TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT  CONSTITUTES  CHATTEL PAPER (AS
DEFINED  IN  THE  UNIFORM  COMMERCIAL  CODE  AS  IN  EFFECT  IN  ANY  APPLICABLE
JURISDICTION),  NO SECURITY  INTEREST IN THIS  AIRCRAFT  LEASE  AGREEMENT MAY BE
CREATED  THROUGH  TRANSFER  OR  POSSESSION  OF ANY  COUNTERPART  OTHER  THAN THE
ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS
THE  ORIGINAL ON THE  SIGNATURE  PAGE OF THIS  AGREEMENT  BY AVIATION  FINANCIAL
SERVICES INC.

                            AIRCRAFT LEASE AGREEMENT

                           Dated as of April 20, 2000

                                     between

                        AVIATION FINANCIAL SERVICES INC.

                                    as Lessor

                                       and

                             FRONTIER AIRLINES, INC.

                                    as Lessee

                                  in respect of

                          Fifteen Airbus A319 Aircraft

                          as further identified herein

                        incorporating the provisions of a

                             COMMON TERMS AGREEMENT





<PAGE>



                            AIRCRAFT LEASE AGREEMENT

THIS AIRCRAFT LEASE AGREEMENT is made as of April 20, 2000 and is BETWEEN:

(1)  Aviation  Financial  Services,  Inc., a corporation  incorporated under the
     laws of Delaware and a wholly owned  subsidiary of General Electric Capital
     Corporation,  a New York corporation ("GECC") having its principal place of
     business at c/o GE Capital  Aviation  Services,  Inc., 201 High Ridge Road,
     Stamford, Connecticut 06927 ("Lessor"); and

FRONTIER AIRLINES,  INC., a corporation  incorporated under the laws of Colorado
     with its principal  place of business and chief  executive  office at 12015
     East 46th Avenue, Suite 200 Denver, Colorado 80239 ("Lessee").

WHEREAS:

(A)      Lessee wishes to lease the Aircraft (as defined below) from Lessor, and
         Lessor wishes to lease the Aircraft to Lessee, on the terms and subject
         to the conditions provided herein;

(B)      GECC and Lessee  have  entered  into the  Common  Terms  Agreement  (as
         defined  below) in respect of aircraft  that may be leased from time to
         time by  Lessee  or one of its  Affiliates  from  Lessor  or one of its
         Affiliates; and

(C)      Lessor and Lessee wish to  incorporate  by reference  such Common Terms
         Agreement,  as well as  Schedules  A and B attached  hereto,  into this
         Aircraft Lease Agreement for each of the Aircraft;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

16.      INTERPRETATION

16.1     Definitions: In this Aircraft Lease Agreement,the following capitalized
         words and expressions have the respective meanings set forth below:

         Agreed Lessee  Modifications  means any modifications or changes to the
         GECC A319 Baseline  Specification  as requested by Lessee and agreed by
         Lessor for  incorporation  on any  Aircraft  prior to  Delivery of such
         Aircraft.   Lessor  agreement  to  such  modifications   shall  not  be
         unreasonably  withheld. All requests for any Agreed Lessee Modification
         shall be made no  later  than * months  prior  to the  Delivery  of any
         Aircraft.

Airbus  Aircraft  means  individually  each  of  the *  A319-100  Aircraft  with
installed Engines, Parts and Aircraft Documents and Records as further described
in Schedule A hereto and each Lease Supplement upon delivery.

Aircraft means individually,  each of the Airframes, Engines, Parts and Aircraft
Documents and Records relating to each individual Aircraft described on Schedule
A hereto, and collectively all of the Airbus Aircraft as so further described.

Airframe Maintenance  Adjustment shall have the meaning as set forth in Schedule
B, Part VI hereof.

Airframe 4C Check means the 4C check including 5 year structural inspections all
in accordance  with Lessee's  Maintenance  Program  which,  at a minimum,  shall
comply with the Manufacturer's  Maintenance Planning Document and Manufacturer's
Maintenance Review Board Report.

Airframe 8C Check means the 8C check  including 10 year  structural  inspections
all in accordance with Lessee's  Maintenance Program which, at a minimum,  shall
comply with the Manufacturer's  Maintenance Planning Document and Manufacturer's
Maintenance Review Board Report.

Airframe  Structural Check means a heavy  maintenance  visit which shall include
but not be limited to  accomplishment  of either or both of an Airframe 4C Check
and an Airframe 8C Check.

Airframe 4C Supplemental  Rent and Airframe 4C Supplemental Rent Rate shall have
the  respective  meanings  set forth in Clause (a) of Schedule B, Part V hereof.
Airframe 8C Supplemental  Rent and Airframe 8C Supplemental Rent Rate shall have
the respective meanings set forth in Clause (a) of Schedule B, Part V hereof.

Alternate  Scheduled  Delivery Month means one Aircraft in each * as alternative
delivery months to a Scheduled Delivery Month; subject, however to the continued
availability  of any  Aircraft in any month other than an  originally  Scheduled
Delivery Month.

APU Supplemental  Rent and APU Supplemental  Rent Rate shall have the respective
meanings set forth in Clause (d) of Schedule B, Part V hereof.

Common Terms Agreement means the "Aircraft Lease Common Terms  Agreement"  dated
as of April  20,  2000  executed  by GECC and  Lessee  (as in effect on the date
hereof without,  unless Lessor and Lessee otherwise  expressly agree, giving any
effect to any subsequent  amendment,  supplement,  waiver or other  modification
thereto), and which forms part of this Aircraft Lease Agreement.

Delivery Condition  Requirements means the requirements specified in Part III of
Schedule A.

Delivery  Location means  Hamburg,  Germany or such other location as Lessor and
Lessee mutually agree.

Deposit means all amounts payable pursuant to Section 3.1 hereof.

Discount Rate means *.

Engine LLP Supplemental  Rent and Engine LLP  Supplemental  Rent Rate shall have
the respective meanings set forth in Clause (b) of Schedule B, Part V hereof.

Engine Refurbishment  Maintenance Adjustment shall have the meaning as set forth
in Schedule B, Part VI hereof.

Engine  Refurbishment  Supplemental Rent and Engine  Refurbishment  Supplemental
Rent Rate shall have the respective meanings set forth in Clause (c) of Schedule
B, Part V hereof.

Final  Delivery  Date means the date that is * months  after the last day of the
Scheduled Delivery Month for each Aircraft, respectively.

Financing Documents means any documentation  reflecting a mortgage or other debt
financing  for any of the  Aircraft  as the  same may be  restated,  refinanced,
replaced or refunded, from time to time as notified by Lessor to Lessee.

Financing  Parties  means  the  holders  of  any  indebtedness  relating  to the
Aircraft.

Financing  Parties'   Representative   means  any  lender  under  the  Financing
Documents, if any, and its successors or assigns.

Guarantor means any guarantor, if any, of the Lessee's obligations hereunder.

Indemnitee  means  each of Lessor,  Owner,  GE  Capital,  GECAS,  the  Financing
Parties'  Representative  and the Financing  Parties,  and their  successors and
assigns,  and  each of their  shareholders,  contractors,  directors,  officers,
representatives, agents and employees.

Landing Gear  Supplemental  Rent and Landing Gear  Supplemental  Rent Rate shall
have the  respective  meanings  set forth in Clause  (e) of  Schedule  B, Part V
hereof.

Maintenance  Adjustment means collectively the Airframe Maintenance  Adjustment,
the Engine  Refurbishment  Maintenance  Adjustment,  the Engine LLP  Maintenance
Adjustment,  the APU  Maintenance  Adjustment  and the Landing Gear  Maintenance
Adjustment  payable  by Lessee  pursuant  to  Section  5.4 of the  Common  Terms
Agreement,  Section  3 of  this  Agreement  and  Schedule  B,  Part  VI of  this
Agreement.

Manufacturer means the manufacturer of each of the Airframe or an Engine, as the
case may be, as set forth on Schedule A hereto.

Owner  means  Lessor or such  other  entity as  notified  by Lessor to Lessee in
writing in accordance with the terms of the Lease,  including  Section 14 of the
Common Terms Agreement.

Redelivery Location means Denver,  Colorado,  or such other location on Lessee's
route system within the Continental  United States as Lessor shall advise Lessee
in writing at least * prior to the Expiry Date;  provided  that,  if an Event of
Default has  occurred  and is  continuing,  such notice may be  delivered on the
Expiry Date.

Rent means all  amounts  payable  pursuant to Section 3.2 hereof for each of the
Aircraft, respectively.

Rent  Commencement  Date means each  respective  date on which Lessor tenders an
Aircraft for Delivery to Lessee in  accordance  with Clause 4.3(a) of the Common
Terms Agreement.

Scheduled  Delivery  Date  means  the date  notified  by  Lessor  to  Lessee  in
accordance  with Clause 4.1(a) of the Common Terms Agreement for the delivery of
each Aircraft in the Scheduled Delivery Month.

Scheduled Delivery Month means one Aircraft in each of *.

Scheduled   Expiry  Date  means  the  date   immediately   preceding   the  date
corresponding  to the  Delivery  Date in the month that is the * month after the
Delivery Date for each Aircraft,  which date shall be specifically  set forth in
Lease Supplement for such Aircraft

State of Registry means United States.

Supplemental  Rent means, as applicable,  all amounts payable under the Lease in
respect of each of Airframe  Supplemental  Rent, Engine  Supplemental  Rent, APU
Supplemental Rent and Landing Gear Supplemental Rent.

Supplemental  Rental Cap shall have the  meaning set forth in Schedule B, Part V
hereof.

Tax Indemnitee means each of Owner, Lessor,  Financing Parties'  Representative,
and each member of the  consolidated  group of which Lessor or Owner is a member
for United States Federal Income Tax purposes, and their successors and assigns.

16.2     Interpretation:  Unless otherwise defined herein, words and expressions
         defined in the Common Terms Agreement have the same respective meanings
         for the purposes of this Aircraft  Lease  Agreement.  The  construction
         provisions of Section 1.2 of the Common Terms  Agreement shall apply to
         this Aircraft Lease Agreement.

17.      LEASING

17.1     Agreement to Lease:  Subject to the terms and  conditions of the Lease,
         Lessor will lease each Aircraft to Lessee and Lessee will take delivery
         of and lease each Aircraft from Lessor in accordance with the Lease for
         the duration of the Term for each such Aircraft respectively.

17.2     Term:  Subject  to  Sections  4.1  through  4.4  of  the  Common  Terms
         Agreement,  Delivery  of  each  Aircraft  will  occur  at the  Delivery
         Location  specified for such  Aircraft,  whereupon  Lessee shall accept
         each such  Aircraft  hereunder  by  executing  and  delivering  a Lease
         Supplement  substantially  in the  form of  Lease  Supplement  No. 1 as
         provided in Section  4.3 of the Common  Terms  Agreement.  The Term for
         each Aircraft  will  commence on the Delivery  Date for such  Aircraft,
         which  Delivery  Date is scheduled to occur on the  Scheduled  Delivery
         Date for such  Aircraft,  and will expire on the Scheduled  Expiry Date
         for such Aircraft  unless  terminated  earlier in  accordance  with the
         provisions of the Lease.

18.      PAYMENTS

18.1     Deposit  and Letter of Credit:  Lessee  shall pay to Lessor the Deposit
         for each  Aircraft  in cash or by Letter of Credit  (to which each such
         Deposit,  Sections  5.12 and 5.13,  as  applicable  of the Common Terms
         Agreement  shall  apply) in the  amount  and at the times  provided  in
         Schedule B hereto.

18.2     Rent:  Lessee  shall pay Rent for each  Aircraft to Lessor on each Rent
         Date for such  Aircraft  during  the Term in the amount  determined  in
         accordance  with  Schedule B hereto and as provided in Sections 5.2 and
         5.3 of the Common Terms  Agreement.  The first  instalment  of Rent for
         each Aircraft  shall be due and payable on the Rent  Commencement  Date
         for such Aircraft as defined  herein.  Provided no Event of Default has
         occurred and is continuing,  (i) during the first * Rental Periods with
         respect to each of the first * A319  Aircraft to deliver,  Lessor shall
         grant Lessee a credit in an amount equal to the Initial Aircraft Rental
         Credit and (ii) during the first three Rental Periods of this Agreement
         with  respect to each of the  remaining  * A319  Aircraft  to  deliver,
         Lessor  shall  grant  Lessee a credit in an amount  equal to the Second
         Aircraft  Rental Credit.  Each such credit shall be applied against the
         Rent  for  the  applicable  Aircraft  then  due  and  payable  for  the
         applicable  Rental  Periods as set forth above  following each Aircraft
         Delivery Date or in such other manner as Lessor and Lessee may agree.

18.3     Supplemental  Rent and  Maintenance  Adjustment:  Lessee  shall pay (a)
         Supplemental  Rent for each Aircraft to Lessor on each  applicable date
         during the Term in  accordance  with  Section  5.4 of the Common  Terms
         Agreement and in the amounts provided in Schedule B hereto; and (b) the
         Maintenance  Adjustments  for each  Airbus  Aircraft  to  Lessor on the
         Return  Occasion  in the  amounts  provided in Schedule B hereto and as
         provided in Section 5.4 of the Common  Terms  Agreement.  Lessor  shall
         retain all Supplemental  Rent and Maintenance  Adjustments,  subject to
         Section 3.4 below. Lessee's obligation to pay Supplemental Rent for any
         Airbus Aircraft shall be suspended when the Supplemental Rental Cap for
         such Aircraft has been reached.  The  Supplemental  Rental Cap for each
         Airbus Aircraft shall be maintained  during the Term and increased from
         time to time by an amount equal to any Lessor Maintenance  Contribution
         made by Lessor with respect to such  Aircraft,  whereupon  Lessee shall
         recommence  payment of Supplemental Rent until the Supplemental  Rental
         Cap for each such Airbus Aircraft shall again have been reached.

18.4     Lessor's  Maintenance   Contribution:  Lessor  shall  make  Maintenance
         Contribution  payments as and to the  extent provided in Section 7.2 of
         the Common Terms Agreement.

18.5     Lessor's  Bank  Account:  For the purposes of Section 5.5 of the Common
         Terms Agreement,  Lessor's bank account and wire transfer  particulars,
         to which all payments to Lessor  shall be made,  are at the date hereof
         Bankers  Trust  Company,  ABA number * for the  account of GECC T&I Air
         Depository Account, Account No. *.

19.      Condition of the aircraft at delivery

19.1     On each Delivery Date, as a condition to Lessee's  obligation to accept
         delivery thereof,  each Aircraft shall be in the condition  provided in
         Part III of Schedule A hereto.

20.      CONDITION OF THE AIRCRAFT AT REDELIVERY

20.1     On the Return  Occasion for each Aircraft,  Lessee shall redeliver each
         such  Aircraft  to  Lessor  at the  Redelivery  Location  and  at  such
         redelivery  each such Aircraft  shall be in the  condition  provided in
         Part  IV of  Schedule  A  hereto  and in the  Common  Terms  Agreement,
         including Schedule 6 of the Common Terms Agreement.

21.      ADDRESSES FOR NOTICES

The addresses  and  facsimile and telephone  numbers of Lessor and Lessee are as
follows:

         Lessor:           Aviation Financial Services Inc.
                           c/o GE Capital Aviation Services, Inc.
                           201 High Ridge Road
                           Stamford, CT  06927

         Attention:        Contracts Leader
         Facsimile:        (203) 357-3201
         Telephone:        (203) 357-4482

         Lessee:           Frontier Airlines, Inc.
         Address:          12015 East 46th Avenue, Suite 200
                           Denver, Colorado 80239

         Attention:        General Counsel
         Facsimile:        (303) 371-7007
         Telephone:        (303) 371-7400

22.      THE SCHEDULES AND COMMON TERMS AGREEMENT

All the provisions of Schedule A, Schedule B and the Common Terms  Agreement are
incorporated  by reference  herein and are part of this Aircraft Lease Agreement
as if they were set out in full herein.  Without  limiting the generality of the
foregoing,  by its signature below, the Lessee  acknowledges and agrees that the
Lease of the  Aircraft  hereunder  is on an "AS IS, where is" basis and that the
disclaimers,  exculpations and limitations of liability, indemnities, the choice
of New York Law as the  governing  law,  THE  LESSEE'S  submission  to  personal
jurisdiction  in New  York,  and THE  waiver  of any  right  to a trial  by jury
provided  for in the Common  Terms  Agreement  are  incorporated  herein by sUCH
reference  and ARE PART OF this  Agreement  as if the same  were set out in full
herein.

8.       RIGHTS AND REMEDIES. The exercise by Lessor of its rights and  remedies
         pursuant  to Section 13.2 of the CTA is subject to Part VII of Schedule
         B of the Lease.

9.       No amendment except in writing

No provision of this Lease, including any provision of Schedule A, Schedule B or
the  Common  Terms  Agreement,  may  be  amended,  rescinded,  changed,  waived,
discharged,  terminated or otherwise modified in any way whatsoever, except by a
writing signed by the party to be charged.  Lessor and Lessee  acknowledge their
agreement to the provisions of this Section 8 by their initials below:

Lessor:                             Lessee:


IN WITNESS  whereof,  the  parties  hereto have  executed  this  Aircraft  Lease
Agreement, each by their duly authorized representative(s), as of the date shown
at the beginning of this Aircraft Lease Agreement.

LESSOR:                                     LESSEE:

AVIATION FINANCIAL SERVICES INC.            FRONTIER AIRLINES, INC.


By:      __________________________         By:      __________________________

Name:    __________________________         Name:    __________________________

Title:   __________________________         Title:   __________________________



<PAGE>




                                   SCHEDULE A

                     PART I-Airframe and engines description

AIRBUS AIRCRAFT

         Manufacturer:              Airbus
         Model:                     (15) x A319-100
         Serial Number:             To be advised
         MTOW                       154,300 pounds

ENGINES  (each  of  which  has  750 or  more  rated  takeoff  horsepower  or the
equivalent of such horsepower)

         Engine Type:               CFM56-5B5/P
         Serial Nos:                To be advised at Delivery and included in
                                    each respective Lease Supplement.

The serial numbers stated under "Aircraft" and "Engines" above are those advised
to Lessor by the Manufacturer.  If the Manufacturer advises of any change to any
serial  number,  the new number will be deemed  inserted  under "Serial  Number"
under "Aircraft" and "Engines" above, as the case may be, above.


<PAGE>





                                   SCHEDULE A

                           PART II-AIRCRAFT DOCUMENTS

MANUALS AVAILABLE (headlines)
1 - ENGINEERING DOCUMENTS
2 - MAINTENANCE & ASSOCIATED MANUALS
3 - MISCELLANEOUS PUBLICATIONS
4 - OPERATIONAL MANUALS AND DATA
5 - OVERHAUL DATA
6 - STRUCTURAL MANUALS
<TABLE>
<S>                                                <C>        <C>      <C>      <C>    <C>

     MANUALS AVAILABLE (detailed)                  Abbr       Form     Type     Qty.    Delivery
                                                   ---------------------------------------------

1.   ENGINEERING DOCUMENTS

     Process and Material Specification              PMS        F      E        1       0***
     Standards Manual                                SM         F      E        1       -90
2.   MAINTENANCE & ASSOCIATED MANUALS

     APU Build-up Manual                             ABM        P2     E        2       -90
     Aircraft Maintenance Manual                     AMM        F      C        10      0 to +90
                                                                MF     C        1       0 to +90
     Aircraft Time Limits/Maintenance Checks         TLMC       P2     C        3       90
     Aircraft Schematics Manual                      ASM        F      C        10      0 to +90
                                                                MF     C        1       0 to +90
     Aircraft Wiring Manual                          AWM        F      C        5       0 to +90
                                                                MF     C     1          0 to +90
     Aircraft Wiring Lists                           AWL        F      C     5          0 to +90
                                                                MF     C     1          0 to +90
     Consumable Material List                        CML        P2     E     1          -90
     Duct Repair Manual                              DRM        P2     E     1          90***
     Fuel Pipe Repair Manual                         FPRM       P2     E     1          90***
     Illustrated Parts Catalog (Airframe)            IPC        F      C     10         0 to +90
                                                                MF     C     1          0 to +90
     Illustrated Parts Catalog (Power Plant)**PIPC   F          C      10    0 to +90
                                                                MF     C     1          0 to +90
     Illustrated Tools and Equipment Manual          TEM        P2     E     3          -180
     Maintenance Facility Planning                   MFP        P2     E     2          -360
     Maintenance Planning Document                   MPD        P2     P     1          -180
                                                                       E     3          -90
     Power Plant Build-up Manual**                   PBM        P2     C     2          -90
     Support Equipment Summary                       SES        P1     E     2          -180
     Tool and Equipment Drawings                     TED        AC     E        1       -180
     Tool and Equipment Index                        TEI        P2     E        2       360
     Tool and Equipment Bulletins                    TEB        P1     E        3       0
     Trouble Shooting Manual                         TSM        F      C        10      0 to +90
                                                                MF     C        1       0 to +90
3.   MISCELLANEOUS PUBLICATIONS

     Airplanes Characteristics for Airport Planning  AC         P2     E        2       -360***
     Aircraft Recovery Manual                        ARM        P2     E        2       0***
     Cargo Loading System Manual                     CLS        P2     E        2       -90
     Crash Crew Chart                                CCC        P1     E        5       -180
     List of Radioactive and Hazardous Elements      LRE        P2     E        1       90***
     List of Applicable Publications                 LAP        P1     C        1       -180
     Livestock Transportation Manual                 LTM        P2     E        1       90***
     Service Bulletin                                SB         P2     C        2       0
                                                                F      E        1       -90
     Technical Publications Combined Index           TPCI       D      E        1       -90
     Service Information Letters                     SIL        P1     E        1       0
     Transportability Manual                         TM         P1     E        1       -90***
     Vendor Information Manual                       VIM        D      E        1       360
     Vendor Information Manual GSE                   VIM/GSE    P2     E        2       360


The         quantities  listed  below are in  addition to the set of one copy of
            each  operational  manual to be delivered with the Aircraft  (except
            PEP/PPM).

4.   OPERATIONAL MANUALS AND DATA

     Quick Reference Handbook                        QRH        P2     C        3       -90
     Flight Crew Operating Manual                    FCOM       P2     C        3       0
     Flight Manual                                   FM         P2     C        1       -90
                                                                       C        3       0
     Master Minimum Equipment List                   MMEL       P2     C        3       0
     Performance Engineering Program                 PEP        MT     C        1       -90
                                                                D      C        1       -90
     Performance Program Manual                      PPM        P2     C        3       90
     Weight and Balance Manual                       WBM        P2     C        3       0

5.   OVERHAUL DATA

     Component Documentation Status                  CDS        D            C    1     180***
     Component Evolution List                        CEL        P2           E    1     ***
     Cable Fabrication Manual                        CFM        P2           E    1     90***
     Component Maintenance Manual Airframe
     Manufacturer                                    CMMM       F            E    2     -180 to +180*

6.   STRUCTURAL MANUALS

     Nondestructive Testing Manual                 NTM        P2           E      2   -90***
     Structural Repair Manual                      SRM        F            E      2   -90***
</TABLE>

**      Supplied by the Propulsion Systems manufacturer.
***      Optional.  Delivered as follow-on for CDS.

MANUAL FORMAT AND TYPE IDENTIFICATION

FORM     AC    APERTURE CARD.  Refers to 35mm film contained in punched aperture
               cards.
         D     FLOPPY DISK 3"1/2
         F     MICROFILM.  Refers to 16mm roll film on 3M type cartridges.
         MF    MASTER FILM.   Refers  to  thick  diaz  film suitable for further
               reproduction.
         MP    Refers to paper  printed  one side,  unpunched  quality  shall be
               suitable  for  further reproduction or microfilming.
         MT    MAGNETIC TAPE
         P1    PRINTED ONE SIDE.  Refers  to  manuals in paper with print on one
               side of the sheets only.
         P2    PRINTED BOTH SIDES.  Refers  to  manuals with print on both sides
                of the sheets.

TYPE     C     CUSTOMIZED.  Refers to manuals which are customized.
         E     ENVELOPE.  Refers to manuals which are not customized.
         P     PRELIMINARY.   Refers  to  preliminary  data or manuals which may
               consist of:

         o  either one time issue not maintained by revision service, or
         o  preliminary issues maintained by revision service until final manual
            or data  delivery,  or o supply of best available data  under  final
            format with progressive completion through revision service.

DELIVERY          Manual  delivery  is  expressed  either as the  number of days
                  prior to delivery of the first  Aircraft or as nil (0),  which
                  designates the date of delivery of the first  Aircraft.  It is
                  agree that the number of days  indicated will be rounded up to
                  the next regular revision release date.


<PAGE>


                                   SCHEDULE A

                    PART III-DELIVERY CONDITION REQUIREMENTS

Set forth below is a description of the condition in which each Airbus  Aircraft
must be in order for Lessee to be obligated to accept each such  Aircraft  under
the Lease. It is solely a description of such condition  precedent and shall not
be construed as a representation,  warranty or agreement of any kind whatsoever,
express  or  implied,  by  Lessor  with  respect  to each such  Aircraft  or its
condition,  all of which have been  disclaimed by Lessor and waived by Lessee as
set forth in the Lease, including in the Common Terms Agreement. Airbus Delivery
Condition Requirements:

1.   The  "Delivery  Condition  Requirements"  for each Airbus  Aircraft  are as
     follows:

     On Delivery,each Airbus  Aircraft  shall

     (i)  be new, ex factory and painted in Lessee's livery;

     (ii)have a valid Export Certificate of Airworthiness for the United States;

     (iii)have an issued FAR 121 Compliance Statement from the Manufacturer;

     (iv) on  or  prior  to  the  Delivery  Date,  have  had   accomplished  all
          outstanding mandatory service bulletins,  Airworthiness Directives and
          similar  requirements  applicable to the Aircraft  having a compliance
          date prior to the  Delivery  Date or within * days after the  Delivery
          Date and which are  required  by the State of  Design,  the FAA or the
          Manufacturer.

     (v)  and  otherwise be in the condition  required for delivery  pursuant to
          each of two Purchase Agreements, dated July 16, 1996 and September 29,
          1998, respectively, each between the Manufacturer and GE Capital (each
          a "Purchase  Agreement" and together,  the "Purchase  Agreements") and
          the Airbus Aircraft  Specification Number D.000.0200,  Issue Number 4,
          dated April 30, 1995,  except as amended by change orders initiated by
          Lessor  under  the  terms  of the  Purchase  Agreement,  including  as
          modified to include the  additional  GECC  baseline SCNs in accordance
          with the GECC A319  baseline  specification  Issue 1 (the  "GECC  A319
          Baseline Specification.")

2.   Modifications  (a) The Agreed Lessee  Modifications  shall be  accomplished
     pre-delivery  at the sole cost and  expense  of  Lessee.  Lessor  shall use
     reasonable efforts to accomplish all Agreed Lessee  Modifications  prior to
     Delivery.  Cost of all Agreed Lessee  Modifications,  including charges for
     any "out of sequence production", shall be invoiced to Lessee upon Lessor's
     receipt of invoice applicable to each individual Agreed Lessee Modification
     from the relevant third party vendor.  If Lessor  notifies  Lessee that any
     Agreed Lessee  Modification  cannot be  accomplished  prior to the Delivery
     Date,  including  without  limitation  any  delays  in  accomplishing  such
     Modifications caused by failure of Lessee to deliver any materials or parts
     to  the   Manufacturer  by  the  required   on-dock  dates  as  advised  by
     Manufacturer,  such Agreed Lessee  Modification  shall be excluded from the
     Delivery Condition Requirements.


(b)  Cost  Adjustment.  Lessor  and  Lessee  agree  that if all fees,  costs and
     expenses  invoiced to Lessor  directly  attributable  to the Agreed  Lessee
     Modifications,  including without limitation, the order, purchase, delivery
     and installation on the Aircraft of the galleys,  seats,  avionics, APU and
     wheels and brakes (collectively,  the "BFE/SFE") selected by Lessee as part
     of the  Agreed  Lessee  Modifications  are less than such  fees,  costs and
     expenses  invoiced to Lessor for the BFE/SFE  selected by Lessor as part of
     the GECC A319 Baseline  Specification  , then upon the delivery of each new
     Aircraft,  Lessor shall pay to Lessee the difference between (i) the Lessee
     selected  BFE/SFE , pro-rata for each Aircraft leased by Lessee from Lessor
     ,  and  (ii)  the  Lessor  selected  BFE/SFE  for  such  Aircraft.   Lessee
     acknowledges that Lessor is subject to confidentiality  agreements with its
     vendors  relating the price of the above referenced  BFE/SFE.  Lessor shall
     certify to Lessee the net difference  between the costs of Lessee  selected
     BFE/SFE if less than the Lessor selected BFE/SFE.


(c)  Specification  Credit.  Lessee has requested that the items listed below in
     this  clause  (c ) (the  "Listed  Items")  be  removed  from the GECC  A319
     Baseline  Specification and not be included in any Aircraft.  Lessor shall,
     in its  discretion,  determine  whether  each  Listed  Item is,  or is not,
     removed from any Aircraft. In consideration thereof, Lessee hereby receives
     a credit for each Aircraft in the amount of * (the "Specification  Credit")
     (i) first, against any amounts due and payable by Lessee to Lessor relating
     to the  cost of any  additions  to the  GECC  A319  Baseline  Specification
     selected by Lessee;  (ii) second,  to the extent any  Specification  Credit
     remains,  against any amounts due and payable by Lessee to Lessor  relating
     to the cost of any increase in BFE or SFE not already  included in the GECC
     A319   Baseline   Specification   and  (iii)  third,   to  the  extent  any
     Specification Credit remains, against any amounts due and payable by Lessee
     to Lessor  under this  Agreement.  No Listed Items shall be included in the
     cost adjustments provided in clause 2 (b) above.
<PAGE>


                                                       Listed Items:





Ozone Catalytic Converters                           (G8EO2J1011101S1H)

HF LRU                                               (G8E23J1113004S1H)

Third Radio Management Panel                         (G8E23J1310102S1H)

System Prov. For Audio Pax Entertainment Sys.        (G8E23J3670000G1H)

System Provisions for PES  Video                     (G8E23J3670000G1H,
                                                      G8E23J3610501S1H)

Lav. D Mod. for Stretcher Loading                    (G8E25J2070000G1H)

Prov. For Mech. Bulk Loading                         (G8E25J5231501S1H,
System in Fwd. And Aft Cargo Holds                    MCG8E25.52.003J1MO1)




<PAGE>


                                   SCHEDULE B

                                COMMERCIAL TERMS

         Lessor  and  Lessee  hereby  agree  that  the   definitions  and  other
commercial  and financial  terms set forth in this Schedule B shall apply to the
leasing of the Aircraft under the Lease.

         In addition, Lessor and Lessee understand and agree that the commercial
and financial  information contained in this Schedule B are considered by Lessor
and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree,
and any of their  assignees,  upon  becoming such shall agree that it will treat
this Schedule B as proprietary and  confidential and will not, without the prior
written  consent  of the other,  disclose  or cause to be  disclosed,  the terms
hereof  or  thereof  to  any  Person,  except  to its  agents,  representatives,
advisors,  employees,  counsel,  underwriters,  auditors,  investors,  financing
parties and head lessors as necessary or appropriate for the leasing transaction
which is the subject hereof,  or except (a) as may be required by applicable Law
or pursuant to an order, or a valid and binding request,  issued by any court or
other Government Entity having jurisdiction over Lessor,  Lessee or the assignee
of either of them,  as the case may be, or (b) as necessary to enable  Lessor or
its assignee to make transfers,  assignments or other  dispositions to potential
transferees, assignees or participants of its interest in and to the Lease.

         In connection with any such disclosure or any filing of the information
contained herein or therein pursuant to any such applicable Law, Lessor,  Lessee
or the assignee of either of them, as the case may be, shall request and use its
best reasonable efforts to obtain confidential  treatment of this Schedule B and
the other party will  cooperate  in making and  supporting  any such request for
confidential treatment.

PART I   PART I-CASUALTY OCCURRENCE DEFINITIONS

Agreed Value The Agreed Value shall be $* for each Airbus Aircraft.

Damage Notification Threshold means $*.

Deductible Amount means $*.

Minimum Liability Coverage means $*.

PART II  DEPOSIT; LC AMOUNT; INTEREST RATE

Deposit means, for the purposes of Section 3.1 hereof,  for each Airbus Aircraft
$*, * of which  shall  have  been  paid on or before  the date  hereof;  and the
balance of which  shall be paid no later than * days prior to  delivery  of each
Aircraft;  provided,  however,  that  Lessee may elect to provide  Lessor with a
Letter of Credit in an amount,  from a financial  institution  and  otherwise in
form and substance,  reasonably  acceptable to Lessor.  Lessee  acknowledges and
agrees  that it is not  located in the State of New York  within the  meaning of
Section 7-101 1-c(b) of the New York General  Obligations Law, and therefore the
requirements  of Section  7-101 of the New York General  Obligations  Law do not
apply to the Deposit.

Initial  Aircraft Rental Credit means, in respect of the first * Airbus Aircraft
to deliver, an amount equal to $* per Airbus Aircraft.

Interest Rate: The Interest Rate shall be the "prime rate" as quoted in the Wall
Street Journal from time to time during the applicable  period plus * per annum,
but not to exceed the maximum amount permitted by Law.

LC Amount  means,  for the purposes of Section 3.1 hereof,  the amount of one or
more Deposits for each Aircraft secured by a Letter of Credit.

Pre-Delivery Termination Value means $* per Airbus Aircraft.

         Quotation  Date means the day two  Business  Days before the  Scheduled
Delivery Date.  Second  Aircraft  Rental Credit means,  in respect of the last *
Airbus Aircraft to deliver, an amount equal to $* per Airbus Aircraft.

PART III RENT

         Assumed  Rent  means  (i) for the  first * Rental  Periods  (a) $* with
         respect to each of the first * Aircraft to be delivered  hereunder (the
         "Initial  Aircraft")  and (b) $*  with  respect  to each of the  last *
         Aircraft to be delivered  hereunder (the "Subsequent  Aircraft");  (ii)
         for  Rental  Periods * through * (a) $* with  respect  to each  Initial
         Aircraft and (b) $* with respect to each Subsequent Aircraft; and (iii)
         for each of the Aircraft  for each Rental  Period  thereafter,  $*. The
         foregoing amounts are based upon the  Manufacturer's  Aircraft Price in
         June,  1999 and an eight year swap rate  between *% and *%. The Assumed
         Rent  shall be (A)  increased  by an  amount  equal to $* per  month if
         Lessee elects to pay the Deposit for any Aircraft  pursuant to a Letter
         of Credit and (B) increased by (i) $* per month if Lessee elects,  upon
         no less than * months prior written notice,  to reschedule  Delivery of
         such Aircraft to any Alternate  Scheduled Delivery Month in lieu of the
         current Scheduled Delivery Month as herein defined or (ii) $* per month
         if Lessee elects,  upon no less than * months prior written notice,  to
         reschedule  Delivery  of  such  Aircraft  to a  month  which  is  not a
         Scheduled Delivery' Month or an Alternate Scheduled Delivery Month.

         Rent. The Rent payable in respect of each Rental Period during the Term
         for each  Airbus  Aircraft  shall be payable in *  consecutive  monthly
         installments,  in advance on each Rent Date, with each such installment
         equal to an amount calculated as follows:

         Rent = * where:

          *    is the Assumed Rent for the applicable Rental Period;

          *    means the assumed  8-year U.S.  Dollar Swap rate  expressed  as a
               number determined as follows: (i) ifs is less than or equal to *,
               then * is equal to *%, (ii) ifs is greater  than *% and less than
               *%,  then * is equal to *, and (iii)  ifs is equal to or  greater
               than *%, then * is equal to *%;

          *    is (i) the  actual  8 year  Dollar  swap  rate  ("Open"  rate per
               Bloomberg  screen  "IRSB" ) expressed as a number and obtained by
               Lessor on the Quotation  Date:  or, if on the Quotation  Date the
               Bloomberg  Screen  "IRSB" is not  available  or does not  display
               rates for the required period, the 8-year Dollar swap rate quoted
               on  the  applicable  Reuters  page,  expressed  as a  number  and
               obtained by Lessor on the  Quotation  Date; or (ii) the sum of(a)
               the  actual 8 year  Dollar  swap  rate as set  forth in (i) above
               fixed on a date, at Lessee's option,  which is earlier than title
               Quotation Date upon 30 days' prior written notice to Lessor;  and
               (b) 15 basis points for each year from the effective date of such
               notice (which  effective  date shall be 30 days after the date of
               such notice) until the Scheduled Delivery Date, pro rated for any
               partial year;

          *    is $*; and

          *    is *, rounded to the nearest * places of decimals, where:

               *    is the  Manufacturer's  Gross Invoice Price for the Aircraft
                    on the basis of  delivery of the  Aircraft  on the  Delivery
                    Date;  provided,  however,  that * shall not be disclosed by
                    Lessor to Lessee and

               *    is the  Manufacturer's  Gross Invoice Price for the Aircraft
                    which  would  apply if the  Aircraft  were  delivered  in *;
                    provided,  however,  that * shall not be disclosed by Lessor
                    to Lessee.

PART IV   [INTENTIONALLY OMITTED]

PART V   SUPPLEMENTAL RENT

The  Supplemental  Rent  payable  will  be  determined  with  reference  to  the
following:

Airframe  Supplemental Rent means all (i) Airframe 4C Supplemental Rent and (ii)
Airframe 8C Supplemental  Rent in each case payable by Lessee pursuant to Clause
(a) below.

Annual Supplemental Rent Adjustment means (*%)

APU Supplemental  Rent means all Supplemental Rent payable by Lessee pursuant to
Clause (d) below.

Assumed  Ratio  Adjustment:  For the purposes of Section 5.4 of the Common Terms
Agreement,  Assumed  Ratio means a * hour to one cycle ratio (*) for each Airbus
Aircraft  and any  adjustment  pursuant  to  Clause  5.4  shall  be based on the
following table:


<PAGE>




Airbus A319 Aircraft - FH/CYC      *      *       *      *       *      *
Ratio
Airframe 4C Supplemental Rent      $*     $*      $*     $*      $*     $*
Rate
Airframe 8C Supplemental Rent      $*     $*      $*     $*      $*     $*
Rate
Engine Refurbishment               $*     $*      $*     $*      $*     $*
Supplemental Rent Rate
Engine LLP Supplemental Rent Rate  $*     $*      $*     $*      $*     $*
APU Supplemental Rent Rate         $*     $*      $*     $*      $*     $*
Landing Gear Supplemental Rent     $*     $*      $*     $*      $*     $*
Rate





Assumed  Utilization  means an annual  utilization of * hours per annum for each
Airbus Aircraft.

Engine  Supplemental  Rent means all (i) Engine LLP Supplemental Rent payable by
Lessee pursuant to Clause (b) below, and (ii) Engine Refurbishment  Supplemental
Rent payable by Lessee pursuant to Clause (c) below.

Landing Gear  Supplemental  Rent means all  Supplemental  Rent payable by Lessee
pursuant to Clause (e) below.

Supplemental Rent equals each of the following amounts:

(a)  Airframe:   in  respect  of  each  Airframe  4C  Check,  $*  ("Airframe  4C
     Supplemental  Rent  Rate") for each  Flight  Hour  operated  by each Airbus
     Aircraft   during  each  calendar  month  during  the  Term  ("Airframe  4C
     Supplemental  Rent") and Airframe 8C Check,  $* ("Airframe 8C  Supplemental
     Rent Rate") for each Flight Hour  operated by each Airbus  Aircraft  during
     each calendar month during the Term ("Airframe 8C Supplemental Rent");

(b)  Engine  Life-Limited  Parts: in respect of the life-limited  Parts for each
     Engine installed on an Airbus Airframe,  $* ("Engine LLP Supplemental  Rent
     Rate") for each Flight Hour  operated by that Engine  during each  calendar
     month during the Term ("Engine LLP Supplemental Rent");

(c)  Engine  Refurbishment:  in respect of each  Engine  installed  on an Airbus
     Airframe,  $*  ("Engine  Refurbishment  Supplemental  Rent  Rate") for each
     Engine  Flight Hour (or fraction  thereof)  operated by that Engine  during
     each  calendar  month during the Term ("Engine  Refurbishment  Supplemental
     Rent"); -

(d)  APU:  in respect of the APU  relating  to each  Airbus  Airframe,  $* ("APU
     Supplemental  Rent Rate") for each  Flight Hour  operated by the APU during
     each calendar month during the Term ("APU Supplemental Rent"); and

(d)  Landing  Gear:  in  respect  of the  Landing  Gear  installed  on an Airbus
     Airframe,  $* ("Landing Gear  Supplemental Rent Rate") for each Flight Hour
     operated by the Landing  Gear during each  calendar  month  during the Term
     ("Landing Gear Supplemental Rent").

Supplemental  Rental Cap means an aggregate amount of all Supplemental Rent paid
in respect of each Airbus Aircraft during the Term in an amount equal to the sum
of (I) $* plus (ii) the amount of all Maintenance  Contributions  made by Lessor
in respect of each such Airbus Aircraft.

   PART VI RETURN CONDITION DEFINITIONS; MAINTENANCE PAYMENTS AT REDELIVERY;
                    AIRWORTHINESS DIRECTIVE SHARING PAYMENTS

DEFINITIONS:

Engine Cycles Restriction means * Engine Cycles.

Engine Flight Hours Restriction means * Engine Flight Hours.

Engine  Refurbishment  means all scheduled and unscheduled  off-the-wing  Engine
maintenance  and repair  accomplished  for each  module in  accordance  with the
performance  restoration,  minimum  restoration or full overhaul sections of the
Manufacturer's  workscope planning guide and including  performing the following
for each of the modules, for each of the Engines:

                  Hot Section Module means the combustor,  combustor casing, HPT
                  nozzle, HPT rotor, LPT nozzle (stage one).

                  Hot Section Module  Refurbishment  means,  with respect to any
                  Engine,   the   accomplishment   of  a   "Performance   Level"
                  refurbishment,  per the CFMI Workscope  Planning Guide, of the
                  Hot Section  Module  including  the  complete  inspection  and
                  repair as  necessary  per the shop  manual  of the  combustor,
                  combustor casing,  high pressure turbine nozzle section,  high
                  pressure  turbine rotor, and low pressure turbine nozzle stage
                  1 in an engine  repair/overhaul  station,  including  (without
                  limitation)  complete unstacking of the high pressure turbine;
                  de-blading  of  discs;   visual   inspections  of  all  discs;
                  verification  that all snap  diameters  on  discs  are  within
                  limits;  inspection  of all  blades for tip  condition,  blade
                  length and cracking. Repair or replacement of all blades below
                  minimum  with new or  refurbished  blades;  blade-up  of discs
                  using new lock  plates;  assembly  of  rotors in the  turbine;
                  balance of all rotors; installation of rotor in the Engine.

                  HPC Module means the high  pressure  compressor  rotor and the
                  high pressure compressor forward and aft stator .

                  HPC Module  Refurbishment  means,  with respect to any Engine,
                  the accomplishment of a "Performance Level" refurbishment, per
                  the CFMI Workscope Planning Guide, of the HPC Module including
                  the  completion of the following:  complete  unstacking of the
                  high pressure  compressor and complete shop manual inspection;
                  of the forward and aft stator cases,  de-blading discs; visual
                  inspections of all discs; verification that all snap diameters
                  on discs are  within  limits;  inspection  of all  blades  for
                  proper chord dimensions,  cracking; and erosion on leading and
                  trailing edges; repair or replacement of blades below minimum;
                  inspection  and repair of stators as  necessary;  blade-up  of
                  discs  using  new  lock  plates;  assembly  of  rotor  in  the
                  compressor;  balance of all rotors;  and installation of rotor
                  in the Engine..

                  Fan and Booster  Module means the fan rotor and  booster,  the
                  number 1 and 2 bearing  support,  inlet  gearbox  and number 3
                  bearing assembly, and the fan frame assembly.

                  Fan and Booster Module  Refurbishment  means,  with respect to
                  any  Engine,   the   accomplishment   of  a  "Minimum   Level"
                  refurbishment,  per the CFMI Workscope  Planning Guide, of the
                  fan  and  booster  module  including  the  completion  of  the
                  following:  removal from engine and shop manual  inspection of
                  fan/booster  assembly,  removal and shop manual  inspection of
                  fan blades,  booster blades, and spacers.  The fan disk should
                  be separated  from the booster spool only for cause.  Visually
                  inspect the exposed  areas of the fan disk and booster  spool.
                  Recontour  fan  blades,  inspection  of all  blades for proper
                  chord dimensions and cracking; repair or replacement of blades
                  below minimum;  inspection and repair of stators as necessary;
                  blade-up of discs using new lock plates; assembly of rotors in
                  the compressor;  balance of all rotors;  installation of rotor
                  in the Engine..

                  LPT Module means the low pressure turbine,  LPT shaft, and LPT
                  Frame.

                  LPT Module  Refurbishment  means,  with respect to any Engine,
                  the accomplishment of a "Minimum Level" refurbishment, per the
                  CFMI Workscope Planning Guide, of the LPT Module including the
                  complete visual  inspection and repair as necessary of the low
                  pressure   turbine   module   of  an   Engine   in  an  engine
                  repair/overhaul   station,   including  (without   limitation)
                  complete  unstacking  of the low  pressure  turbine;  complete
                  visual inspection; de-blading of discs ; visual inspections of
                  all discs;  verification  that all snap diameters on discs are
                  within  limits;  inspection  of all blades  for  proper  chord
                  dimensions  and cracking;  repair or replacement of all blades
                  below minimum;  inspection and repair of stators as necessary;
                  blade-up of discs using new lock plates; assembly of rotors in
                  the turbine;  balance of all rotors; and installation of rotor
                  in the Engine.

                  Accessory  Drive  Module  means   the  Transfer  Gearbox   and
                  Accessory Gearbox.

                  Accessory Drive Module Refurbishment means with respect to any
                  engine the inspection and repair per shop manual.

Minimum APU Limit means * Flight Hours since the last gas path refurbishment.

Minimum Component Calendar Life means * months.

Minimum Component  Cycles means * Cycles

Minimum Component Flight Hours means * Flight Hours

Minimum Engine Cycles means * Cycles.

Minimum Engine Flight Hours means * Flight Hours.

Minimum Landing Gear Calendar Time means * months

Minimum Landing Gear Cycles means * Cycles.

Minimum Landing Gear Flight Hours means * Flight Hours.

Minimum Measurable Fuel Requirement means the amount of fuel as at Delivery.

         Redelivery  "C"  Check  means  the next  sequential  Block `C' check in
         accordance  with  the  Lessee's  Maintenance  Program  including  those
         bridging tasks identified in the  Manufacturer's  Maintenance  Planning
         Document,  Appendix J, to bridge the Aircraft  back to a block  program
         and "Block `C' Structural Check" with at least * Flight Hours remaining
         to the next "C" or higher check.

AD Sharing

AD Threshold means $*.

         If  any  Airworthiness  Directive  is  issued  by  the  FAA  for  which
         terminating  action is required to be performed  by Lessee  pursuant to
         Section  8.10(c)(ii) of the Common Terms Agreement and FAR Part 121 and
         if the actual cost incurred by Lessee (as documented in the same manner
         and paid  within the same time as  required  under  Section  7.2 of the
         Common  Terms  Agreement  for a  Maintenance  Contribution  payment  by
         Lessor) in  performing  or causing to be performed  such  Airworthiness
         Directive exceeds the AD Threshold,  Lessor shall, following receipt of
         the invoice in such amount and provided no (i) Default  relating to any
         payment under the Lease or (ii) any other Event of Default has occurred
         and  is  continuing,  reimburse  to  Lessee  an  amount  calculated  in
         accordance with the following formula:

                  * where:
                  * = Total actual invoiced cost of such Airworthiness Directive
                  * = AD Threshold.
                  * = * months.
                  * = Months remaining to the Scheduled Expiry Date.

MAINTENANCE ADJUSTMENTS:

Maintenance  Adjustment:  In respect of each  calendar  month (or part  thereof)
during the Term,  Lessee will pay to Lessor at the end of the Term in accordance
with Section 5.4 of the Common Terms Agreement and Section 3.3 of this Agreement
the following Maintenance Adjustments for each Airbus Aircraft:

(a)  Airframe  Maintenance  Adjustment:  in respect of the Airframe 4C Check and
     Airframe 8C Check, upon redelivery of the Aircraft to Lessor (but not after
     the  occurrence of an Event of Loss with respect to the  Aircraft),  Lessee
     shall  pay to  Lessor  for each  Flight  Hour  since  new or since the last
     Airframe  Structural  Check,  as applicable,  an amount equal to (i)(A) the
     number of Flight Hours on the Airframe since new or since the last Airframe
     Structural  Check,  as  applicable,  multiplied  by  (B)  the  Airframe  4C
     Supplemental Rent Rate less (C) the Remaining Airframe 4C Supplemental Rent
     and an amount  equal to (ii)(A) the number of Flight  Hours on the Airframe
     since new or since  the last  Airframe  Structural  Check,  as  applicable,
     multiplied  by (B) the  Airframe  8C  Supplemental  Rent  Rate less (C) the
     Remaining  Airframe  8C  Supplemental  Rent  (collectively,  the  "Airframe
     Maintenance Adjustment").

(b)  Engine  Refurbishment  Maintenance  Adjustment:  in respect of each Engine,
     upon  redelivery of the Aircraft to Lessor (but not after the occurrence of
     an Event of Loss with respect to the Aircraft or any Engine),  for any life
     used since new or since the latest  Engine  Refurbishment  of each  defined
     module (as further  described below, each a "Defined Module") in accordance
     with  the  applicable  percentage,  whichever  is  less,  to  the  date  of
     Redelivery,  Lessee  shall pay to  Lessor  an amount  equal to (i) for each
     Engine  Flight Hour (or  fraction  thereof)  operated by that Engine in the
     aggregate during each calendar month during the Term since new or since the
     last  Engine  Refurbishment  multiplied  by (ii) the  Engine  Refurbishment
     Supplemental   Rent  Rate  less  (iii)   Remaining   Engine   Refurbishment
     Supplemental Rent (the "Engine Refurbishment Maintenance Adjustment").  For
     purposes  of  this  Clause,  Defined  Modules  shall  include  each  of the
     Combustion  Chamber/ High Pressure Turbine (*% of the Engine  Refurbishment
     Supplemental  Rent  Rate);  High  Pressure  Compressor  (*% of  the  Engine
     Refurbishment  Supplemental Rent Rate); the Low Pressure Turbine (*% of the
     Engine  Refurbishment  Supplemental  Rent Rate) and the Fan  Booster (*% of
     Engine Refurbishment Supplemental Rent Rate).

provided,  however, if any of the amounts described above is less than zero then
the applicable Maintenance Adjustment shall be equal to zero.

(c)  Engine  Life  Limited  Parts:  with  respect to Engine  Life-Limited  Parts
     ("Engine  LLPs"),  upon redelivery of the Aircraft to Lessor (but not after
     the  occurrence  of an Event of Loss with  respect to the  Aircraft  or any
     Engine),  within any Engine,  Lessee shall pay to Lessor an amount equal to
     (i) for each Engine  Flight  Hour (or  fraction  thereof)  operated by that
     Engine in the aggregate  during each  calendar  month during the Term since
     new or since the last Engine  Refurbishment  multiplied  by (ii) the Engine
     LLP  Supplemental  Rent Rate less (iii) Remaining  Engine LLP  Supplemental
     Rent (the "Engine LLP Maintenance Adjustment").

(d)  APU:  with respect to the APU,  upon  redelivery  of the Aircraft to Lessor
     (but not  after the  occurrence  of an Event of Loss  with  respect  to the
     Aircraft),  Lessee shall pay to Lessor an amount equal to (i) $* per Flight
     Hour since new or HSI in accordance with the Manufacturer's recommendations
     less  (ii) the  Remaining  APU  Supplemental  Rent  (the  "APU  Maintenance
     Adjustment").

(e)  Landing Gear Adjustment:  with respect to Landing Gear (per shipset),  upon
     redelivery  of the Aircraft to Lessor (but not after the  occurrence  of an
     Event of Loss with respect to the Aircraft),  Lessee shall pay to Lessor an
     amount equal to (i) $* per Flight Hour since new or since complete overhaul
     in accordance with the Manufacturer's  recommendations,  whichever is less,
     minus (ii) the Remaining  Landing Gear Supplemental Rent (the "Landing Gear
     Maintenance Adjustment")

For purposes of this section:  "Remaining Airframe  Supplemental Rent" means the
amount equal to the aggregate  amount of Airframe 4C  Supplemental  Rent and the
Airframe  8C  Supplemental  Rent paid under the Lease  during the Term minus the
aggregate amount previously paid by Lessor under Section 7.2(a)(i) of the Common
Terms Agreement. "Remaining Engine LLP Supplemental Rent" means the amount equal
to the  aggregate  amount of Engine LLP  Supplemental  Rent paid under the Lease
during the Term  minus the  aggregate  amount  previously  paid by Lessor  under
Section 7.2(a)(ii) of the Common Terms Agreement. "Remaining Engine Supplemental
Rent" means the amount equal to the aggregate amount of Engine Supplemental Rent
paid under the Lease during the Term minus the aggregate amount  previously paid
by Lessor under Section  7.2(a)(iii) of the Common Terms  Agreement.  "Remaining
APU  Supplemental  Rent" means the amount equal to the  aggregate  amount of APU
Supplemental  Rent paid  under the Lease  during  the Term  minus the  aggregate
amount  previously  paid by Lessor under Section  7.2(a)(iv) of the Common Terms
Agreement.  "Remaining Landing Gear Supplemental Rent" means the amount equal to
the  aggregate  amount of Landing  Gear  Supplemental  Rent paid under the Lease
during the Term  minus the  aggregate  amount  previously  paid by Lessor  under
Section 7.2(a)(v) of the Common Terms Agreement.


<PAGE>


                                   SCHEDULE B

INTENTIONALLY  DELETED FROM THE VERSION OF THIS  DOCUMENT  FILED WITH THE FAA AS
CONTAINING CONFIDENTIAL AND PROPRIETARY INFORMATION.