<PAGE>   1
                                                                  Exhibit 10.20



                              AMENDED AND RESTATED

                                    V2500(R)

                                SUPPORT CONTRACT

                                     BETWEEN

                        IAE INTERNATIONAL AERO ENGINES AG

                                       AND

                           AMERICA WEST AIRLINES, INC.

                                 7 OCTOBER 1998
<PAGE>   2
                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE I   DEFINITIONS........................................................2
                                                                            
ARTICLE II  SALE OF PURCHASED ITEMS............................................3
                                                                            
      2.1   Intent and Agreement to Purchase...................................3
                                                                            
      2.2   Type Approval and Changes in Specification.........................4
                                                                            
      2.3   Inspection and Acceptance..........................................5
                                                                            
      2.4   Delivery, Shipping, Title and Risk of Loss or Damage...............6
                                                                            
      2.5   Price..............................................................6
                                                                            
      2.6   Payment............................................................6
                                                                            
ARTICLE III SPARE PARTS PROVISIONS.............................................7
                                                                            
      3.1   Intent and Term....................................................7
                                                                            
      3.2   ATA Standards......................................................8
                                                                            
      3.3   Use of Procurement Data............................................8
                                                                            
      3.4   Stocking of Spare Parts............................................8
                                                                            
      3.5   Lead Times.........................................................8
                                                                            
      3.6   Ordering Procedure.................................................9
                                                                            
      3.7   Modifications to Spare Parts.......................................9
                                                                            
      3.8   Inspection........................................................10
                                                                            
      3.9   Delivery and Packing..............................................10
                                                                            
      3.10  Prices............................................................11
                                                                            
      3.11  Payment...........................................................11
                                                                            
      3.12  Purchase by AWA from Others.......................................12
                                                                            
      3.13  Special Tools, Ground Equipment and Consumable Stores.............12
                                                                            
      3.14  Conflict..........................................................13
                                                                            
ARTICLE IV  WARRANTIES, GUARANTEES AND LIABILITIES............................13
                                                                            
ARTICLE V   PRODUCT SUPPORT SERVICES..........................................15
                                                                            
ARTICLE VI  MISCELLANEOUS.....................................................15
                                                                            
      6.1   Delay in Delivery.................................................15
                                                                            
      6.2   Patents...........................................................16
                                                                            
      6.3   Credit Reimbursement..............................................18
                                                                            
      6.4   Non-Disclosure and Non-Use........................................18
                                                                           

                                       i.
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                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                            PAGE

      6.5   Taxes.............................................................19
                                                                           
      6.6   Amendment.........................................................20
                                                                           
      6.7   Assignment........................................................20
                                                                           
      6.8   Headings..........................................................20
                                                                           
      6.9   Law...............................................................20
                                                                           
      6.10  Notices...........................................................20
                                                                           
      6.11  Exclusion of Other Provisions and Previous Understandings.........21
                                                                          

      EXHIBIT A   AIRCRAFT DELIVERY SCHEDULE

      EXHIBIT B   PURCHASED ITEMS, PRICE, ESCALATION FORMULA, AND DELIVERY 
                  SCHEDULE

      EXHIBIT C   CONTRACT SPECIFICATIONS

                  C-1   V2524-A5 TURBOFAN ENGINE MODEL SPECIFICATION
                  C-2   V2527-A5 TURBOFAN ENGINE MODEL SPECIFICATION
                  C-3   V2533-A5 TURBOFAN ENGINE MODEL SPECIFICATION

      EXHIBIT D   PRODUCT SUPPORT PLAN

      EXHIBIT E   WARRANTIES, GUARANTEES AND PLANS

                  E-1   ENGINE AND PARTS SERVICE POLICY
                  E-2   NACELLE AND PARTS SERVICE POLICY
                  E-3   WARRANTY FOR SPECIAL TOOLS AND GROUND EQUIPMENT
                  E-4   PARTS COST GUARANTEE
                  E-5   RELIABILITY GUARANTEE
                  E-6   INFLIGHT SHUTDOWN GUARANTEE
                  E-7   DELAY AND CANCELLATION GUARANTEE
                  E-8   FUEL CONSUMPTION RETENTION GUARANTEE
                  E-9   EXHAUST GAS TEMPERATURE GUARANTEE


                                       ii.
<PAGE>   4
           AMENDED AND RESTATED V2500(R) SUPPORT CONTRACT BETWEEN IAE
                          INTERNATIONAL AERO ENGINES AG
                         AND AMERICA WEST AIRLINES, INC.


      THIS RESTATED AND AMENDED CONTRACT (as amended) is made this 7th day of
October l998 between IAE INTERNATIONAL AERO, a joint stock company organized and
existing ENGINES AG, under the laws of Switzerland, with a place of business at
400 Main Street, M/S 121-10, East Hartford, Connecticut, 06108, U.S.A.
(hereinafter called "IAE") and AMERICA WEST AIRLINES, INC. a corporation
organized and existing under the laws of the United States of America, whose
registered office is at 4000 East Sky Harbor Boulevard, Sky Harbor International
Airport, Phoenix, Arizona 85034, U.S.A. (hereinafter called "AWA"). (This
Restated and Amended Contract, as amended, hereinafter referred to as the
"Contract").

                                    WHEREAS:

      A. AWA and AVSA have entered into an Airbus A319/320/321 Purchase
Agreement dated as of September 12, 1997 (together with all exhibits thereto and
all letter agreements currently existing or hereafter entered into that by their
terms constitute part of such purchase agreement, and as such purchase agreement
may be amended, modified or supplemented from time to time, the "New Purchase
Agreement") which covers, among other matters:

      (a) The sale by AVSA and the purchase by AWA of (i) twenty-two (22) firm 
new A319 aircraft powered by new V2524-A5 Propulsion Systems ("Firm A319
Aircraft"), and (ii) seven (7) firm new A320 aircraft, powered by new V2527-A5
Propulsion Systems ("Firm A320-Aircraft"); the Firm A319 Aircraft and the Firm
A320 Aircraft hereafter referred to as the "Firm Aircraft"; and,

      (b) The sale by AVSA and the purchase by AWA of twelve (12) new A320
aircraft powered by new V2527-A5 Propulsion Systems, [***] the scheduled 
delivery date of such aircraft (the"Growth A320 Aircraft") and,

      (c) An option for AWA to purchase forty (40) new A320 family aircraft in
any combination of new A319 aircraft, powered by new V2524-A5 Propulsion Systems
("Option A319 Aircraft"), new A320 aircraft, powered by new V2527-A5 Propulsion
Systems ("Option A320 Aircraft"), and new A321-200 aircraft, powered by new
V2533-A5 Propulsion Systems ("Option A321 Aircraft", Option A319 Aircraft,
Option A320 Aircraft, and Option A321 Aircraft, collectively, or where the
context so requires individually, hereafter referred to as the "Option
Aircraft"; and,

      B. IAE and AWA entered into V2500 Support Contract dated December 23, 1994
in respect of the purchase by AWA of twenty-four (24) new A320-200 aircraft to
be powered by IAE V2527-A5 engines and the support of such V2527-A5 engines (the
"Support Contract");

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[*] indicates Redacted material


                                       1.
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      C. IAE and AWA hereby agree to amend and restate the terms of the Support
Contract to reflect the purchase by AWA of additional Airbus V2500-A5 powered
A320 family aircraft pursuant to the New Purchase Agreement;

      D. IAE is prepared to supply to AWA V2500-A5 spare engines, modules, spare
parts, special tools, ground equipment, product support services and consumable
stores for the support and operation of the V2500 Propulsion Systems pursuant to
the terms set forth herein.

                     NOW THEREFORE IT IS AGREED AS FOLLOWS:

                                    ARTICLE I

                                   DEFINITIONS

      In this Contract, unless the context otherwise requires:

      1.1 "AIRCRAFT" means the Firm Aircraft, Growth A320 Aircraft and Option
Aircraft, being acquired by AWA as set out in Exhibit A to the Contract.

      1.2 "AIRCRAFT MANUFACTURER" means Airbus Industrie.

      1.3 "AVSA" means AVSA S.A.R.L., a societe a responsibilite limitee
organized and existing under the laws of the Republic of France, having its
registered office located at 2, Rond-Point Maurice Bellonte, 31700 Blagnac
France.

      1.4 "BASIC CONTRACT PRICE" means the basic price of each item of the
Purchased Items as specified in Exhibit B to this Contract.

      1.5 "CERTIFICATION AUTHORITY" means the United States of America Federal
Aviation Administration of the Department of Transportation ("FAA").

      1.6 "CHANGE ORDER" shall have the meaning set forth in Article 2.2.1.

      1.7 "CURRENT RULES" shall have the meaning set forth in Article 2.2.4.

      1.8 "ENGINE(S)" means the IAE V2524-A5, V2527-A5, and V2533-A5 aero
engines described in the applicable Specification.

      1.9 "INSTALLATION ITEMS" means Engines, modules, accessories, exhaust
systems, nacelles and all ancillary equipment therefor described in the
Specification which are being supplied pursuant to this Contract for
installation in the Aircraft.

      1.10 "LEAD TIME" means the period between acceptance by IAE of an order of
AWA and commencement of delivery.

      1.11 "NON-INSTALLATION ITEMS" means jigs, tools, handling and
transportation equipment and all equipment whatsoever to be supplied pursuant to
this Contract for use with the Installation Items and not for installation in
the Aircraft.


                                       2.
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      1.12 "Other Supplies" means special tools, ground equipment and consumable
stores (e.g. oils, greases, dyes and penetrants).

      1.13 "PROCUREMENT DATA" means information supplied by IAE to AWA about
Spare Parts required to replenish the said initial stock.

      1.14 "PURCHASED ITEMS" means those Installation Items and Non-Installation
Items specified in Exhibit B to this Contract.

      1.15 "PURCHASE PRICE" shall have the meaning set forth in Article 2.5.

      1.16 "S.A.L.E. AIRCRAFT" shall mean the five (5) A320 aircraft powered by
V2527-A5 Propulsion systems leased by AWA from Singapore Aircraft Leasing
Enterprise Pte. Ltd. as follows:

                                     [***]

                                     [***]

                                     [***]

      1.17 "SERVICE BULLETINS" means those service bulletins containing advice
and instructions issued by IAE to AWA from time to time in respect of Engines.

      1.18 "SPARE PARTS" means spare parts for V2500 engines excluding the items
listed in the Specification as being items of supply by AWA.

      1.19 "SPECIFICATION" means the IAE Contract Specification No. IAE S24A5,
IAE Specification No. IAE S27A5, and IAE Specification No. IAE S33A5 which form
Exhibit C to this Contract.

      1.20 "SUPPLIES" means Installation Items, Non-Installation Items, Spare
Parts and any goods or services supplied pursuant to this Contract.

      1.21 "VENDOR PARTS" means Spare Parts described in Procurement Data which
are not manufactured pursuant to the detailed design and order of IAE.

                                   ARTICLE II

                             SALE OF PURCHASED ITEMS

      2.1 INTENT AND AGREEMENT TO PURCHASE.

            2.1.1 AWA has entered into the New Purchase Agreement with AVSA for
the purchase of [***] 

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[*] indicates Redacted material


                                       3.
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[***]

            2.1.2 IAE agrees to sell and AWA agrees to purchase from IAE the
following Purchased Items for delivery according to the delivery schedule set
forth in Exhibit B to this Contract:

                  [***] new V2527-A5 spare Engines; and

                  [***] new V2524-A5 spare Engines.

      The parties acknowledge that the spare Engine described as and designated
Purchased Item No. 1 on Exhibit B has been purchased by and delivered to AWA.

            2.1.3 [***]

            2.1.4 The parties hereby agree that this Restated and Amended V2500
Support Contract amends the V2527-A5 Support Contract between IAE and AWA dated
23 December 1994, including all side letters and amendments thereto.

      2.2 TYPE APPROVAL AND CHANGES IN SPECIFICATION.

            2.2.1 The Purchased Items will be manufactured to the standards set
forth in the Specification. After the date of this Contract, the Purchased Items
may be varied from time to time by change orders in writing which shall set
forth in detail:

                  2.2.1.1 The changes to be made in the Purchased Items; and 

                  2.2.1.2 The effect (if any) of such changes on the 
Specification (including but not limited to performance and weight), on
interchangeability of the Purchased Items in the airframe, on prices and on
dates of delivery of the Purchased Items (a "Change Order"). Change Orders shall
not be binding on either party until signed by IAE and AWA but upon being so
signed shall constitute amendments to this Contract.

            2.2.2 IAE may make any changes in the Purchased Items which do not
adversely affect the Specification (including, but not limited to, performance
and weight), 

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[*] indicates Redacted material


                                       4.
<PAGE>   8
interchangeability of the Purchased Items in the airframe, prices or dates of
delivery of the Purchased Items. In the case of such permitted changes, a Change
Order shall not be required. IAE will provide notification of all such changes
to AWA prior to delivery.

            2.2.3 At the time of delivery of the Purchased Items, IAE shall
ensure that there is in existence a Type Certificate from the Certification
Authority in accordance with the provisions of the Specification.

            2.2.4 The Specification has, however, been drawn with a view to the
requirements of the Certification Authority referred to in the Specification and
the official interpretations of such requirements in existence at the date of
this Contract (such requirements and interpretations being hereinafter referred
to as "Current Rules"). Subject to Article 2.2.2 above, IAE and AWA agree that
they will execute an appropriate Change Order in respect of any change required
to the Purchased Items to enable such Purchased Items to conform to the
requirements of the Certification Authority and the official interpretations of
such requirements in force at the date of delivery of such Purchased Items.

            2.2.5 The price of any Change Order is to be borne:

                  2.2.5.1 [***]; and

                  2.2.5.2 [***]

      2.3 INSPECTION AND ACCEPTANCE.

            2.3.1 Conformance to the Specification of Purchased Items which are
Installation Items will be assured by IAE through the maintenance of procedures,
systems and records approved by the Certification Authority. Conformance
documentation (an Export Certificate of Airworthiness or a Certificate of
Conformity, as the case may be) will be issued and signed by personnel
authorized for such purposes.

            2.3.2 Conformance to the Specification of Purchased Items which are
Non-Installation Items will be assured by IAE conformance documentation.

            2.3.3 Upon delivery pursuant to Article 2.4.1 below and the issuance
of an Export Certificate of Airworthiness or a Certificate of Conformity
pursuant to Article 2.3.1 or Article 2.3.2 above, AWA shall be deemed to have
accepted the Purchased Items and that the Purchased Items conform to the
Specification. IAE shall, subject to the permission of the appropriate
governmental authorities, arrange for AWA to have reasonable access to the
appropriate premises in order to examine the Purchased Items prior to the issue
of conformance documentation and to witness Engine acceptance tests.

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[*] indicates Redacted material


                                       5.
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            2.3.4 [***]

            2.3.5 [***]

      2.4 DELIVERY, SHIPPING, TITLE AND RISK OF LOSS OR DAMAGE.

            2.4.1 IAE will deliver the Purchased Items at Phoenix, Arizona, USA
in accordance with the delivery schedule set out in Exhibit B to this Contract.
[***]

            2.4.2 Upon such delivery, good title to and risk of loss of or
damage to the Purchased Items shall pass to AWA.

            2.4.3 AWA will notify IAE at least four (4) weeks before the time
for delivery of the Purchased Items of its instructions as to the marking and
shipping of the Purchased Items.

      2.5 PRICE.

            The Purchase Price for each of the Purchased Items shall be the
Basic Contract Price, amended pursuant to Article 2.2 above, and escalated in
accordance with the escalation formula contained in Exhibit B to this Contract.

      2.6 PAYMENT.

            2.6.1 Unless otherwise mutually agreed by the parties, AWA will make
payment in United States Dollars as follows:

                  2.6.1.1 Upon signature of this Contract or issuance of a
purchase order, AWA shall pay to IAE a deposit of [***] of the Estimated
Purchase Price of the Purchased Items.

                  2.6.1.2 [***] before the scheduled delivery of each of the 
Purchased Items, AWA shall pay to IAE a further deposit of [***] of the 
Estimated Purchase Price of such item.

                  2.6.1.3 [***] before the scheduled delivery of each of the 
Purchased Items, AWA shall pay to IAE a further deposit of [***] of the 
Estimated Purchase Price of such item.

                  2.6.1.4 Upon delivery or immediately prior to the delivery of
each of the Purchased Items, AWA shall pay to IAE the balance of the Purchase
Price of such item.

----------
[*] indicates Redacted material


                                       6.
<PAGE>   10
            2.6.2 IAE shall have the right to require AWA to make additional
deposits in respect of price changes arising from the provisions of Article 2.2
above on a similar basis to that specified in Article 2.6.l above.

            2.6.3 AWA undertakes that IAE shall receive the full amount of
payments falling due under this Article 2.6, without any withholding or
deduction whatsoever, subject to those covenants and exceptions set forth in
Article 6.5.4 below.

            2.6.4 All payments under this Article 2.6 shall be made by cable or
telegraphic transfer and shall be deposited not later than the due date of
payment with the following bank for the account of IAE:

                         Fleet Bank, National Association
                         175 Water Street
                         New York, NY 10038-4924
                         Account No.2-982-00819-9
                         ABA No. 021200339

            2.6.5 For the purpose of this Article 2.6 "payment" shall only be
deemed to have been made to the extent cleared or good value funds are received
in the numbered IAE bank account specified in sub-Article 2.6.4 above.

            2.6.6 [***]

            2.6.7 For the purpose of this Article 2.6, the "Estimated Purchase
Price" of any of the Purchased Items shall be calculated in accordance with the
following formula:

                                      [***]


                                   ARTICLE III

                             SPARE PARTS PROVISIONS

      3.1 INTENT AND TERM.

            3.1.1 For as long as AWA owns or operates one or more Aircraft in
regular commercial service, IAE shall provide that adequate supplies of Spare
Parts are available for sale to AWA under this Contract. In consideration
thereof, IAE shall sell to AWA and, except as hereinafter provided, AWA shall
buy from IAE AWA requirements of the following Spare Parts:

----------
[*] indicates Redacted material


                                       7.
<PAGE>   11
                  3.1.1.1 All Spare Parts manufactured pursuant to the detailed
design and order of IAE where IAE is the only source from which AWA can purchase
such Spare Parts in an unused condition and in quantities sufficient to meet
AWA's requirements; and

                  3.1.1.2 Vendor Parts for which direct supply arrangements
between the manufacturers of such Vendor Parts and AWA have not been
established. AWA shall notify IAE in writing not less than [***] before 
scheduled delivery that AWA intends to purchase such Vendor Parts from IAE.

            3.1.2 In an emergency, IAE shall sell to AWA Vendor Parts which it
is not obliged to sell under this Contract, but which it has in stock or
otherwise has reasonably available to it.

      3.2 ATA STANDARDS.

            The parties to this Contract shall comply with the requirements of
ATA Specifications 200/2000 and 300, provided that either of the parties shall
be entitled to negotiate reasonable changes in those procedures or requirements
of the said specifications which, if complied with exactly, would result in an
undue operating burden or unnecessary economic penalty.

      3.3 USE OF PROCUREMENT DATA.

            3.3.1 IAE has furnished AWA with Procurement Data complying with ATA
Specification 200/2000 and shall revise the said Procurement Data as a matter of
routine thereafter.

            3.3.2 Procurement Data shall be used to enable AWA to continue to
order Spare Parts to support the Installation Items.

      3.4 STOCKING OF SPARE PARTS.

            Upon request, AWA shall provide IAE with information reasonably
required to enable IAE to organize the manufacture and stocking of Spare Parts
efficiently.

      3.5 LEAD TIMES.

            3.5.1 Save as herein provided, replenishment Spare Parts shall be
delivered within the Lead Time specified in the IAE Spare Parts Catalog.

            3.5.2 If any order for replenishment Spare Parts shall call for a
quantity materially in excess of AWA's normal requirements, IAE shall use its
best efforts to complete such order, provided however, that IAE shall have the
right to notify AWA and IAE may request a special delivery schedule. If AWA
confirms that the full quantity ordered is required, delivery of the order shall
be effected at delivery dates specified by IAE and the Lead Times provided by
this Article shall not apply.

----------
[*] indicates Redacted material


                                       8.
<PAGE>   12
            3.5.3 In an emergency, IAE shall use its best efforts to deliver
Spare Parts, including certain major Spare Parts referred to in Article 3.5.2
above, within the time limits specified by AWA. The action to be taken on such
orders shall be advised as follows within the following time periods from IAE's
receipt of notice that a situation described below exists:

                  3.5.3.1 AOG orders - within [***];

                  3.5.3.2 other emergency orders - within [***];

                  3.5.3.3 orders for items of which AWA is out-of-stock - within
[***].

      3.6 ORDERING PROCEDURE.

            3.6.1 Orders for Spare Parts shall be placed by AWA from time to
time as may be appropriate. AWA shall give IAE as much notice as possible of any
change in its operation, including, but not limited to, changes in maintenance
or overhaul arrangements affecting its requirements of Spare Parts, including
Vendor Parts.

            3.6.2 IAE shall promptly acknowledge receipt of each order for Spare
Parts in accordance with ATA Specification 200/2000 procedure. Unless qualified,
such acknowledgment, subject to variation in accordance with Article 3.5.3
above, shall constitute an acceptance of the order under the terms of this
Contract.

            3.6.3 Subject to Article 3.l0.2 below, IAE shall accept "control
shipdates" as defined in ATA Specification 200 in orders for Spare Parts
provided that such dates allow IAE its applicable Lead Times in making shipment
and are not subject to cancellation by AWA at less than twelve (12) calendar
months' notice.

            3.6.4 If IAE notifies AWA that certain Spare Parts are packed in
standard package quantities (hereinafter called "SPQ's") or that a minimum sales
quantity (hereinafter called "MSQ") applies, AWA's subsequent orders for such
Spare Parts shall be for SPQ's or multiples thereof with a minimum of one MSQ.

            3.6.5 Unless AWA shall have specified "Total Quantity Required" on
its orders, IAE shall be entitled to consider an order for inexpensive Spare
Parts complete if at least [***] of the quantity ordered is delivered. For the
purpose of this Article the term "inexpensive" shall mean a price listed in the
IAE Spare Parts Catalog at less than [***], but shall be subject to review by
IAE from time to time.

            3.6.6 AWA shall provide IAE with full shipping instructions
applicable to standard replenishment orders for Spare Parts to be placed by AWA.

      3.7 MODIFICATIONS TO SPARE PARTS.

            3.7.1 IAE shall be entitled to make modifications or changes to the
Spare Parts ordered by AWA hereunder. IAE shall promptly inform AWA by means of
Procurement Data and Service Bulletins when such modified Spare Parts (or Spare
Parts introduced by a repair 

----------
[*] indicates Redacted material


                                       9.
<PAGE>   13
scheme) become available for supply hereunder. Notification of such availability
shall be given to AWA before delivery.

            3.7.2 Modified Spare Parts may be supplied unless the modifications
stated in Service Bulletins, in the recommended or optional category, are
considered by AWA to be unacceptable and AWA so states in writing to IAE within
[***] of the transmittal date of a Service Bulletin, in which case AWA shall be
entitled to place a single order for AWA's anticipated total requirement of
pre-modified Spare Parts, at a price and delivery schedule to be agreed.

            3.7.3 Unless AWA notifies IAE in writing under the provisions of
Article 3.7.2 hereof, IAE may supply at the expense of AWA a modification of any
Spare Part ordered (including any additional Spare Part needed to ensure
interchangeability), provided that the said modification has received the
approval of the Certification Authority. The delivery of such Spare Parts shall
begin on dates indicated by Service Bulletin. The delivery schedule shall be
agreed at the time when orders for modifications are accepted by IAE.

            3.7.4 If Spare Parts required for incorporation of a modification
are not ordered as a kit, AWA's orders must distinguish them from normal
replacement Spare Parts in accordance with ATA Specification 200/2000.

      3.8 INSPECTION.

            3.8.1 Conformance to the Specification of Installation Items will be
assured by IAE through the maintenance of procedures, systems and records
approved by the Certification Authority. Conformance documentation will be
issued and signed by personnel authorized for such purpose.

            3.8.2 Conformance of Non-Installation Items will be assured by IAE
conformance documentation.

            3.8.3 Upon the issue of conformance documentation in accordance with
Articles 3.8.1 or 3.8.2 above, AWA shall be deemed to have accepted the
Installation Items and Non-Installation Items and that such Items conform to
specification.

      3.9 DELIVERY AND PACKING.

            3.9.1 IAE shall deliver Spare Parts and Other Supplies ex-works, the
IAE point of manufacture. Shipping documents and invoices shall be in accordance
with ATA Specification 200.

            3.9.2 Upon such delivery, good title to and risk of loss of or
damage to the said Spare Parts and Other Supplies shall pass to AWA.

            3.9.3 In accordance with ATA Specification 200/2000 requirements,
AWA shall advise IAE at time of order of its instructions as to the marking and
shipping of the Spare Parts and Other Supplies.

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[*] indicates Redacted material


                                      10.
<PAGE>   14
            3.9.4 The packaging of Spare Parts shall be in accordance with ATA
Specification 300 Category 2 standard and shall be free of charge to AWA.
Category 1 standard packaging if required by AWA shall be paid for by AWA.

      3.10 PRICES.

            3.10.1 Subject to Article 3.5.2 above, prices of all Spare Parts
shall be quoted in U.S. Dollars, in the IAE Spare Parts Price Catalog and
Procurement Data. Such prices shall represent net unit prices, ex-works the IAE
point of manufacture.

            3.10.2 Prices applicable to each order placed by AWA hereunder shall
be the prices [***]

            3.10.3 [***]

            3.10.4 On request by AWA, prices of Spare Parts or other materials
not included in the Spare Parts Price Catalog shall be quoted within a
reasonable time by IAE, not to exceed thirty (30) days.

      3.11 PAYMENT.

            3.11.1 Payment for all purchases under this Article 3 shall be made
by AWA to IAE within thirty (30) days after the date of delivery.

            3.11.2 AWA undertakes that IAE shall receive payment in U.S. Dollars
of the full amount of payments falling due under this Article 3.11, without any
withholding or deduction whatsoever, subject to those covenants and exceptions
set forth in Article 6.5.4 below.

            3.11.3 All payments under this Article 3.11 shall be made by cable
or telegraphic transfer to, and shall be deposited not later than the due date
of payment with:

                        Fleet Bank, National Association
                        175 Water Street
                        New York, NY 10038-4924
                        Account No. 2-982-00819-9
                        ABA No. 021200339

            3.11.4 For the purpose of this Article 3.11, payment shall only be
deemed to have been made to the extent cleared or good value funds are received
in the numbered IAE bank account specified in sub-Article 3.11.2 above.

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[*] indicates Redacted material


                                      11.
<PAGE>   15
      3.12 PURCHASE BY AWA FROM OTHERS.

            3.12.1 AWA may purchase from another A320-200 operator Spare Parts,
which by virtue of Article 3.1 above are required to be purchased from IAE:

                  3.12.1.1 [***]

                  3.12.1.2 [***]

                  3.12.1.3 [***]

            3.12.2 Subject to the conditions specified below, in the following
circumstances AWA may obtain from established and approved sources, other than
IAE or other A320-200 operators, Spare Parts which by virtue of Article 3.1
above are required to be purchased from IAE:

                  3.12.2.1 [***]; or

                  3.12.2.2 [***]; or

                  3.12.2.3 where IAE identifies a Spare Part as a standard part.

      AWA's rights under sub-Article 3.12.2 above are subject to AWA being
unable to satisfy its requirements for Spare Parts under the provisions of
sub-Article 3.12.1 above.

            3.12.3 Nothing in this Article 3.12 shall be deemed to extend the
obligations of IAE or to diminish the limitations upon such obligations under
the Warranties referred to in sub-Articles 4.1 and 4.2 below.

            3.12.4 Notwithstanding any extension of the time of delivery in
accordance with the provisions of Article 6.1.1 below, AWA shall be entitled to
cancel all or part of any order on IAE for Spare Parts which, pursuant to the
terms of Articles 3.12.2.1 and 3.12.2.2 are purchased from another source by
giving reasonable notice of cancellation of the said order.

            3.12.5 In the event that AWA purchases Spare Parts under this
Article 3.12, AWA shall give written notice to IAE of the extent of such
purchase supported by any other technical information which IAE may reasonably
require.

      3.13 SPECIAL TOOLS, GROUND EQUIPMENT AND CONSUMABLE STORES.

            IAE may sell Other Supplies to AWA subject to the terms and
conditions of this Contract, but the detailed procedures of this Contract with
regard to Procurement Data, prices, 

----------
[*] indicates Redacted material


                                      12.
<PAGE>   16
stocking and Lead Time shall not apply. Technical data for special tools and
ground equipment shall be in accordance with ATA Specification 101.

      3.14 CONFLICT.

            In the event of any conflict between the provisions of this Contract
and the provisions of ATA Specifications 101, 200/2000 and 300, the provisions
of this Contract shall prevail.

                                   ARTICLE IV

                     WARRANTIES, GUARANTEES AND LIABILITIES

      4.1 IAE warrants to AWA that at the time of delivery of the Supplies sold
hereunder such Supplies will be free of defects in material and manufacture and
will conform to IAE's applicable specifications as stipulated in this Contract
(provided however, that any deviation from the applicable specification which in
AWA's reasonable business judgment is not material and not substantial will be
waived by AWA). Except as otherwise provided herein or in any exhibits or Side
Letters hereto, IAE's liability and AWA's remedies under this warranty are
limited to [***]

      4.2 In addition, IAE grants and AWA accepts the following:

          4.2.1 V2500 Engine and Parts Service Policy as set forth in Exhibit
                E-1

          4.2.2 V2500 Nacelle and Parts Service Policy as set forth in Exhibit
                E-2

          4.2.3 V2500 Non-Installation Items Warranty as set forth in Exhibit
                E-3

          4.2.4 V2500 Parts Cost Guarantee as set forth in Exhibit E-4

          4.2.5 Reliability Guarantee as set forth in Exhibit E-5

          4.2.6 Inflight Shutdown Guarantee as set forth in Exhibit E-6

          4.2.7 Delay and Cancellation Guarantee as set forth in Exhibit E-7

          4.2.8 Fuel Consumption Retention Guarantee as set forth in Exhibit E-8

----------
[*] indicates Redacted material


                                      13.
<PAGE>   17
            4.2.9 Exhaust Gas Temperature Guarantee as set forth in Exhibit E-9

      The Service Policies, Warranties and Guarantees referred to in this
Article 4.2 are hereinafter called the "Warranties." The above Service Policies,
Warranties and Guarantees together form Exhibit E to this Contract.

      4.3 The parties agree that those of the Warranties set out in Exhibit E-1
pursuant to Article 4.2.1 and Exhibit E-2 pursuant to Article 4.2.2, wherein AWA
may be referred to as the "Operator", shall also apply to any equipment which
falls within the categories of equipment referred to in the Warranties
manufactured, supplied or inspected by IAE howsoever and whenever (whether
before, on or after the date first above written) acquired by AWA from
whatsoever source including but not limited to any V2500 aero engines and any
associated equipment therefor, and any parts for such engines and associated
equipment which form part of any aircraft acquired from the manufacturer.

      4.4 The Warranties are personal to AWA and the obligations of IAE
thereunder shall only apply insofar as AWA has acquired and operates the
Supplies covered thereunder. Notwithstanding anything to the contrary in
Exhibits E-4 through E-9, if AWA subleases any of the Aircraft to a FAA or other
government certified commercial air carrier while maintaining ultimate
responsibility for maintenance and Warranty administration of the Aircraft, the
Warranties will continue to apply so long as the Aircraft are operated under
similar or better operating conditions and the other conditions of the
Warranties are fulfilled, subject to the terms and conditions of the Warranties.

      4.5 AWA shall inform any person to whom it intends to sell, lease, loan or
otherwise dispose of any of the Supplies or equipment referred to in Article 4.3
above that such person may obtain from IAE a direct warranty agreement
incorporating those of the Warranties set out in Articles 4.2.1 and 4.2.2. AWA
shall also use its reasonable endeavors to ensure that such person shall enter
into a direct warranty agreement with IAE prior to delivery of any of the
Supplies or such equipment to such person.

      4.6 IAE and AWA agree that the intent of the Warranties provided in
Article 4.2 is to provide specified benefits or remedies to AWA as a result of
specified events. It is not the intent however to duplicate benefits or remedies
provided to AWA by IAE or another source, e.g., another equipment manufacturer
or lessor, as a result of the same event. Therefore, the terms of the Warranties
notwithstanding, if the terms of the Warranties should make duplicate benefits
available to AWA from IAE or any third party, AWA may elect to receive the
benefits under the Warranties or under any other applicable guarantee, sales
warranty, service policy or any special benefit of any kind as a result of the
same event, but not both.

      4.7 AWA accepts that the Warranties granted to AWA under Articles 4.1, 4.2
and 4.3 above together with the express remedies provided to AWA in respect of
the Supplies in accordance with this Contract are [***]

----------
[*] indicates Redacted material


                                      14.
<PAGE>   18
[***]

      4.8 IAE and AWA agree that this Article 4 has been the subject of
discussion and negotiation, is fully understood by the parties and the [***] in
this Contract are arrived at in consideration of:

            4.8.1 the [***] and

            4.8.2 the [***] above.

                                    ARTICLE V

                            PRODUCT SUPPORT SERVICES

      5.1 IAE will make available to AWA the Product Support Services described
in Exhibit D to this Contract. Except when identified in such Exhibit as
requiring separate contractual arrangements, such Product Support Services shall
be supplied at no additional charge to AWA and subject to the provisions of this
Contract. IAE may delegate the performance of product support services to an
affiliated company.

                                   ARTICLE VI

                                  MISCELLANEOUS

      6.1 DELAY IN DELIVERY.

            6.1.1 If IAE is hindered or prevented from delivering any of the
Supplies within the time for delivery specified in this Contract (as such time
may be extended pursuant to the provisions of this Contract) by reason of any
cause beyond the reasonable control of IAE, the time for delivery shall be
extended by a period equal to the period for which delivery shall have been so
hindered or prevented, and [***]

            6.1.2 If, by reason of any of the causes embraced by Article 6.1.1
above, IAE is hindered or prevented from delivering any goods (which are the
same as and include the Supplies except for Purchased Items) to purchasers
(including AWA) [***]

----------
[*] indicates Redacted material


                                      15.
<PAGE>   19
[***]

            6.1.3 Should IAE inexcusably delay delivery of any item of the
Supplies beyond the time for delivery specified in this Contract (as such time
may be extended pursuant to the provisions of this Contract), then [***]

            6.1.4 The right of AWA to claim damages [***]

            6.1.5 Should IAE delay delivery of any item of the Supplies beyond
the time for delivery specified in this Contract (as such time may be extended
pursuant to the provisions of this Contract) for [***]

            6.1.6 Should IAE delay for any reason delivery of any of the
Purchased Items beyond the time for delivery specified in this Contract (as such
time may be extended pursuant to the provisions of this Contract), [***]

      6.2 PATENTS.

            6.2.1 IAE shall, subject to the conditions set out in this Article
and as the sole liability of IAE, indemnify AWA in respect of any claim arising
from and related to the infringement of any patent, copyright, trademark,
service mark, trade secret or other property right (together, a "industrial
property right") by use of any of the Supplies:

----------
[*] indicates Redacted material


                                      16.
<PAGE>   20
                        (1) to the extent of [***] thereof in the case of any 
actual or alleged infringement by any Supply or the use thereof (a) any Swiss,
British, Japanese, German or American industrial property right, or (b) any
industrial property rights issued under the laws of any other country that is
bound by the Convention on International Civil Aviation of 7th December l944 or
has in full force and effect industrial property right laws that recognize and
give adequate protection to industrial property rights issued under the laws of
other countries; [***]; and

                        (2) to the extent of [***] thereof in case of any actual
or alleged infringement by any Supply or the use thereof of any industrial
property right issued under the laws of any country not covered by (1) above;
[***]

            6.2.2 AWA will give immediate notice in writing to IAE of any such
claim whereupon IAE shall have the right at its own expense to assume the
defense of or to dispose of or to settle such claim in its sole discretion,
except that no such disposition or settlement that contains an admission of
liability shall directly admit liability on behalf of AWA, and AWA will give IAE
all reasonable assistance and will not by any act or omission [***]

            6.2.3 IAE shall have the right to substitute for any allegedly
infringing Supplies substantially equivalent non-infringing supplies otherwise
complying with the terms of this Contract.

            6.2.4 In the event that the use of the Supplies is enjoined, IAE
shall, at its expense and option either:

            6.2.4.1 substitute substantially equivalent non-infringing
Supplies;

            6.2.4.2 procure for AWA the right to continue using the
Supplies; or

            6.2.4.3 modify the Supplies as to make them non-infringing.

            6.2.5 The indemnity contained in Article 6.2.1 above shall [***]

----------
[*] indicates Redacted material


                                      17.
<PAGE>   21
[***]

      6.3 CREDIT REIMBURSEMENT.

            [***]

      6.4 NON-DISCLOSURE AND NON-USE.

            6.4.1 IAE and AWA each hereby agree for the benefit of each other,
that it will treat the terms of this Contract as confidential, and will not
without the prior written consent of the other, disclose or cause to be
disclosed the terms hereof and any Information received hereunder to any third
party other than its attorneys, accountants and professional advisors. The
expression "Information" in this Article 6.4.1 includes but is not limited to
all oral or written information, know-how, data, reports, drawings and
specification, and all provisions of this Contract.

            6.4.2 IAE and AWA shall be responsible for the observance of the
provisions of Article 6.4.1 above by their respective employees, attorneys,
accountants and professional advisors.

            6.4.3 The provisions of Article 6.4.1 above for Information shall
not apply to any information which is or becomes generally known in the aero
engine industry nor shall the provisions of Article 6.4.1 above prevent any
necessary disclosure of Information to enable AWA itself to operate, maintain or
overhaul Supplies.

            6.4.4 With respect to Supplies ordered by AWA for delivery to a
destination outside the U.S.A., AWA shall be responsible for obtaining any
required authorization including an Export License, Import License, Exchange
Permit or any other governmental authorization (collectively referred to herein
as "Governmental Authorization") required in connection with the transactions
contemplated under this Contract. AWA shall restrict disclosure of all

----------
[*] indicates Redacted material


                                      18.
<PAGE>   22
information and data furnished in connection with receipt of appropriate
Governmental Authorization and shall comply with any conditions imposed by such
Government Authorization.

            6.4.5 In the event that any of the "Information" as described in
Article 6.4.1 is required or requested to be disclosed by AWA or IAE by
governmental, judicial or regulatory agency order, or as a result of compliance
with any law, each of AWA and IAE agrees to limit the disclosure to only those
portions of the Information specifically required to be disclosed, and to
maintain the confidentiality of as much of the Information as legally possible.

            6.4.6 Notwithstanding any of the foregoing, AWA may subcontract
administration of Warranties provided hereunder to a third party and disclose to
that third party Information necessary to administer the Warranties. AWA will,
prior to such disclosure, ensure that the third party has agreed to
non-disclosure and non-use provisions substantially similar to this Article 6.4.

            6.4.7 Notwithstanding any of the foregoing, [***]

      6.5 TAXES.

            6.5.1 Subject to Article 6.5.2 below, IAE shall pay all imposts,
duties, fees, taxes and other like charges levied by the governments of the
United Kingdom, the United States of America, the Federal Republic of Germany,
Japan and Italy or any agency thereof in connection with the Supplies prior to
their delivery.

            6.5.2 Except as stated in Article 6.5.3, all amounts stated to be
payable by AWA pursuant to this Contract exclude any value added tax, sales tax
or similar taxes. In the event that the supply of goods or services under this
Contract is chargeable to any value added tax, sales tax or similar taxes, such
tax will be borne by AWA.

            6.5.3 [***] Notwithstanding the forgoing, AWA shall not be 
responsible for any taxes imposed on the income, revenues, gross receipts,
capital gains or net worth of IAE or like charges. Furthermore, IAE will be
responsible for any interest, penalties or fines imposed upon AWA because of
IAE's failure to file any information return after requested in writing by AWA
to do so or should any representations made by IAE in this Contract or documents
required in Article 6.5.4 prove to be false and misleading.

            6.5.4 IAE represents that all amounts to be payable by AWA under
this Contract are, at the time of the execution of this Contract and will
continue throughout the term of this Contract, to be considered as income
effectively connected with IAE's United States trade or business. IAE will
furnish to AWA, upon execution of this Contract and every year thereafter, a

----------
[*] indicates Redacted material


                                      19.
<PAGE>   23
completed IRS Form 4224 and W-9, or such other document required by law to
certify that the payments are exempt from withholding tax. If for any reason AWA
is required by law to withhold tax, the payments required to be made under this
Contract to IAE shall be reduced by the amount of such withholding.

      6.6 AMENDMENT.

            This Contract shall not be amended in any way other than by
agreement in writing, entered into by the parties hereto after the date of this
Contract, which is expressly stated to amend this Contract.

      6.7 ASSIGNMENT.

            Neither party may assign any of its rights or obligations hereunder
without the written consent of the other party (except that IAE may assign its
rights to receive money hereunder). Any assignment made in violation of this
Article 6.7 shall be null and void.

      6.8 HEADINGS.

            The Article headings and the Index do not form a part of this
Contract and shall not govern or affect the interpretation of this Contract.

      6.9 LAW.

            This Contract shall be subject to and interpreted and construed in
accordance with the laws of the State of New York, United States of America. The
parties hereto hereby agree that all actions or proceedings arising out of this
Contract shall be litigated in United States District Court for the Southern
District of New York. The parties hereto hereby expressly submit and consent in
advance to such jurisdiction and venue in any action or proceeding commenced by
either party in such jurisdiction, agree that jurisdiction and venue is proper
in such court, and hereby waive personal service of the summons and complaint,
or other process or papers issued herein and agree that such service of the
summons and complaint may be made by registered mail, return receipt requested,
addressed to either party, at the address set forth in Article 6.10 hereof. Each
party waives any claim that any such jurisdiction, is an inconvenient forum or
an improper forum based on lack of venue. The choice of forum set forth herein
shall not be deemed to preclude the enforcement by either party of any judgment
in any other appropriate jurisdiction.

      6.10 NOTICES.

            All notices and requests required or authorized hereunder shall be
given in writing either by personal delivery or by commercial courier or mail or
by facsimile transmission to the addresses set forth below. The date upon which
any such notice or request is so personally delivered or delivered by commercial
courier or mail, or if such notice or request is given by facsimile
transmission, the date upon which received unless a facsimile transmission is
received outside of business hours, in which case it shall be deemed received on
the next succeeding business day, shall be deemed to be the effective date of
such notice or request.


                                      20.
<PAGE>   24
                  IAE shall be addressed at:

                        IAE International Aero Engines AG
                        400 Main Street
                        M/S 121-10
                        East Hartford, Connecticut 06108
                        Fax: 860-565-5220
                        Attention: Business Director & Chief Legal Officer

                  and AWA shall be addressed at:

                        America West Airlines, Inc.
                        Phoenix Sky Harbor International Airport
                        4000 East Sky Harbor Boulevard
                        Phoenix, Arizona  85034
                        Fax: (602) 693-5904
                        Attention: Senior Vice President - Legal Affairs

      or at such other address or to such other person as the party receiving
the notice or request may designate from time to time.

      6.11 EXCLUSION OF OTHER PROVISIONS AND PREVIOUS UNDERSTANDINGS.

            6.11.1 This Contract (including all Exhibits hereto and as may be
amended in writing by the parties) contains the only provisions between the
parties governing the sale and purchase of the Supplies (excepting any
obligations to finance Aircraft) and shall apply to the exclusion of any other
provisions on or attached to or otherwise forming part of any order form of AWA,
or any acknowledgment or acceptance by IAE, or of any other document which may
be issued by either party relating to the sale and purchase of the Supplies.

            6.11.2 The parties agree that neither of them have placed any
reliance whatsoever on any representations, agreements, statements or
understandings made prior to the signature of this Contract, whether orally or
in writing, relating to the Supplies, other than those expressly incorporated in
this Contract, which has been negotiated on the basis that its provisions
represent their entire agreement relating to the Supplies and shall supersede
all such representations, agreements, statements and understandings.


                                      21.
<PAGE>   25
      IN WITNESS WHEREOF the parties hereto have caused this Contract to be
signed on their behalf by the hands of their authorized officers the day and
year first before written:


IAE INTERNATIONAL AERO ENGINES AG       AMERICA WEST AIRLINES, INC.

By: /s/ Barry Eccleston                 By: /s/ Ronald A. Armini
    --------------------                    -----------------------
Name: Barry Eccleston                   Name: Ronald A. Armini
      ------------------                      ---------------------
Title: President & CEO                  Title: Sr. V.P. Operations
       -----------------                       --------------------


                                      22.
<PAGE>   26
                                    EXHIBIT A

                           AIRCRAFT DELIVERY SCHEDULE

      FIRM A319 AIRCRAFT: TWENTY-TWO (22)
      A319 AIRCRAFT        DELIVERY DATE       A319 AIRCRAFT      DELIVERY DATE

      One (1)              October 1998        Two (2)            November 2000
      Two (2)              December 1998       One (1)            December 2000
      Two (2)              July 1999           One (1)            January 2001
      One (1)              August 1999         One (1)            March 2001
      One (1)              September 1999      Two (2)            April 2001
      Two (2)              November 1999       One (1)            May 2001
      One (1)              December 1999       One (1)            July 2001
      One (1)              September 2000      One (1)            August 2001
      One (1)              October 2000 

      FIRM A320 AIRCRAFT: SEVEN (7)
      A320 AIRCRAFT        DELIVERY DATE       A320 AIRCRAFT      DELIVERY DATE

      One (1)              February 1999       One (1)            February 2000
      One (1)              May 1999            One (1)            May 2000
      One (1)              August 1999         One (1)            August 2000
      One (1)              November 1999

      RECONFIRMED A320 AIRCRAFT: TWELVE (12)

      One (1)              October 2000        One (1)            August 2001
      One (1)              November 2000       One (1)            September 2001
      One (1)              January 2001        One (1)            October 2001
      One (1)              March 2001          One (1)            November 2001
      One (1)              May 2001            One (1)            January 2002
      One (1)              July 2001           One (1)            February 2002


      OPTION AIRCRAFT (40): Any combination of eight (8) A319, A320, and A321
aircraft for delivery each calendar year between 1 January 2001 and to 31
December 2005.


                                       1.
<PAGE>   27
                                    EXHIBIT B
                             PURCHASED ITEMS, PRICE,
                    ESCALATION FORMULA AND DELIVERY SCHEDULE

                              BASIC CONTRACT PRICE
                            U.S. DOLLARS (JULY 1998)

        PURCHASED ITEM NO.                               QTY.      DELIVERY DATE
                                                     
1.    V2527-A5 spare Engine         4,210,000             1        February 1998
2.    V2527-A5 spare Engine         4,210,000             1        December 1998
3.    V2527-A5 spare Engine         4,210,000             1        August 1999
4.    V2527-A5 spare Engine         4,210,000             1        November 1999
5.    V2527-A5 spare Engine         4,210,000             1        January 2000
6.    V2527-A5 spare Engine         4,210,000             1        November 2000
7.    V2524-A5 spare Engine         3,675,000             1        December 2000
8.    V2524-A5 spare Engine         3,675,000             1        March 2001
9.    V2524-A5 spare Engine         3,675,000             1        June 2001
                                                 


      Additional spare Engines shall be scheduled for delivery pursuant to
Article 2.1.3 of the Contract.

                               ESCALATION FORMULA

1.    Any Basic Contract Price or other Sum expressed to be subject to
      escalation from a Base Month to a month of delivery or other date of
      determination will be subject to adjustment in accordance with the
      following formula:

      P  =  Pb ( 0.60 L + 0.30 M + 0.10 E )
                  Lo       Mo       Eo

      Where:

            P = The Invoiced Purchase Price or Escalated Sum rounded to the
      nearest dollar.


                                       1.
<PAGE>   28
            Pb    =     The Basic Contract Price or other Sum.

      Lo =  The "Average Hourly Earnings of Aircraft Engine and Engine Parts
            Production Workers" SIC Code 3724 published by the Bureau of Labor
            Statistics in the U.S. Department of Labor for the month preceding
            the Base Month by four months.

      L  =  The "Average Hourly Earnings of Aircraft Engine and Engine Parts
            Production Workers" SIC Code 3724 for the month preceding the month
            of delivery or other date of determination by four months.

      Mo =  The "Producer Price Index, Code 10, For Metals and Metal Products"
            published by the Bureau of Labor Statistics in the U.S. Department
            of Labor for the month preceding the Base Month by four months.

      M  =  The "Producer Price Index, Code 10, For Metals and Metal Products"
            for the month preceding the month of delivery or other date of
            determination by four months.

      Eo =  The "Producer Price Index, Code 5, For Fuel and Related Products
            and Power" published by the Bureau of Labor Statistics in the U.S.
            Department of Labor for the month preceding the Base Month by four
            months.

      E  =  The "Producer Price Index, Code 5, For Fuel and Related Products
            and Power" for the month preceding the month of delivery or other
            date of determination by four months.

2.    The values of the factors 0.60 L and 0.30 M and 0.10 E
                                         L      M          E

            respectively, shall be determined to the nearest fourth decimal
      place. If the fifth decimal is five or more, the fourth decimal place
      shall be raised to the next higher number.

3.    If the U.S. Department of Labor substantially revises the methodology
      of calculation of the indexes referred to in this Exhibit B or
      discontinues any of these indexes, IAE will advise AWA of the
      discontinuation.  After consultation with AWA, IAE will apply a
      substitute for the revised or discontinued index, such substitute index
      to lead in application to the same adjustment result, insofar as
      possible, as would have been achieved by continuing the use of the
      original index as it may have fluctuated had it not been revised or
      discontinued.  Appropriate revision of the formula will be made to
      accomplish this result.  Should AWA disagree with IAE's selection, AWA
      agrees to make payments to IAE for all but the sum related to the use
      of the new indexes.  Both parties agree to negotiate in good faith to
      substitute indexes.

4.    The Basic Contract prices contained in this Exhibit B are subject to
      escalation from a Base Month of July 1988 to the month of delivery using
      Lo, Mo and Eo values for March 1988.


                                       2.
<PAGE>   29
5.    If the application of the formula contained in this Exhibit B results in a
      Purchase Price which is lower than the Basic Contract Price, the Basic
      Contract Price will be deemed to be the Purchase Price for such Supplies.


                                       3.
<PAGE>   30
                                    EXHIBIT C
                             CONTRACT SPECIFICATIONS

                                   EXHIBIT C-1
                    V2500 TURBOFAN ENGINE MODEL SPECIFICATION

      Commercial Type Certificate To Be Obtained      Model V2524 - A5
      by IAE from FAA                                 Spec. No. IAE S24A5

                                SEA LEVEL RATINGS

           (With Ideal Inlet and Exhaust Systems - See GENERAL NOTES)

                                                              Net
                                                            Thrust
                                                              lb
                                               ---------------------------------
      Takeoff Rating (Static)                               23,500
      Maximum Continuous Rating                             21,400


                                   DESCRIPTION

      Type - An axial flow, two spool, turbofan engine with fan and multistage
compressors driven by multistage reaction turbines and designed for operation
with fixed area mixed exhaust system.

      Installation Drawing No. TBD.  The Engine Installation Drawing shows
the Engine envelope and provides dimensions and data for the engine
installation interfaces.

                                  FUEL AND OIL

      Fuel - Specification MIL-T-5624, MIL-T-83133 or ASTM-D-1655 
      Oil - Specification MIL-L-23699 Type II 
      Oil Consumption, Maximum (As measured over a 10-Hour Period) 0.15 US 
      gal/hr

                               STANDARD EQUIPMENT
                            INCLUDED IN ENGINE PRICE

                   FUEL SYSTEM AND CONTROL SYSTEM COMPRISING:

      LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel
Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Relay Box, Electronic
Engine Control, Dedicated Generator, P4.9 Sensors and Manifold, Fuel Metering
Unit, Fuel Supply Pipe.

                           IGNITION SYSTEM COMPRISING:

      Ignition Exciter, Igniter Plug, Ignition Lead (2 each).


                                       1.
<PAGE>   31
                             AIR SYSTEM COMPRISING:

      No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control
Valve, Active Clearance Control Valve Actuator, LP Compressor Bleed Valve Master
Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane
Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids.

                      ENGINE INDICATING SYSTEM COMPRISING:

      Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction
Box.

                                   PRELIMINARY
                             OIL SYSTEM COMPRISING:

      Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil
Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter
Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve, No. 4
Bearing Scavenge Pressure Transducer, IDG Fuel Cooled Oil Cooler.

                                 MISCELLANEOUS:

      Electrical EEC Harnesses - Fan and Core, Nose Spinner, PART - Drains, If
Intertwined With Engine parts, Airframe Accessory Mounting Pads and Drives, PART
- Brackets on Working Flanges for attachment of Aircraft Equipment and EBU, PART
- IDG Piping, where Intertwined with Engine Parts.

                              ADDITIONAL EQUIPMENT


      Available at Increased Price
      Shipping Stand
      Storage Bag
      Condition Monitoring Instrumentation

      Items of ADDITIONAL EQUIPMENT should be ordered at the time of engine
procurement in order to assure availability of this equipment at the time of
engine shipment.

                                  GENERAL NOTES

      The specified Sea Level Static Ratings are ideal and are based on US
Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet
pressure recovery, no fan or compressor air bleed or load on accessory drives, a
mixed exhaust system having no internal pressure losses and with a mixed primary
nozzle velocity coefficient equal to 1.0.

      Takeoff rating is the maximum thrust certified for takeoff operation. The
specified takeoff thrust is available at and below ISA + 56oF (+31oC) ambient
temperature.


                                       2.
<PAGE>   32
      Maximum Continuous Rating is the maximum thrust certified for continuous
operation. The specified thrust is available at and below ISA + 18oF (+10oC)
ambient temperature.

      Maximum Climb Rating is the maximum thrust approved for normal climb
operation.

      Maximum Cruise Rating is the maximum thrust approved for normal cruise
operation.

      Unless otherwise specified, engines will be supplied with the STANDARD
EQUIPMENT listed.

      The Electrical Power Generator Fuel Cooled Oil Cooler and any drains,
brackets and Electrical Power Generator piping, and other external hardware
supplied with the Engine are certified by the FAA-NER to FAR Part 33
requirements.

                                   EXHIBIT C-2
                    V2500 TURBOFAN ENGINE MODEL SPECIFICATION

      FAA Commercial Type Certificate E40NE     Model V2527 - A5
                                                Spec. No. IAE S27A5

                                SEA LEVEL RATINGS
           (With Ideal Inlet and Exhaust Systems - See GENERAL NOTES)

                                                              Net
                                                            Thrust
                                                              lb
                                                 -------------------------------
      Takeoff Rating (Static)                               24,800
      Takeoff Rating (at 0.2 Mn)                            22,020
      Maximum Continuous Rating                             22,240


                                   DESCRIPTION

      Type - An axial flow, two spool, turbofan engine with fan and multistage
compressors driven by multistage reaction turbines and designed for operation
with fixed area mixed exhaust system.

      Installation Drawing No. 4W6199.  The Engine Installation Drawing shows
the Engine envelope and provides dimensions and data for the engine
installation interfaces.

                                  FUEL AND OIL

      Fuel - Specification MIL-T-5624, MIL-T-83133 or ASTM-D-1655 
      Oil - Specification MIL-L-23699 Type II 
      Oil Consumption, Maximum (As measured over a 10-Hour Period) 0.15 US 
      gal/hr


                                       3.
<PAGE>   33
                               STANDARD EQUIPMENT
                            Included in Engine Price
                     (Partial List Comprised of Major Items)

                         FUEL SYSTEM AND CONTROL SYSTEM:

      LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel
Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Relay Box, Electronic
Engine Control (EEC), Dedicated Generator, P4.9 Sensors and Manifold, Fuel
Metering Unit, Fuel Supply Pipe, Fuel Nozzles.

                                IGNITION SYSTEM:

      Ignition Exciter, Igniter Plug, Ignition Lead (2 each) (without power
source).

                                   AIR SYSTEM:

      No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control
Valve, Active Clearance Control Valve Actuator, LP Compressor Bleed Valve Master
Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane
Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids, HPT
Cooling Valve and Solenoid.

                            ENGINE INDICATING SYSTEM:

      Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box,
No. 4 Bearing Scavenge Pressure Transducer, Fuel Filter and Scavenge
Differential Pressure Switches, Scavenge Oil Temperature Sensor, Oil Pressure
Transmitter, Low Oil Pressure Switch, Vibration Transducers and Harness, Oil
Quantity Transmitter, Magnetic Chip Detectors, Fuel Flowmeter.

                                   OIL SYSTEM:

      Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil
Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter
Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve,
Electrical Power Generator Fuel Cooled Oil Cooler.

                                 MISCELLANEOUS:

      EEC Harnesses - Fan and Core, Ignition Supply Harness, General Service
Harness, Nose Spinner, Core Fuel Drains, Airframe Accessory Mounting Pads and
Drives, Various Brackets on working flanges for attachment of Nacelle and
Aircraft Equipment Electrical Power Generator Piping to Cooler, P2T2 Probe.


                                       4.
<PAGE>   34
                              ADDITIONAL EQUIPMENT
                          Available at Increased Price

      Shipping Stand
      Engine Condition Monitoring Instrumentation
      Storage Bag

      Items of ADDITIONAL EQUIPMENT should be ordered at the time of Engine
procurement in order to assure availability of this equipment at the time of
Engine shipment.

                                  GENERAL NOTES

      The specified Sea Level Static Ratings are ideal and are based on US
Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet
pressure recovery, no fan or compressor air bleed or load on accessory drives, a
mixed exhaust system having no internal pressure losses and with a mixed primary
nozzle velocity coefficient equal to 1.0.

      Takeoff rating is the maximum thrust certified for takeoff operation. The
specified takeoff thrust is available at and below ISA + 56oF (+31oC) ambient
temperature.

      Maximum Continuous Rating is the maximum thrust certified for continuous
operation. The specified thrust is available at and below ISA + 18oF (+10oC)
ambient temperature.

      Maximum Climb Rating is the maximum thrust approved for normal climb
operation.

      Maximum Cruise Rating is the maximum thrust approved for normal cruise
operation.

      Unless otherwise specified, engines will be supplied with the STANDARD
EQUIPMENT listed.

      The Electrical Power Generator Fuel Cooled Oil Cooler and any drains,
brackets and Electrical Power Generator piping, and other external hardware
supplied with the Engine are certified by the FAA-NER to FAR Part 33
requirements.

                                   EXHIBIT C-3
                    V2500 TURBOFAN ENGINE MODEL SPECIFICATION

      FAA Commercial Type Certificate E40NE     Model V2533 - A5
                                                Spec. No. IAE S33A5


                                       5.
<PAGE>   35
                            SEA LEVEL STATIC RATINGS

             (With Ideal Inlet and Exhaust Systems - See GENERAL NOTES)

                                                              Net
                                                            Thrust
                                                              lb
                                                --------------------------------
      Takeoff Rating                                        31,400
      Maximum Continuous Rating                             26,950


                                   DESCRIPTION

      Type - An axial flow, two spool, turbofan engine with fan and multistage
compressors driven by multistage reaction turbines and designed for operation
with fixed area mixed exhaust system.

      Installation Drawing No. 4W6199. The Engine Installation Drawing shows the
Engine envelope and provides dimensions and data for the engine installation
interfaces.

                                  FUEL AND OIL

      Fuel - Specification MIL-T-5624, MIL-T-83133 or ASTM-D-1655 
      Oil - Specification MIL-L-23699 Type II 
      Oil Consumption, Maximum (As measured over a 10-Hour Period) 0.15 US 
      gal/hr

                               STANDARD EQUIPMENT
                            Included in Engine Price
                     (Partial List Comprised of Major Items)

                         FUEL SYSTEM AND CONTROL SYSTEM:

      LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel
Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Relay Box, Electronic
Engine Control (EEC), Dedicated Generator, P4.9 Sensors and Manifold, Fuel
Metering Unit, Fuel Supply Pipe, Fuel Nozzles.

                                IGNITION SYSTEM:

      Ignition Exciter, Igniter Plug, Ignition Lead (2 each) (without power
source).

                                   AIR SYSTEM:

      No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control
Valve, Active Clearance Control Valve Actuator, LP Compressor Bleed Valve Master
Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane
Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids, HPT
Cooling Valve and Solenoid.


                                       6.
<PAGE>   36
                            ENGINE INDICATING SYSTEM:

      Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box,
No. 4 Bearing Scavenge Pressure Transducer, Fuel Filter and Scavenge
Differential Pressure Switches, Scavenge Oil Temperature Sensor, Oil Pressure
Transmitter, Low Oil Pressure Switch, Vibration Transducers and Harness, Oil
Quantity Transmitter, Magnetic Chip Detectors, Fuel Flowmeter.

                                   OIL SYSTEM:

      Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil
Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter
Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve,
Electrical Power Generator Fuel Cooled Oil Cooler.

                                 MISCELLANEOUS:

      EEC Harnesses - Fan and Core, Ignition Supply Harness, General Service
Harness, Nose Spinner, Core Fuel Drains, Airframe Accessory Mounting Pads and
Drives, Various Brackets on working flanges for attachment of Nacelle and
Aircraft Equipment Electrical Power Generator Piping to Cooler, P2T2 Probe.

                              ADDITIONAL EQUIPMENT
                          Available at Increased Price

      Storage Bag
      Shipping Stand
      Engine Condition Monitoring Instrumentation

      Items of ADDITIONAL EQUIPMENT should be ordered at the time of Engine
procurement in order to assure availability of this equipment at the time of
Engine shipment.

                                  GENERAL NOTES

      The specified Sea Level Static Ratings are ideal and are based on US
Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet
pressure recovery, no fan or compressor air bleed or load on accessory drives, a
mixed exhaust system having no internal pressure losses and with a mixed primary
nozzle velocity coefficient equal to 1.0.

      Takeoff rating is the maximum thrust certified for takeoff operation. The
specified takeoff thrust is available at and below ISA + 27oF (15oC) ambient
temperature.

      Maximum Continuous Rating is the maximum thrust certified for continuous
operation. The specified thrust is available at and below ISA + 18oF (10oC)
ambient temperature.

      Maximum Climb Rating is the maximum thrust approved for normal climb
operation.

      Maximum Cruise Rating is the maximum thrust approved for normal cruise
operation.


                                       7.
<PAGE>   37
      Unless otherwise specified, engines will be supplied with the STANDARD
EQUIPMENT listed.

      The Electrical Power Generator Fuel Cooled Oil Cooler and any drains,
brackets and Electrical Power Generator piping, and other external hardware
supplied with the Engine are certified by the FAA-NER to FAR Part 33
requirements.


                                       8.
<PAGE>   38
                                    EXHIBIT D
                                 PRODUCT SUPPORT


                                       1.
<PAGE>   39
                                 PRODUCT SUPPORT
                              FOR THE V2500 ENGINE
                        IAE INTERNATIONAL AERO ENGINES AG


                                       2.
<PAGE>   40
                                    EXHIBIT D
                                 PRODUCT SUPPORT
                              FOR THE V2500 ENGINE
                        IAE INTERNATIONAL AERO ENGINES AG


I.    INTRODUCTION

      International Aero Engines AG (IAE) will make the following support
personnel and services available to the V2500 engine customer: Flight Operations
Engineering, Customer Performance Engineering, Field Representatives, Customer
Maintenance Support, Product Support Engineering, Powerplant Maintenance
Engineering, Field Operations Data Analysis, Human Engineering, Repair Services,
Warranty Administration, Maintenance Facilities Planning, Tooling and Support
Equipment Services, Product Support Technical Publications, Customer Training,
Spare Parts Support and Engine Overhaul and Repair Service Centers.

      To make these support services readily available to you, our customer, in
the most efficient manner the Customer Support Group has been established and
assigned primary responsibility within IAE for customer contact and
communications. A Manager, Customer Support Engineer is assigned to maintain
direct liaison with each individual Customer. A description of the various
product support services available to each customer follows.

      IAE reserves the right to withdraw or modify the services described herein
at any time at its sole discretion. No such withdrawal or modification shall
diminish the level of services and support which the Customer may be entitled to
receive with respect to V2500 engines for which an acceptable order has been
placed with IAE or with respect to aircraft with installed V2500 engines for
which a firm and unconditional order has been placed with the aircraft
manufacturer, prior to the announcement of any such withdrawal or modification.

II.   CUSTOMER SUPPORT GROUP

      CUSTOMER SUPPORT MANAGER

            The Customer Support Manager provides a direct liaison between the
airline customer's Engineering, Maintenance, Logistics and Financial
organizations and the corresponding functions within IAE. The Customer Support
Manager assigned to each airline is responsible for coordinating and monitoring
the effort of the Product Support Department functional organization to achieve
timely and responsive support for the airline.

      The Customer Support Manager provides the following specific services to
the airline customer:

                  -     Technical recommendations and information.

                  -     Refurbishment, Modification and Conversion program
            planning assistance.


                                       3.
<PAGE>   41
      -     Coordination of customer repair, maintenance and logistics
            requirements with the appropriate Product Support functional groups.

      -     Assist with preparation of all engine warranty/service policy
            claims as may be requested by AWA.

            The Customer Support Manager will represent the airline customer in
      IAE internal discussions to ensure that the best interests of the customer
      and IAE are considered when making recommendations to initiate a program,
      change or improvement in the V2500 engine.

      FIELD REPRESENTATIVES

      IAE Field Representatives provide the following services to the airline
customer:

            -     24 Hour Support

            -     Maintenance Action Recommendations

            -     Daily Reporting on Engine Technical Problems

            -     On-The-Job Training to include hands-on maintenance task as
      requested by AWA

            -     Service Policy Preparation Assistance

            -     Prompt Communication with IAE

            In addition to the two full time dedicated IAE Field Representatives
      already identified, IAE will work with AWA, once AWA outstation
      requirements are identified, to establish a Customer Support Plan to
      provide adequate introductory coverage for the V2500.

      ENGINE MAINTENANCE SUPPORT SERVICE

      Field Representatives assist airline customer personnel in the necessary
preparation for engine operation and maintenance. The Representative, teamed
with Customer Support Manager will work closely with the airplane manufacturer's
field support team particularly during the initial period of aircraft operation.
Field Representatives are in frequent contact with the IAE offices on technical
matters. Information and guidance received from the home office is transmitted
promptly to the airline which allows the airline to share in all related
industry experience.

      The practice permits immediate use of the most effective procedures and
avoidance of unsuccessful techniques. The IAE office contact ensures that IAE
Field Representatives know, in detail, the latest and most effective engine
maintenance procedures and equipment being used for maintenance and overhaul of
V2500 engines. They offer technical information and 


                                       4.
<PAGE>   42
recommendations to airlines personnel on all aspects of maintenance, repair,
assembly, balancing, testing, and spare parts support of IAE.

      ON-THE-JOB TRAINING

      Field Representatives will conduct on-the-job training for the airline's
maintenance personnel. This training continues until the maintenance personnel
have achieved the necessary level of proficiency. Training of new maintenance
personnel will be conducted on a continuing basis.

      SERVICE POLICY ADMINISTRATION

      Field Representatives will provide administrative and technical assistance
in the application of the IAE Engine and Parts Service Policy to ensure
expeditious and accurate processing of airline customer claims.

      CUSTOMER TRAINING

      IAE Customer Training offers airline customers the following support:

            -     Technical Training at Purpose Built Facilities

            -     On-site Technical Training

            -     Technical Training Consulting Service

            -     Training Aids and Materials

      TRAINING PROGRAM

      The IAE Customer Training Center will have an experienced full-time
training staff which conducts formal training programs for airline customers'
maintenance, training and engineering personnel. The standard training programs
are designed to prepare customer personnel, prior to the delivery of the first
aircraft, to operate and maintain the installed engines. Standard courses in
engine operation, line maintenance, heavy maintenance, performance and
trouble-shooting are also available throughout the production life of the
engine. The courses utilize the latest teaching technology, training aids and
student handouts. Customer Training will coordinate the scheduling of specific
courses as required. The following is the curriculum of standard courses for
IAE. On-site technical training, technical training consulting services and
customized courses may be provided upon customer request and subject to separate
contractual arrangements.

      MAINTENANCE AND PROVISIONING PLANNER'S COURSE

      This two day course is designed specifically for experienced gas turbine
personnel who will be responsible for planning and provisioning for maintenance
on the V2500 engine. Discussions are concentrated in the following subject
areas:


                                       5.
<PAGE>   43
            -     Engine construction features internal and external hardware.

            -     Engine systems operation, major components accessibility
                  for removal/replacement.

            -     Maintenance concepts, repair and replacement requirements
                  and special tooling.

      The course is normally conducted in conjunction with two to three days of
consultations with IAE Spare Parts personnel or Support Equipment Personnel to
acquaint the customer with that Group's procedures and services including
computerized services.

      STAFF ORIENTATION

      This course is designed to familiarize key staff, supervisory and
operations planning personnel with engine construction features, fundamental
systems operation, performance characteristics, operational procedures and
general maintenance practices.

      FLIGHT CREW FAMILIARIZATION

      This course is designed to provide flight crew personnel with classroom
familiarization training in the following subject areas:

            -     Basic Engine Design Features

            -     Engine Systems and Airframe Interface

            -     Ground Operational Procedures

            -     Malperformance Analysis Concepts

      V2500 GENERAL FAMILIARIZATION

      This course is designed to provide training for customer maintenance
planning, engineering and instructor personnel in the following subject areas:

            -     Construction Features

            -     Applied Performance

            -     Engine Systems

            -     Installed/Uninstalled Operation

            -     Maintenance Concepts

            Note: This course contains no "hands-on" training.


                                       6.
<PAGE>   44
      ENGINE TROUBLESHOOTING

      This course designed to develop the skills of V2500 experienced personnel
in detecting, analyzing and correcting malfunctions in the V2500 engine systems
and the engine/airframe interfaces. Classroom and shop training are provided in
the following subject areas:

            -     Troubleshooting Philosophy

            -     Systems Review

            -     Systems Troubleshooting

            -     Systems/Component Isolation Procedures

            -     Performance Parameter Analysis

            -     Practical Application of Troubleshooting Procedures

      V2500 FAMILIARIZATION AND NON-FLIGHT PERFORMANCE

      This course is designed specifically for power plant engineering,
condition monitoring and instructor personnel. Performance characteristics are
studied in-depth with consideration given to basic performance losses
attributable to module deterioration. It does not include specific, in-depth,
module performance analysis.

      LINE MAINTENANCE AND TROUBLESHOOTING

      This course is designed for key line maintenance and troubleshooting
personnel who have not received previous formal training on the V2500 engine.
The classroom phases provide the student with the information essential for
timely completion of line maintenance activities. The training focuses on the
following subject areas:

            -     Engine Description

            -     Systems operation

            -     Applied Performance

            -     Ground Operations

            -     Troubleshooting Procedures

            -     Practical Phase Line Maintenance Tasks

      V2500 FAMILIARIZATION AND MODULAR MAINTENANCE

      Provides experienced heavy maintenance personnel with engine modular
disassembly and assembly training. The training is concentrated in the following
subject areas:


                                       7.
<PAGE>   45
      -     Engine Description Overview

      -     Engine Systems Overview

      -     Heavy Maintenance Tasks*

      *     Course duration and "hands-on" coverage are contingent on the
            availability of an engine and required tooling.

III.  CUSTOMER SERVICES

      The Customer Services Group is dedicated to providing prompt and accurate
assistance to you, our V2500 airline customer. The Customer Services Group
provides the following categories of Assistance and Support to the V2500 airline
customer:

      -     Engine Warranty Services

      -     Maintenance Center Support

      -     Maintenance Facilities Planning Service

      -     Tooling and Support Equipment Services

      -     Product Support Technical Publications

      -     Lease Engine Program Support

      ENGINE WARRANTY SERVICES

      Engine Warranty Services will provide the following support for the V2500
engine airline customer:

      -     Prompt administration of claims concerning Engine Warranty, Service
Policy, other support programs and Guarantee Plans.

      -     Investigation of part condition and part failure.

      -     Material provisioning administration for Controlled Service Use
programs and other material support.

      PROMPT ADMINISTRATION

      Each airline customer is assigned a Warranty Analyst whose job is to
provide individual attention and obtain prompt and effective settlements of
Warranty and Service Policy claims. A typical claim properly submitted is
generally settled, including issuance of applicable credit memo, within thirty
days. Experience generated by much of the data derived from such claims often
enables IAE to monitor trends in operating experience and to address and often
eliminate potential problems.


                                       8.
<PAGE>   46
      INVESTIGATION AND REPORTS

      Parts returned to IAE pursuant to the terms of the Service Policy are
investigated in appropriate detail to analyze and evaluate part condition and
cause of part failure. A report of findings is prepared and forwarded to the
airline customer and to all IAE departments involved. In the case of vendor
parts, the vendor is promptly informed. Reports often include recommendations to
preclude repetition of the problem.

      CONTROLLED SERVICE USE PROGRAMS AND MATERIAL SUPPORT

      IAE shall assume responsibility for the planning, sourcing, scheduling and
delivery of Controlled Service Use material, warranty replacement material,
service campaign, material and program support material subject to the terms of
special contracts with customers.

      Urgent customer shipments, both inbound and outbound, are monitored,
traced, routed and expedited as required. The receipt and movement of customer
owned material returned to IAE is carefully controlled, thus assuring an
accurate accounting at all times.

      MAINTENANCE CENTER SUPPORT

      IAE will arrange for the establishment of Maintenance Centers which will
be available to accomplish repairs, modifications and conversions, as well as
the complete overhaul of the V2500 engine subject to IAE's standard terms and
conditions for such work.

      Through the use of the IAE established Maintenance Centers and its
capabilities, an operator can minimize or eliminate the need for investment in
engine support areas depending on the level of maintenance he elects the
Maintenance Center to perform. Savings in specific engine support areas, such as
spare parts inventory, maintenance and test tooling, support equipment and test
facilities, can be demonstrated. Use of the Maintenance Center can also minimize
the need for off-wing maintenance and test personnel with their associated
overhead.

      MAINTENANCE FACILITIES PLANNING SERVICE

      Maintenance Facilities Planning Service offers the following support to
IAE customer:

            -     General Maintenance Facility Planning Publications

            -     Customized Facility Plans

            -     Maintenance Facility and Test Cell Planning Consultation
Services

      Maintenance Facilities Planning Service provides general and customized
facility planning data and consultation services. Facility Planning Manuals for
the V2500 engine will present the maintenance tasks, facility equipment and
typical departments floor plans showing arrangement of equipment required to
accomplish the tasks for all levels of maintenance. The Facility Equipment
Manual is a catalogue of standard facility equipment such as lathes, process
tanks, hoists, cranes, etc., which is suitable for use in the maintenance and
testing of IAE engines.


                                       9.
<PAGE>   47
      Customized facility planning services and consulting services are offered
subject to separate contractual arrangements. Customized facility plans are
developed to meet the requirements of customers' specific fleet sizes,
activities and growth plans. The plans identify floor space, facility equipment,
utilities and manpower requirements. on-site surveys are conducted as a part of
customized plan development to determine the adaptability of existing facilities
and equipment for the desired maintenance program. These plans provide floor
plan layouts to show recommended locations for work stations, major equipment,
marshaling and storage areas, workflow patterns, and structural and utility
requirements to accommodate all the engine models that are maintained in the
customer's shop. The Maintenance Facilities Planning Service also provides
consultant services which are specifically related to the development of engine
test cells, and the adaptation of existing maintenance facilities to accommodate
expanding production requirements and/or new or additional IAE models.

      TOOLING AND SUPPORT EQUIPMENT SERVICES

      The Tooling and Support Equipment Services Group assists the customer by
providing the following services:

      -     Support Equipment Manufacturing/Procurement Documentation

      -     Engine Accessory Test Equipment and Engine Transportation Equipment 
            Specifications

      -     Support Equipment Logistics Planning Assistance

      SUPPORT EQUIPMENT DOCUMENTATION

      The tooling and Support Equipment Services Group designs the special
support equipment required to disassemble, assemble, inspect, repair and test
IAE engines. Special support equipment design drawings and Support Equipment
Master Data Sheets, which describe how to use the support equipment, are
supplied to customers in the form of 35mm aperture cards. Support equipment
designs are kept current with engine growth, and tool Bulletins are issued to
customers as part of continuing configuration management service. Updated Design
and Master Data Sheets Aperture Cards and Tool Bulletins are periodically
distributed to all IAE customers.

      ENGINE ACCESSORY TEST EQUIPMENT AND ENGINE TRANSPORTATION EQUIPMENT
REQUIREMENTS

      Engine accessory test equipment and engine transportation equipment
general requirements and specifications are defined and made available to IAE
customers. If requested, the Tooling and Support Equipment Group will assist
customers in the definition of engine accessory test and engine transportation
equipment required for specific IAE needs.


                                      10.
<PAGE>   48
      SUPPORT EQUIPMENT LOGISTICS PLANNING ASSISTANCE

      The Tooling and Support Equipment Group will provide, at the customer's
request, special support equipment lists which reflect the customer's unique
requirements such as mix of engine models and desired level of maintenance to
aid in support equipment requirements planning.

      PRODUCT SUPPORT TECHNICAL PUBLICATIONS

      IAE and its subcontractors provide the required publications and
maintenance information as described below to support the maintenance and
modification requirements of the airline customer. The publications are prepared
in general accordance with Air Transport Association of America (ATA)
Specification No. 100 and will be available to the airline customer prior to the
delivery of the first aircraft. Customization services and media options will be
available for procurement at established prices.

      ON-WING MAINTENANCE DATA

      IAE supplies the airplane manufacturer with all the necessary information
required to perform "On-Aircraft" engine maintenance, troubleshooting, and
servicing. This information is developed through close coordination between the
airplane manufacturer and IAE and is integrated by the airplane manufacturer
into his maintenance publications.

      TECHNICAL PUBLICATIONS

      Listed and described below are the publications that will be provided to
support the airline customer's maintenance program:

      ENGINE MANUAL

      The Engine Manual is a document which will be structured in accordance
with ATA 100 section 2-13-0 with JEMTOSS applied in accordance with section
2-13-14. Potential customer applications will be applied. The manual will
provide in one place the technical data requirements for information needed to
maintain the engine and the maximum potential number of parts that could,
regardless of design responsibility, remain with the engine when it is removed
from the airplane. Additionally the manual shall include coverage of
interrelated parts (e.g. thrust reverser, cowlings, mounts, etc.) that whilst
they can stay with the airplane when the engine is removed can be removed for
maintenance purpose in lieu of individual component maintenance manuals.

      Customized Engine Manuals can be prepared to incorporate customer
originated material related to data or procedures originated by or peculiar to a
specific IAE customer. Such customized Manuals are provided by separate
contractual arrangements. Customer material authorized by the appropriate
Airworthiness Authorities can be incorporated into customized Manuals and will
be identified in the margin by the customer's initials.


                                      11.
<PAGE>   49
      STANDARD PRACTICES MANUAL

      The Standard Practices Manual supplements the Engine Manual by providing,
in a single document, all IAE recommended or approved general procedures
covering general torques, riveting, lockwiring, cleaning policy, inspection
policy standard repairs, etc., and marking of parts.

      ILLUSTRATED PARTS CATALOG

      The Illustrated Parts Catalog will be structured in accordance with ATA
2-14-0 and is a document which is used in conjunction with the Engine Manual for
the identification and requisitioning of parts and assemblies. Its ATA structure
is to be compatible with the Engine Manual Structure. Additionally the manual
shall include coverage of interrelated parts (e.g. thrust reverser, cowlings,
mounts, etc.) that whilst they can stay with the airplane when the engine is
removed can be removed for maintenance purpose in lieu of individual component
maintenance manuals.

      IAE PROPRIETARY COMPONENT MAINTENANCE MANUALS

      These manuals will be structured in accordance with ATA 2-5-0 and will
cover data for chapters other than 71, 72, and 78.

      SUBCONTRACTOR COMPONENT MAINTENANCE MANUALS

      These manuals will be structured in accordance with ATA 2-5-0 and are
prepared directly by the accessory manufacturers. All accessory data is subject
to IAE prepublication review and approval.

      ENGINE AND ACCESSORY COMPONENT SERVICE BULLETINS

      Each Engine and Accessory Component Service Bulletin will be produced in
accordance with ATA 2-7-0. They will cover planning information, engine or
component effectivity, reason for Bulletin, recommended compliance, manpower
requirements, and tooling information relating to parts repair or modification.
Subcontractor prepared Accessory Component Service Bulletins are reviewed by IAE
prior to issuance. Alert Service Bulletins will be issued on all matters
requiring the urgent attention of the airline customer and will generally be
limited to items affecting safety. The Bulletin will contain all the necessary
information to accomplish the required action.

      OPERATING INSTRUCTIONS

      Engine operating instructions are presented in the form of General
Operating Instructions supplemented by V2500 Specific Engine Operating
Instructions which provide operating information, procedures, operating curves
and engine limits.


                                      12.
<PAGE>   50
      FACILITIES PLANNING AND FACILITY EQUIPMENT MANUALS

      The Facilities Planning Manual outlines the requirements for
engine/component overhaul, maintenance, and test facilities in terms of basic
operations, processes, time studies and equipment. The Facility Equipment Manual
lists and describes the facility equipment used for engine maintenance, overhaul
and repair.

      SUPPORT EQUIPMENT NUMERICAL INDEX

      The Indexes, prepared for each major engine model, provide a listing, in
numeric sequence, by maintenance level, of all IAE ground support equipment
required to maintain and overhaul the engine. The Listings are cross-indexed to
the applicable engine dash model and to the chapter and section of the Engine
Manual.

      PUBLICATIONS INDEX

      This index contains a listing of available technical manuals covering
components of the V2500 Nacelle.

      SERVICE BULLETIN INDEX

      This index will be in a format and on a revision schedule as determined by
IAE.

      COMPUTER SOFTWARE MANUAL

      Data, will be supplied in accordance with ATA 102 revision 2 except where
such data are prohibited due to proprietary or Government restrictions.

      REVISION SERVICES

      Regular, temporary, and "as required" revisions to technical publications
will be made during the service life of IAE equipment. The utilization of
advanced techniques and equipment provides the airline customer with expedited
revision service.

      DISTRIBUTION MEDIA OPTIONS

      IAE will provide IAE technical publications to the airline customer on
roll microfilm at 24:1 reduction or magnetic tape. Media options such as
microfilm at 36:1 reduction, microfiche, and two side or one-sided paper copy of
reproducible quality will be available for procurement at established prices.

      LEASE ENGINE PROGRAM SUPPORT

      An engine lease program will be made available to V2500 Airline Customers
subject to IAE's standard terms and conditions of lease. Pool spares will be
stationed at selected locations to assure emergency protection against
aircraft-on-ground (AOG) situations or to provide supplemental support during
"zero spares" conditions. The lease engines will be incorporate the highest
maintenance standards and configuration levels. Availability will be subject to
prior 


                                      13.
<PAGE>   51
demand, however, the program logistics will be continually reviewed to assure
the most effective deployment of available pool engines.

IV.   TECHNICAL SUPPORT GROUP

      The Technical Support Group provides the following categories of Technical
Support to the airline customer:

      -     Product Support Engineering

      -     Powerplant Maintenance Engineering

      -     Customer Performance Engineering

      -     Diagnostic System Engineering

      -     Human Engineering

      -     Flight Operations Engineering

      -     Repair Services

      -     Field Operations Data Analysis

      PRODUCT SUPPORT ENGINEERING

      Product Support Engineering is responsible for the overall technical
support to the customers. The following services are provided:

      -     Technical Problem Identification/Corrective Action Implementation

      -     Technical Communication

      -     Engine conversion Program Definition and Management

      -     Engine Upgrade and Commonality Studies

      -     Engine Hardware Retrofit Programs

      -     Controlled Service Use Programs and Material Support

      -     Engine Maintenance Management Plans

      -     Engine Incident Investigation Assistance

      TECHNICAL SUPPORT

      Technical information supplied through IAE Field Representatives, Customer
Support Managers, customer correspondence and direct meetings with airlines'
representatives permits 


                                      14.
<PAGE>   52
assessment of the factors involved in technical problems and their impact on
engine reliability and operating costs. Resolution of these problems is
coordinated with responsible groups within IAE and the necessary corrective
action is defined. In certain situations the corrective action involves the
establishment of Service Evaluation programs for proposed modifications, and the
establishment of warranty assistance programs in conjunction with the IAE
Warranty Administration Department. Product Support Engineering will assist
customers in the implementation of recommended corrective action and
improvements principally through official IAE technical communications, and
direct customer contact.

      TECHNICAL COMMUNICATIONS

      Product Support Engineering is responsible for the release of technical
communications. Primary communication modes involves release of limits and
procedures through engine and maintenance manual revisions and the requirements
associated with engine upgrade and/or conversion, durability and performance
improvements, and problem resolution through Service Bulletins is provided by
All Operator Letters and/or wires or direct technical written response to
individual customer inquiries.

      ENGINE CONVERSION PROGRAMS

      Product Support Engineering defines minimum configuration levels for
conversion of service engine models. They serve to assist the customer with the
implementation of conversion programs into existing fleets by providing
preliminary planning cost estimates and technical planning information regarding
tooling, material and instructional requirements. Conversion programs are
monitored for problem areas and Product support Engineering initiates and
implements corrective action as may be necessary.

      ENGINE HARDWARE RETROFIT PROGRAMS

      Engine campaigns are carried out to provide retrofit of engine hardware
configuration when required on delivered engines. This involves assisting in the
marshaling of hardware, special tools, manpower and the scheduling of engine and
material to campaign sites.

      ENGINE MAINTENANCE MANAGEMENT PLANS

      Planning documents, tailored for individual operators, are developed to
serve as Engine Maintenance Management Program criteria. These are directed
toward the objective of ensuring cost-effective operation with acceptable
post-repair test performance, providing engine reliability to achieve maximum
time between shop visits, and minimizing the adverse effects to operation of
inflight shutdowns and delays/cancellations. Through the institution of specific
maintenance recommendations, proper engine performance, durability, and hot
section parts lives can be achieved.

      ENGINE INCIDENT INVESTIGATION ASSISTANCE

      Assistance is provided to an airline in conducting engine incident
investigations in responding to the requirements of the appropriate Air
Worthiness authority.


                                      15.
<PAGE>   53
         LINE MAINTENANCE AND TROUBLESHOOTING

         Line Maintenance and Troubleshooting Seminars can be conducted at the
IAE Training Center with the objective of improving line maintenance
effectiveness fleetwide. Specialized training on V2500 line maintenance and
troubleshooting can be provided through on-site workshops by special contractual
arrangement.

         Troubleshooting support is provided primarily through powerplant
troubleshooting procedures which are published in IAE and airframe manufacturers
manuals. When an airline encounters an engine problem and corrective action
taken has not been effective, more direct support in troubleshooting and
maintenance can also be provided to the customers line maintenance personnel.
Instructions on V2500 powerplant troubleshooting and maintenance can also be
provided to customers line maintenance personnel.

         AIRLINE SHOP MAINTENANCE

         Reviews of shop practices and procedures of individual airlines can be
conducted to determine the most efficient and cost-effective methods for
maintenance and repair of the V2500 in the environment in which the airline must
maintain that engine.

         POWERPLANT MAINTENANCE ENGINEERING

         Powerplant Maintenance Engineering covers responsibility for maximizing
engine maintainability, establishing maintenance concepts and requirements and
providing maintenance support plant for IAE. This group provided the following
services:

         -        Definition of Maintenance Tasks and Resource Requirements

         -        Planning Guides

         MAINTENANCE ENGINEERING

         Powerplant Maintenance Engineering conducts design reviews and
comprehensive maintenance analysis of new engine designs and engine design
changes to maximize engine maintainability consistent with performance,
reliability, durability and life cycle cost considerations. Maintenance
concepts, requirements and tasks are established to minimize maintenance costs.
This group represents the customer's maintainability interests in internal IAE
operations and upon request will assist the customer in resolving specific
maintenance task problems.

         PROGRESSIVE MAINTENANCE PLANNING

         Powerplant Maintenance Engineering also provides Planning Guides based
upon Maintenance Task Analysis. The guides present engine maintenance
requirements, their subordinate tasks and the required resources to accomplish
on-aircraft engine maintenance and the off-aircraft repair of engines by modular
section/build group replacement. Maintenance requirements are also presented for
the refurbishment of modular section/build group by parts replacement, the
complete repair of parts, the refurbishment of accessory components and for


                                      16.
<PAGE>   54
engine testing. The data in the Planning Guides is presented in a manner that is
primarily intended to assist new operators by providing a phased introduction of
new engines into their shops and to capitalize on the design maintainability
features for the engine when they are developing their maintenance plans.

         Powerplant Maintenance Engineering will assist new operators in
planning a gradual, technically feasible, and economically acceptable expansion
from line maintenance of installed engines through the complete repair of parts
and accessory components.

         CUSTOMER PERFORMANCE ENGINEERING

         Customer Performance Engineering provides for the following types of
technical assistance to the airline customer:

         -        Engine Performance Analysis Computer Programs for Test Cell
Use

         -        Test Cell Correlation Analysis and Correction Factors

         -        Engine Stability Procedures and Problem Analysis

         Although much of the above support is provided in the form of
procedures, data and recommendations in various publications, the group also
answers inquiries of a performance nature which are forwarded to IAE by
individual customers.

         ENGINE PERFORMANCE ANALYSIS

         Technical support is provided in a number of areas related to
operational suitability including the development of the test requirements and
performance limits for the Adjustment and Test Section of the Engine Manual.
Computer programs that will assist the operator in analyzing engine performance
using test cell data can be provided subject to IAE then current standard
license fees and Terms and Conditions.

         TEST CELL CORRELATION

         Technical assistance is provided to the customer for developing
appropriate corrections to be used for specific test configurations at customer
owned test cell facilities. Reports are provided presenting correlation analyses
and IAE recommended test cell corrections which permit comparison of the
performance of customer tested engines with the respective Engine Manual limits
and guarantee plan requirements.

         ENGINE STABILITY

         Technical support is provided to ensure that engine stability and
starting reliability are maintained. Service evaluation programs for proposed
improvements are initiated and monitored to determine their effectiveness. In
addition, problems relating to engine control systems which impact engine
stability and performance are analyzed.



                                      17.
<PAGE>   55
         DIAGNOSTIC SYSTEMS ENGINEERING

         Diagnostic Systems Engineering is responsible for the technical support
of customer acquisition of inflight engine data and the assessment of engine
performance through the use of that data. Diagnostic Systems Engineering
personnel provide the following services:

         -        Guidance to help customers define their engine monitoring
system requirements.

         -        Development of hardware specifications and computer programs
(by separate contractual arrangement) to satisfy engine diagnostic requirements.

         -        Coordination of all IAE airborne diagnostic support activity.

         GUIDANCE IN DEFINING ENGINE MONITORING SYSTEMS REQUIREMENTS

         Diagnostic Systems Engineering can provide consultation services to
assist the customer in defining his engine condition and performance monitoring
requirements and in selection of appropriate hardware and software systems to
meet those requirements and options between the customer, airframe manufacturer,
and Airborne Integrated Data System (AIDS) manufacturer.

         DEVELOPMENT AND COORDINATION

         Diagnostic Systems Engineering personnel can develop hardware
specification and make computer software available to accomplish Engine
Condition Monitoring (ECM) and performance analysis of engine modules using AIDS
data. Engine condition monitoring procedures, of both the manual and
computerized variety can also be developed and provided in support of the
customer's selected method of engine condition monitoring. Computer software
will be provided to the customer subject to IAE's then current standard license
fees and Terms and Conditions.

         Diagnostic Systems Engineering personnel also coordinate activities of
cognizant functional groups at IAE to provide engine related information to the
customer, airframe manufacturer, and AIDS equipment vendor during the planning,
installation, and operation of AIDS.

         HUMAN ENGINEERING

         Human Engineering supplies data on task time and skill requirements
necessary for accomplishing maintenance procedures.

         Task data provided includes estimates of the man-hours, elapsed time
and job skills necessary to accomplish maintenance tasks as described in IAE's
Manual and Service Bulletins. Data is supplied for "on" and "off" aircraft
maintenance tasks up to modular disassembly/assembly. Additional selected task
data can be supplied on disassembly/assembly to the piece part level and on
parts repair. In addition, the group can help solve problems related to skill
requirements, body dimensions, or excessive man-hours encountered in
accomplishing maintenance tasks.



                                      18.
<PAGE>   56
         FLIGHT OPERATIONS ENGINEERING

         Flight Operations Engineering provides the airline customer with the
following technical assistance concerning installed engine operations:

         -        Introduction of new equipment

         -        Problem resolution and assistance with in-service equipment

         -        Contractual commitment and development program support

         -        Publication of engine operations literature and performance
aids

         NEW EQUIPMENT

         In accordance with customer needs, a Flight Operations Engineer can
provide on-site assistance in the training of operations personnel and help in
solving engine operational problems that might arise during the initial
commercial service period. Such assistance can include participation in initial
delivery flights, engine operational reviews, and flight crew training activity.

         PROBLEM RESOLUTION - IN-SERVICE EQUIPMENT

         In accordance with a mutually agreed upon plan, a Flight Operations
Engineer can perform cockpit observations to identify or resolve engine
operating problems and to assess installed engine performance.

         CONTRACTUAL SUPPORT AND DEVELOPMENT PROGRAMS

         As required, a Flight Operations Engineer can assist in evaluating
installed engine performance relative to contractual commitments and engine
improvements which have an impact on engine operations.

         PUBLICATION SUPPORT

         Flight Operations Engineering is responsible for the issuance of
Propulsion System Operating Instructions and correspondence pertaining to
inflight engine operations. Such material is coordinated with the airframe
manufacturers as required.

         Special Presentations and Reports are also issued, as required, to
support the activity described above.

         REPAIR SERVICES

         Repair Service provides the following services to the airline
customers:

         -        Coordinated Repair Development Activity

         -        Customer Assistance on Repair Procedures and Techniques



                                      19.
<PAGE>   57
         -        Qualification of Repair Sources

         -        Repair Workshops

         -        Repair Development List

         COORDINATION OF REPAIR DEVELOPMENT

         The Repair Services Engineer provided direct contact with all sources
that initiate repair schemes. The Engineer coordinates with representatives of
Engineering and Support Services disciplines in identifying repair needs,
evaluating various repair options and establishing repair development procedures
and schedules. The Engineer participates in setting repair evaluation and
approval requirements. When the repair is approved and substantiating data is
documented, the Repair Services Engineer releases the repair to the Engine
Manual.

         TECHNICAL ASSISTANCE

         The Repair Services Engineer provides daily communications with airline
customers via technical responses to inquiries direct from the airline or
through our Field Service Representative office at the airline facility. In
addition, repair engineer make periodic visits to airline repair facilities to
discuss new repairs under development, answer specific questions posed by the
particular facility and review actual parts awaiting a repair/scrap decision.
Occasionally repair engineers make special visits to customer facilities to
assist in training customer personnel in accomplishing particularly complex
repairs.

         QUALIFICATION OF REPAIR SOURCES

         The Repair Services Engineer coordinates the qualification of repair
sources for repairs proprietary to IAE or to an outside repair agency. They also
perform a review of the qualifications of repair sources for critical,
non-proprietary repairs for which a source demonstration is deemed necessary.
The group participates in negotiation of the legal and business agreements
associated with these qualification programs.

         FIELD OPERATIONS DATA ANALYSIS

         The following information is available to the airline customer from the
Field Operations Data Analysis organization:

         -        Composite Engine Parts List

         -        Industry Item Lists

         -        Service Bulletin Incorporation Lists

         -        Operating Experience Reports



                                      20.
<PAGE>   58
         COMPOSITE ENGINE PARTS LIST

         The Composite Engine Parts List, a compilation of all saleable and
nonsaleable engine parts incorporated in production engines, describes the
configuration of each engine and identifies those engine parts for which
engineering changes, service bulletins and service instructions have been
issued.

         INDUSTRY ITEM LISTS

         An Industry Item List, consisting of a computer retrievable magnetic
tape and a hard copy printout, is provided after delivery of each new engine to
identify specific parts by part number and serial number which the airline
customer may choose to monitor during the engine operational life. Listed parts
represent approximately 80 percent of engine total value.

         SERVICE BULLETIN INCORPORATION LISTS

         Lists are provided that identify all Service Bulletins which were not
incorporated and, separately, those which were incorporated during initial build
of each new engine.

         OPERATION EXPERIENCE REPORTS

         IAE will maintain a V2500 Operational Data base from which selected
engine operations and reliability summary reports will be developed and made
available on a scheduled basis to each airline customer. Data reported by IAE
Field Representatives serve as input to this data base. This computerized data
maintenance and retrieval system will permit:

         -        A pooling and exchange of service experience for the benefit
of the entire airline industry.

         -        A common statistical base.

         -        The selective querying of computer data files for answers to
customer inquiries.

         In addition to providing operations and reliability reports, the
Operating Experience Data Base serves in-house programs directed at improving
engine design and enhancing overall customer support, including spare parts
provisioning and warranty administration.

V.       SPARE PARTS GROUP

         SPARE PARTS SUPPORT

         The Spare Parts Group provides the following categories of spare parts
support to airline customers:

         -        Individual Customer Account Representatives

         -        Provisioning

         -        Planning



                                      21.
<PAGE>   59
         -        Order Administration

         -        Spare Parts Inventory

         -        Effective Expedite Service

         -        Worldwide Distribution

         ACCOUNT REPRESENTATIVE

         An Account Representative is assigned to each customer using IAE
equipment. This representative provides individualized attention for effective
spare parts order administration, and is the customer's interface on all matters
pertaining to new part planning and procurement. Each representative is
responsible for monitoring each assigned customer's requirements and providing
effective administrative support. The Account Representatives are thoroughly
familiar with each customer's spare parts ordering policies and procedures and
are responsible for ensuring that all customer new parts orders are processed in
an effective manner.

         SPARE PARTS PROVISIONING PLANNING

         Prior to delivery of the first new aircraft to an airline customer,
preplanning discussions will be held to determine the aircraft/engine program,
and engine spare parts provisioning and order plans. Mutually agreed upon
provisioning target dates are then established and on-time completion tracked by
the Customer Account Representative with the assistance of logistics specialists
in Spare Parts Provisioning and Inventory Management. Meetings are held with
airline customers at a mutually agreeable time to review suggested spare parts
provisioning lists prepared by spare parts Provisioning. These lists are
designed to support each customer's particular fleet size, route structure and
maintenance and overhaul program.

         ORDER ADMINISTRATION

         IAE subscribes to the general principles of Air Transport Association
of America (ATA) Specification No. 200, Integrated Data Processing - Supply. The
procedures of Air Transport Association of America (ATA) Specification No. 200
may be used for Initial Provisioning, (Chapter II) Order Administration (either
Chapter III or Chapter VI) Invoicing (Chapter IV).

         A spare parts supply objective is to maintain a 90 percent on-time
shipment performance record to our published lead times. The lead time for
replenishment spare parts is identified in the IAE spare Parts Price Catalog.
Initial provisioning spare parts orders should be placed at least six months
prior to required delivery, while conversions and major modifications require
full manufacturing lead times.

         The action to be taken on emergency requests will be answered as
follows:

         -        Aircraft-On-Ground (AOG) - within four hours (in these
instances every effort is made to ship immediately).



                                      22.
<PAGE>   60
         -        Critical (Imminent Aircraft-On-Ground (AOG) or Work Stoppage)
-- Within 24 hours.

         -        Stock Outage -- Within seven working days (these items are
shipped as per customer request).

         SPARE PARTS INVENTORY

         To ensure availability of spare parts in accordance with published lead
time, spare parts provisioning maintains a modern, comprehensive requirements
planning and inventory management system which is responsive to changes in
customer demand, special support programs and engineering design. Organized on
an engine model basis, this system is intended to maintain part availability for
delivery to customers consistent with published lead times.

         A majority of parts in the spare parts inventory are continually
controlled by an Automatic Forecasting and Ordering System. Those parts which do
not lend themselves to automatic control due to supercedure, unusual usage or
conversion requirements are under the direct manual control of Spares Planning
personnel. As additional protection against changes in production lead time or
unpredicted demand, certain raw materials are also inventoried. Successful
inventory management is keyed to accurate requirements planning. In support of
the requirements planning effort, a wide ranging data retrieval and analysis
program is offered. This program concerns itself both with the customer
logistics and technical considerations as follows:

         -        Forecasts of life limited parts requirements are requested and
received semi-annually from major customers.

         -        Engine technical conferences are held frequently within IAE to
assess the impact of technical problems on parts.

         -        For a selected group of parts a provisioning conference system
is offered which considers actual part inventory change, including usage and
receipts, as reported monthly by participating customers.

         INITIAL PROVISIONING PARTS BUY-BACK

         IAE offers an initial provisioning parts buy-back service, the details
of which are contained in individual customer spare parts contracts.

         PACKAGING

         All material is packaged in general compliance with Air Transport
Association of America (ATA) Specification No. 300.

         WORLD AIRLINE SUPPLIERS' GUIDE

         IAE subscribes to the supply objectives set forth in the World Airlines
Supplier's Guide published by the Air Transport Association of America (ATA).



                                      23.
<PAGE>   61
         IAE requires that its proprietary component vendors also perform in
compliance with the precepts of the World Airline Suppliers' Guide.

VI.      BUSINESS SUPPORT GROUP

         CUSTOMER MAINTENANCE SUPPORT

         This Service provides the following services to airline and engine
maintenance shop customers:

         -        Engine Reliability and Logistics Cost Forecasts

         -        Logistics Support Studies

         ENGINE RELIABILITY AND ECONOMIC FORECASTS

         Engine reliability and economic forecasts in the forms of predicted
shop visit rates and maintenance costs can be provided to reflect the airline
customers' operating characteristics. Additionally, various analyses can be
conducted to establish life probability profiles of critical engine parts, and
to determine optimum part configuration and engine operating procedures.

         LOGISTICS SUPPORT STUDIES

         As required, logistics studies are conducted to assist in the planning
of engine operational support. Such studies may include spare engine and spare
module requirements forecasts, level of maintenance analyses, engine type
economics evaluations and life cycle cost estimates.




                                      24.
<PAGE>   62
                                   EXHIBIT E-1

                                       IAE
                          INTERNATIONAL AERO ENGINES AG
                      V2500 ENGINE AND PARTS SERVICE POLICY

         This Engine and Parts Service Policy ("Service Policy") is a statement
of the terms and conditions under which IAE International Aero Engines AG
("IAE") will grant AWA certain Allowances and adjustments in the event that
Parts of its new V2500 Engines suffer Failure in Commercial Aviation Use, or in
the event that a Parts Life Limit is established or reduced. This Service Policy
becomes effective for AWA's first new V2500 Engine.

         This Service Policy is divided into seven sections:

         Section I         describes the Credit Allowances which will be granted
                           should an Engine suffer a Failure.

         Section II        describes the Credit Allowances which will be granted
                           should a Primary Part Suffer a Failure.

         Section III       lists the Class Life for those Primary Parts for
                           which Credit Allowances will be granted.

         Section IV        describes the Credit Allowances which will be granted
                           when the establishment or reduction of a Parts Life
                           Limit is mandated.

         Section V         describes the Credit Allowances and adjustments which
                           will be granted when IAE declares a Campaign Change.

         Section VI        contains the definitions of certain words and terms
                           used throughout this Service Policy. These words and
                           terms are identified in the text of this Service
                           Policy by the use of initial capital letters for such
                           words and terms.

         Section VII       contains the general conditions governing the
                           application of this Service Policy.

I.       ENGINE FAILURE CREDIT ALLOWANCES

         A.       FIRST RUN ENGINE, MODULE AND PART

                  1.       A First Run Engine is an Engine with 3,000 hours or
less Engine Time, a First Run Module is a Module with 3,000 hours or less Module
Time, and a First Run Part is a Part with 3,000 hours or less Parts Time
operating in a First Run Engine or a First Run Module.


                                       1.
<PAGE>   63
                  2.       If a First Run Part suffers Direct Damage or
Resultant Damage, and provided that the Part causing Resultant Damage is also a
First Run Part, IAE will grant to AWA:

                           a.       A 100 percent Parts Credit Allowance for any
First Run Part Scrapped, or

                           b.       A 100 percent Labor Credit Allowance for any
First Run Part Repair.

                  3.       If such Damage of a First Run Part requires the
removal of the Engine or a Module from the Aircraft, IAE will, in addition to
Subparagraph A.2. above, grant to AWA:

                           a.       A 100 percent Labor Credit Allowance for
disassembly, reassembly and necessary testing of the Engine or Module requiring
Reconditioning as a result of such Damage of the First Run Part, and

                           b.       A 100 percent Parts Credit Allowance for
those Expendable Parts required in the Reconditioning of the Engine or Module.

                  4.       If such Damage of a First Run Part requires the
removal of the Engine or a Module from the Aircraft, IAE will arrange, upon
request by AWA, to Recondition the Engine or Module or accomplish the Parts
Repair at no charge to AWA rather than providing the above Credit Allowances.
Such work will be accomplished at a V2500 Maintenance Center designated by IAE
and acceptable to AWA. Transportation charges to and from the Maintenance Center
shall be paid by AWA. In the event IAE designates a Maintenance Center for which
AWA does not have a maintenance contract and if such Maintenance Center is
located outside of the United States, then IAE shall pay for the transportation
charges to and from such Maintenance Center.

         B.       EXTENDED FIRST RUN ENGINE, MODULE AND PART

                  1.       An Extended First Run Engine is an Engine with more
than 3,000 hours Engine Time but not more than 3,500 hours Engine Time, an
Extended Run Module is a Module with more than 3,000 hours Module Time, but not
more than 3,500 hours Module Time, and an Extended First Run Part is a Part with
3,500 hours or less Parts Time operating in an Extended First Run Engine or an
extended First Run Module.

                  2.       If an Extended First Run Part suffers Direct Damage
or Resultant Damage, and provided that the Part causing Resultant Damage is also
an Extended First Run Part, IAE will grant to AWA:

                           a.       A pro rata Parts Credit Allowance for any
Extended First Run Part Scrapped, or

                           b.       A pro rata Labor Credit Allowance for any
Extended First Run Part Repair.



                                       2.
<PAGE>   64
                                    If the Extended First Run Part is a Primary
                           Part (Section III), the pro rata Credit Allowances
                           will be based on 100 percent at 3,000 hours Engine
                           Time which then decreases, pro rata, to zero percent
                           at 3,500 hours Engine Time, or, 100 percent to 2,000
                           hours Parts Time which then decreases, pro rata, to
                           zero percent at the end of its Class Life (Section
                           III), whichever is greater.

                                    If the Extended First Run Part is not a
                           Primary Part, the pro rata Credit Allowances will be
                           based on 100 percent at 3,000 hours Engine Time which
                           then decrease, pro rata, to zero percent at 3,500
                           hours Engine Time.

                  3.       If such Damage of an Extended First Run Part requires
the removal of the Engine or a Module from the Aircraft, IAE will, in addition
to Subparagraph B.2. above, grant to AWA:

                           a.       A pro rata Labor Credit Allowance for
disassembly, reassembly and necessary testing of the Engine or Module requiring
Reconditioning as a result of such Damage of the Extended First Run Part, and

                           b.       A pro rata Parts Credit Allowance for those
Expendable Parts required in the Reconditioning of the Engine or Module.

                                    The pro rata Credit Allowances will be based
                           on 100 percent at 3,000 hours Engine Time, which then
                           decreases, pro rata, to zero percent at 3,500 hours
                           Engine Time.

Note:    Section VI, Paragraph D. contains the formulas to be used for computing
         the Credit Allowances described above.

         C.       ENGINE OR MODULE FAILURE CREDIT ALLOWANCES ILLUSTRATION

                             Insert Illustration (?)

Note:    The Primary Parts Credit Allowances Illustration (Section II, Paragraph
         B) is also applicable to the Credit Allowances which are based on Parts
         Time as described in Section I, Subparagraph B.2.

II.      PRIMARY PARTS CREDIT ALLOWANCE

         A.       PRIMARY PARTS OTHER THAN FIRST RUN PARTS OR EXTENDED FIRST RUN
                  PARTS

                  1.       Primary Parts are limited to those Parts listed in
Section III while such Parts are within the Class Life indicated in Section III.



                                       3.
<PAGE>   65
                  2.       The Primary Parts Credit Allowances described in
Subparagraph A.3 below will be based on 100 percent to 2,000 hours total Parts
Time which then decreases, pro rata, to zero percent at the end of the
applicable hourly Class Life.

                  3.       If a Primary Part suffers Direct Damage or Resultant
Damage, and provided that the Part causing Resultant Damage is also a Primary
Part, IAE will grant to AWA:

                           a.       A Parts Credit Allowance for any Primary
Part Scrapped, or

                           b.       A Labor Credit Allowance for any Primary
Part Repaired in accordance with a Parts Repair designated in writing by IAE as
being eligible for a Credit Allowance under this Section II, Paragraph A.

Note:    Section VI, Paragraph D. contains the formulas to be used for computing
         the Credit Allowances described above.

         B.       PRIMARY PARTS CREDIT ALLOWANCES ILLUSTRATION

                             Insert Illustration (?)

                       A = CLASS A PRIMARY PARTS (Page 5)

                       B = CLASS B PRIMARY PARTS (Page 6)

                       C = CLASS C PRIMARY PARTS (Page 6)

III.     IDENTIFICATION OF PRIMARY PARTS

         The following Parts are defined as Primary Parts while such Parts are
within the Class Life indicated. Class Life is the period, expressed in either
hours or Parts Time or number of Parts Cycles during which IAE will grant Credit
Allowances for Primary Parts which suffer Direct Damage or Resultant Damage, or
for which a Parts Life Limit is established or reduced.

                        CLASS A (4,000 HOURS PARTS TIME)

         Cold Section Rotating Parts

         LP Compressor Inlet Cone - Spinner

         LP Compressor Blades

         LP Compressor 1st Stage Blade Annulus Fillers

         LP Compressor Blades

         Radial Drive Bevel Gear

         Tower Shaft

         HP Compressor Blades

         HP Compressor Front and Rear Rotating Airseals

         LP Turbine Shaft Coupling Nut

         COLD SECTION STATIC PARTS



                                       4.
<PAGE>   66
         Fan Splitter Fairing

         LP Compressor Stage 2 Inlet and Exhaust Stator Assembly

         HP Compressors Variable Stator Assemblies

         Fan Aerodynamic OGVs

         HP Compressor Stage Stator Assemblies

         HP Compressor Exit Stator


         HOT SECTION ROTATING PARTS

         HP Turbine Stage Blades

         HP Turbine Gage Spacer

         HP Turbine Lock Nut

         LP Turbine Stage Blades

         LP Turbine Lock Nut


         HOT SECTION STATIC PARTS

         Fuel Injector

         Combustion Chamber Assembly

         HPT First Stage Cooling Duct Assembly (TOBI Duct)

         HPT 1st and 2nd Stage Nozzle Guide Vane Assembly

         HPT 1st and 2nd Stage Outer Airseal Assembly

         HP to LP Turbine Transition Duct (Inner & Outer)

         LPT Nozzle Guide Vane Assemblies

         LPT Outer Airseal Assemblies


         MAIN AND ANGLE GEARBOX

         Gearshafts and Bearings

         Lay Shaft

         All Accessory Drive Shafts

         Gearbox Oil Pumps (Pressure and Scavenge)

                        CLASS B (8,000 HOURS PARTS TIME)

         Fan Case Assembly (Includes Intermediate Case)

         HP Compressor Front Casings (Split Casings)

         HP Compressor Rear Casings Diffuser Case

         HP Turbine Case

         LP Turbine Case

         Turbine Exhaust Case

         Main Gearbox Casing

         Oil Tank

                   CLASS C (20,000 HOURS PARTS TIME FOR DAMAGE

                  15,000 PARTS CYCLES FOR LIFE LIMIT REDUCTION)



                                       5.
<PAGE>   67
         Fan Disk

         LPC Drum

         HPC Drums

         HP Turbine Stage Disks

         HP Turbine Spacer Disk

         HP Turbine Stage l Front Rotating Airseal

         HP Turbine 2nd Stage Disk Rear Seal

         LP Turbine Disks

         LP Turbine Rotating Airseals

         Shafts

         All Class C Parts are those referred to in the time limits section of
the Engine Manual

IV.      PARTS LIFE LIMIT ALLOWANCES

         A.       A Parts Life Limit is the maximum allowable total Parts Time
or total Parts Cycles for specific Parts, including Reoperation if applicable,
as established by IAE and the United States Federal Aviation Administration.
Parts Life Limits are published in the Times Limit Section (Chapter 05) of the
applicable V2500 Series Engine Manual.

         B.       CREDIT ALLOWANCES

                  1.       CLASS A AND CLASS B PRIMARY PARTS

                           If a Parts Life Limit is established which results in
Part Scrappage at less than 4,000 hours Parts Time for a Class A Primary Part or
less than 8,000 hours Parts Time for a Class B Primary Part, IAE will grant for
each such Primary Part Scrapped as a result thereof, a Parts Credit Allowance
based on 100 percent to 2,000 hours total Parts Time which then decreases, pro
rata, to zero percent at the end of 4,000 hours total Parts Time for a Class A
Primary Part or 8,000 hours total Parts Time for a Class B Primary Part.

                  2.       CLASS C PRIMARY PARTS

                           If a Parts Life Limit is established for a Class C
Primary Part which results in Part Scrappage in less than 15,000 total Parts
Cycles, IAE will grant for each such Primary Part Scrapped as a result thereof,
a Parts Credit Allowance based on 100 percent to 10,000 total Parts Cycles which
then decreases, pro rata, to zero percent at 15,000 total Parts Cycles.

         In addition, IAE will grant a similarly calculated Labor Credit
Allowance and Parts Credit Allowance for that labor and those Expendable Parts
which are solely related to the removal and replacement of such Class C Primary
Parts and is additional to other maintenance being performed on the Engine or
Module.

Note:    Section VI, Paragraph D. contains the formulas to be used for computing
         the Credit Allowances described above.

         C.       PARTS LIFE LIMIT CREDIT ALLOWANCES ILLUSTRATIONS



                                       6.
<PAGE>   68
                             Insert Illustration(?)


                       A = CLASS A PRIMARY PARTS (Page 5)

                       B = CLASS B PRIMARY PARTS (Page 6)


                             Insert Illustration(?)


                       C = CLASS C PRIMARY PARTS (Page 6)

V.       CAMPAIGN CHANGE CREDIT ALLOWANCES AND ADJUSTMENTS

         A.       A Campaign Change is an IAE program, so designated in writing,
for the Reoperation, replacement, addition, or deletion of a Part(s). IAE will
grant the Credit Allowances and Adjustments specified in this Section V to AWA
when Campaign Change recommendations are complied with by AWA.

         B.       STANDARD ALLOWANCES

                  1.       A 100 percent Parts Credit Allowance for the
replacing Parts specified in the Campaign Change for installed Parts or
serviceable shelf stock Parts directed by IAE to be Scrapped with 3,000 hours or
less total Parts Time.

                  2.       A pro rata Parts Credit Allowance for the replacing
Parts specified in the Campaign Change for installed Parts or serviceable shelf
stock Parts directed by IAE to be Scrapped with more than 3,000 hours total
Parts Time but less than 3,500 hours total Parts Time. The pro rata Parts Credit
Allowance will be based on 100 percent at 3,000 hours total Parts Time which
then decreases, pro rata, to 50 percent at 3,500 hours total Parts Time.

                  3.       A 50 percent Parts Credit Allowance for the replacing
Parts specified in the Campaign Change for installed Parts or serviceable shelf
stock Parts directed by IAE to be Scrapped with more than 3,500 hours total
Parts Time.

                  4.       A 100 percent Labor Credit Allowance for Reoperation
of installed Parts or serviceable shelf stock Parts with 3,000 hours or less
total Parts Time which are Reoperated in accordance with the Campaign Change.

                  5.       A pro rata Labor Credit Allowance for Reoperation of
installed Parts or serviceable shelf stock Parts with more than 3,000 hours
total Parts Time but less than 3,500 hours total Parts Time which are Reoperated
in accordance with the Campaign Change. The pro rata Labor Credit Allowance will
be based on 100 percent at 3,000 hours total Parts Time which then decreases,
pro rata, to 50 percent at 3,500 hours total Parts Time.

                  6.       A 50 percent Labor Credit Allowance for Reoperation
of installed Parts or serviceable shelf stock Parts with more than 3,500 hours
total Parts Time which are Reoperated in accordance with the Campaign Change.



                                       7.
<PAGE>   69
                  7.       A 100 percent Labor Credit Allowance for disassembly
and reassembly of the Engine or Module, if the disassembly of the Engine or
Module is recommended by IAE for accomplishment of the Campaign Change and such
disassembly is performed solely for the purpose of accomplishing the Campaign
Change.

Note:    Section VI, Paragraph D. contains the formulas to be used for computing
         the Credit Allowances described above.

         C.       CAMPAIGN CHANGE CREDIT ALLOWANCES ILLUSTRATION

                             Insert Illustration (?)

Note:    The Labor Credit Allowance for Engine or Module disassembly and
         reassembly remains at a constant 100%.

         D.       OPTIONAL CREDIT ALLOWANCES AND ADJUSTMENTS

                  1.       When IAE declares a Campaign Change, IAE, at its sole
option, may grant to AWA Credit Allowances and/or adjustments, other than as
described above, such as:

                           a.       No Charge material.

                           b.       Specifically priced material.

                           c.       Single credit settlements for AWAs' fleet.

                           d.       Fixed Credit Allowance support for each
Engine.

                  2.       These optional Credit Allowances and adjustments may
be provided:

                           a.       Instead of the standard Credit Allowances of
Section V, Paragraph B.,

                           b.       In addition to the standard Credit
Allowances of Section V, Paragraph B or

                           c.       As a portion of the standard Credit
Allowances of Section V, Paragraph B.

                  3.       In no event shall the value to AWA, as reasonably
determined by IAE, be less than the amount that would have been granted to AWA
as a standard Campaign Change Credit Allowance, per Section V, Paragraph B. In
considering the use of these optional Credit Allowances and adjustments, IAE
will attempt to minimize the financial and administrative impact on AWA.

VI.      DEFINITIONS



                                       8.
<PAGE>   70
         A.       "CAMPAIGN CHANGE" is an IAE program, so designated in writing,
for the Reoperation, replacement, addition or deletion of Part(s) and is
characterized by the granting of certain Credit Allowances to AWA when such
program recommendations are complied with by AWA.

         B.       "CLASS LIFE" is the period, expressed in either hours of Part
Time or number of Parts Cycles, during which IAE will grant Credit Allowances
for Primary Parts which suffer Direct Damage or Resultant Damage, or for which a
Parts Life Limit is established or reduced.

         C.       "COMMERCIAL AVIATION USE" is the operation of Engines in
Aircraft used for commercial, corporate or private transport purposes. The
operation of Engines by government agencies or services is normally excluded
except that IAE will consider written requests for the inclusion of such Engines
under the provisions of this Service Policy pursuant to the C.R.A.F. Program
where AWA operates the Aircraft in North America to its then current flight
operations and maintenance specifications.

         D.       "CREDIT ALLOWANCES"

                  1.       "PARTS CREDIT ALLOWANCE" is an amount determined in
accordance with the following formulas:

                           a.       100 percent Parts Credit Allowance = P

                           b.       50 percent Parts Credit Allowance = P/2

                           c.       Pro rata Parts Credit Allowance =

                                    (i)      For a Primary Part which suffers
Direct or Resultant Damage, or a Class A or Class B Primary Part for which a
Parts Life Limit is established:

                                  Lt  -  T

                                  ________ x P

                                     Lt

                                    (ii)     For a Class C Primary Part for
which a Parts Life Limit is established, which is greater than 10,000 total
Parts Cycles but is less than 15,000 total Parts Cycles:

                                  Lc  -  C

                                  ________ x P

                                     Lc

                                    (iii)    For replacement of a Part because
of a Campaign Change, when such a Part has more than 3,000 hours Parts Time but
less than 3,500 hours Parts Time:



                                       9.
<PAGE>   71
                                  4,000 - T

                                 ___________ x P

                                    l,000

                                    d.       Extended First Run Parts Credit
Allowance =

                     3,500 - E                           Lt  -  T

                     _________ x P          or           ________ x P

                        500                                 Lt

                  2.       "LABOR CREDIT ALLOWANCE" is an amount determined in
                           accordance with the following formulas, except that
                           in no event shall the amount to be granted for repair
                           of Parts exceed the amount of the Parts Credit
                           Allowance which would have been granted if the Part
                           had been Scrapped:

                           a.       100 percent Labor Credit Allowance = H x R

                           b.       50 percent Labor Credit Allowance = H x R
                                                                        -
                                                                         2

                           c.       Pro rata Labor Credit Allowance =

                                    (i)      For a Primary Part which suffers
Direct or Resultant Damage, or a Class A or Class B Primary Part for which a
Parts Life Limit is established:

                                Lt  -  T

                                ________ x H x R

                                   Lt

                                    (ii)     For a Class C Primary Part for
which a Parts Life Limit is established which is greater than 10,000 total Parts
Cycles but is less than 15,000 total Parts Cycles:

                                Lc  -  C

                                ________ x H x R

                                   Lc

                                    (iii)    For replacement of a Part because
of a Campaign Change, which such a Part has more than 3,000 hours Parts Time but
less than 3,500 hours Parts Time:

                                4,000 - T



                                      10.
<PAGE>   72
                                _________ x H x R

                                  l,000

                                    (iv)     Extended First Run Labor Credit
Allowance =

                     3,500 - E                        Lt - T

                     _________  x  H  x  R     or     ______ x H x R

                        500                             Lt

                  3.       The variables used in calculating the above
allowances are defined as:

                  P =      a.       For a Part Scrapped because of Direct
                                    Damage, Resultant Damage or a Parts Life
                                    Limit being established, the IAE catalog
                                    price of the Part Scrapped current at the
                                    time of either the Engine removal or Part
                                    removal, whichever occurs sooner, or

         b.                For replacement of a Part because of a Campaign
         Change, the IAE catalog price of the replacing Part specified in the
         Campaign Change current at the time of replacement.

                  T =      a.       For a Primary Part which has suffered Direct
                                    Damage or Resultant Damage, the actual Parts
                                    Time on the Part minus 2,000 hours, or

         b.                For a Class A or Class B Primary Part for which a
         Parts Life Limit is established, the actual Parts Time on the Part
         minus 2,000 hours, or the Parts Life Limit minus 2,000 hours, whichever
         is greater, or

                           c.       For replacement of a Part because of a
                                    Campaign Change, when such a Part has more
                                    than 3,000 hours Parts Time but less than
                                    3,500 hours Parts Time, the actual Parts
                                    Time on the Part.

                  C =      For a Class C Primary Part for which a Parts Life
                           Limit is established which is greater than 10,000
                           Total Parts Cycles but less than 15,000 Total Parts
                           Cycles, the greater of either:

                           a.       The actual Parts Cycles on the Part minus
                                    10,000 cycles, or

                           b.       The new Parts Life Limit minus 10,000
                                    Cycles.

                           Lt =     Either:

                           a.       For a Primary Part which has suffered Direct
                                    Damage or Resultant Damage, the hours
                                    indicated in Section III minus 2,000 hours,
                                    or

                           b.       For a Class A or Class B Primary Part for
                                    which a Parts Life Limit is established, the
                                    hours indicated in Section III minus 2,000
                                    hours.



                                      11.
<PAGE>   73
                  Lc =     For a Class C Primary Part for which a Parts Life
                           Limit is established which is greater than 10,000
                           total Parts Cycle, 5,000 Cycles.

                  H =      The man-hours reasonably required to accomplish the
                           work.

                  R =      The labor rate, expressed in U.S. Dollars per hour,
                           which will be determined as follows:

                           a.       If the labor is performed at AWA's facility,
                                    or its subcontractor's facility, the labor
                                    rate will be the greater of AWA's labor rate
                                    or the subcontractor's labor rate, where the
                                    labor rates were determined in accordance
                                    with IAE Form _____ and provided to AWA in
                                    writing, or

                           b.       If the labor is performed by IAE, the labor
                                    rate will be the then-current labor rate of
                                    IAE.

                           E =      Actual Engine Time on an Extended First Run
                                    Engine.

         E.       "DIRECT DAMAGE" is the damage suffered by a Part itself upon
its Failure.

         F.       "ECONOMICALLY REPAIRABLE" shall mean that the cost of the
repair as determined by IAE, exclusive of modification and transportation costs,
will be equal to or less than 65 percent of the IAE catalog price of the Part at
the time the repair is considered, or, shall be as otherwise reasonably
determined by IAE.

         G.       "ENGINE(S)" means those V2500 Engine(s), as described by IAE
Specifications, sold by IAE for Commercial Aviation Use, whether installed as
new equipment in aircraft by the manufacturer thereof and delivered to AWA or
delivered directly to AWA from IAE for use as a spare Engine. An Engine which
has been converted or upgraded in accordance with IAE instructions shall
continue to qualify for Credit Allowances and Adjustments under the provisions
of this Service Policy.

         H.       "ENGINE OR MODULE TIME" is the total number of flight hours of
operation of an Engine or a Module.

         I.       "EXPENDABLE PARTS" means those nonreusable Parts, as
reasonably determined by IAE, which are required to be replaced during
inspection or Reconditioning, regardless of the condition of the Part.

         J.       "EXTENDED FIRST RUN ENGINE OR MODULE" is an Engine or Module
with more than 3,000 hours Engine or Module Time but not more than 3,500 hours
Engine or Module Time.

         K.       "EXTENDED FIRST RUN PART" means a Part with 3,500 hours or
less Parts Time operating in an Extended First Run Engine.



                                      12.
<PAGE>   74
         L.       "FAILURE (FAILED)" is the breakage, injury, or malfunction of
a Part rendering it unserviceable and incapable of continued operation without
corrective action.

         M.       "FIRST RUN ENGINE OR FIRST RUN MODULE" is an Engine or Module
with 3,000 hours or less Engine or Module Time.

         N.       "FIRST RUN PART" is an Engine Part with 3,000 hours or less
Parts Time operating in a First Run Engine.

         O.       "MODULE(S)" means any one or more of the following assemblies
of Parts:

                  Fan Assembly and Low Pressure Compressor Assembly

                  High Pressure Compressor Assembly

                  High Pressure Turbine Assembly

                  Low Pressure Turbine Assembly

                  Main gearbox

         P.       "PART(S)" means Engine parts delivered to AWA as original
equipment in an Engine or Engine parts sold and delivered by IAE to AWA as new
spare parts in support of an Engine.

         Q.       "PARTS CYCLE(S)" means the aggregate total number of times a
Part completes an Aircraft takeoff and landing cycle, whether or not thrust
reverser is used on landing. As pilot training will involve extra throttle
transients such as touch and go landings and takeoffs, IAE shall evaluate such
transients for Parts Cycle determination.

         R.       "PARTS LIFE LIMIT" is the maximum allowable total Parts Time
or total Parts Cycles for specific Parts, including Reoperation if applicable,
as established by IAE or by the United States Federal Aviation Administration.
Parts Life Limits are published in the Time Limits Section (Chapter 05) of the
applicable V2500 Series Engine Manual.

         S.       "PARTS REPAIR" means the IAE designated restoration of Failed
Parts to functional serviceable status, excluding repair of normal wear and
tear, as determined by IAE.

         T.       "PARTS TIME" is the total number of flight hours of operation
of a Part.

         U.       "PRIMARY PART(S)" are limited to those Parts listed in Section
III while such Parts are within the Class Life indicated in Section III.

         V.       "RECONDITIONING" means the restoration of an Engine or Module
allowing substitution of new or serviceable used Parts, to the extent necessary
for continued operation of the Engine or Module as a serviceable unit. When such
Reconditioning is performed by IAE, the Parts Time or Parts Cycles, as
applicable, of the replaced Part shall, for the purpose of this Service Policy,
be applicable to the substituted new or serviceable used Part. Said replaced
Part shall become the property of IAE.

         W.       "REOPERATION" is the alteration to or modification of a Part.



                                      13.
<PAGE>   75
         X.       "RESULTANT DAMAGE" is the damage suffered by a Part because of
the Failure of another Part within the same Engine.

         Y.       "SCRAPPED PARTS (SCRAP, SCRAPPED, SCRAPPAGE)" shall mean those
Parts which are unserviceable and not Economically Repairable. AWA shall cause
such Parts to be mutilated or disposed of in such a manner as to preclude any
possible further use as an Engine Part.

VII.     GENERAL CONDITIONS

         The following general conditions govern the application of this Service
Policy:

         A.       RECORDS AND AUDIT

                  AWA shall maintain adequate records for the administration of
this Service Policy and shall permit IAE to audit such records at reasonable
intervals.

         B.       SCRAPPING OF PARTS

                  1.       SCRAPPAGE VERIFICATION

                           Any Part for which a Parts Credit Allowance is
requested shall be verified as Scrapped prior to the issuance of the Parts
Credit Allowance. Verification of Scrappage shall occur as follows:

                           a.       At AWA's, or its subcontractor's, facility.
Such verification shall be accomplished by the IAE Field Representative; or

                           b.       At IAE, by IAE. Sufficient information to
identify the Part, the Engine from which the Part was removed, and the reason
for its return shall be provided.

                  2.       RETURN OF PARTS

                          IAE, at its sole option, may require AWA to return to
IAE any Part for which a Parts Credit Allowance is requested. Such return shall
be a condition for the issuance of a Parts Credit Allowance.

                  3.       TRANSPORTATION EXPENSES

                           Transportation expenses shall be at the expense of
AWA if such Parts are shipped to and from IAE for examination and verification;
except that IAE shall pay the expense if such Parts as are shipped at the
request of IAE.

                  4.       TITLE

                           Title to such Parts returned to IAE shall vest in
IAE:

                           a.       Upon receipt by AWA of a replacement Part or
a Parts Credit Allowance. If the Parts are Scrapped Parts but are not eligible
for Service Policy coverage, the


                                      14.
<PAGE>   76
Parts will be returned at AWA's expense if AWA so requests; otherwise, the Parts
will be disposed of by IAE without any type of adjustment, or

                           b.       Upon shipment, when such Parts are
determined to be Scrap at AWA's facility and are shipped to IAE at the request
of IAE.

         C.       REPAIRABILITY REQUIREMENTS

                  AWA shall set aside and exclude from the operation of this
Service Policy for a period of six months any Life Limited Part for which IAE
states it has, or plans to initiate, an active program to achieve a repair,
corrective Reoperation or Parts Life Limit extension, provided that such program
has equivalent or greater coverage to this warranty. In the event IAE has not
released a repair procedure, corrective Reoperation, or Parts Life Limit
extension by the expiration of this six month period, such Life Limited Part
shall be retained by AWA and excluded from the operation of this Service Policy
for additional periods beyond the expiration of said six month period only if
agreed to by AWA.

         D.       EXCLUSIONS FROM SERVICE POLICY

                  This Service Policy will not apply to any Engine, Module or
Part to the extent it has been determined to the reasonable satisfaction of IAE
that said Engine, Module or Part has Failed because:

                  1.       IAE recommendations with respect to installation or
maintenance were not properly implemented (proper implementation of such
recommendations taking into consideration the impact on AWA's operations), or

                  2.       It has been used contrary to the operating and
maintenance instructions or recommendations authorized or issued by IAE and
current at the time, or

                  3.       It has been repaired or altered other than by an IAE
designated V2500 Maintenance Center in such a way as to impair its safety,
operation or efficiency, or

                  4.       It has been subjected to:

                           a.       Misuse, neglect, or accident, or

                           b.       Ingestion of foreign material, or

                  5.       It has been adversely affected in any way by a part
                           not defined as a Part herein, or

                  6.       It has been adversely affected in any way by
occurrences not associated with ordinary use, such as, but not limited to, acts
of war, rebellion, seizure or other belligerent acts, in each case, to the
extent that such events can be reasonably determined to have contributed to the
failure of the Engine, Modules, or Parts.

         E.       PAYMENT OPTIONS



                                      15.
<PAGE>   77
                  IAE at its option may grant any Parts Credit Allowance as
either a credit to AWA's account with IAE or as a Part replacement.

         F.       PRESENTATION OF CLAIMS

                  Any request for a Credit Allowance must be presented to IAE
not later than 60 days after the receipt of invoice for which the Credit
Allowance is requested. If IAE disallows the request, written notification will
be provided to AWA. AWA shall have 90 days from such notification to request a
reconsideration of the request for Credit Allowance. IAE shall have the right to
refuse any request for a Credit Allowance which is not submitted within the
stated time periods.

         G.       DURATION OF SERVICE POLICY

                  This Service Policy will cease to apply to all Parts in any
Engine that is more than ten years old as measured from the date of shipment of
the Engine from the factory. Unless advised to the contrary by IAE, this Service
Policy shall, however, continue to be applicable to individual Engines after the
expiration of the ten year period on a year to year basis so that AWA may
continue to receive the benefits of the Service Policy on the Parts in these
Engines.

         H.       GENERAL ADMINISTRATION

                  On matters concerning this Service Policy, AWA is requested to
address all correspondence to:

                       IAE International Aero Engines AG
                       400 Main Street, M/S 121-10
                       East Hartford, CT 06108  U.S.A.
                       Attention: Warranty Administration

         I.       LIMITATION OF LIABILITY

                  1.       Except as set forth in the Contract, the express
provisions of this Service Policy set forth the maximum liability of IAE with
respect to any claims relating to this Service Policy. In the event of any
conflict or inconsistency between the express provisions of this Service Policy
and any illustrations contained herein, the express provisions shall govern.

                  2.       Except to the extent that the Credit Allowances and
adjustments expressly set forth in this Service Policy may exceed the
limitations of the corresponding portions of any warranties or representations
included in any sales agreements, the provisions of this Service Policy do not
modify, enlarge or extend in any manner the conditions governing the sale of its
Engines and Parts by IAE.

                  3.       IAE reserves the right to change or retract this
Service Policy at any time at its sole discretion. No such retraction or change
shall diminish the benefits which AWA may be entitled to receive with respect to
Engines: (1) Engines purchased from or on firm order with IAE prior to the
announcement of any such retraction or change; and (2) Engines to be delivered


                                      16.
<PAGE>   78
on Aircraft pursuant to the New Purchase Agreement; and (3) Engines which were
installed on the S.A.L.E. Aircraft at time of delivery to AWA.

         J.       ASSIGNMENT OF SERVICE POLICY

                  This Service Policy shall not be assigned, either in whole or
in part, by either party, except as provided in the Contract. IAE will, however,
upon the written request of AWA, consider an extension of Service Policy Credit
Allowances and adjustments to Engines, Modules and Parts sold or leased by an
AWA to another operator, to the extent only, however, that such Credit
Allowances and adjustments exist at the time of such sale or lease and subject
to the terms and conditions of the Service Policy. IAE shall not unreasonably
withhold such extension of such Credit Allowances.




                                      17.
<PAGE>   79
                                   EXHIBIT E-2
                        IAE INTERNATIONAL AERO ENGINES AG
                     V2500 NACELLE AND PARTS SERVICE POLICY

         This Nacelle and Parts Service Policy (Service Policy) is a statement
of the terms and conditions under which IAE International Aero Engines AG
("IAE") will grant the Operators of its V2500 Nacelles certain Allowances and
adjustments in the event that Parts of such Nacelles suffer Failure in service.

         This Service Policy is divided into four sections:

         Section I         describes the Allowances and adjustments which will
                           be granted should the Nacelle or Part(s) suffer a
                           Failure.

         Section II        describes the Allowances and adjustments which will
                           be granted when IAE declares a Campaign Change.

         Section III       contains the definitions of certain words and terms
                           used throughout this Service Policy. These words and
                           terms are identified in the text of this Service
                           Policy by the use of initial capital letters for such
                           words and terms.

         Section IV        contains the general conditions governing the
                           application of this Service Policy.

VIII.    ALLOWANCES AND ADJUSTMENTS

         A.       FIRST RUN NACELLE AND PART

                  1.       A First Run Nacelle is a Nacelle with 6,000 hours or
less Nacelle Time and a First Run Part is a Part with 6,000 hours or less Parts
Time operating in a First Run Nacelle.

                  2.       If a First Run Part suffers Direct Damage or
Resultant Damage, and provided that the Part causing Resultant Damage is also a
First Run Part:

                           a.       IAE will grant to the Operator:

                                    (i)      A 100 percent Parts Credit
Allowance for any such First Run Part Scrapped, and

                                    (ii)     A 100 percent Labor Allowance for
Parts Repair of any First Run Part requiring Parts Repair.

                           b.       If such Damage of a First Run Part causes
the removal of the Nacelle from the Aircraft, IAE will, in addition to
Subparagraph a. above, grant to the Operator:


                                       1.
<PAGE>   80
                                    (i)      A 100 percent Labor Allowance for
disassembly, reassembly and necessary testing of the Nacelle requiring
Reconditioning as a result of such Damage of the First Run Part, and

                                    (ii)     A 100 percent Parts Credit
Allowance for those Expendable Parts required in the Reconditioning of the
Nacelle.

                           c.       If such Damage of a First Run Part causes
the removal of the Nacelle from the Aircraft, IAE will arrange, upon request by
the Operator, to Recondition the Nacelle or accomplish the Parts Repair at no
charge to the Operator rather than providing the above Allowances. Such work
will be accomplished at a V2500 Maintenance Center designated by IAE, and
acceptable to AWA . Transportation charges to and from the Maintenance Center
shall be paid by the operator.

         B.       PRIMARY PART

                  1.       A Primary Part is a Part other than a First Run Part
but having not more than 6,000 hours Parts Time.

                  2.       Primary Parts not eligible for those Allowances
granted to First Run Parts are eligible for Allowances under this Section I,
Paragraph B., provided that the Primary Part suffers Direct Damage or Resultant
Damage and Provided that the Part causing Resultant Damage is also a Primary
Part.

                  3.       IAE will grant to the Operator a Parts Credit
Allowance for such a Primary Part Scrapped or a Labor Allowance for such a
Primary Part for which a Parts Repair is designated in writing by IAE as being
eligible for adjustment under this Section I, Paragraph B. Such Allowance will
be based on 100 percent to 1,000 hours total Parts Time which then decreases,
pro rata, to zero percent at 6000 hours Parts time.

IX.      CAMPAIGN CHANGE ALLOWANCES AND ADJUSTMENTS

         A.       A Campaign Change is an IAE program, so designated in writing,
for the Reoperation, replacement, addition, or deletion of a Part(s). IAE will
grant the Allowances and adjustments specified in this Section II to the
Operator when Campaign Change recommendations are complied with by the Operator.

         B.       STANDARD ALLOWANCES

                  1.       A 100 percent Parts Credit Allowance for the
replacing Parts specified in the Campaign Change for installed or serviceable
shelf stock Nacelle Parts which are Scrapped with 6,000 hours or less total
Parts Time.

                  2.       A 50 percent Parts Credit Allowance for the replacing
Parts specified in the Campaign Change for installed or serviceable shelf stock
Nacelle Parts which are Scrapped with more than 6,000 hours total Parts Time.



                                       2.
<PAGE>   81
                  3.       A 100 percent Labor Allowance for Reoperation of
installed or serviceable shelf stock Nacelle Parts with 6,000 hours or less
total Parts Time, which are Reoperated in accordance with the Campaign Change.

                  4.       A 50 percent Labor Allowance for Reoperation of
in-stalled or serviceable shelf stock Nacelle Parts with more than 6,000 hours
total Parts Time, which are Reoperated in accordance with the Campaign Change.

                  5.       A 100 percent Labor Allowance for disassembly and
reassembly of the Nacelle, if the disassembly is recommended by IAE for
accomplishment of the Campaign Change and such disassembly is performed solely
for the purpose of accomplishing the Campaign Change.

         C.       OPTIONAL ALLOWANCES AND ADJUSTMENTS

                  1.       When IAE declares a Campaign Change, IAE, at its sole
option, may grant to the Operator allowances and adjustments, such as, but not
necessarily limited to:

                           a.       No charge material

                           b.       Specially priced material

                           c.       Single payment settlements for the
Operators' fleet

                           d.       Fixed allowance support for each Nacelle.

                  2.       These optional allowances and adjustments will be
provided either:

                           a.       Instead of the standard Allowances of
Paragraph B.,

                           b.       In addition to the standard Allowances of
Paragraph B., or

                           c.       As a portion of the standard Allowances of
Paragraph B.

                  3.       In no event shall the worth to the Operator, as
reasonably determined by IAE, be less than the amount that would have been
granted to the Operator as a standard Campaign Change Allowance, per Paragraph
B. In considering the use of these optional allowances and adjustments, IAE will
attempt to minimize the financial and administrative impact on the Operator.

X.       DEFINITIONS

         A.       ALLOWANCES

                  1.       "PARTS CREDIT ALLOWANCE" is an amount determined in
accordance with the following formula:

                           a.       100 percent Parts Credit Allowance = P



                                       3.
<PAGE>   82
                           b.       50 percent Parts Credit Allowance = P/2

                           c.       Pro rata Parts Credit Allowance =
6,000 - T x P
---------
5,000

                  2.       "LABOR ALLOWANCE" is an amount determined in
accordance with the following formulas, except that in no event shall the amount
to be granted for repair of Parts exceed the amount of the Parts Credit
Allowance which would have been granted if the Part had been Scrapped.

                           a.       100 percent Labor Allowance = H x R

                           b.       50 percent Labor Allowance = H x R
                                                                 -
                                                                 2

                           c.       Pro rata Labor Allowance = 6,000 - T x H x R
                                                               ---------
                                                               5,000

                  3.       The variables used in calculating the above
                           Allowances are defined as:

                  P =      for a Part Scrapped because of Direct Damage or
                           Resultant Damage, the IAE commercial price of the
                           Part Scrapped current at the time of either the
                           Nacelle removal or Part removal, whichever occurs
                           sooner, or

                                    for replacement of Parts because of a
                           Campaign Change, the IAE price of the replacing Part
                           specified in the Campaign Change current at the time
                           of notification to the Operator of the Campaign
                           Change.

                  T =      actual Parts Time hours on a Part which has suffered
                           Direct Damage or Resultant Damage or the Parts Life
                           Limit as established for the Part.

                  H =      the man-hours required to accomplish the work as
                           established in writing by IAE.

                  R =      the labor rate, expressed in dollars per hour, which
                           will be determined as follows:

                           a.       If the labor is performed at the Operator's
                                    facility, or its subcontractor's facility,
                                    the labor rate will be the greater of the
                                    Operator's labor rate or the subcontractor's
                                    labor rate, where the labor rates were
                                    determined in accordance with IAE Form and
                                    provided to the Operator in writing, or

                           b.       If the labor is performed at a V2500
                                    Maintenance Center designated by IAE, the
                                    labor rate will be the then current labor
                                    rate at that Center.



                                       4.
<PAGE>   83
         B.       "CAMPAIGN CHANGE" is an IAE program, so designated in writing,
for the Reoperation, replacement, addition or deletion of a Part(s) and is
characterized by the granting of certain Allowances to the Operator when such
recommendations are complied with by the Operator.

         C.       "COMMERCIAL AVIATION USE" is the operation of Nacelles in
Aircraft used for commercial, corporate or private transport purposes. The
operation of Nacelles by Government Agencies or Services is normally excluded
except that IAE will consider written requests for the inclusion of such
Nacelles under the provisions of this Service Policy.

         D.       "DIRECT DAMAGE" is the damage suffered by a Part itself upon
its Failure.

         E.       "ECONOMICALLY REPAIRABLE" shall generally mean that the cost
of the repair as determined by IAE exclusive of modification and transportation
costs, will be equal to or less than 65 percent of the IAE commercial price of
the Part at the time the repair is considered, or, shall be as otherwise
reasonably determined by IAE.

         F.       "EXPENDABLE PARTS" means those nonreusable Parts, as
determined by IAE, which are required to be replaced during inspection or
Reconditioning, regardless of the condition of the Part.

         G.       "FAILURE (FAILED) is the breakage, injury, or malfunction of a
Part rendering it unserviceable and incapable of continued operation without
corrective action.

         H.       "FIRST RUN NACELLE" is a Nacelle with 6,000 hours or less
Nacelle Time.

         I.       "FIRST RUN PART" is a Nacelle Part with 6,000 hours or less
Parts Time operating in a First Run Nacelle.

         J.       "NACELLE(S)" means V2500 nacelle(s) and thrust reverser, as
described in IAE Specifications referenced below, as such Specifications may be
revised from time to time, sold by IAE for Commercial Aviation Use, whether
installed as new equipment in aircraft by the manufacturer thereof and delivered
to the Operator or delivered directly to the Operator from IAE for use as a
spare nacelle. A Nacelle which has been converted or upgraded in accordance with
IAE instructions shall continue to qualify for Allowances and adjustments under
the provisions of this Service Policy.

<TABLE>
<CAPTION>
                  MODEL NO.      SPECIFICATION NO.         SPECIFICATION FATE
<S>                              <C>                   <C>
                    V2500            IAE 0004          December 1988, as amended
</TABLE>

         K.       "NACELLE TIME" is the total number of flight hours of
operation of a Nacelle.

         L.       "OPERATOR" is the owner of one or more Nacelles operated for
Commercial Aviation use, the lessee if such Nacelle(s) is the subject of a
long-term financing lease or as otherwise reasonably determined by IAE.



                                       5.
<PAGE>   84
         M.       "PART(S)" means Nacelle parts delivered to the Operator as
original equipment in a Nacelle or Nacelle parts sold and delivered by IAE to
the Operator as new spare parts in support of a Nacelle.

         N.       "PARTS LIFE LIMIT" is the maximum allowable Parts Time, for
specific Parts as established by IAE or by the Federal Aviation Administration
in an Airworthiness Directive.

         O.       "PARTS REPAIR" means the IAE designated restoration of Failed
Parts to functional serviceable status, excluding repair of normal wear and
tear, as determined by IAE.

         P.       "PARTS TIME" is the total number of flight hours of operation
of a Part.

         Q.       "PRIMARY PART" means a Part other than a First Run Part but
not having more than 6,000 hours Parts Time.

         R.       "RECONDITIONING" means the restoration of a Nacelle allowing
substitution of new or serviceable used Parts, to the extent necessary for
continued operation of the Nacelle as a serviceable unit. When such
Reconditioning is performed by IAE designated V2500 Maintenance Center, the
Parts Time, of the replaced Part shall, for the purpose of this Service Policy,
be applicable to the substituted new or serviceable used Part. Said replaced
Part shall become the property of IAE.

         S.       "REOPERATION" is the alternation to or modification of a Part.

         T.       "RESULTANT DAMAGE" is the damage suffered by a Part because of
the Failure of another Part within the same Nacelle.

         U.       "SCRAPPED PARTS (SCRAP, SCRAPPED, SCRAPPAGE)" shall mean those
Parts determined by IAE to be unserviceable and not Economically Repairable. The
Operator shall cause such Parts to be mutilated or disposed of in such a manner
as to preclude any possible further use as a Nacelle Part.

XI.      GENERAL CONDITIONS

         The following general conditions govern the application of this Service
Policy:

         A.       RECORDS AND AUDIT

                  The Operator shall maintain adequate records for the
administration of this Service Policy and shall permit IAE to audit such records
at reasonable intervals.

         B.       SCRAPPING OF PARTS

                  1.       SCRAPPAGE VERIFICATION

                           Any Part for which a Parts Credit Allowance is
requested shall be verified as Scrapped prior to the issuance of the Allowance.
Verification of Scrappage shall occur as Follows:



                                       6.
<PAGE>   85
                           a.       At the Operator's, or its subcontractor's,
facility. Such verification shall be accomplished by the IAE Field
Representative.

                           b.       At a V2500 Maintenance Center designated by
IAE, provided that IAE concurs that the Part is to be Scrapped. Sufficient
information to identify the Nacelle from which the Part was removed, and the
reason for its return shall be provided.

                  2.       RETURN OF PARTS

                           IAE, at its sole option, may require the Operator to
return to IAE any Part for which a Parts Credit Allowance is requested. Such
return shall be a condition for the issuance of a Parts Credit Allowance.

                  3.       TRANSPORTATION EXPENSES

                           Transportation expenses shall be at the expense of
the Operator if such Parts are shipped to and from a V2500 Maintenance Center
designated by IAE for examination and verification; except, that IAE shall pay
the expense of transport of such Parts as are shipped at the request of IAE.

                  4.       TITLE

                           Title to such Parts returned to IAE shall vest in
IAE.

                           a.       Upon determination by IAE that the Operator
is eligible for a Parts Credit Allowance. If it is determined that the Parts are
scrapped Parts but are not eligible for Service Policy coverage, the Operator
will be notified of the decision and the Parts returned at the Operator's
expense if the Operator so requests; otherwise, the Parts will be disposed of by
IAE without any type of adjustment, or

                           b.       Upon shipment, when such Parts are
determined to be Scrap at the Operator's facility and are shipped to IAE at the
request of IAE.

         C.       REPAIRABILITY REQUIREMENTS

                  The Operator shall set aside and exclude from the operation of
this Service Policy for a period of six months any Part for which IAE states it
has, or plans to initiate, an active program to achieve a repair, corrective
Reoperation or Parts Life Limit extension provided that such program has
equivalent or greater coverage to this warranty. In the event IAE has not
released a repair procedure, corrective Reoperation, or Parts Life Limit
extension by the expiration of this six month period, such Part shall be
retained by the Operator and excluded from the operation of this Service Policy
for additional periods beyond the expiration of said six month period only if
agreed to by the Operator.

         D.       EXCLUSIONS FROM SERVICE POLICY

                  This Service Policy will not apply to any Nacelle, or Part if
it has been determined to the reasonable satisfaction of IAE that said Nacelle
or Part has Failed because:



                                       7.
<PAGE>   86
                  1.       IAE recommendations with respect to installation or
maintenance were not properly implemented (proper implementation of such
recommendation taking into consideration the impact on AWA's operations), or

                  2.       It has been used contrary to the operating and
maintenance instructions or recommendations authorized or issued by IAE and
current at the time, or

                  3.       It has been repaired or altered outside any V2500
Maintenance Center in such a way as to impair its safety, operation or
efficiency, or

                  4.       It has been subjected to:

                           a.       Misuse, neglect, or accident, or

                           b.       Ingestion of foreign material, or

                  5.       It has been adversely affected in any way by a part
not defined as a Part herein, or

                  6.       It has been affected in any way by occurrences not
associated with ordinary use, such as, but not limited to, acts of war,
rebellion, seizure or other belligerent acts, in each case, to the extent that
such events can be reasonably determined to have contributed to the failure of
the Engine, Modules, or Parts.

         E.       PAYMENT OPTIONS

                  IAE at its option may grant any Parts Credit Allowance as
either a credit to the Operator's account or as a Part replacement.

         F.       PRESENTATION OF CLAIMS

                  Any request for an Allowance must be presented to IAE not
later than 180 days after the removal from service of the Engine or Part for
which the Allowance is requested. If IAE disallows the request, written
notification will be provided to the Operator. The Operator shall have 90 days
from such notification to request a reconsideration of the request for
Allowance. IAE shall have the right to refuse any request for an Allowance which
is not submitted within the stated time periods.

         G.       DURATION OF SERVICE POLICY

                  This Service Policy will cease to apply to all Parts in any
Nacelle that is more than ten years old as measured from the date of shipment of
the Nacelle from the factory. This Service Policy shall, however, continue to be
applicable to individual Nacelles after the expiration of the ten year period on
a year to year basis so that the Operator may continue to receive the benefits
of the Service Policy on the Parts in these Nacelles.



                                       8.
<PAGE>   87
         H.       GENERAL ADMINISTRATION

                  On matters concerning this Service Policy, the Operator is
requested to address all correspondence to:

                       IAE International Aero Engines AG
                       400 Main Street, M/S 121-10
                       East Hartford, CT  06108 U.S.A.
                       Attention: Warranty Administration

         I.       LIMITATION OF LIABILITY

                  1.       Except on set forth in the Contract the express
provisions of this Service Policy set forth the maximum liability of IAE with
respect to any claims relating to this Service Policy.

                  2.       Except to the extent that the Allowances and
adjustments expressly set forth in this Service Policy may exceed the
limitations of the corresponding portions of any warranties or representations
included in any sales agreements, the provisions of this Service Policy do not
modify, enlarge or extend in any manner the conditions governing the sale of its
Nacelles and Parts by IAE.

                  3.       IAE reserves the right to change or retract this
Service Policy at any time at its sole discretion. No such retraction or change
shall diminish the benefits which AWA may be entitled to receive with respect to
Nacelles: (1) Nacelles to be delivered on Aircraft pursuant to the New Purchase
Agreement; and (2) Nacelles which were installed on the S.A.L.E. Aircraft at
time of delivery to AWA.

         J.       ASSIGNMENT OF SERVICE POLICY

                  This Service Policy shall not be assigned, either in whole or
in part, by either party except as provided in the Contract. IAE will, however,
upon the written request of the Operator consider an extension of Service Policy
Allowances and adjustments to Nacelles and Parts sold or leased by an Operator
to another Operator, to the extent only, however, that such Allowances and
adjustments exist at the time of such sale or lease and subject to the terms and
conditions of the Service Policy. IAE shall not unreasonably withhold such
extension of such Allowances.




                                       9.
<PAGE>   88
                                   EXHIBIT E-3

                 WARRANTY FOR SPECIAL TOOLS AND GROUND EQUIPMENT

         1.       If it is shown that a defect in material or workmanship has
become apparent in any item of special tooling and ground equipment within one
year from the date of receipt of such item by the Operator, then IAE will either
as it may in its sole discretion determine repair or exchange such item free of
charge.

         2.       The obligations of IAE under this Warranty are subject to the
following terms and conditions.

         2.1      The defect must not be due to misuse, negligence of anyone
other than IAE, accident or misapplication.

         2.2      Such item shall not have been used, maintained, modified,
stored or handled other than in a manner approved by IAE.

         2.3      Any claim under this Warranty shall be made in writing to IAE
within 90 days of the discovery of the defect and the defective item shall be
made available or sent to IAE for inspection as it may require.

         3.       IAE shall not be liable for any incidental, consequential or
resultant loss or damage howsoever occurring, nor for labor costs involved in
removal or replacement of parts.




                                       1.
<PAGE>   89
                                   EXHIBIT E-4
                           V2500 PARTS COST GUARANTEE


I.    INTRODUCTION

      IAE covenants to AWA that during the Guarantee Period, the cumulative
Eligible Parts Cost will not, subject to escalation, exceed a Guaranteed Cost
Rate of [***] per Eligible Engine flight hour. Under this Guarantee, if the
cumulative Eligible Parts Cost per Eligible Engine flight hour of AWA's Engines
over the Guarantee Period exceeds the escalated Guaranteed Cost Rate, IAE will
credit AWA's account with IAE an amount of [***] of the excess costs as
described in paragraph II.F.

II.   GUARANTEE

      A.    GUARANTEE PERIOD

            The Guarantee Period will be the [***] period following the [***]

      B.    ELIGIBLE ENGINES

            The Engines that will be Eligible Engines under this Guarantee shall
be the Engines delivered with the Aircraft, the Purchased Items and S.A.L.E.
Engines. The Engines shall remain Eligible Engines provided that IAE
recommendations with respect to installation or maintenance are properly
implemented (proper implementation of such recommendations taking into
consideration the impact on AWA's operations).

      C.    ELIGIBLE PARTS COSTS

            Eligible Parts Costs shall comprise the cost of Parts which are
removed from Eligible Engines and actually Scrapped as a result of:

            1.    a [***]

            2.    [***]

            3.    an [***]; and

            4.    [***];

                  except for Parts Scrapped as the result of life limitation and
vendor proprietary accessories and parts therein.

      D.    ADJUSTED PARTS COST

            Within [***] following each [***] of the commencement of the
Guarantee Period, AWA will report to IAE the Eligible Parts Costs incurred by
AWA during the preceding [***] together with a statement of any contributions
received from IAE or third parties

---------
[*] indicates Redacted material


                                       1.
<PAGE>   90
towards such Eligible Parts Costs. Within the following [***], IAE and AWA will
jointly calculate the adjusted Parts Costs for that [***] making appropriate
reductions for contributions received by AWA from IAE and third parties
including, but not limited to: Prior remedy payments under this guarantee,
warranty payments in the form of a Parts Credit Allowance or a Parts
replacement, commercial assistance programs provided by IAE or its shareholders,
insurance settlement, and maintenance provider warranty settlements (the
"Adjusted Parts Costs").

and for disallowed Parts Costs incurred by AWA because IAE recommendations with
respect to installation or maintenance were not properly implemented (proper
implementation of such recommendations taking into consideration the impact on
AWA's operations).

      E.    GUARANTEED PARTS COST

            Within thirty days following each [***] of the commencement of the
Guarantee Period, AWA will report to IAE the flight hours of Eligible Engines
operated by AWA in the preceding [***]. Within thirty days of receipt of the
flight hours for Eligible Engines, IAE will calculate the Guaranteed Parts Cost
(GPC) for AWA for that [***] using the following formula:

                  GPC  =  A x Escalated Guaranteed Cost Rate ("GCR")

                  where:

                  A is the flight hours of Eligible Engines operated by AWA in
                  that [***];

                  Escalated GCR is $[***]/engine Flight Hours escalated for
                  that [***];

            and the Escalated Guaranteed Cost Rate for any [***] is calculated
by determining the arithmetic average of the Guaranteed Cost Rate calculated for
each [***] using the IAE Escalation Formula attached to this Contract for a Base
Month of January, 1996.

      F.    ANNUAL STATEMENT

            Following the [***] of the commencement of the Guarantee Period, IAE
will, within thirty days following the calculation of the adjusted parts cost
and the GPC, credit AWA's account with IAE an amount equal to [***] of the
difference between the Adjusted Parts Costs for each preceding year and of the
Guaranteed Parts Costs for [***].

III   DEFINITIONS AND GENERAL CONDITIONS

      All of the definitions and General Conditions of the V2500 Engine and
Parts Service Policy (Exhibit E-1) shall apply to this Guarantee. Engines and
Engine maintenance excluded by the General Conditions of the Policy shall be
excluded from this Guarantee except that Parts Costs incurred during Engine
maintenance resulting from ingestion of birds, hailstones or runway gravel shall
be included as Eligible under this Guarantee.

---------
[*] indicates Redacted material


                                       2.
<PAGE>   91
IV    SPECIFIC CONDITIONS

      A.    THE GUARANTEED COST RATE IS PREDICATED ON THE USE BY AWA OF:

            1. An average flight cycle of no less than [***];

            2. Thrust levels which are derated an average of [***] percent for
takeoff and climb relative to full takeoff and climb ratings;

            3. An average Firm Aircraft utilization equal to or less than [***]
flight hours per year;

            4. a fleet of aircraft and spare Engines consisting of [***] Firm
Aircraft, [***] S.A.L.E. Aircraft and [***] Purchased Items; and

            5. a delivery schedule in respect of the aforementioned aircraft and
spare Engines as set forth in Exhibit A, Exhibit B and Clause 1.1.6 of the
Contract on the date of Contract signature.

      B.    [***]

      C. IAE hereby confirms that the analytical relationships and processes
used to calculate the original coverage provided by the Warranties for the
Aircraft will be used to calculate the adjusted levels of coverage for the V2500
Guarantees set forth in the Contract.

      D. Any modifications to the Guaranteed Cost Rate will be made in
consultation with AWA. Further, IAE will, at AWA's request, recalculate the
Guaranteed Cost Rate one time in each [***] during the Period of Guarantee.

      E. AWA and IAE establish by mutual agreement modifications or Parts which
can be incorporated to correct Guarantee exceedances, and AWA will incorporate
the changes into Eligible Engines.

V.    EXCLUSION OF BENEFITS

      The intent of this Guarantee is to provide specified benefits to AWA as a
result of the failure of Eligible Engines to achieve the parts cost level
stipulated in the Guarantee. It is not the intent, however, to duplicate
benefits provided to AWA under any other applicable guarantee, sales warranty,
service policy, or any special benefit of any kind as a result of the same
failure. Therefore, the terms and conditions of this Guarantee notwithstanding,
if the terms of this Guarantee should make duplicate benefits available to AWA
from IAE or any third-party, AWA

---------
[*] indicates Redacted material


                                       3.
<PAGE>   92
may elect to receive the benefits under this Guarantee or under any of the other
benefits described above, but not both.


                                       4.
<PAGE>   93
                                   EXHIBIT E-5
                           V2500 RELIABILITY GUARANTEE


I.    INTRODUCTION

      IAE covenants to AWA that during the Guarantee Period, the cumulative
Engine Shop Visit Rate will not exceed a Guaranteed Rate of [***] per [***]
Eligible Engine flight hours. Under this Guarantee, if the cumulative Engine
Shop Visit Rate exceeds the Guaranteed Rate, IAE will credit AWA's account with
IAE an amount of $[***] U.S. Dollars for each Eligible Engine Shop Visit
determined to have been in excess of the Guaranteed Rate.

II.   GUARANTEE

      A.    GUARANTEE PERIOD

            The Guarantee Period will be the [***] period following the [***]

      B.    ELIGIBLE ENGINES

            The Engines that will be Eligible Engines under this Guarantee shall
be the Engines delivered with the Aircraft, the Purchased Items and S.A.L.E.
Engines. The Engines shall remain Eligible Engines provided that IAE
recommendations with respect to installation or maintenance are properly
implemented (proper implementation of such recommendations taking into
consideration the impact on AWA's operations).

      C.    ELIGIBLE SHOP VISITS

            Eligible Shop Visits shall comprise the shop visits of Eligible
Engines required for the following reasons:

            1.    [***];

            2.    [***];

            3.    [***];

            and

            4.    [***].

      D.    REPORTING OF ENGINE SHOP VISITS AND ENGINE FLIGHT HOURS

            Eligible Shop Visits shall be reported to IAE by AWA within [***]
following each [***] of the commencement of the Guarantee Period using IAE Form
FIAE-152 together with such other information as may be needed to determine the
Eligibility of the Engine Shop Visit. [***]

---------
[*] indicates Redacted material


                                       1.
<PAGE>   94
            [***] AWA shall have the right to provide additional information for
IAE's consideration in an effort to qualify such event as eligible.

      Within thirty days following each [***] of the commencement of the
Guarantee Period, AWA will report to IAE the flight hours of Eligible Engines
operated by AWA in the preceding [***].

      E.    CREDIT ALLOWANCE CALCULATION

            A credit of $[***] U.S. Dollars will be granted by IAE for each
Eligible Engine Shop Visit determined as calculated below to be in excess of the
Guaranteed Rate during the Guarantee Period. An [***] calculation will be made
no later than [***] following receipt of IAE form FIAE-152 and the flight hours
accumulated on Eligible Engines.

      Each [***] calculation will be made using data that will be cumulative
from the start of the Guarantee Period. An interim credit will be granted, if
necessary, following the [***] calculations for the [***] and each subsequent
year of the Guarantee Period. If subsequent [***] calculations show that on a
cumulative basis, a previous interim credit (or portion thereof) was excessive,
such excess amount shall be subject to repayment which will be effected by IAE
issuing a debit against AWA's account with IAE. Credits and debits will be
applied to AWA's account with IAE not later than [***] following a calculation
for the [***] of the Guarantee Period, as applicable.

            Credit Allowance  =  (AR - GR) x $[***] U.S. Dollars

            where:

            AR          = Total Eligible Engine Shop Visits during the period of
                        the calculation.

            GR          = [***] removals per [***] Engine flight hours x total
                        engine flight hours accumulated on Eligible Engines
                        during the period of the calculation.

            (NOTE:      GR will be rounded to the nearest whole number.)

III.  DEFINITIONS AND GENERAL CONDITIONS

      All of the Definitions and General Conditions of the V2500 Engine and
Parts Service Policy (Exhibit E-1) shall apply to this Guarantee. Engines and
Engine Shop Visits excluded by the General Conditions of the Policy shall be
excluded from this Guarantee except that Engine Shop Visits resulting from
ingestion of birds, hailstones or runway gravel shall be included as Eligible
under this Guarantee.

---------
[*] indicates Redacted material


                                       2.
<PAGE>   95
IV.   SPECIFIC CONDITIONS

      A.    The Guaranteed Rate is predicated on the use by AWA of:

            1.    An average flight cycle of no less than [***] hours;

            2. Thrust levels which are derated an average of [***] percent for
Takeoff and Climb relative to full Takeoff and Climb ratings;

            3. An average Engine utilization equal to or less than [***] flight
hours per year; and

            4. A fleet of aircraft and spare Engines consisting of [***] Firm
Aircraft, [***] Aircraft and [***] Purchased Items; and

            5. A delivery schedule in respect of the aforementioned aircraft and
spare Engines as set forth in Exhibit A, Exhibit B and Clause 1.1.6 of the
Contract on the date of Contract signature.

      B.    [***]

      C. IAE hereby confirms that the analytical relationships and processes
used to calculate the original coverage provided by the Warranties for the
Aircraft will be used to calculate the adjusted levels of coverage for the V2500
Guarantees set forth in the Contract.

      D. Any modifications to the Guaranteed Cost Rate will be made in
consultation with AWA. Further, IAE will, at AWA's request, recalculate the
Guaranteed Cost Rate one time in each [***] during the Period of Guarantee.

      E. AWA and IAE establish by mutual agreement modifications or Parts which
can be incorporated to correct Guarantee exceedances, and AWA will incorporate
the changes into Eligible Engines.

V     EXCLUSION OF BENEFITS

      The intent of this Guarantee is to provide specified benefits to AWA as a
result of the failure of Eligible Engines to achieve the reliability level
stipulated in the Guarantee. It is not the intent, however, to duplicate
benefits provided to AWA under any other applicable guarantee, sales warranty,
service policy, or any special benefit of any kind as a result of the same
failure. Therefore, the terms and conditions of this Guarantee notwithstanding,
if the terms of this Guarantee should make duplicate benefits available to AWA
from IAE or any third-party, AWA

---------
[*] indicates Redacted material


                                       3.
<PAGE>   96
may elect to receive the benefits under this Guarantee or under any of the other
benefits described above, but not both.


                                       4.
<PAGE>   97
                                   EXHIBIT E-6
                        V2500 INFLIGHT SHUTDOWN GUARANTEE


I.    INTRODUCTION

      IAE covenants to AWA that during the Guarantee Period, the cumulative
Engine Inflight Shutdown Rate will not exceed a Guaranteed Rate of [***] per
[***] Eligible Engine flight hours. Under this Guarantee, if the cumulative
Eligible Inflight Shutdown Rate is determined to have exceeded the Guaranteed
Rate over the Guarantee Period, IAE will credit AWA's account with IAE an amount
of $[***] U.S. Dollars for each Eligible Inflight Shutdown determined to have
been in excess of the Guaranteed Rate.

II.   GUARANTEE

      A.    GUARANTEE PERIOD

            The Guarantee Period will be the [***] period following the [***]

      B.    ELIGIBLE ENGINES

            The Engines that will be Eligible Engines under this Guarantee shall
be the Engines delivered with the Aircraft, the Purchased Items and S.A.L.E.
Engines. The Engines shall remain Eligible Engines provided that IAE
recommendations with respect to installation or maintenance are properly
implemented (proper implementation of such recommendations taking into
consideration the impact on AWA's operations).

      C.    ELIGIBLE INFLIGHT SHUTDOWNS

            Eligible Inflight Shutdowns shall comprise the inflight shutdown of
an Eligible Engine during a scheduled revenue flight which is determined to have
been caused by a Failure of a Part of such Engine. Multiple inflight shutdowns
of the same Engine during the same flight leg for the same problem will be
counted as one Eligible Inflight Shutdown. [***]

      D.    REPORTING OF ELIGIBLE INFLIGHT SHUTDOWNS

            Eligible Inflight Shutdowns shall be reported to IAE by AWA within
[***] following each [***] of the commencement of the Guarantee Period using IAE
Form FIAE-153 together with such other information as may be needed to determine
the Eligibility of the Inflight Shutdown. Each such Form shall be verified by an
authorized IAE Representative before submission. Should it be necessary to
disqualify a reported Inflight Shutdown, IAE will notify AWA of such intent. AWA
shall have the right to provide additional information for IAE's consideration
in an effort to qualify such event as eligible. Within [***] following 

---------
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                                       1.
<PAGE>   98
each [***] of the commencement of the Guarantee Period, AWA will report to IAE
the flight hours of Eligible Engines operated by AWA in the [***].

      Notwithstanding the foregoing, AWA's failure to provide data will not
invalidate the coverage provided by this Guarantee if data can be accurately
recreated unless the data was specifically requested by IAE and AWA failed to
provide the information.

      E.    CREDIT ALLOWANCE CALCULATION

            A credit of $[***] U.S. Dollars will be granted by IAE for each
Eligible Inflight Shutdown determined as calculated below to be in excess of the
Guaranteed Rate during the Guarantee Period. An [***] calculation will be made
no later than [***] following receipt of IAE form FIAE-153 and flight hours
accumulated on Eligible Engines.

      Each [***] calculation will be made using data that will be cumulative
from the start of the Guarantee Period. An interim credit will be granted, if
necessary, following the annual calculations for the [***] and each [***] of the
Guarantee Period. Credits will be applied to AWA's account with IAE not later
than [***] following a calculation for the [***] and each [***] of the Guarantee
Period, as applicable.

      The Credit Allowance  =  (AI - GI) x $[***] U.S. Dollars

            Where:

      AI    =     Total Eligible Inflight Shutdowns during the period of the
                  calculation;

      GI    =     [***] inflight shutdowns per [***] engine flight hours) x
                  total Engine flight hours accumulated on Eligible Engines
                  during the period of the calculation.

      (NOTE:      GI will be rounded to the nearest whole number.)

III.  DEFINITIONS AND GENERAL CONDITIONS

      All of the Definitions and General Conditions of the V2500 Engine and
Parts Service Policy (Exhibit E-1) shall apply to this Guarantee. Engines and
Inflight Shutdowns excluded by the General Conditions of the Policy shall be
excluded from this Guarantee.

IV.   SPECIFIC CONDITIONS

      A.    The Guaranteed Rate is predicated on the use by AWA of:

            1.    An average flight cycle of no less than [***] hours;

            2. Thrust levels which are derated an average of [***] percent for
Takeoff and Climb relative to full Takeoff and Climb ratings;

            3. An average Aircraft utilization equal to or less than [***]
flight hours per year;

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                                       2.
<PAGE>   99
            4. A fleet of aircraft and spare Engines consisting of [***] Firm
Aircraft, [***] Aircraft and [***] Purchased Items; and

            5. A delivery schedule in respect of the aforementioned aircraft and
spare Engines as set forth in Exhibit A, Exhibit B and Clause 1.1.6 of the
Contract on the date of Contract signature.

      B. [***]

      C. IAE hereby confirms that the analytical relationships and processes
used to calculate the original coverage provided by the Warranties for the
Aircraft will be used to calculate the adjusted levels of coverage for the V2500
Guarantees set forth in the Contract.

      D. Any modifications to the Guaranteed Cost Rate will be made in
consultation with AWA. Further, IAE will, at AWA's request, recalculate the
Guaranteed Cost Rate one time in each [***] during the Period of Guarantee.

      E. AWA and IAE establish by mutual agreement modifications or Parts which
can be incorporated to correct Guarantee exceedances, and AWA will incorporate
the changes into Eligible Engines.

V     EXCLUSION OF BENEFITS

      The intent of this Guarantee is to provide specified benefits to AWA as a
result of the failure of Eligible Engines to achieve the reliability level
stipulated in the Guarantee. It is not the intent, however, to duplicate
benefits provided to AWA under any other applicable guarantee, sales warranty,
service policy, or any special benefit of any kind as a result of the same
failure. Therefore, the terms and conditions of this Guarantee notwithstanding,
if the terms of this Guarantee should make duplicate benefits available to AWA
from IAE or any third-party, AWA may elect to receive the benefits under this
Guarantee or under any of the other benefits described above, but not both.

---------
[*] indicates Redacted material


                                       3.
<PAGE>   100
                                   EXHIBIT E-7
                          V2500 DELAY AND CANCELLATION


I.    INTRODUCTION

      IAE covenants to AWA that during the Guarantee Period, the cumulative
Engine caused delay and cancellation rate will not exceed a Guaranteed Rate of
[***] per [***] Aircraft departures. Under this Guarantee, if the cumulative
Engine-caused delay and cancellation Rate is determined to have exceeded the
Guaranteed Rate over the Guarantee Period, IAE will credit AWA's account with
IAE an amount of $[***] U.S. Dollars for each excess Eligible delay and
cancellation determined to have been in excess of the Guaranteed Rate.

II.   GUARANTEE

      A.    GUARANTEE PERIOD

            The Guarantee Period will be the [***] period following the
[***]

      B.    ELIGIBLE ENGINES

            The Engines that will be Eligible Engines under this Guarantee shall
be the Engines delivered with the Aircraft, the Purchased Items and S.A.L.E.
Engines. The Engines shall remain Eligible Engines provided that IAE
recommendations with respect to installation or maintenance are properly
implemented (proper implementation of such recommendations taking into
consideration the impact on AWA's operations).

      C.    (i)   ELIGIBLE DELAY

            An Eligible delay shall occur when by a Failure of a Part in an
Eligible Engine installed in an Aircraft is the initial and primary cause of a
delay in the final Departure of that Aircraft by fifteen or more minutes after
its scheduled Departure in either of the following instances:

            2.    an originating flight departing later than its scheduled
      departure time;

                  or

            3. a through flight or a turnaround flight remaining on the ground
longer than its scheduled ground time.

      C.    (ii)  ELIGIBLE CANCELLATION

                  A single cancellation shall occur when a Failure of a Part in
an Eligible Engine installed in an Aircraft is the initial and primary cause of
the elimination of a departure in either of the following instances:

            1.    cancellation of a trip comprising a single flight leg; or

---------
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                                       1.
<PAGE>   101
            2. cancellation of any or all of the flight legs of a multiple leg
trip.

      C.    (iii)

            [***] shall be an Eligible cancellation not an Eligible Delay.

      C.    (iv)

            Consecutive delays and cancellations for the same problem because
corrective action had not been taken will be excluded unless AWA is prevented
from taking corrective action due to a failure of IAE to reasonably provide
technical support.

      D.    DEPARTURE

            A Departure comprises the movement of an Aircraft from the blocks
for the purpose of an intended revenue flight provided that there can be only
one Departure for each intended flight.

      E.    REPORTING OF ELIGIBLE DELAYS AND CANCELLATIONS

            Eligible delays and cancellations shall be reported to IAE by AWA
[***] during the Guarantee Period using IAE Form FIAE-155 together with such
other information as may be needed to determine the Eligibility of the delay or
cancellation. Each such Form shall be verified by an authorized IAE
Representative before submission. Should it be necessary to disqualify a
reported delay or cancellation, IAE will notify AWA of such intent. AWA shall
have the right to provide additional information for IAE's consideration in an
effort to qualify such event as eligible.

      Departures accumulated by Eligible Engines during the Guarantee Period
shall be reported by AWA within [***] following each [***] of the commencement
of the Guarantee Period. Notwithstanding the foregoing, AWA's failure to submit
such information to IAE shall not invalidate the coverage provided by this
Guarantee if the information can be accurately recreated unless IAE requested
the information from AWA and AWA failed to provide the information.

      F.    CREDIT ALLOWANCE CALCULATION

            A credit of $[***] U.S. Dollars will be granted by IAE for each
Eligible Delay and Eligible Cancellation determined as calculated below to be in
excess of the Guaranteed Rate during the Guarantee Period. An [***] calculation
will be made no later than [***] following receipt of the necessary
records of Delays, Cancellation and Departure.

      Each annual calculation will be made using data that will be cumulative
from the start of the Guarantee Period. An interim credit will be granted, if
necessary, following the [***] calculations for the [***] and each [***] of the
Guarantee Period. If subsequent [***] calculations show that on a cumulative
basis, a previous interim credit (or portion thereof) was excessive, such excess
amount shall be subject to repayment which will be effected by IAE

---------
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                                       2.
<PAGE>   102
issuing a debit against AWA's account with IAE. Credits and debits will be
applied to AWA's account with IAE not later than [***] following the calculation
ADC for the [***] and each [***] of the Guarantee Period, as applicable.

            Credit Allowance  =  (ADC - GDC) x $[***] U.S. Dollars

            Where:

            ADC = Total qualifying Eligible Delays and Eligible Cancellations.

            GDC = [***] Eligible Delays and Eligible Cancellations per [***]
                  Departures) x total Departures completed on Eligible Engines
                  during the applicable period of calculation.

III.  DEFINITIONS AND GENERAL CONDITIONS

      All of the Definitions and General Conditions of the V2500 Engine and
Parts Service Policy (Exhibit E-1) shall apply to this Guarantee. Delays and
Cancellation excluded by the General Conditions of the Policy shall be excluded
from this Guarantee.

IV    SPECIFIC CONDITIONS

      A.    The Guaranteed Rate is predicated on the use by AWA of:

            1.    An average flight cycle of no less than [***] hours;

            2. Thrust levels which are derated an average of [***] percent for
Takeoff relative to full Takeoff ratings;

            3. An average Aircraft utilization equal to or less than [***]
flight hours per year;

            4. A fleet of aircraft and spare Engines consisting of [***]
 Firm Aircraft, [***] S.A.L.E. Aircraft and [***] Purchased Items; and

            5. A delivery schedule in respect of the aforementioned aircraft and
spare Engines as set forth in Exhibit A, Exhibit B and Clause 1.1.6 of the
Contract on the date of Contract signature.

      B. [***]

---------
[*] indicates Redacted material


                                       3.
<PAGE>   103
      C. IAE hereby confirms that the analytical relationships and processes
used to calculate the original coverage provided by the Warranties for the
Aircraft will be used to calculate the adjusted levels of coverage for the V2500
Guarantees set forth in the Contract.

      D. Any modifications to the Guaranteed Cost Rate will be made in
consultation with AWA. Further, IAE will, at AWA's request, recalculate the
Guaranteed Cost Rate one time in each [***] during the Period of Guarantee.

      E. AWA and IAE establish by mutual agreement modifications or Parts which
can be incorporated to correct Guarantee exceedances, and AWA will incorporate
the changes into Eligible Engines.

V.    EXCLUSION OF BENEFITS

      The intent of this Guarantee is to provide specified benefits to AWA as a
result of the failure of Eligible Engines to achieve the reliability level
stipulated in the Guarantee. It is not the intent, however, to duplicate
benefits provided to AWA under any other applicable guarantee, sales warranty,
service policy, or any special benefit of any kind as a result of the same
failure. Therefore, the terms and conditions of this Guarantee notwithstanding,
if the terms of this Guarantee should make duplicate benefits available to AWA
from IAE or any third-party, AWA may elect to receive the benefits under this
Guarantee or under any of the other benefits described above, but not both.

---------
[*] indicates Redacted material


                                       4.
<PAGE>   104
                                   EXHIBIT E-8
                   V2500 FUEL CONSUMPTION RETENTION GUARANTEE


I     INTRODUCTION

      IAE covenants to AWA that at the end of the Period of Guarantee, the fleet
average cruise fuel consumption for Eligible Engines will not have increased by
more than a Guaranteed Margin of [***]. Under this Guarantee, if the fleet
average cruise fuel consumption for Eligible Engines exceeds the Guaranteed
Margin at the end of the Guarantee Period, IAE will credit AWA's account with
IAE an amount in respect of excess fuel consumed.

II.   GUARANTEE

      A.    PERIOD OF GUARANTEE

            The Guarantee Period will be the [***] period following [***].

      B.    ELIGIBLE ENGINES

      The Engines that will be Eligible Engines under this Guarantee shall be
the Engines delivered with the Aircraft, the Purchased Items and S.A.L.E.
Engines. The Engines shall remain Eligible Engines provided that IAE
recommendations with respect to installation or maintenance are properly
implemented (proper implementation of such recommendations taking into
consideration the impact on AWA's operations).

      C.    FUEL CONSUMPTION MEASUREMENT

            The inflight data required for administration of this Guarantee will
be obtained by AWA during steady state cruise conditions using methods which
will be mutually agreed between AWA and IAE. Steady state cruise conditions are
defined as a minimum of five minutes at the same altitude, Mach number and
thrust setting Engine Pressure Ratio in clear, smooth air with normal bleed and
power extraction and autothrottle disengaged (unless flight evaluation shows
this disengagement to be unnecessary). Data points falling within the following
envelope of altitude, Mach number and Engine Pressure Ratio: Mach No. -- TBD to
TBD, Altitude -- TBD to TBD feet, Engine Pressure Ratio -- TBD to TBD will be
deemed to be Acceptable Data Points, provided that:

            1. the fuel consumption data for any Eligible Engine on which the
engine parameters indicate a possible malfunction (including associated Aircraft
systems), other than normal gas path deterioration, that is subsequently
confirmed by maintenance action will not be considered acceptable data, and

            2. data which is obviously inaccurate under normal engine monitoring
practices will not be considered acceptable data; this type of data will be
rejected unless AWA validity checks have established that Total Air Temperature,
Fuel Flow Aircraft and Engine Bleed Systems and other Aircraft parameters are
within normal operating ranges.

----------
[*] indicates Redacted material


                                       1.
<PAGE>   105
      The data to be recorded will be that normally recorded for Engine
Condition Monitoring purposes and will include the following:

            Altitude
            Mach Number
            Total Air Temperature (TAT) 
            Indicated Airspeed (IAS) 
            Engine Pressure Ratio (EPR) 
            Fuel Flow 
            Low Compressor Rotor Speed (N1) 
            High Compressor Rotor Speed (N2) 
            Exhaust Gas Temperature (EGT) 
            Bleed Air Configuration

      Engine Fuel Flow measurements will be referred to in the Standard Engine
Fuel Flow-Engine Pressure Ratio Relationship which will be defined for installed
Engines by the Aircraft manufacturer during the Aircraft flight test
certification program.

      D.    BASE FUEL FLOW

            The Base Fuel Flow shall be the initial fuel flow level of each
Eligible Engine on commencement of its commercial service. This shall be the
average of the cruise fuel flow values for the first ten Acceptable Data Points
recorded for each Eligible Engine. Base Fuel Flow is represented as a percentage
deviation from the Standard Engine Fuel Flow-Engine Pressure Ratio Relationship.

      E.    CRUISE FUEL FLOW

            The Cruise Fuel Flow shall be the average of the cruise fuel flow
values for ten Acceptable Data Points for each installed Eligible Engine at any
time after that Engine's Base Fuel Flow is established. Cruise Fuel Flow will
also be expressed as a percent deviation from the Standard Engine Fuel
Flow-Engine Pressure Ratio Relationship.

      F.    ENGINE CRUISE FUEL FLOW DETERIORATION

            The Cruise Fuel Flow Deterioration for an Eligible Engine shall
be the difference between its Cruise Fuel Flow and the Base Fuel Flow
expressed in percentage points.

      G.    PERIODIC FLEET AVERAGE CRUISE FUEL CONSUMPTION DETERIORATION

            The Periodic Fleet Average Cruise Fuel Consumption Deterioration
shall be the average of the Cruise Fuel Flow Deterioration for all installed
Eligible Engines for a [***] reporting period. This is to be reported to IAE
every [***].

---------
[*] indicates Redacted material
                                       2.
<PAGE>   106
      H.    FINAL FLEET AVERAGE CRUISE FUEL CONSUMPTION DETERIORATION

            The Final Fleet Average Cruise Fuel Consumption Deterioration is the
average of the Periodic Fleet Average Cruise Fuel Consumption Deterioration
values for all [***] periods during the Period of Guarantee.

      I.    OPERATIONAL DATA

            AWA shall provide the following data to IAE as indicated during the
Period of the Guarantee:

            1. Total quantity of fuel consumed by Eligible Engines during the
Period (U.S. Gallons), every [***].

            2. Average cost of fuel to AWA over the Period of Guarantee (U.S.
Dollars per U.S. Gallon), every [***].

            3. Individual Eligible Engine operating hours for each [***] period
during the Period of Guarantee identified by engine serial number, annually.

            4. Engine maintenance action information, as requested.

      J.    EXCESS FUEL CONSUMPTION CREDIT CALCULATION

            If at the [***] the Final Fleet Average Fuel Consumption
Deterioration exceeds the Guaranteed Margin, IAE will grant AWA a credit in
respect to excess fuel consumption calculated in accordance with the following
formula:

            C  =  (D-GM) YHF

            where:

            C  =  the amount of the credit in U.S. dollars

            D  =  the Final Fleet Average Fuel Consumption Deterioration
                  (expressed as a percentage)

            GM =  the Guaranteed Margin (expressed as a percentage)

            Y  =  average cruise fuel flow of Eligible Engines expressed in U.S.
                  gallons per hour

            H  =  the total of all flight hours flown by Eligible Engines during
                  the Period of Guarantee

            F  =  [***]

----------
[*] indicates Redacted material


                                       3.
<PAGE>   107
      In the alternative, the Credit Calculation will be made using the ECM
Trend Monitoring Program. In such event, the [***] reporting requirements are
not required and references to [***] periods shall be deemed deleted. Instead,
the Trend Monitoring data will be shared with IAE on a regular basis.

III.  DEFINITIONS AND GENERAL CONDITIONS

      All of the Definitions and General Conditions of the V2500 Engine and
Parts Service Policy shall apply to this Guarantee. Engines excluded by the
General Conditions of the Policy shall be excluded from this Guarantee.

IV.   SPECIFIC CONDITIONS

      A.    The Guaranteed Rate is predicated on the use by AWA of:

            1. An average flight cycle of no less than [***] hours;

            2. Thrust levels which are derated an average of [***] percent for
Takeoff and Climb relative to full Takeoff and Climb ratings;

            3. An average Aircraft utilization equal to or less than [***]
flight hours per year;

            4. A fleet of aircraft and spare Engines consisting of [***] Firm 
Aircraft, [***] Aircraft and [***] Purchased Items; and

            5. A delivery schedule in respect of the aforementioned aircraft and
spare Engines as set forth in Exhibit A, Exhibit B and Clause 1.1.6 of the
Contract on the date of Contract signature.

      B. [***]

      C. IAE hereby confirms that the analytical relationships and processes
used to calculate the original coverage provided by the Warranties for the
Aircraft will be used to calculate the adjusted levels of coverage for the V2500
Guarantees set forth in the Contract.

      D. Any modifications to the Guaranteed Cost Rate will be made in
consultation with AWA. Further, IAE will, at AWA's request, recalculate the
Guaranteed Cost Rate one time in each [***] during the Period of Guarantee.

----------
[*] indicates Redacted material


                                       4.
<PAGE>   108
      E. AWA and IAE establish by mutual agreement modifications or Parts which
can be incorporated to correct Guarantee exceedances, and AWA will incorporate
the changes into Eligible Engines.

V.    EXCLUSION OF BENEFITS

      The intent of this Guarantee is to provide specified benefits to AWA as a
result of the failure of Eligible Engines to achieve the performance level
stipulated in the Guarantee. It is not the intent, however, to duplicate
benefits provided to AWA under any other applicable guarantee, sales warranty,
service policy, or any special benefit of any kind as a result of the same
failure. Therefore, the terms and conditions of this Guarantee notwithstanding,
if the terms of this Guarantee should make duplicate benefits available to AWA
from IAE or any third-party, AWA may elect to receive the benefits under this
Guarantee or under any of the other benefits described above, but not both.


                                       5.
<PAGE>   109
                                   EXHIBIT E-9
                     V2500 EXHAUST GAS TEMPERATURE GUARANTEE


I.    INTRODUCTION

      IAE covenants with AWA that during the first [***] hours of operation of
each V2500 Engine, the maximum stabilized takeoff exhaust gas temperature will
not exceed the Certified Limit. Under this Guarantee if it is confirmed that the
Certified Limit has been exceeded, IAE will credit AWA's account with IAE in the
amount equal to the pro rata cost to restore the Engine performance. Further, if
there are five or more confirmed Engine removals to restore Engine performance
during the term of this Guarantee, additional credits will be provided to AWA as
described in section II E below. For the purpose of this Guarantee, the
Certified Limit is exceeded if the Engine will not achieve the specified engine
pressure ratio for takeoff thrust without exceeding the Certified Limit for its
exhaust gas temperature.

II.   GUARANTEE

      A.    PERIOD OF GUARANTEE

            The Period of Guarantee for each Eligible Engine will begin as of
[***] and will terminate [***] from that [***] or upon the expiration of the
first [***] hours of operation of such Engine, whichever is the sooner.

      B.    ELIGIBLE ENGINES

            The Engines that will be Eligible Engines under this Guarantee shall
be the Engines delivered with the Aircraft, the Purchased Items and S.A.L.E.
Engines. The Engines shall remain Eligible Engines provided that IAE
recommendations with respect to installation or maintenance are properly
implemented (proper implementation of such recommendations taking into
consideration the impact on AWA's operations).

      C.    RESTORATION OF INSTALLED ENGINE

            If during the Period of Guarantee, the maximum stabilized takeoff
exhaust gas temperature of an Eligible Engine installed on an Aircraft operated
by AWA exceeds the Certified Limit, AWA shall undertake on-wing Engine
maintenance recommended by IAE, with technical assistance provided by IAE, to
restore the performance of that Engine.

      D.    CALIBRATION OF REMOVED ENGINE

            If the performance of an installed Eligible Engine cannot be
restored by the maintenance recommended under Section II, Paragraph C, AWA shall
promptly remove such Engine from the Aircraft and dispatch it for calibration in
an IAE designated test cell. If such calibration verifies that the exhaust gas
temperature of the Engine is not in excess of the Certified Limit or it is
established that any excess is due to causes which are excluded by the General
Conditions in Section III, then the cost of such test cell calibration and
associated transportation will be borne by AWA. Otherwise, IAE will bear the
cost of the test cell calibration.

----------
[*] indicates Redacted material


                                       1.
<PAGE>   110
      E.    CREDIT ALLOWANCE

            A credit will be granted by IAE for each event not meeting the
requirements set forth in Section I of this Guarantee and as verified by Section
II, Paragraph D. above. Such credit shall be equivalent to the pro rata cost to
restore the Engine's performance based on the time remaining on the Engine's
first [***] flight hours of commercial operation according to the following
equation;

      Credit =    (([***] engine flight hours - engine flight hours of
                  commercial operation)/[***])) x cost of performance
                  restoration

      In addition to the above, should there be [***] or more confirmed Engine
removals to restore Engine performance during the Period of Guarantee, the
following additional credit will be granted by IAE.

      For the [***] confirmed removal through the [***] confirmed removal:

      Credit - $[***] per confirmed removal;

      For the tenth and each additional confirmed removal;

      Credit = $[***] per confirmed removal.

      IAE's maximum liability for these additional credits shall be $[***].

III.  DEFINITIONS AND GENERAL CONDITIONS

      All of the Definitions and General Conditions of the V2500 Engine and
Parts Service Policy shall apply to this Guarantee. Engines excluded by the
General Conditions of the Policy shall be excluded from this Guarantee.

IV.   SPECIFIC CONDITIONS

      A.    The Guaranteed Rate is predicated on the use by AWA of:

            1. An average flight cycle of no less than [***] hours;

            2. Thrust levels which are derated an average of [***] percent for
Takeoff and Climb relative to full Takeoff and Climb ratings;

            3. An average Aircraft utilization equal to or less than [***]
flight hours per year; and

            4. A fleet of aircraft and spare Engines consisting of [***] Firm 
Aircraft, [***] Aircraft and [***] Purchased Items; and

            5. A delivery schedule in respect of the aforementioned aircraft and
spare Engines as set forth in Exhibit A, Exhibit B and Clause 1.1.6 of the
Contract on the date of Contract signature.

----------
[*] indicates Redacted material


                                       2.
<PAGE>   111
      B. [***]

      C. IAE hereby confirms that the analytical relationships and processes
used to calculate the original coverage provided by the Warranties for the
Aircraft will be used to calculate the adjusted levels of coverage for the V2500
Guarantees set forth in the Contract.

      D. Any modifications to the Guaranteed Cost Rate will be made in
consultation with AWA. Further, IAE will, at AWA's request, recalculate the
Guaranteed Cost Rate one time in each [***] during the Period of Guarantee.

      E. AWA and IAE establish by mutual agreement modifications or Parts which
can be incorporated to correct Guarantee exceedances, and AWA will incorporate
the changes into Eligible Engines.

V.    EXCLUSION OF BENEFITS

      The intent of this Guarantee is to provide specified benefits to AWA as a
result of the failure of Eligible Engines to achieve the performance level
stipulated in the Guarantee. It is not the intent, however, to duplicate
benefits provided to AWA under any other applicable guarantee, sales warranty,
service policy, or any special benefit of any kind as a result of the same
failure. Therefore, the terms and conditions of this Guarantee notwithstanding,
if the terms of this Guarantee should make duplicate benefits available to AWA
from IAE or any third-party, AWA may elect to receive the benefits under this
Guarantee or under any of the other benefits described above, but not both.

---------
[*] indicated Redacted material

                                       3.
<PAGE>   112
7 October 1998


America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Sky Harbor International Airport
Phoenix, Arizona  85034

Subject:   SIDE LETTER NO. 1 TO AMENDED AND RESTATED V2500(R) SUPPORT CONTRACT
           BETWEEN AMERICA WEST AIRLINES, INC. AND IAE INTERNATIONAL AERO
           ENGINES AG DATED 7 OCTOBER 1998

Ladies and Gentlemen:

We refer to the Amended and Restated V2500 Support Contract dated 7 October 1998
between America West Airlines, Inc. ("AWA") and IAE International Aero Engines
AG ("IAE") (said Amended and Restated V2500 Support Contract, as amended, being
hereinafter referred to as the "Contract"). Terms used herein shall have the
same meanings as those given to them in the Contract.

The Side Letter No. 1 amends and restates Side Letter No. 1 to V2500 Support
Contract dated 23 December 1994 between AWA and IAE and Side Letter No. 2 to
V2500 Support Contract dated 7 March, 1995 between AWA and IAE as part of the
Contract to reflect the purchase by AWA of certain additional Airbus V2500-A5
powered A320 family aircraft.

1.    OPTION AIRCRAFT

      The delivery schedule of the Option Aircraft are subject to:

            (a)   Delivery occurring between [***] and [***]; and

            (b)   AWA will provide written notice to IAE within [***] days of
                  AWA's exercise of its right to firmly order such Option
                  Aircraft in accordance with a delivery date proposed by
                  Aircraft Manufacturer; and

            (c)   AWA purchasing no more than ten (10) Aircraft in any calendar
                  year.

      [***]

----------
[*] indicates Redacted material


              THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE


                                       1.
<PAGE>   113
2.    CONVERSION RIGHTS

      2.1 [***] If the Aircraft Manufacturer permits AWA to convert every other
[***] to be delivered to AWA into either one (1) [***]") or one (1) [***]
collectively referred to as the "[***]"), and IAE receives written notice of
such conversion at least [***] months prior to the month of scheduled delivery
of the [***], IAE will provide Propulsion Systems to such new delivery dates to
the same extent such substitution rights are provided by Aircraft Manufacturer
for such [***]. AWA's right to exercise its substitution rights are subject to
IAE's receipt of an irrevocable written notice from AWA upon effectivity of such
substitution and, in any event, such notice shall be at least [***] months prior
to the scheduled delivery date of the [***] which is being substituted by the
new [***].

      2.2 [***] If the Aircraft Manufacturer permits AWA to convert each of the
[***] to be delivered to AWA in accordance with the schedule set forth in
Exhibit A of the Contract to one [***], and IAE receives irrevocable written
notice from AWA of such conversion at least [***] months prior to the month of
scheduled delivery of the [***] to be converted, IAE will provide Propulsion
Systems to such new delivery dates.

      2.3 The conversion rights set forth in Clause 2.1 above are limited to a
maximum of one (1) conversion per [***]

      2.4 To the extent AWA converts [***], then at least one (1) of the Firm
Spare Engines shall be substituted with one (1) new V2533-A5 spare Engine for
delivery in accordance with the Firm Spare Engine delivery schedule set forth in
Exhibit B to the Contract. The unit base price of each V2533-A5 spare Engine is
US$[***], subject to escalation from the base month of July 1988.

3.    [***]

      3.1 [***]

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                                       2.
<PAGE>   114
[***]

4.    THIRD PARTY PRE-DELIVERY PAYMENT FINANCING

      4.1 In respect of predelivery payment financing of the Aircraft by a third
party lender or financial lessor, IAE will consent to the assignment by AWA of
certain of its rights to receive benefits (monetary or otherwise) and its
obligations under the Contract (including any exhibits thereto and any letter
agreements currently existing or hereafter entered into, that by their terms
constitute part of such Contract), upon no less than [***] days prior written
notice from AWA, to such lender or financial lessor, as security; provided that
(1) the assignee shall agree in a manner reasonably acceptable to IAE that
exercise of its rights and obligations shall be subject to this agreement; and
(2) a copy of the assignment by provided to IAE (with financial terms redacted);
and (3) AWA shall be liable for all costs and expenses arising from the
preparation and enforcement of such agreement.

      4.2 Without limiting the foregoing, AWA may assign its rights under this
Agreement as collateral security for the payment of amounts owed in respect of
any financing of the Aircraft, provided that (i) IAE shall receive an executed
true and complete original of the written instrument of assignment with
sensitive commercial terms redacted, and (ii) the assignee shall agree in a
manner reasonably satisfactory to IAE that the exercise of its rights is subject
to all of the terms and conditions of the Contract and provided further that in
no event shall such assignee obtain any rights greater than the rights of AWA
under the Contract. IAE shall provide reasonably cooperation in connection with
such an assignment provided appropriate documentation is provided to IAE for
review and execution at least [***] business days prior to the closing. No
action taken by AWA or IAE under the Subclause shall subject IAE to any
liability to which it would not otherwise be subject under the Contract or
adversely modify in any way IAE's rights under the Contract.

5.    FLEET INTRODUCTORY ASSISTANCE CREDIT

      5.1 To assist AWA with introducing the Firm Aircraft, Growth A320 Aircraft
and Option Aircraft into its fleet, IAE will provide the following fleet
introductory assistance credits (the "Fleet Introductory Assistance Credit") to
AWA:

            a.    US$[***] per aircraft for each of the Firm A319 Aircraft;

            b.    US$[***] per aircraft for each of the Firm A320 Aircraft;

            c.    US$[***] per aircraft for each of the Growth A320 Aircraft;

            d.    US$[***] per aircraft for each of the Option A319 Aircraft;

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                                       3.
<PAGE>   115
            e.    US$[***] per aircraft for each of the Option A320 Aircraft;

            f.    US$[***] per aircraft for each of the Option A321 Aircraft;

      With the agreement of AVSA, IAE consents to the assignment by AWA of the
credit to AVSA. IAE will issue the applicable Fleet Introductory Assistance
Credit specified above to AVSA, upon delivery to AWA of each of the
corresponding Firm, Growth or Option Aircraft, to be applied toward payment for
the Propulsion Systems for the corresponding Aircraft. Should AVSA not agree to
the assignment of the credit, IAE will issue the applicable credit to AWA's
account with IAE.

      Should AWA be in default or material breach of any of its obligations
under the Contract, and without prejudice to any other rights that IAE may have,
any credits issued hereunder will be used first to reduce any outstanding
indebtedness under the Contract to IAE. Thereafter, any remaining Fleet
Introductory Assistance Credit issued hereunder may be used by AWA for the
purchase of V2500 spare Engines, Spare Parts, tooling, or services from IAE.

      5.2 In respect of each Firm Converted Aircraft and Option Converted
Aircraft of which AWA takes delivery, the credits specified in Clause 5.1 above
would be withdrawn, and replaced with a substitute credit as follows:

            (a) In respect of each new Firm Converted A320 Aircraft powered by
new V2527-A5 Propulsion Systems, the value of the fleet introductory assistance
credit is US$[***].

            (b) In respect of each new Firm Converted A321 Aircraft powered by
new V2533-A5 Propulsion Systems, the value of the fleet introductory assistance
credit is US$[***].

            (c) In respect of each new Option Converted A319 Aircraft powered by
new V2524-A5 Propulsion Systems, the value of the fleet introductory assistance
credit is US$[***];

            (d) In respect of each new Option Converted A321-200 Aircraft
powered by new V2533-A5 Propulsion Systems, the value of the fleet introductory
assistance credits is US$[***];

      Fleet Introductory Assistance Credits for the Firm Converted Aircraft and
the Option Converted Aircraft will be issued by IAE and may be used by AWA as
set forth in Clause 5.1 above.

      5.3 To further assist AWA with introducing the Firm A320 Aircraft, Growth
A320 Aircraft, Option Converted Aircraft and the Option Aircraft into its fleet,
IAE will provide AWA with spare parts credits in the amount of US$[***] per
Aircraft for each of the Firm A320 Aircraft and spare parts credits in the
amount of US$[***] per 

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                                       4.
<PAGE>   116
Aircraft for each of the Growth A320 Aircraft, Option Converted Aircraft, and
Option Aircraft. These credits will be issued upon delivery to and acceptance of
each corresponding Firm A320 Aircraft, Growth A320 Aircraft, Option Converted
Aircraft and Option Aircraft and shall be used for the payment of up to [***] of
the invoiced amount of any individual Spare Parts or tooling order from IAE.

      5.4 The credits described above in Clause 5.1, 5.2, and 5.3 above are
subject to escalation in accordance with the IAE Escalation Formula from the
base month of January, 1996 to the actual date of delivery to Aircraft
Manufacturer by IAE of the Propulsion Systems for the corresponding Aircraft.

6.    ADDITIONAL CREDITS

      IAE will provide additional Fleet Introductory Assistance Credits (the
"Additional Credits") to AWA as follows:

            (i) US$[***] per aircraft for each of the [***] Firm A319 Aircraft
delivered to and accepted by AWA, payable by IAE to AWA on delivery of such Firm
A319 Aircraft. In the event AWA converts [***] Firm A319 Aircraft to Firm
Converted Aircraft, $[***] credit may be payable by IAE to AWA on delivery of
such Firm Converted Aircraft.

            (ii) US$[***] per aircraft for each of the [***] Firm A320 Aircraft
delivered to and accepted by AWA, payable by IAE to AWA on delivery of such Firm
A320 Aircraft.

      It shall be a condition precedent to the obligation of IAE to provide such
Additional Credits that each of the following conditions shall have been
satisfied (x) IAE shall have no obligation to arrange or provide or cause to be
arranged or cause to be provided any other financing, credit support, or asset
support whatsoever in relation to any of the Aircraft, except as set forth in
the [***] Agreement between AWA and IAE dated [***] and (y) the [***] Agreement
between AWA and IAE dated [***] shall have been terminated by an instrument in
writing of even date herewith executed by all parties or by their duly
authorized representatives.

7.    LIQUIDATED DAMAGES

      7.1 AWA acknowledges and agrees that, should it breach the Contract as
modified by this Side Letter No. 1, the damages that IAE would suffer would be
uncertain and difficult to prove and quantify. If AWA shall have [***], then AWA
shall pay to IAE, as liquidated damages, and not as a penalty, [***]

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                                       5.
<PAGE>   117
Subject to the limitation set forth in Clause [***] below, AWA and IAE agree
that liquidated damages are appropriate and that the amount of liquidated
damages is not disproportionate to the amount of damages that IAE would suffer
if AWA were to [***] as described above.

      7.2 AWA acknowledges and agrees that, should it breach the Contract as
modified by this Side Letter No. 1, the damages that IAE would suffer would be
uncertain and difficult to prove and quantify. If AWA shall have [***], then AWA
shall pay to IAE, as liquidated damages, and not as a penalty, [***]. Subject to
the limitation set forth in Clause [***] below, AWA and IAE agree that
liquidated damages are appropriate and that the amount of liquidated damages is
not disproportionate to the amount of damages that IAE would suffer if AWA [***]
as described above.

      7.3 In no event shall AWA be liable to IAE for liquidated damages pursuant
to clauses 7.1 and 7.2 above in an aggregate amount in excess of US$[***].

      7.4 IAE's rights to claim liquidated damages hereunder shall not prejudice
any other rights and remedies IAE may have under the Contract and at law,
including without limitation, any other claim for damages relating to AWA's
failure to purchase and to take delivery of any of the Firm Aircraft pursuant to
the Contract, and any other breach by AWA of its obligations hereunder.

      7.5 AWA, after consultation with its own attorneys, hereby specifically
acknowledges and agrees with IAE that these liquidated damages represent a
reasonable forecast of the loss that would be incurred by IAE and just
compensation to IAE should AWA breach this Contract by [***].

      7.6 Should AWA not [***]

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                                       6.
<PAGE>   118
[***] For the purpose of clarity and solely as an example, should AWA [***]

8.    [***]

      [***]

9.    AIRCRAFT DELIVERY DATE FLEXIBILITY

      IAE acknowledges that the [***] has certain rights to change the delivery
date of the Aircraft. IAE agrees that the delivery dates of the Aircraft as set
forth in [***] Contract shall be modified without the prior written consent of
IAE if all of the following conditions are fulfilled:

      (1) The change in delivery date is made [***] in accordance with the 
terms of the contract [***]; and

      (2) [***] advises [***] of the change in delivery date at approximately 
the same time; and

      (3) The change in delivery date does not change the calendar year in 
which the Aircraft will be delivered unless:

          a. the change is due to a force majeure event affecting [***] or

          b. the change is due to an inexcusable delay on the part of [***] of 
the delay within the [***] prior to the scheduled delivery date; or

          c. the change is due to an inexcusable delay on the part of [***] of 
the delay more than [***] prior to the scheduled delivery date, and, at IAE's 
request, AWA has used its reasonable efforts to arrange a meeting amongst [***] 
to discuss the impact of such change on IAE.

            The resultant change in the delivery date of the Propulsion Systems
            for such Aircraft can be made by the Aircraft Manufacturer without
            the consent of IAE according to the terms of the contract between
            IAE and the Aircraft Manufacturer for the supply of the respective
            Propulsion Systems.

      Except as revised by this Side Letter No. 1, the provisions of the
Contract shall remain in full force and effect.

Very truly yours,                       Accepted on behalf of:

IAE INTERNATIONAL AERO                  AMERICA WEST AIRLINES, INC.
ENGINES AG

By: /s/ Barry Eccleston                 By: /s/ Ronald A. Armini           
    ----------------------                  --------------------------
Title: President and CEO                Title: Sr. V.P. Operations
       -------------------                     -----------------------
Date: October 7, 1998                   Date: October 7, 1998
      --------------------                    ------------------------

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                                       7.
<PAGE>   119
7 October 1998

America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Sky Harbor International Airport
Phoenix, Arizona 85034

RE:   SIDE LETTER AGREEMENT NO. 2 TO THE AMENDED AND RESTATED V2500(R) SUPPORT
      CONTRACT BETWEEN AMERICA WEST AIRLINES, INC. AND IAE INTERNATIONAL AERO
      ENGINES AG DATED 7 OCTOBER 1998

Dear Ladies and Gentlemen:

We refer to the Amended and Restated V2500 Support Contract between America West
Airlines, Inc. ("AWA") and IAE International Aero Engines AG ("IAE") dated 7
October 1998 (said Amended and Restated V2500 Support Contract, as amended,
being hereinafter referred to as the "Contract"). Terms used herein shall have
the same meaning as those given to them in the Contract.

This Side Letter Agreement Number 2 provides AWA with certain benefits
pertaining to AWA's V2500-A5 series Propulsion Systems for Aircraft and V2500
spare Engines purchased by AWA.

      1. Pre-Delivery Payments ("PDP's")/Pooling Arrangement.

            1.1 With respect to Purchased Item Nos. [***] through [***], the
predelivery payment terms set forth in Clauses 2.6.1.1, 2.6.1.2, 2.6.1.3 and
2.6.2 of the Contract are replaced with the following:

            1.1.1 AWA is to deposit $[***] into IAE's account within five (5)
business days of the date of signature of the Contract.

            1.1.2 Such $[***] deposit will be applied to the invoice price of
Purchased Item No. 9.

            1.1.3 No further predelivery payments will be required of AWA with
respect to Purchased Items No. [***] through [***].

            1.1.4 The $[***] deposited with IAE will be refunded to AWA if IAE
is unable to deliver Purchased Item No. [***] and AWA cancels the order for
Purchased Item No. [***] pursuant to AWA's rights as set forth in Clause 6.1 of
the Contract. In such event, IAE will refund the $[***] deposit [***].

            1.1.5 If AWA fails to take delivery of any of Purchased Items Nos.
[***] through [***], except as to Purchased Item No. [***] as set forth in
Clause 1.1.4 above, the $[***] deposit will be applied against IAE's damages and
the balance refunded to AWA. Should AWA fail to take delivery of any of
Purchased Items Nos. [***] through [***], and the $[***] deposit be

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<PAGE>   120
applied against IAE's damages, the parties agree to negotiate in good faith the
replenishment of the deposit pool.

      2. Spare Engine Assistance Credit for Specified Engines.

            2.1 To assist AWA with procuring spare Engines, IAE will credit
AWA's account with IAE in the amount of $[***] per spare Engine for each of the
[***] spare Engines purchased by AWA pursuant to the Contract.

            2.2 Each such credit will be issued upon delivery to and acceptance
by AWA of the corresponding spare Engine. Each such credit may be used by AWA
toward the final payment for the corresponding spare Engine or for the purchase
of Spare Parts from IAE.

            2.3 Each such credit is subject to escalation in accordance with the
IAE Escalation Formula set forth in Exhibit B to the Contract from the base
month of July 1988.

      3. V2500 Engine and Parts Service Policy Enhancement.

            3.1 The V2500 Engine and Parts Service Policy set forth in Exhibit
E-1 to the Contract is hereby enhanced as follows:

                  3.1.1 Service Policy coverage as described below will be
provided for those Engines installed on the Aircraft and on the S.A.L.E.
Aircraft, in both cases at the time of delivery of such to AWA, and Spare Engine
Nos. [***] through [***] (collectively referred to as the "Enhanced Engines").

                  3.1.2 From [***] Engine Flight Hours through [***] Engine
Flight Hours of each of the Enhanced Engines, AWA will receive reimbursement
from IAE for the costs of AWA's qualifying shop visits in the following amounts:

                        3.1.2.1 For the first [***] removals/shop visits of any 
of the Enhanced Engines taken together which would have been covered by the
Service Policy had they occurred prior to 3,000 Engine Flight Hours - no
reimbursement;

                        3.1.2.2 For each subsequent removal/shop visit of any of
the Enhanced Engines which would have been covered by the Service Policy had
they occurred prior to 3,000 Engine Flight Hours - [***] percent ([***]%) of the
allowance set forth in Section I.A of the Service Policy as if the Engine had
been operated less than [***] Engine Flight Hours.

            3.2 All provisions of the Service Policy regarding submission and
verification of claims shall apply to this Clause 3.

            3.3 IAE's contribution to the cost of qualifying shop visits will
take the form of a Spare Parts credit to AWA's account with IAE.

            3.4 The [***] events referred to in Clause 3.1.2.1 above shall be 
eligible for Extended First Run Coverage as described in the Service Policy.
Thereafter, Extended First Run Coverage shall no longer be applicable to
Eligible Engines.

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      4. SPARE PARTS AND SPARE ENGINE DELIVERY ASSISTANCE.

            4.1 In the event that AWA anticipates entering into a period of zero
spares (no serviceable spare Engines available) that will continue for at least
[***] days and such situation is due either to:

                  4.1.1 excessive turn times at AWA's maintenance provider and
such excessive turn times can be reasonably associated with IAE's inability to
deliver Spare Parts to the maintenance provider at the published lead times in
the then current IAE Spare Parts Catalog; or

                  4.1.2 a delay in delivery of a spare Engine purchased by AWA
pursuant to the Contract;

IAE will use diligent efforts to reposition a V2500-A5 spare engine to AWA's
facility in Phoenix. This engine will remain there until the zero spare
situation has been alleviated or until the spare engine is needed to satisfy an
Aircraft-on-Ground ("AOG") situation.

            4.2 In the situation described in Clause 4.1 above, should AWA
require the use of the IAE lease pool engine positioned at AWA's facility in
Phoenix to alleviate an AOG situation, such engine shall be leased to AWA under
the then current IAE Standard Terms of Business Lease ("STOBL") except that
[***]

            4.3 In a situation described in Clause 4.1 above which does not
relate to an excusable delay in delivery of a spare Engine purchased by AWA, if
IAE can not position an emergency lease pool engine in Phoenix and AWA is forced
to lease an engine from a third party to alleviate an AOG situation, IAE will
reimburse AWA for up to [***] percent ([***]%) of reasonable third party fees
(excluding hourly use charges) incurred by AWA during the period reasonably
necessary to alleviate the AOG situation. This reimbursement shall be in the
form of Spare Parts credits which will be issued upon IAE's receipt of an
original invoice issued by such third party which has been certified by AWA. The
benefit set forth in this clause 4.3 will not be available to AWA with respect
to any delays in delivery of spare Engine purchased by AWA pursuant to the
Contract for reasons set forth in Clause 6.1.1 of the Contract.

            4.4 If IAE fails to have a V2500-A5 engine available for positioning
in the situation described in Clause 4.1 above, and AWA can not lease an engine
from a third party during an AOG situation, IAE will issue AWA Spare Parts
credits in an amount equal to of $[***] per day of the AOG situation up to a
maximum of $[***] of Spare Parts credits per occurrence. IAE's maximum
obligation pursuant to this Clause 4.4 shall be $[***]. The benefits set forth
in this Clause 4.4 will not be available to AWA with respect to any delays in
delivery of spare Engines purchased by AWA pursuant to the Contract for reasons
set forth in Clause 6.1.1 of the Contract.

            4.5 IAE's obligations in this Clause 4 shall begin upon delivery of
the first Aircraft to AWA and terminate [***] years thereafter.

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      5. THRUST RATING FLEXIBILITY.

            5.1 Subject to AWA's compliance with Clause 2.1.3 of the Contract,
the IAE Customer Support Representative at AWA will provide AWA with access to
an adequate quantity of appropriate data plates and data entry plugs which allow
AWA to utilize the Aircraft Engines and Engines on the S.A.L.E. Aircraft and
spare Engines and any other spare Engine(s) purchased from IAE interchangeably
in the AWA fleet of Aircraft and IAE shall take any other action required to
allow this interchange. For purposes of IAE service bulletin 500-ENG-72-0285,
this Side Letter shall constitute a contractual agreement to allow the
conversion described in that bulletin.

      6. ASSIGNMENT OF CREDITS.

            So long as AWA is not in material default of any of its obligations
as set forth in the Contract at the time of any assignment, which default has
continued for a period of [***] business days after notice thereof from IAE, AWA
may assign to any provider of Engine maintenance to AWA any credits available in
AWA's account with IAE to which AWA has the right to utilize toward the purchase
of V2500 spare parts or otherwise from IAE. Any credits in AWA's account with
IAE which were granted pursuant to Clause 5.3 of Side Letter No. 1 and so
assigned shall be utilized in the manner set forth in Clause 5.3 of Side Letter
No. 1.

      7. SPARE ENGINE DELIVERY DATE FLEXIBILITY.

            AWA may interchange the delivery date of Purchased Item No. [***] as
set forth in Exhibit B of the Contract as of the date of Contract signing, with
one (1) of the delivery dates assigned to Purchased Item Nos. [***]. AWA agrees
to advise IAE in writing of such interchange no later than [***] days prior to
the proposed interchange date.

      8. PREVIOUSLY DELIVERED ENGINE.

            If any Engines were delivered to AWA prior to the date of the
delivery date of the first spare Engine listed on Exhibit B, the V2500 Support
Contract dated December 23, 1994 and its Warranties and Guarantees shall apply
to such Engines as if the amendments and letter agreement of even date herewith
had not been made.

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<PAGE>   123
Except as revised by this Side Letter Agreement No. 2, the provisions of the
Contract shall remain in full force and effect.

Very truly yours,                       Accepted on behalf of:

IAE INTERNATIONAL AERO                  AMERICA WEST AIRLINES, INC.
ENGINES AG

By: /s/ Barry Eccleston                 By: /s/ Ronald A. Armini        

Title: President and CEO                Title: Sr. V.P. Operations

Date: October 7, 1998                   Date: October 7, 1998


              THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE