We have restrictions on both Scheduled block hours and the Revenue share. I have not heard of any violations of the JV sections but UAALPA does have a committee that monitors compliance.

1-C-3-b-(3) In the event the Company or a Company Affiliate enters into or maintains a Revenue Share Agreement with one or more Foreign Air Carriers, the Scheduled block hours of Company Flying between the United States and Territories and the foreign country or countries covered by the applicable Revenue Share Agreement in each Rolling Twelve-Month Period shall be not less than ninety percent (90%) of the Scheduled block hours of Company Flying between the United States and Territories and foreign countries covered by the applicable Revenue Share Agreement either:

1-C-3-b-(3)-(a) During the twelve (12) full calendar months immediately prior to the effective date of this Agreement (if the Foreign Air Carrier was a party to a Revenue Share Agreement on the effective date of this Agreement) (a “Base Period”), or

1-C-3-b-(3)-(b) During the twelve (12) full calendar months immediately prior to the effective date of the Revenue Share Agreement with the Foreign Air Carrier (if the Foreign Air Carrier was not a party to a Revenue Share Agreement on the effective date of this Agreement) (a “Base Period”).



1-C-3-c Revenue Limitations Under Revenue Share Agreements with Foreign Air Carriers

Measured on a Rolling Twelve-Month basis for each Revenue Share Agreement, the Company's revenue from that Revenue Share Agreement associated with Flights that are 1) operated by the Company between the United States and Territories and Foreign Airports or between Foreign Airports, and 2) covered by the applicable Revenue Share Agreement, shall not exceed 130% of the total revenue onboard Company Flights that are 1) operated by the Company between the United States and Territories and Foreign Airports or between Foreign Airports, and 2) covered by the applicable Revenue Share Agreement. For purposes of this provision, total revenue onboard Company Flights equals the prorated segment passenger revenue as recognized by the Company's business revenue accounting systems used in the Company's public reports.

For example, if, during a Rolling Twelve-Month period, 1) total revenue onboard Company Flights between the United States and Foreign Airports or between Foreign Airports covered by a Revenue Share Agreement equals $5.872B, and 2) the Company receives an additional $100M under the applicable Revenue Share Agreement associated with these same Flights (meaning that the Company receives total revenue under the Revenue Share Agreement associated with these Flights of $5.972B), then 3) the percentage of the Company's revenue associated with these Flights under the Revenue Share Agreement ($5.972B) would be 101.7% of the Company's onboard revenue for these Flights ($5.872B), because $5.972B divided by $5.872B results in 101.7%. Since this 101.7% would be smaller than the 130% limit, the Company in this example would be in compliance with Section 1-C-3-c.

As another example: if, during a Rolling Twelve-Month period, 1) there are no Company Flights covered by a Revenue Share Agreement, meaning that total revenue onboard Company Flights under this Revenue Share Agreement equals $0, then 2) the Company may not receive any revenue under the applicable Revenue Share Agreement, because the Company receipt of such revenue would exceed the 130% limit in Section 1-C-3-c.


1-L-30 “Revenue Share Agreement” means an agreement or arrangement between or among two (2) or more air carriers or their Affiliates, providing for any form of:

• Capacity purchase,

• Fees for Scheduled block hours or departures,

• Revenue sharing from flight operations,

• Profit sharing from flight operations,

• Margin sharing from flight operations,

• Purchase of blocks of passenger seats on an air carrier for sale or resale by a different air carrier.

For purposes of this definition, the following provisions in an agreement or arrangement do not make it a Revenue Share Agreement: (i) reimbursement of distribution costs, or (ii) payments or receipts under standard industry prorate agreements, standard industry interline service charge agreements, standard industry re-accommodation agreements, or standard industry revenue settlement agreements.