing Lender from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Lender’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence, bad faith or willful misconduct on the part of the applicable Issuing Lender (as finally determined by a court of competent jurisdiction),

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the applicable Issuing Lender shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the applicable Issuing Lender may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(g) Disbursement Procedures . The applicable Issuing Lender shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The applicable Issuing Lender shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment, whether the applicable Issuing Lender has made or will make an LC Disbursement thereunder and the amount of such LC Disbursement; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the applicable Issuing Lender with respect to any such LC Disbursement in accordance with the terms herein.

(h) Interim Interest . If the applicable Issuing Lender shall make any LC Disbursement, then, unless the Borrower shall reimburse (including by a Borrowing) such LC Disbursement in full not later than the first Business Day following the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrower fails to reimburse (including by a Borrowing) such LC Disbursement when due pursuant to Section 2.02(e), then Section 2.08 shall apply. Interest accrued pursuant to this paragraph shall be for the account of the applicable Issuing Lender.

(i) Replacement of the Issuing Lender . Any Issuing Lender may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Lender and the successor Issuing Lender. The Administrative Agent shall notify the Revolving Lenders of any such replacement of the Issuing Lender. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Lender pursuant to Section 2.21. From and after the effective date of any such replacement, (i) the successor Issuing Lender shall have all the rights and obligations of the Issuing Lender under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Lender” shall be deemed to refer to such successor or to any previous Issuing Lender, or to such successor and all previous Issuing Lenders, as the context shall require. After the replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(j) Replacement of Letters of Credit; Cash Collateralization . The Borrower shall (i) upon or prior to the occurrence of the earlier of (A) the Revolving Facility Maturity Date with respect to all Revolving Commitments and (B) the acceleration of the Loans (if any) and the

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termination of the Commitments in accordance with the terms hereof, (x) cause all Letters of Credit which expire after the earlier to occur of (A) the Revolving Facility Maturity Date with respect to all Revolving Commitments and (B) the acceleration of the Loans (if any) and the termination of the Commitments in accordance with the terms hereof (the “ Outstanding Letters of Credit ”) to be returned to the applicable Issuing Lender undrawn and marked “cancelled” or (y) if the Borrower does not do so in whole or in part, either (A) provide one or more “back-to-back” letters of credit to each applicable Issuing Lender with respect to any such Outstanding Letters of Credit in a form reasonably satisfactory to each such Issuing Lender and the Administrative Agent, issued by a bank satisfactory to each such Issuing Lender (in its sole discretion) and the Administrative Agent, and/or (B) deposit cash in the Letter of Credit Account, as collateral security for the Borrower’s reimbursement obligations in connection with any such Outstanding Letters of Credit, such cash (or any applicable portion thereof) to be promptly remitted to the Borrower (provided no Default or Event of Default has occurred and is continuing) upon the expiration, cancellation or other termination or satisfaction of the Borrower’s reimbursement obligations with respect to such Outstanding Letters of Credit, in whole or in part, in an aggregate principal amount for all such “back-to-back” letters of credit and any such Cash Collateralization equal to 100% of the then outstanding amount of all LC Exposure (less the amount, if any, on deposit in the Letter of Credit Account prior to taking any action pursuant to clauses (A) or (B) above), and (ii) if required pursuant to Section 2.02(m), 2.12(c), 2.12(d), 2.12(e), 2.12(g)(iii) or 7.01 or pursuant to any Extension Amendment, deposit in the Letter of Credit Account an amount required pursuant to Section 2.02(m), 2.12(c), 2.12(d), 2.12(e), 2.12(g)(iii) or 7.01, or pursuant to any such Extension Amendment, as applicable (any such deposit or provision of back-to-back letters of credit described in the preceding clause (i) or clause (ii), “ Cash Collateralization ” (it being understood that any LC Exposure shall be deemed to be “ Cash Collateralized ” only to the extent a deposit or provision of back-to-back letters of credit as described above is made in an amount equal to 100% of the amount of such LC Exposure)). The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the Letter of Credit Account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent (in accordance with its usual and customary practices for investments of this type) and at the Borrower’s risk and reasonable expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account and shall be paid to the Borrower on its request provided no Default or Event of Default has occurred and is continuing. Moneys in such account shall be applied by the Administrative Agent to reimburse the applicable Issuing Lender for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time. If the Borrower is required to provide Cash Collateralization hereunder pursuant to Section 2.02(m), 2.12(c), 2.12(d), 2.12(e) or 2.12(g)(iii) or the terms of any Extension Amendment, such Cash Collateralization (to the extent not applied as contemplated by the applicable section) shall be returned to the Borrower within three (3) Business Days after the applicable section (or Extension Amendment) no longer requires the provision of such Cash Collateralization.

(k) Issuing Lender Agreements . Unless otherwise requested by the Administrative Agent, each Issuing Lender shall report in writing to the Administrative Agent (i) on the first Business Day of each week, the daily activity (set forth by day) in respect of Letters of Credit

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during the immediately preceding week, including all issuances, extensions, amendments and renewals, all expirations and cancellations and all disbursements and reimbursements, (ii) on or prior to each Business Day on which such Issuing Lender expects to issue, amend, renew or extend any Letter of Credit, the date of such issuance, amendment, renewal or extension, the aggregate face amount of the Letters of Credit to be issued, amended, renewed, or extended by it (and whether, subject to Section 2.02(b), the face amount of any such Letter of Credit was changed thereby) and the aggregate face amount of such Letters of Credit outstanding after giving effect to such issuance, amendment, renewal or extension, (iii) on each Business Day on which such Issuing Lender makes any LC Disbursement, the date of such LC Disbursement and the amount of such LC Disbursement, (iv) on any Business Day on which the Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Lender on such day, the date of such failure, and the amount of such LC Disbursement and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request.

(l) [Reserved]

(m) Provisions Related to Extended Revolving Commitments . If the maturity date in respect of any tranche of Revolving Commitments of an Issuing Lender occurs prior to the expiration of any Letter of Credit issued by such Issuing Lender, then (i) if one or more other tranches of Revolving Commitments of such Issuing Lender in respect of which the maturity date shall not have occurred are then in effect, such Letters of Credit shall automatically be deemed to have been issued under such Issuing Lender’s Revolving Commitments in respect of such non-terminating tranches up to an aggregate amount not to exceed the aggregate principal amount of such Issuing Lender’s unutilized Revolving Commitments thereunder at such time and (ii) to the extent not reallocated pursuant to the immediately preceding clause (i), the Borrower shall Cash Collateralize any such Letter of Credit in accordance with Section 2.02(j). For the avoidance of doubt, commencing with the maturity date of any tranche of Revolving Commitments of any Issuing Lender, the sublimit for Letters of Credit issued by such Issuing Lender under any tranche of Revolving Commitments that has not so then matured shall be as agreed in the relevant Extension Amendment with such Issuing Lender (to the extent such Extension Amendment so provides).

Section 2.03. Requests for Loans .

(a) Unless otherwise agreed to by the Administrative Agent in connection with making the initial Revolving Loans, to request a Revolving Loan, the Borrower shall notify the Administrative Agent of such request by (i) telephone or (ii) by hand or by facsimile delivery of a written Loan Request (A) in the case of a Eurodollar Loan, not later than 2:00 p.m., New York City time, three (3) Business Days before the date of the proposed Loan and (B) in the case of an ABR Loan, not later than 12:00 noon, New York City time, on the date of the proposed Loan. Each such telephonic Loan request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Loan Request signed by the Borrower. Each such telephonic Loan request and written Loan Request shall specify the following information in compliance with Section 2.01(a):

(i) the aggregate amount of the requested Loan (which shall comply with Section 2.01(c));

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(ii) the date of such Loan, which shall be a Business Day;

(iii) whether such Loan is to be an ABR Loan or a Eurodollar Loan; and

(iv) in the case of a Eurodollar Loan, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”.

If no election as to the Type of Loan is specified, then the requested Loan shall be an ABR Loan. If no Interest Period is specified with respect to any requested Eurodollar Loan, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(b) Promptly following receipt of a Loan Request in accordance with this Section 2.03, the Administrative Agent shall advise each Revolving Lender of the details thereof and of the amount of such Revolving Lender’s Loan to be made as part of the requested Loan.

Section 2.04. Funding of Loans .

(a) Each Revolving Lender shall make each Revolving Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 3:00 p.m., New York City time, or such earlier time as may be reasonably practicable, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. Upon satisfaction or waiver of the conditions precedent specified herein, the Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account designated by the Borrower in the applicable Loan Request; provided that ABR Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.02(e) shall be remitted by the Administrative Agent to the Issuing Lender.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Loan (or, with respect to any ABR Loan made on same-day notice, prior to 11:00 a.m., New York City time, on the date of such Loan) that such Lender will not make available to the Administrative Agent such Lender’s share of such Loan, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section 2.04 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Loan available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith upon written demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate otherwise applicable to such Loan. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Loan and the Borrower shall not be obligated to repay such amount pursuant to the preceding sentence if not previously repaid.

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Section 2.05. Interest Elections .

(a) The Borrower may elect from time to time to (i) convert ABR Loans to Eurodollar Loans, (ii) convert Eurodollar Loans to ABR Loans, provided that any such conversion of Eurodollar Loans may be made only on the last day of an Interest Period with respect thereto or (iii) continue any Eurodollar Loan as such upon the expiration of the then current Interest Period with respect thereto.

(b) To make an Interest Election Request pursuant to this Section 2.05, the Borrower shall notify the Administrative Agent of such election by telephone or by hand or facsimile delivery of a written Interest Election Request by the time that a Loan Request would be required under Section 2.03(a) if the Borrower were requesting a Loan of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in substantially the same form as a Loan Request signed by the Borrower.

(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.01:

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to a one month Eurodollar Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing, and upon the request of the

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Required Lenders, (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

Section 2.06. Limitation on Eurodollar Tranches . Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than twenty Eurodollar Tranches shall be outstanding at any one time.

Section 2.07. Interest on Loans .

(a) Subject to the provisions of Section 2.08, each ABR Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 days or 366 days in a leap year) at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.

(b) Subject to the provisions of Section 2.08, each Eurodollar Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal, during each Interest Period applicable thereto, to the LIBO Rate for such Interest Period in effect for such Borrowing plus the Applicable Margin.

(c) Accrued interest on all Loans shall be payable in arrears on each Interest Payment Date applicable thereto, on the Termination Date with respect to such Loans and thereafter on written demand and upon any repayment or prepayment thereof (on the amount repaid or prepaid); provided that in the event of any conversion of any Eurodollar Loan to an ABR Loan, accrued interest on such Loan shall be payable on the effective date of such conversion.

(d) The Borrower agrees that on any date that the outstanding Revolving Loans are in excess of 50% of the original aggregate Revolving Commitment (or if the Revolving Commitment is increased, the increased aggregate Revolving Commitment), the Utilization Fee shall be added to the Applicable Margin for each Eurodollar Loan and each ABR Loan, as applicable, and payable on the same basis as interest.

Section 2.08. Default Interest . If the Borrower or any Guarantor, as the case may be, shall default in the payment of the principal of or interest on any Loan or in the payment of any other amount becoming due hereunder (including, without limitation, the reimbursement pursuant to Section 2.02(e) of any LC Disbursements), whether at stated maturity, by acceleration or otherwise, the Borrower or such Guarantor, as the case may be, shall on written demand of the Administrative Agent from time to time pay interest, to the extent permitted by law, on all overdue amounts up to (but not including) the date of actual payment (after as well as before judgment) at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days or, when the Alternate Base Rate is applicable, a year of 365 days or 366 days in a leap year) equal to (a) with respect to the principal amount of any Loan, the rate then applicable for such Borrowings plus 2.0%, and (b) in the case of all other amounts, the rate applicable for ABR Loans plus 2.0%.

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Section 2.09. Alternate Rate of Interest .

(a) Subject to Section 2.09(b), in the event, and on each occasion, that on the date that is two (2) Business Days prior to the commencement of any Interest Period for a Eurodollar Loan, the Administrative Agent shall have reasonably determined (which determination shall be conclusive and binding upon the Borrower absent manifest error) that reasonable means do not exist for ascertaining the applicable LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter, give written, facsimile or telegraphic notice of such determination to the Borrower and the Lenders and, until the circumstances giving rise to such notice no longer exist, any request by the Borrower for a Borrowing of Eurodollar Loans hereunder (including pursuant to a refinancing with Eurodollar Loans and including any request to continue, or to convert to, Eurodollar Loans) shall be deemed a request for a Borrowing of ABR Loans.

(b) In the event that the supervisor for the administrator of the LIBO Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the LIBO Rate shall no longer be used for determining interest rates for loans or such LIBO Rate shall otherwise cease to be available for use in determining interest rates for loans, then ( i ) the Borrower and the Administrative Agent shall endeavor to establish an alternate rate of interest to the LIBO Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for loans similar to the Revolving Loans at such time, and, if and when such alternate rate of interest is established, shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable (which changes shall not include a reduction of the Applicable Margin) and (ii) such amendment pursuant to clause (i) above shall become effective without any further action or consent of any other party to this Agreement (other than the Borrower and the Administrative Agent so long as the Administrative Agent shall have received, within five (5) Business Days of the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Supermajority Lenders stating that such Supermajority Lenders approve such amendment).

Section 2.10. Repayment of Loans; Evidence of Debt .

(a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the ratable account of each Revolving Lender the then unpaid principal amount of each Revolving Loan then outstanding on the Revolving Facility Termination Date applicable to such Revolving Loan.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received

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by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof. The Borrower shall have the right, upon reasonable notice, to request information regarding the accounts referred to in the preceding sentence.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section 2.10 shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall promptly execute and deliver to such Lender a promissory note payable to such Lender and its registered assigns in a form furnished by the Administrative Agent and reasonably acceptable to the Borrower. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 10.02) be represented by one or more promissory notes in such form payable to such payee and its registered assigns.

Section 2.11. Optional Termination or Reduction of Revolving Commitments . Upon at least one (1) Business Day prior written notice to the Administrative Agent, the Borrower may at any time in whole permanently terminate a Total Revolving Commitment (subject to compliance with Section 2.12(e)), or from time to time in part permanently reduce the Unused Total Revolving Commitment; provided that each such notice shall only be revocable to the extent such termination or reduction would have resulted from a refinancing of the Obligations, which refinancing shall not be consummated or shall otherwise be delayed. Each such reduction of the Unused Total Revolving Commitment shall be in the principal amount not less than $1,000,000 and in an integral multiple of $1,000,000. Simultaneously with each reduction or termination of the Revolving Commitment, the Borrower shall (i) pay to the Administrative Agent for the account of each Revolving Lender the Commitment Fee accrued and unpaid on the amount of the Revolving Commitment of such Revolving Lender so terminated or reduced through the date thereof and (ii) any outstanding Letters of Credit issued by an Issuing Lender that results in the amount of such Issuing Lender’s Revolving Extensions of Credit then outstanding to exceed the Revolving Commitment (as so reduced) of such Revolving Lender shall be reduced and cancelled (or Cash Collateralized in accordance with Section 2.02(j)) as necessary to ensure the portion (if any) thereof outstanding and not Cash Collateralized does not exceed such Issuing Lender’s Revolving Commitment (as so reduced). Any reduction of the Unused Total Revolving Commitment pursuant to this Section 2.11 shall be applied to reduce the Revolving Commitment of each Revolving Lender on a pro rata basis.

Section 2.12. Mandatory Prepayment of Loans; Commitment Termination; Change of Control Offer .

(a) Within five (5) Business Days of the Borrower or any of its Subsidiaries receiving any Net Proceeds as a result of a Collateral Sale or a Recovery Event in respect of Collateral, if the Borrower shall not be in compliance with Section 6.09(a) on the date such Net Proceeds are received, the Borrower shall deposit cash in an amount (the “ Net Proceeds Amount ”) equal to the

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amount of such received Net Proceeds (solely to the extent necessary to maintain compliance with Section 6.09(a)) into the Collateral Proceeds Account that is maintained with the Administrative Agent for such purpose and subject to an Account Control Agreement and thereafter such Net Proceeds Amount shall be applied (to the extent not otherwise applied pursuant to the immediately succeeding proviso and solely to the extent the Borrower is not in compliance with Section 6.09(a)) in accordance with the requirements of Section 2.12(c); provided that (i) the Borrower may use such Net Proceeds Amount to replace the Collateral which was sold or, other than in the case of any Pledge Routes (or related Pledged Slots and Pledged Gate Leaseholds), that was the subject of a Recovery Event, with Qualified Replacement Assets or, solely in the case of any Net Proceeds Amount in respect of any Recovery Event, repair the assets which are the subject of such Recovery Event or Collateral Sale within 365 days after such deposit is made, (ii) all such Net Proceeds Amounts shall be subject to release as provided in Section 6.09(c) or, at the option of the Borrower at any time, may be applied in accordance with the requirements of Section 2.12(c), and (iii) upon the occurrence of an Event of Default, the amount of any such deposit may be applied by the Administrative Agent in accordance with Section 2.12(c); provided further that any release of any Net Proceeds Amount pursuant to clause (ii) of this Section 2.12(a) shall be conditioned on the Borrower being in compliance with Section 6.09(a) after giving effect thereto (it being understood that the failure to be in compliance with Section 6.09(a) shall not prevent the release of any Net Proceeds Amount in connection with any repair or replacement of assets permitted hereunder so long as no decrease in the Collateral Coverage Ratio will result therefrom).

(b) The Borrower shall prepay the Revolving Loans (without any corresponding reduction in Revolving Commitments) when and in an amount necessary to comply with Section 6.09.

(c) Amounts required to be applied to the prepayment of Loans pursuant to Section 2.12(a) and (b) shall be applied to prepay the outstanding Revolving Loans (and to provide Cash Collateralization for the outstanding LC Exposure following the repayment of all outstanding Revolving Loans) in an amount necessary to comply with Section 6.09, in each case as directed by the Borrower. Such prepayments of Revolving Loans (and Cash Collateralization of the outstanding LC Exposure) shall not result in a corresponding permanent reduction in the Revolving Commitments. Any Cash Collateralization of outstanding LC Exposure shall be consummated in accordance with Section 2.02(j). The application of any prepayment pursuant to this Section 2.12 shall be made, first , to ABR Loans and, second , to Eurodollar Loans.

(d) If at any time the Total Revolving Extensions of Credit for any reason exceed the Total Revolving Commitment at such time, the Borrower shall prepay Revolving Loans on a pro rata basis in an amount sufficient to eliminate such excess. If, after giving effect to the prepayment of all outstanding Revolving Loans, the Total Revolving Extensions of Credit exceed the Total Revolving Commitment then in effect, the Borrower shall Cash Collateralize outstanding Letters of Credit to the extent of such excess.

(e) Upon the Revolving Facility Termination Date applicable to any Revolving Commitment, such Revolving Commitment shall be terminated in full and the Borrower shall repay the applicable Revolving Loans in full and, except as the Administrative Agent may

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otherwise agree in writing, if any Letter of Credit remains outstanding, comply with Section 2.02(j) in accordance therewith.

(f) All prepayments under this Section 2.12 shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to (but not including) the date of prepayment, plus any accrued and unpaid Fees and any losses, costs and expenses, as more fully described in Sections 2.15 hereof.

(g) Unless otherwise prepaid in accordance with Section 2.12 or 2.13 hereof, and subject to the next sentence, upon the occurrence of a Change of Control, each Lender shall have the right to require the Borrower to prepay all or part of such Lender’s Loans at a prepayment price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of prepayment, to discharge all or part of such Lender’s LC Exposure (if any) and to terminate all or part of such Lender’s unused Revolving Commitment in accordance with this Section 2.12. Notwithstanding the foregoing, the Borrower shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control if, upon direction of the Borrower, a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 2.12(g) applicable to a Change of Control Offer made by the Borrower and purchases all Loans validly surrendered and not withdrawn under such Change of Control Offer and the Borrower otherwise complies with this Section 2.12(g).

(i) Within 30 days following the occurrence of any Change of Control, the Borrower shall provide a written notice to the Administrative Agent and each Lender containing the following information (such notice, a “ Change of Control Offer ”):

(A) that a Change of Control has occurred and that such Lender has the right to require Borrower to repay such Lender’s Loans at a prepayment price in cash equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase, to discharge its LC Exposure by Cash Collateralizing such LC Exposure and to terminate such Lender’s unused Revolving Commitment;

(B) the date of prepayment, LC Exposure discharge and unused Revolving Commitment termination (the “ Prepayment Date ”) (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

(C) a statement that any Lender wishing to have its Loans repaid, LC Exposure discharged and unused Revolving Commitment terminated pursuant to such Change of Control Offer must comply with Section 2.12(g)(ii).

A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control occurring, if a definitive agreement is in place for the Change of Control at the time of making the Change of Control Offer.

(ii) In order to accept any Change of Control Offer, a Lender shall notify the Administrative Agent in writing at its address for notices contained in this Agreement prior to 12:00 noon, New York time, on the Business Day next preceding the Prepayment

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Date with respect to such Change of Control Offer (the “ Election Time ”) of such Lender’s election to require the Borrower to prepay all or a specified portion of such Lender’s Loans, to discharge all or a specified portion of such Lender’s LC Exposure and to terminate all or a specified portion of such Lender’s unused Revolving Commitment pursuant to such Change of Control Offer (which, in the case of any election to require less than all of such Lender’s Loans to be prepaid, less than all of such Lender’s LC Exposure to be discharged and less than all such Lender’s unused Revolving Commitment to be terminated in such Change of Control Offer, shall be, taken together, in a minimum principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof) and the principal amount of such Lender’s Loans to be prepaid, the amount of such Lender’s LC Exposure to be discharged and the amount of such Lender’s unused Revolving Commitment to be terminated each shall be in the same proportion of such Lender’s total Loans, total LC Exposure and total unused Revolving Commitment, respectively), and shall specify the amount of such Lender’s Loans which such Lender requests be prepaid, amount of such Lender’s LC Exposure which such Lender requests be discharged and amount of unused Revolving Commitment to be terminated in such Change of Control Offer. In order to validly withdraw any election with respect to any Put Exposure in any Change of Control Offer, the Lender holding such Put Exposure shall notify the Administrative Agent in writing at its address for notices contained in this Agreement prior to the Election Time of such Lender’s election to withdraw such Put Exposure from such Change of Control Offer, which notification shall include a copy of such Lender’s previous notification electing to have its Put Exposure prepaid, discharged or terminated in such Change of Control Offer and shall state that such election is withdrawn. All such prepayments of such Lender’s Loans and discharge of such Lender’s LC Exposure shall automatically result in a corresponding permanent reduction in such Lender’s Revolving Commitments. The Administrative Agent shall from time to time, upon request by the Borrower, advise the Borrower of the amount of Put Exposure with respect to any Change of Control Offer.

(iii) If as of the Election Time there is any Put Exposure as to which the election to accept the Change of Control Offer has not been withdrawn pursuant to Section 2.12(g)(ii), prior to 1:00 p.m., New York City time, on the Prepayment Date the Borrower shall pay to the Administrative Agent the aggregate amount payable with respect to such Put Exposure pursuant to Section 2.12(g)(i)(A). The Administrative Agent shall apply such funds to repay the Loans included in such Put Exposure and to Cash-Collateralize the LC Exposure included in the Put Exposure. In addition, the Administrative Agent shall recalculate the Revolving Commitment Percentage of each Lender after giving effect to such Change of Control Offer and give written notice thereof to the Borrower and each Lender.

Section 2.13. Optional Prepayment of Loans .

(a) The Borrower shall have the right, at any time and from time to time, to prepay any Loans, in whole or in part, (i) with respect to Eurodollar Loans, upon (A) telephonic notice (followed promptly by written or facsimile notice or notice by electronic mail) to the Administrative Agent or (B) written or facsimile notice (or notice by electronic mail) to the

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Administrative Agent, in any case received by 1:00 p.m., New York City time, three (3) Business Days prior to the proposed date of prepayment and (ii) with respect to ABR Loans, upon written or facsimile notice (or notice by electronic mail) to the Administrative Agent received by 1:00 p.m., New York City time, one Business Day prior to the proposed date of prepayment; provided that ABR Loans may be prepaid on the same day notice is given if such notice is received by the Administrative Agent by 12:00 noon, New York City time; provided further , however, that (A) each such partial prepayment shall be in an amount not less than $1,000,000 and in integral multiples of $1,000,000 in the case of Eurodollar Loans and integral multiples of $100,000 in the case of ABR Loans, (B) no prepayment of Eurodollar Loans shall be permitted pursuant to this Section 2.13(a) other than on the last day of an Interest Period applicable thereto unless such prepayment is accompanied by the payment of the amounts described in Section 2.15, and (C) no partial prepayment of a Eurodollar Tranche shall result in the aggregate principal amount of the Eurodollar Loans remaining outstanding pursuant to such Eurodollar Tranche being less than $1,000,000.

(b) Any prepayments under Section 2.13(a) shall be applied to repay the outstanding Revolving Loans of the Revolving Lenders (without any reduction in the Total Revolving Commitment) as the Borrower shall specify until all Revolving Loans shall have been paid in full (plus any accrued but unpaid interest and fees thereon). All prepayments under Section 2.13(a) shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to (but not including) the date of prepayment, plus any Fees and any losses, costs and expenses, as more fully described in Section 2.15 hereof.

(c) Each notice of prepayment shall specify the prepayment date, the principal amount of the Loans to be prepaid and, in the case of Eurodollar Loans, the Borrowing or Borrowings pursuant to which made, shall be irrevocable and shall commit the Borrower to prepay such Loan by the amount and on the date stated therein; provided that the Borrower may revoke any notice of prepayment under this Section 2.13 if such prepayment would have resulted from a refinancing of any or all of the Obligations hereunder, which refinancing shall not be consummated or shall otherwise be delayed. The Administrative Agent shall, promptly after receiving notice from the Borrower hereunder, notify each Lender of the principal amount of the Loans held by such Lender which are to be prepaid, the prepayment date and the manner of application of the prepayment.

Section 2.14. Increased Costs .

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or Issuing Lender (except any such reserve requirement subject to Section 2.14(c)); or

(ii) impose on any Lender or Issuing Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit issued hereunder;

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and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting into, continuing or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Issuing Lender of issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or Issuing Lender hereunder with respect to any Eurodollar Loan or Letter of Credit (whether of principal, interest or otherwise), then, upon the request of such Lender or Issuing Lender, the Borrower will pay to such Lender or Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Lender, as the case may be, for such additional costs incurred or reduction suffered.

(b) If any Lender or Issuing Lender reasonably determines in good faith that any Change in Law affecting such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or Issuing Lender’s capital or on the capital of such Lender’s or Issuing Lender’s holding company, if any, as a consequence of this Agreement or the Eurodollar Loans made by such Lender, or the Letters of Credit issued by such Issuing Lender, to a level below that which such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Lender’s policies and the policies of such Lender’s or Issuing Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or Issuing Lender, as the case may be, such additional amount or amounts, in each case as documented by such Lender or Issuing Lender to the Borrower as will compensate such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company for any such reduction suffered; it being understood that to the extent duplicative of the provisions in Section 2.16, this Section 2.14(b) shall not apply to Taxes.

(c) Solely to the extent arising from a Change in Law, the Borrower shall pay to each Lender (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurodollar funds or deposits, additional interest on the unpaid principal amount of each Eurodollar Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive in the absence of manifest error) and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurodollar Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least fifteen (15) days’ prior written notice (with a copy to the Administrative Agent, and which notice shall specify the Statutory Reserve Rate, if any, applicable to such Lender) of such additional interest or cost from such Lender. If a Lender fails to give written notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest or cost shall be due and payable fifteen (15) days from receipt of such notice.

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(d) A certificate of a Lender or Issuing Lender setting forth the amount or amounts necessary to compensate such Lender or Issuing Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section 2.14 and the basis for calculating such amount or amounts shall be delivered to the Borrower and shall be prima facie evidence of the amount due. The Borrower shall pay such Lender or Issuing Lender, as the case may be, the amount due within fifteen (15) days after receipt of such certificate.

(e) Failure or delay on the part of any Lender or Issuing Lender to demand compensation pursuant to this Section 2.14 shall not constitute a waiver of such Lender’s or Issuing Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or Issuing Lender pursuant to this Section 2.14 for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or Issuing Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The protection of this Section 2.14 shall be available to each Lender regardless of any possible contention as to the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed.

(f) The Borrower shall not be required to make payments under this Section 2.14 to any Lender or Issuing Lender if (A) a claim hereunder arises solely through circumstances peculiar to such Lender or Issuing Lender and which do not affect commercial banks in the jurisdiction of organization of such Lender or Issuing Lender generally, (B) the claim arises out of a voluntary relocation by such Lender or Issuing Lender of its applicable Lending Office (it being understood that any such relocation effected pursuant to Section 2.18 is not “voluntary”), or (C) such Lender or Issuing Lender is not seeking similar compensation for such costs to which it is entitled from its borrowers generally in commercial loans of a similar size.

(g) Notwithstanding anything herein to the contrary, regulations, requests, rules, guidelines or directives implemented after the Closing Date pursuant to either the Dodd-Frank Wall Street Reform and Consumer Protection Act or Basel III shall be deemed to be a Change in Law; provided however , that any determination by a Lender or Issuing Lender of amounts owed pursuant to this Section 2.14 to such Lender or Issuing Lender due to any such Change in Law shall be made in good faith in a manner generally consistent with such Lender’s or Issuing Lender’s standard practice.

Section 2.15. Break Funding Payments . In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of the occurrence and continuance of an Event of Default), (b) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto, or (c) the assignment (or reallocation) of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.18, 2.27(d) or 10.08(d), then, in any such event, at the request of such Lender, the Borrower shall compensate such Lender for the loss, cost and expense sustained

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by such Lender attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount reasonably determined in good faith by such Lender or Issuing Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the applicable rate of interest for such Loan (excluding, however the Applicable Margin included therein, if any), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest (as reasonably determined by such Lender) which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts (and the basis for requesting such amount or amounts) that such Lender is entitled to receive pursuant to this Section 2.15 shall be delivered to the Borrower and shall be prima facie evidence of the amount due. The Borrower shall pay such Lender the amount due within fifteen (15) days after receipt of such certificate.

Section 2.16. Taxes .

(a) Any and all payments by or on account of any Obligation of the Borrower or any Guarantor hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if any Indemnified Taxes or Other Taxes are required to be withheld from any amounts payable to the Administrative Agent, any Lender or any Issuing Lender, as determined in good faith by the applicable Withholding Agent, then (i) the sum payable by the Borrower or applicable Guarantor shall be increased as necessary so that after making all required deductions for any Indemnified Taxes or Other Taxes (including deductions for any Indemnified Taxes or Other Taxes applicable to additional sums payable under this Section 2.16), the Administrative Agent, Lender, Issuing Lender or any other recipient of such payments (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the applicable Withholding Agent shall make such deductions and (iii) the applicable Withholding Agent shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrower or any Guarantor, as applicable, shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent, each Lender and each Issuing Lender, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by or on behalf of or withheld or deducted from payments owing to the Administrative Agent, such Lender or such Issuing Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower or any Guarantor hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.16) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment

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or liability delivered to the Borrower by a Lender or Issuing Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender or Issuing Lender, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment to the extent available, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Each Lender shall, within ten (10) days after written demand therefor, indemnify the Administrative Agent (to the extent the Administrative Agent has not been reimbursed by the Borrower) for the full amount of any Taxes imposed by any Governmental Authority that are attributable to such Lender and that are payable or paid by the Administrative Agent, together with all interest, penalties, reasonable costs and expenses arising therefrom or with respect thereto, as determined by the Administrative Agent in good faith. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.

(f) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law and as reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law or requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate; provided that a Foreign Lender shall not be required to deliver any documentation pursuant to this Section 2.16(f) that such Foreign Lender is not legally able to deliver.

(g) (1) Without limiting the generality of the foregoing, each Foreign Lender shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter when the previously delivered certificates and/or forms expire, or upon request of the Borrower or the Administrative Agent) whichever of the following is applicable:

(i) two (2) duly executed originals of the applicable Internal Revenue Service Form W-8BEN or W-8BEN-E (or any successor form), claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,

(ii) two (2) duly executed originals of Internal Revenue Service Form W-8ECI (or any successor form),

(iii) two (2) duly executed originals of Internal Revenue Service Form W-8IMY (or any successor form), accompanied by Internal Revenue Service Form W-8ECI (or any successor form), the applicable Internal Revenue Service Form W-8BEN or W-8BEN-E (or any successor form), Internal Revenue Service Form W-9 (or any

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successor form), and/or other certification documents from each beneficial owner, as applicable,

(iv) in the case of a Foreign Lender claiming the benefits of exemption for portfolio interest under Section 881(c) of the Code (the “ Portfolio Interest Exemption ”), (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code or (D) conducting a trade or business in the United States with which the relevant interest payments are effectively connected (such certificate, a “ Certificate Re: Non-Bank Status ”), or if such Foreign Lender is an entity treated as a partnership, an Internal Revenue Service Form W-8IMY (or any successor form), together with a Certificate Re: Non-Bank Status on behalf of any beneficial owners claiming the Portfolio Interest Exemption, and (y) two (2) duly executed originals of the applicable Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E (or any successor form), or in the case of a Foreign Lender that is treated as a partnership, two (2) duly executed originals of Internal Revenue Service Form W-8IMY (or any successor form), together with the appropriate Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E (or any successor form) on behalf of each beneficial owner claiming the Portfolio Interest Exemption, or

(v) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States federal withholding tax and reasonably requested by the Borrower or the Administrative Agent to permit the Borrower to determine the withholding or required deduction to be made.

A Foreign Lender shall not be required to deliver any form or statement pursuant to this Section 2.16(g) that such Foreign Lender is not legally able to deliver.

(1) Any Lender that is a “United States Person” (as such term is defined in Section 7701(a)(30) of the Code) shall deliver to the Administrative Agent and the Borrower, on or prior to the date on which such Lender becomes a party to this Agreement (and from time to time thereafter when the previously delivered certificates and/or forms expire, or upon request of the Borrower or the Administrative Agent), two (2) copies of Internal Revenue Service Form W-9 (or any successor form), properly completed and duly executed by such Lender, certifying that such Lender is entitled to an exemption from United States backup withholding tax.

(2) If a payment made to a Lender under this Agreement or any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower or the Administrative Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied

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with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.16(g)(3), the term “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(h) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes from the Governmental Authority to which such Taxes or Other Taxes were paid and as to which it has been indemnified by the Borrower or a Guarantor or with respect to which the Borrower or a Guarantor has paid additional amounts pursuant to this Section 2.16, it shall pay over such refund to the Borrower or such Guarantor (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower or such Guarantor under this Section 2.16 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender incurred in obtaining such refund (including Taxes imposed with respect to such refund) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower or such Guarantor, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower or such Guarantor (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h), in no event will the Administrative Agent or any Lender be required to pay any amount to the Borrower pursuant to this paragraph (h) if, and then only to the extent, the payment of such amount would place the Administrative Agent or such Lender in a less favorable net after-Tax position than the Administrative Agent or such Lender would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

(i) For purposes of this Error! Reference source not found. , the term “Lenders” shall include the Issuing Lenders.

Section 2.17. Payments Generally; Pro Rata Treatment .

(a) The Borrower shall make each payment or prepayment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.14 or 2.15, or otherwise) prior to 1:00 p.m., New York City time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the reasonable discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 388 Greenwich Street, New York, NY 10013, pursuant to wire instructions to be provided by the Administrative Agent, except payments to be made directly to an Issuing Lender as expressly provided herein and except that payments pursuant to Sections 2.14, 2.15 and 10.04 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day

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that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in U.S. Dollars.

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all Obligations then due hereunder, such funds shall be applied (i) first , towards payment of Fees and expenses then due under Sections 2.19 and 10.04 payable to the Administrative Agent, (ii) second , towards payment of Fees and expenses then due under Sections 2.20, 2.21 and 10.04 payable to the Lenders and the Issuing Lenders and towards payment of interest then due on account of the Revolving Loans and Letters of Credit, ratably among the parties entitled thereto in accordance with the amounts of such Fees and expenses and interest then due to such parties and (iii) third , towards payment of (A) principal of the Revolving Loans and unreimbursed LC Disbursements then due hereunder, (B) any Designated Banking Product Obligations then due, to the extent such Designated Banking Product Obligations constitute “Obligations” hereunder, and (C) any Designated Hedging Obligations then due, to the extent such Designated Hedging Obligations constitute “Obligations” hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal, unreimbursed LC Disbursements, Designated Banking Product Obligations constituting Obligations and Designated Hedging Obligations constituting Obligations then due to such parties. Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or its assets, but appropriate adjustment shall be made with respect to payments from the Borrower or other Guarantors to preserve the allocations to Obligations otherwise set forth above in this Section 2.17(b).

(c) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the applicable Issuing Lender, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the applicable Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(d) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(a), 2.04(b), 8.04 or 10.04(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

Section 2.18. Mitigation Obligations; Replacement of Lenders .

(a) If the Borrower is required to pay any additional amount to any Lender under Section 2.14 or to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different

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lending office for funding or booking its Loans hereunder, to assign its rights and obligations hereunder to another of its offices, branches or affiliates, to file any certificate or document reasonably requested by the Borrower or to take other reasonable measures, if, in the judgment of such Lender, such designation, assignment, filing or other measures (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. Nothing in this Section 2.18 shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.14 or 2.16.

(b) If, after the date hereof, any Lender requests compensation under Section 2.14 or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender becomes a Defaulting Lender or becomes subject to an Illegality Event, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, (i) terminate such Lender’s Revolving Commitment, prepay such Lender’s outstanding Loans and provide Cash Collateralization for such Lender’s LC Exposure or (ii) require such Lender to assign, without recourse (in accordance with and subject to the restrictions contained in Section 10.02), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), in any case as of a Business Day specified in such notice from the Borrower; provided that (i) such terminated or assigning Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts due, owing and payable to it hereunder at the time of such termination or assignment, from the assignee (to the extent of such outstanding principal and accrued interest and fees in the case of an assignment) or the Borrower (in the case of all other amounts) and (ii) in the case of an assignment due to payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments.

Section 2.19. [Reserved]

Section 2.20. Commitment Fee and Upfront Fee . (a) The Borrower shall pay to the Administrative Agent for the accounts of the Revolving Lenders a commitment fee (the “ Commitment Fee ”) for the period commencing on the Closing Date to the Revolving Facility Termination Date with respect to the applicable Revolving Commitments or the earlier date of termination of the applicable Revolving Commitment, computed (on the basis of the actual number of days elapsed over a year of 360 days) at the Commitment Fee Rate on the average daily Unused Total Revolving Commitment. Such Commitment Fee, to the extent then accrued, shall be payable quarterly in arrears (a) on the last Business Day of each March, June, September and December, beginning on March 31, 2019, (b) on the Revolving Facility Termination Date with respect to the applicable Revolving Commitments, and (c) as provided in Section 2.11 hereof, upon any reduction or termination in whole or in part of the Total Revolving Commitment.

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(a) The Borrower shall pay on the Closing Date to each Lender set forth on Annex A as of such date, an upfront fee in an amount specified in a fee letter between the Borrower and such Lender (the “ Upfront Fee ”).

Section 2.21. Letter of Credit Fees . The Borrower shall pay with respect to each Letter of Credit (i) to the Administrative Agent for the account of the applicable Issuing Lender a fee calculated (on the basis of the actual number of days elapsed over a year of 360 days) at the per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility on the daily average LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) with respect to such Letter of Credit and (ii) to each Issuing Lender (with respect to each Letter of Credit issued by it), such Issuing Lender’s customary and reasonable fees as may be agreed by the Issuing Lender and the Borrower for issuance, amendments and processing referred to in Section 2.02. In addition, the Borrower agrees to pay each Issuing Lender for its account a fronting fee of 0.125% per annum in respect of each Letter of Credit issued by such Issuing Lender, for the period from and including the date of issuance of such Letter of Credit to and including the date of termination of such Letter of Credit. Accrued fees described in this paragraph in respect of each Letter of Credit shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December and on the Revolving Facility Termination Date with respect to the applicable Revolving Commitments. So long as no Event of Default has occurred, fees accruing on any Letter of Credit outstanding after the applicable Revolving Facility Termination Date shall be payable quarterly in the manner described in the immediately preceding sentence and on the date of expiration or termination of any such Letter of Credit.

Section 2.22. Nature of Fees . All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent, as provided herein and in the fee letters described in Section 2.19. Once paid, none of the Fees shall be refundable under any circumstances.

Section 2.23. Right of Set-Off . Upon the occurrence and during the continuance of any Event of Default pursuant to Section 7.01(b), the Administrative Agent and each Lender (and their respective banking Affiliates) are hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final but excluding deposits in the Escrow Accounts, Payroll Accounts and other accounts, in each case, held in trust for an identified beneficiary) at any time held and other indebtedness at any time owing by the Administrative Agent and each such Lender (or any of such banking Affiliates) to or for the credit or the account of the Borrower or any Guarantor against any and all of any such overdue amounts owing under the Loan Documents, irrespective of whether or not the Administrative Agent or such Lender shall have made any demand under any Loan Document; provided that in the event that any Defaulting Lender exercises any such right of setoff, (x) all amounts so set off will be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.26(d) and, pending such payment, will be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders and the Revolving Lenders and (y) the Defaulting Lender will provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. Each Lender agrees promptly to

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notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender (or any of such banking Affiliates) and the Administrative Agent agrees promptly to notify the Borrower after any such set-off and application made by it (or any of its banking Affiliates), as the case may be, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender and the Administrative Agent under this Section 2.23 are in addition to other rights and remedies which such Lender and the Administrative Agent may have upon the occurrence and during the continuance of any Event of Default.

Section 2.24. Security Interest in Letter of Credit Account . The Borrower hereby pledges to the Administrative Agent, for its benefit and for the benefit of the other Secured Parties, and hereby grants to the Administrative Agent, for its benefit and for the benefit of the other Secured Parties, a first priority security interest, senior to all other Liens, if any, in all of the Borrower’s right, title and interest in and to the Letter of Credit Account, any direct investment of the funds contained therein and any proceeds thereof. Cash held in the Letter of Credit Account shall not be available for use by the Borrower, and shall be released to the Borrower only as described in Section 2.02(j).

Section 2.25. Payment of Obligations . Subject to the provisions of Section 7.01, upon the maturity (whether by acceleration or otherwise) of any of the Obligations under this Agreement or any of the other Loan Documents of the Borrower, the Lenders shall be entitled to immediate payment of such Obligations.

Section 2.26. Defaulting Lenders .

(a) If at any time any Lender becomes a Defaulting Lender, then the Borrower may, on ten (10) Business Days’ prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 10.02(b) (with the assignment fee to be waived in such instance and subject to any consents required by such Section) all of its rights and obligations under this Agreement to one or more assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender or other such Person.

(b) Any Lender being replaced pursuant to Section 2.26(a) shall (i) execute and deliver an Assignment and Acceptance with respect to such Lender’s outstanding Commitments and Loans, and (ii) deliver any documentation evidencing such Loans to the Borrower or the Administrative Agent. Pursuant to such Assignment and Acceptance, (A) the assignee Lender shall acquire all or a portion, as specified by the Borrower and such assignee, of the assigning Lender’s outstanding Commitments and Loans, (B) all obligations of the Borrower owing to the assigning Lender relating to the Commitments and Loans so assigned shall be paid in full by the assignee Lender to such assigning Lender concurrently with such Assignment and Acceptance (including, without limitation, any amounts owed under Section 2.15 due to such replacement occurring on a day other than the last day of an Interest Period), and (C) upon such payment and, if so requested by the assignee Lender, delivery to the assignee Lender of the appropriate documentation executed by the Borrower in connection with previous Borrowings, the assignee Lender shall become a Lender hereunder and the assigning Lender shall cease to constitute a

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Lender hereunder with respect to such assigned Commitments and Loans, except with respect to indemnification provisions under this Agreement, which shall survive as to such assigning Lender; provided that an assignment contemplated by this Section 2.26(b) shall become effective notwithstanding the failure by the Lender being replaced to deliver the Assignment and Acceptance contemplated by this Section 2.26(b), so long as the other actions specified in this Section 2.26(b) shall have been taken.

(c) Anything herein to the contrary notwithstanding, if a Revolving Lender becomes, and during the period it remains, a Defaulting Lender, during such period, such Defaulting Lender shall not be entitled to any fees accruing during such period pursuant to Section 2.20 (without prejudice to the rights of the Non-Defaulting Lenders in respect of such fees).

(d) Any amount paid by the Borrower or otherwise received by the Administrative Agent for the account of a Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity payments or other amounts) will not be paid or distributed to such Defaulting Lender, but shall instead be retained by the Administrative Agent in a segregated account until (subject to Section 2.26(f)) the termination of the Revolving Commitments and payment in full of all obligations of the Borrower hereunder and will be applied by the Administrative Agent, to the fullest extent permitted by law, to the making of payments from time to time in the following order of priority:

first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent,

second , to the payment of the default interest and then current interest due and payable to the Revolving Lenders which are Non-Defaulting Lenders hereunder, ratably among them in accordance with the amounts of such interest then due and payable to them,

third , to the payment of fees then due and payable to the Non-Defaulting Lenders hereunder, ratably among them in accordance with the amounts of such fees then due and payable to them,

fourth , to the ratable payment of other amounts then due and payable to the Non-Defaulting Lenders, and

fifth , after the termination of the Revolving Commitments and payment in full of all obligations of the Borrower hereunder, to pay amounts owing under this Agreement to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct.

(e) The Borrower may terminate the unused amount of the Commitment of any Lender that is a Defaulting Lender upon not less than ten (10) Business Days’ prior notice to the Administrative Agent (which shall promptly notify the Revolving Lenders thereof), and in such event the provisions of Section 2.26(d) will apply to all amounts thereafter paid by the Borrower for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts), provided that (i) no Event of Default shall have occurred and be continuing and (ii) such termination shall not be deemed to be a waiver or

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release of any claim the Borrower, the Administrative Agent, or any Lender may have against such Defaulting Lender.

(f) If the Borrower and the Administrative Agent agree in writing that a Revolving Lender that is a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the Revolving Lenders, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, such Revolving Lender shall purchase at par such portions of outstanding Revolving Loans of the other Revolving Lenders, and/or make such other adjustments, as the Administrative Agent may determine to be necessary to cause the Revolving Lenders to hold Revolving Loans on a pro rata basis in accordance with their respective Revolving Commitments, whereupon such Revolving Lender shall cease to be a Defaulting Lender and will be a Non-Defaulting Lender; provided that no adjustments shall be made retroactively with respect to fees accrued while such Revolving Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Non-Defaulting Lender shall constitute a waiver or release of any claim of any party hereunder arising from such Revolving Lender’s having been a Defaulting Lender.

(g) Notwithstanding anything to the contrary herein, (x) any Lender that is an Issuing Lender hereunder may not be replaced in its capacity as an Issuing Lender at any time that it has a Letter of Credit outstanding hereunder unless arrangements reasonably satisfactory to such Issuing Lender have been made with respect to such outstanding Letters of Credit and (y) the Administrative Agent may not be replaced hereunder except in accordance with the terms of Section 8.05.

Section 2.27. Increase in Revolving Commitment .

(a) Borrowing Request . The Borrower may by written notice to the Administrative Agent request, prior to the Revolving Facility Maturity Date, an increase to the existing Revolving Commitments by an amount not to exceed $100,000,000 in the aggregate. Such notice shall specify (i) the date (each, an “ Revolving Increase Effective Date ”) on which the Borrower proposes that the increased Revolving Commitments shall be effective, which shall be a date not less than ten (10) Business Days after the date on which such notice is delivered to the Administrative Agent and (ii) the identity of each Eligible Assignee to whom the Borrower proposes any portion of such increased Revolving Commitments be allocated (each, a “ New Revolving Lender ”) and the amounts of such allocations; provided that any existing Lender approached to provide all or a portion of the increased Revolving Commitments may elect or decline, in its sole discretion, to provide such increased Revolving Commitment.

(b) Conditions . The increased Revolving Commitments shall become effective as of such Revolving Increase Effective Date provided that:

(i) each of the conditions set forth in Section 4.02 shall be satisfied on or prior to such Revolving Increase Effective Date;

(ii) no Event of Default shall have occurred and be continuing or would result from giving effect to the increased Revolving Commitments on such Revolving Increase Effective Date;

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(iii) after giving pro forma effect to the increased Revolving Commitments to be made on such Revolving Increase Effective Date, the Borrower shall be in pro forma compliance with the covenants set forth in Sections 6.08 and 6.09(a); and

(iv) the Borrower shall deliver or cause to be delivered any legal opinions or other documents reasonably requested by the Administrative Agent in connection with any such transaction.

(c) Terms of Revolving Loans and Commitments . The terms and provisions of Revolving Loans made pursuant to the increased Revolving Commitments shall be identical to the Revolving Loans. The increased Revolving Commitments shall be effected by a joinder agreement (the “ Revolving Increase Joinder ”) executed by the Borrower, the Administrative Agent and each Lender making such increased Revolving Commitment, in form and substance satisfactory to each of them. The Revolving Increase Joinder may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.27. In addition, unless otherwise specifically provided herein, all references in the Loan Documents to Revolving Loans shall be deemed, unless the context otherwise requires, to include references to Revolving Loans made pursuant to any increased Revolving Commitments made pursuant to this Agreement.

(d) Adjustment of Revolving Loans . Each of the existing Revolving Lenders shall assign to each of the applicable New Lenders, and each of the New Lenders shall purchase from each of the existing Revolving Lenders, at the principal amount thereof (together with accrued interest), such interests in the Revolving Loans outstanding on such Revolving Increase Effective Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans will be held by the existing Lenders and New Lenders ratably in accordance with their Revolving Commitments after giving effect to the increased Revolving Commitments on such Revolving Increase Effective Date; provided that no such reallocation shall result in any Issuing Lender having Revolving Extensions of Credit greater than its Revolving Commitment. If there is a new Borrowing of Revolving Loans on such Revolving Increase Effective Date, the Revolving Lenders after giving effect to such Revolving Increase Effective Date shall make such Revolving Loans in accordance with Section 2.01(a). Any amounts owed under Section 2.15 due to a reallocation of Eurodollar Loans pursuant to this Section 2.27(d) occurring on a day other than the last day of an Interest Period applicable thereto shall be payable by the Borrower pursuant to Section 2.15.

(e) Equal and Ratable Benefit . The Revolving Loans and Revolving Commitments established pursuant to this paragraph shall constitute Revolving Loans and Revolving Commitments under, and shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents and shall, without limiting the foregoing, benefit equally and ratably from the security interests created by the Collateral Documents.

Section 2.28. Extension of the Revolving Facility .

(a) Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “ Extension Offer ”) made from time to time by the Borrower to all Lenders

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holding Revolving Commitments with a like maturity date, on a pro rata basis (based on the aggregate Revolving Commitments with a like maturity date) and on the same terms to each such Lender, the Borrower is hereby permitted to consummate from time to time transactions with individual Lenders that accept the terms contained in such Extension Offers to extend the maturity date of each such Lender’s Revolving Commitments by one year and otherwise modify the terms of such Revolving Commitments pursuant to the terms of the relevant Extension Offer (including, without limitation, by the changing interest rate or fees payable in respect of such Revolving Commitments (and related outstandings)) (each, an “ Extension ”, and each group of Revolving Commitments, as so extended, being a “ tranche ”, and each group of Revolving Commitments not so extended being a separate tranche), so long as the following terms are satisfied:

(i) no Default or Event of Default shall have occurred and be continuing at the time the offering document in respect of an Extension Offer is delivered to the Lenders (the “ Extension Offer Date ”),

(ii) except as to interest rates, fees and final maturity (which shall be set forth in the relevant Extension Offer), the Revolving Commitment of any Revolving Lender that agrees to an Extension with respect to such Revolving Commitment extended pursuant to an Extension (an “ Extended Revolving Commitment ”), and the related outstandings, shall be a Revolving Commitment (or related outstandings, as the case may be) with the same terms as the original Revolving Commitments (and related outstandings); provided that (1) the borrowing and repayment (except for (A) payments of interest and fees at different rates on Extended Revolving Commitments (and related outstandings), (B) repayments required upon the maturity date of the non-extending Revolving Commitments and (C) repayment made in connection with a permanent repayment and termination of commitments) of Loans with respect to Extended Revolving Commitments after the applicable Extension date shall be made on a pro rata basis with all other Revolving Commitments, (2) the permanent repayment of Revolving Loans with respect to, and termination of, Extended Revolving Commitments after the applicable Extension date shall be made on a pro rata basis with all other Revolving Commitments, except that the Borrower shall be permitted to permanently repay and terminate commitments of any such tranche on a better than a pro rata basis as compared to any other tranche with a later maturity date than such tranche, (3) assignments and participations of Extended Revolving Commitments and extended Revolving Loans shall be governed by the same assignment and participation provisions applicable to Revolving Commitments and Revolving Loans and (4) at no time shall there be Revolving Commitments hereunder (including Extended Revolving Commitments and any original Revolving Commitments) which have more than two different maturity dates,

(iii) if the aggregate principal amount of Revolving Commitments in respect of which Revolving Lenders shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amount of Revolving Commitments, as the case may be, offered to be extended by the Borrower pursuant to such Extension Offer, then the Revolving Loans of such Revolving Lenders shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual

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holdings of record) with respect to which such Revolving Lenders have accepted such Extension Offer,

(iv) if the aggregate principal amount of Revolving Commitments in respect of which Revolving Lenders shall have accepted the relevant Extension Offer shall be less than the maximum aggregate principal amount of Revolving Commitments, as the case may be, offered to be extended by the Borrower pursuant to such Extension Offer, then the Borrower may, in any combination, (A) require each Revolving Lender that does not accept such Extension Offer to assign pursuant to Section 10.02 no later than forty-five (45) days after the Extension Offer Date any or all of its pro rata share of the outstanding Revolving Commitments and Revolving Loans offered to be extended pursuant to such Extension Offer to one or more assignees (which may new or existing Lenders) which have agreed to such assignment and to extend the applicable Revolving Facility Maturity Date and/or (B) terminate any or all of the outstanding Revolving Commitments of any Revolving Lender that does not accept such Extension Offer (to the extent not assigned pursuant to the preceding clause (A)); provided that (1) each Revolving Lender that does not respond affirmatively within thirty (30) days of the Extension Offer Date shall be deemed not to have accepted such Extension Offer, (2) each assigning Revolving Lender shall have received payment of an amount equal to the outstanding principal of its Revolving Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), (3) the processing and recordation fee specified in Section 10.02(b) shall be paid by the Borrower or such assignee and (4) the assigning Revolving Lender shall continue to be entitled to the rights under Section 10.04 for any period prior to the effectiveness of such assignment,

(v) all documentation in respect of such Extension shall be consistent with the foregoing, and

(vi) any applicable Minimum Extension Condition shall be satisfied unless waived by the Borrower. For the avoidance of doubt, no Lender shall be obligated to accept any Extension Offer.

(b) With respect to all Extensions consummated by the Borrower pursuant to this Section, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of Section 2.12 or Section 2.13 and (ii) each Extension Offer shall specify the minimum amount of Revolving Commitments to be tendered, which shall be a minimum amount approved by the Administrative Agent (a “ Minimum Extension Condition ”). The Administrative Agent and the Lenders hereby consent to the transactions contemplated by this Section (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Revolving Commitments on such terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including, without limitation, Section 2.11, 2.12, 2.17 and 8.08) or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section 2.28.

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(c) The consent of the Administrative Agent shall be required to effectuate any Extension, such consent not to be unreasonably withheld. No consent of any Lender shall be required to effectuate any Extension, other than the consent of each Lender agreeing to such Extension with respect to one or more of its Revolving Commitments (or a portion thereof) (or, in the case of an Extension pursuant to clause (iv) of Section 2.28(a), the consent of the assignee agreeing to the assignment of one or more Revolving Commitments and/or Revolving Loans). All Extended Revolving Commitments and all obligations in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by the Collateral on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents (each, an “ Extension Amendment ”) with the Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of Revolving Commitments so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent with this Section 2.28.

(d) In connection with any Extension, the Borrower shall provide the Administrative Agent prior written notice thereof no earlier than nine (9) months but no later than twelve (12) months from the Closing Date, and shall agree to such procedures (including, without limitation, regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section 2.28.

Section 2.29. Term Loan .

(a) Term Loan . Notwithstanding anything to the contrary in this Agreement, at any time prior to the latest Revolving Facility Maturity Date then in effect, the Borrower is hereby permitted to consummate with one or more lenders (including any existing Lender) (each, a “Term Lender”) a term loan facility (the “Term Loan Facility”) in an aggregate principal amount to be agreed by the Borrower and the Lenders, (the “Term Loans”), so long as the following terms are satisfied:

(i) no Event of Default shall have occurred and be continuing or would result from giving effect to the Term Loans on the Term Loan Effective Date; and

(ii) after giving pro forma effect to the Term Loans to be made on the Term Loan Effective Date, the Borrower shall be in pro forma compliance with the covenants set forth in Section 6.08 and Section 6.09(a).

(b) Terms of Term Loans . The terms and provisions of the Term Loans shall be substantially similar to the Revolving Loans except as follows:

(i) the Term Loans shall be advanced in a single drawing on a date notified to the Administrative Agent no later than three (3) Business Days prior to the proposed effective date of the Term Loan Facility (the “ Term Loan Effective Date ”);

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(ii) Term Loans that are repaid or prepaid may not be re-borrowed;

(iii) the Term Loans will be repayable in consecutive quarterly installments, and the Term Loans will mature on the Term Loan maturity date (each such installment being in an aggregate principal amount equal to a percentage of the initial aggregate principal amount of the Term Loans to be agreed by the Borrower and the Lenders, except that the final such installment shall be in an aggregate amount equal to the remaining balance of the Term Loans); and

(iv) The Term Loan Facility may allow for the payment of a premium in connection with any prepayment (in whole or in part) of the Term Loans.

The Term Loans shall be effected by a joinder or amendment agreement (the “ Term Loan Joinder ”) executed by the Borrower, the Administrative Agent and each Lender making such Term Loan, in form and substance satisfactory to each of them and an intercreditor agreement executed by the Administrative Agent and each Lender. The Term Loan Joinder may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.29. For the avoidance of doubt, no existing Lender will be obligated to participate in the Term Loan Facility as a Term Lender.

(c) Equal and Ratable Benefit . The Term Loan advanced pursuant to this paragraph shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents and shall, without limiting the foregoing, benefit equally and ratably from the security interests created by the Collateral Documents.

Section 2.30. Illegality Event . If any Revolving Lender shall determine (which determination shall, upon notice thereof to the Borrower and the Administrative Agent, be conclusive and binding on the Borrower absent manifest error) that any Change In Law makes it unlawful, or any Governmental Authority having jurisdiction over such Revolving Lender asserts that it is unlawful, for such Revolving Lender to fund its Revolving Loans (or any portion thereof) as funded hereunder (any such event being hereinafter referred to as an “ Illegality Event ”), then:

(i) such Revolving Lender shall promptly serve notice of such fact on the Borrower and the Administrative Agent;

(ii) such Revolving Lender’s obligation to fund Revolving Loans shall be suspended until such time as the Revolving Lender may again fund and maintain such Revolving Loans.

(iii) such Revolving Lender shall not be entitled to any fees pursuant to Section 2.20 accruing during the period that such Revolving Lender is subject to such Illegality Event (without prejudice to the rights of the Revolving Lenders not subject to an Illegality Event in respect of such fees).

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SECTION 3.

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to make Loans and issue Letters of Credit hereunder, the Borrower and each of the Guarantors jointly and severally represent and warrant as follows:

Section 3.01. Organization and Authority . Each of the Borrower and the Guarantors (a) is duly organized, validly existing and in good standing (to the extent such concept is applicable in the applicable jurisdiction) under the laws of the jurisdiction of its organization and is duly qualified and in good standing in each other jurisdiction in which the failure to so qualify would have a Material Adverse Effect and (b) has the requisite corporate or limited liability company power and authority to effect the Transactions, to own or lease and operate its properties and to conduct its business as now or currently proposed to be conducted.

Section 3.02. Air Carrier Status . The Borrower is an “air carrier” within the meaning of Section 40102 of Title 49 and holds a certificate under Section 41102 of Title 49. The Borrower holds an air carrier operating certificate issued pursuant to Chapter 447 of Title 49. The Borrower is a “citizen of the United States” as defined in Section 40102(a)(15) of Title 49 and as that statutory provision has been interpreted by the DOT pursuant to its policies (a “ United States Citizen ”).

Section 3.03. Due Execution . The execution, delivery and performance by each of the Borrower and the Guarantors of each of the Loan Documents to which it is a party (a) are within the respective corporate or limited liability company powers of each of the Borrower and the Guarantors, have been duly authorized by all necessary corporate or limited liability company action, including the consent of shareholders or members where required, and do not (i) contravene the charter, by-laws or limited liability company agreement (or equivalent documentation) of the Borrower or any of the Guarantors, (ii) violate any applicable law (including, without limitation, the Securities Exchange Act of 1934) or regulation (including, without limitation, Regulations T, U or X of the Board), or any order or decree of any court or Governmental Authority, other than violations by the Borrower or the Guarantors which would not reasonably be expected to have a Material Adverse Effect, (iii) conflict with or result in a breach of, or constitute a default under, any material indenture, mortgage or deed of trust or any material lease, agreement or other instrument binding on the Borrower or the Guarantors or any of their properties, which, in the aggregate, would reasonably be expected to have a Material Adverse Effect, or (iv) result in or require the creation or imposition of any Lien upon any of the property of the Borrower or any of the other Grantors other than the Liens granted pursuant to this Agreement or the other Loan Documents; and (b) do not require the consent, authorization by or approval of or notice to or filing or registration with any Governmental Authority or any other Person, other than (i) the filing of financing statements under the UCC, (ii) the filings and consents contemplated by the Collateral Documents, (iii) approvals, consents and exemptions that have been obtained on or prior to the Closing Date and remain in full force and effect and (iv) consents, approvals and exemptions that the failure to obtain in the aggregate would not be reasonably expected to result in a Material Adverse Effect. Each Loan Document to which the

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Borrower or a Guarantor is a party has been duly executed and delivered by the Borrower and each of the Guarantors party thereto. This Agreement and the other Loan Documents to which the Borrower or any of the Guarantors is a party, each is a legal, valid and binding obligation of the Borrower and each Guarantor party thereto, enforceable against the Borrower and the Guarantors, as the case may be, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 3.04. Statements Made .

(a) The written information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement (as modified or supplemented by other written information so furnished), together with the Annual Report on Form 10-K for 2017 of the Parent filed with the SEC and all Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that have been filed after December 31, 2017, by the Parent, with the SEC (as amended), taken as a whole as of the Closing Date did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made therein not misleading in light of the circumstances in which such information was provided; provided that, with respect to projections, estimates or other forward-looking information the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

(b) The Annual Report on Form 10-K of the Parent most recently filed with the SEC, and each Quarterly Report on Form 10-Q and Current Report on Form 8-K of the Parent filed with the SEC subsequently and prior to the date that this representation and warranty is being made, did not as of the date filed with the SEC (giving effect to any amendments thereof made prior to the date that this representation and warranty is being made) contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

Section 3.05. Financial Statements; Material Adverse Change .

(a) The audited consolidated financial statements of the Parent and its Subsidiaries for the fiscal year ended December 31, 2017, included in the Parent’s Annual Report on Form 10-K for 2017 filed with the SEC, as amended, present fairly, in all material respects, in accordance with GAAP, the financial condition, results of operations and cash flows of the Parent and its Subsidiaries on a consolidated basis as of such date and for such period.

(b) Except as disclosed in the Parent’s Annual Report on Form 10-K for 2017 or any subsequent report filed by the Parent on Form 10-Q or Form 8-K with the SEC, since December 31, 2017, there has been no Material Adverse Change.

Section 3.06. Ownership of Subsidiaries . As of the Closing Date, other than as set forth on Schedule 3.06, (a) each of the Persons listed on Schedule 3.06 is a wholly-owned, direct or

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indirect Subsidiary of the Parent, and (b) the Parent owns no other Subsidiaries (other than Immaterial Subsidiaries), whether directly or indirectly.

Section 3.07. Liens . There are no Liens of any nature whatsoever on any Collateral other than Permitted Liens.

Section 3.08. Use of Proceeds . The proceeds of the Loans, and the Letters of Credit, shall be used for working capital or other general corporate purposes of the Parent and its Subsidiaries (including the payment of fees and transaction costs as contemplated hereby and as referred to in Sections 2.19 and 2.20).

Section 3.09. Litigation and Compliance with Laws .

(a) Except as disclosed in the Parent’s Annual Report on Form 10-K for 2017 or any subsequent report filed by the Parent on Form 10-Q or Form 8-K with the SEC since December 31, 2017, there are no actions, suits, proceedings or investigations pending or, to the knowledge of the Borrower or the Guarantors, threatened against the Borrower or the Guarantors or any of their respective properties (including any properties or assets that constitute Collateral under the terms of the Loan Documents), before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that (i) are likely to have a Material Adverse Effect or (ii) could reasonably be expected to affect the legality, validity, binding effect or enforceability of the Loan Documents or, in any material respect, the rights and remedies of the Administrative Agent or the Lenders thereunder or in connection with the Transactions.

(b) Except with respect to any matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, the Borrower and each Guarantor to its knowledge is currently in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its business and ownership of its property.

Section 3.10. Pledged Routes . Each of the Borrower and the other Grantors, as applicable, hold the requisite authority to operate each of its respective Pledged Routes pursuant to Title 49, applicable foreign law, and the applicable rules and regulations of the FAA, DOT and any applicable Foreign Aviation Authorities with jurisdiction over its Pledged Routes, and each is in compliance in all material respects with all of the terms, conditions and limitations of each related certificate or order issued by the DOT and the applicable Foreign Aviation Authorities with jurisdiction over its Pledged Routes regarding such Pledged Routes and with all applicable provisions of Title 49, applicable foreign law, and the applicable rules and regulations of the FAA, DOT and any Foreign Aviation Authorities with jurisdiction over its Pledged Routes regarding such Pledged Routes. There exists no failure of either the Borrower or any applicable Grantor to comply with such terms, conditions or limitations that gives the FAA, DOT or any applicable Foreign Aviation Authorities with jurisdiction over its Pledged Routes the right to terminate, cancel, suspend, withdraw or modify in any materially adverse respect the rights of the Borrowers and the other Grantors, as applicable, in any such Pledged Route, except to the

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extent that such failure could not reasonably be expected to have a Collateral Material Adverse Effect.

Section 3.11. Margin Regulations; Investment Company Act .

(a) Neither the Borrower nor any Guarantor is engaged, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board, “ Margin Stock ”), or extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Loans will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of Regulation U.

(b) Neither the Borrower nor any Guarantor is, or after the making of the Loans will be, or is required to be, registered as an “investment company” under the Investment Company Act of 1940, as amended. Neither the making of any Loan, nor the issuance of any Letters of Credit, nor the application of the proceeds of any Loan or repayment of any Loan or reimbursement of any LC Disbursement by the Borrower, nor the consummation of the other transactions contemplated by the Loan Documents, will violate any provision of such Act or any rule, regulation or order of the SEC thereunder.

Section 3.12. Ownership of Collateral . Each Grantor has good title to the Collateral owned by it, free and clear of all Liens other than Permitted Liens.

Section 3.13. Perfected Security Interests . The Collateral Documents, taken as a whole, are effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in all of the Collateral to the extent purported to be created thereby, subject as to enforceability to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 3.14. Payment of Taxes . Each of the Borrower and its Subsidiaries (other than any Immaterial Subsidiary) has timely filed or caused to be filed all Tax returns and reports required to have been filed by it and has paid or caused to be paid when due all Taxes required to have been paid by it, except and solely to the extent that, in each case (a) such Taxes are being contested in good faith by appropriate proceedings or (b) the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

Section 3.15. Anti-Corruption Laws and Sanctions . Parent has implemented and maintains in effect policies and procedures intended to ensure compliance by Parent, its Subsidiaries and, when acting in such capacity, their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. Parent, its Subsidiaries and their respective officers and directors, and to the knowledge of Parent, the employees, agents, advisors and Affiliates of Parent and its Subsidiaries, are in compliance with Anti-Corruption Laws and applicable Sanctions. None of Parent, any of its Subsidiaries or, to the knowledge of Parent, any of their respective directors, officers, employees, agents, advisors and Affiliates is a Sanctioned Person or located, organized or resident in a Sanctioned Country.

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SECTION 4.

CONDITIONS TO CLOSING AND LENDING

Section 4.01. Conditions Precedent to Closing . This Agreement shall become effective on the date on which the following conditions precedent shall have been satisfied (or waived by the Lenders in accordance with Section 10.08 and by the Administrative Agent):

(a) Supporting Documents . The Administrative Agent shall have received with respect to the Borrower and the Guarantors in form and substance reasonably satisfactory to the Administrative Agent:

(i) a certificate of the Secretary of State of the state of such entity’s incorporation or formation, dated as of a recent date, as to the good standing of that entity (to the extent available in the applicable jurisdiction) and as to the charter documents on file in the office of such Secretary of State;

(ii) a certificate of the Secretary or an Assistant Secretary (or similar officer), of such entity dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the certificate of incorporation or formation and the by-laws or limited liability company or other operating agreement (as the case may be) of that entity as in effect on the date of such certification, (B) that attached thereto is a true and complete copy of resolutions adopted by the board of directors, board of managers or members of that entity authorizing the Borrowings and Letter of Credit issuances hereunder, the execution, delivery and performance in accordance with their respective terms of this Agreement, the other Loan Documents and any other documents required or contemplated hereunder or thereunder, and the granting of the security interest in the Letter of Credit Account and other Liens contemplated hereby or the other Loan Documents (in each case to the extent applicable to such entity), (C) that the certificate of incorporation or formation of that entity has not been amended since the date of the last amendment thereto indicated on the certificate of the Secretary of State furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer of that entity executing this Agreement and the Loan Documents or any other document delivered by it in connection herewith or therewith (such certificate to contain a certification by another officer of that entity as to the incumbency and signature of the officer signing the certificate referred to in this clause (ii)); and

(iii) an Officer’s Certificate from the Borrower certifying (A) as to the truth in all material respects of the representations and warranties made by it contained in the Loan Documents as though made on the Closing Date, except to the extent that any such representation or warranty relates to a specified date, in which case as of such date (provided that any representation or warranty that is qualified by materiality, “Material Adverse Change” or “Material Adverse Effect” shall be true and correct in all respects as of the applicable date, before and after giving effect to the Closing Date Transactions) and (B) as to the absence of any event occurring and continuing, or resulting from the Closing Date Transactions, that constitutes an Event of Default.

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(b) Credit Agreement . Each party hereto shall have duly executed and delivered to the Administrative Agent this Agreement.

(i) a written opinion of Aaron Alter, General Counsel for the Borrower, dated the Closing Date, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders;

(ii) a written opinion of Hughes Hubbard & Reed LLP, special New York counsel to the Borrower and the Guarantors, dated the Closing Date, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders;

(iii) a written opinion of Vedder Price P.C., special New York counsel to the Administrative Agent, dated the Closing Date, in form and substance reasonably satisfactory to the Administrative Agent; and

(d) Payment of Fees and Expenses . The Borrower shall have paid to the Administrative Agent and the Lenders the then unpaid balance of all accrued and unpaid Fees due, owing and payable under and pursuant to this Agreement, as referred to in Sections 2.19 and Section 2.20, all “Commitment Fees” due, owing and payable under the Previous Credit Agreement, and all reasonable and documented out-of-pocket expenses of the Administrative Agent (including reasonable attorneys’ fees of Vedder Price P.C.) for which invoices have been presented at least one Business Day prior to the Closing Date.

(e) Consents . All material governmental and third party consents and approvals necessary in connection with the financing contemplated hereby shall have been obtained, in form and substance reasonably satisfactory to the Administrative Agent, and be in full force and effect.

(f) Representations and Warranties . All representations and warranties of the Borrower and the Guarantors contained in this Agreement and the other Loan Documents executed and delivered on the Closing Date shall be true and correct in all material respects on and as of the Closing Date, before and after giving effect to the Closing Date Transactions, as though made on and as of such date (except to the extent any such representation or warranty by its terms is made as of a different specified date, in which case as of such specified date); provided that any representation or warranty that is qualified by materiality, “Material Adverse Change” or “Material Adverse Effect” shall be true and correct in all respects, as though made on and as of the applicable date, before and after giving effect to the Closing Date Transactions.

(g) No Event of Default . Before and after giving effect to the Closing Date Transactions, no Event of Default shall have occurred and be continuing on the Closing Date.

(h) Patriot Act . The Lenders shall have received at least five (5) days prior to the Closing Date all documentation and other information required by bank regulatory authorities

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under applicable “know-your-customer” and anti-money laundering rules and regulations, including the Patriot Act, that such Lenders shall have requested from the Borrower or a Guarantor prior to such date.

The execution by each Lender of this Agreement shall be deemed to be confirmation by such Lender that any condition relating to such Lender’s satisfaction or reasonable satisfaction with any documentation set forth in this Section 4.01 has been satisfied as to such Lender.

Section 4.02. Conditions Precedent to Each Loan and Each Letter of Credit . The obligation of the Lenders to make each Loan and of the Issuing Lenders to issue each Letter of Credit, including the initial Loans and the initial Letters of Credit, is subject to the satisfaction (or waiver in accordance with Section 10.08) of the following conditions precedent:

(a) Notice . The Administrative Agent shall have received a Loan Request pursuant to Section 2.03 with respect to such borrowing or a request for issuance of such Letter of Credit pursuant to Section 2.02, as the case may be.

(b) Representations and Warranties . All representations and warranties contained in this Agreement and the other Loan Documents (other than, with respect to Loans made or Letters of Credit issued after the Closing Date, the representations and warranties set forth in Sections 3.05(b), 3.06 and 3.09(a)) shall be true and correct in all material respects on and as of the date of such Loan or the issuance of such Letter of Credit hereunder (both before and after giving effect thereto and, in the case of each Loan, the application of proceeds therefrom) with the same effect as if made on and as of such date except to the extent such representations and warranties expressly relate to an earlier date and in such case as of such date; provided that any representation or warranty that is qualified by materiality, “Material Adverse Change” or “Material Adverse Effect” shall be true and correct in all respects, as though made on and as of the applicable date, before and after giving effect to such Loan or the issuance of such Letter of Credit hereunder.

(c) No Default . On the date of such Loan or the issuance of such Letter of Credit hereunder, no Event of Default, material Default, any Default incapable of being cured or Default under Section 5.07(a) or, in the event that Additional Collateral is pledged on such date and the condition precedent set forth in Section 4.02(d) cannot be satisfied with respect to such Loan or Letter of Credit unless such Additional Collateral is pledged on such date, Section 5.12(b) (but only with respect to such Additional Collateral) shall have occurred and be continuing nor shall any such Event of Default or Default, as the case may be, occur by reason of the making of the requested Borrowing or the issuance of the requested Letter of Credit and, in the case of each Loan, the application of proceeds thereof.

(d) Collateral Coverage Ratio . On the date of such Loan or the issuance of such Letter of Credit hereunder (and after giving pro forma effect thereto), the Collateral Coverage Ratio shall not be less than 1.0 to 1.0. In the event that any Collateral is required to be pledged in order for the Collateral Coverage Ratio to be not less than 1.0 to 1.0 after giving pro forma effect to the making of such Loan or issuance of such Letter of Credit, as the case may be, the Borrower shall have complied with Section 5.12(b) respect to such Collateral.

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(e) Collateral Documents . With respect to any Additional Collateral to be pledged on the date of such Loan or issuance of such Letter of Credit, and the condition precedent set forth in Section 4.02(d) cannot be satisfied with respect to such Loan or Letter of Credit unless such Additional Collateral is pledged on such date, the Borrower shall have satisfied all of the conditions precedent specified in any Loan Documents required to grant, create and maintain an enforceable security interest in such Collateral (subject to the terms hereof and of the other Loan Documents).

(f) No Going Concern Qualification . On the date of such Loan or the issuance of such Letter of Credit hereunder, the opinion of the independent public accountants (after giving effect to any reissuance or revision of such opinion) on the most recent audited consolidated financial statements delivered by the Parent pursuant to Section 5.01(a) shall not include a “going concern” qualification under GAAP as in effect on the date of this Agreement or, if there is a change in the relevant provisions of GAAP thereafter, any like qualification or exception under GAAP after giving effect to such change.

The acceptance by the Borrower of each extension of credit hereunder shall be deemed to be a representation and warranty by the Borrower that the conditions specified in this Section 4.02 have been satisfied at that time.

SECTION 5.

AFFIRMATIVE CONVENANTS

From the date hereof and for so long as the Commitments remain in effect, any Letter of Credit remains outstanding (in a face amount in excess of the sum of (i) the amount of cash then held in the Letter of Credit Account and (ii) the face amount of back-to-back letters of credit delivered pursuant to Section 2.02(j)), or the principal of or interest on any Loan or reimbursement of any LC Disbursement is owing (or any other amount that is due and unpaid on the first date that none of the foregoing is in effect, outstanding or owing, respectively, is owing) to any Lender or the Administrative Agent hereunder:

Section 5.01. Financial Statements, Reports, etc . The Borrower shall deliver to the Administrative Agent on behalf of the Lenders:

(a) Within ninety (90) days after the end of each fiscal year, the Parent’s consolidated balance sheet and related statement of income and cash flows, showing the financial condition of the Parent and its Subsidiaries on a consolidated basis as of the close of such fiscal year and the results of their respective operations during such year, the consolidated statement of the Parent to be audited for the Parent by independent public accountants of recognized national standing and to be accompanied by an opinion of such accountants (without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements fairly present in all material respects the financial condition and results of operations of the Parent and its Subsidiaries on a consolidated basis in accordance with GAAP; provided that the foregoing delivery requirement shall be satisfied if the Parent shall have filed with the SEC its Annual

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Report on Form 10-K for such fiscal year, which is available to the public via EDGAR or any similar successor system;

(b) Within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year, the Parent’s consolidated balance sheets and related statements of income and cash flows, showing the financial condition of the Parent and its Subsidiaries on a consolidated basis as of the close of such fiscal quarter and the results of their operations during such fiscal quarter and the then elapsed portion of the fiscal year, each certified by a Responsible Officer of the Parent as fairly presenting in all material respects the financial condition and results of operations of the Parent and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year end audit adjustments and the absence of footnotes; provided that the foregoing delivery requirement shall be satisfied if the Parent shall have filed with the SEC its Quarterly Report on Form 10-Q for such fiscal quarter, which is available to the public via EDGAR or any similar successor system;

(c) Within the time period under Section 5.01(a) above, a certificate of a Responsible Officer of the Parent certifying that, to the knowledge of such Responsible Officer, no Event of Default has occurred and is continuing, or, if, to the knowledge of such Responsible Officer, such Event of Default has occurred and is continuing, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto;

(d) Within the time period under (a) and (b) of this Section 5.01, a certificate of a Responsible Officer demonstrating in reasonable detail compliance with Sections 6.08 and 6.09(a) as of the end of the preceding fiscal quarter, including an updated calculation of the Collateral Coverage Ratio reflecting the most recent Appraisals (as adjusted for any Dispositions or additions to the Collateral since the date of delivery to the Administrative Agent of such Appraisals);

(e) Within 15 days after a Responsible Officer of the Borrower obtains knowledge that there has been one or more Dispositions of Collateral (excluding those described in clause (b), (d) or (e)(iv) of the definition of “Permitted Disposition”) since the date of the Officer’s Certificate demonstrating compliance with Section 6.09(a) most recently delivered under this Agreement by the Borrower to the Administrative Agent consisting of (i) a Pledged Aircraft, (ii) a Pledged Engine or (iii) any other Collateral comprising, in the aggregate, 10% or more of the total Borrowing Base of all Eligible Collateral, a certificate of a Responsible Officer demonstrating in reasonable detail compliance with Section 6.09(a);

(f) (i) At any time that Eligible Accounts are included as Collateral, within 15 days after the completion of each Field Audit (or, if such day is not a Business Day, on the next succeeding Business Day) completed pursuant to Section 5.07(b), an Officer’s Certificate from the Borrower setting forth the amount of each Eligible Account included in the Collateral as of such date, (ii) on the date upon which any Eligible Account is pledged as Collateral, but only with respect to such Eligible Account, an Officer’s Certificate from the Borrower setting forth the amount of such Eligible Account pledged on such date, and (iii) at any time that the Administrative Agent provides written notice to the Borrower that the Administrative Agent, acting reasonably and in good faith, believes that a Material Eligible Account contained in the most recent Officer’s Certificate delivered pursuant to clauses (i) and (ii) above with respect to such Pledged Account no longer meets the criteria of an Eligible Account set forth in the

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definition thereof, and that the Borrower would not reasonably be expected to be in compliance with Section 6.09(a) after excluding the Certified Value of such disqualified Material Eligible Account from the aggregate Certified Value of the Pledged Accounts, within five (5) Business Days of such receipt of such request by the Borrower, an Officer’s Certificate from the Borrower setting forth the amount of each Eligible Account included in the Collateral as of such date, in each case together with all supporting documents with respect to the applicable Eligible Accounts as the Administrative Agent may reasonably request;

(g) Promptly after a Responsible Officer obtains knowledge thereof, notice of the failure of any material assumption contained in any Appraisal to be correct, except if such failure would not reasonably be expected to materially adversely affect the Appraised Value of the applicable type of Appraised Collateral;

(h) So long as any Commitment, Loan or Letter of Credit is outstanding, within 30 days after the Chief Financial Officer or the Treasurer of the Borrower becoming aware of the occurrence of a Default or an Event of Default that is continuing, an Officer’s Certificate specifying such Default or Event of Default and what action the Borrower and its Subsidiaries are taking or propose to take with respect thereto; and

(i) Promptly, from time to time, such other information regarding the Collateral and the operations, business affairs and financial condition of either the Borrower or any Guarantor, in each case as the Administrative Agent, at the request of any Lender, may reasonably request (it being understood that, so long as no Event of Default shall have occurred and be continuing, the Borrower shall not be obligated to provide utilization reports with respect to Pledged Routes or related Pledged Slots).

Subject to the next succeeding sentence, information delivered pursuant to this Section 5.01 to the Administrative Agent may be made available by the Administrative Agent to the Lenders by posting such information on the Intralinks website on the Internet at http://www.intralinks.com. Information required to be delivered pursuant to this Section 5.01 by the Borrower shall be delivered pursuant to Section 10.01 hereto. Information required to be delivered pursuant to this Section 5.01 (to the extent not made available as set forth above) shall be deemed to have been delivered to the Administrative Agent on the date on which the Borrower provides written notice to the Administrative Agent that such information has been posted on the Borrower’s general commercial website on the Internet (to the extent such information has been posted or is available as described in such notice), as such website may be specified by the Borrower to the Administrative Agent from time to time. Information required to be delivered pursuant to this Section 5.01 shall be in a format which is suitable for transmission.

Any notice or other communication delivered pursuant to this Section 5.01, or otherwise pursuant to this Agreement, shall be deemed to contain material non-public information unless (i) expressly marked by the Borrower or a Guarantor as “PUBLIC”, (ii) such notice or communication consists of copies of the Borrower’s public filings with the SEC or (iii) such notice or communication has been posted on a the Borrower’s general commercial website on the Internet, as such website may be specified by the Borrower to the Administrative Agent from time to time.

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Section 5.02. Taxes . The Parent shall pay, and cause each of its Subsidiaries to pay, all material taxes, assessments, and governmental levies before the same shall become more than 90 days delinquent, other than taxes, assessments and levies (i) being contested in good faith by appropriate proceedings and (ii) the failure to effect such payment of which are not reasonably be expected to have a Material Adverse Effect on the Parent.

Section 5.03. Stay, Extension and Usury Laws . The Borrower and each of the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Agreement; and the Borrower and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Administrative Agent, but will suffer and permit the execution of every such power as though no such law has been enacted.

Section 5.04. Corporate Existence . The Parent shall do or cause to be done all things reasonably necessary to preserve and keep in full force and effect:

(A) its corporate existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Parent or any such Subsidiary; and

(B) the rights (charter and statutory) and material franchises of the Parent and its Subsidiaries (other than any Immaterial Subsidiary); provided , however, that the Borrower shall not be required to preserve any such right or franchise, or the corporate, partnership or other existence of it or any of its Subsidiaries, if its Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Parent and its Subsidiaries, taken as a whole, and that the loss thereof would not, individually or in the aggregate, have a Material Adverse Effect.

For the avoidance of doubt, this Section 5.04 shall not prohibit any actions permitted by Section 6.10 hereof or described in Section 6.10(b).

Section 5.05. Compliance with Laws . The Parent shall comply, and cause each of its Subsidiaries to comply, with all applicable laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where such noncompliance, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Parent will maintain in effect policies and procedures intended to ensure compliance by Parent, its Subsidiaries and, when acting in such capacity, their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

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Section 5.06. [Intentionally Omitted] .

Section 5.07. Delivery of Appraisals; Field Audits . (a) The Borrower shall:

(A) on a date within 30 days prior to May 15 and November 15 of each year, beginning with the first such date occurring at least 90 days after any Appraised Collateral is first added to the Collateral;

(B) on the date upon which any Additional Collateral comprised of Appraised Collateral is pledged as Collateral, but only with respect to such Additional Collateral; and

(C) promptly (but in any event within 45 days) following a request by the Administrative Agent if an Event of Default has occurred and is continuing;

deliver to the Administrative Agent one or more Appraisals establishing the Appraised Value of the Appraised Collateral; provided , however , that:

(i) the Borrower shall be required to deliver only an Appraisal with respect to the (x) Pledged Aircraft, Pledged Engines, Pledged Spare Parts and Pledged Routes (inclusive of the value of any related Pledged Slots and/or Pledged Gate Leaseholds) (in the case of clause (A) above) or (y) the applicable Additional Collateral (in the case of clause (B) above);

(ii) in connection with the pledging of any Eligible Aircraft, Eligible Engines, Eligible Spare Parts or any Routes as Additional Collateral, any Appraisal with respect to such Additional Collateral that is more than 180 days old as of the date on which such Additional Collateral is pledged hereunder shall not be deemed to satisfy the Appraisal requirement in clause (B) above; and

(iii) if any new spare Engine is pledged as Collateral within 90 days after delivery from the manufacturer to Borrower and such new spare Engine is of the same make and model as any spare Engine then currently included (or being replaced) in the Collateral (any such Engine make and model, an “ Existing Engine Type ”), an Appraisal with respect to such new spare Engine shall only be required under this Section 5.07 if the Borrower elects to provide such an Appraisal for purposes of determining the Appraised Value of such new spare Engine pursuant to clause (iii) of the proviso of the definition of “Appraised Value”.

In addition to the requirements set forth in this Section 5.07(a), if at any time (a) the Administrative Agent in its reasonable good faith business judgment believes that any material assumption contained in any Appraisal fails to be correct, except if such failure would not reasonably be expected to result in the Collateral Coverage Ratio being less than 1.0 to 1.0, or (b) the Administrative Agent receives a notice from the Borrower under Section 5.01(g), it may request the delivery of an updated Appraisal with respect to the affected Appraised Collateral,

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and the Borrower and Guarantors shall cooperate with the applicable Appraiser(s) to ensure that the Administrative Agent receives the same within 30 days (or such longer period as may be reasonably required by the relevant Appraiser(s) to issue a revised Appraisal) after such request. The Borrower may from time to time cause subsequent Appraisals to be delivered to the Administrative Agent if it believes that any affected item of Appraised Collateral has a higher Appraised Value than that reflected in the most recent Appraisals delivered pursuant to this Section 5.07.

(b) The Borrower will reasonably cooperate with the Field Auditor such that the Administrative Agent shall receive one or more Field Audits establishing the Certified Value of the Pledged Accounts:

(A) on a date within 30 days prior to May 15 and November 15 of each year, beginning 90 days after any such Pledged Account is first added to the Collateral; and

(B) promptly (but in any event within 45 days) following a request by the Administrative Agent if an Event of Default has occurred and is continuing.

In addition, on such additional dates as the Borrower may reasonably request from time to time, the Administrative Agent shall cooperate with the Borrower to cause the Field Auditor to provide a Field Audit to the Administrative Agent that establishes the Certified Value of the Pledged Accounts. The Borrower shall be responsible for all reasonable out-of-pocket costs and expenses actually incurred by the Field Auditor in connection with any Field Audit for which reasonably detailed invoices have been presented to the Borrower.

Section 5.08. [Intentionally Omitted]

Section 5.09. Citizenship; Utilization; Collateral Requirements . The Borrower will:

(A) maintain at all times its status as an “air carrier” within the meaning of Section 40102(a)(2) of Title 49, and hold a certificate under Section 41102(a)(1) of Title 49;

(B) be a United States Citizen;

(C) maintain at all times its status at the FAA as an “air carrier” and hold an air carrier operating certificate under Section 44705 of Title 49 and operations specifications issued by the FAA pursuant to Parts 119 and 121 of Title 14 as currently in effect or as may be amended or recodified from time to time;

(D) if Eligible Spare Parts are included in the Collateral at any time, take or cause to be taken such actions to ensure that at all times the Pledged Spare Parts include all Spare Parts and Appliances then owned by the Borrower and its Subsidiaries (subject to the provisions of the Spare Parts Security Agreement);

(E) possess and maintain all necessary certificates, exemptions, franchises, licenses, permits, designations, rights, concessions, authorizations, frequencies and consents that are material to the operation of the Pledged Routes

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(and related Pledged Slots) operated by it, and to the conduct of its business and operations as currently conducted, except to the extent that any failure to possess or maintain would not reasonably be expected to result in a Collateral Material Adverse Effect;

(F) utilize its Pledged Routes in a manner consistent with Title 49, applicable foreign law, the applicable rules and regulations of the FAA, DOT and any applicable Foreign Aviation Authorities, and any applicable treaty in order to preserve its rights to hold and operate its Pledged Routes, except to the extent that any failure to utilize would not reasonably be expected to result in a Collateral Material Adverse Effect;

(G) utilize its Pledged Slots in a manner consistent with applicable regulations, rules, foreign laws and contracts in order to preserve its right to hold and use its Pledged Slots, taking into account any waiver or other relief granted to it by any applicable Governmental Authority or Airport Authority, except to the extent that any failure to utilize would not reasonably be expected to result in a Collateral Material Adverse Effect;

(H) cause to be done all things reasonably necessary to preserve and keep in full force and effect its rights in and to use its Pledged Slots, including, without limitation, satisfying any applicable Use or Lose Rule, except to the extent that any failure to do so would not reasonably be expected to result in a Collateral Material Adverse Effect;

(I) maintain Pledged Gate Leaseholds sufficient to ensure its ability to retain its right in and to the Pledged Routes and to preserve its right in and to its Pledged Slots, except to the extent that any failure to maintain would not reasonably be expected to result in a Collateral Material Adverse Effect; and

(J) cause to be done all things reasonably necessary to preserve and keep in full force and effect its authority to serve its Pledged Routes, except to the extent that any failure to do so would not reasonably be expected to result in a Collateral Material Adverse Effect.

Section 5.10. Collateral Ownership .

Subject to the provisions described (including the actions permitted) under Sections 6.04 and 6.10 hereof, each Grantor will continue to maintain its interest in and right to use all property and assets so long as such property and assets constitute Collateral, except as provided in Section 5.09.

Section 5.11. Insurance . The Borrower shall:

(A) keep all Collateral (other than the Mortgaged Collateral, as to which only the insurance provisions of the Aircraft and Spare Engine Mortgage and each Other Aircraft Mortgage shall be applicable, and Pledged Spare Parts, as to which only the insurance provisions of the applicable Collateral Document

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shall be applicable) that is tangible property insured at all times, against such risks, including risks insured against by extended coverage, as is prudent and customary with U.S.-based companies of the same or similar size in the same or similar businesses;

(B) maintain in full force and effect public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of the tangible Collateral (other than the Mortgaged Collateral, as to which only the insurance provisions of the Aircraft and Spare Engine Mortgage and each Other Aircraft Mortgage shall be applicable, and Pledged Spare Parts, as to which only the insurance provisions of the applicable Collateral Document shall be applicable) owned, occupied or controlled by the Borrower, in such amounts and with such deductibles as are prudent and customary with U.S.-based companies of the same or similar size in the same or similar businesses and in the same geographic area; and

Section 5.12. Additional Guarantors; Grantors; Collateral .

(a) If the Parent or any of its Subsidiaries acquires or creates another Domestic Subsidiary after the Closing Date, then the Parent will promptly cause such Domestic Subsidiary to become a party to the Guarantee contained in Section 9 hereof by executing an Instrument of Assumption and Joinder substantially in the form attached hereto as Exhibit A; provided , that any Domestic Subsidiary that constitutes an Immaterial Subsidiary or an Excluded Subsidiary need not become a Guarantor unless and until thirty (30) Business Days after such time as it ceases to be an Immaterial Subsidiary or an Excluded Subsidiary or such time as it guarantees, or pledges any property or assets to secure, any other Obligations.

(b) If the Parent or any of its Subsidiaries desires or is required pursuant to the terms of this Agreement to add Additional Collateral after the Closing Date, the Parent shall, in each case at its own expense, (A) cause any such Subsidiary to become a party to the Guarantee contained in Section 9 hereof (to the extent such Subsidiary is not already a party thereto) and cause any such Grantor to become a party to each applicable Collateral Document and all other agreements, instruments or documents that create or purport to create and perfect a first priority Lien (subject to Permitted Liens) in favor of the Administrative Agent for the benefit of the Secured Parties applicable to such Additional Collateral, by executing and delivering to the Administrative Agent an Instrument of Assumption and Joinder substantially in the form attached hereto as Exhibit A and/or joinders to all applicable Collateral Documents or pursuant to new Collateral Documents, as the case may be, in form and substance reasonably satisfactory to the Administrative Agent (it being understood that (i) in the case of Additional Collateral consisting of Section 1110 Eligible Aircraft or Eligible Engines, the applicable Collateral Documents shall be the Aircraft and Spare Engine Mortgage, (ii) in the case of Additional Collateral consisting of Eligible Spare Parts, the applicable Collateral Documents shall be the Spare Parts Security Agreement, (iii) in the case of Additional Collateral consisting of Eligible Account or Ground

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Support Equipment, the applicable Collateral Documents shall be the Security Agreement, (iv) in the case of Additional Collateral consisting of Other Eligible Aircraft, the applicable Collateral Documents shall be the Other Aircraft Mortgage under which a Lien is being granted on such Other Eligible Aircraft, (v) in the case of Additional Collateral consisting of Pledged Routes (or any related Pledged Slots and/or Pledged Gate Leaseholds), the applicable Collateral Documents shall be the SRG Security Agreement, and (vi) in the case of any other Additional Collateral of a type that has not been theretofore included in the Collateral, such Additional Collateral may be subject to such additional terms and conditions as may be customarily required by lenders in similar financings of a similar size for similarly situated borrowers secured by the same type of Collateral, as agreed by the Borrower and the Administrative Agent in their reasonable discretion), (B) promptly execute and deliver (or cause such Subsidiary to execute and deliver) to the Administrative Agent such documents and take such actions to create, grant, establish, preserve and perfect the first priority Liens (subject to Permitted Liens) (including to obtain any release or termination of Liens not permitted under the definition of “Additional Collateral” in Section 1.01 or under Section 6.06 and the filing of UCC financing statements, filings with the FAA and registrations with the International Registry, as applicable) in favor of the Administrative Agent for the benefit of the Secured Parties on such assets of the Parent or such Subsidiary, as applicable, to secure the Obligations to the extent required under the applicable Collateral Documents or reasonably requested by the Administrative Agent, and to ensure that such Collateral shall be subject to no other Liens other than Permitted Liens, (C) deliver to the Administrative Agent, for the benefit of the Secured Parties, a written opinion of counsel(s) (which counsel shall be reasonably satisfactory to the Administrative Agent) to the Parent or such Subsidiary, as applicable, with respect to the matters described in clauses (A) and (B) hereof and any matters required by the applicable Collateral Document, in each case concurrently with (or, with the Administrative Agent’s consent, such consent not to be unreasonably withheld or delayed, promptly after the making of any filings and/or registrations required by clause (B) hereof) the addition of such Collateral and in form and substance reasonably satisfactory to the Administrative Agent, (D) deliver to the Administrative Agent such UCC and aircraft registry lien searches as the Administrative Agent may reasonably request, in each case reflecting the absence of Liens (other than Permitted Liens) on such Additional Collateral, and (E) comply with Section 5.07(a) and/or Section 5.07(b), as the case may be, with respect to such Additional Collateral.

Section 5.13. Access to Books and Records .

(a) The Borrower and the Guarantors will make and keep books, records and accounts in which full, true and correct entries in conformity with GAAP are made of all financial dealings and transactions in relation to its business and activities, including, without limitation, an accurate and fair reflection of the transactions and dispositions of the assets of the Borrower and the Guarantors.

(b) The Borrower and the Guarantors will permit, to the extent not prohibited by applicable law, any representatives designated by the Administrative Agent or any Governmental Authority that is authorized to supervise or regulate the operations of a Lender, as designated by such Lender, upon reasonable prior written notice and, so long as no Event of Default has

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occurred and is continuing, at no out-of-pocket cost to the Borrower and the Guarantors, to visit and inspect the Collateral (other than (i) the Mortgaged Collateral, as to which the provisions of Section 3.03 of the Aircraft and Spare Engine Mortgage and Section 3.03 of each Other Aircraft Mortgage shall apply, (ii) the Pledged Spare Parts, as to which only the inspection provisions of the applicable Collateral Document shall apply and (iii) the Pledged Accounts, as to which the provisions of Section 5.07(b) shall apply) and the properties of the Borrower and the Guarantors, to examine its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times during normal business hours and as often as reasonably requested; provided that if an Event of Default has occurred and is continuing, the Borrower and the Guarantors shall be responsible for the reasonable costs and expenses of any visits of the Administrative Agent and the Lenders, acting together (but not separately).

Section 5.14. Further Assurances . The Borrower and each Guarantor shall execute any and all further documents and instruments, and take all further actions, that may be required or advisable under applicable law, or by the FAA, or that the Administrative Agent may reasonably request, in order to create, grant, establish, preserve, protect and perfect the validity, perfection and priority of the Liens and security interests created or intended to be created by the Collateral Documents, to the extent required under this Agreement or the Collateral Documents.

SECTION 6.

NEGATIVE CONVENANTS

From the date hereof and for so long as the Commitments remain in effect, any Letter of Credit remains outstanding (in a face amount in excess of the sum of (i) the amount of cash then held in the Letter of Credit Account and (ii) the face amount of back-to-back letters of credit delivered pursuant to Section 2.02(j)) or principal of or interest on any Loan or reimbursement of any LC Disbursement is owing (or any other amount that is due and unpaid on the first date that none of the foregoing is in effect, outstanding or owing, respectively, is owing) to any Lender or the Administrative Agent hereunder:

Section 6.01. [Intentionally Omitted] .

Section 6.02. [Intentionally Omitted] .

Section 6.03. [Intentionally Omitted] .

Section 6.04. Disposition of Collateral . Neither the Borrower nor any Grantor shall sell or otherwise Dispose of any Collateral (including, without limitation, by way of any Sale of a Grantor) except that such sale or other Disposition shall be permitted (i) in the case of a Permitted Disposition or (ii) provided that upon consummation of any such sale or other Disposition (A) no Event of Default shall have occurred and be continuing and (B) the Collateral Coverage Ratio is no less than 1.0 to 1.0 after giving effect to such sale or other Disposition (including any deposit of any Net Proceeds received upon consummation thereof in the

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Collateral Proceeds Account subject to an Account Control Agreement and any concurrent pledge of Additional Collateral, if any); provided that nothing contained in this Section 6.04 is intended to excuse performance by the Borrower or any Guarantor of any requirement of any Collateral Document that would be applicable to a Disposition permitted hereunder. A Disposition of Collateral referred to in clause (d) of the definition of “Permitted Disposition” shall not result in the automatic release of such Collateral from the security interest of the applicable Collateral Document, and the Collateral subject to such Disposition shall continue to constitute Collateral for all purposes of the Loan Documents (without prejudice to the rights of the Borrower to release an such Collateral pursuant to Section 6.09(c)).

Section 6.05. [ Intentionally Omitted] .

Section 6.06. Liens . The Parent will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind on any property or asset that constitutes Collateral, except Permitted Liens.

Section 6.07. [Intentionally Omitted] .

Section 6.08. Liquidity . The Borrower will not permit the aggregate amount of Liquidity to be less than $300,000,000 for three (3) consecutive Business Days at any time following the Closing Date.

Section 6.09. Collateral Coverage Ratio .

(a) The Parent will not permit at any time on or after the dates on which (i) Collateral is first pledged to secure the Obligations, (ii) the Lenders make the initial Loans and (iii) the Issuing Lenders issue the initial Letters of Credit, the Collateral Coverage Ratio to be less than 1.0 to 1.0; provided , that if, (A) upon delivery of an Appraisal, pursuant to Section 5.07(a) or otherwise pursuant to this Agreement (except pursuant to Section 5.07(a)(2) or 5.07(a)(3) or any Appraisal delivered to the Administrative Agent in connection with the designation of Additional Collateral solely to evidence compliance with the requirements of this Section 6.09(a)) and (B) solely with respect to determining compliance with this Section as a result thereof, it is determined that the Parent shall not be in compliance with this Section 6.09(a), the Parent shall, within forty-five (45) days of the date of such Appraisal (or, in the case of an Appraisal required under Section 5.07(a)(1), not delivered by the deadline thereunder, the date such Appraisal was due thereunder) designate Additional Collateral as additional Eligible Collateral and comply with Section 5.12 and/or prepay or cause to be prepaid the Loans in accordance with Section 2.12(b), collectively, in an amount sufficient to enable the Parent to comply with this Section 6.09(a).

(b) Notwithstanding anything to the contrary contained herein, if the Parent shall fail at any time to be in compliance with this Section 6.09 solely as a result of damage to or loss of any Collateral covered by insurance (pursuant to which the Administrative Agent is named as loss payee and with respect to which payments are to be delivered directly to the Administrative Agent) for which the insurer thereof has been notified of the relevant claim and has not challenged such coverage, any calculation made pursuant to this Section 6.09 shall deem the relevant Grantor to have received Net Proceeds (and to have taken all steps necessary to have pledged such Net Proceeds as Additional Collateral) in an amount equal to the expected coverage amount (as determined by the Parent in good faith and updated from time to time to reflect any

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agreements reached with the applicable insurer) and net of any amounts required to be paid out of such proceeds and secured by a Lien until the earliest of (i) the date any such Net Proceeds are actually received by the Administrative Agent, (ii) the date that is 270 days after such damage and (iii) the date on which any such insurer denies such claim; provided that, prior to giving effect to this clause (b), (x) the aggregate Appraised Value of all the Appraised Collateral plus (y) the aggregate Certified Value of all of the Pledged Accounts plus (z) the Pledged Cash and Cash Equivalents, shall be no less than 150% of the Total Obligations. It is understood and agreed that if the Administrative Agent should receive any Net Proceeds directly from the insurer in respect of a Recovery Event and at the time of such receipt, (A) no Event of Default shall have occurred and be continuing and the Parent is in compliance with Section 6.09(a) (without giving effect to the receipt of such Net Proceeds), the Administrative Agent shall promptly cause such proceeds to be paid to the Parent or the applicable Grantor and (B) an Event of Default shall have occurred and be continuing or the Parent fails to be in compliance with Section 6.09(a) (without giving effect to the receipt of such Net Proceeds), the Administrative Agent shall promptly cause such proceeds to be deposited into the Collateral Proceeds Account maintained for such purpose with the Administrative Agent that is subject to an Account Control Agreement and such proceeds shall be applied or released from such account in accordance with Section 2.12(a).

(c) At the Parent’s request, the Lien on any asset or type or category of asset (including after-acquired assets of that type or category) included in the Collateral will be promptly released, provided , in each case, that the following conditions are satisfied or waived: (A) no Event of Default shall have occurred and be continuing, (B) either (x) after giving effect to such release, the Collateral Coverage Ratio is not less than 1.0 to 1.0 or (y) the Parent shall prepay or cause to be prepaid the Loans and/or shall designate Additional Collateral and comply with Section 5.12, collectively, in an amount necessary to cause the Collateral Coverage Ratio to not be less than 1.0 to 1.0, and (C) the Parent shall deliver an Officer's Certificate demonstrating compliance with this Section 6.09(c) following such release. In connection herewith, the Administrative Agent agrees to promptly provide any documents or releases reasonably requested by the Parent to evidence such release

(d) If the Borrower has pledged cash as Additional Collateral at any time in order to comply with Section 6.09(a) and any of such cash remains pledged as Collateral for a period of twelve (12) months or longer, such remaining pledged cash may be applied by the Administrative Agent to prepay the Loans in accordance with Section 2.12(b), in each case up to an amount sufficient to enable the Parent to comply with Section 6.09(a).

Section 6.10. Merger, Consolidation, or Sale of Assets .

(a) Neither the Parent nor the Borrower (whichever is applicable, the “ Subject Company ”) shall directly or indirectly: (i) consolidate or merge with or into another Person (whether or not such surviving Subject Company is the surviving corporation) or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Subject Company and its Subsidiaries taken as a whole, in one or more related transactions, to another Person, unless:

(A) either:

(1) the Subject Company is the surviving corporation; or

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(2) the Person formed by or surviving any such consolidation or merger (if other than the Subject Company) or to which such sale, assignment, transfer, conveyance or other disposition has been made is an entity organized or existing under the laws of the United States, any state of the United States or the District of Columbia; and, if such entity is not a corporation, a co-obligor of the Loans is a corporation organized or existing under any such laws;

(B) the Person formed by or surviving any such consolidation or merger (if other than the Subject Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of the Subject Company under the Loan Documents by operation of law (if the surviving Person is the Borrower) or pursuant to agreements reasonably satisfactory to the Administrative Agent;

(D) the Subject Company shall have delivered to the Administrative Agent an Officer’s Certificate stating that such consolidation, merger or transfer complies with this Agreement.

In addition, a Subject Company will not, directly or indirectly, lease all or substantially all of the properties and assets of such Subject Company and its Subsidiaries taken as a whole, in one or more related transactions, to any other Person.

(b) Section 6.10(a) will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Parent and/or its Subsidiaries. Clauses (C) and (D) of Section 6.10(a) will not apply to the Airline/Parent Merger.

(c) Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of any Subject Company in a transaction that is subject to, and that complies with the provisions of, Section 6.10(a), the successor Person formed by such consolidation or into or with which such Subject Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Agreement referring to such Subject Company shall refer instead to the successor Person and not to such Subject Company), and may exercise every right and power of such Subject Company under this Agreement with the same effect as if such successor Person had been named as such Subject Company herein; provided , however , that the predecessor Subject Company, if applicable, shall not be relieved from the obligation to pay the principal of, and interest, if any, on the Loan except in the case of a sale of all of such Subject Company’s assets in a transaction that is subject to, and that complies with the provisions of, Section 6.10(a) hereof.

Section 6.11. Use of Proceeds . Parent will not use, and will not permit any of its Subsidiaries to use, directly or indirectly, the proceeds of any Borrowing or any Letter of Credit,

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or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture or any other Person, (A) in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country (except to the extent permitted by applicable law), or (C) in any manner that would result in the violation of any Sanctions applicable to Parent or any of its Subsidiaries or any other Person (including any Person participating in the Loans hereunder, whether as underwriter, advisor, investor, Revolving Lender, Issuing Lender, Administrative Agent or otherwise).

SECTION 7.

EVENTS OF DEFAULT

Section 7.01. Events of Default . In the case of the happening of any of the following events and the continuance thereof beyond the applicable grace period if any (each, an “ Event of Default ”):

(a) any representation or warranty made by the Borrower or any Guarantor in this Agreement or in any other Loan Document shall prove to have been false or incorrect in any material respect when made, and such representation or warranty, to the extent capable of being corrected, is not corrected within ten (10) Business Days after the earlier of (A) a Responsible Officer of the Borrower obtaining knowledge of such default or (B) receipt by the Borrower of notice from the Administrative Agent of such default; or

(b) default shall be made in the payment of (i) any principal of the Loans or reimbursement obligations or cash collateralization in respect of Letters of Credit, when and as the same shall become due and payable; (ii) any interest on the Loans and such default shall continue unremedied for more than five (5) Business Days; or (iii) any other amount payable hereunder when due and such default shall continue unremedied for more than ten (10) Business Days after receipt of written notice by the Borrower from the Administrative Agent of the default in making such payment when due; or

(d) default shall be made by the Borrower, the Parent or any Subsidiary of the Parent in the due observance or performance of any other covenant, condition or agreement to be observed or performed by it pursuant to the terms of this Agreement or any of the other Loan Documents and such default shall continue unremedied for more than sixty (60) days after receipt of written notice by the Borrower from the Administrative Agent of such default; or

(e) (A) any material provision of any Loan Document to which the Borrower or a Guarantor is a party ceases to be a valid and binding obligation of the Borrower or such Guarantor, or the Borrower or any of the Guarantors shall so assert in any pleading filed in any court, or (B) the Lien on any material portion of the Collateral intended to be created by the Loan

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Documents shall cease to be or shall not be a valid and perfected Lien having the priorities contemplated hereby or thereby (subject to Permitted Liens and except as permitted by the terms of this Agreement or the Collateral Documents or other than as a result of the action, delay or inaction of the Administrative Agent) for a period of fifteen (15) consecutive days after the Borrower receives written notice thereof from the Administrative Agent; or

(f) The Parent, the Borrower, any Significant Subsidiary or any group of Subsidiaries of the Parent that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:

(1) commences a voluntary case,

(2) consents to the entry of an order for relief against it in an involuntary case,

(3) consents to the appointment of a custodian of it or for all or substantially all of its property,

(4) makes a general assignment for the benefit of its creditors, or

(5) admits in writing its inability generally to pay its debts; or

(a) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(1) is for relief against the Parent, the Borrower, any Significant Subsidiary or any group of Subsidiaries of the Parent that, taken together, would constitute a Significant Subsidiary in an involuntary case;

(2) appoints a custodian of the Parent, the Borrower, any Significant Subsidiary or any group of Subsidiaries of the Parent that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of the Parent, the Borrower, any Significant Subsidiary or any group of Subsidiaries of the Parent that, taken together, would constitute a Significant Subsidiary; or

(3) orders the liquidation of the Parent, the Borrower, any Significant Subsidiary or any group of Subsidiaries of the Parent that, taken together, would constitute a Significant Subsidiary;

and in each case the order or decree remains unstayed and in effect for sixty (60) consecutive days; or

(b) failure by the Parent, the Borrower or any of the Parent’s Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $50,000,000 (determined net of amounts covered by insurance policies issued by creditworthy insurance companies (and as to which the applicable insurance company has not denied

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coverage) or by third party indemnities or a combination thereof), which judgments are not paid, discharged, bonded, satisfied or stayed for a period of sixty (60) days; or

(c) (1) the Borrower or any Guarantor shall default in the performance of any obligation relating to Material Indebtedness and any applicable grace periods shall have expired and any applicable notice requirements shall have been complied with, and as a result of such default the holder or holders of such Material Indebtedness or any trustee or agent on behalf of such holder or holders shall be permitted to cause such Material Indebtedness to become due prior to its scheduled final maturity date, and such ability to cause such Material Indebtedness to become due shall be continuing for a period of more than 60 consecutive days, (2) the Borrower or any Guarantor shall default in the performance of any obligation relating to any Indebtedness of the Borrower or a Guarantor (other than the Loans and obligations relating to Letters of Credit) outstanding under one or more agreements of the Borrower or a Guarantor that results in such Indebtedness coming due prior to its scheduled final maturity date in an aggregate principal amount at any single time unpaid exceeding $125,000,000 or (3) the Borrower or any Guarantor shall default in the payment of the outstanding principal amount due on the scheduled final maturity date of any Indebtedness outstanding under one or more agreements of the Borrower or a Guarantor, any applicable grace periods shall have expired and any applicable notice requirements shall have been complied with and such failure to make payment when due shall be continuing for a period of more than five (5) consecutive Business Days following the applicable scheduled final maturity date thereunder, in an aggregate principal amount at any single time unpaid exceeding $125,000,000;

then, and in every such event and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders, the Administrative Agent shall, by written notice to the Borrower, take one or more of the following actions, at the same or different times:

(i) terminate forthwith the Commitments;

(ii) declare the Loans or any portion thereof then outstanding to be forthwith due and payable, whereupon the principal of the Loans and other Obligations (other than Designated Hedging Obligations) together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower and the Guarantors, anything contained herein or in any other Loan Document to the contrary notwithstanding;

(iii) require the Borrower and the Guarantors promptly upon written demand to deposit in the Letter of Credit Account Cash Collateralization for the LC Exposure (and to the extent the Borrower and the Guarantors shall fail to furnish such funds as demanded by the Administrative Agent, the Administrative Agent shall be authorized to debit the accounts of the Borrower and the Guarantors (other than Escrow Accounts, Payroll Accounts or other accounts held in trust for an identified beneficiary) maintained with the Administrative Agent in such amounts);

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(iv) set-off amounts in the Letter of Credit Account or any other accounts (other than Escrow Accounts, Payroll Accounts or other accounts held in trust for an identified beneficiary) maintained with the Administrative Agent (or any of its affiliates) and apply such amounts to the obligations of the Borrower and the Guarantors hereunder and in the other Loan Documents; and

(v) exercise any and all remedies under the Loan Documents and under applicable law available to the Administrative Agent and the Lenders.

In case of any event with respect to the Parent, the Borrower, any Significant Subsidiary or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary described in clause (f) or (g) of this Section 7.01, the actions and events described in clauses (i), (ii) and (iii) above shall be required or taken automatically, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Any payment received as a result of the exercise of remedies hereunder shall be applied in accordance with Section 2.17(b).

SECTION 8.

THE AGENTS

Section 8.01. Administration by Agents .

(a) Each of the Lenders and each Issuing Lender hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.

(b) Each of the Lenders and each Issuing Lender hereby authorizes the Administrative Agent, in its sole discretion:

(i) in connection with the sale or other disposition of any asset that is part of the Collateral of the Borrower or any other Grantor, as the case may be, to the extent permitted by the terms of this Agreement, to release a Lien granted to the Administrative Agent, for the benefit of the Secured Parties, on such asset;

(ii) to determine that the cost to the Borrower or any other Grantor, as the case may be, is disproportionate to the benefit to be realized by the Secured Parties by perfecting a Lien in a given asset or group of assets included in the Collateral and that the Borrower or such other Grantor, as the case may be, should not be required to perfect such Lien in favor of the Administrative Agent, for the benefit of the Secured Parties;

(iii) to enter into the other Loan Documents on terms acceptable to the Administrative Agent and to perform its respective obligations thereunder;

(iv) to execute any documents or instruments necessary to release any Guarantor from the guarantees provided herein pursuant to Section 9.05;

(v) to enter into intercreditor and/or subordination agreements in accordance with Sections 2.29, 6.06 and 10.17 on terms reasonably acceptable to the Administrative

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Agent and to perform its obligations thereunder and to take such action and to exercise the powers, rights and remedies granted to it thereunder and with respect thereto; and

(vi) to enter into any other agreements reasonably satisfactory to the Administrative Agent granting Liens to the Administrative Agent, for the benefit of the Secured Parties, on any assets of the Borrower or any other Grantor to secure the Obligations.

Section 8.02. Rights of Administrative Agent . Any institution serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Administrative Agent, and such bank and its respective Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower, the Parent or any Subsidiary or other Affiliate of the Parent as if it were not an Administrative Agent hereunder.

Section 8.03. Liability of Agents .

(a) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (i) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing, (ii) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.08), (iii) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower, the Parent or any of the Parent’s Subsidiaries that is communicated to or obtained by the institution serving as an Administrative Agent or any of its Affiliates in any capacity and (iv) the Administrative Agent will not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt, any action that may be in violation of the automatic stay under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.08) or in the absence of its own gross negligence, bad faith or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Event of Default unless and until written notice thereof is given to the Administrative Agent by the Borrower, the Parent or a Lender, and the Administrative Agent shall not be responsible for, or have any duty to ascertain or inquire into, (A) any statement, warranty or representation made in or in connection with this Agreement, (B) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (C) the performance or observance of any of the covenants, agreements or other terms

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or conditions set forth herein, (D) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (E) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

(b) The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower or the Parent), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

(c) The Administrative Agent may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by it. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers through its Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Section 8.04. Reimbursement and Indemnification . Each Lender agrees (a) to reimburse on demand the Administrative Agent for such Lender’s Aggregate Exposure Percentage of any expenses and fees incurred for the benefit of the Lenders under this Agreement and any of the Loan Documents, including, without limitation, counsel fees and compensation of agents and employees paid for services rendered on behalf of the Lenders, and any other expense incurred in connection with the operations or enforcement thereof, not reimbursed by the Borrower or the Guarantors and (b) to indemnify and hold harmless the Administrative Agent and any of its Related Parties, on demand, in the amount equal to such Lender’s Aggregate Exposure Percentage, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against it or any of them in any way relating to or arising out of this Agreement or any of the Loan Documents or any action taken or omitted by it or any of them under this Agreement or any of the Loan Documents to the extent not reimbursed by the Borrower or the Guarantors (except such as shall result from its gross negligence or willful misconduct as determined in a final and nonappealable judgment by a court of competent jurisdiction).

Section 8.05. Successor Agents . Subject to the appointment and acceptance of a successor agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Lenders and the Borrower. Upon any such resignation by the Administrative Agent, the Required Lenders shall have the right, with the consent (provided no Event of Default or Default has occurred and is continuing) of the Borrower (such consent not to be unreasonably withheld or delayed), to appoint a successor. If no successor shall have been

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so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, with the consent (provided no Event of Default or Default has occurred or is continuing) of the Borrower (such consent not to be unreasonably withheld or delayed), appoint a successor Administrative Agent which shall be a bank institution with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as an Administrative Agent.

Section 8.06. Independent Lenders . Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.

Section 8.07. Advances and Payments .

(a) On the date of each Loan, the Administrative Agent shall be authorized (but not obligated) to advance, for the account of each of the Lenders, the amount of the Loan to be made by it in accordance with its Revolving Commitment hereunder. Should the Administrative Agent do so, each of the Lenders agrees forthwith to reimburse the Administrative Agent in immediately available funds for the amount so advanced on its behalf by the Administrative Agent, together with interest at the Federal Funds Effective Rate if not so reimbursed on the date due from and including such date but not including the date of reimbursement.

(b) Any amounts received by the Administrative Agent in connection with this Agreement (other than amounts to which the Administrative Agent is entitled pursuant to Sections 2.19, 2.20, 8.04 and 10.04), the application of which is not otherwise provided for in this Agreement, shall be applied in accordance with Section 2.17(b). All amounts to be paid to a Lender by the Administrative Agent shall be credited to that Lender, after collection by the Administrative Agent, in immediately available funds either by wire transfer or deposit in that Lender’s correspondent account with the Administrative Agent, as such Lender and the Administrative Agent shall from time to time agree.

Section 8.08. Sharing of Setoffs . Each Lender agrees that, except to the extent this Agreement expressly provides for payments to be allocated to a particular Lender, if it shall,

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through the exercise either by it or any of its banking Affiliates of a right of banker’s lien, setoff or counterclaim against the Borrower or a Guarantor, including, but not limited to, a secured claim under Section 506 of the Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim and received by such Lender (or any of its banking Affiliates) under any applicable bankruptcy, insolvency or other similar law, or otherwise, obtain payment in respect of its Revolving Extensions of Credit as a result of which the unpaid portion of its Revolving Extensions of Credit is proportionately less than the unpaid portion of the Revolving Extensions of Credit of any other Lender (other than with respect to any LC Exposure under clause (i) of the definition thereof) (a) it shall promptly purchase at par (and shall be deemed to have thereupon purchased) from such other Lender a participation in the Loans or LC Exposure of such other Lender, so that the aggregate amount of each Lender’s Revolving Extensions of Credit and its participation in Loans and LC Exposure of the other Lenders shall be in the same proportion to the aggregate unpaid principal amount of all Revolving Extensions of Credit then outstanding as the amount of its Revolving Extensions of Credit prior to the obtaining of such payment was to the amount of all Revolving Extensions of Credit prior to the obtaining of such payment and (b) such other adjustments shall be made from time to time as shall be equitable to ensure that the Lenders share such payment pro-rata, provided that if any such non-pro-rata payment is thereafter recovered or otherwise set aside, such purchase of participations shall be rescinded (without interest). The Borrower expressly consents to the foregoing arrangements and agrees, to the fullest extent permitted by law, that any Lender holding (or deemed to be holding) a participation in a Loan or LC Exposure acquired pursuant to this Section or any of its banking Affiliates may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing by the Borrower to such Lender as fully as if such Lender was the original obligee thereon, in the amount of such participation. The provisions of this Section 8.08 shall not be construed to apply to (a) any payment made by the Borrower or a Guarantor pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender) or (b) any payment obtained by any Lender as consideration for the assignment or sale of a participation in any of its Loans or other Obligations owed to it.

Section 8.09. Withholding Taxes . To the extent required by any applicable law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any withholding tax applicable to such payment. If the Internal Revenue Service or any other Governmental Authority asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender for any reason, or the Administrative Agent has paid over to the Internal Revenue Service applicable withholding tax relating to a payment to a Lender but no deduction has been made from such payment, without duplication of any indemnification obligations set forth in Section 8.04, such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including any penalties or interest and together with any expenses incurred.

Section 8.10. Appointment by Secured Parties . Each Secured Party that is not a party to this Agreement shall be deemed to have appointed the Administrative Agent as its agent under the Loan Documents in accordance with the terms of this Section 8 and to have acknowledged

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that the provisions of this Section 8 apply to such Secured Party mutatis mutandis as though it were a party hereto (and any acceptance by such Secured Party of the benefits of this Agreement or any other Loan Document shall be deemed an acknowledgment of the foregoing).

SECTION 9.

GUARANTY

Section 9.01. Guaranty .

(a) Each of the Guarantors unconditionally, absolutely and irrevocably guarantees the due and punctual payment by the Borrower of the Obligations (including interest accruing on and after the filing of any petition in bankruptcy or of reorganization of the obligor whether or not post filing interest is allowed in such proceeding) (collectively, the “ Guaranteed Obligations ” and the obligations of each Guarantor in respect thereof, its “ Guaranty Obligations ”). Each of the Guarantors further agrees that, to the extent permitted by applicable law, the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and it will remain bound upon this guaranty notwithstanding any extension or renewal of any of the Obligations. The Obligations of the Guarantors shall be joint and several. Each of the Guarantors further agrees that its guaranty hereunder is a primary obligation of such Guarantor and not merely a contract of surety.

(b) To the extent permitted by applicable law, each of the Guarantors waives presentation to, demand for payment from and protest to the Borrower or any other Guarantor, and also waives notice of protest for nonpayment. The obligations of the Guarantors hereunder shall not, to the extent permitted by applicable law, be affected by (i) the failure of the Administrative Agent or a Lender to assert any claim or demand or to enforce any right or remedy against the Borrower or any other Guarantor under the provisions of this Agreement or any other Loan Document or otherwise; (ii) any extension or renewal of any provision hereof or thereof; (iii) any rescission, waiver, compromise, acceleration, amendment or modification of any of the terms or provisions of any of the Loan Documents; (iv) the release, exchange, waiver or foreclosure of any security held by the Administrative Agent for the Obligations or any of them; (v) the failure of the Administrative Agent or a Lender to exercise any right or remedy against any other Guarantor; or (vi) the release or substitution of any Collateral or any other Guarantor.

(c) To the extent permitted by applicable law, each of the Guarantors further agrees that this guaranty constitutes a guaranty of payment when due and not just of collection, and waives any right to require that any resort be had by the Administrative Agent or a Lender to any security held for payment of the Obligations or to any balance of any deposit, account or credit on the books of the Administrative Agent or a Lender in favor of the Borrower or any other Guarantor, or to any other Person.

(d) To the extent permitted by applicable law, each of the Guarantors hereby waives any defense that it might have based on a failure to remain informed of the financial condition of the Borrower and of any other Guarantor and any circumstances affecting the ability of the Borrower to perform under this Agreement.

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(e) To the extent permitted by applicable law, each Guarantor’s guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or any other instrument evidencing any Obligations, or by the existence, validity, enforceability, perfection, or extent of any collateral therefor or by any other circumstance relating to the Obligations which might otherwise constitute a defense to this guaranty (other than payment in full in cash of the Obligations in accordance with the terms of this Agreement (other than those that constitute unasserted contingent indemnification obligations)). Neither the Administrative Agent nor any of the Lenders makes any representation or warranty in respect to any such circumstances or shall have any duty or responsibility whatsoever to any Guarantor in respect of the management and maintenance of the Obligations.

(f) Upon the occurrence of the Obligations becoming due and payable (by acceleration or otherwise), the Lenders shall be entitled to immediate payment of such Obligations by the Guarantors upon written demand by the Administrative Agent.

Section 9.02. No Impairment of Guaranty . To the extent permitted by applicable law, the obligations of the Guarantors hereunder shall not be subject to any reduction, limitation or impairment for any reason, including, without limitation, any claim of waiver, release, surrender, alteration or compromise, other than pursuant to a written agreement in compliance with Section 10.08 and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations. To the extent permitted by applicable law, without limiting the generality of the foregoing, the obligations of the Guarantors hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent or a Lender to assert any claim or demand or to enforce any remedy under this Agreement or any other agreement, by any waiver or modification of any provision hereof or thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of the Guarantors or would otherwise operate as a discharge of the Guarantors as a matter of law.

Section 9.03. Continuation and Reinstatement, etc . Each Guarantor further agrees that its guaranty hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Administrative Agent, the Issuing Lenders, any Lender or any other Secured Party upon the bankruptcy or reorganization of the Borrower or a Guarantor, or otherwise.

Section 9.04. Subrogation . Upon payment by any Guarantor of any sums to the Administrative Agent or a Lender hereunder, all rights of such Guarantor against the Borrower arising as a result thereof by way of right of subrogation or otherwise, shall in all respects be subordinate and junior in right of payment to the prior payment in full of all the Obligations (including interest accruing on and after the filing of any petition in bankruptcy or of reorganization of an obligor whether or not post filing interest is allowed in such proceeding). If any amount shall be paid to such Guarantor for the account of the Borrower relating to the Obligations prior to payment in full of the Obligations, such amount shall be held in trust for the benefit of the Administrative Agent and the Lenders and shall forthwith be paid to the

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Administrative Agent and the Lenders to be credited and applied to the Obligations, whether matured or unmatured.

Section 9.05. Discharge of Guaranty .

(a) In the event of any sale or other disposition of all or substantially all of the assets of any Guarantor (other than the Parent), by way of merger, consolidation or otherwise, or a sale or other disposition of all Capital Stock of any Guarantor (other than the Parent), in each case to a Person that is not (either before or after giving effect to such transactions) the Parent or a Subsidiary of the Parent or the merger or consolidation of a Guarantor with or into the Borrower or another Guarantor, in each case, in a transaction permitted under this Agreement, then such Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the Capital Stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) will be automatically released and relieved of any obligations under its Guarantee of the Guaranteed Obligations.

(b) Upon the request of the Borrower, the guarantee of any Guarantor that is an Immaterial Subsidiary shall be promptly released; provided that (i) no Event of Default shall have occurred and be continuing or shall result therefrom and (ii) the Borrower shall have delivered a certificate of a Responsible Officer certifying that such Subsidiary is an Immaterial Subsidiary; provided further that a Subsidiary that is considered not to be an Immaterial Subsidiary solely pursuant to clause (1) of the proviso of the definition thereof shall, solely for purposes of this clause (b), be considered an Immaterial Subsidiary so long as any applicable guarantee, pledge or other obligation of such Subsidiary with respect to any Junior Secured Debt shall be irrevocably released and discharged substantially simultaneously with the release of such guarantee hereunder.

(a) The Administrative Agent shall use commercially reasonable efforts to execute and deliver, at the Borrower’s expense, such documents as the Borrower or any Guarantor may reasonably request to evidence the release of the guarantee of such Guarantor provided herein.

SECTION 10.

MISCELLANEOUS

Section 10.01. Notices .

(a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein or under any other Loan Document shall be in writing (including by facsimile), and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

(i) if to the Borrower or any Guarantor, to it at Hawaiian Airlines, Inc., 3375 Koapaka Street, Suite G350, Honolulu, HI 96819, telephone: (808) 835-3610, facsimile: (808) 840-8369, email: Aaron.Alter@hawaiianair.com; Attention: Aaron Alter, EVP, Chief Legal Officer and Corporate Secretary;

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(ii) if to the Administrative Agent, to it at Citibank, N.A., Specialized Agency Group, Agency & Trust, 388 Greenwich Street, 14 ^th Floor, New York, NY 10013, Attn: Cynthia J. (“CJ”) Powell, Vice President, Telephone: (212) 816-5958, Fax: (646) 291-5664, E-mail: cynthia.powell@citi.com and daniel.rothman@citi.com; with a copy to Citibank, N.A. Global Loans, 1615 Brett Road, New Castle, DE 19720, Attn: Annemarie Pavco, Telephone: (302) 323-2475, Fax: (646) 274-5080 E-mail: Annemarie.e.pavco@citi.com;

(iii) if to an Issuing Lender that is a Lender, to it at its address determined pursuant to clause (iv) below or, if to an Issuing Lender that is not a Lender, to it at the address most recently specified by it in notice delivered by it to the Administrative Agent and the Borrower, unless no such notice has been received, in which case to it in care of its Affiliate that is a Lender at its address determined pursuant to clause (iv); and

(iv) if to any other Lender, to it at its address (or telecopy number) set forth in Annex A hereto or, if subsequently delivered, an Assignment and Acceptance.

(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its reasonable discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

(c) Any party hereto may change its address, telecopy number or e-mail address for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

Section 10.02. Successors and Assigns .

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of an Issuing Lender that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void), provided that the foregoing shall not restrict any transaction permitted by Section 6.10, and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 10.02. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of an Issuing Lender that issues any Letter of Credit), Participants (to the extent provided in paragraph (d) of this Section 10.02) and, to the extent expressly contemplated hereby, the Related Parties of the Administrative Agent, the Issuing Lenders and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

(A) the Administrative Agent; provided that no consent of the Administrative Agent shall be required for an assignment if the assignee is a Lender, an Affiliate of a Lender or an Approved Fund of a Lender, in each case so long as such assignee is an Eligible Assignee; and

(B) the Borrower; provided that no consent of the Borrower shall be required for an assignment (I) if an Event of Default has occurred and is continuing or (II) if the assignee is a Lender, an Affiliate of a Lender or an Approved Fund of a Lender, in each case so long as such assignee is an Eligible Assignee; provided , further , that the Borrower’s consent will be deemed given with respect to a proposed assignment if no response is received with ten (10) Business Days after having received a written request from such Lender pursuant to this Section 10.02(b).

(ii) Assignments shall be subject to the following additional conditions:

(A) any assignment of any portion of the Total Revolving Commitment, Revolving Loans and LC Exposure shall be made to an Eligible Assignee;

(B) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Revolving Commitment or Loans, the amount of such Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000, and after giving effect to such assignment, the portion of the Loan or Commitment held by the assigning Lender of the same tranche as the assigned portion of the Loan or Commitment shall not be less than $5,000,000, in each case unless the Borrower and the Administrative Agent otherwise consent; provided that no consent of the Borrower shall be required with respect to such assignment if an Event of Default has occurred and is continuing; provided , further , that any such assignment shall be in increments of $1,000,000 in excess of the minimum amount described above;

(C) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

(D) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500 for the account of the Administrative Agent; and

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(E) the assignee, if it was not a Lender immediately prior to such assignment, shall deliver (i) to the Administrative Agent an administrative questionnaire in a form as the Administrative Agent may require and (ii) any documents required to be delivered pursuant to Section 2.16.

For the purposes of this Section 10.02(b), the term “ Approved Fund ” means with respect to any Lender, any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) such Lender, (b) an Affiliate of such Lender or (c) an entity or an Affiliate of an entity that administers or manages such Lender, in each case that that has total assets in excess of $200,000,000 (or is guaranteed by an affiliate who has total assets in excess of $200,000,000).

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section 10.02, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Revolving Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16 and 10.04). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 10.02 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section 10.02.

(iv) The Administrative Agent shall maintain at its offices a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Revolving Commitments of, and principal amount (and stated interest) of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Guarantors, the Administrative Agent, the Issuing Lenders and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Lenders and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Notwithstanding anything to the contrary contained herein, no assignment may be made hereunder to any Defaulting Lender or any of its subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (v).

(vi) In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment will be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment make such additional payments to the Administrative Agent in an aggregate amount

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sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Borrower, Administrative Agent, the Issuing Lender and each other Revolving Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Aggregate Exposure Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder becomes effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest will be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

(c) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee’s completed administrative questionnaire in a form as the Administrative Agent may require (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.04(a), 8.04 or 10.04(d), the Administrative Agent shall have no obligation to accept such Assignment and Acceptance and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(d) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent or any Issuing Lender, sell participations to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Lenders and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.08(a) that affects such Participant. Subject to Section 10.02(d)(ii), the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14 and 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.02(b). To the extent permitted by law, each Participant also shall be entitled to the

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benefits of Section 8.08 as though it were a Lender, provided such Participant agrees to be subject to the requirements of Section 8.08 as though it were a Lender. Each Lender that sells a participation, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under this Agreement or any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender, the Borrower, a Guarantor and the Administrative Agent shall treat each person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of such participation for all purposes of this Agreement, notwithstanding notice to the contrary.

(ii) A Participant shall not be entitled to receive any greater payment under Section 2.14 or 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant and shall be subject to the terms of Section 2.18(a). The Lender selling the participation to such Participant shall be subject to the terms of Section 2.18(b) if such Participant requests compensation or additional amounts pursuant to Section 2.14 or 2.16. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.16 unless such Participant agrees, for the benefit of the Borrower, to comply with Sections 2.16(f), 2.16(g) and 2.16(h) as though it were a Lender.

(e) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank or other central bank having jurisdiction over such Lender, and this Section 10.02 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(f) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.02, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrower or any of the Guarantors furnished to such Lender by or on behalf of the Borrower or any of the Guarantors; provided that prior to any such disclosure, each such assignee or participant or proposed assignee or participant provides to the Administrative Agent its agreement in writing to be bound for the benefit of the Borrower by either the provisions of Section 10.03 or other provisions at least as restrictive as Section 10.03.

Section 10.03. Confidentiality . Each Lender agrees to keep any information delivered or made available by the Borrower or any of the Guarantors to it confidential, in accordance with its customary procedures, from anyone other than persons employed or retained by such Lender

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who are or are expected to become engaged in evaluating, approving, structuring or administering the Loans, and who are advised by such Lender of the confidential nature of such information; provided that nothing herein shall prevent any Lender from disclosing such information (a) to any of its Affiliates and their respective agents and advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential) or to any other Lender or any other party hereto, (b) upon the order of any court or administrative agency, (c) upon the request or demand of any regulatory agency or authority (including any self-regulatory authority), (d) which has been publicly disclosed other than as a result of a disclosure by the Administrative Agent or any Lender which is not permitted by this Agreement, (e) in connection with any litigation to which the Administrative Agent, any Lender, or their respective Affiliates may be a party to the extent reasonably required under applicable rules of discovery, (f) to the extent reasonably required in connection with the exercise of any remedy or enforcement of rights hereunder, (g) to such Lender’s legal counsel and independent auditors, (h) on a confidential basis to any rating agency in connection with rating the Borrower and its Subsidiaries or the Revolving Facility, (i) with the consent of the Borrower, and (j) to any actual or proposed participant or assignee of all or part of its rights hereunder, to any direct or indirect contractual counterparty (or the professional advisors thereto) to any swap or derivative transaction relating to the Borrower and its obligations or to any credit insurance provider relating to the Borrower and its obligations, in each case, subject to the proviso in Section 10.02(f) (with any reference to any assignee or participant set forth in such proviso being deemed to include a reference to such contractual counterparty or credit insurance provider for purposes of this Section 10.03(j)). If any Lender is in any manner requested or required to disclose any of the information delivered or made available to it by the Borrower or any of the Guarantors under clauses (b) or (e) of this Section, such Lender will, to the extent permitted by law, provide the Borrower or such Guarantor with prompt notice, to the extent reasonable, so that the Borrower or such Guarantor may seek, at its sole expense, a protective order or other appropriate remedy or may waive compliance with this Section 10.03.

Section 10.04. Expenses; Indemnity; Damage Waiver .

(a) (%3) The Borrower shall pay or reimburse: (A) all reasonable fees and reasonable out-of-pocket expenses of the Administrative Agent (including the reasonable fees, disbursements and other charges of Vedder Price, P.C., special counsel to the Administrative Agent) associated with the syndication of the credit facilities provided for herein, and the preparation, execution and delivery of the Loan Documents and any amendments, modifications or waivers of the provisions hereof requested by the Borrower (whether or not the transactions contemplated hereby or thereby shall be consummated); and (B) in connection with any enforcement of the Loan Documents, (i) all fees and out-of-pocket expenses of the Administrative Agent (including the reasonable fees, disbursements and other charges of a single counsel for the Administrative Agent) incurred during the continuance of a Default, (ii) all such fees and expenses of the Administrative Agent and the Lenders (including the reasonable fees, disbursements and other charges of counsel for the Administrative Agent and the Lenders, which may be separate counsel) incurred during the continuance of an Event of Default; and (C) all reasonable, documented, out-of-pocket costs, expenses, taxes, assessments and other charges (including the reasonable fees, disbursements and other charges of counsel for the Administrative

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Agent) incurred by the Administrative Agent in connection with any filing, registration, recording or perfection of any security interest contemplated by any Loan Document or incurred in connection with any release or addition of Collateral after the Closing Date.

(ii) All payments or reimbursements pursuant to the foregoing clause (a)(i) shall be paid within thirty (30) days of written demand together with back-up documentation supporting such reimbursement request.

(b) The Borrower shall indemnify the Administrative Agent, the Issuing Lenders and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, arising out of, in connection with, or as a result of any actual or prospective claim, litigation, investigation or proceeding brought by a third party, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto and whether or not any such claim, litigation, investigation or proceeding is brought by the Borrower, its equity holders, its Affiliates, its creditors or any other Person (including any investigating, preparing for or defending any such claims, actions, suits, investigations or proceedings, whether or not in connection with pending or threatened litigation in which such Indemnitee is a party), relating to (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit) or (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by the Parent or any of its Subsidiaries, or any Environmental Liability related in any way to, or asserted against, the Parent or any of its Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee or any of its related Indemnitees (as defined below), and such Indemnitee shall repay the Borrower the amount of any expenses previously reimbursed by the Borrower in connection with any such loss, claims, damages, expenses or liability to such Indemnitee and, to the extent not repaid by any of them, such Indemnitee’s Related Parties not a party to this Agreement. This Section 10.04(b) shall not apply with respect to Taxes other than Taxes that represent losses or damages arising from any non-Tax claim. For purposes of this Section 10.04(b), a Person shall be considered a “related” Indemnitee with respect to an Indemnitee if such Person is an Affiliate or employer of such Indemnitee, a director, officer, employee, agent, or servant of such Indemnitee or any such Affiliate.

(c) In case any action or proceeding shall be brought or asserted against an Indemnitee in respect of which indemnity is sought against the Borrower under the provisions of any Loan Document, such Indemnitee shall promptly notify the Borrower in writing and the Borrower shall, if requested by such Indemnitee or if the Borrower desires to do so, assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnitee

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but only if (i) no Event of Default shall have occurred and be continuing and (ii) such action or proceeding does not involve any risk of criminal liability or material risk of material civil money penalties being imposed on such Indemnitee. The Borrower shall not enter into any settlement of any such action or proceeding that admits any Indemnitee’s misconduct or negligence. The failure to so notify the Borrower shall not affect any obligations the Borrower may have to such Indemnitee under the Loan Documents or otherwise other than to the extent that the Borrower is materially adversely affected by such failure. The Indemnitees shall have the right to employ separate counsel in such action or proceeding and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Indemnitees unless: (i) the Borrower has agreed to pay such fees and expenses, (ii) the Borrower has failed to assume the defense of such action or proceeding and employ counsel reasonably satisfactory to the Indemnitees or (iii) the Indemnitees shall have been advised in writing by counsel that under prevailing ethical standards there may be a conflict between the positions of the Borrower and the Indemnitees in conducting the defense of such action or proceeding or that there may be legal defenses available to the Indemnitees different from or in addition to those available to the Borrower, in which case, if the Indemnitees notify the Borrower in writing that they elect to employ separate counsel at the expense of the Borrower, the Borrower shall not have the right to assume the defense of such action or proceeding on behalf of the Indemnitees; provided , however , that the Borrower shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be responsible hereunder for the reasonable fees and expenses of more than one such firm of separate counsel, in addition to any local counsel. The Borrower shall not be liable for any settlement of any such action or proceeding effected without the written consent of the Borrower (which shall not be unreasonably withheld or delayed).

(d) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent under paragraph (a) or (b) of this Section 10.04, each Lender severally agrees to pay to the Administrative Agent, as the case may be, such portion of the unpaid amount equal to such Lender’s Aggregate Exposure Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent in its capacity as such.

(e) To the extent permitted by applicable law, each party hereto shall not assert, and hereby waives, any claim against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; provided that, nothing in this clause (e) shall relieve the Borrower of any obligation it may have to indemnify any Indemnitee against special, indirect, consequential or punitive damages pursuant to Section 10.04(c).

Section 10.05. Governing Law; Jurisdiction; Consent to Service of Process .

(a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

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(b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall, to the extent permitted by law, be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 10.05(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

Section 10.06. No Waiver . No failure on the part of the Administrative Agent or any of the Lenders to exercise, and no delay in exercising, any right, power or remedy hereunder or any of the other Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.

Section 10.07. Extension of Maturity . Should any payment of principal of or interest or any other amount due hereunder become due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day and, in the case of principal, interest shall be payable thereon at the rate herein specified during such extension.

Section 10.08. Amendments, etc .

(a) No modification, amendment or waiver of any provision of this Agreement or any Collateral Document (other than the Account Control Agreements), and no consent to any departure by the Borrower or any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders (or signed by the Administrative Agent with the consent of the Required Lenders), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given; provided , however , that no such modification or amendment shall without the prior written consent of:

(i) each Lender directly and adversely affected thereby (A) increase the Commitment of any Lender or extend the termination date of the Commitment of any Lender (it being understood that a waiver of an Event of Default shall not constitute an

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increase in or extension of the termination date of the Commitment of a Lender), or (B) reduce the principal amount of any Loan, any reimbursement obligation in respect of any Letter of Credit issued by it, or the rate of interest payable thereon (provided that only the consent of the Required Lenders (or in the case of any such reimbursement obligation, the applicable Issuing Lender) shall be necessary for a waiver of default interest referred to in Section 2.08), or extend any date for the payment of interest or Fees hereunder or reduce any Fees payable hereunder or extend the final maturity of the Borrower’s obligations hereunder or (C) amend, modify or waive any provision of Section 2.17(b); and

(ii) all of the Lenders (A) amend or modify any provision of this Agreement which provides for the unanimous consent or approval of the Lenders or which alters the ratable treatment of Obligations under the Loan Documents, (B) amend this Section 10.08 that has the effect of changing the number or percentage of Lenders that must approve any modification, amendment, waiver or consent or modify the percentage of the Lenders required in the definitions of Required Lenders and Supermajority Lenders, (C) amend the definition of Aggregate Exposure Percentage or Borrowing Base or (D) release all or substantially all of the Liens granted to the Administrative Agent hereunder or under any other Loan Document (except to the extent contemplated by Section 6.09 on the date hereof or by the terms of the Collateral Documents), or release all or substantially all of the Guarantors (except to the extent contemplated by Section 9.05);

provided further , that any Collateral Document may be amended, supplemented or otherwise modified with the consent of the applicable Grantor and the Administrative Agent (i) to add assets (or categories of assets) to the Collateral covered by such Collateral Document, as contemplated by the definition of Additional Collateral set forth in Section 1.01 hereof or (ii) to remove any asset or type or category of asset (including after-acquired assets of that type or category) from the Collateral covered by such Collateral Document to the extent the release thereof is permitted by Section 6.09(c).

(b) No such amendment or modification shall adversely affect the rights and obligations of the Administrative Agent or any Issuing Lender hereunder without its prior written consent.

(c) No notice to or demand on the Borrower or any Guarantor shall entitle the Borrower or any Guarantor to any other or further notice or demand in the same, similar or other circumstances. Each assignee under Section 10.02(b) shall be bound by any amendment, modification, waiver, or consent authorized as provided herein, and any consent by a Lender shall bind any Person subsequently acquiring an interest on the Loans held by such Lender. No amendment to this Agreement shall be effective against the Borrower or any Guarantor unless signed by the Borrower or such Guarantor, as the case may be.

(d) Notwithstanding anything to the contrary contained in Section 10.08(a), (i) in the event that either the Borrower requests that this Agreement be modified or amended in a manner which would require the unanimous consent of all of the Lenders or the consent of all Lenders directly and adversely affected thereby and, in each case, such modification or amendment is agreed to by the Required Lenders, then the Borrower may replace any non-consenting Lender in accordance with an assignment pursuant to Section 10.02 (and such non-consenting Lender shall

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reasonably cooperate in effecting such assignment); provided that such amendment or modification can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this clause (i)); (ii) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender (it being understood that the Commitment and the outstanding Loans or other extensions of credit held or deemed held by any Defaulting Lender shall be excluded for a vote of the Lenders hereunder requiring any consent of the Lenders); and (iii) if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature in any provision of the Loan Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders within five (5) Business Days after written notice thereof to the Lenders.

(e) [Reserved]

(f) In addition, notwithstanding anything to the contrary contained in Section 10.08(a), this Agreement and, as appropriate, the other Loan Documents, may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Loans and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.

(g) In addition, notwithstanding anything to the contrary contained in Section 7.01 or Section 10.08(a), following the consummation of any Extension pursuant to Section 2.28, no modification, amendment or waiver (including, for the avoidance of doubt, any forbearance agreement entered into with respect to this Agreement) shall limit the right of any non-extending Revolving Lender (each, a “ Non-Extending Lender ”) to enforce its right to receive payment of amounts due and owing to such Non-Extending Lender on the Revolving Maturity Date applicable to the Revolving Commitments of such Non-Extending Lenders without the prior written consent of Non-Extending Lenders that would constitute Required Lenders if the Non-Extending Lenders were the only Lenders hereunder at the time.

(h) In addition, notwithstanding anything to the contrary contained in Section 10.08(a), any amendment made in accordance with Section 2.09(b) to reflect an alternate rate of interest established pursuant to such Section shall become effective without any further action or consent of any other party to this Agreement (other than such parties as required pursuant to such Section 2.09(b)), and, notwithstanding anything to the contrary set forth in Section 10.04 hereof, each party shall bear its own costs and expenses ( provided , that the Borrower shall pay or reimburse Administrative Agent for its reasonable costs and expenses) in connection with any such amendment.

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(i) It is understood that the amendment provisions of this Section 10.08 shall not apply to extensions of the Revolving Facility Maturity Date or the maturity date of any tranche of Revolving Commitments, in each case, made in accordance with Section 2.28.

Section 10.09. Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 10.10. Headings . Section headings used herein are for convenience only and are not to affect the construction of or be taken into consideration in interpreting this Agreement.

Section 10.11. Survival . All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Issuing Lender or any Lender may have had notice or knowledge of any Event of Default or incorrect representation or warranty at the time any credit is extended hereunder. The provisions of Sections 2.14, 2.15, 2.16 and 10.04 and Section 8 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments, or the termination of this Agreement or any provision hereof.

Section 10.12. Execution in Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or electronic .pdf copy shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 10.13. USA Patriot Act . Each Lender that is subject to the requirements of the Patriot Act hereby notifies the Borrower and each Guarantor that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower and each Guarantor, which information includes the name and address of the Borrower and each Guarantor and other information that will allow such Lender to identify the Borrower and each Guarantor in accordance with the Patriot Act.

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Section 10.14. New Value . It is the intention of the parties hereto that any provision of Collateral by a Grantor as a condition to, or in connection with, the making of any Loan or the issuance of any Letter of Credit hereunder, shall be made as a contemporaneous exchange for new value given by the Lenders or Issuing Lenders, as the case may be, to the Borrower.

Section 10.15. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.15.

Section 10.16. No Fiduciary Duty . The Administrative Agent, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”), may have economic interests that conflict with those of the Borrower, its stockholders and/or its affiliates. The Borrower agree that nothing in the Loan Documents or otherwise related to the Transactions will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and the Borrower, its stockholders or its affiliates, on the other hand. The parties hereto acknowledge and agree that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower and the Guarantors, on the other hand, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower, its stockholders or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise the Borrower, its stockholders or its affiliates on other matters) or any other obligation to the Borrower except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of the Borrower, its management, stockholders, affiliates, creditors or any other Person. The Borrower acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Borrower, in connection with such transaction or the process leading thereto.

Section 10.17. Intercreditor Agreements . Notwithstanding anything to the contrary contained in this Agreement, if at any time the Administrative Agent shall enter into any intercreditor agreement pursuant to and as permitted by the terms of this Agreement and that is

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reasonably acceptable to the Administrative Agent (any such intercreditor agreement, an “ Intercreditor Agreement ”) and such Intercreditor Agreement shall remain outstanding, the rights granted to the Secured Parties hereunder and under the other Loan Documents, the lien and security interest granted to the Administrative Agent pursuant to this Agreement or any other Loan Document and the exercise of any right or remedy by the Administrative Agent hereunder or under any other Loan Document shall be subject to the terms and conditions of such Intercreditor Agreement. In the event of any conflict between the terms of this Agreement, any other Loan Document and such Intercreditor Agreement, the terms of such Intercreditor Agreement shall govern and control with respect to any right or remedy, and no right, power or remedy granted to the Administrative Agent hereunder or under any other Loan Document shall be exercised by the Administrative Agent, and no direction shall be given by the Administrative Agent, in contravention of such Intercreditor Agreement.

Section 10.18. Registrations with International Registry . Each of the parties hereto (i) consents to the registrations with the International Registry of the International Interests constituted by the Aircraft and Spare Engine Mortgage and each Other Aircraft Mortgage, and (ii) covenants and agrees that it will take all such action reasonably requested by the Borrower or Administrative Agent in order to make any registrations with the International Registry, including without limitation establishing a valid and existing account with the International Registry and appointing an Administrator and/or a Professional User reasonably acceptable to the Administrative Agent to make registrations with respect to the Mortgaged Collateral and providing consents to any registration as may be contemplated by the Loan Documents.

Section 10.19. Contractual Recognition of Bail-in . Notwithstanding any other term of any Loan Document or any other agreement, arrangement or understanding between the parties hereto, each party hereto acknowledges and accepts that any liability of any party hereto to any other party hereto under or in connection with the Loan Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

(a) any Bail-In Action in relation to any such liability, including (without limitation):

(i) a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

(iii) a cancellation of any such liability; and

(b) a variation of any term of any Loan Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and the year first written.

HAWAIIAN AIRLINES, INC.,
as Borrower


By:	Name: Title:

HAWAIIAN HOLDINGS, INC.,
as a Guarantor


By:	Name: Title:

AIRLINE CONTRACT MAINTENANCE & EQUIPMENT, INC.,
as a Guarantor


By:	Name: Title:

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CITIBANK, N.A., as Administrative Agent and a Lender


By:	Name: Title:

BARCLAYS BANK PLC, as a Lender


By:	Name: Title:

GOLDMAN SACHS BANK USA, as a Lender


By:	Name: Title:

MORGAN STANLEY SENIOR FUNDING, INC., as a Lender


By:	Name: Title:

BNP PARIBAS, as a Lender


By:	Name: Title:


By:	Name: Title:

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BANK OF HAWAII, as a Lender


By:	Name: Title:

92544055_10

ANNEX A

to Amended and Restated Credit and Guaranty Agreement

LENDERS AND COMMITMENTS

A. Revolving Commitments



Revolving Lender	Revolving Commitment
Citibank, N.A.	$50,000,000
Barclays Bank PLC	$45,000,000
Goldman Sachs Bank USA	$45,000,000
Morgan Stanley Senior Funding, Inc.	$45,000,000
BNP Paribas	$25,000,000
Bank of Hawaii	$25,000,000
TOTAL:	$235,000,000

B. Lender Notices

Citibank, N.A.

388 Greenwich Street

New York, New York 10013

Facsimile: (646) 274-5080

Attention: Joseph Shanahan & Scott Debano

Morgan Stanley Senior Funding, Inc.
1300 Thames Street Wharf, 4th Floor
Baltimore, MD 21231
Telephone: (443) 627-4355
E-mail: msloanservicing@morganstanley.com
Attention: Morgan Stanley Loan Servicing

Bank of Hawaii
130 Merchant Street, 20th Floor
Honolulu, HI 96813
Telephone: (808) 694-8298
Facsimile: (808) 694-8301
E-mail: John.mckenna@BOH.com
Attention: John McKenna, Senior Vice President

With a copy to:
Bank of Hawaii
909 Dillingham Blvd.
Honolulu, HI 96817
Telephone: (808) 694-5605

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Facsimile: (808) 694-1672
Email: Iwalani.Sabarre-Kapika@BOH.com
Attention: Iwalani Sabarre-Kapika, Assistant Vice President

Goldman Sachs Bank USA
c/o Goldman, Sachs & Co.
30 Hudson Street, 4th Floor
Jersey City, New Jersey 07302
Telephone: (212) 934-3921
Facsimile: (917) 977-3966
Email: gsd.link@gs.com
Attention: Thierry C. Le Jouan

With a copy to:
Goldman Sachs Bank USA
200 West Street
New York, New York 10282
Telephone: (212) 902-1099
Facsimile: (917) 977-3966
Email: gsd-sbd-admin-contacts@ny.email.gs.com

Barclays Bank PLC
700 Prides Crossing
Newark, DE 19713
Telephone: (201) 409-0040
Facsimile: (972) 535-5728
Email: 19725355728@tls.ldsprod.com
Attention: US Loan Operations

BNP Paribas
525 Washington Blvd.
Jersey City, New Jersey 07310
Telephone: (514) 908-5755
Facsimile: (201) 616-7912
Email: nyk_ls_regional@us.bnpparibas.com
Attention: NYK LS Regional, Loan Admin

With a copy to:
BNP Paribas
787 7th Avenue, 27th Floor
New York, New York 10019
Email: dl.afgny.mo@us.bnpparibas.com
Attention: DL AFGNY MO

92544055_10

ANNEX B

to Amended and Restated Credit and Guaranty Agreement

LIST OF AIRCRAFT AND ENGINE APPRAISERS

Aviation Specialists Group, Inc.

IBA Group Ltd

ICF International, Inc.

Morten, Beyer and Agnew

Ascend FG Advisory

AVITAS, Inc.

92544055_10

EXHIBIT A

to Amended and Restated Credit and Guaranty Agreement

FORM OF INSTRUMENT OF ASSUMPTION AND JOINDER

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EXHIBIT B

to Amended and Restated Credit and Guaranty Agreement

FORM OF ASSIGNMENT AND ACCEPTANCE

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EXHIBIT C

to Amended and Restated Credit and Guaranty Agreement

FORM OF LOAN REQUEST

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EXHIBIT D

to Amended and Restated Credit and Guaranty Agreement

FORM OF AIRCRAFT AND SPARE ENGINE MORTGAGE

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EXHIBIT E

to Amended and Restated Credit and Guaranty Agreement

FORM OF SPARE PARTS SECURITY AGREEMENT

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EXHIBIT F

to Amended and Restated Credit and Guaranty Agreement

FORM OF SRG SECURITY AGREEMENT

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EXHIBIT G

to Amended and Restated Credit and Guaranty Agreement

FORM OF SECURITY AGREEMENT

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EXHIBIT H

to Amended and Restated Credit and Guaranty Agreement

FORM OF OTHER AIRCRAFT MORTGAGE

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SCHEDULE 3.06

to Amended and Restated Credit and Guaranty Agreement

SUBSIDIARIES

HAWAIIAN HOLDINGS, INC.



	Jurisdiction of Incorporation	Ownership (directly or indirectly
Hawaiian Airlines, Inc.	Delaware	100%
Hawaiian Gifts, LLC	Arizona	100%
Airline Contract Maintenance and Equipment, Inc.	Delaware	100%
HA 3049 Ualena Street LLC	Delaware	100%
Hawaiian Airlines Foundation	Hawaii	100%
Aviation Legacy LLC	Delaware	100%
Elliott Street Holdings, Inc. (Delaware)	Delaware	100%

92544055_10

Exhibit 21.1

LIST OF SUBSIDIARIES OF HAWAIIAN HOLDINGS, INC.

Hawaiian Airlines, Inc.

Hawaiian Gifts, LLC

Airline Contract Maintenance and Equipment, Inc.

HA 3049 Ualena Street, LLC

Elliott Street Holdings, Inc.

Aviation Legacy, LLC

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:


(1)	Registration Statement (Form S-8 No. 333-127732),


(2)	Registration Statement (Form S-8 No. 333-172356),


(3)	Registration Statement (Form S-8 No. 333-204383);

of our reports dated February 13, 2019 , with respect to the consolidated financial statements and schedule of Hawaiian Holdings, Inc. and the effectiveness of internal control over financial reporting of Hawaiian Holdings, Inc., included in this Annual Report (Form 10-K) of Hawaiian Holdings, Inc. for the year ended December 31, 2018 .



/s/ ERNST & YOUNG LLP

Honolulu, Hawai'i

February 13, 2019

Exhibit 31.1

CERTIFICATION

I, Peter R. Ingram, certify that:


1.	I have reviewed this Annual Report on Form 10-K of Hawaiian Holdings, Inc.;


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 the registrant as of, and for, the periods presented in this report;


4.	The registrant'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 the registrant 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 the registrant, 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 the registrant'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 the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant'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 the registrant'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 the registrant's internal control over financial reporting.



Date:	February 13, 2019	By:	/s/ PETER R. INGRAM
			Peter R. Ingram President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Shannon L. Okinaka, certify that:

1. I have reviewed this Annual Report on Form 10-K of Hawaiian Holdings, Inc.;


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 the registrant as of, and for, the periods presented in this report;


4.	The registrant'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 the registrant 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 the registrant, 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 the registrant'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 the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant'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 the registrant'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 the registrant's internal control over financial reporting.



Date:	February 13, 2019	By:	/s/ SHANNON L. OKINAKA
			Shannon L. Okinaka Executive Vice President, Chief Financial Officer and Treasurer

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Hawaiian Holdings, Inc. (the Company) for the period ended December 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Mark B. Dunkerley, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	February 13, 2019	By:	/s/ PETER R. INGRAM
			Peter R. Ingram President and Chief Executive Officer

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Hawaiian Holdings, Inc. (the Company) for the period ended December 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Shannon L. Okinaka, Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	February 13, 2019	By:	/s/ SHANNON L. OKINAKA
			Shannon L. Okinaka Executive Vice President, Chief Financial Officer and Treasurer