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HomeMy WebLinkAboutC04-130 United Air Lines
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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.
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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.
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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.
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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.
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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
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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]
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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.
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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.
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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
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