Code Share And Revenue Sharing Agreement

EXHIBIT 10.2


CODE SHARE AND REVENUE SHARING AGREEMENT


This CODE SHARE AND REVENUE SHARING AGREEMENT (the "Agreement") is made and entered into to be effective as of March 20, 2001 (the "Effective Date"), by and between AMERICA WEST AIRLINES, INC., a Delaware corporation ("AWA"), and CHAUTAUQUA AIRLINES, INC., a New York corporation ("CAI").


R E C I T A L S


A. AWA holds a certificate of public convenience and necessity issued by the Department of Transportation ("DOT") authorizing AWA to engage in the interstate and oversees air transportation of persons, property and mail between all points in the United States, its territories and possessions.


B. CAI holds a certificate of public convenience and necessity issued by the DOT authorizing CAI to engage in the interstate transportation of persons, property and mail in the United States, its territories and possessions.


C. AWA owns various trades marks, services marks and logos, including "America West Airlines," "America West Express," and distinctive exterior color decor and patterns on its aircraft, hereinafter referred to individually and collectively as the "AWA Service Marks".


D. AWA and CAI desire to provide scheduled air transportation services as America West Express using a Columbus, Ohio hub and to share in the revenue and costs of such services as provided in this Agreement.


NOW, THEREFORE, in consideration of the promises, covenants, representations and warranties hereinafter set forth, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, AWA and CAI agree as set forth below.


A G R E E M E N T


1. RIGHTS, RESPONSIBILITIES AND OBLIGATIONS OF CAI:


1.1 FLIGHT SERVICE. Commencing upon the date the first Aircraft is
placed into Flight Services pursuant to Section 1.2 (the
"Commencement Date"), and continuing during the term of this
Agreement, CAI shall operate America West Express air
transportation services (the "Flight Services"), using the
fleet of aircraft as established pursuant to Section 1.2, to
and from Columbus, Ohio as the hub city ("CMH") for the Flight
Services, and based upon the schedule established from time to
time by AWA (the "Schedule") in written notice to CAI (a
"Schedule Notice"). AWA, to the extent reasonably practicable,
shall provide CAI with a Schedule Notice at least 60 days
prior to any Schedule change. For purposes of this Agreement,
"Flights" means flights operated pursuant to the Schedule. AWA
may change the Schedule by issuance of a Schedule Notice at
any time. When creating a Schedule,


AWA shall: (i) take into account the number of Aircraft in the
Fleet and CAI's aircraft maintenance requirements; (ii) create
a Schedule which will permit CAI to schedule flight crews in a
manner consistent with industry operational practices; (iii)
schedule block times based on AWA's internal block time
policy; (iv) provide for a minimum of [*] turn time in CMH and
[*] turn time in other cities; (v) provide for at least [*] of
the Aircraft to remain overnight in CMH for a minimum of [*]
hours; (vi) provide for Aircraft to remain overnight at least
[*] (vii) take into account airport facilities available for
Aircraft handling; (viii) provide for the following Aircraft
utilization: (a) an average of not less than [*] block hours
per day per Aircraft in the Fleet during each calendar month;
(b) an average of [*] Available Seat Miles nor more than [*]
Available Seat Miles per day per Aircraft in the Fleet during
each calendar month; and (c) an average of not less than [*]
departures per day per Aircraft in the Fleet during each
calendar month; and (ix) provide for scheduled heavy
maintenance on Aircraft as required from time to time. CAI, to
the extent reasonably practicable, shall implement all changes
in the Schedule contained in a Schedule Notice in accordance
with AWA's scheduling requirements but in no event greater
than [*] after receipt of a Schedule Notice. CAI or any of
its affiliates shall not provide any flight service from
Columbus for any other airline utilizing Columbus, Ohio as a
hub city. Except as provided in the previous sentence, CAI may
provide flight services for other airlines. "Available Seat
Miles" means one seat traveling one statute mile.


CAI acknowledges that AWA may Schedule Flights using ERJs in
and out of the Phoenix, Arizona Sky Harbor International
airport. Prior to CAI commencing such Flights, CAI and AWA, in
good faith based on prevailing market costs and expenses,
[*] to take into consideration the additional and increased
cost of operating such Flights in such location. Upon agreeing
to the Guaranteed Costs adjustment, AWA and CAI shall execute
and attach an addendum to this Agreement supplementing the
Guaranteed Costs Schedule. In addition to paying the increased
or additional Guaranteed Costs, [*] in connection with
establishing Flight Services out of the Phoenix, Arizona Sky
Harbor International Airport (the "Transition Costs"). CAI,
within 60 days after commencement of such Flights, shall
submit to AWA a statement for the Transition Costs together
with backup documentation of such Transition Costs (the
"Transition Statement"). AWA shall reimburse the Transition
Costs within 30 days after receipt of the Transition
Statement.


1.2 FLEET.


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1.2.1 INITIAL ERJ FLEET. CAI shall provide the Flight
Services using [*] (collectively, the "Fleet" and
individually, each an "Aircraft"). [*] shall be
placed into Flight Services by CAI during or before
each of the following calendar months: August 2001,
September, 2001, October 2001 (2 Aircraft), January
2002, February 2002, March 2002, April 2002, May
2002, June 2002, July 2002, and August 2002 for a
total of 12 Aircraft (collectively, the "Firm
Aircraft"). CAI shall provide AWA with at least 90
days' prior written notice of the calendar week in
which each of the Firm Aircraft will be placed into
Flight Services under this Agreement (each, a
"Scheduled Delivery Week"). If an Aircraft is not a
"new" Aircraft from the manufacturer, then the
Aircraft shall not be older than [*] from new
manufacturer delivery and the interior and exterior
shall be decorated, painted and reconfigured to AWA
specifications at CAI's sole cost and expense prior
to the delivery date.


1.2.2 ERJ FLEET EXPANSION. AWA shall have the options to
expand the Fleet by [*] to acquire the Aircraft in
the years pursuant to that certain agreement with the
Aircraft manufacturer referenced on Exhibit D,
attached hereto. On or before each Option Exercise
Date (set forth in the chart below), AWA, by written
notice to CAI, shall have the option to require CAI
to increase the Fleet by the addition of two new
Aircraft in the applicable In Service Months (each,
a "Fleet Expansion Option"):


Option Exercise Date in Service Months
-------------------- ----------------- [*] [*]


[*] The two Aircraft that are the subject
of each Fleet Expansion Option shall be
added to the Fleet by CAI one each in each
of the applicable In Service Months.


(c) CAI shall provide AWA with at least 90 days'
prior written notice of the Scheduled
Delivery Week for each Option Aircraft that
is placed into Flight Service pursuant to
this Section 1.2.2.


1.2.3 [*]


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Aircraft after the 10th anniversary of the date such
Aircraft is placed into Flight Services (each, a
[*]). In addition, AWA may require CAI to [*] (i) any
[*] after the sixth anniversary of the Commencement
Date, and (ii) any [*] after the eighth anniversary
of the Commencement Date, by providing CAI with an
[*] no less than 365 days prior to the [*] date
(each, an [*]). CAI shall remove the applicable
Aircraft from providing Flight Services on the date
set forth in the [*] (the [*]). From and after the
[*], the Aircraft shall no longer be used to provide
Flight Services and AWA shall have no further
payment obligations under this Agreement for such
Aircraft. [*]


1.2.4 SPARE AIRCRAFT. The [*] Aircraft placed into Flight
Services under this Agreement shall be a spare
Aircraft under this Agreement. The spare Aircraft
shall be an Aircraft providing Flight Services for
all purposes under this Agreement, including, without
limitation, payments under Section 6.1.7 and 6.2.


1.2.5 FAILED DELIVERY. Notwithstanding anything in this
Agreement to the contrary, CAI shall not be liable to
AWA for the failure to deliver any Aircraft during a
Scheduled Delivery Week (a "FAILED DELIVERY") if: (i)
the failure to deliver is the result of the
manufacturer's failure to deliver the Aircraft to CAI
as a result events, facts or circumstances beyond the
control of CAI and not directly or indirectly
attributable to or arising or resulting from the acts
or omissions of CAI, its agents, employees or
contractors; (ii) CAI uses commercially reasonable
efforts to acquire a replacement aircraft for the
Aircraft that was not delivered; and (iii) [*]
(an "EXCUSED FAILURE"). In the event of a Failed
Delivery, CAI shall use commercially reasonable
efforts to obtain the applicable Aircraft as soon as
practicable after the Scheduled Delivery Week. If the
Aircraft that is the subject of a Failed Delivery is
not delivered within [*] after the Scheduled Delivery
Week, then AWA shall have the option to elect not to
include such Aircraft under this Agreement by
providing written notice to CAI at any time prior to
the actual delivery of such Aircraft. If a Failed
Delivery is not the result of an Excused Failure,
then AWA shall have all rights and remedies under
this Agreement for such Failed Delivery.


1.3 PERSONNEL; TRAINING. CAI shall employ and maintain a
sufficient number of competent, trained personnel, including,
but not limited to [*]. In addition, CAI shall employ and


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maintain a commercially reasonable number of [*] area based
on the Flight Services to be provided pursuant to this
Agreement. CAI shall cause all CAI personnel providing Flight
Services to wear uniforms approved by AWA, which approval
shall not be unreasonably withheld, and shall comply with all
appearance guidelines required of all AWA personnel.


CAI shall provide initial training, recurrent training and
customer service training to personnel reasonably identified
by AWA at programs approved by AWA. AWA shall provide
applicable training materials. [*] all training expenses
including [*] travel expenses. In the event AWA becomes a
hazardous materials carrier, CAI, at AWA's expense, shall
conduct all hazardous materials training required by AWA or
AWA's other code share partners.


1.4 SERVICE QUALITY AND LEVEL. All Flight Services shall be
provided by CAI at a service quality and level of service
(other than first class service) equal to or greater than the
service quality and level of service provided by AWA to the
extent applicable to the type of Aircraft used to provide the
Flight Services.


1.5 MAINTENANCE.


1.5.1 OBLIGATION. CAI, at its own cost and expense, shall
be responsible for the service, repair, maintenance,
overhauling and testing of each Aircraft: (i) in
compliance with the maintenance program for each
Aircraft as approved by the FAA and pursuant to all
applicable aircraft maintenance manuals applicable to
each Aircraft; (ii) so as to keep each Aircraft in
good and safe operating condition; and (iii) so as to
keep the Aircraft in such operating condition as may
be necessary to enable the airworthiness
certification of the Aircraft to be maintained in
good standing. CAI shall retain full authority and
control over the service, repair, maintenance,
overhauling and testing of each Aircraft. AWA shall
have no obligations or duties with respect to the
service, repair, maintenance, overhauling or testing
of any Aircraft.


1.5.2 LOCATION. CAI shall maintain its maintenance base for
the Aircraft in Columbus, Ohio. CAI shall not
relocate its maintenance base, without the prior
written consent of AWA, which consent may be withheld
if the new location fails to meet AWA's maintenance
base requirements. CAI, with the prior written
consent of AWA, may add maintenance bases as
necessary to provide the Flight Services at locations
which meet AWA's maintenance base requirements.


1.6 EMERGENCY OPERATIONS. CAI and AWA shall coordinate to develop
a plan that complies with applicable Regulations (as defined
below) to be implemented in the event of any incident
involving personal injury or death to a passenger or crew
member on a Flight. The emergency response teams of AWA and
CAI shall coordinate their efforts and shall cooperate fully
in response to such emergency.


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1.7 FLEET CONFIGURATION. All Aircraft in the Fleet on the
Commencement Date and Aircraft added to the Fleet shall have a
passenger seating configuration and seating capacity as
provided in the first Aircraft in the Fleet. AWA, at AWA's
cost and expense, may require CAI to reconfigure or change the
seating capacity of an Aircraft. All such requested changes
shall be implemented within 180 days after CAI's receipt of
written request from AWA. Upon the expiration or termination
of this Agreement or the elimination of any reconfigured
Aircraft pursuant to Section 1.2.3, AWA, within 30 days after
receipt of written request, shall reimburse CAI for all actual
out-of-pocket costs and expenses incurred by CAI to
reconfigure any Aircraft back to the original configuration
existing prior to any reconfiguration requested by AWA.


1.8 CLEANLINESS. [*], shall cause all Aircraft while remaining
overnight at CMH to be cleaned and maintained in an
appearance in accordance with cleaning standards, requirements
and guidelines promulgated by AWA from time to time.


2. RIGHTS, RESPONSIBILITIES AND OBLIGATIONS OF AWA.


2.1 FLIGHT MANAGEMENT ITEMS. AWA, in its sole discretion, shall:
(i) designate from time to time, pursuant to each Schedule
Notice, the routes on and destinations to which CAI is to
provide the Flight Services and the times of departure for the
Flights; (ii) set the fares to be paid for such Flights by the
passengers; and (iii) be responsible for the passenger
booking, yield management and overbooking of Flights, limited
only by the Fleet required to be maintained by CAI pursuant to
this Agreement.


2.2 MARKETING/REVENUE. AWA, in its sole discretion and at its sole
cost, shall market, advertise and sell tickets on all Flights.
AWA shall provide all reservation services for the Flight
Services and shall pay all ticketing and advertising expenses,
credit card charges, travel agent commissions and CRS fees
applicable to such services. AWA shall be entitled to retain,
and CAI shall pay to AWA, all revenue and income generated by
the Flight Services. CAI shall provide to AWA all tickets and
other revenue documentation collected or lifted by CAI. AWA
shall process CAI lifted passenger lift documents using
standard industry pricing procedures. CAI agrees to cooperate
with AWA on any special pricing or reporting requirements. CAI
shall supply AWA with specific reporting requirements.


2.3 AIRPORT SERVICES. [*]: (i) provide curb-side service, check-in
service, ticketing and security services for all Flights;
(ii) transfer all baggage for passengers connecting to and
from AWA flights and Flights; (iii) provide baggage, cargo and
mail handling services for all Flights; (iv) provide Aircraft
ground handling; (v) provide Aircraft cleaning (other than
during overnight turns at CMH) and provisioning during turns
and overnight stays; (vi) provide food and beverage supplies
for each Flight; and (vii) [*].


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2.4 OTHER CODE SHARE PARTNERS. AWA shall have the right to enter
into code share, joint marketing, charter or other
alliance-type agreements with any other flight service
commuter operator to provide flight services to any
destinations or for any routes. AWA may permit any of AWA's
other code share partners to place their code on any Flight.
AWA or its code share partners shall pay all costs and
expenses incurred by CAI in placing such other code on such
Flights.


2.5 CHARTERS. AWA, at its sole discretion, may market charter
flights on the Aircraft. CAI shall operate such charter
flights provided flight crews and Aircraft are available and
not otherwise subject or committed to maintenance
requirements. CAI is required to operate the charters in a
manner consistent with the terms of this Agreement. In respect
of any charter flight, AWA and CAI, in good faith, shall
negotiate the costs and expenses to be paid by AWA for such
services.


2.6 AIRPORT SLOTS. AWA shall provide to CAI the right to use the
airport slots owned by AWA at airports that are or become slot
controlled (the "Slots"). The Slots shall at all times remain
the property of AWA and upon the expiration or earlier
termination of this Agreement or upon the request of AWA, CAI
shall take all steps necessary to insure all rights acquired
by CAI in the Slots, if any, are conveyed to AWA or any other
person or entity designated by AWA.


2.7 HANGER. AWA shall use commercially reasonable efforts to
provide CAI with hanger space at CAI leased by AWA (the
"Hanger"). Prior to entering into a lease for hanger space at
CMH, CAI shall meet and confer with AWA as to the availability
of the Hanger. If CAI executes a lease for hanger space at
CMH, then CAI shall not be required to use the Hanger provided
by AWA unless AWA reimburses CAI for all costs and expenses
incurred by CAI in terminating the lease and any unamortized
capital improvements to such space. If AWA provides the Hanger
to CAI, then the Guaranteed Costs shall be reduced by an
amount equal to the actual occupancy costs being paid by CAI
at CMH.


3. COMPLIANCE WITH REGULATIONS.


3.1 REGULATIONS. CAI shall perform its obligations and duties
under this Agreement, including, without limitation, all
Flight Services in full compliance with any and all applicable
laws, ordinances, codes, statutes, orders, directives,
mandates, requirements, rules and regulations, whether now in
effect or hereafter adopted or promulgated, of all
governmental agencies having jurisdiction over CAI's
operations, including but not limited to the FAA and the DOT
(collectively, "Regulations").


3.2 FLIGHT OPERATIONS. CAI shall be responsible for the operation
of each Aircraft and the safe performance of the Flights in
accordance with the Regulations and airline industry standard
practice and shall retain full authority, operational control
and possession of the Aircraft to do so. CAI, its


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agents or employees, for the purpose of the safe performance
of the Flights, shall have absolute discretion in and shall
have sole responsibility for all matters concerning the
preparation of each Aircraft for its Flights, and all other
matters relating to the technical operation of the Aircraft.
CAI, insofar as such relates to the safe operation of a
Flight, shall have sole and absolute discretion as to the load
carried and its distribution and as to the decision whether
such Flight shall be taken. CAI shall be solely responsible
for and AWA shall have no obligations or duties with respect
to the dispatch of all Flights.


3.3 REGISTRATION. All Aircraft shall remain registered in the
United States of America in accordance with the Regulations.


3.4 DISCLOSURE. CAI, upon 3 business days' prior written request,
shall provide AWA the opportunity to review all operating
specifications, operational regulations, manuals and
calculations with respect to all Aircraft and flight
statistics with respect to all Flights at CAI's corporate or
other relevant offices where such records are located.


3.5 REVIEW/AUDIT. AWA, [*], may review, at CAI's corporate office,
airport ticket offices and other relevant offices, all
records, books, logs, files, documentation and information
maintained by CAI, or any of its maintenance or service
contracts, in connection with Flight operation, safety and
regulatory compliance, employee training, Flight dispatch,
Aircraft use, operation, maintenance and repair, Flight
incidents and governmental orders, mandates and requirements.


3.6 REPORTING. This Agreement shall be treated a ...