Exhibit 10.1
FOIA CONFIDENTIAL
TREATMENT REQUESTED
 
Supplemental Agreement No. 23
 
to
 
Purchase Agreement No. 2497
 
between
 
The Boeing Company
 
and
 
Alaska Airlines, Inc.
 
Relating to Boeing Model 737-800 and 737-900ER Aircraft
 
 
THIS SUPPLEMENTAL AGREEMENT, entered into as of January 24, 2011, by and between
THE BOEING COMPANY (Boeing) and ALASKA Airlines, Inc. (Customer).
 
WHEREAS, the parties hereto entered into Aircraft General Terms Agreement Number
AGTA-ASA dated June 15, 2005 (the AGTA) and Purchase Agreement No. 2497 dated
June 15, 2005 (the Purchase Agreement), as amended and supplemented, relating to
Boeing Model 737-800 aircraft (the Aircraft), and;
 
WHEREAS, Customer wishes to exercise three (3) Option Aircraft as Aircraft under
the Purchase Agreement as set forth below and in Table 1, Page 12 (each an
Exercised Option Aircraft):
 
Delivery Month
Serial Number
November 2012
41,730
December 2012
41,731
January 2013
41,732

and;
 
WHEREAS, Boeing offered and Customer agrees to purchase four (4) Boeing Model
737-990ER aircraft) as set forth below (each a 737-990ER Incremental Aircraft):
 
Delivery Month
Serial Number
June 2013
41,702
August 2013
41,703
October 2013
41,704
November 2013
41,705

 

 
 

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and;
 
WHEREAS, Customer agrees to exercise and convert eight (8) Option Aircraft to
eight (8) Boeing Model 737-990ER aircraft (each a Substitute Aircraft) in 2005
base year dollars, with delivery positions as follows:
 
 
Delivery Month
Serial Number
February 2013
41,733
April 2013
41,734
January 2014
36,354
February 2014
36,355
March 2014
36,352
April 2014
36361 and 36363
August 2014
41,735

 
and;
 
WHEREAS, Customer and Boeing agree to substitute one (1) Aircraft, bearing
manufacturer serial number MSN 40714 with current delivery position of May 2014
(Firm Aircraft) to a Boeing Model 737-990ER aircraft with the delivery position
of May 2014 (also a Substitute Aircraft); and
 
WHEREAS, the Customer and Boeing have each agreed that Customer will have the
option to purchase [***] additional Option Aircraft (each a New Option
Aircraft), with delivery positions as follows:
 
[***]
 
and;
 
WHEREAS, Customer and Boeing agree to recontract Aircraft bearing serial number
35205 (Recontracted Aircraft), as set forth below and in Table 1 page 12 to the
Purchase Agreement attached hereto:
 
Current Delivery Month
Revised Delivery Month
Serial Number
April 2013
March 2013
35,205

 
and
 
WHEREAS, as a result of the Customer's election to purchase the Boeing 737-900ER
Aircraft and order additional 737-800 aircraft, Table 1 of the Purchase
Agreement will modified by (i) modifying page 12 to add the Exercised Option
Aircraft and reposition the Recontracted Aircraft,(ii) deleting from page 13 the
Firm Aircraft that was replaced by a Substitute Aircraft, and (iii) adding a
page 15 to identify the delivery positions, quantities, Price and Advance
Payment Base Price for the Incremental Aircraft and Substitute Aircraft.
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 

 
 

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NOW THEREFORE, in consideration of the mutual covenants herein contained, the
parties agree to amend the AGTA and Purchase Agreement as follows:
 
1.
The AGTA:

 
1.1 Remove pages 1 and 2 and replace with pages 1 and 2 attached hereto, to
reflect the addition of the Model 737-900ER in Article 2 in each place that
Model 737-900 appears.
1.2 Remove page 3 of “Attachment A” to Letter Agreement 6-1162-MSA-591 and
replace with page 3 attached hereto, to reflect the addition of Model 737-900ER
in the table of insurance requirements.
 
 
2.
Purchase Agreement Table of Contents, Articles, Tables and Exhibits:

 
2.1    Remove and replace, in its entirety, the “Title Page,” “Table of
Contents” and pages one and two with the Title Page, Table of Contents and pages
one and two, attached hereto, to reflect the inclusion of the Boeing 737-990ER
Aircraft in Purchase Agreement No. 2497 and the other changes made by this
Supplemental Agreement No. 23.
 
2.2    Remove and replace, in its entirety, Table 1 page 12 attached hereto, to
(i) reflect the revised delivery month of one 737-890 Aircraft and (ii) include
the three 737-890 Aircraft added through the exercise of options.
 
2.3    Remove and replace, in its entirety, Table 1 page 13 attached hereto, to
reflect the deletion of the Firm Aircraft with a May 2014 delivery position due
to the conversion of that Aircraft to the Substitute Aircraft as reflected in
Article 2.2 above.
 
2.4    Add page 15 to “Table 1 to Purchase Agreement 2497” attached hereto to
reflect (i) the addition of the four (4) 737-990ER Incremental Aircraft under
the Purchase Agreement; (ii) the exercise of eight (8) 737-890 Option Aircraft
and simultaneous conversion of the Aircraft to a Substitute Aircraft, and (iii)
the election to substitute one (1) Substitute Aircraft for one (1) previously
contracted 737-890 Aircraft.
 
2.5    Remove and replace, in its entirety, Exhibit B to Purchase Agreement No.
2497     entitled “Aircraft Delivery Requirements and Responsibilities between
The Boeing Company and Alaska Airlines, Inc.” and replace with a revised Exhibit
B to Purchase Agreement No. 2497, attached hereto, to designate applicability
for the Boeing 737-990ER Aircraft.
 
 
3.
Supplemental Exhibits.

 
3.1    Remove and replace page 1 of Supplemental Exhibit AE1 entitled
“Escalation Adjustment/Airframe and Optional Features” with a revised page 1,
attached hereto, to reflect the inclusion of the Boeing 737-990ER Aircraft in
the Purchase Agreement No. 2497.
 
3.2    Supplemental Exhibit BFE1 entitled “Buyer Furnished Equipment Variables
between The Boeing Company and Alaska Airlines, Inc.” is deleted in its entirety
and replaced with a revised Supplemental Exhibit BFE1 attached hereto to
incorporate the Boeing 737-990ER Aircraft.

 
 

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3.3    Supplemental Exhibit CS1 entitled “Customer Support Variables between The
Boeing Company and Alaska Airlines, Inc.” is deleted in its entirety and
replaced with a revised Supplemental Exhibit CS1 attached hereto to clarify its
applicability to the Boeing 737-890 Aircraft.
 
3.4    Supplemental Exhibit CS2 entitled “Customer Support Variables between The
Boeing Company and Alaska Airlines, Inc.” is added to the Purchase Agreement by
this Supplemental Agreement attached hereto to incorporate the Boeing 737-990ER
Aircraft.
 
3.5    Supplemental Exhibit EE1 entitled “Engine Escalation, Engine Warranty and
Patent Indemnity between The Boeing Company and Alaska Airlines, Inc.” is
deleted in its entirety and replaced with a revised Supplemental Exhibit EE1
attached hereto to incorporate the Boeing 737-990ER Aircraft.
 
 
4.
Letter Agreements.

 
4.1    Letter Agreement 2497-1R16 entitled “Option Aircraft” and its
corresponding Attachment 1, are hereby deleted and replaced in their entirety
with a revised Letter Agreement 2497-1R17 and Attachments 1 and 2 attached
hereto, to reflect (i) the deletion of three (3) Exercised Option Aircraft which
are being exercised pursuant to this Supplemental Agreement No. 23, (ii) the
addition of [***] New Option Aircraft pursuant to this Supplemental Agreement
No. 23, and (iii) terms and conditions with respect to converting an Option
Aircraft to a 737-990ER Aircraft.
 
4.2    Letter Agreement 2497-2 entitled “Aircraft Model Substitution” is hereby
deleted and replaced in its entirety with a revised Letter Agreement 2497-2R1 to
incorporate changes necessitated by this Supplemental Agreement No. 23.
 
4.3    Letter Agreement 2497-3 entitled “Seller Purchased Equipment” is hereby
deleted and replaced in its entirety with a revised Letter Agreement 2497-3R1
attached hereto, to incorporate the Boeing 737-990ER Aircraft.
 
4.4    Letter Agreement 2497-4 entitled “Demonstration Flight Waiver” is hereby
deleted and replaced in its entirety with a revised Letter Agreement 2497-4R1
attached hereto, to incorporate the Boeing 737-990ER Aircraft.
 
4.5    Letter Agreement 2497-5 entitled “Loading of Software Owned by or
Licensed to Customer” is hereby deleted and replaced in its entirety with a
revised Letter Agreement 2497-5R1 attached hereto, to incorporate the Boeing
737-990ER Aircraft.
 
4.6    Letter Agreement 6-1162-SCR-106, entitled “Model 737-990ER Open
Configuration Matters,” attached hereto, applicable for Boeing Model 737-990ER
Aircraft, is added.
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 

 
 

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4.7    Letter Agreement 6-1162-MSA-592 entitled “Special Purchase Agreement
Provisions” is hereby deleted and replaced in its entirety with a revised Letter
Agreement 6-1162-MSA-592R1 attached hereto, to incorporate the Boeing 737-990ER
Aircraft.
 
4.8    Letter Agreement 6-1162-MSA-597R18 entitled “Special Matters” is deleted
and replaced in its entirety with a revised Letter Agreement 6-1162-MSA-597R19
attached hereto, to incorporate the Boeing 737-990ER Aircraft.
 
4.9    Letter Agreement 6-1162-MSA-691R4 entitled “Process for Fixing Escalation
Factor” is hereby deleted and replaced in its entirety with a revised Letter
Agreement 6-1162-MSA-691R5 attached hereto, to incorporate the Boeing 737-990ER
Aircraft.
 
4.10    Letter Agreement 6-1162-SCR-112 entitled “Performance Guarantees
737-900ER”, attached hereto, applicable for Boeing Model 737-990ER Aircraft, is
added.
 
4.11    Letter Agreement 6-1162-SCR-111 entitled [***] attached hereto, is
added.
 
 
5.     Advance Payments.
 
Upon execution of this Supplemental Agreement, Customer agrees to pay Boeing
[***] in advance payments as the initial advance payment for the following: (i)
the conversion of one (1) firm 737-890 to a 737-990ER Aircraft, (ii) exercise of
options for three (3) 737-890 Aircraft, (iii) the addition of four (4) 737-990ER
Aircraft, and (v) the exercise of eight (8) options for Boeing Model 737-890 as
737-990ER Aircraft identified in and pursuant to this Supplemental Agreement.
 
6.     Escalation Matters .
 
Escalation Matters. Boeing and Customer agree that any recontrated Firm or
Option Aircraft, as defined in the Purchase Agreement, will be recontracted to
the new delivery month and that the Aircraft Base Price and associated
escalation will be based on the new delivery month.
 
The Agreement will be deemed to be supplemented to the extent herein provided as
of the date hereof and as so supplemented will continue in full force and
effect.
 
 
EXECUTED IN DUPLICATE as of the day and year first written above.
 
 
 
THE BOEING COMPANY        ALASKA Airlines, Inc.
 
By: /s/ Stuart C. Ross         By: /s/ Brandon S. Pedersen    
 
 
Its: Attorney‑In‑Fact            Its: Vice President, Finance
Chief Financial Officer
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 

 
 

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AIRCRAFT GENERAL TERMS AGREEMENT NUMBER AGTA-ASA
 
between
 
The Boeing Company
 
and
 
Alaska Airlines, Inc.
 
Relating to
 
BOEING AIRCRAFT
 
 
This Aircraft General Terms Agreement Number AGTA-ASA (AGTA) between The Boeing
Company, including its wholly-owned subsidiary McDonnell Douglas Corporation,
(Boeing) and Alaska Airlines, Inc. (Customer) will apply to all Boeing aircraft
contracted for purchase from Boeing by Customer after the effective date of this
AGTA.
 
Article 1.    Subject Matter of Sale.
 
1.1    Aircraft. Boeing will manufacture and sell to Customer and Customer will
purchase from Boeing aircraft under purchase agreements that incorporate the
terms and conditions of this AGTA.
 
1.2    Buyer Furnished Equipment. Exhibit A, Buyer Furnished Equipment
Provisions Document to the AGTA, contains the obligations of Customer and Boeing
with respect to equipment purchased and provided by Customer, which Boeing will
receive, inspect, store, and install in an aircraft before delivery to Customer.
This equipment is defined as Buyer Furnished Equipment (BFE).
 
1.3    Customer Support. Exhibit B, Customer Support Document to the AGTA,
contains the obligations of Boeing relating to Materials (as defined in Part 3
thereof), training, services, and other things in support of aircraft.
 
1.4    Product Assurance. Exhibit C, Product Assurance Document to the AGTA,
contains the obligations of Boeing and the suppliers of equipment installed in
each aircraft at delivery relating to warranties, patent indemnities, software
copyright indemnities, and service life policies.
 
Article 2.    Price, Taxes, and Payment.
 
2.1    Price.
 
2.1.1    Airframe Price is defined as the price of the airframe for a specific
model of aircraft described in a purchase agreement. (For Models 717-200,
737-600, 737-700, 737-800, 737-900, 737-900ER, 777-200LR and 777-300ER the
Airframe Price includes the engine price at its basic thrust level.)
 
2.1.2    Optional Features Prices are defined as the prices for optional
features selected by Customer for a specific model of aircraft described in a
purchase agreement.
 
2.1.3    Engine Price is defined as the price set by the engine manufacturer for
a specific engine to be installed on the model of aircraft described in a
purchase agreement (not applicable to Models 717-200, 737-600, 737-700, 737-800,
737-900, 737-900ER, 777-200LR and 777-300ER).

 
 

--------------------------------------------------------------------------------

 

 
2.1.4    Aircraft Basic Price is defined as the sum of the Airframe Price,
Optional Features Prices, and the Engine Price, if applicable.
 
2.1.5    Escalation Adjustment is defined as the price adjustment to the
Airframe Price (which includes the basic engine price for Models 717-200,
737-600, 737-700 737-800, 737-900, 737-900ER, 777-200LR and 777-300ER) and the
Optional Features Prices resulting from the calculation using the economic price
formula contained in the Airframe and Optional Features Escalation Adjustment
supplemental exhibit to the applicable purchase agreement. The price adjustment
to the Engine Price for all other models of aircraft will be calculated using
the economic price formula in the Engine Escalation Adjustment supplemental
exhibit to the applicable purchase agreement.
 
2.1.6    Advance Payment Base Price is defined as the estimated price of an
aircraft rounded to the nearest thousand U. S. dollars, as of the date of
signing a purchase agreement, for the scheduled month of delivery of such
aircraft using commercial forecasts of the Escalation Adjustment.
 
2.1.7    Aircraft Price is defined as the total amount Customer is to pay for an
aircraft at the time of delivery, which is the sum of the Aircraft Basic Price,
the Escalation Adjustment, and other price adjustments made pursuant to the
purchase agreement.
 
2.2    Taxes.
 
2.2.1 Taxes. Taxes are defined as all taxes, fees, charges, or duties and any
interest, penalties, fines, or other additions to tax, including, but not
limited to sales, use, value added, gross receipts, stamp, excise, transfer, and
similar taxes imposed by any domestic or foreign taxing authority arising out of
or in connection with the performance of the applicable purchase agreement or
the sale, delivery, transfer, or storage of any aircraft, BFE, or other things
furnished under the applicable purchase agreement. Except for U.S. federal or
California State income taxes imposed on Boeing or Boeing's assignee, and
Washington State business and occupation taxes imposed on Boeing or Boeing's
assignee, Customer will be responsible for and pay all Taxes. Customer is
responsible for filing all tax returns, reports, declarations and payment of any
taxes related to or imposed on BFE.
 
2.2.2    Reimbursement of Boeing. Customer will promptly reimburse Boeing on
demand, net of additional taxes thereon, for any Taxes that are imposed on and
paid by Boeing or that Boeing is responsible for collecting.
Attachment A to

 
 

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SAMPLE
Insurance Certificate
 
(737-900)                US$500,000,000
(737-900ER)                US$500,000,000
(757-200)                US$525,000,000
(757-300)                US$550,000,000
(767-200)                US$550,000,000
(767-300)                US$700,000,000
(767-400ERX)                US$750,000,000
(7E7)                    US$700,000,000
(777-200LR)                US$800,000,000
(MD-11)                US$800,000,000
(777-200/300)                US$800,000,000
(777-300ER)                US$800,000,000
(747-400)                US$900,000,000
 
(In regard to all other models and/or derivatives, to be specified by Boeing).
 
(In regard to Personal Injury coverage, limits are US$25,000,000 any one
offense/aggregate.)
 
DEDUCTIBLES / SELF-INSURANCE
 
Any deductible and/or self-insurance amount (other than standard market
deductibles) are to be disclosed to Boeing.
 
SPECIAL PROVISIONS APPLICABLE TO BOEING:
 
It is certified that Insurers are aware of the terms and conditions of AGTA-ASA
and the following purchase agreements:
 
PA ______ dated _______
PA ______ dated _______
PA ______ dated _______
 
Each Aircraft manufactured by Boeing which is delivered to the Insured pursuant
to the applicable purchase agreement during the period of effectivity of the
policies represented by this Certificate will be covered to the extent specified
herein.
 
 
 

 
 

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PURCHASE AGREEMENT NUMBER 2497
 
between
 
THE BOEING COMPANY
 
and
 
Alaska Airlines, Inc.
 
 
Relating to Boeing Model 737-890 and 737-990ER Aircraft
 
 
 

 
 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS
 
SA
ARTICLES                                        NUMBER
 
1.    Quantity, Model and Description                    23    
 
2.    Delivery Schedule        
 
3.    Price    
 
4.    Payment        
 
5.    Miscellaneous        
 
TABLE
 
1.    Aircraft Information Table                        23    
 
EXHIBIT
 
A.    Aircraft Configuration                        6
 
A1.    Aircraft Configuration                        20
 
B.    Aircraft Delivery Requirements and Responsibilities        23    
 
SUPPLEMENTAL EXHIBITS
 
AE1.    Escalation Adjustment/Airframe and Optional Features         23
 
BFE1.    BFE Variables                                23
 
CS1.    Customer Support Variables: 737-890 Aircraft            23
 
CS2.    Customer Support Variables: 737-990ER Aircraft            23
 
EE1.    Engine Escalation/Engine Warranty and Patent Indemnity        23
 
SLP1.    Service Life Policy Components    
 

 
 

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SA
LETTER AGREEMENT                                NUMBER
 
2497-1R17    Option Aircraft                        23
Attachment 1                            23
 
2497-2R1    Aircraft Model Substitution                    23
 
2497-3R1    Seller Purchased Equipment                    23
 
2497-4R1    Demonstration Flight Waiver                    23
 
2497-5R1    Customer Software                        23
 
2497-6R6    Promotion Support                        16
 
6-1162-SCR-027    Promotion Support - extension of termination date        19
 
6-1162-SCR-106    737-990ER Model Open Configuration Matters        23
 
 

 
 

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                    SA
RESTRICTED LETTER AGREEMENT                        NUMBER
    
6-1162-MSA-588    Aircraft Performance Guarantees -         
Model 737-800    
    
6-1162-MSA-589    [***]    
 
6-1162-MSA-592R1    Special Purchase Agreement Provisions            23
 
6-1162-MSA-597R19     Special Matters                        23
(Attachments 1A, 1B, and 2)                    17
 
6-1162-MSA-691R5    Process for Fixing Escalation Factor                23
 
6-1162-IRS-118    “Special Matters” - Economic Impact            18
(deleted in SA-19 and replaced with 6-1162-SCR-025)
 
6-1162-SCR-025R2     “Special Matters” - Economic Impact Aircraft        
Rescheduled delivery dates                    22
 
6-1162-SCR-028    Notice of Exercise by Boeing of its Right to    
Reschedule Economic Impact Aircraft            19
 
 
6-1162-SCR-112     Aircraft Performance Guarantees                 23
Model 737-900ER
 
6-1162-SCR-111    [***]        
 
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 

 
 

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SUPPLEMENTAL AGREEMENTS            DATED AS OF:
 
Supplemental Agreement No. 1            December 20, 2005
Supplemental Agreement No. 2            January 31, 2006
Supplemental Agreement No. 3            February 28, 2006
Supplemental Agreement No. 4            March 31, 2006
Supplemental Agreement No. 5            May 31, 2006
Supplemental Agreement No. 6            June 30, 2006
Supplemental Agreement No. 7            July 31, 2006
Supplemental Agreement No. 8            October 31, 2006
Supplemental Agreement No. 9            November 30, 2006
Supplemental Agreement No. 10            December 20, 2006
Supplemental Agreement No. 11            January 31, 2007
Supplemental Agreement No. 12            April 26, 2007
Supplemental Agreement No. 13            July 31, 2007
Supplemental Agreement No. 14            September 24, 2007
Supplemental Agreement No. 15            October 31, 2007
Supplemental Agreement No. 16            January 5, 2009
Supplemental Agreement No. 17            February 11, 2009
Supplemental Agreement No. 18            April 22, 2009
Supplemental Agreement No. 19            December 9, 2009
Supplemental Agreement No. 20            March 15, 2010
Supplemental Agreement No. 21            June 18, 2010
Supplemental Agreement No. 22            June 30, 2010
Supplemental Agreement No. 23            ________, 2011
 
 

 
 

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Purchase Agreement No. 2497
 
between
 
The Boeing Company
 
and
 
Alaska Airlines, Inc.
 
______________________________
 
This Purchase Agreement No. 2497 dated as of June 15, 2005 between The Boeing
Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to the purchase
and sale of Model 737-890 and 737-990ER aircraft together with all tables,
exhibits, supplemental exhibits, letter agreements and other attachments
thereto, if any, (Purchase Agreement) incorporates the terms and conditions of
the Aircraft General Terms Agreement dated as of June 15, 2005 between the
parties, identified as AGTA-ASA (AGTA).
 
Article 1.    Quantity, Model and Description.
 
The aircraft to be delivered to Customer will be designated as either
Model 737-890 or Model 737-990ER aircraft (the Aircraft). Boeing will
manufacture and sell to Customer Aircraft conforming to the configuration
described in Exhibit A in the quantities listed in Table 1 to the Purchase
Agreement.
 
Article 2.    Delivery Schedule.
 
The scheduled months of delivery of the Aircraft are listed in the attached
Table 1. Exhibit B describes certain responsibilities for both Customer and
Boeing in order to accomplish the delivery of the Aircraft.
 
Article 3.    Price.
 
3.1    Aircraft Basic Price. The Aircraft Basic Price is listed in Table 1 in
subject to escalation dollars.
 
3.2    Advance Payment Base Prices. The Advance Payment Base Prices listed in
Table 1 were calculated utilizing the latest escalation factors available to
Boeing on the date of this Purchase Agreement projected to the month of
scheduled delivery.
 
 
Article 4.    Payment.
 
4.1    Boeing acknowledges receipt of a deposit in the amount shown in Table 1
for each Aircraft (Deposit).
 
4.2    The standard advance payment schedule for the Aircraft requires Customer
to make certain advance payments, expressed in a percentage of the Advance
Payment Base Price of each Aircraft beginning with a payment of 1%, less the
Deposit, on the effective date of the Purchase Agreement for the Aircraft.
Additional advance payments for each Aircraft are due as specified in and on the
first business day of the months listed in the attached Table 1.
 
4.3    For any Aircraft whose scheduled month of delivery is less than 24 months
from the date of this Purchase Agreement, the total amount of advance payments
due for payment upon signing of this Purchase

 
 

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Agreement will include all advance payments which are past due in accordance
with the standard advance payment schedule set forth in paragraph 4.2 above.
 
4.4    Customer will pay the balance of the Aircraft Price of each Aircraft at
delivery.
 
Article 5.    Additional Terms.
 
5.1    Aircraft Information Table. Table 1 consolidates information contained in
Articles 1, 2, 3 and 4 with respect to (i) quantity of Aircraft, (ii) applicable
Detail Specification, (iii) month and year of scheduled deliveries,
(iv) Aircraft Basic Price, (v) applicable escalation factors and (vi) Advance
Payment Base Prices and advance payments and their schedules.
 
5.2    Escalation Adjustment/Airframe and Optional Features. Supplemental
Exhibit AE1 contains the applicable airframe and optional features escalation
formula.
 
5.3    Buyer Furnished Equipment Variables. Supplemental Exhibit BFE1 contains
vendor selection dates and other variables applicable to the Aircraft.
 
5.4    Customer Support Variables. Information, training, services and other
things furnished by Boeing in support of introduction of the Aircraft into
Customer's fleet of 737-890 aircraft are described in Supplemental Exhibit CS1.
As Customer has taken delivery of 737-800 type aircraft, the level of support to
be provided under Supplemental Exhibit CS1 (the Entitlements) is as applicable
for an operator already operating such aircraft. For Customer's 737-990ER
aircraft, a Supplemental Exhibit CS2 has been added pursuant to Supplemental
Agreement No. 23.
 
 
 
 

 
 

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Table 1 to Purchase Agreement 2497
737-800
Aircraft Delivery, Description, Price and Advance Payments
 
    
 
 
* Indicates that certain information contained herein has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the omitted portions.

 
 
 
 

 
 

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Table 1 to Purchase Agreement 2497
737-800
Aircraft Delivery, Description, Price and Advance Payments
 
[***]
 
* Indicates that certain information contained herein has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the omitted portions.

 
 

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Table 1 to Purchase Agreement 2497
737-900ER
Aircraft Delivery, Description, Price and Advance Payments
 
[***]
 
* Indicates that certain information contained herein has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the omitted portions.

 
 
 

 
 

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AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES
 
between
 
THE BOEING COMPANY
 
and
 
Alaska Airlines, Inc.
 
 
Exhibit B to Purchase Agreement Number 2497
 
 
 

 
 

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AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES
 
relating to
 
BOEING MODEL 737-890 and 737-990ER AIRCRAFT
 
 
Both Boeing and Customer have certain documentation and approval
responsibilities at various times during the construction cycle of Customer's
Aircraft that are critical to making the delivery of each Aircraft a positive
experience for both parties. This Exhibit B documents those responsibilities and
indicates recommended completion deadlines for the actions to be accomplished.
 
1.    GOVERNMENT DOCUMENTATION REQUIREMENTS.
 
Certain actions are required to be taken by Customer in advance of the scheduled
delivery month of each Aircraft with respect to obtaining certain government
issued documentation.
 
1.1    Airworthiness and Registration Documents.
 
Not later than 6 months prior to delivery of each Aircraft, Customer will notify
Boeing of the registration number to be painted on the side of the Aircraft. In
addition, and not later than 3 months prior to delivery of each Aircraft,
Customer will, by letter to the regulatory authority having jurisdiction,
authorize the temporary use of such registration numbers by Boeing during the
pre-delivery testing of the Aircraft.
 
Customer is responsible for furnishing any Temporary or Permanent Registration
Certificates required by any governmental authority having jurisdiction to be
displayed aboard the Aircraft after delivery.
 
1.2    Certificate of Sanitary Construction.
 
1.2.1    U.S. Registered Aircraft. Boeing will obtain from the United States
Public Health Service, a United States Certificate of Sanitary Construction to
be displayed aboard each Aircraft after delivery to Customer.
 
1.2.2    Non-U.S. Registered Aircraft. If Customer requires a United States
Certificate of Sanitary Construction at the time of delivery of the Aircraft,
Customer will give written notice thereof to Boeing at least 3 months prior to
delivery. Boeing will then use its reasonable best efforts to obtain the
Certificate from the United States Public Health Service and present it to
Customer at the time of Aircraft delivery.
 
1.3    Customs Documentation.
 
1.3.1    Import Documentation. If the Aircraft is intended to be exported from
the United States, Customer must notify Boeing not later than 3 months prior to
delivery of each Aircraft of any documentation required by the customs
authorities or by any other agency of the country of import.
 
1.3.2    General Declaration ‑ U.S. If the Aircraft is intended to be exported
from the United States, Boeing will prepare Customs Form 7507, General
Declaration, for execution by U.S. Customs immediately prior to the ferry flight
of the Aircraft. For this purpose, Customer will furnish to Boeing not later
than 20 days prior to delivery all information required by U.S. Customs or U.S.
Immigration and Naturalization Service, including without limitation (i) a
complete crew and passenger

 
 

--------------------------------------------------------------------------------

 

list identifying the names, birth dates, passport numbers and passport
expiration dates of all crew and passengers and (ii) a complete ferry flight
itinerary, including point of exit from the United States for the Aircraft.
 
If Customer intends, during the ferry flight of an Aircraft, to land at a U.S.
airport after clearing Customs at delivery, Customer must notify Boeing not
later than 20 days prior to delivery of such intention. If Boeing receives such
notification, Boeing will provide to Customer the documents constituting a
Customs permit to proceed, allowing such Aircraft to depart after any such
landing. Sufficient copies of completed Form 7507, along with passenger
manifest, will be furnished to Customer to cover U.S. stops scheduled for the
ferry flight.
 
1.3.3    Export Declaration ‑ U.S. If the Aircraft is intended to be exported
from the United States, Boeing will prepare Form 7525V and, immediately prior to
the ferry flight, will submit such Form to U.S. Customs in Seattle in order to
obtain clearance for the departure of the Aircraft, including any cargo, from
the United States. U.S. Customs will deliver the Export Declaration to the U.S.
Department of Commerce after export.
 
 
2.    Insurance Certificates.
 
Unless provided earlier, Customer will provide to Boeing not later than 30 days
prior to delivery of the first Aircraft, a copy of the requisite annual
insurance certificate in accordance with the requirements of Article 8 of the
AGTA.
 
 
3.    NOTICE OF FLYAWAY CONFIGURATION.
 
Not later than 20 days prior to delivery of the Aircraft, Customer will provide
to Boeing a configuration letter stating the requested "flyaway configuration"
of the Aircraft for its ferry flight. This configuration letter should include:
 
(i)    the name of the company which is to furnish fuel for the ferry flight and
any scheduled post‑delivery flight training, the method of payment for such
fuel, and fuel load for the ferry flight;
 
(ii)    the cargo to be loaded and where it is to be stowed on board the
Aircraft, the address where cargo is to be shipped after flyaway and
notification of any hazardous materials requiring special handling;
 
(iii)    any BFE equipment to be removed prior to flyaway and returned to Boeing
BFE stores for installation on Customer's subsequent Aircraft;
 
(iv)    a complete list of names and citizenship of each crew member and
non-revenue passenger who will be aboard the ferry flight; and
 
(v)    a complete ferry flight itinerary.
 
 
4.    DELIVERY ACTIONS BY BOEING.
 
4.1    Schedule of Inspections. All FAA, Boeing, Customer and, if required, U.S.
Customs Bureau inspections will be scheduled by Boeing for completion prior to
delivery or departure of

 
 

--------------------------------------------------------------------------------

 

the Aircraft. Customer will be informed of such schedules.
 
4.2    Schedule of Demonstration Flights. All FAA and Customer demonstration
flights will be scheduled by Boeing for completion prior to delivery of the
Aircraft.
 
4.3    Schedule for Customer's Flight Crew. Boeing will inform Customer of the
date that a flight crew is required for acceptance routines associated with
delivery of the Aircraft.
 
4.4    Fuel Provided by Boeing. Boeing will provide to Customer, without charge,
the amount of fuel shown in U.S. gallons in the table below for the model of
Aircraft being delivered and full capacity of engine oil at the time of delivery
or prior to the ferry flight of the Aircraft.
 
Aircraft Model
Fuel Provided
737
1,000

 
4.5    Flight Crew and Passenger Consumables. Boeing will provide reasonable
quantities of food, beverages, coat hangers, towels, toilet tissue, drinking
cups and soap for the first segment of the ferry flight for the Aircraft.
 
4.6    Delivery Papers, Documents and Data. Boeing will have available at the
time of delivery of the Aircraft certain delivery papers, documents and data for
execution and delivery. If title for the Aircraft will be transferred to
Customer through a Boeing sales subsidiary and if the Aircraft will be
registered with the FAA, Boeing will pre‑position in Oklahoma City, Oklahoma,
for filing with the FAA at the time of delivery of the Aircraft an executed
original Form 8050‑2, Aircraft Bill of Sale, indicating transfer of title to the
Aircraft from Boeing's sales subsidiary to Customer.
 
4.7    Delegation of Authority. Boeing will present a certified copy of a
Resolution of Boeing's Board of Directors, designating and authorizing certain
persons to act on its behalf in connection with delivery of the Aircraft.
 
 
5.    DELIVERY ACTIONS BY CUSTOMER.
 
5.1    Aircraft Radio Station License. At delivery Customer will provide its
Aircraft Radio Station License to be placed on board the Aircraft following
delivery.
 
5.2.    Aircraft Flight Log.     At delivery Customer will provide the Aircraft
Flight Log for the Aircraft.
 
5.3    Delegation of Authority. Customer will present to Boeing at delivery of
the Aircraft an original or certified copy of Customer's Delegation of Authority
designating and authorizing certain persons to act on its behalf in connection
with delivery of the specified Aircraft.
 
 
1.    Alternate Escalation Formula
 
Airframe and Optional Features price adjustments (Airframe Price Adjustment) are
used to allow prices to be stated in current year dollars at the signing of this
Purchase Agreement and to adjust the amount to be paid by Customer at delivery
for the effects of economic fluctuation. The Airframe Price Adjustment will be
determined at the time of Aircraft delivery in accordance with the following
formula:
 

 
 

--------------------------------------------------------------------------------

 

Pa = (P) (L + M) ‑ P
 
Where:
 
Pa =     [***]
 
L =     [***]    
                        
 
M =    [***]                        
    
P =    [***]
    
        
                    
[***]
 
CPI is a value determined using the U.S. Department of Labor, Bureau of Labor
Statistics Consumer Price Index (BLS Series ID
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 

 
 

--------------------------------------------------------------------------------

 

BUYER FURNISHED EQUIPMENT VARIABLES
 
between
 
THE BOEING COMPANY
 
and
 
Alaska Airlines, Inc.
 
 
Supplemental Exhibit BFE1 to Purchase Agreement Number 2497
 
 
 

 
 

--------------------------------------------------------------------------------

 

BUYER FURNISHED EQUIPMENT VARIABLES
 
relating to
 
BOEING MODEL 737 AIRCRAFT
 
This Supplemental Exhibit BFE1 contains vendor selection dates, on-dock dates
and other variables applicable to the Aircraft.
 
1.    Supplier Selection.
 
Customer will:
 
1.1    For 737-800 Aircraft, select and notify Boeing of the suppliers and part
numbers of the following BFE items by the following dates:
 
Galley System                [***]
 
Galley Inserts                [***]
 
Seats (passenger)            [***]
 
Overhead & Audio System        [***]
 
In-Seat Video System            [***]
 
Miscellaneous Emergency        [***]
Equipment
 
Cargo Handling            [***]
Systems            
 
1.2For 737-900ER Aircraft, select and notify Boeing of the suppliers and part
numbers of the following BFE items by the following dates:
 
Galley System            [***]
 
Galley Inserts                [***]
 
Seats (passenger)            [***]
 
Overhead & Audio System        [***]
 
In-Seat Video System            [***]
 
Miscellaneous Emergency        [***]
Equipment             
 
Cargo Handling Systems        [***]
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

 
 

--------------------------------------------------------------------------------

 

 
 
2.     On-dock Dates
On or before September 2011, Boeing will provide to Customer the BFE
Requirements electronically in My Boeing Fleet (MBF), through My Boeing
Configuration (MBC). These requirements may be periodically revised, setting
forth the items, quantities, on-dock dates and shipping instructions and other
requirements relating to the in-sequence installation of BFE. For planning
purposes, preliminary BFE on-dock dates are set forth below:
For planning purposes, a preliminary BFE on-dock schedule is set forth below:
 
[***]
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

 
 

--------------------------------------------------------------------------------

 

[***]
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 

 
 

--------------------------------------------------------------------------------

 

[***]
 
3.    Additional Delivery Requirements - Import.
Customer will be the “importer of record” (as defined by the U.S. Customs and
Border Protection) for all BFE imported into the United States, and as such, it
has the responsibility to ensure all of Customer's BFE shipments comply with
U.S. Customs Service regulations. In the event Customer requests Boeing, in
writing, to act as importer of record for Customer's BFE, and Boeing agrees to
such request, Customer is responsible for ensuring Boeing can comply with all
U.S. Customs Import Regulations by making certain that, at the time of shipment,
all BFE shipments comply with the requirements in the “International Shipment
Routing Instructions”, including the Customs Trade Partnership Against Terrorism
(C-TPAT), as set out on the Boeing website referenced below. Customer agrees to
include the International Shipment Routing Instructions, including C-TPAT
requirements, in each contract between Customer and BFE supplier.
 
http://www.boeing.com/companyoffices/doingbiz/supplier_portal/index_general.html
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 

 
 

--------------------------------------------------------------------------------

 

CUSTOMER SUPPORT VARIABLES
 
between
 
THE BOEING COMPANY
 
and
 
Alaska Airlines, Inc.
 
 
Supplemental Exhibit CS1 to Purchase Agreement Number 2497
 
 

 
 

--------------------------------------------------------------------------------

 

CUSTOMER SUPPORT VARIABLES
 
relating to
 
BOEING MODEL 737-890 AIRCRAFT
 
This Supplemental Exhibit CS1 contains the Customer Support Variables applicable
to the 737-890 Aircraft and incorporates all terms and conditions contained in
the Customer Support Document as Exhibit C to the Purchase Agreement.
 
Customer currently operates an aircraft of the same model as the 737-890
Aircraft. Upon Customer's request, Boeing will develop and schedule a customized
Customer Support Program to be furnished in support of the 737-890 Aircraft. The
customized program will be based upon and equivalent to the entitlements
summarized below.
 
1.    Maintenance Training.
 
1.1    Maintenance Training Minor Model Differences Course, if required,
covering operational, structural or systems differences between Customer's
newly-purchased Aircraft and an aircraft of the same model currently operated by
Customer; 1 class of 15 students;
 
1.2    Training materials, if applicable, will be provided to each student. In
addition, one set of training materials as used in Boeing's training program,
including visual aids, text and graphics will be provided for use in Customer's
own training program.
 
2.    Flight Training.
 
Boeing will provide, if required, one classroom course to acquaint up to 15
students with operational, systems and performance differences between
Customer's newly-purchased Aircraft and an aircraft of the same model currently
operated by Customer.
 
Any training materials used in Flight Training, if required, will be provided
for use in Customer's own training program.
 
3.    Planning Assistance.
 
3.1    Maintenance and Ground Operations.
 
Upon request, Boeing will provide planning assistance regarding Minor Model
Differences requirements for facilities, tools and equipment.
 
 
3.2    Spares.
 
Boeing will revise, as applicable, the customized Recommended Spares Parts List
(RSPL) and Illustrated Parts Catalog (IPC).
 
4.    Technical Data and Documents.
 
Boeing will revise, as applicable, technical data and documents provided with
previously delivered aircraft.

 
 

--------------------------------------------------------------------------------

 

CUSTOMER SUPPORT VARIABLES
 
between
 
THE BOEING COMPANY
 
and
 
Alaska Airlines, Inc.
 
 
Supplemental Exhibit CS2 to Purchase Agreement Number 2497
 
 
 

 
 

--------------------------------------------------------------------------------

 

CUSTOMER SUPPORT VARIABLES
 
relating to
 
BOEING MODEL 737-990ER AIRCRAFT
 
 
This Supplemental Exhibit CS2 contains the Customer Support Variables applicable
to the 737-990ER Aircraft and incorporates all terms and conditions contained in
the Customer Support Document as Exhibit C to the Purchase Agreement.
 
Customer currently operates 737-990 aircraft that is the predecessor to the
737-990ER aircraft (Aircraft). Upon Customer's request, Boeing will develop and
schedule a customized Customer Support Program to be furnished in support of the
Aircraft. The customized program will be based upon and equivalent to the
entitlements summarized below.
 
1.    Maintenance Training.
 
1.1    Maintenance Training Minor Model Differences Course, if required,
covering operational, structural or systems differences between Customer's
newly-purchased Aircraft and an aircraft of the same model currently operated by
Customer; 1 class of 15 students;
 
1.2    Training materials, if applicable, will be provided to each student. In
addition, one set of training materials as used in Boeing's training program,
including visual aids, text and graphics will be provided for use in Customer's
own training program.
 
2.    Flight Training.
 
Boeing will provide, if required, one classroom course to acquaint up to 15
students with operational, systems and performance differences between
Customer's newly-purchased Aircraft and an aircraft of the same model currently
operated by Customer.
 
Any training materials used in Flight Training, if required, will be provided
for use in Customer's own training program.
 
3.    Planning Assistance.
 
3.1    Maintenance Engineering. Notwithstanding anything in Exhibit B to the
AGTA to the contrary, Boeing will provide the following Maintenance Engineering
support:
3.1.1    Maintenance Planning Assistance. Upon request, Boeing will provide
assistance in identifying the impact to Customers maintenance program resulting
from minor model differences between the Aircraft and the 737-990 aircraft
currently operated by the Customer.
 
3.1.2    ETOPS Maintenance Planning Assistance. Upon request, Boeing will
provide assistance in identifying the impact to Customer's ETOPS maintenance
program resulting from minor model differences between the Aircraft and the
737-990 aircraft.
 
3.1.3    GSE/Shops/Tooling Consulting. Upon request, Boeing will provide
assistance to Customer in identifying the impact to Customer's maintenance tools
and ground support equipment resulting from the minor model differences between
the Aircraft and the 737-990

 
 

--------------------------------------------------------------------------------

 

aircraft currently operated by Customer.
 
3.2    Spares.
 
Boeing will revise, as applicable, the customized Recommended Spares Parts List
(RSPL) and Illustrated Parts Catalog (IPC).
 
4.    Technical Data and Documents.
 
Boeing will revise, as applicable, technical data and documents provided with
previously delivered aircraft.
 

 
 

--------------------------------------------------------------------------------

 

ENGINE ESCALATION,
ENGINE WARRANTY AND PATENT INDEMNITY
 
between
 
THE BOEING COMPANY
 
and
 
Alaska Airlines, Inc.
 
 
Supplemental Exhibit EE1 to Purchase Agreement Number 2497

 
 

--------------------------------------------------------------------------------

 

ENGINE ESCALATION,
ENGINE WARRANTY AND PATENT INDEMNITY
 
relating to
 
BOEING MODEL 737 AIRCRAFT
 
 
1.    ENGINE ESCALATION. No separate engine escalation methodology is defined
for the 737-600, -700, -800, -900, or -900ER Aircraft. Pursuant to the AGTA, the
engine prices for these Aircraft are included in and will be escalated in the
same manner as the Airframe.
 
2.    ENGINE WARRANTY AND PRODUCT SUPPORT PLAN. Boeing has obtained from CFM
International, Inc. (or CFM International, S.A., as the case may be) (CFM) the
right to extend to Customer the provisions of CFM's warranty as set forth below
(herein referred to as the "Warranty"); subject, however, to Customer's
acceptance of the conditions set forth herein. Accordingly, Boeing hereby
extends to Customer and Customer hereby accepts the provisions of CFM's Warranty
as hereinafter set forth, and such Warranty shall apply to all CFM56‑7 type
Engines (including all Modules and Parts thereof) installed in the Aircraft at
the time of delivery or purchased from Boeing by Customer for support of the
Aircraft except that, if Customer and CFM have executed, or hereafter execute, a
General Terms Agreement, then the terms of that Agreement shall be substituted
for and supersede the provisions of Paragraphs 2.1 through 2.10 below and
Paragraphs 2.1 through 2.10 below shall be of no force or effect and neither
Boeing nor CFM shall have any obligation arising therefrom. In consideration for
Boeing's extension of the CFM Warranty to Customer, Customer hereby releases and
discharges Boeing from any and all claims, obligations and liabilities
whatsoever arising out of the purchase or use of such CFM56‑7 type Engines and
Customer hereby waives, releases and renounces all its rights in all such
claims, obligations and liabilities. In addition, Customer hereby releases and
discharges CFM from any and all claims, obligations and liabilities whatsoever
arising out of the purchase or use of such CFM56‑7 type Engines except as
otherwise expressly assumed by CFM in such CFM Warranty or General Terms
Agreement between Customer and CFM and Customer hereby waives, releases and
renounces all its rights in all such claims, obligations and liabilities.
 
2.1.    Title. CFM warrants that at the date of delivery, CFM has legal title to
and good and lawful right to sell its CFM56‑7 type Engine and Products and
furthermore warrants that such title is free and clear of all claims, liens and
encumbrances of any nature whatsoever.
 
2.2.    Patents.
 
2.2.1    CFM shall handle all claims and defend any suit or proceeding brought
against Customer insofar as based on a claim that any product or part furnished
under this Agreement constitutes an infringement of any patent of the United
States, and shall pay all damages and costs awarded therein against Customer.
This paragraph shall not apply to any product or any part manufactured to
Customer's design or to the aircraft manufacturer's design. As to such product
or part, CFM assumes no liability for patent infringement.
 
2.2.2    CFM's liability hereunder is conditioned upon Customer promptly
notifying CFM in writing and giving CFM authority, information and assistance
(at CFM's expense) for the defense of any suit. In case said equipment or part
is held in such suit to constitute infringement and the use of said equipment or
part is enjoined, CFM

 
 

--------------------------------------------------------------------------------

 

shall expeditiously, at its own expense and at its option, either (i) procure
for Customer the rights to continue using said product or part; (ii) replace the
same with a satisfactory and noninfringing product or part; or (iii) modify the
same so it becomes satisfactory and noninfringing. The foregoing shall
constitute the sole remedy of Customer and the sole liability of CFM for patent
infringement.
 
2.2.3    The above provisions also apply to products which are the same as those
covered by this Agreement and are delivered to Customer as part of the installed
equipment on CFM56‑7 powered Aircraft.
 
2.3.    Initial Warranty. CFM warrants that CFM56‑7 Engine products will conform
to CFM's applicable specifications and will be free from defects in material and
workmanship prior to Customer's initial use of such products.
 
2.4.    Warranty Pass-On.
 
2.4.1    If requested by Customer and agreed to by CFM in writing, CFM will
extend warranty support for Engines sold by Customer to commercial airline
operators, or to other aircraft operators. Such warranty support will be limited
to the New Engine Warranty, New Parts Warranty, Ultimate Life Warranty and
Campaign Change Warranty and will require such operator(s) to agree in writing
to be bound by and comply with all the terms and conditions, including the
limitations, applicable to such warranties.
 
2.4.2    Any warranties set forth herein shall not be transferable to a third
party, merging company or an acquiring entity of Customer.
 
2.4.3    In the event Customer is merged with, or acquired by, another aircraft
operator which has a general terms agreement with CFM, the Warranties as set
forth herein shall apply to the Engines, Modules, and Parts.
 
2.5.    New Engine Warranty.
 
2.5.1.    CFM warrants each new Engine and Module against Failure for the
initial 3000 Flight Hours as follows:
 
(i)    Parts Credit Allowance will be granted for any Failed Parts.
 
(ii)    Labor Allowance for disassembly, reassembly, test and Parts repair of
any new Engine Part will be granted for replacement of Failed Parts.
 
(iii)    Such Parts Credit Allowance, test and Labor Allowance will be: 100%
from new to 2500 Flight Hours and decreasing pro rata from 100% at 2500 Flight
Hours to zero percent at 3000 Flight Hours.
 
2.5.2    As an alternative to the above allowances, CFM shall, upon request of
Customer:
 
(i)    Arrange to have the failed Engines and Modules repaired, as appropriate,
at a facility designated by CFM at no charge to Customer for the first 2500
Flight Hours and at a charge to Customer increasing pro rata from zero percent

 
 

--------------------------------------------------------------------------------

 

of CFM's repair cost at 2500 Flight Hours to 100% of such CFM repair costs at
3000 Flight Hours.
 
(ii)    Transportation to and from the designated facility shall be at
Customer's expense.
 
2.6.    New Parts Warranty. In addition to the warranty granted for new Engines
and new Modules, CFM warrants Engine and Module Parts as follows:
 
2.6.1.    During the first 1000 Flight Hours for such Parts and Expendable
Parts, CFM will grant 100% Parts Credit Allowance or Labor Allowance for repair
labor for failed Parts.
 
2.6.2.    CFM will grant a pro rata Parts Credit Allowance for Scrapped Parts
decreasing from 100% at 1000 Flight Hours Part Time to zero percent at the
applicable hours designated in Table 1.
 
2.7.    Ultimate Life Warranty.
 
2.7.1.    CFM warrants Ultimate Life limits on the following Parts:
 
(i)    Fan and Compressor Disks/Drums
(ii)    Fan and Compressor Shafts
(iii)    Compressor Discharge Pressure Seal (CDP)
(iv)    Turbine Disks
(v)    HPT Forward and Stub Shaft
(vi)    LPT Driving Cone
(vii)    LPT Shaft and Stub Shaft
 
2.7.2.    CFM will grant a pro rata Parts Credit Allowance decreasing from 100%
when new to zero percent at 25,000 Flight Hours or 15,000 Flight Cycles,
whichever comes earlier. Credit will be granted only when such Parts are
permanently removed from service by a CFM or a U.S. and/or French Government
imposed Ultimate Life limitation of less than 25,000 Flight Hours or 15,000
Flight Cycles.
 
2.8.    Campaign Change Warranty.
 
2.8.1.    A campaign change will be declared by CFM when a new Part design
introduction, Part modification, Part Inspection, or premature replacement of an
Engine or Module is required by a mandatory time compliance CFM Service Bulletin
or FAA Airworthiness Directive. Campaign change may also be declared for CFM
Service Bulletins requesting new Part introduction no later than the next Engine
or Module shop visit. CFM will grant following Parts Credit Allowances:
 
Engines and Modules
 
(i)    100% for Parts in inventory or removed from service when new or with 2500
Flight Hours or less total Part Time.
 
(ii)    50% for Parts in inventory or removed from service with over 2500 Flight
Hours since new, regardless of warranty status.

 
 

--------------------------------------------------------------------------------

 

 
2.8.2.    Labor Allowance - CFM will grant 100% Labor Allowance for disassembly,
reassembly, modification, testing, or Inspection of CFM supplied Engines,
Modules, or Parts therefor when such action is required to comply with a
mandatory time compliance CFM Service Bulletin or FAA Airworthiness Directive. A
Labor Allowance will be granted by CFM for other CFM issued Service Bulletins if
so specified in such Service Bulletins.
 
2.8.3.    Life Controlled Rotating Parts retired by Ultimate Life limits
including FAA and/or DGAC Airworthiness Directive, are excluded from Campaign
Change Warranty.
 
2.9.    Limitations.     The provisions set forth HEREIN are exclusive and are
in lieu of all other warranties whether written, oral or implied. There are no
implied warranties of fitness or merchantability. Said provisions set forth the
maximum LIABILITY of CFM with respect to claims of any kind, including
negligence, arising out of MANUFACTURE, sale, possession, use or handling of the
products or parts thereof or therefor, and in no event shall CFM's liability to
Customer exceed the purchase price of the product giving rise to Customer's
claim or include incidental or consequential damages.
 
2.10.    Indemnity and Contribution.
 
2.10.1.    In the event Customer asserts a claim against a third party for
damages of the type limited or EXCLUDED in LIMITATIONS, PARAGRAPH 2.9. above,
Customer shall indemnify and hold CFM HARMLESS from AND against any claim by or
liability to such third party for contribution or indemnity, including costs and
expenses (INCLUDING attorneys' fees) incident thereto or incident to
establishing SUCCESSFULLY the right to indemnification under this provision.
this indemnity shall apply whether or not such damages were occasioned in whole
or in part by the fault or negligence of CFM, whether active, passive or
imputed.
 
2.10.2.    Customer shall indemnify and hold CFM HARMLESS from any damage, loss,
claim, and LIABILITY of any kinD (including expenses of LITIGATION and
ATTORNEYS' fees) for physical injury to or death of any person, or for property
damage of any type, arising out of the alleged defective nature of any product
or service FURNISHED under this agreement, to the extent that the payments made
or required to be made by CFM exceed its allocated share of THE total fault or
legal responsibility of all persons alleged to have caused such damage, loss,
claim, or liability because of a limitation of liability asserted by CUSTOMER or
BECAUSE Customer did not appear in an action brought against cfm. Customer's
obligation to indemnify CFM hereunder shall be applicable at such time as CFM is
required to maKe payment pursuant to a final judgement in an action or
proceeding in which cfm was a party, PERSONALLY appeared, and had the
opportunity to DEFEND itself. this INDEMNITY shall apply whether or not
Customer's liability is otherwise limited.
 

 
 

--------------------------------------------------------------------------------

 

TABLE 1
737X
CFM56 WARRANTY PARTS LIST
FLIGHT HOURS
 
 
Flight Hours
 
2000
3,000
4,000
6,000
8,000
12,000
Fan Rotor/Booster
 
 
 
 
 
 
Blades
 
X
 
 
 
 
Disk, Drum
 
 
 
 
 
X
Spinner
 
X
 
 
 
 
Fan Frame
 
 
 
 
 
 
Casing
 
 
 
 
X
 
Hub & Struts
 
 
X
 
 
 
Fairings
 
 
X
 
 
 
Splitter (Mid Ring)
 
 
X
 
 
 
Vanes
 
X
 
 
 
 
Engine Mount
 
 
X
 
 
 
No. 1 & No. 2 Bearing Support
 
 
 
 
 
 
Bearings
 
 
X
 
 
 
Shaft
 
 
 
 
 
X
Support (Case)
 
 
X
 
 
 
Inlet Gearbox & No. 3 Bearing
 
 
 
 
 
 
Bearings
 
 
X
 
 
 
Gear
 
 
X
 
 
 
Case
 
 
X
 
 
 
Compressor Rotor
 
 
 
 
 
 
Blades
 
X
 
 
 
 
Disk & Drums
 
 
 
 
 
X
Shaft
 
 
 
 
 
X
Compressor Stator
 
 
 
 
 
 
Casing
 
 
 
 
X
 
Shrouds
 
X
 
 
 
 
Vanes
 
X
 
 
 
 
Variable Stator Actuating Rings
 
X
 
 
 
 
Combustor Diffuser Nozzle (CDN)
 
 
 
 
 
 
Casings
 
X
 
 
 
 
Combustor Liners
 
X
 
 
 
 
Fuel Atomizer
 
X
 
 
 
 
HPT Nozzle
 
X
 
 
 
 
HPT Nozzle Support
 
 
X
 
 
 
HPT Shroud
 
X
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

TABLE 1
737X
CFM56 WARRANTY PARTS LIST
(continued)
 
 
Flight Hours
 
2000
3,000
4,000
6,000
8,000
12,000
HPT Rotor
 
 
 
 
 
 
Blades
 
 
X
 
 
 
Disks
 
 
 
 
 
X
Shafts
 
 
 
 
 
X
Retaining Ring
 
X
 
 
 
 
LP Turbine
 
 
 
 
 
 
Casing
 
 
 
X
 
 
Vane Assemblies
 
X
 
 
 
 
Interstage Seals
 
X
 
 
 
 
Shrouds
 
X
 
 
 
 
Disks
 
 
 
 
X
 
Shaft
 
 
 
 
 
X
Bearings
 
 
X
 
 
 
Blades
 
X
 
 
 
 
Turbine Frame
 
 
 
 
 
 
Casing & Struts
 
 
 
X
 
 
Hub
 
 
X
 
 
 
Sump
 
 
X
 
 
 
Accessory & Transfer Gearboxes
 
 
 
 
 
 
Case
 
 
X
 
 
 
Shafts
 
 
X
 
 
 
Gears
 
 
X
 
 
 
Bearings
 
 
X
 
 
 
Air-Oil Seals
 
X
 
 
 
 
Controls & Accessories
 
 
 
 
 
 
Engine
X
 
 
 
 
 
Condition Monitoring Equipment
X
 
 
 
 
 

 
 
 

 
 

--------------------------------------------------------------------------------

 

2497-1R17
 
Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188
 
 
 
Subject:    Option Aircraft
 
Reference:    Purchase Agreement 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to Model
737-890 and 737-990ER aircraft (the Aircraft)
 
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. This Letter Agreement supersedes and replaces in its entirety Letter
Agreement 2497-1R16 dated June 18, 2010. All terms used but not defined in this
Letter Agreement have the same meaning as in the Purchase Agreement.
 
Boeing agrees to manufacture and sell to Customer additional Model 737-890
aircraft as the Option Aircraft. The delivery months, number of aircraft,
Advance Payment Base Price per aircraft and advance payment schedule are listed
in Attachment 1 and Attachment 2 to this Letter Agreement. The Airframe Price
shown includes the Engine Price.
 
1.    Aircraft Description and Changes
 
1.1     Aircraft Description: The Option Aircraft are described by the Detail
Specification listed in the Attachments.
 
1.2    Changes: The Detail Specification will be revised to include:
 
(i)     Changes applicable to the basic Model 737 aircraft that are developed by
Boeing between the date of the Detail Specification and the signing of the
definitive agreement to purchase the Option Aircraft;
(ii)     Changes required to obtain required regulatory certificates;
(iii)     Changes mutually agreed upon; and
(iv)    In the case of the Boeing 737-990ER, Changes incorporated in the final
configuration in accord with Letter Agreement 5-1162-SCR-106.
2.    Price
 
2.1    The pricing elements of the Option Aircraft are listed in the Attachments
1 and 2 attached hereto.
 
2.1.1    The [***] New Option Aircraft added to the Purchase Agreement by
Supplemental Agreement No. 23 listed in Attachment 2 include escalation factors
based on [***] and the resulting advance payment base price and advance payments
listed are based on such escalation.
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

 
 

--------------------------------------------------------------------------------

 

 
2.1.2    The remaining Option Aircraft listed in Attachment 1 include escalation
factors based on [***] and the resulting advance payment base price and advance
payments are based on such escalation.
 
2.2    Price Adjustments.
 
2.2.1    Optional Features. The price for Optional Features selected for the
Option Aircraft will be adjusted to Boeing's current prices as of the date of
execution of the definitive agreement for the Option Aircraft. The existing
Optional Features amounts shown on Attachments 1 and 2 do not include changes to
the Exhibit A incorporated in Supplemental Agreement No. 20 nor do the amounts
include Boeing Sky Interior (BSI).
 
2.2.2    Escalation Adjustments. The Airframe Price and the price of Optional
Features for Option Aircraft will be escalated using 1) Boeing's standard
escalation provisions (ECI-W formula) or alternate escalation provisions
(ECI-MFG/CPI formula) to be selected by Customer at the date of execution of the
definitive agreement for the Option Aircraft, or 2) a mutually agreed different
Boeing then current escalation provision should such exist at the date of
execution of the definitive agreement for the Option Aircraft. Attachments 1and
2 are shown with the alternate escalation provisions (ECI-MFG/CPI formula).
[***]
 
2.2.3    Base Price Adjustments. [***]
 
 
3.    Payment.
 
3.1    Customer will pay a deposit to Boeing in the amount specified in an
Attachment for each Option Aircraft (Deposit), on the date of this Letter
Agreement when the particular Option Aircraft was not previously included in an
Attachment to an earlier version of this letter and previously paid. If Customer
exercises an option the Deposit will be credited against the first advance
payment due. If Customer does not exercise an option Boeing will retain the
Deposit for that Option Aircraft.
 
 
3.2    Following option exercise, advance payments in the amounts and at the
times listed in an Attachment will be payable for the Option Aircraft. The
remainder of the Aircraft Price for the Option Aircraft will be paid as advance
payments and at the time of delivery as provided in the Purchase Agreement.
 
4.    Option Exercise.
 
4.1    Customer may exercise an option by giving written notice to Boeing prior
to the delivery dates listed in Attachments 1 and 2 (Option Exercise Date) as
described in paragraphs 4.3 and 4.4 below.
 
4.2    If Boeing must make production decisions which are dependent on
Customer's exercising an option earlier than the Option Exercise Date, Boeing
may accelerate the Option Exercise Date subject to Customer's agreement. If
Boeing and Customer fail to agree to a revised Option Exercise Date, either
party may terminate the option and Boeing will refund to Customer, without
interest, any Deposit and advance payments received by Boeing with respect to
the terminated Option Aircraft.
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

 
 

--------------------------------------------------------------------------------

 

 
4.3    For Option Aircraft listed on Attachment 1, Customer may (i) exercise its
Option, or (ii) exercise its Option and convert an Option Aircraft by providing
written notice of its intention to purchase the Option Aircraft, and if
applicable, state that it intends to purchase a [***] Substitute Aircraft in
substitution for an Option Aircraft:
 
(a)     no later than the first day of the month that is [***] prior to the
scheduled month of delivery of the Option Aircraft set forth in Attachment 1;
and
 
(b)     any substitution into a Boeing Model [***] aircraft with auxiliary tanks
may result in a two (2) month slide to delivery unless the notice of intention
to substitute indicates that the [***] Aircraft will require auxiliary tanks and
such notice is given no later than the first day of the month that is [***]
prior to the scheduled option month set forth in Attachment 1 as the month of
delivery for the Aircraft; and
    
(c)      any substitution into a Boeing Model [***] aircraft may not later be
substituted to any other Boeing Model.
 
4.4    For the [***] New Option Aircraft added by Supplemental Agreement No. 23
that are reflected in Attachment 2, Customer may (i) exercise its Option, or
(ii) exercise its Option and convert an Option Aircraft by providing written
notice of its intention to purchase a [***] (Substitute Aircraft) in
substitution for an Option Aircraft;
 
(a) no later than the first day of the month that is [***] prior to the
scheduled month of delivery of the Option Aircraft set forth in Attachment 2.
(b)     any substitution into a Boeing Model [***] aircraft may not later be
substituted to any other Boeing Model.
 
5.    Contract Terms.
 
Boeing and Customer will use their best efforts to reach a definitive agreement
for the purchase of an Option Aircraft, including the terms and conditions
contained in this Letter Agreement, in the Purchase Agreement, and other terms
and conditions as may be agreed upon. In the event the parties have not entered
into a definitive agreement within 30 days following option exercise, other than
as a result of Boeing's failure to timely provide an agreement to Customer for
review and execution, either party may terminate the purchase of such Option
Aircraft by giving written notice to the other within 5 days. If Customer and
Boeing fail to enter into a definitive agreement containing terms consistent
with Purchase Agreement No. 2497 that was delivered to Customer within 20 days
following Option exercise due to Customer's failure or refusal, Boeing will
retain the Deposit for that Option Aircraft.
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 

 
 

--------------------------------------------------------------------------------

 

Sincerely,
 
THE BOEING COMPANY
    
By   /s/ Stuart C. Ross          
 
Its           Attorney‑In‑Fact            
 
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
Alaska Airlines, Inc.
 
By /s/ Brandon S. Pedersen       
 
Its Vice President, Finance              
 Chief Financial Officer              
 
Attachments 1 and 2
 
 

 
 

--------------------------------------------------------------------------------

 

Attachment 1 to Option Aircraft Letter Agreement 2497-1R17
737-800 Options
Aircraft Delivery, Description, Price and Advance Payments (1)
 
 
 
[***]
 
 
 
* Indicates that certain information contained herein has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the omitted portions.

 
 

 
 

--------------------------------------------------------------------------------

 

Attachment 1 to Option Aircraft Letter Agreement 2497-1R17
737-800 Options
Aircraft Delivery, Description, Price and Advance Payments (1)
 
 
 
[***]
 
 
 
* Indicates that certain information contained herein has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the omitted portions.

 
 

 
 

--------------------------------------------------------------------------------

 

Attachment 2 to Option Aircraft Letter Agreement 2497-1R17
737-800 Options
Aircraft Delivery, Description, Price and Advance Payments (1)
 
 
 
[***]
 
 
 
* Indicates that certain information contained herein has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the omitted portions.

 
 
 
 

 
 

--------------------------------------------------------------------------------

 

2497-2R1
 
Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188
 
 
Subject:    Aircraft Model Substitution
 
Reference:    Purchase Agreement No. 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to
Model 737-890 and [***] aircraft, collectively (the Aircraft)
 
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
 
Customer may substitute the purchase of Boeing Model [***] aircraft (Substitute
Aircraft) in place of any of the Aircraft, subject to the following terms and
conditions:
 
1.    Customer's Written Notice.
 
Customer will provide written notice of its intention to substitute the purchase
of a Substitute Aircraft in substitution for a 737-800 Aircraft:
 
(a)     no later than the first day of the month that is (i) [***] prior to the
scheduled month of delivery for the Option Aircraft as reflected on Attachment 1
of Letter Agreement 2497-1R17, or (ii) [***] prior to the scheduled month of
delivery as reflected on Attachment 2 of Letter Agreement 2497-1R17, provide
written notice to Boeing of its election to exercise its Option and substitute a
Substitute Aircraft for the exercised Option Aircraft; and
 
(b)     in the case of exercise of an Option Aircraft as reflected on Attachment
1 of Letter Agreement 2497-1R17 only, any substitution into a Boeing Model [***]
aircraft with auxiliary tanks may result in a two (2) month slide to delivery
unless the notice of intention to substitute indicates that the [***] Aircraft
will require auxiliary tanks and such notice is given no later than the first
day of the month that is [***] prior to the schedule month of delivery for the
Aircraft; and
 
(c)     any substitution into a Boeing Model [***] may not later be substituted
to any other Boeing Model.
 
2.    Boeing's Production Capability.
 
Customer's substitution right is conditioned upon Boeing's having production
capability and the availability for the Substitute Aircraft in the scheduled
delivery month of the Aircraft for which it will be substituted.
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 
 

 
 

--------------------------------------------------------------------------------

 

If offerable, Boeing will tentatively quote delivery positions for the
Substitute Aircraft to allow Customer to secure quotes from Buyer Furnished
Equipment vendors, and Boeing to secure quotes from Seller Furnished Equipment
vendors which supports the required on-dock dates. If Boeing is unable to
manufacture the Substitute Aircraft in the scheduled delivery month of the
Aircraft for which it will be substituted, then Boeing shall promptly make a
written offer of an alternate delivery month for Customer's consideration and
written acceptance within thirty (30) days of such offer.
 
3.    Definitive Agreement.
 
Customer's substitution right and Boeing's obligation in this Letter Agreement
are further conditioned upon Customer's and Boeing's executing a definitive
agreement for the purchase of the Substitute Aircraft within thirty (30) days of
(i) Customer's substitution notice to Boeing or, (ii) if required pursuant to
paragraph 2, Customer's acceptance of an alternate delivery month in accordance
with paragraph 2 above. Upon definitive agreement, such Substitute Aircraft
shall be incorporated into the Agreement as Aircraft.
 
4.    Price, Escalation Adjustments and Advance Payments.
 
[***] The Airframe Price and the price of Optional Features for Substitute
Aircraft will be escalated using 1) Boeing's standard escalation provisions
(ECI-W formula) or alternate escalation provisions (ECI-MFG/CPI formula) to be
selected by Customer at the date of execution of the definitive agreement for
the Substitution Aircraft, or 2) a different Boeing then current escalation
provisions should such exist at the date of execution of the definitive
agreement for the Substitution Aircraft. The representative escalation indices
and methodology will be used to estimate the Advance Payment Base Prices for
Substitution Aircraft.
 
 
If the Advance Payment Base Price for any Substitute Aircraft is higher than
that of the Aircraft, Customer will pay to Boeing the amount of the difference
as of the date of execution of the definitive agreement for the Substitute
Aircraft. If the Advance Payment Base Price of the Substitute Aircraft is lower
than that of the Aircraft, Boeing will retain any excess amounts previously paid
by Customer until the next payment is due from Customer, at which point Customer
may reduce the amount of such payment by the amount of the excess. In no case
will Boeing refund or pay interest on any excess amounts created by virtue of
Customer's exercise of the rights of substitution described in this agreement.
 
 
5.    Confidential Treatment.
 
Customer understands that certain commercial and financial information contained
in this Letter Agreement are considered by Boeing as confidential. Customer
agrees that it will treat this Letter Agreement and the information contained
herein as confidential and will not, without the prior written consent of
Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity.
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 

 
 

--------------------------------------------------------------------------------

 

Sincerely,
 
THE BOEING COMPANY
    
By     /s/ Stuart C. Ross            
 
Its         Attorney‑In‑Fact              
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
Alaska Airlines, Inc.
 
 
By  /s/ Brandon S. Pedersen       
 
Its     Vice President, Finance            
    Chief Financial Officer                
 
 

 
 

--------------------------------------------------------------------------------

 

2497-4R1
 
Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188
 
 
Subject:    Demonstration Flight Waiver
 
Reference:    Purchase Agreement No. 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to
Model 737-890 aircraft and 737-990ER (the Aircraft)
 
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement shall have
the same meaning as in the Purchase Agreement.
 
Definition of Terms:
 
Correction Costs: Customer's direct labor costs and the cost of any material
required to correct a Flight Discrepancy where direct labor costs are equal to
the warranty labor rate in effect between the parties at the time such labor is
expended.
 
Flight Discrepancy: A failure or malfunction of an Aircraft, or the accessories,
equipment or parts installed on the Aircraft which results from a defect in the
Aircraft, Boeing Product, engine or Supplier Product or a nonconformance to the
Detail Specification for the Aircraft.
 
The AGTA provides that each aircraft will be test flown prior to delivery for
the purpose of demonstrating the functioning of such Aircraft and its equipment
to Customer; however, Customer may elect to waive this test flight. For each
test flight waived, Boeing agrees to provide Customer an amount of jet fuel at
delivery that, including the standard fuel entitlement, totals the following
amount of fuel:
 
Aircraft Model
Total Fuel Entitlement
(U.S. Gallons)
737
Full tanks (approx. 5,300 to 6,800, depending on model)

 
Further, Boeing agrees to reimburse Customer for any Correction Costs incurred
as a result of the discovery of a Flight Discrepancy during the first flight of
the aircraft by Customer following delivery to the extent such Correction Costs
are not covered under a warranty provided by Boeing, the engine manufacturer or
any of Boeing's suppliers.
 
Should a Flight Discrepancy be detected by Customer which requires the return of
the Aircraft to Boeing's facilities at Seattle, Washington, so that Boeing may
correct such Flight Discrepancy, Boeing and Customer agree that title to and
risk of loss of such Aircraft will remain with Customer. In addition, it is
agreed that Boeing will have responsibility for the Aircraft while it is on the
ground at Boeing's facilities in Seattle, Washington, as is chargeable by law to
a bailee for mutual benefit, but Boeing shall not be chargeable for loss of use.
 
To be reimbursed for Correction Costs, Customer shall submit a written itemized
statement describing any flight discrepancies and indicating the Correction Cost
incurred by Customer for each discrepancy. This request must be submitted to
Boeing's Contracts Regional Director at Renton, Washington, within ninety

 
 

--------------------------------------------------------------------------------

 

(90) days after the first flight by Customer.
 
 
Sincerely,
 
THE BOEING COMPANY
 
          
By     /s/ Stuart C. Ross            
 
Its         Attorney‑In‑Fact              
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
Alaska Airlines, Inc.
 
 
By  /s/ Brandon S. Pedersen       
 
Its     Vice President, Finance            
    Chief Financial Officer                
 
 

 
 

--------------------------------------------------------------------------------

 

2497-3R1
 
 
Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188
 
 
Subject:    Seller Purchased Equipment
 
Reference:    Purchase Agreement No. 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to
Model 737890 and 737-990ER aircraft (the Aircraft)
 
 
This Letter Agreement amends and supplements the Purchase Agreement. All terms
used but not defined in this Letter Agreement have the same meaning as in the
Purchase Agreement.
 
Definition of Terms:
 
Seller Purchased Equipment (SPE): Buyer Furnished Equipment (BFE) that Boeing
purchases for Customer.
 
Developmental Buyer Furnished Equipment (DBFE): BFE not previously certified for
installation on the same model aircraft.
 
Developmental Seller Purchased Equipment (DSPE): DBFE which is converted to SPE.
This Letter Agreement does not include developmental avionics. Developmental
avionics are avionics that have not been previously certified for installation
on the same model aircraft.
 
 
1.    Price.
 
Advance Payments. An estimated SPE price is included in the Advance Payment Base
Prices shown in Table 1 for the purpose of establishing the advance payments for
the Aircraft.
 
Aircraft Price. The Aircraft Price will be adjusted to reflect the actual costs
charged to Boeing by the SPE suppliers and transportation charges.
 
 
2.    Responsibilities.
 
2.1    Customer is responsible for:
 
(i)    selecting and notifying Boeing of the supplier for all items identified
in paragraph 1.1 of Supplemental Exhibit BFE1 of the Purchase Agreement,
 
(ii)    selecting a FAA certifiable part; and
 
(iii)    providing to Boeing the SPE part specification/Customer requirements.

 
 

--------------------------------------------------------------------------------

 

 
2.2.    Boeing is responsible for:
 
(i)    placing and managing the purchase order with the supplier;
 
(ii)    coordinating with the suppliers on technical issues;
 
(iii)    ensuring that the delivered SPE complies with the part specification;
 
(iv)    obtaining certification of the Aircraft with the SPE installed; and
 
(v)    obtaining for Customer the supplier's standard warranty for the SPE. SPE
is deemed to be BFE for purposes of Part 2 and Part 4 of Exhibit C, the Product
Assurance Document.
 
3.    Changes.
 
After this Letter Agreement is signed, changes to SPE may only be made by and
between Boeing and the suppliers. Customer's contacts with SPE suppliers
relating to design (including selection of materials and colors), weights,
prices or schedules are for informational purposes only. If Customer wants any
changes made, requests must be made directly to Boeing for coordination with the
supplier.
 
4.    Proprietary Rights.
 
Boeing's obligation to purchase SPE will not impose upon Boeing any obligation
to compensate Customer or any supplier for any proprietary rights Customer may
have in the design of the SPE.
 
5.    Remedies.
 
If Customer does not comply with the obligations above, Boeing may:
 
(i)    delay delivery of the Aircraft;
 
(ii)    deliver the Aircraft without installing the SPE;
 
(iii)    with Customer's prior written consent, substitute a comparable part and
invoice Customer for the cost;
 
(iv)    increase the Aircraft Price by the amount of Boeing's additional costs
attributable to such noncompliance.
 
6.    Customer's Indemnification of Boeing.
 
Customer will indemnify and hold harmless Boeing from and against all claims and
liabilities, including costs and expenses (including attorneys' fees) incident
thereto or incident to successfully establishing the right to indemnification,
for injury to or death of any person or persons, including employees of Customer
but not employees of Boeing, or for loss of or damage to any property, including
Aircraft, arising out of any nonconformance or defect in any SPE and whether or
not arising in tort or occasioned in whole or in part by the negligence of
Boeing. This indemnity will not apply with respect to any nonconformance or
defect caused solely by Boeing's installation of the SPE.

 
 

--------------------------------------------------------------------------------

 

 
 
Sincerely,
 
THE BOEING COMPANY
 
          
By     /s/ Stuart C. Ross            
 
Its         Attorney‑In‑Fact              
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
Alaska Airlines, Inc.
 
 
By  /s/ Brandon S. Pedersen       
 
Its     Vice President, Finance            
    Chief Financial Officer                
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

2497-5R1
 
Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188
 
 
Subject:    Loading of Software Owned by or Licensed to Customer
 
Reference:    Purchase Agreement No. 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to
Model 737-890 and 737-990ER aircraft (the Aircraft)
 
This Letter Agreement amends and supplements the Purchase Agreement. All terms
used but not defined in this Letter Agreement have the same meaning as in the
Purchase Agreement.
Prior to delivery of an Aircraft to Customer, Customer may request Boeing to
install software owned by or licensed to Customer (Software) in the following
systems in the Aircraft: i) aircraft communications addressing and reporting
system (ACARS), ii) digital flight data acquisition unit (DFDAU), iii) flight
management system (FMS), iv) cabin management system (CMS), v) satellite
communications system (SATCOM), vi) engine indication and crew alerting system
(EICAS) and vii) airplane information management system (AIMS). The Software is
not part of the configuration of the Aircraft certified by the FAA. If requested
by Customer, Boeing will install the Software after the FAA has issued the
standard airworthiness certificate or the export certificate of airworthiness,
whichever is applicable, but before delivery of the Aircraft on the following
conditions:
1.    Customer and Boeing agree that the Software is deemed to be BFE for the
purposes of Articles 3.1.3, 3.2, 3.4, 3.5, 3.10, 9, 10 and 11 of Exhibit A,
Buyer Furnished Equipment Provisions Document, to the AGTA and such articles
apply to the installation of the Software.
 
2.     Customer and Boeing further agree that the installation of the Software
is deemed to be a service under Exhibit B, Customer Support Document, to the
AGTA. Boeing makes no warranty as to the performance of such installation and
Article 11 of Part 2 of Exhibit C of the AGTA, Disclaimer and Release; Exclusion
of Liabilities and Article 8.2, Insurance, of the AGTA apply to the installation
of the Software.
 

 
 

--------------------------------------------------------------------------------

 

Sincerely,
 
THE BOEING COMPANY
 
    
By     /s/ Stuart C. Ross            
 
Its         Attorney‑In‑Fact              
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
Alaska Airlines, Inc.
 
 
By  /s/ Brandon S. Pedersen       
 
Its     Vice President, Finance            
    Chief Financial Officer                
 
 
 

 
 

--------------------------------------------------------------------------------

 

6-1162-MSA-592R1
 
 
Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188
 
 
Subject:    Special Purchase Agreement Provisions
 
Reference:    Purchase Agreement No. 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to
Model 737-800 and 737-900ER aircraft (Aircraft)
 
 
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
 
This Letter Agreement modifies certain terms and conditions of the Purchase
Agreement with respect to the Aircraft.
 
 
1.    [***]
    
1.1 [***]
 
2.    Confidential Treatment.    
 
Customer understands that certain commercial and financial information contained
in this Letter Agreement is considered by Boeing as confidential. Customer
agrees that it will treat this Letter Agreement and the information contained
herein as confidential and will not, without the prior written consent of
Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity.
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 

 
 

--------------------------------------------------------------------------------

 

Sincerely,
 
THE BOEING COMPANY
 
    
By     /s/ Stuart C. Ross            
 
Its         Attorney‑In‑Fact              
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
Alaska Airlines, Inc.
 
 
By  /s/ Brandon S. Pedersen       
 
Its     Vice President, Finance            
    Chief Financial Officer                
 
 

 
 

--------------------------------------------------------------------------------

 

6-1162-MSA-597R19
 
 
Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188
 
 
 
Subject:    Special Matters
 
Reference:    Purchase Agreement No. 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to
Model 737-890 (-890 Aircraft) and 737-990ER (-990 ER Aircraft), collectively the
(Aircraft).
 
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. This Letter Agreement supersedes and replaces in its entirety Letter
Agreement 6-1162-MSA-597R18 dated March 15, 2010. All terms used but not defined
in this Letter Agreement have the same meaning as in the Purchase Agreement.
 
1.    Basic Credit Memorandum.
 
Concurrent with the delivery of each Aircraft, Boeing will provide a credit
memorandum equal to [***] of the escalated Airframe Price. Customer may apply
such credit memorandum to the balance of the Purchase Price due at the time of
delivery for such Aircraft, or in payment for Boeing goods and services, but not
for advance payment on the Aircraft.
 
2.    Special Credit Memorandum.
 
Concurrent with the delivery of each Aircraft, Boeing will provide a credit
memorandum equal to [***] of the escalated Airframe Price. Customer may apply
such credit memorandum to the balance of the Purchase Price due at the time of
delivery for such Aircraft, or in payment for Boeing goods and services, but not
for advance payment on the Aircraft.
 
3.
[***] Credit Memorandum.

 
3.1     Concurrent with the delivery of each of the first [***] Aircraft, Boeing
will provide a credit memorandum equal to [***] of the escalated Airframe Price.
Customer may apply such credit memorandum to the balance of the Purchase Price
due at the time of delivery for such Aircraft, or in payment for Boeing goods
and services, but not for advance payment on the Aircraft. For subsequent
Aircraft [***], this [***] Credit Memorandum shall increase to [***], to be
applied as described above.
 
3.2    Boeing provides this [***] Credit Memorandum, in addition to the other
Credit Memoranda of this Letter Agreement, as a financial accommodation to
Customer in consideration of Customer becoming the operator of the Aircraft.
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 

 
 

--------------------------------------------------------------------------------

 

 
3.3     [***]
 
4.    Market Development Credit Memorandum.
 
[***]
 
5.    [***] Escalation Factors.
 
5.1    Table 1, pages 9 through 15 to the Purchase Agreement identifies the
delivery positions and the estimated escalation for the Aircraft. The parties
agree that escalation factors shall be [***] ([***] Factor) for certain Aircraft
([***]Factor Aircraft). The [***] Factor will be used to determine the
escalation adjustment component of the Aircraft Price for each [***] Factor
Aircraft notwithstanding any other provisions of the Purchase Agreement to the
contrary, including without limitation the provisions of Supplemental Exhibit
AE1 to the Purchase Agreement. The applicable [***] Factor Aircraft with the
corresponding [***] Factor are as listed in Attachments 1A, 1B, and 2 and are
listed in Table 1, pages 10, 11 and 14. As of the date of this Letter Agreement,
all Aircraft listed in Attachments 1A, 1B, and 2 have been delivered by Boeing
to the Customer and such Attachments are included herein for historical and
documentation administration purposes.
 
5.2    The Aircraft Price, Basic Credit Memorandum, Special Credit Memorandum
and [***] Credit Memorandum for [***] Factor Aircraft entitled to [***] Factor
escalation are as listed in Attachments 1A, 1B, and 2 and are subject to
adjustment per Article 5.3 below. To confirm, [***] Factor is not applicable to
Buyer Furnished Equipment and Seller Purchased Equipment.
 
5.3    In addition, the escalation adjustment for any other sum which is
identified in the Purchase Agreement as subject to escalation and which pertains
to [***] Factor Aircraft, including but not limited to changes as described in
AGTA-ASA Article 3 and Article 4 shall be calculated using the applicable [***]
Factor notwithstanding any other provisions of the Purchase Agreement to the
contrary, including without limitation the provisions of Supplemental Exhibit
AE1 to the Purchase Agreement.
 
5.4    The process for determining eligibility and adding Aircraft not listed in
Attachments 1A, 1B, and 2 and Table 1, pages 10, 11, and 14 is specified in
Letter Agreement 6-1162-MSA-691, titled [***].
 
6.    [***]
 
7.    [***]
 
8.    Increased Quantity Purchase.
 
In addition to the Basic, Special and [***] Credit Memorandums described above
in Articles 1, 2 and 3 above, should Customer purchase additional firm aircraft
beyond the [***] firm 737-890 Aircraft and exercised Option Aircraft, a further
credit memorandum shall be applicable only to the additional groups of aircraft
purchased as follows:
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 
8.1    [***]
 

 
 

--------------------------------------------------------------------------------

 

8.2    [***]
 
8.3    [***]
 
9.    [***] Advance Payment Schedule.
 
9.1    [***], Customer [***] pay advance payments according to the following
schedule, for Aircraft on order as of the date of signing the Purchase
Agreement.
 
Due Date of Payment    Amount Due per Aircraft
(Percentage times     Advance Payment Base Price)
 
Definitive Purchase Agreement        [***]
 
24 months prior to the first        [***]
day of the scheduled delivery
month of the Aircraft
 
21 months prior to the first        [***]
day of the scheduled delivery
month of the Aircraft
 
18 months prior to the first        [***]
day of the scheduled delivery
month of the Aircraft
 
12 months prior to the first        [***]
day of the scheduled delivery
month of the Aircraft
 
9 months prior to the first        [***]
day of the scheduled delivery
month of the Aircraft
 
6 months prior to the first        [***]
day of the scheduled delivery
month of the Aircraft                  
Total                [***]
 
9.2    [***]
 
10.    [***]
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 
11.    [***]
 
12.    [***]
 

 
 

--------------------------------------------------------------------------------

 

13.    Option Aircraft.
 
Further to Option Aircraft Letter Agreement 2497-1 of the Purchase Agreement,
Boeing provides the following additional terms for 737-890 option aircraft
(Option Aircraft):
 
13.1     [***]
 
13.2    [***]
 
13.3    Applicable Credit Memorandums.
 
The Basic, Special and [***] Credit Memorandums described in Articles 1, 2 and
3, above, shall be applicable to the Option Aircraft. To confirm, should an
Option Aircraft be exercised (whether or not for a Substitute Aircraft), which
becomes an Aircraft delivery within the first [***] Aircraft, the [***] Credit
Memorandum will be [***]. For Option Aircraft exercised as Aircraft with
delivery after the [***] sequenced Aircraft delivery, the [***] Credit
Memorandum will be [***].
 
13.4    [***]
 
14.    737 Next Generation Manuals in the SGML Format
 
In consideration of Customer electing to receive Task Cards for Customer's fleet
of Boeing Model 737-400 aircraft in the SGML format in lieu of the Print File
format that Customer currently receives, Boeing will provide the Aircraft
Maintenance Manual (AMM) and Fault Isolation/Fault Reporting Manual (FIM/FRM)
for Customer's fleet of Boeing Model 737-700, 737-800 and 737-900 aircraft (the
737 NG aircraft) in the SGML format at no-charge to Customer for the period
[***]. Should Customer continue to receive the AMM and FIM/FRM for 737 NG
aircraft in the SGML format beyond the date of [***], Customer shall upon such
date pay Boeing its then-current fees for such on-going manuals service.
 
In recognition that Customer paid for the initial set-up and first-year revision
service (November 2007 through November 2008) of the AMM and FIM/FRM for its 737
NG aircraft fleet, Boeing shall immediately upon execution of this Letter
Agreement issue a credit in the fixed amount of [***] which Customer may apply
towards the purchase of future Boeing goods and services.
 
 
15.     INTENTIONALLY LEFT BLANK
 
16.    [***]
 
17.    INTENTIONALLY LEFT BLANK
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 
 
 
18.    Assignment.
 
Unless otherwise described herein, the Credit Memoranda described in this Letter
Agreement are provided as a financial accommodation to Customer in consideration
of Customer's becoming the operator of the Aircraft, and cannot be assigned, in
whole or in part, without the prior written consent of Boeing.
 
 
19.    Confidential Treatment.    
 
Customer understands that certain commercial and financial information contained
in this Letter Agreement is considered by Boeing as confidential. Customer
agrees that it will treat this Letter Agreement and the information contained
herein as confidential and will not, without the prior written consent of
Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity.
 
Sincerely,
 
THE BOEING COMPANY
    
By     /s/ Stuart C. Ross            
 
Its         Attorney‑In‑Fact              
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
Alaska Airlines, Inc.
 
 
By  /s/ Brandon S. Pedersen       
 
Its     Vice President, Finance            
    Chief Financial Officer                               
 
Attachment
 
 

 
 

--------------------------------------------------------------------------------

 

6-1162-SCR-106
 
Alaska Airlines
19300 International Blvd. South
Seattle, Washington
98188
 
 
Subject:    Model 737-990ER Open Configuration Matters
 
 
Reference:    Purchase Agreement No. 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to Model
737-990ER aircraft (the Aircraft)
 
 
This Letter Agreement amends the Purchase Agreement. All terms used but not
defined in this Letter Agreement have the same meaning as in the Purchase
Agreement.
 
 
1.    Aircraft Configuration.
 
1.1    Initial Configuration. The initial configuration of Customer's Model
737-900ER Aircraft has been defined by Boeing 737-900ER Configuration
Specification D019A001, Rev N, dated January 29, 2010 and configured with the
737 Standard Selections Publication D924A110-2, including selections for the
Boeing Sky Interior. Boeing and Customer agree to include this initial
configuration and the related pricing of the Optional Features in this
Supplemental Agreement number 23.
 
1.2    Final Configuration Schedule. The final configuration of the Customer's
Aircraft has not yet been defined. Customer and Boeing hereby agree to complete
discussions of the configuration of the Aircraft no later than September 1, 2011
using the then current Model 737 Aircraft Description and Selections Document
(Final Configuration), with Customer acceptance no later than November 1, 2011.
Customer has requested a decision milestone chart from Boeing to assist Customer
by providing the dates that Boeing needs decisions to be made by in order to
complete the configuration in a timely manner to meet the delivery month of
February 2013 for the first Aircraft. The milestone chart is attached hereto as
Attachment A.
 
2.    Amendment of the Purchase Agreement. Within thirty (30) days following
Final Configuration pursuant to Article 1.2, above, Boeing and Customer will
execute a written amendment to the Purchase Agreement which will reflect the
following:
 
2.1    Changes applicable to the basic Model 737-990ER Aircraft between the date
of signing of this Supplemental Agreement and date of Final Configuration
pursuant to Article 1.2, above (Baseline Changes);
 
2.2    Incorporation into Exhibit A of the Purchase Agreement of those Customer
Selections which have been agreed to by Customer and Boeing (Customer
Configuration Changes);
 
2.3    Revisions to the Performance Guarantees to reflect the effects, if any,
on Aircraft performance of the incorporation of the Customer Configuration
Changes and the Baseline Changes.
 
2.4    Changes to the Optional Features Price, Aircraft Basic Price and the
Advance Payment

 
 

--------------------------------------------------------------------------------

 

Base Price of the Aircraft to adjust for (i) the difference, if any, between the
[***] Optional Features amount included in the Aircraft Basic Price reflected in
Table 1, Page 15; and (ii) the difference between the actual prices of the
Optional Features and Seller Purchased Equipment reflected in the Customer
Configuration Changes.
 
3.    Other Letter Agreements.
Boeing and Customer acknowledge that as the definition of the Model 737-990ER
Aircraft progresses, there may be a need to execute letter agreements addressing
one or more of the following subjects:
3.1    Software. Additional provisions relating to software.
3.2    Seller Purchased Equipment (SPE) and/or Buyer Furnished Equipment (BFE).
Provisions relating to the terms under which Boeing may offer or install SPE
and/or BFE in the Model 737-990ER Aircraft.
 
4.     Confidential Treatment.
 
Customer understands that certain commercial and financial information contained
in this Letter Agreement and attachments hereto are considered by Boeing as
confidential. Customer agrees that it will treat this Letter Agreement and the
information contained herein as confidential and, except as otherwise required
by law, will not, without the prior written consent of Boeing, disclose this
Letter Agreement or any information contained herein to any other person or
entity.
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 
 

 
 

--------------------------------------------------------------------------------

 

Very truly yours,
 
THE BOEING COMPANY
 
 
 
By        /s/ Stuart C. Ross        
 
Its           Attorney‑In‑Fact           
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
 
ALASKA AIRLINES, INC.
 
 
 
By  /s/ Brandon S. Pedersen       
    
Its  Vice President, Finance             
 Chief Financial Officer        
 
 
 
 
Attachment A
 
 
 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

Attachment A to 6-1162-SCR-106
 
Aircraft Configuration Milestones
SA-23
 
 
 
Initial Configuration Discussions Completed - [***]
This is the start of the formal configuration process, with informal
configuration discussions leading up to this. Writing options, providing price
and offerability, and formally offering proposals to Alaska with CADs will occur
during this process.
First Option Package Proposed to Alaska - [***] with CAD [***]
The program has scheduled the first option package.
Final Configuration Discussions Completed - [***]
This will result in the last option package processed. By this time Boeing will
require a complete airplane definition:
- Flight Deck and other capabilities (e.g. Short Field Performance, ETOPS/no
ETOPS, RNP)
- Interior arrangement (e.g. seat layout, monuments including class divider, aft
galley complex/flat pressure bulkhead, emergency equipment)
- Structures (e.g. window plug)
- Exterior color schemes
Customer Acceptance for Final Configuration - [***]
Combined with all previous option packages, Customer selects their final
configuration
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 

 
 

--------------------------------------------------------------------------------

 

6-1162-MSA-691R5
 
 
Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188
 
Subject:    [***]
 
Reference:    Purchase Agreement No. 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to
Model 737-890 and 990-ER aircraft (the Aircraft)
 
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. This Letter Agreement supersedes and replaces in its entirety Letter
Agreement 6-1162-MSA-691R4 dated October 31, 2007. All terms used but not
defined in this Letter Agreement have the same meaning as in the Purchase
Agreement.
 
Article 4 of Special Matters Letter Agreement 6-1162-MSA-597 identifies [***]
Factor Aircraft for which [***] Factors are to be applied. The following defines
the conditions for eligibility and process for changing certain Aircraft that
are not designated for [***] escalation ([***] Factor Aircraft) to [***] Factor
Aircraft.
 
Recitals:
 
A.     Each year (Annual Base Year) Boeing updates the airframe price for each
model of Boeing aircraft.
 
B.    In August of each year Boeing prepares and furnishes to its customers
forecasts of escalation factors developed by Boeing using data published by
independent forecasting services (August Forecast).
 
C.    Attachment A to this Letter Agreement, which is incorporated by this
reference, shall be used to list Aircraft that Customer has agreed to purchase
and for which Boeing, at a future date, offers to permit Customer to elect to
[***]. In the event that Boeing makes Customer such an offer, this letter will
be revised to include a new Attachment A that will reflect (i) the delivery
months for the [***] Factor Aircraft, (ii) the serial numbers of the [***]
Factor Aircraft, (iii) the escalation provisions applicable to the [***] Factor
Aircraft, and (iv) the time period during which Customer may give notice of an
[***] for the [***] Factor Aircraft pursuant to Article 2 of this Letter
Agreement.
 
Agreement:
 
1.     Once an Aircraft has been designated as a [***] Factor Aircraft (per
Article 4 of Special Matters Letter Agreement 6-1162-MSA-597) the [***] Factor
value may not be changed. The escalation of any sum pertaining to a [***] Factor
Aircraft which is subject to escalation pursuant to the provisions of the
Purchase Agreement shall be calculated using such [***], regardless of the date
on which the obligation to pay such sum arises.
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
2.    The airframe escalation factor for the [***] Factor Aircraft may be [***]
as provided in Articles

 
 

--------------------------------------------------------------------------------

 

2.1 through 2.3, below, at the election of Customer:
 
2.1    Customer may [***] for each [***] Factor Aircraft only one time [***].
 
2.2    Customer may make an [***] only with respect to [***] Factor Aircraft
delivering in the twelve month period following August 1 of the year three years
after the Annual Base Year in which [***] is made (Candidate Aircraft). (For
example, for an [***] made during the Annual Base Year 2006, the Candidate
Aircraft would be the [***] Factor Aircraft delivering in the months of August
2009 through July 2010.)
 
2.3    Customer may elect [***] for Candidate Aircraft at the applicable
forecasted airframe escalation factor for the delivery month of such Candidate
Aircraft as set forth in the August Forecast published by Boeing in the Annual
Base Year in which the [***] occurs, provided that Customer provides written
notice to Boeing of such election in the form attached as Attachment B by
October 1 of such Annual Base Year (Election Period).
 
3.    Upon Boeing's receipt of Customer's notice in the form of Attachment B and
Boeing's confirmation of its content and timeliness, the Purchase Agreement
shall be deemed amended to reflect such [***] for the specified [***] Factor
Aircraft.
 
4.    The amount and timing of Advance Payments Customer is required to pay to
Boeing pursuant to the Purchase Agreement shall be unaffected by any [***].
 
5.    This Letter Agreement is only applicable to Aircraft that may be listed in
Attachment A in the future. At Boeing's discretion, [***] Factor may be offered
for other aircraft that Customer agrees to purchase by executing a Supplemental
Agreement to the Purchase Agreement. In the event that [***] Factor is offered,
applicable Aircraft that were not eligible for [***] Factor may be added to
Attachment A.
 
 
5.1    Notwithstanding the provisions as set forth in paragraph 5 above,
Customer and Boeing agree that the following Aircraft, identified in paragraphs
5.1.1 and 5.1.2 below, shall not be designated as [***] Factor Aircraft, and
accordingly not designated for [***].
 
5.1.1    The following serial numbers from Table 1, page 15 to the Purchase
Agreement:
[***]
5.1.2 [***]
 
6.    Customer understands that certain commercial and financial information
contained in this Letter Agreement and the attachments hereto is considered by
Boeing as confidential. Customer agrees that it will treat this Letter Agreement
and the information contained herein as confidential and will not, without the
prior written consent of Boeing, disclose this Letter Agreement or any
information contained herein to any other person or entity.
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 

 
 

--------------------------------------------------------------------------------

 

Sincerely,
 
THE BOEING COMPANY
 
    
By       /s/ Stuart C. Ross          
 
Its           Attorney‑In‑Fact            
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
Alaska Airlines, Inc.
 
By  /s/ Brandon S. Pedersen       
    
Its  Vice President, Finance             
 Chief Financial Officer        
 
Attachments
 
 

 
 

--------------------------------------------------------------------------------

 

Attachment A to Letter Agreement 6-1162-MSA-691R5
 
 
 
 
 
Airframe Model
737-800
737-900ER
Engine Model:
CFM56-7B27
CFM56-7B27
Airframe Price Base Year
2004
2005
Engine Price Base Year
N/A
N/A
 
 
 
 
 
 
 
 
Delivery Month and Year
[***]
Factor Aircraft Serial Number
Applicable
[***] Airframe/Engine [***]
 Provisions
Election Period (notification due by)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

Attachment B to Letter Agreement 6-1162-MSA-691R5
 
Notice of [***]
 
Boeing Commercial Airplanes
P.O. Box 3707
Seattle, Washington 98124-2207
U.S.A.
 
Reference:    Purchase Agreement No. 2497 dated as of June 15, 2005, between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (the Purchase Agreement)
 
Attention:    Vice President - Contracts
Mail Code 21-34
 
Pursuant to Article 2 of Letter Agreement 6-1162-MSA-691 (Letter Agreement) to
the Purchase Agreement and subject to the provisions of Article 3 of such Letter
Agreement, Alaska Airlines elects to [***] for the following Candidate Aircraft
as provided in the following table:
 
Airframe Model:
737-800, 900ER
Airframe Price Base Year:
2004, 2005 (900ER)
Engine Model:
CFM56-7B27
Engine Price Base Year:
N/A

 
Delivery Month and Year
Candidate Aircraft Serial Number
[***] Airframe/Engine [***]
 
 
 
 
 
 

 
Alaska Airlines, Inc.
 
 
By
Its
Dated

 
 
Receipt of the above notice is acknowledged and the [***] pursuant to the Letter
Agreement as described in this notice is confirmed, effective as of this date.
 
THE BOEING COMPANY
 
By        
Its    Attorney-in-Fact    
Dated        
 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

 
 

--------------------------------------------------------------------------------

 

6-1162-SCR-112
 
Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188
 
Subject:    Aircraft Performance Guarantees
 
Reference:    Purchase Agreement No. 2497 (the Purchase Agreement) between The
Boeing Company (Boeing) and Alaska Airlines, Inc. (Customer) relating to Model
737-990ER aircraft (the Aircraft)
 
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
 
1.    Aircraft Performance Guarantees.
 
Boeing agrees to provide Customer with the performance guarantees in the
Attachment. These guarantees are exclusive and expire upon delivery of the
Aircraft to Customer.
 
2.    Confidential Treatment.    
 
Customer understands that certain commercial and financial information contained
in this Letter Agreement is considered by Boeing as confidential. Customer
agrees that it will treat this Letter Agreement and the information contained
herein as confidential and will not, without the prior written consent of
Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity.
 
 
Sincerely,
 
THE BOEING COMPANY
 
    
By        /s/ Stuart C. Ross         
 
Its           Attorney‑In‑Fact            
 
 
ACCEPTED AND AGREED TO this
 
Date: January 24, 2011
 
Alaska Airlines, Inc.
 
 
By   /s/ Brandon S. Pedersen       
 
Its Vice President, Finance               
 Chief Financial Officer         
 
Attachment

 
 

--------------------------------------------------------------------------------

 

MODEL 737-900ER with winglets PERFORMANCE GUARANTEES
FOR Alaska Airlines, Inc.
SECTION    CONTENTS
1    AIRCRAFT MODEL APPLICABILITY
2    FLIGHT PERFORMANCE
3    MANUFACTURER'S EMPTY WEIGHT
4    SOUND LEVELS
5    AIRCRAFT CONFIGURATION
6    GUARANTEE CONDITIONS
7    GUARANTEE COMPLIANCE
8    EXCLUSIVE GUARANTEES
    

 
 

--------------------------------------------------------------------------------

 

1    AIRCRAFT MODEL APPLICABILITY
The guarantees contained in this Attachment (the "Performance Guarantees") are
applicable to the 737-900ER Aircraft with winglets and a maximum takeoff weight
of [***] pounds, a maximum landing weight of [***] pounds, and a maximum zero
fuel weight of [***] pounds, and equipped with Boeing furnished CFM56‑7B26E
engines.
2    FLIGHT PERFORMANCE
2.1    Takeoff
The FAA approved takeoff field length at a gross weight at the start of the
ground roll of [***] pounds, at a temperature of [***]°C, at a sea level
altitude, with an alternate forward center of gravity limit of 15 percent of the
mean aerodynamic chord, and using maximum takeoff thrust, shall not be more than
the following guarantee value:
GUARANTEE:    [***]    Feet
2.2    Landing
The FAA approved landing field length at a gross weight of [***] pounds and at a
sea level altitude, shall not be more than the following guarantee value:
GUARANTEE:    [***]    Feet
2.3    Mission
2.3.1    Mission Block Fuel
The block fuel for a stage length of [***] statute miles in still air with a
[***] pound payload using the conditions and operating rules defined below,
shall not be more than the following guarantee value:
NOMINAL:    [***]    Pounds
TOLERANCE:    [***]    Pounds
GUARANTEE:    [***]    Pounds
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
Conditions and operating rules:
Stage Length:
The stage length is defined as the sum of the distances for the climbout
maneuver, climb, cruise, and descent.
Fuel Density:
The fuel density is 6.7 pounds per U.S. gallon.
Block Fuel:
The block fuel is defined as the sum of the fuel used for taxi-out, takeoff and
climbout maneuver, climb, cruise, descent, approach and landing maneuver, and
taxi-in.
Takeoff:
The takeoff gross weight is not limited by the airport conditions.

 
 

--------------------------------------------------------------------------------

 

 
Maximum takeoff thrust is used for the takeoff.
 
The takeoff gross weight shall conform to FAA Regulations.
Climbout Maneuver:
Following the takeoff to [***] feet, the Aircraft accelerates to [***] KCAS
while climbing to [***] feet above the departure airport altitude and retracting
flaps and landing gear.
Climb:
The Aircraft climbs from [***] feet above the departure airport altitude to
[***] feet altitude at [***] KCAS.
 
The Aircraft then accelerates at a rate of climb of [***] feet per minute to the
recommended climb speed for minimum block fuel.
 
The climb continues at the recommended climb speed for minimum block fuel until
0.78 Mach number is reached.
 
The climb continues at 0.78 Mach number to the initial cruise altitude.
 
The temperature is standard day during climb.
 
Maximum climb thrust is used during climb.
Cruise:
The Aircraft cruises at 0.79 Mach number.
 
The initial cruise altitude is 37,000 feet.
 
A step climb or multiple step climbs of 2,000 feet altitude may be used when
beneficial to minimize fuel burn.
 
The temperature is standard day during cruise.
 
The cruise thrust is not to exceed maximum cruise thrust except during a step
climb when maximum climb thrust may be used.
Descent:
The Aircraft descends from the final cruise altitude at 250 KCAS to an altitude
of 1,500 feet above the destination airport altitude.
 
Throughout the descent, the cabin pressure is controlled to a maximum rate of
descent equivalent to 300 feet per minute at sea level.
 
The temperature is standard day during descent.
Approach
and Landing Maneuver:
The Aircraft decelerates to the final approach speed while extending landing
gear and flaps, then descends and lands.
 
The destination airport altitude is a sea level airport.
Fixed Allowances:
For the purpose of this guarantee and for the purpose of establishing compliance
with this guarantee, the following shall be used as fixed quantities and
allowances:
 
Operational Empty Weight, OEW (Paragraph 2.3.3): 100,527 Pounds
 
Taxi-Out:
Fuel 230 Pounds
 
Takeoff and Climbout Maneuver:
Fuel 530 Pounds
Distance 3.7 Nautical Miles
 
Approach and Landing Maneuver:
Fuel 250 Pounds
 
Taxi-In (shall be consumed from the reserve fuel):
Fuel 200 Pounds
 
Usable reserve fuel remaining upon completion of the approach and landing
maneuver: 7,680 Pounds

 
 

--------------------------------------------------------------------------------

 

 
For information purposes, the reserve fuel is based on a standard day
temperature and a) a 200 pound general purpose fuel, b) a missed approach and
flight to a 200 nautical mile alternate, c) an approach and landing maneuver at
the alternate airport, and d) a 45 minutes hold at 1,500 feet above a sea level
alternate airport.

 
2.3.2Operational Empty Weight Basis
The Operational Empty Weight (OEW) derived in Paragraph 2.3.3 is the basis for
the mission guarantees of Paragraph 2.3.1.
2.3.3 737-9ER Weight Summary Alaska Airlines
 
 
Pounds
 
 
Standard Model Specification MEW
[***]
     Configuration Specification D019A001, Rev. N
 
          Dated January 29, 2010
 
     204 Tourist Class Passengers
 
     CFM56-7 Engines
 
     164,500 Pounds (74,615 kg.) Maximum Taxi Weight
 
     6,875 U.S. Gallons (26,024 l.) Fuel Capacity
 
 
 
   Changes for Alaska Airlines
 
     Interior Change to 178 (16 FC/162 EC) Passengers*
[***]
       (Ref: LOPS B376189) (BSI interior)
 
     188,200 Pounds (85,366 Kilograms) Maximum Taxi Weight
[***]
     Mid Cabin Exit Door Deactivation
[***]
     Extended Operations (ETOPS)
[***]
     60 Minute Standby Power
[***]
     Heads Up Display (HUD)
[***]
     Centerline Overhead Cargo Compartments (4)
[***]
     Heavy Duty Cargo Compartment Linings/Panels
[***]
     Winglets
[***]
     Additional Change Requests Allowance (Based on 737-800)
[***]
 
 
Alaska Airlines Manufacturer's Empty Weight (MEW)
[***]
 
 
   Standard and Operational Items Allowance
[***]
        (Paragraph 2.3.4)
 
 
 
Alaska Airlines Operational Empty Weight (OEW)
[***]

 
    
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

 
Quantity
Pounds
Pounds
 
 
 
 
 
 
 
 
* Seat Weight Included:
 
 
6,080
 
 
 
 
 
 
 
 
     First Class Front Row Double w/2 In-Arm Food Trays
2
257
 
 
 
 
     First Class Double w/2 In-Arm Food Trays
6
710
 
 
 
 
     Economy Class Front Row Triple w/3 In-Arm Food Trays
2
256
 
 
 
 
     Economy Class Triple
45
4,857
 
 
 
 
2.3.4 Standard and Operational Items Allowance
 
 
 
 
 
 
 
 
 
 
Qty
Pounds
Pounds
Pounds
 
 
 
 
 
Standard Items Allowance
 
 
 
[***]
 
 
 
 
 
   Unusable Fuel
 
 
[***]
 
   Oil
 
 
[***]
 
   Oxygen Equipment
 
 
[***]
 
      Passenger Portable Bottles and Masks
7
 
[***]
 
 
      Crew Masks and Goggles
4
 
[***]
 
 
   Miscellaneous Equipment
 
 
[***]
 
      Crash Axe
1
 
[***]
 
 
      Megaphones
2
 
[***]
 
 
      Flashlights
6
 
[***]
 
 
      Smoke Hoods
5
 
[***]
 
 
      Seat Belt Extensions
5
 
[***]
 
 
   Galley Structure & Fixed Inserts
 
 
[***]
 
 
 
 
 
 
Operational Items Allowance
 
 
 
[***]
 
 
 
 
 
   Crew and Crew Baggage
 
 
[***]
 
      Flight Crew
2
 
[***]
 
 
      Cabin Crew
5
 
[***]
 
 
      Crew Baggage
7
 
[***]
 
 
      Pilot Flight Kits and Flight Deck Manuals
 
[***]
 
 
   Catering Allowance & Removable Inserts
 
 
[***]
 
      First Class
16
 
[***]
 
 
      Economy Class
162
 
[***]
 
 
   Passenger Service Equipment
178
 
 
[***]
 
   Potable Water - 60 USG
 
 
[***]
 
   Waste Tank Disinfectant
 
 
[***]
 
   Emergency Equipment
 
 
[***]
 
      Escape Slides
4
 
[***]
 
 
      Life Rafts
4
 
[***]
 
 
      Life Vests - Passengers
178
 
[***]
 
 
      Life Vests - Crew
10
 
[***]
 
 
      Emergency Locator Transmitter
2
 
[***]
 
 
 
 
 
 
 
Total Standard and Operational Items Allowance
 
 
 
[***]

 

 
 

--------------------------------------------------------------------------------

 

3    MANUFACTURER'S EMPTY WEIGHT
The Manufacturer's Empty Weight (MEW) is guaranteed not to exceed the value in
Section 03-60-00 of Detail Specification D019A001ASA39E-1 plus one percent.
4    SOUND LEVELS
4.1    Community Sound Levels
4.1.1    Certification
The Aircraft shall be certified in accordance with the requirements of 14CFR
Part 36, Stage 4 and ICAO Annex 16, Volume 1, Chapter 4.
5    AIRCRAFT CONFIGURATION
5.1    The guarantees contained in this Attachment are based on the Aircraft
configuration as defined in the original release of Detail Specification
D019A001ASA39E-1 (hereinafter referred to as the Detail Specification).
Appropriate adjustment shall be made for changes in such Detail Specification
approved by the Customer and Boeing or otherwise allowed by the Purchase
Agreement which cause changes to the flight performance, sound levels, and/or
weight and balance of the Aircraft. Such adjustment shall be accounted for by
Boeing in its evidence of compliance with the guarantees
5.2    The Manufacturer's Empty Weight guarantee of Section 3 will be adjusted
by Boeing for the following in its evidence of compliance with the guarantees:
(1)    Changes to the Detail Specification or any other changes mutually agreed
upon between the Customer and Boeing or otherwise allowed by the Purchase
Agreement.
(2)    The difference between the component weight allowances given in Appendix
IV of the Detail Specification and the actual weights.
6    GUARANTEE CONDITIONS
6.1    All guaranteed performance data are based on the International Standard
Atmosphere (ISA) and specified variations therefrom; altitudes are pressure
altitudes.
6.2    The Federal Aviation Administration (FAA) regulations referred to in this
Attachment are, unless otherwise specified, the 737-900ER Certification Basis
regulations specified in the Type Certificate Data Sheet A16WE, Revision 40,
dated April 27, 2007.
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
 
 
6.3    In the event a change is made to any law, governmental regulation or
requirement,

 
 

--------------------------------------------------------------------------------

 

or in the interpretation of any such law, governmental regulation or requirement
that affects the certification basis for the Aircraft as described in Paragraphs
4.1 or 6.2, and as a result thereof, a change is made to the configuration
and/or the performance of the Aircraft in order to obtain certification, the
guarantees set forth in this Attachment shall be appropriately modified to
reflect any such change.
6.4    The takeoff and landing guarantees, and the takeoff portion of the
mission guarantee are based on hard surface, level and dry runways with no wind
or obstacles, no clearway or stopway, 225 mph tires, with Category P brakes and
anti-skid operative, and with the Aircraft center of gravity at the most forward
limit unless otherwise specified. The takeoff performance is based on no engine
bleed for air conditioning or thermal anti-icing and the Auxiliary Power Unit
(APU) turned off unless otherwise specified. The improved climb performance
procedure will be used for takeoff as required. The landing performance is based
on the use of automatic spoilers.
6.5    The climb, cruise and descent portions of the mission guarantee include
allowances for normal power extraction and engine bleed for normal operation of
the air conditioning system. Normal electrical power extraction shall be defined
as not less than a 50 kilowatts total electrical load. Normal operation of the
air conditioning system shall be defined as pack switches in the "Auto"
position, the temperature control switches in the "Auto" position that results
in a nominal cabin temperature of 75°F, and all air conditioning systems
operating normally. This operation allows a maximum cabin pressure differential
of 8.35 pounds per square inch at higher altitudes, with a nominal Aircraft
cabin ventilation rate of 3,300 cubic feet per minute including passenger cabin
recirculation (nominal recirculation is 47 percent). The APU is turned off
unless otherwise specified.
6.6    The climb, cruise and descent portions of the mission guarantee are based
on an Aircraft center of gravity location, as determined by Boeing, not to be
aft of 19.7 percent of the mean aerodynamic chord.
6.7    Performance, where applicable, is based on a fuel Lower Heating Value
(LHV) of 18,580 BTU per pound and a fuel density of 6.70 pounds per U.S. gallon.
7    GUARANTEE COMPLIANCE
7.1    Compliance with the guarantees of Sections 2, 3 and 4 shall be based on
the conditions specified in those sections, the Aircraft configuration of
Section 5 and the guarantee conditions of Section 6.
7.2    Compliance with the takeoff and landing guarantees, the takeoff portion
of the mission guarantee, and the community sound level guarantees shall be
based on the FAA approved Airplane Flight Manual for the Model 737-900ER.
7.3    Compliance with the takeoff guarantee and the takeoff portion of the
mission guarantee shall be shown using an alternate forward center of gravity
limit of 15 percent of the mean aerodynamic chord.
7.4    Compliance with the climb, cruise and descent portions of the mission
guarantee shall be established by calculations based on flight test data
obtained from an aircraft

 
 

--------------------------------------------------------------------------------

 

in a configuration similar to that defined by the Detail Specification.
7.5    Compliance with the Manufacturer's Empty Weight guarantee shall be based
on information in the "Weight and Balance Control and Loading Manual - Aircraft
Report."
7.6    The data derived from tests shall be adjusted as required by conventional
methods of correction, interpolation or extrapolation in accordance with
established engineering practices to show compliance with these guarantees.
7.7    Compliance shall be based on the performance of the airframe and engines
in combination, and shall not be contingent on the engine meeting its
manufacturer's performance specification.
8    EXCLUSIVE GUARANTEES
The only performance guarantees applicable to the Aircraft are those set forth
in this Attachment.
 
 
 

 
 

--------------------------------------------------------------------------------

 

Alaska Airlines, Inc.
19300 International Blvd.
Seattle, Washington 98188    
 
[***]
 
 
 
Very truly yours,
 
THE BOEING COMPANY
 
By
/s/ Stuart C. Ross
 
Its
Attorney-In-Fact
 
ACCEPTED AND AGREED TO this
 
Date:
January 24, 2011
 
ALASKA AIRLINES, INC.
 
By
/s/ Brandon S. Pedersen
 
Its
Vice President, Finance
Chief Financial Officer

 
*     Indicates that certain information contained herein has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.