No preview available
HomeMy WebLinkAboutC04-130 United Air Lines U t~ -~ 3 0- Ll~ United Contract No. 125790 UNITED AIR SERVICE AGREEMENT THIS AGREEMENT is made and entered into by and between UNITED AIR LINES, INC. ("United'), a Delaware corporation having its principal offices at 1200 E. Algonquin Rd., Elk Grove Township, Illinois 60007, and Eagle County Colorado, a body corporate and politic by and through its Board of County Corrunissioners ("Client"), with its principal offices located at 500 Broadway, Eagle, Colorado 81631-0850. RECITALS WHEREAS, United is an air carrier engaged in the transportation of persons, property and mail; and WHEREAS, Client is Eagle County Colorado, a body corporate and politic; and WHEREAS, Client desires to secure new and/or additional air transportation service to the Destination Airport during the Season; and WHEREAS, United desires to arrange such air transportation at a reasonable return on its investment. NOW THEREFORE, in consideration of the mutual covenants of the parties as herein contained, the parties agree as follows: Definitions "Destination Airport" means an airport, as specified and more fully described on Attachment A, to be served by an air carrier as the primary airport destination near the Site. "Base Airport(s)" means an airport(s), as specified and more fully described on Attachment A, to be served by an air carrier as the primary originating or connecting airport for United's air transportation services hereunder. "Site" means the location, as specified and more fully described on Attachment A. "Season" means the period during which services will be provided by United to Client under this Agreement and which is specified and more fully described on Attachment A. "Equipment" means the aircraft type(s) which an air carrier will be using to provide the air transportation services useful to Client under this Agreement during the Season and which is specified and more fully described on Attachment A. "Flights" means the city-pair air transportation services provided by an air carrier in accordance with the terms of this Agreement as such operations are designated pursuant to Article 3. "Canceled Flights" means the Flights under this Agreement that are canceled in accordance with the terms of Article S.B. "Diverted Flights" means the Flights under this Agreement that are diverted in accordance with the terms of Article S.C. "Minimum Guaranteed Cash Contribution" means the amount to be paid by Client to United that is the difference between the $4,000 cash contribution per round trip minus either the actual cash contribution per roundtrip or $1,300 per round trip forecast by United whichever is greater. The parties agree that the Season is 97 days in length and United requires $4,000 cash contribution per round trip and has forecast/guaranteed $1,300 per round trip leaving a potential shortfall of $2,700 per round trip or a total shortfall of $261,000 for the Season. Each dollar generated by United i Contract No. 125790 above the $1,300 shall reduce Client's Minimum Guaranteed Cash Contribution to United and Client shall not be required to pay United more than $261,000 under this Agreement. The parties agree that the Minimum Guaranteed Cash Contribution will be calculated at the close of the Season by totaling the amount owed, if any, from each round trip. Example: If the actual cash contribution, calculated with the above definition, for the Season is $145,500 the Minimum Guaranteed Cash Contribution would be $388,000, ($4,000 X 97), - $145,500 or $242,500. The $145,500 actual cash contribution includes the United forecast cash contribution of $126,100, ($1300*97). The Client shall not be required to pay United more than $261,000 under this Agreement. "Actual Origination and Destination Revenue" means the total Origination and Destination passenger revenue related to the flights described in Attachment A. 2. Term This Agreement shall commence on the latest date signed and, unless sooner terminated in accordance with its provisions, shall terminate on September 8, 2004. 3. Air Services United, subject only to its acquisition of all necessary governmental appxovals, will cause to be provided regularly scheduled passenger air service during the period or periods set forth on Attachment A between the Destination Airport and the Base Airport(s) in accordance with the Schedule and using the Equipment as described on Attachment A ("Flights"). A. United shall exercise its best effort to cause the Flights to be scheduled to connect with arriving flights and departing flights at the priority cities listed in Attachment A-1. B. All Flights shall be regularly scheduled flights, unless otherwise provided on Attachment A, and shall not, for any purpose, be classified or designated as charter flights. C. All Equipment selections are subject to the right of United to cause the substitution of equipment or the restriction of capacity, if necessary, to enable United to respond to emergency conditions or circumstances, including unplanned maintenance, or weight limitations due to weather or runway conditions. It is understood by both parties that all Flights which are expected to be operated by one or more of the aircraft, as described on Attachment A, but which for weather or mechanical failure reasons may not be available to perform one or more Flights and that backup aircraft, if any and of whatever type, shall be at the sole discretion of United. D. United shall determine the pricing of its service at its sole discretion; provided, however, that its pricing shall be done in a manner such that it is competitive with the then current level of service in the city-pair market involved. E. United shall publish fares to points beyond the Base Airport(s) wherever reasonable and whenever within its control to do so. 4. Revenue Requirement In consideration for the services provided by or arranged through United under this Agreement, Client will pay United the Minimum Guaranteed Cash Contribution as described in Article 21 herein and as defined in Article I hereof. Page 2 of 10 EGE final doc t l Contract No, 125790 Cost of Service A. United and Client acknowledge that a Flight may be diverted because of weather or other emergency conditions at the Destination Airport or the Base Airport(s), and the Flight will be required to land or take- off at an airport other than the Destination Airport or the Base Airport(s) ("Diverted Flights"). For all Diverted Flights, United shall be responsible for delivering the passengers and baggage at its expense and in the most expedient manner to the intended Destination Airport, regardless of which airport is used for the Diverted Flight. B. United and Client acknowledge that United may be required to cancel Flights due to mechanical problems, weather conditions, or other circumstances beyond the reasonable control of United ("Canceled Flights"). If circumstances or conditions result in Canceled Flights, United shall have the obligation to arrange alternate transportation to the Destination Airport for passengers who are ticketed on Flights to the Destination Airport via the manner which best serves the ticketed passenger's interest but in accordance with United's tariffs. Such alternative air transportation (on or off line) shall be at United's expense. Non-Revenue Passengers Except for United's policies on positive space business travel and VIP travel, any available unsold seats on a Flight shall be treated by United the same as any other "space available basis" seat on the air carrier used. United shall have the right to use such unsold seats on any Flights on a "space available basis" according to United's policies and procedures Joint Marketing Efforts A. United and Client shall cooperate in exchanging flight booking information on Flights; provided, however, that the parties agree any such information supplied by one party to the other is proprietary and co~dential information and will be treated as confidential by the receiving party, used only as necessary to perform obligations under this Agreement, and shall be made available only to those with a need to know and to those consented to in writing by the party supplying such information. B. United agrees that it will, immediately upon execution hereof, take all necessary steps to list as scheduled service all Flights hereunder in all computer reservation systems (including its own services and that of others) and in any airline service guides, including the Official Airline Guides, and its own and its code share partners' timetables. C. Client shall promote the service and reservation telephone number of United in its appropriate promotional and informational materials. The corporate and the marketing contacts of the parties are as set forth on Attachment C. The respective corporate contacts shall be the primary person responsible for managing and facilitating the processing of this Agreement. D. Promotional material relating to the services hereunder and produced by one party must be received for approval and approved by the other party prior to distribution. Default -Remedies A. A party shall be deemed to be in default hereunder if said party is in material breach of its obligations under any provisions of this Agreement and such party does not cure such default within a period of ten (10) days after the effective date of notice from the other party specifying the breach, If a party is in default pursuant to the foregoing, the non-defaulting party shall have all rights and remedies provided by law or equity, and, in addition, shall have the right, at its sole option, without prejudicing its other rights and remedies, to terminate this Agreement by giving the defaulting party notice of such termination; provided, however, that if a party desires to exercise its right to terminate pursuant to this Article 8.A, it must exercise said option within twenty (20) days after the expiration of the ten (10) day cure period provided for herein. Page 3 of 10 EGE final.doc 1 Contract No. 125790 B. If bankruptcy proceedings are commenced with respect to a party and if this Agreement has not otherwise terminated, then the other party may suspend all further performance of this Agreement until the party involved in bankruptcy assumes or rejects this Agreement pursuant to section 365 of the Bankruptcy Code or any similar or successor provision. Any such suspension of further performance by a party pending the other party's assumption or rejection will not be a breach of this Agreement and will not affect a party's right to pursue or enforce any of its rights under this Agreement or otherwise. 9. Governing Law This Agreement, and any dispute or action under this Agreement, including any action in tort, shall be construed in accordance with, and the remedies hereunder shall be governed by, the internal laws of the State of Illinois. Notwithstanding the foregoing the parties agree that nothing contained herein waives or is intended to waive any protections that may be applicable to Eagle County under the Governmental Immunity Act Section 24-10-101 et. Seq. C.R.S and that Eagle County is entitled to protections afforded under such Act. 10. Indemnification: Insurance To the extent permitted by law, each party shall indemnify and hold harmless the other party, and its officers, directors, employees, and agents from all liabilities, damages, injuries, deaths, losses, claims, suits, judgments, costs and expenses, including reasonable attorneys' fees, directly or indirectly incurred by the other party, from claims by third parties as a result of or arising out of or in connection with its respective products or services supplied or performed in connection with this Agreement. United represents to Client that it is a fully qualified airline operating within all applicable governmental regulation, and with required insurance or loss protection for all its activities performed hereunder ,including without limitation, airline liability insurance with aggregate limits of at least Fifly Million and no/100 United States Dollars ($50,000,000.00 US) for personal injury (including without limitation bodily injury an death) and property damage. 11. Assignment Neither Party may assign this Agreement or any interest therein without the prior written consent of the other party; provided, however, that United may assign its obligations to its parent company or a subsidiary of either United or its parent company. 12. Waivers and Modifications This Agreement, including its Attachments, embodies the entire Agreement and understanding of the parties and as of its effective date terminates and supersedes all prior or independent agreements and understandings between the parties, whether oral or in writing, covering the subject matter of this Agreement. The provisions of this Agreement shall govern all services to be provided hereunder by the parties, and no addition, amendment, waiver, modification or document contrary to the provisions of this Agreement shall be effective unless signed jointly by an official of United and by an official of Client. 13. Headings The headings contained herein are for convenience and reference and are not intended to define or limit the scope of any provision of this Agreement. 14. Relationship of the Parties For the purposes of this Agreement, neither party shall be deemed to be the agent, partner, employee or a joint venturer of the other party. Page 4 of 10 EGE final.doc U l Contract No. 125790 15 16. 17. 18 Notices Any notice required to be given by either party to the other pursuant to this Agreement shall be in writing and shall be deemed to have been properly given if delivered in person or by electronic transmission to the party entitled hereto or if mailed to the party entitled thereto by registered or certified mail, return receipt requested. If delivered, said notice shall be deemed effective and complete on the date of such delivery. If mailed, said notice shall be deemed effective and complete two (2) business days after mailed. Until changed by notice, mailing shall be to the following: By Client to United: Leisure Sales (WHQLS) United Air Lines, Inc. 1200 E. Algonquin Rd. Elk Grove Township, IL 60007 Attn: Director, Specialty Sales Force Maieure By United to Client: Eagle County Government P.O. Box 850 Eagle, CO 81631 Attn: County Administrator A. If any party is rendered unable, in whole or in part, by force majeure to carry out its obligations under this Agreement, other than the obligation to make money payments, that party shall give the other party prompt notice of the force majeure with reasonably full particulars concerning it, and, thereupon, the obligations of the party giving the notice, so far as they are affected by the force majeure, shall be suspended during, but no longer than, the continuance of the force majeure. B. The term "force majeure" as here employed shall mean an act of God, strike, lockout or other industrial disturbance, act of the public enemy, war, blockage, public riot, lightning, fire storm, flood, explosion, failure to timely receive necessary governmental approvals, governmental restraint, and any other cause, whether of the kind specifically enumerated above or otherwise, which is not reasonably within the control of the party claiming suspension. Audit Upon reasonable notice, the Client, at its expense, shall have the right to audit and inspect, at United's offices during normal business hours, United's books and records as they relate to the determination of Actual Origination and Destination Revenue for the sole purpose of ensuring that, in determining the Actual Origination and Destination Revenue, United is utilizing the same methodology as is applied to all of United's similar routes. United will provide traffic, yield and pricing information with respect to the Flights to Client in a manner to be mutually agreed upon. Confidentiality A. Except in any proceeding to enforce any of the provisions of this Agreement, neither party will, without the prior written consent of the other, use, publicize or disclose to any third party, either directly or indirectly, any of the following (hereinafter "Confidential Information"): (i) any confidential or proprietary information or data, either oral or written, received from and designated as such by the disclosing party. B. If either party is served with a subpoena or other legal process requiring the production or disclosure of any Confidential Information, then that party, before complying, will immediately notify the non-disclosing party and the non-disclosing party shall be given a reasonable period of time to intervene and contest disclosure or production. Neither party shall be in breach of this Agreement for failing to comply with this provision if compliance with this section would violate the laws, rules or regulations of its government. Page 5 of 10 EGE final.doc L 1 Contract No. 125790 19. Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and permitted assigns. 20. Accountine and Payment of Fees United shall provide Client with a monthly accounting (each, an "Accounting") of the prior month's Actual origination and destination revenue generated by the Flights. Each Accounting will be furnished to Client approximately thirty (30) days following the end of the applicable month during the Season. At the end of the Season, a final accounting covering the entire Season ("Final Accounting") will be provided by United to Client, and Client shall pay to United the Minimum Guaranteed Cash Contribution related to such Final Accounting within thirty (30) days of receipt of the Final Accounting. IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their duly authorized representatives on the date shown below. EAGLE COUNTY, COLORADO BY AND THROUGH ITS BOARD OF COUNTY COMMISSIONERS UNITED AIR LINES, ]NC o~~~~o gy: ~ G~ By: ~~.~,..iL--, ~ { Name: Tom C. Stone dr * Name: Robert McDowell CC~Q~PpO Title: Chairman Title: Director .Specialty Sales Date: C~~G('i ~ ~0~5~ Date: 1 z- b Page 6 of 10 EGE final.doc U ', Contract No. 125790 United Contract No.: 158271 Attachment A Serviced Airports, Season, Equipment and Schedule In accordance with the terms of this Agreement, the parties agree to the following specifications and conditions: DESTINATION AIRPORT: Eagle County Airport, Colorado (EGE) BASE AIRPORT: Denver International Airport (DIA) SITE: Eagle, Colorado SEASON: June 3, 2004 -September 7, 2004 EQUIPMENT: 757-200 SCHEDULE: [See Attachment A-1 for service dates and Schedule] Page 7 of ] 0 EGE final.doc U Contract No. 125790 United Contract No.: 158271 Attachment A-1 Service Dates and Schedule Dates of Service: Segment DEN-EGE Segment EGE-DEN Schedule: Daily Dav and Equipment Daily/757 Dav and Equipment Daily/757 Orin Dest. Dpt.-Arr. ~*) DEN-EGE 1112-1205 Period of Segment Service 06/03/(14-09/07/04 Period of Segment Service 06/03/04-09/07/04 Orig.-Dest. I?nt.-Arr. Equipment ~*) EGE-DEN 1305-1353 757-200 * Flight times are subject to change, but such times will remain within a 60 minute range in either direction from the times set forth above. Page 8 of 10 EGE final.doc U Contract No. 125790 Attachment B Revenue Requirement Pursuant to Article 4 and as further consideration for United's arranging for the initiation or expansion of the availability of scheduled air service of Flights between the Base Airport(s) and the Destination Airport during the Season, Client agrees to participate in the following revenue plan. During the season the Client guarantees United Airlines a Minimum Guaranteed Cash Contribution. A calculation of cash contributions and all other amounts in this agreement will be determined in accordance with United's standard accounting practices. Page 9 of 10 EGE final.doc U Contract No. 125790 Primary Corporate Contacts: Attachment C Primary Contacts United - Michael Moeller Seriior Staff Planner Phone 847 700-9579/Fax 847 700-7013 Client - Jack Ingstad County Administrator Eagle County Goverrunent Phone (970) 328-8506 /Fax (970) 328-8629 2. Primary Sales Contacts: United = Steven Reetz National Account Manager-Leisure Sales Phone 847-700-9579/Fax 847 700-7013 Client = Jack Ingstad County Administrator Eagle County Government Phone (970) 328-8506 /Fax (970) 328-8629 Page 10 of 10 EGE final.doc