BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

""..._-,'""..•-.;-\j; ,--.':::

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. -, ~',

)

Application of )

)

CHINA EASTERN AIRLINES CORPORATION LTD. )

)

for a blanket exemption under )

49 U.S.C. S 40109 (U.S.-ehina Codesharing) )

--------------).

)

Application of )

)

VIRGIN AMERICA INC. )

)

for a blanket statement of authorization under )

14 CF.R. Part 212 (U.S.-China Codesharing) )

)

Docket No. OST- 20l4-J 0 107

Docket No. OST- 2014-0 J 0 'if

JOINT APPLICATION OF

CHINA EASTERN AIRLINES CORPORATION LTD. AND VIRGIN AMERICA INC.

Communications with respect to this document should be sent to:

Evelyn D. Sahr

Drew M. Derco

Eckert Seamans Cherin & Mellott, L.L.C.

1717 Pennsylvania Ave., N.W., 12th Floor

Washington, D.C. 20006

Tel: (202) 659-6600

Fax: (202) 659-6699

esahr@eckertseamans.com

dderco@eckertseamans.com

Counsel for

China Eastern Airlines Corporation Ltd.

June 17,2014

Malcolm L. Benge

Jonathon H. Foglia

Zuckert Scoutt & Rasenberger, L.L.P.

888 Seventeenth Street, N.W., Suite 700

Washington, D.C 20006

Tel: (202) 298-8660

Fax: (202) 342-0683

mlbenge@zsrlaw.com

jhfoglia@zsrlaw.com

Counsel for

Virgin America Inc"

NOTICE: Answers to the statement of authorization sought herein ordinarily would be due

by June 26, 2014, and answers to the requested exemption ordinarily would be due by July

2, 2014. The Joint Applica"nts are requesting expedited processing and will poll the air

carrier representatives served with this Application and notify the Department of the

results.
BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

)

Application of )

)

CHINA EASTERN AIRLINES CORPORATION LTD. )

)

for a blanket exemption under )

49 U.S.C. S 40109 (U.S.-China Codesharing) )

)

)

Application of )

)

VIRGIN AMERICA INC. )

)

for a blanket statement of authorization under )

14 C.F.R. Part 212 (U.S.-China Codesharing) )

)

Docket No. OST- 2014.

Docket No. OST - 2014-

JOINT APPLICATION OF

CHINA EASTERN AIRLINES CORPORATION LTD. AND VIRGIN AMERICA INC.

China Eastern Airlines Corporation Ltd. ("China Eastern") hereby applies for a blanket

codeshare-only exemption pursuant to 49 U.S.C. S 40109, and Virgin America Inc. ("Virgin

America") hereby applies for a blanket statement of authorization under 14 C.F .R. Part 212, in

order to engage in codeshare operations as more fully described herein.

In support of this Joint Application, China Eastern and Virgin America (collectively, the

"Joint Applicants") hereby state as follows:

1. The Joint Applicants recently entered into an agreement to engage in codeshare

services (the "Codeshare Agreement"). A copy of the Codeshare Agreement is attached hereto

-1-
(Exhibit A).! The Joint Applicants plan to initiate the proposed codeshare services on or about

July I, 2014. The initial routes covered by the Codeshare Agreement are set forth in Appendix

A to this Joint Application.

2. The Joint Applicants request: (i) a blanket statement of authorization for Virgin

America to display China Eastern's "MU" designator code on flights operated by Virgin

America between any points in the United States, in conjunction with foreign air transportation

of persons, property and mail held out by China Eastern between a point or points in China

(either non-stop or via third country intermediate points) and a point or points in the United

States; and (ii) a blanket exemption under 49 U.S.C. 9 41019 authorizing China Eastern to

provide such foreign air transportation of persons, property and mail, on a codeshare-only basis

with Virgin America, between any points in the United States.

3. The Joint Applicants request that: (i) the statement of authorization be granted for

an indefinite duration so long as the Joint Applicants' codesharing arrangement remains in

effect; and (ii) the blanket exemption be issued for a period of no less than two (2) years'

duration. Should the Codeshare Agreement cease to be effective, the Joint Applicants will notify

the Department accordingly.

4. China Eastern holds a foreign air carrier permit to engage in scheduled foreign air

transportation of persons, property, and mail between China and the United States, Order 92-11-

7 (Nov. 10, 1992), and currently serves both Los Angeles and San Francisco pursuant to

exemption authority. See Notice of Action Taken in Dockets OST-2005-23074 (Jan. 9, 2014)

and OST-2013-0079 (Jan. 9, 2014).

I As is customary for requests of this nature, commercially sensitive information has been redacted from the

attached Codeshare Agreement. A copy of an umedacted Codeshare Agreement will be provided to the

Department in accordance with 14 C.F.R. S 302.12.

-2-
5. Virgin America is authorized to engage in interstate air transportation of persons,

property and mail pursuant to its certificate of public convenience and necessity, Order 2007-8-

17 (Aug. 17,2007) (confirming oral actions and issuing effective certificate authority).

6. Pursuant to Rule 24 of the Department's Rules of Practice, the Joint Applicants

request that the Department take official notice of all information and data that have been filed to

establish their fitness.

7. The requested codeshare authorities are fully consistent with the current Air

Transport Agreement between China and the United States.2 Specifically, subparagraph (l)(a)

of paragraph 5 of Article II of the Agreement provides:

A Chinese airline or airlines may codeshare with any U.S. airline or airlines

without limitation. Subject to the mutual agreement of the participating Chinese

and U.S. airlines, such codeshare arrangements may also involve airlines of third

countries. U.S. and Chinese airlines may hold out codeshare services pursuant to

this subparagraph on routes that include points in the territories of the Parties and

may also include any behind, intermediate and beyond points in third countries.

8. Grant of the requested codeshare authorities also is consistent with the public

interest and would expand online service options for consumers. Indeed, and as the Department

has long recognized:

Increased international code sharing and other cooperative arrangements can

benefit consumers by increasing international service options and enhancing

competition between carriers, particularly for traffic to or from cities behind

major gateways. By stimulating traffic, the increased competition and service

options should expand the overall international market and increase overall

opportunities for the aviation industry. U.S. airlines should be major beneficiaries

of this expansion and the concomitant increased service opportunities, given their

competitive advantages. 3

2 See Agreement between the Government of the United States of Amenca and the Government of the People's

Republic of China Relating to Civil Air Transport (Sep. 17, 1980), as amended (the "Agreement").

3 See Statement of United States International Air Transportation Policy, 60 Fed. Reg. 21,841, 21,842 (May 3,

1995).

-3-
9. The authorities requested herein have been routinely granted under similar

circumstances. See Notices of Action Taken in Docket OST-2011-0065 (China Eastern/Delta

Air Lines, Inc.) and Notices of Action Taken in Dockets OST-2003-1613 and OST-2008-0068

(Air China Ltd. and United Air Lines, Inc.).

10. The Joint Applicants agree to accept the standard conditions typically applicable

to codeshare authority such as that requested in this Application. In this regard, the Joint

Applicants will conduct all of their codeshare operations in compliance with 14 C.F.R. Part 257.

II. With respect to the statement of authorization requested herein, the Joint

Applicants respectfully ask that the Department waive its requirement under 14 C.F.R. 9

212.IO(d)(2) that such requests be filed at least 45 days in advance of the proposed date of

implementation.

12. The Joint Applicants request expedited approval of this Application in order to

facilitate the initiation ofthe codeshare services described above at an early date.

-4-
WHEREFORE. based on the foregoing, the Joint Applicants respectfully requestthat the

Department grant (i) a blanket statement of authorization to Virgin America and (ii) a blanket

codeshare-only exemption to China Eastern, as more fully described herein, so that the Joint

Applicants may implement the Codeshare Agreement. The Joint Applicants further request that

the Department grant such other or additional relief as it considers consistent with this Joint

Application and the public interest.

Respectfully submitted,

/YeA" l). SA~rIp~

EvelydD. Sahr 7

Drew M. Derco

Eckert Seamans Cherin & Mellott, L.L.C.

1717 Pennsylvania Ave., N.W., 12th Floor

Washington, D.C. 20006

Tel: (202) 659-6600

Fax: (202) 659-6699

esahr@eckertseamans.com

dderco@eckertseamans.com

Counsel for

China Eastern Airlines Corporation Ltd.

June 17, 2014

-5-

M lcolm L. B e

Jonathon H. Foglia

Zuckert Scoutt & Rasenberger, L.L.P.

888 Seventeenth Street, N.W., Suite 700

Washington, D.C. 20006

Tel: (202) 298-8660

Fax: (202) 342-0683

mlbenge@zsrlaw.com

jhfoglia@zsrlaw.com

Counsel for

Virgin America Inc.
Appendix A

Display of China Eastern's "MU" Designator Code on Virgin America Operated Flights

Routing:

From/To Los Angeles, California (LAX)

Boston, Massachusetts (BaS)

Dallas Love Field, Texas (DAL)

Dallas/Fort Worth, Texas (DFW)

Fort Lauderdale, Florida (FLL)

New York, New York (JFK)

Las Vegas, Nevada (LAS)

Chicago, Illinois (ORD)

Seattle, Washington (SEA)

From/To San Francisco, California (SFO)

Dallas Love Field, Texas (DAL)

Dallas/Fort Worth, Texas (DFW)

Newark, New Jersey (EWR)

Washington, D.C. (lAD)

New York, New York (JFK)

Las Vegas, Nevada (LAS)

Los Angeles, California (LAX)

Chicago, Illinois (ORD)

Seattle, Washington (SEA)

San Diego, California (SAN)
CERTIFICATE OF SERVICE

I hereby certify that I caused a copy of the foregoing Joint Application for a blanket

codeshare-only exemption and blanket statement of authorization to be served, this 17th day of

June, 2014, via email transmission, on the following persons:

francis.heil@aa.com

howard.kass@aa.com

robert. wirick@aa.com

sascha.vanderbellen@delta.com

sametta.c.barnett@delta.com

sllunsford@fedex.com

sharon.pasley@fedex.com

gbleopard@fedex.com

jhill@cooley.com (Counsel for Hawaiian Airlines)

kevin.montgomery@polaraircargo.com

peter. beckett@polaraircargo.com

dan. weiss@united.com

gmurohy@croweJl.com (Counsel for United Airlines)

anita.mosner@hklaw.com(Counsel for United Parcel Service)

jennifer.nowak@hklaw.com (Counsel for United Parcel Service)

urskr@state.gov

esta.rosenberg@dot.gov

brett.kruger@dot.gov

john.s.duncan@faa.gov

info@airlineinfo.com

~09=_

Bryant Templeton
EXHIBIT A

CODESHARE AGREEMENT

(Public Version)
PUBLIC VERSION

CMC(2014]TC1821D

CHINA EASTERN

and

VIRGIN AMERICA

CODESHAREAGREEMENT

Tableof Contents

- ,

'.

Description

Preamble

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

Article 17

, Page

'2

Definitions - .,•2

Codeshare, Seat Inventory & Managemen~-- 2

Charges, Costs, Taxes& Acc~L!!1ti.n.g , 3

Schedule of Flights t 4

Reservation & Passenger Handling Procedure, 4

Mark'etingj Product Display -- , 5

Industry Discount Travel 5

. Execution o{Flights,"Force Majeure'S' ,

. Liability Indemnity -- I;

insurance 8

Safety Audit 9

Security 9

Confidentiality 10

I Tr~c!e.and C_orpora~-Id~n~ficiltion_ .. ,"10

I Consultation and Settlement of DisP.':ltes ~11

I Gove~!!Ig Law • _ ' 11

Appendices, Annexes, Attachments & /12

Amendments

+ - ~- -~

Article 18 Term & Termination 12

Article 19 Entirety I 13

Article 20 Severability , 13

Article 21 • Notices - "'13"-

Article 22 T Generai'Provis'io-ns' ---.14

Annexure A: DefLnitions - . .. _ _ .. 115

Appendix A Codeshare Schedule Planning 18

Appendix 8 . Station Procedures 20

Appendix C Reservations & 'Seat Handling Procedures 23

Appendix 0 RevenueAccounting Procedures 25

Appendix E ,EmergencyI CrisisM;3nagement.procedl!res ..". 26
PUBLIC VERSION

CMCl2014)TC18210

Recitals

THIS CODESHARE AGREEMENT (the "Agreement") is made by and between

1. China Eastern Airlines Limited (hereinafter referred to as 'China Eastern" or

'MU"), a company duly incorporated according to the laws of the People's Republic of

China; and

2. Virgin America Inc .. (hereinafter referred to as "Virgin America" or "VX"), a

company duly incorporated according to the laws of the state of Delaware.

Hereinafter referred to collectively as the "Parties" or "Carriers" within this Agreement.

The Parties desire to conduct a free sale codeshare arrangement with MU as the

Marketing Carrier and VX as the Operating Carrier on scheduled air transportation

services operated over one or more VX city pair routes as described in Appendix A.

Through this codesharing arrangement, the Parties will improve their ability to offer

enhanced air transportation service to the public and the communitie9 they serve or

may choose to serve.

In consideralion of the mutual understandings and commitments set forth herein, the

Parties agree to enter into this Agreement on the terms and conditions set forth here in:

Article 1. Definitions

The definitions in Annexure A shall apply for purposes of this Agreement.

Article 2. Codeshare, Seat Inventory and Management, and tariffs

2.1 VX will make available seats to MU on Codeshare Flights on a freesale basis

at the cost specified within the prevailing Special Prorate Agreement between the

Parties.

2.2 MU shall ensure that in all such publications all necessary information about

the Codeshare Flights with VX as Operating Carrier is disclosed, subject to applicable

government regulations.

2.3 The Parties shall map inventory classes of MU to inventory classes of VX on

the Codeshare Flights and shall manage seat inventory and related processes as

outlined inAppendix C.1.5.

2.4 MU will independently and at its sole discretion establish and determine the

tariffs and fares for tickets sold under its designator Code on Codeshare Flights.

2
PUBLIC VERSION

CMC{2014JTC1821D

2 5 MU's Conditions of Carriage shall be applied to the Codeshare Flights and

deemed to govern the transportation of Codeshare Passengers, provided lhat VX shall

operate Codeshare Flights in accordance with its Conditions of Carriage, policies and

procedures and Applicable Law.

Arli£le 3 Charges. Costs, Taxes, and Accounting

31 VX shall be responsible for all costs, charges. losses, expenses and

Iiabililtes whatsoever associated with the operation of Codeshare Flights and will

assume the entire commercial and financial risk of the operation of the Codeshare

Flights.

3.2 The Ticketing Carrier shall be responsible for all commission payment costs

and Interline Service Charges for sales of Codeshare Flights.

3.3 Unless otherwise agreed in writing between the Carriers. MU shall be

responsible for all marketing, selling and advertising costs associated with Codeshare

Flights.

34 The Parties agree that any and all costs. fines. and penalties .incurred in

respect of the refusal of entry of any passengers at a destination point shall be borne

by lhe Carrier that failed to confirm the passenger documentation at point of departure.

35 The Parties agree to comply with collection and payment of taxes and with

the revenue accounting procedures outlined in Appendix D.

3.6 Revenue derived from charges collected at time of departure for baggage

and/or other related services shall belong to the Carrier performing customer check-in,

until such time as it may be otherwise mutually agreed between the Carriers.

3.; MU shall be responsible for its respective booking fees or other fees charged

by the vendor of a GDS or a travel agent for the creation of a booking or any service

relating to its sale on the Codeshare Flight.

3.8 Each Party shall be responsible for all documentation and its own revenue

accounting for traffiCcarried pursuant 10this Agreement.

3.9 VX will retain all Codeshare Flight coupons and bill MU or the ticketing

carrier as outlined in Appendix D.

3.10 The Parties will attempt to sellie any disputes that may arise with respect to

revenue settlement. However. if no settlement is reached after the third rejection and

tl',e correspondence stage, the Alliances team of both Carriers will be notified

immediately and will finally resolve the dispute through good faith negotiations, if
PUBLIC VERSION

CMC[2014jTC18210

possible.

Article 4. Schedule of Flights

<l i The schedule of Codeshare Flights may be modified, canceled or suspended.

VX must notify MU as soon as possible in writing or by email message of modifications,

cancellalions or suspensions of any of Ihe Codeshare Flights in accordance with the

procedures sel out in Appendix A.

4.2 Unplanned cancellations or suspensions of Codeshare Flights as a result of

an event of Force Majeure shall be dealt with in accordance wilh Ihe provisions of

Article 8 (Execulion of Flights, Force Majeure).

Article S. Reservation and Passenger Handling Procedure

5.1 VX shall advise passengers through on-board announcements that the

Codeshare Flights are operated as Codeshare Flights of MU.

5.2 Each Party will comply with the reservation and passenger handling

procedures sel out In Appendix C, as amended by the Parties from time to time,

53 Each Party Willcomply wilh the slatlon procedures set out in Appendix B, as

a~ended by the Parties from time to time,

5.4 In case of flight irregularities, MU shall be notified accordingly. In all

circumstances. VX agrees 10 treat MU's passengers no less favorably than it treals ils

own passengers.

5.5 In the case of a flight cancellation or delay announced

before scheduled departure time. MU shaH handle and rebook its Codeshare

Passengers provided that, if MU is unable to handle or rebook any Codeshare

Passengers. Each Party shall be responsible for any expenses arising out of the

cancellation or delay for its own passengers.

56 In the case of cancellation or a delay to a Codeshare Flighl either (a) _

_ prior to scheduled departure or (b) afler scheduled departure time, vx. shall

handle and rebook all Codeshare Passengers and be responsible for any additional

expense, if any, incurred in cannaclian wilh the transportalion of passengers and

baggage to the passengers' final destination, irrespective of the cause of the delay or

cance!lation. In case the cancellation or a delay requires the rerouting of a Codeshare

Passenger, all necessary coupons will be endorsed to VX, and VX shall be responsible

for all expenses incurred in conneclion with transportation of passengers and baggage

to the final destination, and if applicable, any denied boarding compensation due 10the

Codeshare Passenger.

.,
PUBLIC VERSION

CMC(2014]TC18210

5.7 In all cases of cancellation or a delay, whether the cancellation of a

Codeshare Flight is announced before scheduled departure

time, the Parties shall assist Codeshare Passengers in every reasonable respect. and

VX shall extend treatment (including, without limitation, in relation to boarding priority

and accommodation) to Codeshare Passengers equal to the treatment it provides to its

own passengers traveling in the same class of service as the Codeshare Passengers.

Article 6. Ma[keting / Product Display'

6.1 MU shall disclose in accordance with Applicable Law, including DOT

regulations, 14 C.F.R. Parts 257 and 258, and through schedule and selling

mechanisms to consumers, travel agents and others selling the Codeshare Flights. as

wei' as through advertising disclosures. that each Codesharc Flight is a flight operated

by VX and any chango of gauge associated with any flight. Such information shall be

given at the earliest reasonable opportunity and, in any event, before a ticket is sold.

6.2 MU shall include the Codeshare Flights in those published listings of industry

schedules in which such Party participates, including Airline Guides, GDSs and

Reservations Systems of the Parties and of other airlines with which such Party

exchanges Interline reservations and traffic to the extent permitted by Applicable Law.

MU will ensure, unless the Parties agree otherwise, simultaneous display in distribution

media. including GDSs, of all Codeshare Flights and their respective schedules.

63 Any costs incurred for the publication of Codeshare Flights or connections to

and from sLich flights in the Airline Guides, GDSs and Reservation Systems shall be

borne by the Party who displays ils Code on such published flights.

8r!!~~.7~J!1dtJslry Discount Travel

Industry and employee discount travel is outside the scope of this Agreement.

Article 8. Execution of Flights. Force Majeure

8.1 The aircraft shall be supplied by VX in an airworthy and operable condition,

duly manned and equipped for the operation of the services. It shall remain under VX's

technical and operational control and shall be operated in accordance with VX's

operational requirements.

8.2 VX has the right to delay, cancel, divert or interrupt a flight and shall not be

responsible for such delays, cancellations, diversions, or interruptions for reasons

beyond its reasonable control including but not limited to acts of God or public enemy,

war, civil war, warlike operations, terrorism, insurrections or riots, fires. floods.

explosions, earthquakes, natural disasters or serious accidents, epidemics, quarantine
PUBLIC VERSION

CMC(2014)TCl821D

restrictions, any act of government, governmental priorities or defects of aircraft

undiscovered ("Force Majeure"). In any such event, prompt written notice shall be

given to the MU's flight operation control center address shown in Appendix A. The

Parties will then discuss and agree on the action to be taken, and the Parties shall

work together to mitigate the effect upon each other of such circumstance.

8.3 The flight crew provided by VX shall have sole responsibility for pilotage,

flight plan clearance, in-flight navigation of the aircraft and for ensuring that the aircraft

is operated in accordance with its certification. and the pilot in command may take such

action as they deem necessary in all of the circumstances relevant to each flight.

8.4 VX shall also have responsibility for provision and preparation of flight plans,

f,ight dispatch, f1igh! control, flight-watch and in-flight instructions, communications,

loading and discharge of the aircraft and all traffic (passenger. baggage, cargo and

mati) hand'ing.

8.5 VX shall always keep MU duly informed about all actual flight movement and

cperational developments of the flight as may be reasonably relevant to MU.

8.6 If VX subcontracts any of its obligations under this Agreement to a third party

(olher than a wholly-owned subsidiary) it must provide MU with _ wrillen notice

to enable MU to remove its Code from the affected Codeshare Flights If It chooses to

00 so. The responsibility and liability of VX under the terms of this Agreement shall not

be affected by any such subcontracting.

8.7 The security regulations and emergency and accident procedures of VX shall

apply. However, each Party will comply with the emergency response procedures set

out in Appendix E, as amended by the Parties from time to time.

9.1 Each Party shall issue or make available to its passengers. and, where

applicable. its shippers. its own standard system-Vlide traffic documents (tickets.

Conditions of Carriage and related notices) which shall conform to all Applicable LaVIS,

rules and regulalions. Each Party s!'>all assume the entire responsibility for the

issuance of its own traffic documents, and shall indemnify the other party, its directors,

officers, agents, servants and employees against all claims, demands, costs, expenses

and liability arising oul of any incorrectness or errors therein unless caused by the

negligence of the other Party, its directors, officers, agents, servants and employees.

9.2 Subject to Article 9.5 below, VX agrees to indemnify and hold harmless MU,

and its directors, officers, agents. servants and employees from all liabilities, damages

and claims (including all costs and expenses incidental hereto), which may accrue

against, be charged to or recoverable from MU, and its directors, officers, agents.

servants and employees, by reason of death or injury to pe;sons, or damage to or loss

6
PUBLIC VERSION

CMC(2014]TC1821D

of baggage or personal property while such persons, baggage or property are on an

aircraft used by VX for a Codeshare Flight or are under the custody or control of VX

(including claims or actions for the loss of or damage to the aircraft used for the

Codeshare Flights), and/or claims brought by third parties. passengers and nonpassengers, including without limitation claims for damages to baggage, cargo and

mail, arising out of or connected with the operation of the Codeshare Flight but only

while such person or property are under the control of or in the custody of, or being

transported by VX. and any delay or cancellation of intended Codeshare Flight or delay

to a VX Codeshare Flight covered under VX's insurance policy subject to an insured

occurrence taking place caused to such passengers and their luggage. unless due to

the gross negligence or the willful misconduct of MU, its directors, its officers, agents,

servants and employees. VX further agrees to indemnify and hold harmless MU from

and against any and all claims for death, injury or other damage caused to VX's

employees while such persons, (or their baggage or property) are on an aircraft used

by VX for a Codeshare Flight or are under the custody or control of VX, unless such

claims result from the gross negligence or the willful misconduct of MU. its directors. its

officers, agents, servants and employees. VX agrees to indemnify and hold harmless

MU from all liabilities, damages and claims in connection with third party liability arising

out of flights operated by VX.

9.3 Subject to Article 9.5 below. MU agrees to indemnify and hold harmless VX.

and its directors, officers, agents. servants and employees from all liabilities, damages

and claims (including all costs and expenses incidental hereto), which may accrue

against. be charged to or recoverable from VX, and its directors, officers. agents,

servants and employees, by reason of death or injury to persons, or damage to, or loss

of baggage or personal property while such persons. baggage or property are under

the custody or control of MU, and/or claims brought by third parties, passengers and

non-passengers arising out of or connected with the operation of the Codeshare Flight

while such person or property are under the control of or in the custody of, or being

transported by MU, and any cancellation of intended Codeshare Flight or delay caused

10 such passengers and their luggage, due to the gross negligence or willful

misconduct of MU, its directors. its officers, agents. servants and employees.

9.4 When an incident arising out of or connected with the operation of the

Codeshare Flight, and any cancellation on intended Codeshare Flight or delay involves

MU's passenger{s), it is recognized VX has overall control of all claims. consulting with

fviU ai all times deemed necessary. VX shall defend at its own cost and expense all

claims. actions, suits and proceedings brought against MU for any loss, damage, injury.

death or delay in rP.sPp.ctof which that MU is indemnified by VX pursuant to Article 9.2,

In accordance with MU's Conditions of Carriage. MU shall promptly notify VX of all

claims or notices received by it and cooperate with and against VX as requested in the

preparation for the defense of all such claims. actions, suits and proceedings.

9.5 NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL

CONSEQUENTIAL DAMAGE, WHETHER OR NOT FORESEEABLE AND WHETHER

OR NOT BASED ON CONTRACT, STATUTORY LIABILITY, TORT, WARRANTY

7
PUBLIC VERSION

CMC/2014]TC1821D

CLAIMS OR OTHERWISE IN CONNECTION WITH THIS AGREEMENT, AND/OR THE

PRODUCTS OR SERVICES PROVIDED HEREUNDER, AND EACH PARTY HEREBY

RELEASES AND WAIVES ANY CLAIM AGAINST THE OTHER PARTY REGARDING

SUCH DAMAGE.

9.6 The Parties anticipate that in the event of the death of or injury to persons

occurring under the circumstances described in Article 9.2 above, any liability to

Codeshare Passengers under the Conditions of Carriage of MU may be similar to or

commensurate with liabilities that would have been incurred to such passengers if they

were traveling under the Conditions of Carriage of VX. HOViever.for the avoidance of

doubt. VX acknowledges and agrees that its indemnification shall extend to and

include all Damages arising out of death of or injury to Codeshare Passengers (under

the circumstances described in Article 9.2 above), traveling under the Conditions of

Carriage of MU. at least up to the limit of MU liability, even if such Conditions of

Carriage differ from those of VX.

Article 10. Insurance

10.1 VX shall procure and maintain for the benefit of MU during the term of this

Agreement, comprehensive aviation liability insurance including passenger (revenue

and non-revenue), baggage, and aircraft third party legal liability (all policies shall be

extended to include war riskS,hijacking and allied perils)

. In additlon,VX

snail maintain coverage for licensed vehicles while on airport premises, and premises

liability in an amount of not less than Premises

liability mean VX occupied buildings on an airfield or elsewhere but used in connection

with their business as an airline as more fUlly defined in the policy and subject policy

terms conditions exclusions and limitations. Such insurance shall:

10.1.1 Name MU. its agents, officers, directors. servants and employees as

additional insureds:

10.1.2 Contain a severability of interest clause;

condilion:

10.1.3 Contain a provision requiring VX's insurers to provide to MU not less than

prior written notice of any cancellation or material change to such

in~lJfan('-"except that in the case of war and allied perils such period of notice shall be

or such lesser period as may be available in accordance with policy

10.1.4 Be primary and wijhout any right of contribution from any insurance effected

byMU;

101.5 Provide that the Additional Insureds shall have no responsibility for any

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PUBLIC VERSION

CMC(2014ITC1821D

premium and Insurers shall waive any rights of set-off or counter-claim against the

Additional Insureds (in the Additional Insureds role as the marketing carrier).

10.2 VX shall effect and maintain hull and war risks insurance in respect of any

aircraft used to operate services under this Agreement. VX's aircraft hull insurance

policy shall contain a waiver of subrogation by VX's aircraft hull insurers against MU, its

parent and affiliate or associate companies or corporations and their respective

directors, officers, agents. servants, representatives, and employees to the extent of

the indemnity pursuant to Article g hereof.

10.3 Prior to the commencement of the operations to be conducted hereunder,

each Party shall furnish to the other Party a certificate of insurance evidencing the

foregoing insurance coverage required under Article 10.1 and 10.2 above.

Article 11. Safety Audit

MU shall have the right, at its own expense, to periodically audit and observe VX's

conformance to the ISARPs (IOSA Standards and Recommended Practices) at

reasonable intervals during the term of the Agreement. MU shall have the right to

request and obtain from lATA the most current JAR (IOSA Audit Report) of VX. The

Carriers shall coordinate such safety and security audits so that the audits do not

disturb VX's operations. Notwithstanding the foregoing, MU does not undertake any

resfJo"',iuilily or assume allY liability for any aspect of VX's operations nor shall VX be

entitled to assert any responsibility or assumption of liability on the part of MU for VX's

safety, security, or operation of the Codeshare Flights.

Article 12. Security

12.1 With regard to enplaning passengers on the Parties' services, VX will adhere

to all regulatory security requirements that are applicable to the flights in question. VX

may utilize its own Security Program and may use its own staff for such purpose,

provided that its Security Program complies with any legal or regulatory requirement of

any government or government agency. In undertaking the Security Program, VX may

interview passengers, x-ray baggage, and perform such other functions as it may

choose in its sole discretion. MU and VX agree to cooperate in matters of security

procedures, requirements and obligations at all ports to or from which the services

operate subject to any appropriate regulatory authority approval.

122 VX shall notity MU of any new security procedure, requirement or obligation

of a Competent Authority of which it becomes aware which might impact Marketing

Flights.

12.3 VX shall notify the details of a Heightened Threat to the aircraft of the VX to

MU. When additional security measures are introduced by VX to counter the

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PUBLIC VERSION

CMq2014jTC18210

Heightened Threat. the additional measures proposed shall be informed to MU.

13 1 Except to the extent required by any Applicable Law, court order or

regulatory authori1y, both Parties hereby agree and warrant that they shall keep the

terms and conditions of this Agreement confidential and shall prevent the disclosure

thereof to any third party other than to the respective directors. officers, employees or

agents, or advisors. or the directors, officers, employees, or agents, or advisors of the

parent companies of the Parties, or other persons retained by the Parties, for

purposes specificaliy related to the administration and/or operational conditions to this

Agreement. In all cases. the Parties shali be responsible for any breach of

confidentiality by their respective employees, officers, directors, or retained agents,

advisors or third parties.

13.2 For the purposes of this Agreement, 'Confidential Information' shali mean all

information identified as such or as being information that would reasonably be

understood as being confidential information, including but not limiternto passenger

details, and which pertains to MU and VX and their respective operations disclosed or

acquired pursuant to this Agreement;

13.2.1 MU and VX hereby acknowledge that the Confidential Information of the

other Party hereto is a valuable, special, unique and proprietary asset and during the

term of this Agreement or any extension thereof, the Parties shall not loan, sell. assign,

use, disclose, take or cause to be used, disclosed or taken any Confidential

Information of the other Party hereto to any third party or remove any of such

Confidential Information from the offices or premises of such Party;

13,2,2 MU and VX hereby agree that they shall not make copies or transcribe any

Confidential Information of the other without the prior consent of such Party and

forthwith upon such Party's request therefore and/or upon termination of this

Agreement, shall forthwith return any and ali copies thereof to such Party;

13.2.3 Title to any and all Confidential Information, copies and other material

provided by MU or VX to the other Party shall pursuant hereto at all time vest in the

disclosing Party (MU or VX respectively). Upon termination of this Agreement, each

Party shall ensure that any and all Confidential Information. copies and other materials

provided by the other Party are immediately returned to the applicable Party upon

requesl.

{\rtLc.le 14. Trade and Corporate Identification

14.1 Each Party hereby covenants that its respective advertising and promotions

shall be in accordance with all applicable governmental rules. laws and regulations.

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PUBLIC VERSION

CMC(2014JTC18210

14.2 Each Party acknowledges and agrees that it has no right, title or interest in

the other Party's logo. nor any part thereof and that it shall not use any of the other

Party's ,logos.trade marks or trade names except in accordance with the other Party's

prior approval and direction which shall not be unreasonably withheld or delayed.

14.3 Each Party agrees that should any right, title to or interest in the other Party's

logo or any other part thereof. or in any copyright or trade mark of the other Party

become vested in it (by operation of law or otherwise) by reason of this Agreement. it

shall hold the same in trust for the other Party and shall. at the request of the other

Party, forthwith unconditionally assign any such right. title or interest to the other Party,

or as the other Party may othelWise direct.

14.4 It is understood and agreed thai the logos, trade marks and trade names of

each Party shall be and remain at all times the applicable Party's exclusive property.

Article 15. Consultation and Settlement of Disputes

15.1 In the event of a question or dispute between the Parties concerning the

validity, interpretation or application of this Agreement, including its appendices and

Amendments, a Party may not commence any court proceedings relating to the dispute

unless it has complied with Article 15.2 below.

15.2 Unless olherwise stated, any questions or disputes concerning the validity,

interpretation or application of this Agreement, including its Appendices and

Amendments (if any), at the request of either Party, shall be referred for resolution to a

group comprising of at least one senior official from each Party ("the Committee'). The

Committee shall in good failh endeavor to settle mutually and in a timely manner and

within _ any dispute or daim referred to it.

15.3 Nothing in this Article 15 will affect either Party's rights to terminate this

Agreement or to seek interlocutory relief in a court of competent jurisdiction,

,!lorticte16. Governing Law

16.1 This Agreement shall in all respects be governed by and interpreted in

accordance with the laws of the State of California (without regard to principles of

conflicts of law) including all matters of construction, validity and performance

applicable to contracts made and to be performed therein. The Parties agree to submit

to the non-exclusive jurisdiction of the courts of the State of CaUfornia.

16.2 This Agreement may be subject to review and approval by applicable

government agencies and/or organizations. Both Parties agree to exert their best

efforts to satisfy the requirements of any such review. If. as a result of such review. this

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PUBLIC VERSION

CMC(1014)TCI8l1D

Agreement Is disapproved, or approved and tater withdrawn, in any respect by any

such governmental agency or organization, then either Party may forthwith tenninate

lhis Agreement by written notice to the other Party without prejudice to the accrued

rights and liabilities of either Party prior to the termination of this Agreement.

Article 17, Appendices, Annexes. Attachments and Amendments

The Parties acknowledge that this Agreement and

Appendices are subject to occasional changes,

amendments as are agreed in writing by both Parties.

Article 18. Term & Termination

the procedures set out in the

The Parties may make such

18.2 This Agreement may be terminated by either Party pursuant to any of the

following provisions hereof:

18.2.2 Either Pany may terminate this Agreement Immediately if the same is

disapproved by the aeronautical or government authorities having supervisory

jurisdiction over that Party or if one or more of any necessary rights. licenses, permits

and approvals necessary for the performance of the flights specified in Appendix A are

at any time withdrawn or revoked.

18.2.3 Either. in addition to and without prejudice to any other rights or remedies it

may have, may terminate this Agreement immediately upon giving written notice to the

other Party in the event of any order being made or any effective resolution being

passed for the compulsory or voluntary winding up of the other Party (except for the

purposes of reconstruction or amalgamation) or if any person shall take possession of,

or a receiver is appointed to, its undertaking or any part thereof or if such other Party

sha!1make any arrangement with its creditors or shall for any reason become insolvent,

cease or threaten to cease to carry on its business.

1824 Either Party may terminate this Agreement by giving prior

\willen not;ce to the other Party if the other Party fails 10 perform or observe any

material and essential covenant, condition or agreement to be performed or observed

by it hereunder and such failures is not cured within a period of after

wnlien notice thereof.

18,2.5 Either Party may terminate in the event of a change of control of the other

Party by giving nol less than _ written notice to lhe other. For the purposes of

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PUBLIC VERSION

CMQ2014)TC1821D

this agreement control of a corporation includes the possession directly or indirectly of

the power, whether or not having statutory, legal or equitable rights, directly or indirectly

to control the membership of the board of directors of the corporation or to otherwise

directly or indirectly direct or cause the direction of the management and policies of

that corporation whelher by means of trusts. agreements, arrangements,

understandings. practices, the ownership of any interests in shares or stocks of that

corporation or otherwise. The Parties agree that an initial public offering of securities

shall not consistute a change of control for purposes of this Agreement.

18.2.6 The Agreement may be terminated or canceled at any time during the term

hereof by the mutual written consent of the Parties.

18.2.7 In the event of termination of this Agreement, such termination shall not

release either Party from any obligations with respect to charges or other obligations

specified in this Agreement which have accrued to the effective date of such

termination.

Article 19. Entirety

This Agreement, its Appendices and Annexures shall constitute the entire Agreement

and shall not be varied in its terms otherwise than in writing executed by the Parties'

duly authorized representatives concurrently with or subsequent to the execution of this

Agreement.

Article 20. Severability

20,1 If any provision contained in this Agreement shall be held to be invalid or

unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the

other provisions hereof which can be given effect without the invalid provision, and to

this end the provision of this Agreement are inlended to be and shall be deemed

severable.

202 The Parties agree to use their best efforts to replace such invalid or

unenforceable provision with a valid and enforceable provision having to the maximum

extent possible the same economic or practical effect.

Art!£le 21... Notices

Except as otherwise provided herein. all notices, requests. demands or other

communications to or upon the respective Parties hereto shall be given or made by

express courier or hand delivery (receipt confirmed) to the Party to which such notice,

request. demand or olher communication is required or permiited to be given or made

under this Agreement addressed as follows:

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PUBLIC VERSION

CMC(2014]TC18210

China Eastern Airlines

AtlenliO:1 Legal Department

Address 2550 Hongqiao Road

Shanghai, 200335

Virgin America

Legal Department

555 Airport Blvd Suite 500

Burlingame CA, 94010

or al such other address as the respective Parties hereto may hereafter specify to the

other from time to time, All such notices, requests, demands or other communications

shall be effective upon receipt.

Arlicle 22, General Provisions

22 1 The headings of the Articles of this Agreement are for convenience only and

a'e not part of this Agreement According:y, they shall not affect the interpretation of

any of the provisions hereof.

22.2 The Appendices to this Agreement, as duly amended from time to time, form

part of this Agreement.

22.3 Neither Party hereto may assign this Agreement nor any rights, duties, or

intere~t hereunder in whole or in part 10 any Ihird party without the prior written consent

of the other Party.

22.4 The waiver by either Party of any breach of any term, covenant. or condition

of this Agreement shall not constitute a waiver of any subsequent breach or preclude

such Party from there after demanding pertormance thereof according to the terms

hereof

22.5 This Agreement is done in duplicate, both in English and exchanged

between the two airlines.

SIGNED for and on behalf of

China~ .. !eern;~rco ..Litd.

_.- ~ \\ - ----

Name' Wvt. GCUL3--

Title DGPUTY MD

14

SIGNED for and on behalr of

Virgin America 1 ., Ilkk\ _J)lliLp_' _

Name: :Sol V' t'j<Ie. Ltcx \

Title: ',:'Vf r\<t~\\.A\\A"" fs..l"" :;:0"
PUBLIC VERSION

CMCl20141TC1821D

ANNEXURE A

DEFINITIONS

"ACH" means Airlines Clearing House.

"Applicable Law" means all applicable laws of any jurisdiction including securities

laws, tax laws, tariff and trade laws, ordinances, judgments, decrees, injunctions. vults.

and orders or like actions of any Competent Authority and the rules, regulations, orders

or like actions of any Competent Authority and the interpretations, licenses, and

permits of any Competent Authority.

"Code" means the two (2) characters assigned to a carrier by lATA for the purpose of

exchanging interline carrier messages in accordance with AIRIMPS procedures.

"Codeshare Flight" means a flight on which both parties have placed their respective

Codes. on the routes listed inAppendix A.

"Codeshare Passenger" means a passenger travelling on an MU FJighfCoupon.

"Committee" has the meaning assigned to such terms inArticle 15.2.

"Competent Authorities" means any national, federal, state, county, local or municipal

government bOdy, bureau, commission, board. board of arbitration, instrumentality,

authority, agency, court, department, inspectorate, minister, ministry, official or public or

statutory person (whether autonomous or not) having jurisdiction over this Agreement

or either party.

"Conditions of Carriage" means those conditions of contract tariffs and rules of

carriage of a party that govern the transport of passengers travelling on tickets showing

such party's Code in the carrier code box of the flight coupon.

"Confidential Information" means (a) all confidential or proprietary information of a

party, including, wilhout limitation, trade secrets, information concerning past, present

and future research, development, business activities and affairs, finances, properties.

methods of operation. processes and systems, customer lists, customer infonnation

(such as passenger name record or "PNR" data) and computer procedures and access

codes; and (b) the terms and conditions of this Agreement and any reports, invoices or

other communications between the parties given in connection with the np.gnliation or

performance of this Agreement; and (c) excludes (i) information already in a party's

possession prior to its disclosure by the other party; (ii) information obtained from a

third person or entity that is not prohibited from transmitting such information 10the

receiving party as a result of a contractual, legal or fiduciary obligation to the party

whose information is being disclosed; (iii) information that is or becomes generally

available to ihe public, other than as a result of disclosure by a party in violation of this

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PUBLIC VERSION

CMC(20141TC1821D

Agreement: or (iv) information that has been or is independently acquired or developed

by a party, or its Affiliate, without violating any of its obligations under this Agreement.

"GDS" means a computerized reservation system owned or operated by any entity,

including either party to this Agreement, that contains information about commercial

alrl:ne schedules, fares, cargo rates, passenger and cargo tariff rules and flight

availability that is made available to travel agents, cargo agents and other non-airline

entities to facilitate their ability to make reservations and issue tickets and air waybills.

"GST" means any goods and services tax, value added tax or sales tax imposed on

the sale or supply of goods, services and rights

"Heightened Threat" means any terrorist act or threats thereof, including but not

limited to bomb threats and any other situation that may be considered to augment

dangers in flight operation related circumstances.

"lATA" means the International Air Transport Association.

"Interline Service Charge" means the payment by the ticket using carrier to the carrier

shown in the carrier code box of the flight coupon.

"Marketing Carrier" means MU, the Party whose Code is shown in the carrier code

box of a flight coupon as well as in the e ticket data of the GDS for a Codeshare Flight

but which is not VX.

"Marketing Flight(s)" means a Codeshare Flight when displayed, sold, or referred to

as a flight of MU rather than a flight of VX, such as when using MU's name, Designator

Code and/or flight number.

"Operating Carrier" means VX, the party having operational control of an aircraft used

for a given Codeshare Flight.

"Reservations System" means the internal computerized airline passenger or cargo

reservations system used by the personnel of an airline that contains information about

flight schedules, fares, cargo rates, passenger and cargo tariff rules and seat

availability of that airline and other carriers, and provides the ability to make

reservations and issue tickets or air waybills.

-Security Program" mean~ means a Transport Security Program (TSP) :'lpproved by

the Transport Security Administration.

"Special Prorate Agreement" means the agreement, as amended from from time to

time, between the Parties relating to the proration of interline and codeshare revenue.

"Ticketing Carrier" means a Carrier or carrier whose traffic documents are used to

issue a ticket.

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PUBLIC VERSION

CMC(2014)TC18210

"Ticket' Taxes" means any transac!ional taxes or passenger facility charges that are

separately identified on the ticket, i1icluding, without limitation, sales taxes, use taxes,

stamp taxes, excise taxes, value added taxes, GST, gross receipts taxes, departure

taxes, surcharges (including and insurance surcharges) and travel taxes, and all

related charges, fees, licenses 'or assessm~nts (and any Interest or penaity tpereon)

imposed on 'paSsengers (or which air carriers or their agents' are required to .coilec!

froni passengers) by any authority in any country, ,or political subdivision thereof or

public 8uthorltyoperating therein (including, without limitatiol1 any national, feder~1.

state, provincial, territorial, local, municipal, port or airport authority) or which are levied

upon passengers by operation of Applicable Law, industry standard or the air .carrier's

policy.

.17
PUBLIC VERSION

APPENDIX A

CODESHARE SCHEDULE PLANNING

CMC(2014)TC18210

1. Codeshare Flights

1.1 Subject to all necessary reglJ"latorYapprovals, MU is entitled to display its

\1'10 letter designator Code on the following routes operated by VX, with .otherroutes to

be added 'or removed as mutually agreed by the f'arties:

San Francisco (SFO) to and from:

Dallas ForiWorth (DFW)

Dallas Love Field (DAL)

Nev1ark(EWR)

Washington Dulles (lAD)

New York (JFK)

Las Vegas (LAS)

Los Angeles (LAX)

Chicago (ORO)

Seattle (SEA)

San Diego (SAN)

Los Angeles (LAX) to .andfrom:

!:lostoh (BOS)

Dallas Fort Worth (DFW)

Dallas (DAL)

Fort Lauderoa'ie (FLL)

New York (JFK)

Las Vegas(LAS)

Chicago (ORO)

Seattle (SEA)

1.2 Traffic restrictions will be applied to Codeshare Flights by MU as required.

2. Codesharc Schedule Operations

The .Parties shall:

2.1 Eslablish a dedicated flight number range for use by MU with respect to the

'Codeshare Flights; and

2,2 .Establish an alltomated transfer of flight schedule information between both

Parties to allo"l efficient loading of the Codeshare FJlghts.

2.3 VX will provide MU wilh new schedules or schedule changes for its

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PUBLIC VERSION

CMC(2014jTC1821D

Codeshare Flights as outlined in the \iXIMUGeneral Business Requirements (GBR).

3. Affiliate Carriers

The following affiliate carriers of VX and MU shall.be included 'inthisAgreemeht:

VX Affiliates: MU Affiliates:

None .None

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PUBLIC VERSION

CMC(2014)TC18210

APPENDIX B

STATION PROCEDURES

1. Ground Handling

VX shall be responsible for providing ground handling facilities for VX's Codeshare

Flights and, if applicable. shall be charged for all costs attributable to handling as set

out In any ground handling agreements between the Parties.

2. Check-In Procedures

2.1 Passenoers

2.1 1 The VX flight number will be shown on the boarding passes which may also

show a reference to the MU flight number. Only operating carrier flight numbers will

appear on baggage tags.

2.1.2 Through check-in will be performed up to passengers' final destination for all

Codeshare Passengers in accordance with VX's through check.in procedures.

including Advanced Passenger Information System (APIS) data transmission, if

reqUlied at final destination.

2.2 Checked Baggage Acceptance

In the acceptance of codeshare baggage, and for the purpose of clarity, the following

will apply:

22.1 Each Party will apply the checked baggage allowances and assess

applicable fees in accordance wilh the rules and procedures of the first marketing

carrier listed on the Codeshare Passenger's ticket.

2.22 Each Party reserves the right to waive checked baggage fees so long as it

remains compliant with all U.S. DOT regulations.

2.2.3 Each Party will apply excess/overweight baggage limitations and charge

excess/overweight baggage fees in accordance with the rules and procedures of the

first marketing carrier listed on the Codeshare Passenger's ticket.

2.2.4 Each Party reserves the right to waive excess baggage limitations and fees

so long as it remains compliant with all U.S. DOT regulations.

2 2.5 The Parties agree to file, maintain and keep current with ATPCO all relevant

baggage information, including free checked baggage allowances, excess checked

baggage limitations and all applicable fees in a manner that permits this information to

be accessible to each other by using the ATPCO Baggage Calculator.

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PUBLIC VERSION

CMQ2014)TC18210

3. Staff Travel

Industry and employee discounVnon-revenue travel on the Codeshare services is

outside the scope of this Agreement and therefore shall be solely administered by VX

and only booked using VX's designator code.

4. Counter and Gate Signage

VX will make reasonable business efforts to display both VXand MU designators and

flight numbers on Public Flight Iniormation Display System (FIDS) boards, recognizing

that in certain cases these displays are controlled by airport authorities and in other

situations the displays may not have sufficient space to display MU's information. VX

shall provide counter and gate signage reflecting the Codeshare operations where

possible.

5. Irregularity Handling

5.1 EJjghllrregularities

In.the event of flight delays, cancellations or other flight irregularities, VX shall provide

prompt advice to the following addresses:

MU: Customer Service C~

VX: Guest Services OCC_

See Appendix E.

5.3 Denied Boarding

In the event of oversale situations, equal treatment (including, without limitation, in

relation to boarding priority and accommodation) shall be extended by VX to

Codeshare Passengers traveling in the same class of service as non-Codeshare

Passengers.

5.4 Passenger Related Expenses

Where VX is responsible under the Agreement for delays, cancellations and other flight

irregularities involving the Codeshare Flights, VX shall absorb the costs of overnight

expenses, meals, or other i.ncidental expenses of Codeshare Passengers. For the

avoidance of doubt, VX is not responsible for such costs when the operational delay or

missed connect1onis caused by MU's or another Inbound carrier's delayed operation.

5.5 Involuntary. Rerouting

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PUBLIC VERSION

CMC(2014JTC1821D

Codeshare Passengers are to be re-booked primarily to another MU or VX flight ana

then as VX sees fit, in accordance with its standard operating procedures'.

6. Missed ConneCtions

The Party responsible for the irregularity shall cover .the reasonable costs of providing

passenger amenities to Codeshare Passengers who fail to m'aketheir connections (i.e.

flight canceilation, short term equipment changes or overbooking). The passenger

amenities Shall includeiteins such as hotel accommodation, meals and denied

boa(dingcompensation as appropriate.

7. ~!!ge Irreqularities

The operating carrier at the destination shall absorb costs fOrdelivery; replacement and

temporary settlement and handle .such irregularities according 10 the first marketing

carrier's Conditions of Carriage.

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PUBLIC VERSION

CMc[2014JTC18210

APPENDIX C

RESERVATIONS AND SEAT HANDLING PROCEDURES

1. Inventory Control

1.1 The inventory of Codeshare Flights shall be fully controlled by VX. Each

Party is responsible for its reservations as well as maintenance of booking.

1.2 VX shall grant MU access to space on a free sale basis in all classes in

accordance to the Special Prorate Agreement.

1.3 PNR recorded in the correct booking classes of VX inventory and shown as

such on VX PNL shall be sole proof of authenticity of passengers booked on the flight

number. All other Codeshare Passengers presenting themselves at check-in counters

shall be accommodated on seat avaiiabte basis.

1.~ Class mapping will in no case be taken into consideration as an Instrument

to calcl,late the value of MU's coupons.

1.5 The Parties shall periodically review and modify the mapping of seat

inventory as necessary.

2. Special Passenqer Requirements

Acceptance of Codeshare Passengers requiring special services and assistance is

outlined in the VX/MU G8R.

3. Advance Seat Reguest (ASR) Bookings

A$R bookings can be made with either Carrier.

4. Sales

Sales on VX operated flights may be made up to aircraft departure.

VX agrees to hOnor the space on the Codeshare Flights in respect of tickets issued

and confirmed booking held for each passenger by MU. All Codeshare sales are

considered as guaranteed sells and can not be rejected even if an oversold situation

occurs with those sales. In case a severe volume of sales to the same flighUclass

occurs. both Carriers will coordinate to re-accommodate those overbooked sales. In

order to avoid the overbooking issue, whenever VX receives a Codeshare sale but the

flighUclass is closed, VX will automatically send an AVS message to MU.

The sales quota per segment sell transaction shall be set as follows

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PUBLIC VERSION

CMC(2014)TC1821D

5. Data Transfer

MU will sell seats on Codeshare Flights based on availability displays controlled by

AVS messages forwarded by VX.

MU inventorycontro) will automatically transfer the reservation records for a Codeshare

Flight to VX at the following SITA addresses:

'vx' - _._~ MU --l

!Production S~stem Information I Production System Information

~1iIIIIIII-' ___ ~_~__.J_-~_~_ -_--.

..__----"1 ._....

.6. Group Bookings

Group bookings are addressed in the VX/MU GBR.

7. Duplicate Booking Control

Duplicate bookings are addressed in the VXlMU GBR.

8. Schedule Change andFHght Irregularities

Flight irregularities shall be handled in accordance with VX siandards and procedures.

VX will inform MU by ASC message and email about delays, schedule change and

cancellations.

9. Ticketing Time Limits

Mu willdelermlne appropriate ticketing time limits for use on the Codeshare Flights.

10. Name Change Policy

VX will permit name changes in aCcordance with MU's rules.

11. Termination

In Case of termination of this Agreement. bookings confirmed prior to the date6f notice

of termination shall be respecte\l and honored by the Parties.

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PUBLIC VERSION

CMC(2014)TC1821D

APPENDIX D

REVENUE ACCOUNTING PROCEDURES

1. Accounting Procedures

1.i The accounting 'offlight coupons shall be in accordance with the rules of the

/l,CH Manual of Procedures. Settlement shall be in accordance with the Special

Prorate Agreement (SPA) in force between VX and MU. Where the SPA is not

applicable. the AcH Manual of Procedures, or the lATA Multilateral Prorate Agreement

(MPA), as applicable. shall apply.

1.2 In the event ihat VX uplifts flight coupons issued by a third party ticketing

carrier that are closed to the flights of MU, VX may bill the ticketing carrier without

recourse to an endorsement from MU.

1.3 In case of billing dispute on application of either the SPA or the Codeshare

Agreement, the VX Reservation Booking Designator (RBD) takes precedence over all

other elements in the SPAlCodeshare Agreement. .

1.4 All interlineable TFCs (Tax, Fees and Charges) shall be paid by VX for all

passengers having MU's tickets. These interlineable TFCs shall be invoiced to MU by

VX regardless collected or not on the ticket.

1.5 Subject to 1.6 below, the Ticketing Carrier shall be responsible for, collect

and pay to the relevant authority any Ticket Taxes in relation to seats sold by the

Ticketing Carrier on Codeshare Flights.

1.6 Where the Ticket Taxes are ultimately the responsibility of and are payable to

the relevant authority by VX, but are in relation to tickets issued by MU, then VX shall

bill MU accordingly.

1,7 TCN/ISR data will be sent via ATPCO for all tickets issued by MU.

2. Flight Interruption Manifest

Virgin America does not currently issue FIMs.

Virgin America accepts FIMs.from China Eastern,

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PUBLIC VERSION

CMC[20141TC1821D

APPENDIX E

EMERGENCY J CRISIS MANAGEMENt PROCEDURE:S

1. Emergency J Crisis Management Procedures

1.1 The procedures as laid down in the "Reciprocal Crisis Management Plans for

Codeshare Flights" (Appendix E1) shall apply.

1.2 In the event of a major incident or accident, VX shall advi~e tile following

departments and this information should ,berestricted to its services:

Virgin America 10China Eastern: Operations Control Center:

China Eastern

Email: •••

Telephone:

-••NOT FOR PUBLIC DISClOSURE---

China Eastern.to Virgin America: Operations Control Center:

Virgin America

Email:

Telephone:

--.NOT F.OR ,PUBLIC DISClOSURE---

2. Appendix Administration

The departments responsible for the administration of this Appendix are:

Administrative Contact(s) for

Er:rtergency Procedures

Phone/E-Maii

China Eastern

.~mergen-cyAdministration

26

Administrative Contact(s) for

Emergency Procedures

'Phona/E-Mali

Virgin America

Emergency Preparedness
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CMC(2014]TC18210

APPENDIX E.1

RECIPROCAL CRISIS MANAGEMENT PLANS FOR CODESHARE FLIGHTS

1. Introduction

1.1 This Crisis Management Plan is designed for the effective co-ordination and

management of the overall operational and media responses fa a crisis affecting a

Codeshare passenger or cargo flight anywhere in the world.

1.2 It sets oul the roles and responsibilities of both VX and MU to achieve

seamless co-ordination and communications amongst the partners in the management

of a crisis.

1.3 Both VX and MU will benefit from this Plan.

2. Commitments

2.1 VX and MU should each have a corporate Crisis Management or

Emergency Response Plan, including a Special Assistance Team to render assistance

to the affected passengers. crew, ground casualties and Iheir relatives.

2.2 VX and MU should each be committed to provide the resources necessary to

execute the corporate Crisis ManagementiEmergency Response Plan.

2 3 VX is responsible for the overall management of a crisis, including all the

agreed costs incurred byMU and their sen/ice providers In rendering the assistance or

services. if assistance is formally requested and specific sen/ices agreed upon by VX

for the duration of the emergency.

2.4 MU upon a request by VX, shall render all the agreed necessary supports to

the VX to minimize the consequences and effects of a crisis affecting a Codeshare

Flight.

3. Scope

3.1 This Plan is to be activated for an aircraft crash and may be activated lor

other emergencies involving a Codeshare Passenger or cargo night on agreement by

the Parties.

4. Corporate Responses and Command and Control

4.1 VX is responsible for the corporate emergency response. including the policy

decisions, to a crisis affecting its own flight anywhere in the world. It is also

responsible for the overall command and control of the emergency response.

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CMC(2014)TC1821O

4.2 VX shall Immediately launch its operational and media responses to a crisis

when It becomes known. In the event of a crisis occurring outside its home base, it

shall, __ launch an Emergency Response Team from Headquarters

or fro~to the crisis site to manage the crisis.

4.3 In the event of any accident of serious incident involving Codeshare flights, V

X will;

b) provide the representatives specified below with ali appropriate informatio

n collected by VX's call center in relation to MU's passengers.

c) provide MU with copies of all appropriate correspondences passing betwe

en VXand Codeshare Passengers and their relatives and representatives.

d) afford the Codeshare Passengers and their relatives the same family assi

stance, services and benefits as passenger of VX aboard the incident aircraft.

e) provide MU with all appropriate information in relation to the investigation

oftha accident as permitted by the government authority of VX.

5, Geographical Areas of Responsibilities

5 1 VX is responsible for managing a crisis affecting anyone of its flights

anywhere in the world from the time of its occurrence until it is resolved.

5.2 However, in the event that a crisis were to occur in respecl of a Codeshare

Flight in a location within MU's home base or flight infonmation region and in which VX

does not have a physical presence in the form of an operalingoffice whereas MU has

such a physical presence, then MU may be requested to provide assistance, and if

agreed upon with managing the immediate humanitarian care and assistance to the

affected passengers, crew, ground casualties and their families. If the parties agree,

fliU shall use its own resources, facilities, equipment and procedures to provide any

such assistance at the eKpensc of VX. This suppor! is to be provided for a maximum

period of whichever is earlier.

6. Notification of Crisis to MU

6.1 VX sl1allemail or telephone the details of the crisis to MU

crisis becoming known.

ofa

6.2 VX must provide the following information to MU's Operational Control

Center Duty Manager:
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CMQ2014)TC18210

6.21

6.2.2

6.2 3

6.24

6.25

6.3 Upon receipt of the information, MU's Duty Manager shall immediately

activate MU's crisis management machine inlernall. VX shall provkle information on

the

13.4 VX shall also update MU on the significant developments In the crisis

situation and its responses at

7. Activation of Assistance

. Upon request, and if agreed

upon, MU may also activate its Local Emergency Response Center (LERC) to provide

local support.

8. MU's Emergency Responses to a VX Crisis in Ihe Home Base

!lr.l~.J'I.ight Information Region

8.1 Upon the request of VX, and if agreed upon by the Parties, MU will_

• activate its corporate Crisis Management Center to coordinate the management of

Ihe emergency responses with VX. Such agreemen: will address MU's use of its own

racmlies, systems and procedures to provide the immediate emergency responses for

the affected passengers, crew, ground casualties and their relatives as specified herei

n The agreement will also specify if MU may contract a specialist organization to depl

cy specialists, in addition or instead of, MU's own staff.
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CMC[2014)TC1821D

8.2.1 If requested by VX, and agreed upon by the parties, then MU, in conjunction

with its station nearest to the crisis site, shall deplo a "Special Assistance Team"

at the Crisis Station

6.2.2 If requested by VX and agreed upon by the parties. MU will deploy_

MU will not take any salvage and removal action on

behalf of VX.

8.2.3 If requested by VX, and agreed upon by the parties MU shall arrange

transport to to the crisis station/site by the fastest possible means,

which may include launching an aircraft, of notification of a .crisis, if

needed.

8.2.4 VX will activate its Telephone Enquiry Center (TEG)to handleand processall tel

ephone enquiries from the affeded family membersandthe generalpublic (morethan one

paliner shall activate the TEC intheir respectivehome bases if approved by VX). The TEC

shall record the information on the family callers on individual Passenger Information

Forms. The Reports will be forwarded immediately by scan/email or fax to VX's Custo

me~ Information Center (CIC) at the Crisis Station or at VX's head office.

8.2.5 VX when pel1l1ittedby government authority, shall release the Passenger

Manifest of the applicable MU Cocleshare Passengers to MU's Headquarters Crisis

Management Center. and to the Telephone Enquiry Center (TEC) which has been

activated to handle and process such enquiries. VX shall contact the affected families

immediately to take follow-up actions to render the necessary care and assistance.

MU shall respond to local general enquiries in accordance with its own procedures for

handling such enquiries based on information provided by the VX's representative in

the Center.

8.26 MU may also activate

equipment including

crisis communications and office

9. Crisis Occurring Outside Home Base ofMU

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9.1 VX shall manage the accident I ineldent, including, as applicable,launching of a

Response Aircraft and mobilization of its Go Team. MU however may be requested to

assist VX by activating its emergency response plan and If agreed upon by the parties,

dispa~chof a response aircraft and mobilization of its Go Team for a quick response as

may be necessary due to geographical location of the accident I incident. MU however

should turn over the accident I incident response to VX upon the arrival of its response

learn.

9.2 In the case of handling and processing of public enquiries, VX's Telephone

EnqUiry Center shall be activated to handle and process telephone enquiries from the

affected family members and the general public. However, if agreed upon, VX may

request that MU activate as many telephone lines as it can spare to handle and

process such enquiries.

9.3 VX when permitted by government authority, shall release the Passenger

rJianifes\ of the applicable MU Codeshare Passengers to MU's Headquarters Crisis

Ivlanagement Center, and to the Telephone Enquiry Center (TEC) which has been

activated to handle and process such enquiries. VX shall contact the affected families

immediately to take fo!low.up actions to render the necessary care and assistance. If

requested by VX. MU shall respond to local general enquiries in accordance with Its

own procedures for handling such enquiries based on information provided by VX.

10. Oe..p.!QY.mentof Liason Representatives

MU shall deplOY as necessary at least one liaison representative in VX's Crisis

Management facilities to assist by providing information and advice but not to give

directions to VX.

11. Support From Other Codeshars Partners at the Crisis Stations

i1.1 In the event of a crisis affecting a codeshare partner, the corporate Crisis

Management Centers of MU shall be placed on a standby mode as necessary for a

period _ from the time of notification of a crisis, to render any assistance

which I~quired.

11.2 MU shall assist VX with transport and trallel within its respective network as

necessary. for the affected passengers, crew, and family members as weli as the staff

of VX at the expense of VX.

12. Media Responses

12.1 VX shall manage its own media responses, including setting up its own local

Media Relations Center at the crisis site.

12.2 MU which has facilities and equipment at the crisis site for local media mana

gement shall allow, upon request and if agreed 10 and if available, VX to make use of

such facilities. if required by VX.

12.3 VX is solely responsible for the release of all information on the crisis to the

media. MU shall oblain the concurrence of VX before making such any statement on t

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he crisis to the media

1J. Handover of Duties

CMC{2014JTC18210

lloU shall hand over the duiies and all the ,relevantdocuments to VX's representativesi

n a systematic manner unless prohibited by government aulhorily. VX's representative

s shall acknowledge receipt of the documents handed over.

14. Confidentiality of Information

14.1 When a crisis becomes known, both VX and MU shall impound and secure

all documents on the affected flight, the affected aircraft and the affected passengers

and crew immediately. With the exception of lhe release of relevant informalion to the

local authorities in connection with the local authorities' investigations into the causell

of the cMis, the MU shall not release any information on the affected aircraft, the

affected flight, lhe aff~cled passengers and crew and their families to any third parties,

including media agencies and lravel agencies.

14.2 MU ShOuldre.direct all third party enquiries for information on the affected

flight, the aHecled aircraft. the affected passengers, crew and their families to VX.

15. Payments of Actual Crisis Management Costs Incurred by MU

16, Joint Exercises

The Carriers shall aclivale lheir respective Emerg~ Response Plans to conduct a

simulated Crisis Managemenl Exercise or meet _ as necessary

to maintain familiarity with eacholher's systems and procedures and to fine-tune the

co-ordination of processes.