MESA » Topics » Revenue-Guarantee

These excerpts taken from the MESA 10-K filed Jan 15, 2008.
Revenue-Guarantee
 
As of September 30, 2007, we operated 38 CRJ-900, 13 CRJ-200, and 6 Dash-8 aircraft for US Airways under a revenue-guarantee code-share agreement. In exchange for providing flights and all other services under such agreement, we receive a fixed monthly minimum amount plus certain additional amounts based upon the number of flights flown and block hours performed during the month. US Airways also reimburses us for certain costs on an actual basis, including fuel costs, aircraft ownership and financing costs, landing fees, passenger liability, hull insurance and aircraft property taxes, all as defined in the agreement. In addition, US Airways also provides, at no cost to Mesa, certain ground handling and customer service functions, as well as airport-related facilities and gates at US Airways hubs and cities where both carriers operate. We also receive a monthly payment from US Airways based on a percentage of revenue from flights that we operate under the code-share agreement. Under the our agreement, US Airways has the right to reduce the combined CRJ fleets utilized under the code-share agreement by one aircraft in any six-month period. The Company has received notice of US Airways’ intent to reduce one CRJ-200 in January 2008, one CRJ-200 in September 2008 and one CRJ-200 in January 2009 and expects to continue to receive notice on one CRJ-200 every six months. In addition, US Airways may eliminate the Dash-8 aircraft upon 180 days prior written notice. The code-share agreement terminates on June 30, 2012 unless US Airways elects to extend the contract for two years or exercises options to increase fleet size. The code-share agreement is subject to termination prior to that date in various circumstances including:
 
  •  If our flight completion factor or arrival performance in our Phoenix hub falls below certain levels for a specified period of time, subject to notice and cure rights;
 
  •  If either US Airways or we become insolvent, file for bankruptcy or fail to pay our debts as they become due, the non-defaulting party may terminate the agreement;
 
  •  Failure by us or US Airways to perform the covenants, conditions or provisions of the code-share agreement, subject to 15 days notice and cure rights;
 
  •  If we or US Airways fail to make a payment when due, subject to ten business days notice and cure rights;


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  •  If we are required by the FAA or the U.S. Department of Transportation (“DOT”) to suspend operations and we have not resumed operations within three business days, except as a result of an emergency airworthiness directive from the FAA affecting all similarly equipped aircraft, US Airways may terminate the agreement;
 
  •  Upon a change in our ownership or control without the written approval of US Airways.
 
Revenue-Guarantee


 



As of September 30, 2007, we operated 38 CRJ-900, 13
CRJ-200, and 6 Dash-8 aircraft for US Airways under a
revenue-guarantee code-share agreement. In exchange for
providing flights and all other services under such agreement,
we receive a fixed monthly minimum amount plus certain
additional amounts based upon the number of flights flown and
block hours performed during the month. US Airways also
reimburses us for certain costs on an actual basis, including
fuel costs, aircraft ownership and financing costs, landing
fees, passenger liability, hull insurance and aircraft property
taxes, all as defined in the agreement. In addition, US Airways
also provides, at no cost to Mesa, certain ground handling and
customer service functions, as well as airport-related
facilities and gates at US Airways hubs and cities where both
carriers operate. We also receive a monthly payment from US
Airways based on a percentage of revenue from flights that we
operate under the code-share agreement. Under the our agreement,
US Airways has the right to reduce the combined CRJ fleets
utilized under the code-share agreement by one aircraft in any
six-month period. The Company has received notice of US
Airways’ intent to reduce one
CRJ-200 in
January 2008, one CRJ-200 in September 2008 and one CRJ-200 in
January 2009 and expects to continue to receive notice on one
CRJ-200 every six months. In addition, US Airways may eliminate
the Dash-8 aircraft upon 180 days prior written notice. The
code-share agreement terminates on June 30, 2012 unless US
Airways elects to extend the contract for two years or exercises
options to increase fleet size. The code-share agreement is
subject to termination prior to that date in various
circumstances including:


 














































  • 

If our flight completion factor or arrival performance in our
Phoenix hub falls below certain levels for a specified period of
time, subject to notice and cure rights;
 
  • 

If either US Airways or we become insolvent, file for bankruptcy
or fail to pay our debts as they become due, the non-defaulting
party may terminate the agreement;
 
  • 

Failure by us or US Airways to perform the covenants, conditions
or provisions of the code-share agreement, subject to
15 days notice and cure rights;
 
  • 

If we or US Airways fail to make a payment when due, subject to
ten business days notice and cure rights;





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  • 

If we are required by the FAA or the U.S. Department of
Transportation (“DOT”) to suspend operations and we
have not resumed operations within three business days, except
as a result of an emergency airworthiness directive from the FAA
affecting all similarly equipped aircraft, US Airways may
terminate the agreement;
 
  • 

Upon a change in our ownership or control without the written
approval of US Airways.


 




This excerpt taken from the MESA 10-K filed Dec 14, 2006.
Revenue-Guarantee
 
As of September 30, 2006, we operated 38 CRJ-900, 18 CRJ-200, and six Dash-8 aircraft for US Airways under a revenue-guarantee code-share agreement. In exchange for providing flights and all other services under the agreement, we receive a fixed monthly minimum amount plus certain additional amounts based upon the number of flights flown and block hours performed during the month. US Airways also reimburses us for certain costs on an actual basis, including fuel costs, aircraft ownership and financing costs, landing fees, passenger liability and hull insurance, and aircraft property taxes, all as defined in the agreement. In addition, US Airways also provides, at no cost to Mesa, certain ground handling and customer service functions, as well as airport-related facilities and gates at US Airways hubs and cities where both carriers operate. We also receive a monthly payment from US Airways based on a percentage of revenue from flights that we operate under the code-share agreement. Under the amended code-share agreement, US Airways has the right to reduce the combined CRJ fleets utilized under the code-share agreement by one aircraft in any six-month period commencing in June 2006 (except during the calendar year 2007 in which 2 CRJ-200 can be eliminated in each six-month period). The Company has received notice of US Airways’ intent to reduce one CRJ-200 in December 2006, two CRJ-200s in April 2007 and two CRJ-200s in September 2007. In addition, beginning in February 2007, US Airways may eliminate the Dash-8 aircraft upon 180 days prior written notice. The code-share agreement terminates on June 30, 2012 unless US Airways elects to extend the contract for two years or exercises options to increase fleet size. The code-share agreement is subject to termination prior to that date in various circumstances including:
 
  •  If our flight completion factor or arrival performance in the Phoenix Hub falls below a specified percentage for a specified period of time, subject to notice and cure rights;
 
  •  If either US Airways or we become insolvent, file for bankruptcy or fail to pay our debts as they become due, the non-defaulting party may terminate the agreement;
 
  •  Failure by us or US Airways to perform the covenants, conditions or provisions of the code-sharing agreement, subject to 15 days notice and cure rights;
 
  •  If we or US Airways fail to make a payment when due, subject to ten business days notice and cure rights; or
 
  •  If we are required by the FAA or the U.S. Department of Transportation (“DOT”) to suspend operations and we have not resumed operations within three business days, except as a result of an emergency airworthiness directive from the FAA affecting all similarly equipped aircraft, US Airways may terminate the agreement.
 
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