<PAGE>

                                                                    EXHIBIT 10.1

    PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION IN A CONFIDENTIAL TREATMENT REQUEST UNDER
RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE SYMBOL
"[***]" IN THIS EXHIBIT INDICATES THAT INFORMATION HAS BEEN OMITTED.

                              CODE SHARE AGREEMENT

This CODE SHARE AGREEMENT (this "Agreement") is made and entered into as of
September 18, 2003 (the "Contract Date") to be effective as of January 1, 2004
(the "Effective Date"), by and between FRONTIER AIRLINES, INC., a Colorado
corporation ("Frontier"), and HORIZON AIR INDUSTRIES, INC., a Washington
corporation ("Partner"). Certain capitalized terms not otherwise defined herein
will have the meanings ascribed to them in Schedule A to this Agreement.

                                 R E C I T A L S

A.       Frontier holds a certificate of public convenience and necessity issued
by the Department of Transportation ("DOT") authorizing it to engage in the
interstate and overseas air transportation of persons, property and mail between
all points in the United States, its territories and possessions.

B.       Partner holds certificates of public convenience and necessity issued
by the DOT authorizing Partner to engage in the interstate transportation of
persons, property and mail in the United States, its territories and
possessions.

C.       Frontier owns various trademarks, service marks and logos, including
"Frontier Airlines" and distinctive exterior color decor and patterns on its
aircraft, hereinafter referred to individually and collectively as the "Frontier
Service Marks."

D.       Frontier and Partner desire to enter into a code share agreement
whereby Partner will provide certain flight and other services to Frontier on
terms and conditions more particularly set forth in this Agreement from and
after the Effective Date.

NOW, THEREFORE, in consideration of the promises, covenants, representations and
warranties hereinafter set forth, and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Frontier and Partner
agree as set forth below.

                                A G R E E M E N T

1.  Rights, Responsibilities and Obligations of Partner:

         1.1      Flight Service. During the term of this Agreement, Partner
                  will operate "Frontier JetExpress" air transportation services
                  (the "Flight Services") using the Initial Fleet and the Option
                  Fleet (each as defined in Section 1.3) to and from the cities
                  and based upon the schedule established from time to time by
                  Frontier (the "Schedule") and provided to Partner by written
                  notice (a "Schedule Notice") no less than 70 days for schedule
                  changes not involving Flight Services to new cities and no
                  less than 90 days for schedule changes involving the addition
                  of Flight Services to a new city or cities prior to the
                  effective date of the schedule change described in the
                  Schedule Notice. The aircraft comprising the Fleet will be
                  Bombardier CRJ-700s and are herein collectively referred to as
                  the "Aircraft."

<PAGE>

                  For purposes of this Agreement, "Flights" means flights
                  operated pursuant to the Schedule. Frontier may change the
                  Schedule by issuance of a Schedule Notice at any time. When
                  creating a Schedule, Frontier shall: (i) create a Schedule
                  which will permit Partner to schedule flight crews in a manner
                  consistent with Partner's block time, operational and
                  maintenance practices set forth on Exhibit 1.1 to this
                  Agreement, as modified from time to time by mutual agreement
                  of the parties prior to the due date of the relevant Schedule
                  Notice; (ii) take into account airport facilities available
                  for Aircraft handling; (iii) permit maintenance as required by
                  Section 1.7.2 and scheduled heavy maintenance on Aircraft, as
                  required; (iv) take into account the Spare Aircraft (as
                  defined in Section 1.3.1); and (v) provide for at least 70
                  days prior notice of any holiday cancellations.

         1.2      Ad Hoc Schedule Changes. Frontier may at its election require
                  ad hoc changes to the Schedule for any reason including but
                  not limited to irregular operations, mechanical problems,
                  weather conditions, or charter opportunities (such flights as
                  requested on an ad hoc basis by Frontier and not otherwise
                  reflected on a Schedule Notice hereby defined as "Ad Hoc
                  Flights"). Frontier and Partner will discuss Ad Hoc Flights
                  and Partner will complete such Ad Hoc Flights only upon mutual
                  agreement of the parties. Ad Hoc Flights completed by Partner
                  will become part of the Schedule for purposes of Section 6.2
                  but will be excluded from the Partner's performance
                  requirements under Section 4.

         1.3      Fleet.

                  1.3.1    Initial Fleet. Each of the Aircraft identified on
                           Exhibit 1.3.1 as the initial aircraft (the "Initial
                           Fleet") will be Bombardier CRJ-700s and shall be
                           placed into Flight Services by Partner in the
                           calendar months set forth on Exhibit 1.3.1 (the
                           "Delivery Schedule"). For new aircraft deliveries
                           Partner will provide no less than 60 days' prior
                           written notice of the week in which the Aircraft in
                           the Initial Fleet will be delivered, and no less than
                           30 days' prior written notice of the day on which the
                           Aircraft in the Initial fleet will be delivered. In
                           the event Partner is unable to meet the delivery week
                           or dates set for on any notice, Partner may use a
                           Substitute Aircraft (as defined in Section 1.3.4) to
                           operate any Flight that was scheduled for the delayed
                           Aircraft for up to 30 days or, with prior consent of
                           Frontier, for such longer period as may be necessary.
                           The Initial Fleet will be comprised of eight (8) core
                           operating Aircraft (the "Core Aircraft") and one (1)
                           operational spare Aircraft (the "Spare Aircraft").

                  1.3.2    Option Fleet. Frontier and Partner agree to meet
                           periodically during the term of this Agreement to
                           discuss and if possible agree on the expansion of the
                           Initial Fleet by as many as twelve (12) Aircraft (the
                           "Option Fleet"). Placement of the Option Fleet into
                           Flight Services is subject to review and mutual
                           agreement between the parties, provided, it is
                           understood and agreed that the terms and conditions
                           set forth in this Agreement will generally be
                           applicable to the Option Fleet other than such
                           changes as may be agreed to by the parties with
                           respect to the Fixed Costs and Maintenance Parts
                           relating to the Option Aircraft and the possible
                           extension of the term of this Agreement

<PAGE>

                           to take into account a reasonable operating
                           commitment for the Option Fleet. The Initial Fleet
                           and the Option Fleet are collectively referred to
                           herein as the "Fleet."

                  1.3.3    Aircraft Configuration, Decor and Livery. From the
                           Effective Date until such time that all Aircraft in
                           the Initial Fleet are operating as Frontier
                           JetExpress Flights, all but two (2) of the Aircraft
                           shall be painted, marked and decorated to bear
                           Frontier Service Marks, consisting of Frontier livery
                           and the name "Frontier JetExpress" in accordance with
                           the livery standards to be provided by Frontier (the
                           "Frontier JetExpress Livery") and, at Frontier's
                           election, meet the configurations and interior decor
                           standards set forth in Exhibit 1.3.3 (the
                           "Configuration Standards"). Thereafter, eighty
                           percent (80%) of the Fleet, rounded up to the nearest
                           whole number, shall be painted, marked and decorated
                           to bear the "Frontier JetExpress Livery" and, at
                           Frontier's election, meet the Configuration
                           Standards. Aircraft not required to be in Frontier
                           JetExpress Livery under the prior sentence and in the
                           Fleet may be left with an all white exterior and
                           otherwise be configured in accordance with Partner's
                           internal standards (such Aircraft referred to as
                           "White Tail Aircraft"). Costs and expenses incurred
                           in meeting the Livery and Configuration Standards or
                           White Tail configuration will be allocated as
                           follows: For New Aircraft, the Aircraft will be
                           delivered in the Frontier JetExpress Livery and
                           covered by the terms of the purchase agreement
                           between Partner and the Aircraft manufacturer, and
                           costs relating to the application of the animal motif
                           tail decal and any costs associated with Frontier
                           Configuration Standards over and above costs for
                           Partner's own configuration shall be borne by
                           Frontier. For Used Aircraft, the costs of removing
                           the existing livery and placing the exterior of the
                           Aircraft in an all white condition will be borne by
                           Partner, and the cost of placing the Frontier
                           JetExpress Livery and the application of the animal
                           motif decal for all Used Aircraft not being left as
                           White Tail Aircraft will be borne by Frontier. Should
                           Frontier elect to have the New Aircraft delivered to
                           meet the Configuration Standards, or have the
                           interior of the Used Aircraft (other than the White
                           Tail Aircraft) modified to meet the Configuration
                           Standards, related costs and expenses will be borne
                           by Frontier. Any changes to the Livery and
                           Configuration Standards requested by Frontier after
                           the Aircraft are placed into service as part of the
                           Fleet will be performed by Partner at Frontier's sole
                           cost and expense. Such configuration changes must be
                           accomplished within 120 days following Frontier's
                           request. In the event Frontier desires changes to
                           Frontier JetExpress Livery, Frontier will provide
                           Partner with 120 days' prior written notice and all
                           requested changes must be accomplished by the end of
                           such 120 day period, at Frontier's sole cost and
                           expense. Partner shall use and display suitable signs
                           on the interior and exterior of each Aircraft
                           identifying Partner as the operator of the Flight
                           Services. All announcements, displays or literature
                           used or viewed by Partner customers on Flights shall
                           feature Frontier or "Frontier JetExpress," and no
                           other air carrier.

<PAGE>

                  1.3.4    Substitute Aircraft. In order to address maintenance
                           requirements, irregular operations, or Aircraft
                           delivery delays as permitted under Section 1.3.1,
                           Partner may substitute for any Aircraft in the Fleet
                           an aircraft from its own operational fleet (each, a
                           "Substitute Aircraft") for up to thirty (30) days, so
                           long as such substitute aircraft is a White Tail
                           Aircraft or Horizon Livery. Permanent substitutions
                           or substitutions over thirty (30) days for any
                           aircraft in the Fleet will require the advance
                           written consent of Frontier.

                  1.3.5    Fleet Domicile. On or before the Effective Date,
                           Partner will domicile crews required for the Fleet
                           Services in Denver, Colorado and establish a line
                           maintenance base capable of performing A Checks and
                           clearing MELs at Denver International Airport.

         1.4      Other Services. Frontier will be responsible for providing all
                  Other Services required in connection with the Flight Services
                  through the use of its own personnel or through the retention
                  of third party contractors, and will be responsible for all
                  costs and expenses related to such Other Services. Should
                  Frontier request proposals to subcontract for Other Services,
                  Partner will have a right of first refusal to provide such
                  Other Services upon the most favorable terms and conditions
                  being offered to Frontier by other subcontractors on a "right
                  of first refusal" basis. In the event Partner is selected to
                  perform the Other Services on a subcontract basis, Frontier
                  and Partner will enter into a separate agreement with respect
                  to such Other Service, the terms of which will be separate and
                  apart from this Agreement.

         1.5      Personnel; Training. Partner shall hire, engage, employ and
                  maintain a sufficient number of trained personnel and
                  subcontractors, including, but not limited to pilots, flight
                  attendants, and maintenance personnel necessary to provide the
                  Flight Services required by this Agreement. Pilots, Flight
                  Attendants, and maintenance personnel shall wear Partner
                  uniforms. For flights attendants newly hired by Partner to
                  provide Flight Services, Frontier will be responsible for the
                  cost of initial training. For current Partner flight
                  attendants transferring to Frontier Flight Services, Frontier
                  will be responsible for relocation costs. Frontier will be
                  responsible for initial Pilot Training costs for new Aircraft
                  Partner will allocate such costs over a 12 month period
                  beginning at the time of initial training and no interest will
                  be assessed by Partner. Partner will be responsible for all
                  recurrent training expenses relating to pilots, flight
                  attendants or mechanics, including uniform allowances and
                  cleaning in accordance with collective bargaining agreements
                  and its internal policies, except costs related to differences
                  in training related to Frontier Service requirements. Costs
                  and expense for which Frontier is responsible under this
                  Section will be remitted as part of the Pass Thru Costs.
                  Should Frontier elect to provide an initial orientation
                  program or any similar subsequent refresher programs for any
                  Partner personnel involved in Flight Services, Frontier will
                  be responsible for all costs and expenses, including without
                  limitation expenses relating to travel, room and board. If
                  Frontier elects to carry hazardous and/or dangerous materials,
                  Frontier will work with Partner to insure that all such
                  hazardous materials training meets all governmental
                  regulations applicable to Frontier and Partner. Such training
                  and related costs will be the sole responsibility of Frontier.

<PAGE>

         1.6      Service Quality and Level. All Flight Services and Other
                  Services shall be provided by Partner at a service quality and
                  level of service equal to or greater than the service quality
                  and level of service provided by Frontier to the extent
                  applicable to the type of Aircraft used to provide the Flight
                  Services. More specifically, but without limitation:

                           1.6.1    Partner pilots and flights attendants
                  providing Flight Services will be required and trained to
                  comply with Partner's appearance standards as set forth on
                  Exhibit 1.6.1.

                           1.6.2    All Aircraft in the Fleet, at the time of
                  commencing any Flight Service in the Schedule, must have a
                  functioning lavatory and coffee maker, notwithstanding any
                  regulations of the FAA that would permit operation of the
                  Aircraft with such equipment tagged inoperable. Any flight
                  cancelled pursuant to this subparagraph will be deemed to be a
                  flight cancellation for purposes of calculating the FCF and
                  the OTP (each as defined in Section 4).

                           1.6.3    In the event Frontier is required to
                  reaccommodate a passenger who is unable to complete a
                  scheduled flight because of an inoperable seat, Frontier will
                  apply its applicable policies and procedures and Partner will
                  be required to reimburse Frontier for all reasonable costs and
                  expenses relating to the reaccommodation. In the alternative,
                  Frontier may setoff such amount against its next payment
                  obligation to Partner arising under this Agreement.

                           1.6.4    If Frontier changes Frontier's service
                  requirements and as a result Partner will be required to
                  modify related training programs or make any capital upgrades
                  to any Aircraft, Partner, in writing, shall advise Frontier of
                  the need for such upgrades together with the estimated cost to
                  complete such upgrades (the "Upgrade Notice"). If, after
                  receipt of the Upgrade Notice, Frontier, in writing, elects to
                  require Partner to comply with such changes in service
                  requirements, then Frontier, within 30 days after receipt of a
                  written notice, shall reimburse Partner for the costs incurred
                  by Partner in making such capital upgrades. If Frontier does
                  not approve the making of the capital upgrades, then Partner
                  shall not be required to meet the new Frontier service
                  requirements. Partner will cause each Aircraft in the Fleet to
                  comply with all aircraft exterior cleanliness and appearance
                  standards, including appearance and condition of the livery,
                  established by Frontier.

         1.7      Maintenance.

                  1.7.1    Obligation. Partner, at its own cost and expense,
                           shall be responsible for the service, repair,
                           maintenance, overhauling and testing of each
                           Aircraft: (i) in compliance with the maintenance
                           program for each Aircraft as approved by the FAA and
                           pursuant to all applicable aircraft maintenance
                           manuals applicable to each Aircraft; (ii) so as to
                           keep each Aircraft in good and safe operating
                           condition; and (iii) so as to keep the Aircraft in
                           such operating condition as may be necessary to
                           enable the airworthiness certification of the
                           Aircraft to be maintained in good standing. Partner
                           shall retain full authority and control over the
                           service, repair, maintenance, overhauling

<PAGE>

                           and testing of each Aircraft. Frontier shall have no
                           obligations or duties with respect to the service,
                           repair, maintenance, overhauling or testing of any
                           Aircraft.

                  1.7.2    Scheduled Maintenance. At the time Aircraft are
                           identified to the Fleet, Frontier and Partner will
                           cooperate to estimate the maintenance schedule for
                           each Aircraft and will develop a schedule for
                           required maintenance that will minimize disruptions
                           to Flight Services required by the Schedule and avoid
                           non-consecutive scheduled maintenance events. The
                           Schedule will also provide that each Aircraft that
                           will remain overnight at DEN, or such other location
                           as may be mutually agreed by the parties from time to
                           time (the " MTX RON Location"), will be scheduled in
                           accordance with Exhibit 1.1. Partner will provide
                           Frontier with 120 days' prior written notice of any
                           heavy maintenance check required under the applicable
                           maintenance program that would require removal of an
                           Aircraft from the Schedule. Upon receiving such
                           notice, Frontier and Partner will cooperate to alter
                           the scheduled maintenance in order to minimize
                           interruption to the Schedule and to provide maximum
                           Fleet capacity during holiday periods.

                  1.7.3    Ground Equipment. Partner will be required to provide
                           one Aircraft tow bar for each Aircraft in the Fleet.

         1.8      Emergency Operations. Prior to the commencement of Flight
                  Services, Partner and Frontier shall coordinate to develop a
                  plan that complies with applicable Government Regulations to
                  be implemented in the event of any incident involving personal
                  injury or death to a passenger or crew member on a Flight. The
                  emergency response teams of Frontier and Partner shall
                  coordinate their efforts and shall cooperate fully in response
                  to such emergency, and Partner will provide Frontier full
                  access to all data and records relating to the Flight. The
                  parties recognize and agree that Frontier will have sole
                  responsibility for addressing the media and providing all
                  aspects of family assistance with the exception of Partner's
                  retention of responsibility for operational requirements
                  pursuant to Government Regulations and for family assistance
                  relating to Partner crew members and employees.

         1.9      Post-Departure Procedures. Unless otherwise performed by
                  Frontier personnel, Partner shall perform post-departure
                  procedures for each Flight. Partner will deposit into bank
                  accounts identified by Frontier on a daily basis all cash
                  receipts relating to liquor sales conducted on the Aircraft in
                  the Fleet. Partner will be liable for all losses arising from
                  shortfalls from the sales of liquor or other catering, if any.
                  Partner will reimburse Frontier for all such losses within 30
                  days following receipt of an invoice or other written notice
                  setting forth the details of such losses. Frontier and Partner
                  will each have the right to audit all internal collection
                  procedures and records relating to Frontier's and Partner's
                  post-departure procedures and all cash receipts relating to
                  catering or liquor sales on board the Aircraft in the Fleet.
                  Should Frontier's audit identify errors or losses exceeding
                  10% of the amount that should have been reported and paid to
                  Frontier, Partner, after a fifteen (15) day review period,
                  will reimburse Frontier for all reasonable costs, expenses and
                  fees, including without limitation

<PAGE>

                  the fees of any outside auditors, incurred in connection with
                  the performance of the audits permitted under this Agreement.

2.  Rights, Responsibilities and Obligations of Frontier.

         2.1      Flight Management Items. Frontier shall: (i) designate from
                  time to time, pursuant to each Schedule Notice, the routes on
                  and destinations to which Partner is to provide the Flight
                  Services and the times of departure for the Flights; (ii) set
                  the fares to be paid for such Flights by the passengers; and
                  (iii) be responsible for the passenger booking, yield
                  management and overbooking of Flights, limited only by the
                  Fleet operated by Partner pursuant to this Agreement.

         2.2      Maintenance Items. Frontier shall provide: (i) adequate access
                  to hangar and related facilities that insures that Partner can
                  perform necessary maintenance functions in a timely fashion to
                  support Flight Services pursuant to this Agreement and related
                  OTP and FCF requirements; (ii) subject to and in compliance
                  with Partner's Maintenance Department Manual System as
                  applicable adequate tooling, ground support equipment, power
                  carts, fuel bowser (ability to fuel and de-fuel), potable
                  water equipment (gate and hangar), separate climate controlled
                  storage of Partner parts inventory; staging and storage area
                  for U/S components, materials handling equipment and supplies
                  (including racking, fire cabinets, pallet jack, forklift,
                  boxes, labels, IATA books, scale, etc); (iii) deicing and snow
                  removal at maintenance facility; (iv) logistical help for any
                  AOG parts shipments, i.e. using Frontiers internal co-mat
                  system to move parts required to support the operation; (v)
                  office, storage, uniform locker space (with telecommunications
                  access) for Partner maintenance personnel (including material
                  clerks), manuals, and records at maintenance facility; (vi)
                  office and parts storage space at DIA terminal for Partner;
                  (vii) Partner's internal auditors with the ability to audit
                  the facilities and services provided to Partner to the extent
                  of the Agreement's terms or other future agreements between
                  the parties allows Partner use or procurement of the other
                  parties' facilities, parts/materials, tools, support
                  equipment, fueling services, personnel resources, or technical
                  data to ensure regulatory compliance; and (viii) Partner the
                  ability to use Frontier's hazardous material disposal
                  services.

         2.3      Marketing/Revenue. Frontier, in its sole discretion and at its
                  sole cost, shall market, advertise and sell tickets on all
                  Flights. Frontier shall provide all reservation services for
                  the Flight Services and shall pay all ticketing and
                  advertising expenses, credit card charges, travel agent
                  commissions and CRS fees applicable to such services. Frontier
                  shall be entitled to retain, and Partner shall pay to
                  Frontier, all revenue and income generated by the Flight
                  Services. Frontier agrees that it will not require Partner to
                  enter into an Essential Air Service market unless Partner, at
                  its sole discretion, agrees in advance to enter the market and
                  the parties have agreed in advance to a method for the
                  establishment of related rates and costs.

3.  Compliance with Regulations.

         3.1      Regulations. Frontier and Partner shall perform their
                  obligations and duties under this Agreement, including,
                  without limitation, all Flight Services and Other Services, in
                  full compliance with any and all applicable laws, ordinances,
                  codes, statutes, orders, directives,

<PAGE>

                  mandates, requirements, rules and regulations, whether now in
                  effect or hereafter adopted or promulgated, of all
                  governmental agencies having jurisdiction over Partner's
                  operations, including but not limited to the FAA and the DOT
                  (collectively, "Regulations") for operations in the 50 states
                  in the United States of America and throughout Canada and
                  Mexico. If a party fails to comply with the requirements of
                  this Section 3.1, that failure will constitute a default under
                  Section 12.1.2 or Section 12.2.2, as the case may be.

         3.2      Flight Operations. Partner shall be responsible for the
                  operation of each Aircraft and the safe performance of the
                  Flights in accordance with the Regulations and airline
                  industry standard practice and shall retain full authority,
                  operational control and possession of the Aircraft to do so.
                  Partner, its agents or employees, for the purpose of the safe
                  performance of the Flights, shall have absolute discretion in
                  and shall have sole responsibility for all matters concerning
                  the preparation of each Aircraft for its Flights, and all
                  other matters relating to the technical operation of the
                  Aircraft. Partner will provide policies, procedures and
                  training to Frontier or any other third party providing Other
                  Services in order to meet its obligations under this Section.
                  Partner, insofar as it relates to the safe operation of a
                  Flight, shall have sole and absolute discretion as to the load
                  carried and its distribution and as to the decision whether
                  such Flight shall be taken. Partner shall be solely
                  responsible for and Frontier shall have no obligations or
                  duties with respect to the dispatch of all Flights, provided,
                  Partner will provide Frontier at no cost to Partner with
                  access to its flight operations data on a real-time basis
                  through Bournemann or such other similar system used by
                  Partner in tracking its flight operations.

         3.3      Registration. All Aircraft shall remain registered in the
                  United States of America in accordance with the Regulations.

         3.4      Disclosure. Partner, upon ten (10) business days' prior
                  written request, shall provide Frontier the opportunity to
                  review all operating specifications, operational regulations,
                  manuals and calculations with respect to all Aircraft and
                  flight statistics with respect to all Flights at Partner's
                  corporate or other relevant offices where such records are
                  located.

         3.5      Frontier Stations. Documents will be provided to the relevant
                  airport authorities as required for Partner to operate the
                  Fleet into any city set forth in the Schedule, or any other
                  city to which Frontier provides mainline service in order to
                  enable Partner to provide Flight Services to any city in
                  Frontier's system as in effect from time to time.

         3.6      Reporting. This Agreement shall be treated as a code share for
                  DOT reporting and advertising requirements. Frontier shall
                  provide Partner, within ten (10) days' of Partner's request,
                  with such information necessary for Partner to make the DOT
                  reports and disclosures.

4.     Operational Performance Criteria. In order to promote efficient
       operation of the Flight Services, other than Flight Services conducted
       for ad hoc schedule changes described in Section 1.2 of this Agreement
       or due to circumstances outside the Partner's Control, the performance
       criteria and related bonuses and penalties set forth in this Section 4
       will become effective on and after January 1, 2005.

         4.1      On Time Performance Rate Bonus and Penalty Criteria. The "OTP
                  Rate"

<PAGE>

                  is defined as the percentage, rounded down to the nearest full
                  percentage point if the percentage point(s) fractional amount
                  is .49 or less and rounded up to the nearest full percentage
                  point if the fractional amount is .50 or greater (for example
                  .49 is rounded down to 0.00, 1.49 is rounded down to 1.0, and
                  1.50 is rounded up to 2.0), determined by dividing the number
                  of Flights not Delayed (as defined below) by the total number
                  of Flights flown by Partner pursuant to a Schedule during the
                  applicable period. For purposes of this Agreement, "Delayed"
                  means a Flight that does not arrive at the destination within
                  15 minutes after the scheduled arrival time due to matters
                  within Partner's Control. All Flights will be included for
                  calculating the OTP Rate. A cancelled flight (except Flights
                  cancelled because of no passengers, Flights cancelled by
                  Frontier for any reason, Flights cancelled for reasons not
                  within Partner's Control, and the reasons set out in Section
                  4.2) is a Delayed flight. If Partner's OTP Rate exceeds the
                  lower of (i) Frontier's OTP Rate, or (ii) [***] (the "OTP
                  Bonus Threshold") for any given month, Frontier shall pay
                  Partner a performance bonus in an amount equal to [***] for
                  each full percentage point over the OTP Bonus Threshold,
                  provided, no such bonus will be payable from the time of a OTP
                  Cancellation Event and during the OTP Cure Period described in
                  Section 7.3 herein. If Partner's OTP Rate falls below the
                  lower of (i) Frontier's OTP Rate, or (ii) [***] (the "OTP
                  Penalty Threshold") for any given month, Partner shall pay to
                  Frontier a performance penalty in the amount of [***] for each
                  full percentage point below the OTP Penalty Threshold. Amounts
                  payable in this Section shall be made within 10 business days
                  of receiving the statements provided for in Section 4.6.

         4.2      Flight Completion Factor Bonus and Penalty Criteria. The "FCF"
                  is defined as the percentage of published, scheduled Flights
                  completed for a given month rounded to the nearest 1/10th of a
                  percentage point. For example 97.48% is rounded to 97.5%,
                  while 97.44% is rounded to 97.4%. Flights not completed due to
                  matters not in Partner's Control will not be included in
                  either the numerator or denominator for calculating the FCF.
                  Any Flight that departs 2 hours or more after its scheduled
                  departure, or a Flight that fails to depart pursuant to
                  Section 1.6.2 will be deemed cancelled for purposes of
                  calculating the FCF. If Partner's FCF for a given month
                  exceeds the lower of (i) Frontier's FCF for the comparable
                  period, or (ii) [***] (the "FCF Bonus and Penalty Threshold"),
                  Frontier shall pay Partner a performance bonus in an amount
                  equal to [***], provided, no such bonus will be payable from
                  the time of a FCF Cancellation Event and during the FCF Cure
                  Period described in Section 7.4 herein. If Partner's FCF falls
                  below the FCF Bonus and Penalty Threshold for any given month,
                  Partner shall pay to Frontier a performance penalty as
                  follows:

<TABLE>
<CAPTION>
 CONSECUTIVE MONTH                                  AMOUNT OF PENALTY
BELOW FCF BONUS AND                               PER PERCENTAGE POINT
 PENALTY THRESHOLD                                 BELOW THE FCF BONUS
                                                  AND PENALTY THRESHOLD
<S>                                               <C>
       1st                                               [***]
       2nd                                               [***]
       3rd                                               [***]
       4th and Thereafter                                [***]
</TABLE>

                  Amounts payable in this Section 4.2 shall be made within 10
                  business days of receiving the statements provided for in
                  Section 4.6.

<PAGE>

         4.3      Daily Performance Data. Partner and Frontier will exchange
                  Fleet performance statistics, including information relating
                  to Flight Delays, cancellations, departures and block hours
                  flown by each Aircraft. Each party will have 7 business days
                  from the receipt of such information to dispute the
                  characterization of the performance statistics for purposes of
                  calculating the OTP Rate and FCF. Failure to dispute such
                  operating statistics within such 7 day period will be deemed
                  acceptance. In order to resolve disputes, each party will
                  designate a single point of contact who will attempt to
                  resolve any disputes. If these two parties are unable to reach
                  agreement, the dispute will be directed to the Vice President,
                  Maintenance, or his or her designee, for each party for final
                  resolution.

         4.4      Combined Performance Criteria. In the event Partner fails to
                  meet both the OTP Penalty Threshold and the FCF Bonus and
                  Penalty Threshold in any given month, the Standard Margin to
                  be paid to Partner pursuant to Section 6 for that month will
                  be reduced by [***]. In the event Partner exceeds both the OTP
                  Bonus Threshold and the FCF Bonus and Penalty Threshold in any
                  given month, the Standard Margin to be paid to Partner
                  pursuant to Section 6 for that month will be increased by
                  [***].

         4.5      Records. Within 5 business days after the end of each calendar
                  month Frontier and Partner will provide each other with all
                  reports, records and supporting documentation as may
                  reasonably be requested by the other party evidencing the
                  number of Aircraft operating in the Fleet, block hours and
                  departures flown by each Aircraft, and passengers carried by
                  each Aircraft, and Frontier shall provide Partner with
                  statements detailing its OTP Rate and FCF calculations, and,
                  if applicable, MBR, for the prior calendar month.

         4.6      Right of Setoff. Each party will have the right to set off an
                  amount due the other party against any amounts to be received
                  from the other party pursuant to this Agreement.

         4.7      Limitation on Applicability of Standards, Criteria,
                  Incentives, and Penalties. Frontier acknowledges that Partner
                  operates flights and provides flight services and other
                  services under its own name and/or under names or service
                  marks other than Frontier JetExpress using aircraft that are
                  not included in the Fleet and that are not subject to this
                  Agreement. Notwithstanding any other term, condition or
                  provision hereof to the contrary, the standards and criteria
                  set forth above in this Section 4 apply only to Flight
                  Services, Flights and Other Services performed by Partner
                  hereunder operating as Frontier JetExpress and not to any
                  other flights, flight services or other services performed by
                  Partner under its own name or under a name or service mark
                  other than Frontier JetExpress. Thus, in calculating Partner's
                  OTP Rate and the FCF, only Flight Services and Other Services
                  performed by Partner under the service mark Frontier
                  JetExpress shall be taken into account in calculating such
                  rates and assessing such incentives and penalties.

5.       Interline Agreement. Partner maintenance personnel traveling to provide
         critical repair services and dead heading Partner crews will be
         entitled to travel on Frontier and Frontier JetExpress flights as must
         ride passengers. Commuting Partner crew members and all other Partner
         employees will be entitled to free travel on Frontier's and Frontier
         JetExpress flights at a category one level below the lowest category
         for Frontier employees. Frontier employees will be entitled to travel
         on Frontier JetExpress Flights under

<PAGE>

         the category of travel to which they are entitled to travel on Frontier
         flights, and will be entitled to travel on all other Partner flights at
         a category one level below the lowest category for Partner and Alaska
         Air Group employees.

6.       Payment of Fees. Frontier hereby agrees to pay the following sums as
         consideration for this Agreement and the provision of the Flight
         Services and Other Services provided for herein:

         6.1      Estimated Payments. Ten (10) business days prior to the first
                  calendar day of each month in the Term, Frontier will provide
                  operating statistics for the coming month based on the number
                  of Aircraft, departures, block hours and revenue passenger
                  miles to be flown during the coming month assuming a [***] FCF
                  (the "Estimated Statistics"). No later than five (5) business
                  days prior to the first calendar day of each month, Partner
                  will invoice Frontier for the estimated total Fixed Costs,
                  Variable Costs and Pass Thru Costs, plus a margin of [***]
                  (the "Standard Margin") of the total of such items (the total
                  of such costs plus the Standard Margin referred to as the
                  "Estimated Costs") that will be incurred by Partner in
                  connection with providing the Flight Services based on the
                  Estimated Statistics, or, if Frontier fails to provide
                  Estimated Statistics, based on the Estimated Statistics
                  provided for the prior month. Frontier will then pay the
                  Estimated Costs no later than (i) the first business day of
                  the month for which the Estimated Costs have been invoiced, or
                  (ii) five (5) business days following receipt by Frontier of
                  the invoice, whichever is later. .

                  On or before the Effective Date, Frontier will pay to Partner
                  the Estimated Costs for the first two months of Flight
                  Services. Thereafter, on the first business day of each month
                  during the Term, Frontier will pay to Partner the Estimated
                  Costs for the subsequent month of Flight Services. For
                  example, on January 1, 2004, Frontier will pay to Partner the
                  Estimated Costs for January and February of 2004. On February
                  1, 2004, Frontier will pay to Partner the Estimated Costs for
                  March 2004.

         6.2      Settlement of Actual Costs.

                  6.2.1    Fixed Costs. Except as may be modified for the Option
                           Fleet, Fixed Costs will remain fixed during the term
                           of this Agreement and payment of the Fixed Costs by
                           Frontier at the time of payment of the Estimated
                           Costs will be considered payment in full of the Fixed
                           Costs.

                  6.2.2    Variable Costs. Upon receipt of the reports due under
                           Section 4.6 and determination of the Utilization
                           Guaranty described in Section 6.5, Frontier will
                           determine final Variable Costs (the "Final Variable
                           Costs") for the prior month by multiplying the higher
                           of (i) the actual Unit of Measure incurred in the
                           prior month for each of the Variable Cost set forth
                           on Exhibit 6.1.1, or (ii) the Unit of Measure
                           applicable under the Utilization Guaranty, times the
                           relevant Unit Cost. If the Final Variable Costs plus
                           the Standard Margin exceed the Variable Costs and
                           Standard Margin paid by Frontier as part of the
                           Estimated Costs at the beginning of the prior month,
                           Frontier will pay to Partner the excess within 10
                           business days or, at Partner's option and request,
                           add the excess to the next payment of Estimated
                           Costs. If the Final Variable Costs are less than the
                           Variable Costs and Standard Margin paid by Frontier
                           as part of the Estimated Costs under Section 6.1,
                           Partner will pay the difference to Frontier within 10
                           business days or, at Frontier's option, Frontier may
                           deduct the difference from the next payment of
                           Estimated Costs.

<PAGE>

                  6.2.3    Pass Thru Costs. Within 60 days of the end of each
                           month during the term, Partner will provide Frontier
                           with preliminary information and supporting invoices
                           and other supporting documentation as may reasonably
                           be requested by Frontier, relating to the actual Pass
                           Thru Costs incurred by Partner in such month.
                           Frontier will then calculate the total Pass Thru
                           Costs as evidenced by the supporting documentation
                           and invoices times the Standard Margin (the "Actual
                           Pass Thru Costs"). If the aggregate Actual Pass Thru
                           Costs plus the Standard Margin for the Fleet exceed
                           the Pass Through Costs and Standard Margin paid by
                           Frontier as part of the Estimated Costs under Section
                           6.1 for the month in which such costs were incurred,
                           Frontier will pay to Partner the excess within 10
                           business days or, at Partner's option and request,
                           add the excess to the next payment by Frontier of
                           Estimated Costs. If the aggregate Actual Pass Thru
                           Costs are less than the Pass Thru Costs and Standard
                           Margin paid by Frontier as part of the Estimated
                           Costs under Section 6.1 for the month in which such
                           costs were incurred, Partner will pay the difference
                           to Frontier within 10 business days or, at Frontier's
                           option, Frontier may deduct the difference from the
                           next payment of Estimated Costs. Notwithstanding
                           settlement of the above payments at the end of the 60
                           day period described above, it is understood that
                           Partner may receive additional invoices and
                           supporting documentation with respect to Pass Thru
                           Costs after the 60 day period. Partner will have the
                           right to submit such further invoices or other
                           supporting documentation to Frontier with respect to
                           Pass Thru Costs up to 120 days from the end of the
                           month in which such Pass Thru Costs were incurred by
                           Partner, at which time Frontier and Partner will
                           settle any over or underpayment of the Pass Thru
                           Costs in accordance with the procedures described
                           above. No further settlement of Pass Through Costs
                           will be permitted after the close of the 120 day
                           period.

         6.3      Variable Cost Adjustments. The Adjustable Portion of the
                  Variable Costs as set forth on Exhibit 6.1.1 will be adjusted
                  as set forth in this Section 6 using the indices set forth
                  next to the category of Variable Costs.

                  6.3.1    Definition. "CPI" shall mean the Consumer Price
                           Index, U.S. City Average, Urban Wage Earners and
                           Clerical Workers, All Items (base index year 1982-84
                           = 100) as published by the United States Department
                           of Labor, Bureau of Labor Statistics. If the manner
                           in which the Consumer Price Index as determined by
                           the Bureau of Labor Statistics shall be substantially
                           revised, including, without limitation, a change in
                           the base index year, an adjustment shall be made by
                           the parties in such revised index which would produce
                           results equivalent, as nearly as possible, to those
                           which would have been obtained if such Consumer Price
                           Index had not been so revised. If the Consumer Price
                           Index shall become unavailable to the public because
                           publication is not readily available to enable the
                           parties to make the adjustment referred to in this
                           Section, then the parties shall mutually agree to
                           substitute therefore a comparable index based upon
                           changes in the cost of living or purchasing power of
                           the consumer dollar published by any other
                           governmental agency or, if no such index shall be
                           available, then a comparable index published by a
                           major bank or other financial institution or by a
                           university or a recognized financial publication.

<PAGE>

                  6.3.2    Adjustment Formula. On each anniversary of the
                           Effective Date (each an "Adjustment Date") and except
                           as otherwise specifically provided for in this
                           Agreement, to determine the amount of adjustment or
                           increase based on CPI, the applicable Adjustable
                           Portion of Variable Costs in effect for the prior
                           twelve months shall be adjusted by multiplying the
                           Adjustable Portion of Variable Costs in effect for
                           the prior twelve months by a fraction, the numerator
                           which shall be the CPI for the third full calendar
                           month immediately preceding the Adjustment Date, and
                           the denominator of which shall be the CPI for the
                           same calendar month in the immediately preceding
                           twelve month period (the "Adjustment").

                  6.3.3    MTX Adjustment. Variable Costs relating to
                           maintenance operations and identified as adjusted
                           pursuant to the MTX Index will be adjusted on each
                           anniversary of the Effective Date pursuant to the
                           formula set forth on Exhibit 6.3.3.

                  6.3.4    Negotiated Variable Cost Adjustment. [***].

         6.4      Net Pre-Tax Operating Margin Payment. In addition to the
                  amounts set forth above, Frontier will pay to Partner an
                  incentive payment (the "Incentive Payment") relating to the
                  pre-tax net operating margin [***]

                  The Incentive Payment will be calculated by Frontier within 5
                  business days following the filing of its quarterly financial
                  statements with the SEC. The Incentive Payment so determined
                  will be paid to Partner at the time of the next payment of
                  Estimated Costs. Notwithstanding the above, Partner will have
                  no right to receive an Incentive Payment, and the quarterly
                  Incentive Payment will be pro-rated, for any month during the
                  quarter Partner is in an OTP Cure Period as defined in section
                  7.3 or an FCF Cure Period as defined in section 7.4

         6.5      Utilization Guarantee. Frontier will guarantee a minimum daily
                  block hour utilization based on its original estimate of [***]
                  block hours per Aircraft in the Fleet less all Spare Aircraft.
                  For example, for 10 Core Aircraft, Frontier would guarantee
                  any Schedule would require [***] total block hours of flight
                  per day (10 Core Aircraft times [***] hours per day) during
                  the Schedule period. If Frontier either (i) scheduled fewer
                  than the 10 Core Aircraft, or (ii) scheduled the 10 Core
                  Aircraft for fewer than [***] hours per day, during its
                  settlement of Variable Costs under Section 6.2.2,
                  notwithstanding the actual figures reported by Partner,
                  Frontier would need to calculate the Variable Costs as if the
                  actual aircraft and block hours flown during the period were
                  10 and [***], respectively. Frontier will also gross up any
                  reduction in the Aircraft and block hours flown during any
                  period from the guaranteed amount due to acts or omissions of
                  Frontier's employees, agents, or subcontractors.
                  Notwithstanding the above, Frontier will not be liable for any
                  reduction in actual Aircraft or block hours flown during any
                  period due to maintenance requirements (includes heavy
                  checks), an Extraordinary Maintenance Event (as defined in
                  Section 6.7), weather, air traffic control, or matters within
                  Partner's Control.

         6.6      Statements and Audit Rights. All statements and other
                  information supplied by Partner pursuant to Section 4.5 and
                  this Section 6 shall be accompanied by such supporting
                  information, documentation described on Exhibit 6.6 attached
                  hereto, and as Frontier

<PAGE>

                  may reasonably request from time to time (the "Backup
                  Information"). If Frontier reasonably disputes the amount set
                  forth in any statement or the Backup Information is
                  inadequate, incomplete or inaccurate, then Frontier shall pay
                  the undisputed portion of such statement and the portions for
                  which the Backup Information is adequate, complete and
                  accurate, timely, and together with such payment provide
                  Partner with a written statement detailing any disputed amount
                  and the specific amounts for which the Backup Information is
                  inadequate, incomplete or inaccurate. Frontier and Partner
                  shall meet and confer on a regular basis as necessary to
                  resolve any disputed amount and inadequate, incomplete or
                  inaccurate Backup Information within 30 days after Frontier
                  provides notice of the dispute. Both Frontier and Partner
                  agree that it is in the best interest of both parties to
                  initially attempt to resolve disputes without the use of third
                  parties in a cost effective manner. In the event resolution is
                  not successful, the parties will mutually agree to use
                  alternative dispute services as described in Section 15.12,
                  unless otherwise agreed. Disputed amounts and shall not be
                  payable until the dispute is resolved and then shall be
                  payable within 10 days after the dispute is resolved.

                  Frontier or Partner, upon 10 business days' prior written
                  notice, may at its sole cost and expense review and audit, or
                  cause its independent accountants to review and audit for the
                  preceding twelve months of operations, records, files,
                  information, data and documentation (including computer data
                  bases) (the "Record") maintained by the other party
                  specifically related to the calculation of the payments
                  required to be made by Frontier pursuant to this Agreement.
                  Both parties will allow the other's internal auditor or
                  designees to participate in such review, audit and findings.
                  If a party's review of the Records reveals an overcharge or
                  underpayment, then upon demand (subject to the other party's
                  right to review and dispute such findings), the appropriate
                  adjustment will be made as specified above. If the overpayment
                  and/or underpayment is 10% or more than the amount that should
                  have been charged or paid, then there will also be a
                  requirement of reimbursement for all reasonable out of pocket
                  fees, expenses and charges, including the fees and charges of
                  independent accountants retained by the auditing party to
                  complete the audit permitted by this Section, within 30 days
                  following receipt of a detailed invoice setting for the nature
                  of such fees, charges and expenses. Partner and Frontier shall
                  maintain all Records used in calculating the sums payable or
                  receivable under this Agreement in good condition and order at
                  Frontier's or Partner's corporate headquarters for at least
                  three (3) years from the date such Records are created.
                  Frontier and Partner acknowledge and understand that audit
                  rights under this Section shall be strictly limited to the
                  Records involving the Frontier JetExpress operations.

         6.7      Extraordinary Maintenance Event. When an AD or a major
                  component failure that affects the Partner's entire fleet of
                  CRJ-700 aircraft (an "Extraordinary Maintenance Event")
                  occurs, Partner will advise Frontier's VP Maintenance as soon
                  as practicable. Partner will then collect records and reports
                  for all costs and expenses relating to the cure of the
                  Extraordinary Maintenance Event and submit to Frontier for
                  review and approval, which approval will not be unreasonably
                  withheld. Upon approval, Frontier will reimburse Partner for
                  all such costs and expenses according to the following
                  formula: the total approved costs and expenses will be divided
                  by total Partner fleet of CRJ-700 aircraft, with the quotient
                  further divided by the average number of months remaining on
                  the leases or loans in place with respect to the Partner's
                  total Fleet. This amount per month will then be multiplied

<PAGE>

                  by the number of Aircraft in the Fleet and the number of
                  months remaining in the term of this Agreement. Frontier will
                  then, at its option, either (i) pay the amounts as a lump sum,
                  or (ii) pay the amount per month per aircraft during the
                  remaining term of this Agreement as a Pass Thru Cost; provided
                  no Standard Margin or Incentive Payment will be made on these
                  amounts or costs. If Frontier and Partner are unable to agree
                  whether an Extraordinary Maintenance Event occurred or the
                  costs associated with addressing the Extraordinary Maintenance
                  Event, the parties agree to use an independent arbitrator with
                  expertise in aviation maintenance to resolve the dispute.
                  Should the arbitrator rule in favor of Partner, the
                  amortization period will be as if it were the date the costs
                  were first presented to Frontier. Any cancellations and delays
                  resulting from an Extraordinary Maintenance Event will not be
                  included in the determination of Partner's OTP or FCF
                  calculations under both Section 4 and Section 7. For the
                  period of the Extraordinary Maintenance Event, Frontier will
                  only pay a margin and bonus margin on those days not impacted
                  by the event. For purposes of "Net-Pre Tax Margin Termination"
                  the quarter during which an Extraordinary Maintenance Event
                  has occurred will not be included in the calculation.

         6.8      Start-up costs. Frontier shall reimburse Partner for Start-up
                  costs as set forth in Exhibit 6.1.2.

7.       Term and Termination.

         7.1      Term. The term of this Agreement (the "Term") commences on the
                  Effective Date and shall expire ("Expiration Date") on the
                  12th anniversary of the Effective Date or, unless earlier
                  terminated as provided in this Agreement.

         7.2      Agreement Review. Frontier and Partner shall meet within 60
                  days prior to the third and sixth anniversary of the Effective
                  Date of the Agreement. The purpose of this meeting shall be to
                  evaluate and modify the Agreement as the parties may deem
                  appropriate. In the event the meeting does not occur by the
                  anniversary date, or no agreement is reached on modifications
                  of the Agreement proposed by either party, within thirty days
                  of the receipt of a proposal, at the sole discretion of either
                  party. Frontier or Partner shall have the right to terminate
                  this Agreement upon 30 days written notice (an "Interim
                  Termination Notice"). In the event of an Interim Termination
                  Notice, there shall be a one year Ramp Down Period as
                  described in Section 7.9, during which all terms of the
                  Agreement then effect, shall control both Frontier and
                  Partner.

         7.3      OTP Rate Early Termination. If at any time during the Term
                  Partner's OTP Rate falls below the lower of (i) Frontier's OTP
                  Rate, or (ii) [***] (the "OTP Termination Threshold") for
                  three of any four consecutive calendar months (an "OTP
                  Cancellation Event"), Frontier, at its election, may by
                  written notice (an "OTP Performance Notice") inform Partner
                  that if Partner does not achieve the OTP Termination Threshold
                  and continue to meet the FCF Termination Threshold for each of
                  the next two calendar months after receipt of the OTP
                  Performance Notice (the "OTP Cure Period"), Frontier, at its
                  option may give an OTP Termination Notice (as defined below).
                  If, after the OTP Cure Period has expired Partner has not
                  cured the OTP Cancellation Event as set forth in the notice,
                  then Frontier may provide Partner with written notice of its
                  intent to terminate this Agreement on the date set forth
                  therein ("OTP Termination Notice"), such date to be no earlier
                  than 180 days from the date the OTP Termination Notice

<PAGE>

                  is received by Partner.

         7.4      FCF Early Termination. If Partner's FCF falls below (a) for
                  calendar year 2004 and Ramp Down Period, the lower of (i)
                  Frontier's FCF, or (ii) [***], or (b) for any other year
                  during the Term, the lower of (i) Frontier's FCF, or (ii)
                  [***] (the "FCF Termination Threshold") for three of any four
                  consecutive calendar months (an "FCF Cancellation Event"),
                  Frontier, at its election, may by written notice (an "FCF
                  Performance Notice") inform Partner that if Partner does not
                  achieve the FCF Termination Threshold and continue to meet the
                  OTP Termination Threshold for each of the next two calendar
                  months after receipt of the FCF Performance Notice (the "FCF
                  Cure Period"), Frontier, at its option may give an FCF
                  Termination Notice (as defined below). If, after the FCF Cure
                  Period has expired Partner has not cured the FCF Cancellation
                  Event as set forth in the notice by the end of the FCF Cure
                  Period, then Frontier may provide Partner with written notice
                  of its intent to terminate this Agreement on the date set
                  forth therein ("FCF Termination Notice"), such date to be no
                  earlier than 180 days from the date the FCF Termination Notice
                  is received by Partner.

         7.5      Overall Performance Early Termination. Beginning January 1,
                  2005 and on January 1 of each subsequent year during the Term,
                  Frontier will calculate Partner's FCF and OTP for the prior 24
                  month period. If either (i) Partner's OTP fails to meet the
                  OTP Termination Threshold, or (ii) Partner's FCF falls below
                  the FCF Termination Threshold for such 24 month period,
                  Frontier will have the right, at its option and at any time
                  until June 30th of the year in which the calculations are
                  made, to terminate the term of this Agreement upon 180 days'
                  prior written notice.

         7.6      Change of Control Termination. This Agreement may be
                  terminated by either Partner or Frontier in the event the
                  other party, including, in the case of Partner, all Affiliated
                  Service Providers, experiences a change in control or a sale
                  of substantially all of its assets by providing 30 days' prior
                  written notice (the "Change Termination Notice"). For purposes
                  of this paragraph, "change of control" means any person or
                  group (each as used in section 13(d)(3) and 14(d)(2) of the
                  Exchange Act) either becomes the beneficial owner, directly or
                  indirectly, of voting securities of either party representing
                  50% or more of the combined voting power of all securities of
                  the party on a fully diluted basis, or otherwise has the
                  ability, directly or indirectly, to elect a majority of the
                  board of directors of the party.

         7.7      Route Overlap Termination. The following defined terms shall
                  apply only for purposes of this Section 7.7: (i) "Affiliate"
                  means an entity majority owned by, owned in common with, or
                  controlled by a party; (ii) "F9" means Frontier Airlines, Inc.
                  and all Affiliates; (iii) "QX" means Alaska Air Group and all
                  Affiliates; (iv) "Routes" means markets served using non-stop
                  flights; (v) "Flight Leg" is one take-off and landing on a
                  Route; (vi) "F9 Flight Legs" means the total number of Flight
                  Legs on all Routes served by F9, or by Partner pursuant
                  Flights operated under this Agreement, using aircraft operated
                  by F9 or Partner, but not including Routes served by its other
                  code share partners operating aircraft not owned

<PAGE>

                  or operated by F9 or Partner; (vii) "F9 Departing Seats" means
                  the total number of seats on the aircraft operated on the F9
                  Flight Legs; (viii) "QX Flight Legs" means the total number of
                  Flight Legs on all Routes served by QX using aircraft operated
                  by QX, but not including Routes served by its other code share
                  partners operating aircraft not owned or operated by QX; (ix)
                  "QX Departing Seats" means the total number of seats on the
                  aircraft operated on the QX Flight Legs; (x) "Overlap Legs"
                  means the number of Flight Legs flown by both F9 and QX on the
                  same Routes; and (xi) "Overlap Seats" means the number of
                  seats on the aircraft operated on the Overlap Legs.

                  On the Effective Date, Frontier will calculate the number of
                  F9 Departing Seats and Partner will calculate the number of QX
                  Departing Seats, each based on an average peak day in its
                  schedule for the month of January 2004. An overlap ratio (the
                  "Base Ratio") will be determined in accordance with the
                  following formula:

                                      [***]

                           where,

                           [***]

                           with all calculations rounded up to the nearest whole
                           number

                  On each anniversary of the Effective Date, Frontier and
                  Partner will calculate an Overlap Ratio in accordance with the
                  procedures and formula set forth above. If the then computed
                  Overlap Ratio is greater than [***] the Base Ratio, then
                  either party may terminate this Agreement by providing no
                  fewer than 30 days' prior written notice (a " Route Overlap
                  Notice") to the other party.

         7.8      Effect of Termination. If either party elects to terminate
                  this Agreement pursuant to this Section 7, Frontier and
                  Partner shall make all payments as required by this Agreement,
                  with full rights of setoff as set forth herein, for the period
                  through and including the termination date set forth in the
                  notice provided under Sections 7.2, 7.3, 7.4, 7.5, 7.6, or
                  7.7, as applicable.

         7.9      Ramp Down Period. At the final year of the Term, or in the
                  event of an early termination under Sections 7.2, 7.6 or 7.7,
                  a one-year ramp down period will be permitted under which
                  Aircraft will be removed from the Fleet at a rate of 25% of
                  the Aircraft then in the Fleet, rounded up to the nearest
                  whole number, per 90 day period following the effective date
                  of termination upon the end of the Term or as required by such
                  notice. Any notice of termination under Sections 7.2, 7.6 or
                  7.7 will state the dates on which the Aircraft are to be
                  removed from the Fleet. For a termination upon the end of the
                  Term, Frontier must provide Partner 180 days notice of date
                  that aircraft will be taken out within each 90-day period.

8.       Service Mark License For Services Provided By Partner.

         8.1      Grant of License. For the payment of $1.00, Frontier and
                  Partner each hereby grant to the other a non-exclusive,
                  non-transferable, revocable license to use the other's Service
                  Marks as Frontier and Partner may designate, in writing, from
                  time to time solely for the purpose of conducting the Flight
                  Services and Other Services to be rendered by Partner;
                  provided, however, that at any time prior to expiration or
                  termination of this Agreement Frontier and Partner may alter,
                  amend or revoke the license hereby granted and require the
                  other's use of any new or different Frontier or Partner
                  Service Mark in conjunction with the Flight Services as
                  Frontier and Partner may determine in its sole discretion and
                  judgment.

<PAGE>

         8.2      Terms and Conditions Governing Service Mark License.

                  8.2.1    Frontier and Partner hereby acknowledge Frontier's
                           and Partner's ownership of their respective Service
                           Marks, further acknowledge the validity of their
                           Service Marks, and agree that it shall not do
                           anything in any way to infringe or abridge upon the
                           other's rights in their Service Marks or directly or
                           indirectly to challenge the validity of the other's
                           Service Marks. Frontier's and Partner's use of the
                           Service Marks inures to the benefit of the respective
                           party. Frontier and Partner will sign any lawful
                           documents, make any lawful declaration, or provide
                           affidavits, the other reasonably requests in
                           connection with any trademark application or
                           registration for the Frontier or Partner Service
                           Marks or any variation thereof.

                  8.2.2    To assure that the production, appearance and quality
                           of the Frontier Service Marks is consistent with
                           Frontier's reputation for high quality and the
                           goodwill associated with the Frontier Service Marks,
                           Partner agrees to maintain a level of quality
                           consistent with Frontier's quality in the Flight
                           Services it provides pursuant to this agreement and
                           to follow Frontier's written instructions regarding
                           use of the Frontier's Service Marks, as they may be
                           amended from time to time. Partner also retains the
                           right to require Frontier to follow Partner's written
                           instructions regarding use of the Partner's Service
                           Marks, as they may be modified from time to time.

                  8.2.3    Frontier and Partner agree that, in providing the
                           Flight Services and Other Services, they shall not
                           advertise or make use of either party's Service Marks
                           without the prior written consent of the other.
                           Frontier and Partner shall have absolute discretion
                           to withhold its consent concerning any and all such
                           advertising and use of its Service Marks in any
                           advertising. In the event Frontier or Partner
                           approves the use of its Service Marks in any
                           advertising, such advertising shall identify the
                           owner of such Service Marks and conform with any
                           additional requirements specified by the owner.

                  8.2.4    To the extent that either party licenses the use its
                           Service Marks, the Service Marks shall be used only
                           in connection with the Flight Services and not in
                           connection with any other business or activity of
                           Frontier, Partner or any other entity.

                  8.2.5    Nothing in this agreement shall be construed to give
                           either party the exclusive right to use the other's
                           Service Marks or abridge the owner's right to use and
                           license the Service Marks, and Frontier and Partner
                           herby reserve the right to continue to use its
                           Service Marks and to license such other uses of its
                           Service Marks, as it may desire.

                  8.2.6    No term or provision of the Agreement shall be
                           construed to preclude Frontier from allowing the use
                           of the Frontier Service Marks, including "Frontier
                           JetExpress," or the aircraft exterior color decor and
                           patterns by other individuals or entities not covered
                           by this Agreement.

                  8.2.7    Upon the termination or expiration of this Agreement,
                           the license and use of the Frontier and Partner
                           Service Marks by the other shall cease and such use
                           shall not thereafter occur.

9.       Liability and Indemnification.

<PAGE>

         9.1      Relationship Between the Parties. Nothing contained in this
                  Agreement will be deemed to create any agency or partnership
                  or similar relationship between Frontier and Partner. Nothing
                  contained in this Agreement will be deemed to authorize either
                  Frontier or Partner to bind or obligate the other. Partner and
                  its employees engaged in performing the Flight Services and
                  Other Services shall be employees of Partner for all purposes,
                  and under no circumstances shall be deemed to be employees,
                  agents or independent contractors of Frontier. Frontier and
                  its employees engaged in performing the obligations of
                  Frontier under this Agreement shall be employees, agents and
                  independent contractors of Frontier for all purposes, and
                  under no circumstances shall be deemed to be employees, agents
                  or independent contractors of Partner. Pursuant to this
                  Agreement, Partner shall act, for all purposes, as an
                  independent contractor and not as an agent for Frontier.
                  Frontier shall have no supervisory power or control over any
                  employees engaged by Partner in connection with their
                  performance hereunder, and all complaints or requested changes
                  in procedures shall be transmitted by Frontier to a designated
                  officer of Partner. Nothing contained in this Agreement shall
                  be intended to limit or condition Partner's control over its
                  operations or the conduct of its business as an air carrier,
                  and Partner and its principals assume all risks of financial
                  losses which may result from the operation of the Flight
                  Services and Other Services to be provided by Partner
                  hereunder.

                  Each party accepts full and exclusive liability for the
                  payments of workers' compensation and employer's liability
                  insurance premiums with respect to its own employees and for
                  the payment of all taxes, contributions or other payments for
                  unemployment compensation or old age benefits, pensions or
                  annuities now or hereafter imposed upon employers by the
                  government of the United States or by any other national,
                  state, or local governmental authority having jurisdiction
                  with respect to a party's employees, measured by the wages,
                  salaries, compensation, or other remuneration paid to a
                  party's employees. Each party further agrees to make such
                  payments and to make and file all reports, and to do
                  everything necessary to comply with the laws imposing such
                  taxes, contributions or other payments.

         9.2      Indemnification by Partner. Partner agrees to indemnify,
                  defend and hold harmless Frontier, its directors, officers,
                  employees, agents, parent corporation, subsidiaries and
                  affiliates for, from and against any and all loss, liability,
                  claim, damage, penalty, fine, charge, cause of action, demand,
                  cost and expense (including attorneys' and consultants' fees
                  and costs) whatsoever (collectively, "Damages"), as incurred,
                  arising out of, or resulting from: (i) the provision of the
                  Flight Services by Partner or any of its employees, agents,
                  licensees, officers or directors; (ii) Partner's breach of
                  this Agreement; (iii) damage or destruction of property of any
                  person, or injury or death of any person, caused by, arising
                  out of, or in connection with any act or omission of Partner,
                  its employees, agents, licensees, contractors, suppliers,
                  officers or directors; and (iv) Partner's failure to comply
                  with any Regulations. Partner shall reimburse Frontier or
                  other Indemnified Party (as defined below) for any legal and
                  any other expenses reasonably incurred in investigating,
                  preparing or defending against any claim or action arising out
                  of or relating to any of the foregoing. The indemnity
                  provisions of this paragraph 9.2 will not apply if it is
                  determined by final decision of a court or tribunal that, with
                  respect to the cause of the applicable Damages, the percentage
                  of responsibility allocated to Partner is less than the
                  percentage of responsibility

<PAGE>

                  allocated directly to Frontier for its negligence, gross
                  negligence, or willful misconduct. The indemnification
                  obligations of this paragraph 9.2 shall survive termination or
                  expiration of this Agreement.

         9.3      Indemnification by Frontier. Frontier agrees to indemnify,
                  defend and hold harmless Partner, its directors, officers,
                  employees, agents, subsidiaries and affiliates and their
                  officers and directors for, from and against any and all
                  Damages, as incurred, arising out of, or resulting from: (i)
                  Frontier's breach of this Agreement; (ii) damage or
                  destruction of property of any person, or injury or death of
                  any person, caused by, arising out of, or in connection with
                  any act or omission of Frontier, its employees, agents,
                  licensees, contractors, suppliers, officers or directors in
                  performing Frontier's obligations or in connection with Flight
                  operations; and (iii) Frontier's failure to comply with any of
                  the Regulations. Frontier shall reimburse Partner or other
                  Indemnified Party (as defined below) for any legal and any
                  other expenses reasonably incurred in investigating, preparing
                  or defending against any claim or action arising out of or
                  relating to any of the foregoing. The indemnity provisions of
                  this paragraph 9.3 will not apply if it is determined by final
                  decision of a court or tribunal that, with respect to the
                  cause of the applicable Damages, the percentage of
                  responsibility allocated to Frontier is less than the
                  percentage of responsibility allocated directly to Partner for
                  its negligence, gross negligence, or willful misconduct. The
                  indemnification obligations of this paragraph 9.3 shall
                  survive termination or expiration of this Agreement.

         9.4      Conduct of Indemnification Proceedings. The person or entity
                  claiming indemnification hereunder is referred to as the
                  "Indemnified Party" and the party against whom such claims are
                  asserted hereunder is referred to as the "Indemnifying Party".
                  Each Indemnified Party shall give reasonably prompt notice to
                  the Indemnifying Party of any action or proceeding or
                  assertion or threat of claim commenced against it in respect
                  of which indemnity may be sought hereunder, but failure to so
                  notify the Indemnifying Party (i) shall not relieve the
                  Indemnifying Party from any liability which it may have under
                  the indemnity agreement provided in this Agreement, unless and
                  to the extent the Indemnifying Party did not otherwise learn
                  of such action, threat or claim and the lack of notice by the
                  Indemnified Party results in the forfeiture by the
                  Indemnifying Party of substantial rights and defenses and (ii)
                  shall not, in any event, relieve the Indemnifying Party from
                  any obligations to the Indemnified Party other than the
                  indemnification obligation provided under Sections 9.2 and 9.3
                  above. If the Indemnifying Party elects within a reasonable
                  time after receipt of notice, the Indemnifying Party may
                  assume the defense of the action or proceeding at Indemnifying
                  Party's own expense with counsel chosen by the Indemnifying
                  Party and approved by the Indemnified Party; provided,
                  however, that, if the Indemnified Party reasonably determines
                  upon advice of counsel that a conflict of interest exists
                  where it is advisable for the Indemnified Party to be
                  represented by separate counsel or that, upon advice of
                  counsel, there may be legal defenses available to it which are
                  different from or in addition to those available to the
                  Indemnifying Party, then the Indemnified Party shall be
                  entitled to separate counsel at its own expense, which counsel
                  shall be chosen by the Indemnified Party in its sole
                  discretion. If the Indemnifying Party does not assume the
                  defense, after having received the notice referred to in the
                  second

<PAGE>

                  sentence of this Section, the Indemnifying Party will pay the
                  reasonable fees and expenses of counsel for the Indemnified
                  Party. Unless and until a final judgment that an Indemnified
                  Party is not entitled to the costs of defense under the
                  foregoing provision, the Indemnifying Party shall reimburse,
                  promptly as they are incurred, the Indemnified Party's costs
                  of defense.

         9.5      Insurance.

                  9.5.1    Frontier and Partner, at all times during the Term of
                           this Agreement, shall have and maintain in full force
                           and effect, policies of insurance of the types of
                           coverage, and in the minimum amounts stated below
                           with insurance companies of recognized reputation and
                           responsibility in the United States commercial air
                           carrier industry, licensed to do business in the
                           state(s) of the location(s) covered by this
                           Agreement, including insurance coverage on all
                           Aircraft used to provide Flight Services. Unless
                           otherwise specified, the minimum amounts of insurance
                           coverage required hereunder shall be per occurrence,
                           combined single limit for all insurance coverage
                           required hereunder.

                            1.   Aircraft Liability          [***].per Occurence
                                    and Ground                 Combined Single
                                 Liability Insurance         Limit of Liability
                                 (including Commercial             for CRJs
                                 General Liability)

                                 a. Bodily Injury              Included in
                                    and Personal               Combined Single
                                    Injury - Passengers              Limit

                                 b. Bodily Injury              Included in
                                    and Personal               Combined Single
                                    Injury - Third Parties         Limit

                                 c. Property Damage            Included in
                                                               Combined Single
                                                                   Limit

                                                               Per Accident

                            2.   Worker's Compensation         Statutory
                                 Insurance (Company
                                 Employees)

                                 Employers' Liability          [***].
                                 (Company Employees)

                                 Baggage                       [***] (per
                                 Liability                     Passenger),
                                                                unlimited for
                                                               assistive devices

                                 Cargo Liability               [***] any One
                                                                Aircraft.

<PAGE>

                                                              [***] any One
                                                              Disaster with
                                                              Terms, Limitations
                                                              and Conditions
                                                              Acceptable to
                                                              Frontier

                  9.5.2    The parties hereby agree that from time to time
                           during the Term of this Agreement, Frontier and
                           Partner may agree that it is necessary for Partner to
                           have and maintain amounts of insurance coverage
                           different from those amounts set forth in Section
                           9.5.1. If these changes in coverage are agreed to by
                           Partner, Partner shall implement these changes upon
                           the earlier of the renewal of the applicable policy
                           and the effective date of the Regulation, if any,
                           requiring the insurance coverage.

                  9.5.3    Partner and Frontier shall cause all policies of
                           insurance which they maintain pursuant to this
                           Agreement, to be duly and properly endorsed by
                           Partner's insurance underwriters as follows:

                           9.5.3.1  To provide that Partner's underwriters shall
                                    waive any and all subrogation rights against
                                    Frontier, its directors, officers, agents
                                    and employees without regard to any breach
                                    of warranty by Partner or to provide other
                                    evidence of such waiver of recourse against
                                    Frontier, its directors, officers, agents,
                                    or employees as shall be acceptable to
                                    Frontier to the extent Partner is liable
                                    pursuant to Section 9.2.

                           9.5.3.2  To provide that Frontier's underwriters
                                    shall waive any and all subrogation rights
                                    against Partner, its directors, officers,
                                    agents and employees without regard to any
                                    breach of warranty by Frontier or to provide
                                    other evidence of such waiver of recourse
                                    against Partner, its directors, officers,
                                    agents, or employees as shall be acceptable
                                    to Partner to the extent Frontier is liable
                                    pursuant to Section 9.3.

                           9.5.3.3  Be duly and properly endorsed to provide
                                    that each such policy or policies or any
                                    part or parts thereof shall not be canceled,
                                    terminated, or materially altered, changed
                                    or amended by Frontier or Partner's
                                    insurance underwriters, until after 30 days'
                                    written notice to Frontier or Partner which
                                    30 days' written notice shall commence to
                                    run from the date such notice is issued to
                                    Frontier or Partner or such shorter period
                                    (10 days in respect to non-payment of
                                    premium/7days or such shorter period as my
                                    exist in the case of a War Risk coverage).

<PAGE>

                  9.5.4    With respect to policies of insurance described as
                           Aircraft Liability and Ground Liability Insurance and
                           to the extent of the indemnity provided by Partner in
                           Section 9.2 and Frontier in Section 9.3, Frontier and
                           Partner will provide that Frontier's and Partner's
                           policies:

                           9.5.4.1  Name the other party, its directors,
                                    officers, agents, parents, subsidiaries and
                                    employees as Additional Insureds thereunder.

                           9.5.4.2  Constitute primary insurance for such claims
                                    and acknowledge that any other insurance
                                    policy or policies of the other party will
                                    be secondary or excess insurance; and

                           9.5.4.3  Provide a cross-liability clause acceptable
                                    to both parties, and a specific contractual
                                    liability insurance provision covering
                                    liability assumed by Frontier and Partner
                                    under this Agreement.

                  9.5.5    With respect to policies of insurance for coverage
                           described as Aircraft Liability and Ground Liability
                           Insurance, Partner shall cause its insurance
                           underwriters to provide a breach of warranty clause.

                  9.5.6    Upon request by Frontier and Partner shall furnish
                           the other with evidence of the aforesaid insurance
                           coverage and by providing certificates of insurance
                           certifying that the aforesaid insurance policy or
                           policies with the aforesaid policy limits are duly
                           and properly endorsed as aforesaid and are in full
                           force and effect.

                  9.5.7    Frontier shall maintain cargo liability coverage, in
                           types and amounts required by law, for all airfreight
                           transported by Partner under a Frontier airbill on
                           any Flights.

10.  Confidentiality.

         10.1     Frontier and Partner agree that the terms of this Agreement
                  shall be treated as confidential and shall not be disclosed to
                  third parties without the express written consent of Frontier
                  and Partner, or as required by law. In the event of disclosure
                  required by law, only those portions of this Agreement
                  required to be disclosed shall be disclosed. The disclosing
                  party shall make good faith efforts to minimize the portions
                  to be disclosed and shall seek confidential treatment by the
                  receiving party or agency for any portions disclosed. In the
                  event of one party being served a subpoena

<PAGE>

                  or discovery request, prior to responding to the subpoena or
                  request, the party served shall notify the other party to
                  provide the other party an opportunity to contest the
                  disclosure of any terms of this Agreement.

         10.2     "Confidential Information" means the terms and conditions of
                  this Agreement and any and all information or data shared
                  between the parties or learned by either party as the result
                  of the performance of its obligations under this Agreement,
                  including but not limited to information and data relating to
                  fares, route performance and profitability, maintenance
                  programs, technical manuals, or load factors, in any form,
                  including, without limitation, written documents, oral
                  communications, recordings, videos, software, data bases,
                  business plans, and electronic and magnetic media, except for
                  information generally available to the public. Frontier and
                  Partner agree that they shall maintain all Confidential
                  Information in confidence and use such Confidential
                  Information solely for purposes of performance under this
                  Agreement. Such Confidential Information shall be distributed
                  within each party's company only to personnel and to its legal
                  counsel, auditors and other consultants on a need-to-know
                  basis for purposes related to this Agreement or in compliance
                  with a court order or statutory or regulatory requirements.
                  Except for legal counsel and auditors, and as permitted by
                  Section 10.1, in no event shall either party disclose
                  Confidential Information to any third parties except
                  subcontractors and independent consultants and then only if
                  approved by both parties in writing in advance of such
                  disclosure. Confidential Information does not include
                  information that is available to the general public other than
                  as a result of disclosure by the disclosing party or
                  information that was known or independently developed by the
                  receiving party prior to disclosure, as evidenced by records
                  kept in the ordinary course of business.

11.      Taxes. Partner shall pay, prior to delinquency, those taxes related
         directly to the Partner's provision of Flight Services under this
         Agreement with the following exceptions. For the purposes of this
         Agreement, Partner will not be construed as the seller of
         transportation to the passenger. Fuel taxes, property taxes, and sales
         taxes on aircraft parts and maintenance equipment associated with this
         Agreement will be treated as Pass Thru Costs. Net income taxes on
         Partner's profits are the responsibility of Partner. Frontier will pay,
         prior to delinquency, all taxes imposed on any sums paid by Partner to
         Frontier under this Agreement.

12.      Defaults and Remedies.

         12.1     Default by Partner. The occurrence of any one or more of the
                  following events shall constitute a material default and
                  breach of this Agreement by Partner (an "Event of Default"):

                  12.1.1   The failure of Partner to make any payment required
                           to be made to Frontier by Partner hereunder, as and
                           when due, and such failure continues for five (5)
                           days after Partner's receipt of written notice from
                           Frontier;

                  12.1.2   The failure of Partner to observe or perform any of
                           the material covenants, conditions or provisions of

<PAGE>

                           this Agreement to be observed or performed by
                           Partner, other than as described in 12.1.1 and such
                           failure shall continue for a period of 15 days after
                           written notice thereof from Frontier to Partner or
                           such longer period as may be reasonably necessary to
                           complete the cure of such failure up to 120 days;
                           provided Partner commences such cure during the
                           initial 15-day period and pursues the cure to
                           completion;

                  12.1.3   (i) the cessation of Partner's business operations as
                           a going concern; (ii) the making by Partner of any
                           general assignment, or general arrangement for the
                           benefit of creditors; (iii) the inability of Partner
                           to generally pay Partner's debts as they come due and
                           Partner's written admission of its inability to pay
                           its debts as they come due; (iv) the filing by or
                           against Partner of a petition to have Partner
                           adjudged bankrupt or a petition for reorganization or
                           arrangement under any law relating to bankruptcy
                           (unless, in the case of petition filed against
                           Partner, the same is dismissed, stayed or vacated
                           within 120 days); (v) an adjudication of Partner's
                           insolvency; (vi) appointment of a trustee or receiver
                           to take possession of substantially all of Partner's
                           assets which is not dismissed, stayed or vacated
                           within 120 days; or (vii) the attachment, execution
                           or other judicial seizure of substantially all of
                           Partner's assets which is not dismissed, stayed or
                           vacated within 120 days.

                  12.1.4   Upon an Event of Default, Frontier may within 30 days
                           of such Event of Default: (a) by written notice to
                           Partner (a "Default Termination Notice"), terminate
                           this Agreement effective as of the date set forth in
                           the Default Termination Notice which date shall not
                           be less than 30 nor more than 180 days after the date
                           of the Default; and/or (b) pursue all other rights
                           and remedies available at law or in equity to
                           Frontier for the Event of Default, including, without
                           limitation, injunctive relief, specific performance
                           and damages. After receipt of a Default Termination
                           Notice, Partner shall continue to provide the Flight
                           Services and Other Services in accordance with this
                           Agreement until the termination date set forth in the
                           Default Termination Notice and provided Frontier has
                           satisfied its obligations under the Agreement. No
                           remedy or election by Frontier hereunder shall be
                           deemed exclusive, but shall, wherever possible, be
                           cumulative with all other rights and remedies at law
                           or in equity.

         12.2     Frontier Default. The occurrence of any one or more of the
                  following events shall constitute a material default and
                  breach of this Agreement by Frontier (an "Frontier Event of
                  Default"):

                  12.2.1   The failure of Frontier to make any payment required
                           to be made to Partner by Frontier hereunder, as and
                           when due, and such failure continues for two (2)
                           business days after Frontier's receipt of written
                           notice from Partner;

<PAGE>

                  12.2.2   The failure of Frontier to observe or perform any of
                           the covenants, conditions or provisions of this
                           Agreement to be observed or performed by Frontier,
                           other than as described in Section 12.2.1 and such
                           failure shall continue for a period of 15 days after
                           written notice thereof from Partner to Frontier or
                           such longer period as may be reasonably necessary to
                           complete the cure of such failure, up to 120 days,
                           provided Frontier commences such cure during the
                           initial 15-day period and pursues the cure to
                           completion;

                  12.2.3   (i) the cessation of Frontier's business operations
                           as a going concern; (ii) the making by Frontier of
                           any general assignment, or general arrangement for
                           the benefit of creditors; (iii) the inability of
                           Frontier to generally pay Frontier's debts as they
                           come due or Frontier's written admission of its
                           inability to pay its debts as they come due; (iv) the
                           filing by or against Frontier of a petition to have
                           Frontier adjudged bankrupt or a petition for
                           reorganization or arrangement under any law relating
                           to bankruptcy (unless, in the case of petition filed
                           against Frontier, the same is dismissed, stayed or
                           vacated within 120 days); (v) an adjudication of
                           Frontier's insolvency; (vi) appointment of a trustee
                           or receiver to take possession of substantially all
                           of Frontier's assets which is not dismissed, stayed
                           or vacated within 120 days; or (vii) the attachment,
                           execution or other judicial seizure of substantially
                           all of Frontier's assets which is not dismissed,
                           stayed or vacated within 120 days.

                  12.2.4   Upon the occurrence and continuance of an Frontier
                           Event of Default under Section 12.2.1, Partner may
                           immediately terminate this Agreement, discontinue
                           Flight Services, and /or pursue all other rights and
                           remedies available at law or in equity, including,
                           without limitation, injunctive relief, specific
                           performance and damages. Under any other Frontier
                           Event of Default, Partner may: (a) by written notice
                           to Frontier (an "Frontier Default Notice") terminate
                           this Agreement effective as of the date set forth in
                           the Frontier Default Notice which date shall not be
                           less than 30 nor more than 180 days after the date of
                           the Frontier Event of Default; and/or (b) pursue all
                           other rights and remedies available at law or in
                           equity to Partner for the Frontier Event of Default,
                           including, without limitation, injunctive relief,
                           specific performance and damages. After receipt of a
                           Frontier Default Notice, Frontier shall continue to
                           perform its obligations under this Agreement until
                           the termination date set forth in the Frontier
                           Default Notice. No remedy or election by Partner
                           hereunder shall be deemed exclusive, but shall,
                           wherever possible, be cumulative with all other
                           rights and remedies at law or in equity.

13.  Records and Reports.

         13.1     Retention of Records. Frontier and Partner shall retain all
                  records developed in connection with this Agreement in
                  accordance the express terms of this Agreement and as required
                  by applicable law and

<PAGE>

                  the Regulations.

         13.2     Provision of Additional Records. Subject to DOT practices,
                  regulations and procedures, Partner shall promptly furnish
                  Frontier, upon written request by Frontier with a copy of
                  every final report that it prepares and is required to submit
                  to the DOT, FAA, National Transportation Safety Board or any
                  other governmental agency, relating to any accident or
                  incident involving an Aircraft used in performing Flight
                  Services under this Agreement, when such accident or incident
                  is claimed to have resulted in the death of or substantial
                  injury to any person or the loss of, damage to, or destruction
                  of any property. Frontier agrees to treat all such material
                  supplied by Partner pursuant to this Section as Confidential
                  as defined under Section 10 of this Agreement.

14.      Exclusivity. Nothing contained in this Agreement shall restrict either
         party from entering into any other code-share agreement with any other
         party.

15.      Miscellaneous Provisions.

         15.1     Notices. All notices, consents, approvals or other instruments
                  required or permitted to be given by either party pursuant to
                  this Agreement shall be in writing and given by: (i) hand
                  delivery; (ii) facsimile; (iii) express overnight delivery
                  service; or (iv) certified or registered mail, postage
                  prepaid, return receipt requested. Notices shall be provided
                  to the parties and addresses (or facsimile numbers, as
                  applicable) specified below and shall be effective upon
                  receipt or the rejection of such delivery, except if delivered
                  by facsimile outside of business hours in which case they
                  shall be effective on the next succeeding business day:

                  If to Frontier:   Frontier Airlines, Inc.
                                    7001 Tower Road
                                    Denver, Colorado 80239
                                    Attn: Vice President - Marketing & Planning
                                    Telephone:  [***]
                                    Facsimile: [***]

                  If to Partner:    Horizon Air
                                    19521 International Boulevard
                                    Attn:  Vice President, Finance
                                    Telephone:  [***]
                                    Facsimile:  [***]

         15.2     Waiver and Amendment. No provisions of this Agreement shall be
                  deemed waived or amended except by a written instrument
                  unambiguously setting forth the matter waived or amended and
                  signed by the party against which enforcement of such waiver
                  or amendment is sought. Waiver of any matter shall not be
                  deemed a waiver of the same or any other matter on any future
                  occasion.

         15.3     Captions. Captions are used throughout this Agreement for
                  convenience of reference only and shall not be considered in
                  any manner in the construction or interpretation hereof.

<PAGE>

         15.4     Attorneys' Fees. In the event of any judicial or other
                  adversarial proceeding between the parties concerning this
                  Agreement, the prevailing party shall be entitled to recover
                  its attorneys' fees and other costs in addition to any other
                  relief to which it may be entitled.

         15.5     Entire Agreement. This Agreement, including all attached
                  exhibits and schedules, constitutes the entire agreement
                  between the parties with respect to the subject matter hereof
                  and supercedes any prior agreements, whether written or oral,
                  with respect to such matters, and there are no other
                  representations, warranties or agreements, written or oral,
                  between Frontier and Partner with respect to the subject
                  matter of this Agreement other than as set forth herein.

         15.6     Jurisdiction; Choice of Law. For purposes of any action or
                  proceeding arising out of this Agreement, the parties hereto
                  hereby expressly submit to the non-exclusive jurisdiction of
                  all federal and state courts located in the State of Colorado.
                  This Agreement shall be governed by and construed in
                  accordance with the laws of the State of New York.

         15.7     Severability. If this Agreement, any one or more of the
                  provisions of this Agreement, or the applicability of this
                  Agreement or any one or more of the provisions of this
                  Agreement to a specific situation, shall be held invalid,
                  illegal or unenforceable or in violation of any contract or
                  agreement to which Partner or Frontier are a party, then
                  Frontier and Partner shall in good faith amend and modify this
                  Agreement, consistent with the intent of Partner and Frontier,
                  as evidenced by this Agreement, to the minimum extent
                  necessary to make it or its application valid, legal and
                  enforceable and in accordance with the applicable agreement or
                  contract, and the validity or enforceability of all other
                  provisions of this Agreement and all other applications of any
                  such provision shall not be affected thereby.

         15.8     Force Majeure. A party may not consider any default, delay, or
                  failure to perform by the other party, including Partner's
                  failure to achieve the OTP and/or the FCF rates required under
                  this Agreement, other than a failure to pay amounts when due,
                  as a breach of this Agreement if such default, delay or
                  failure to perform is shown to be due entirely to causes
                  beyond the reasonable control of the party charged with a
                  default including, but not limited to, causes such as strikes
                  or other labor disputes, riots, civil disturbances, actions of
                  governmental authorities that effect Partner's fleet of
                  CRJ-700 aircraft, epidemics, war, embargoes, terrorism,
                  weather, fire, earthquakes, nuclear disasters, or acts of God
                  or of the public enemy.

         15.9     Counterparts. This Agreement may be executed in one or more
                  counterparts, each of which shall be deemed an original.

         15.10    Binding Effect. This Agreement shall be binding upon and inure
                  to the benefit of Frontier and Partner and their respective
                  successors and permitted assigns.

         15.11    No Assignment. The rights, obligations and duties of Frontier
                  and Partner under this Agreement may not be assigned or
                  delegated,

<PAGE>

                  except as may otherwise be mutually agreed by Frontier and
                  Partner, which shall not be unreasonably withheld.

         15.12    Arbitration. Except as otherwise expressly provided herein,
                  any controversy, dispute, disagreement or claim between the
                  parties arising under or relating to this Agreement (a
                  "Dispute"), including any question concerning the validity,
                  termination, interpretation, performance, operation,
                  enforcement or breach of this Agreement, shall be referred to
                  binding arbitration. Each of Frontier and Partner irrevocably
                  submits to the exclusive jurisdiction of such arbitration and
                  expressly and irrevocably waives its rights to bring suit
                  against the other party in any court of law except for the
                  limited purpose of enforcing an arbitral award obtained in
                  respect of a Dispute, or for obtaining any injunctive relief
                  available to it under the laws of any jurisdiction for a
                  breach or threatened breach by the other party of this
                  Agreement that threatens irreparable damage.

                  Any Dispute submitted for arbitration will be finally settled
                  by binding and confidential arbitration according to the
                  American Arbitration Association Commercial Arbitration Rules
                  (the "Rules"), except as modified by mutual agreement of
                  Frontier and Partner. In the event of a conflict between the
                  Rules and this Section 15.12, the provisions of this Section
                  15.12 will prevail. The arbitration will be conducted by three
                  arbitrators, each of whom will be knowledgeable about the
                  legal, marketing and other business aspects of the airline
                  industry, unless otherwise agreed. Initially, and until
                  written notice has been received to the contrary, all
                  notifications and communications arising from the arbitral
                  proceedings may be made to the parties in the manner and the
                  addresses specified in Section 15.1.

                  In the event that any Dispute is submitted to arbitration, all
                  then current Disputes (including counterclaims between the
                  parties) will be consolidated in a single arbitration
                  proceeding. The arbitral proceeding will not exceed ninety
                  (90) days commencing on the date the last arbitrator accepts
                  his or her appointment. If the arbitral award is not issued
                  within this time, then the arbitration proceeding will be
                  renewed automatically for another ninety (90) days. Evidence
                  may not be taken in the arbitral proceeding except in the
                  presence of both parties and all witnesses, if any, may be
                  questioned by both parties. Notwithstanding the outcome of any
                  Dispute, each party will bear its own costs and expenses,
                  including attorneys' and expert fees, relating to any
                  arbitration occurring pursuant to this Section.

                     IN WITNESS WHEREOF, the parties executed and deliver this
         Agreement as of the date first written above.

                                                Frontier Airlines, Inc.,
                                                a Colorado corporation

                                                By:
                                                Name:

<PAGE>

                                                Title:

                                                HORIZON AIR INDUSTRIES, INC.
                                                a Washington corporation

                                                By:
                                                Name:
                                                Title:

                                    EXHIBITS

<TABLE>
<S>                        <C>
Schedule A                 Certain Defined Terms

Exhibit 1.1                Partner Operational and Maintenance Practices

Exhibit 1.3.1              Initial Fleet

Exhibit 1.3.3              Configuration, Decor and Livery Standards

Exhibit 1.6.1              Pilot and Flight Attendant Appearance Standards

Exhibit 6.1.1              Fixed, Variable and Pass Thru Costs

Exhibit 6.1.2              Training/Start-up Pass Thru Costs

Exhibit 6.3.3              MTX Variable Cost Adjustment Formula

Exhibit 6.6                Backup Documentation
</TABLE>

                                   EXHIBIT 1.1

                    PARTNER'S OPERATIONAL AND MAINTENANCE PRACTICES

1. Aircraft are scheduled to have a minimum turn time of [***] minutes in the
hub, and [***] minutes of minimum turn time in non-hub stations.

2. Three aircraft are scheduled to RON in DEN, or another MTX RON location as
mutually agreed, each night, of which two are scheduled Aircraft and one is a
spare Aircraft. Two Aircraft will have a minimum ground time of [***], and 1
Aircraft will have a minimum ground time of [***]. The Schedule will provide
that each aircraft will remain overnight in DEN or MTX RON location at least
once every [***].

3. Each line of flying that originates at a non-maintenance RON location as
defined in section 1.7.2 in the agreement, will be scheduled to have one [***]
turn in DEN each day.

                                  EXHIBIT 1.3.1

Initial Fleet - 8 + 1 Spare

<PAGE>

                   Anticipated                                Number of
                  In-Service                                  Aircraft
                     Month

                   [***]2004                            3 Core + 1 Spare; 4 Used

                   [***]2004                                2 Core; 2 New

                   [***]2004                                1 Core; Used

                   [***]2004                                1 Core; Used

                   [***]2004                                1 Core; Used

                                  EXHIBIT 1.3.3

                   CONFIGURATION AND INTERIOR DECOR STANDARDS

Aircraft seating configuration

1.       All aircraft will be configured to have 70 seats with a 31 inch pitch,
except for the exit row, which will have a 41 inch pitch.

2.       Seats will be covered in color (color#) leather according to the
current Horizon standard interior configuration (reference to Horizon aircraft
configuration manual) for a Bombardier CRJ-700 aircraft.

Carpeting

All aircraft interiors will have carpet according to current Horizon standard
interior configuration (reference to Horizon aircraft configuration manual) for
a Bombardier CRJ-700 aircraft.

Emergency cards

All aircraft will be outfitted with emergency cards in their seatback pocked as
required by federal regulations. Emergency cards will be labeled "Frontier
JetExpress operated by Horizon Airlines".

<PAGE>

                                  EXHIBIT 1.6.1

                    PILOT AND FLIGHT ATTENDANT APPEARANCE STANDARDS

Pilots

All pilots are to adhere to the appearance standards set by the Policies and
Procedures section of the Horizon Air Flight Operations Manual.

Flight Attendants

All flight attendants are to adhere to the appearance standards set by the
Policies and Standards section of the Horizon Air Flight Attendant Manual.

                                  EXHIBIT 6.1.1

                       FIXED, VARIABLE AND PASS THRU COSTS

                                      [***]

                                  EXHIBIT 6.1.2

                        TRAINING/START-UP PASS THRU COSTS

                                      [***]

                                  EXHIBIT 6.3.3

                      MTX VARIABLE COST ADJUSTMENT FORMULA

                                      [***]

                                   EXHIBIT 6.6

                              BACKUP DOCUMENTATION

<TABLE>
<CAPTION>
     Cost                            Backup Required                    Minimum Frequency
<S>                            <C>                                <C>
Hull Insurance                 Insurance Policy & Invoice         Annually or at time of change
</TABLE>

<PAGE>

<TABLE>
<S>                            <C>                                <C>
Liability Insurance            Insurance Policy & Invoice         Annually or at time of change

War Risk Insurance             Insurance Policy & Invoice         Annually or at time of change

Property Taxes                 Assessment & Evidence of Payment   Semi-annually

Deicing                        Invoices & Evidence of Payment     Monthly

Fuel Costs                     Invoices & Evidence of Payment     Monthly

Catering                       Invoices & Evidence of Payment     Monthly

Landing Fees                   Invoices & Evidence of Payment     Monthly

Security Fees                  Invoices & Evidence of Payment     Monthly

Station Rent                   Lease Document; Invoices &         Monthly
                               Evidence of Payment

Aircraft Ownership Costs       Lease or Finance Documents         When added to Fleet

Station Costs                  Subcontracts; All Invoices         Monthly
                               and Evidence of Payment
</TABLE>

                                   SCHEDULE A

                              CERTAIN DEFINED TERMS

"FIXED COSTS"                  means each of the cost elements identified as
                               Fixed Costs on Exhibit 6.1 to this Agreement,
                               or such costs and expenses as may be otherwise
                               agreed to by the parties from time to time and
                               evidenced by an appropriate amendment to
                               Exhibit 6.1.

"OTHER SERVICES"               means (i) curb-side service in all locations
                               where it is normal and customary or where
                               another airline offers curbside check-in; (ii)
                               check-in service with automated baggage tags
                               and boarding pass printers in all locations;
                               (iii) ticketing and security services in
                               accordance with the Federal Aviation
                               Administration and Frontier directives and
                               guidelines, as may be issued from time to
                               time, and any other directives or guidelines
                               as Partner and Frontier may mutually approve,

<PAGE>

                               in all locations; (iv) transportation of mail
                               and other cargo (other than hazardous
                               materials) on Flights, at the order of
                               Frontier, to the extent of available Aircraft
                               capacity; (v) the acquisition and delivery of
                               aircraft fuel and oil to the Fleet; (vi)
                               Aircraft deicing when needed; (vii) station
                               handling, including aircraft, ticket counter,
                               gate, ramp, aircraft cleaning and baggage
                               services; and (viii) communication systems,
                               office supplies, postage, parking, training,
                               reaccommodation, in-flight catering.

"PARTNER CONTROL"              means acts, omissions or events are not due to
                               the acts or omissions of a Frontier employee
                               or agent, including any third party contractor
                               of Frontier, or Force Majeure as defined in
                               Section 15.8 of this Agreement, or are not due
                               to acts taken by Partner in order to comply
                               with Regulations.

"PASS THRU COSTS"              means each of the cost elements identified as
                               Pass Thru Costs on Exhibit 6.1 to this
                               Agreement and certain occasional costs
                               incurred by Partner while providing the Flight
                               Services, such as costs relating to opening
                               new cities or costs and expenses relating to
                               arranging for and conducting Ad Hoc Flights
                               pursuant to Section 1.2 of this Agreement.

"UNIT OF MEASURE"              means the unit used to measure the Fixed Costs,
                               Variable Costs and Pass Thru Costs as set forth
                               on Exhibit 6.1 to this Agreement.

"VARIABLE COSTS"               means each of the cost elements identified as
                               Variable Costs on Exhibit 6.1 to this Agreement,
                               as adjusted from time to time in accordance with
                               the terms of this Agreement.