Exhibit 10.3


 





 


IAE Building

400 Main Street

East Hartford, CT 06108 USA


 


23 April 2003


 


JetBlue Airways Corporation

19 Old Kings Highway South, Suite 23

Darien, Connecticut 06820

Attention: Vice President and Treasurer


 


Subject:                                                     Side
Letter No. 13 to the V2500 General Terms of Sale Agreement between JetBlue
Airways Corporation and IAE International Aero Engines AG dated May 4, 1999


 


Dear Tom:


 


IAE is pleased to submit to JetBlue this Side Letter No. 13 to the
Agreement (as defined below) in support of JetBlue’s firm purchase from Airbus
of sixty-five (65) incremental A320 Aircraft powered by V2527-A5 Propulsion
Systems (the “Incremental Firm Aircraft”), and its option to purchase fifty
(50) A320 Aircraft powered by V2527-A5 Propulsion Systems (the “New Option
Aircraft”, the Incremental Firm Aircraft and the New Option Aircraft are
referred to collectively herein as the “Incremental Aircraft”), all for
delivery in accordance with the delivery schedule set forth in Exhibit B-1
hereto.


 


The Incremental Aircraft shall constitute ‘Aircraft’ for all purposes
under the Agreement, except as otherwise noted herein.  All other Firm Aircraft (not including the
Firm Incremental Aircraft) that have not been delivered to JetBlue as of the
date of this Side Letter shall be referred to herein as the “Existing Firm
Aircraft.”  Capitalized terms used
herein which are not otherwise defined shall have the same meaning as those
given to them in the V2500 General Terms of Sale Agreement between JetBlue
Airways Corporation (“JetBlue”) and IAE International Aero Engines AG (“IAE”)
dated May 4, 1999 (the “Agreement”).


 


1.                                       Fleet
Introductory Assistance Credit for Incremental Aircraft and Existing Firm
Aircraft


 


1.1                                 To assist JetBlue with
the introduction of the Incremental Aircraft into its fleet and to support
delivery of the Existing Firm Aircraft, IAE will issue the following credits to
JetBlue’s account with IAE:


 

















 


***


 


The credits in the above table with respect to the Incremental Firm
Aircraft shall escalate from a base month of January 2003 in accordance with
Escalation Formula I set forth in Exhibit B-2 hereto.  The credits in the above table with respect to the New Option
Aircraft shall escalate from a base month of January 2003 in accordance with
Escalation Formula II set forth in Exhibit B-2 hereto.


 


1.1.1                        For all of the Existing Firm
Aircraft yet to be delivered, a credit in the amount of U.S.***.  These credits shall escalate from a base
month of January 2003 in accordance with Escalation Formula I set forth in Exhibit
B-2 hereto.


 


1.1.2                        Each such credit above may be
used by JetBlue towards the purchase of V2500 Spare Parts, tooling and services
from IAE, but unless JetBlue provides written notice to IAE at least ninety
(90) days prior to delivery of each applicable Incremental Aircraft, the total
amount of such credit available for such Incremental Aircraft shall be assigned
to the Aircraft Manufacturer to be applied toward the payment for the
Propulsion Systems for such Incremental Aircraft.


 


1.1.3                        In the event any credit, or
portion thereof, under this Clause 1 is assigned to the Aircraft Manufacturer,
JetBlue acknowledges that the credit shall not vest in the Aircraft
Manufacturer until delivery to and acceptance by JetBlue of the respective
Incremental Aircraft or existing Firm Aircraft yet to be delivered.


 


2.                                       IAE and JetBlue
agree that the foregoing Section 1 shall replace in its entirety Section 1 of
the existing Agreement.


 


3.                                       With respect to
Propulsion Systems for installation on Incremental Aircraft (“Installed Propulsion
Systems”), which are delivered by IAE under this Side Letter, the escalation
per annum for the period of 1 January 2003 through delivery, applicable to the
net Propulsion System and Spare Engine prices shall be the escalation per annum
amount as determined by the application of the applicable Escalation Formulae I
or II, as the case may be, set forth as Exhibit B-2 to this Side Letter No. 13
and, where applicable, the ***.


 


4.                                       Notwithstanding
any other provision of this Side Letter No. 13, the escalation per annum for
the period from 1 January 2003 through delivery for all of the credits set
forth in Clauses 1 and 4 of this Side Letter No. 13 and the applicable Spare


 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


IAE PROPRIETARY INFORMATION


 


2

















 


Engine credit
provided by IAE shall be the escalation per annum amount as determined by the
application of the applicable Escalation Formulae I and II, as the case may be,
set forth as Exhibit B-2 to the Side Letter No. 13 and, where applicable, the
***.


 


5.                                       JetBlue hereby
places a firm and unconditional order with IAE for the purchase of a minimum of
twelve (12) new firm V2527-A5 spare Engines (the “New Firm Spare Engines”) and
eight (8) new option V2527-A5 spare Engines (the “New Option Spare Engines”)
and agrees to otherwise purchase, operate and maintain a minimum ratio of new
spare engines to new installed V2500-A5 engines on the Incremental Aircraft of
no less than *** with respect to each Engine thrust level per Aircraft model
(or such ratio is maintained with respect to all engines at the applicable or
higher thrust level for A319-100, A320-200 or A321-200 aircraft), all for
delivery according to the schedule set forth in Exhibit B-2 to this side
letter.  IAE and JetBlue agree that the
New Firm Spare Engines and all existing firm spare engines ordered but, as of
the date of this side letter, undelivered, shall be escalated from January 2003
in accordance with Escalation Formula I set forth in Exhibit B-2 hereto.  IAE and JetBlue further agree that the New
Option Spare Engines shall be escalated from January 2003 in accordance with
Escalation Formula II set forth in Exhibit B-2 hereto.


 


6.                                       Exhibits B-1
(Aircraft Delivery Schedule) and B-2 (Spare Engine Delivery Schedule) to the
Agreement are removed in their entirety and replaced by the new Exhibit B
attached hereto.


 


7.                                       IAE also
confirms that on delivery of every *** Aircraft, starting with the ***
delivered aircraft, JetBlue shall be entitled to receive the U.S.*** spare
parts credits provided in Side Letter No. 6 to the Agreement with respect to
all of the firm and option delivered to JetBlue, including the Incremental
Aircraft and delivered New Option Aircraft, which as noted above, constitute
‘Aircraft’ for all other purposes, including this credit, under the Agreement.  In addition, independent of the foregoing
credit, IAE shall issue on the delivery of every *** Incremental Aircraft, a
U.S.*** spare parts credit.  Such
credits shall escalate from the base month of January 2003 in accordance with Escalation
Formula I set forth in Exhibit B-2 hereto.


 


8.                                       IAE confirms
that all of the Incremental Aircraft when purchased and delivered to JetBlue,
shall be covered under the guarantees, including the Maintenance Cost Guarantee
provided to JetBlue with respect to all of its other Aircraft, both delivered
and firmly ordered.


 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


3

















 


9.                                       IAE hereby
confirms that it will provide a second dedicated Customer Support
Representative to JetBlue starting by the 1st quarter of 2003.  Such second representative will be at no
charge, for so long as JetBlue operates sixty (60) or more V2500-A5 powered
aircraft.  JetBlue will provide
reasonable office facilities for the second Customer Support Representative and
other accommodation and support equivalent to that provided to the existing
customer support representative charge.


 


10.                                 IAE will immediately
credit JetBlue’s spare parts account receivables with IAE prior to January 1,
2002 for the total net amount outstanding of approximately U.S.$ ***, provided
that JetBlue agrees to an allocation of all its spare parts credits existing
prior to that date against such outstanding account receivable amount.


 


11.                                 ***


 


12.                                 Flexibility Rights


 


12.1                           From and including calendar
year *** Incremental Aircraft may be converted by JetBlue into a firm order for
another model of aircraft (either A319-100 or A321-200 powered by V2500-A5
Propulsion Systems).


 


12.2


 


13.                                 Exclusivity


 


JetBlue agrees that until December 31, 2011 each Aircraft, including
any Incremental Aircraft, and any further single aisle aircraft acquired by
JetBlue to fill the mission carried out by such Aircraft, shall be powered by
new V2500-A5 Propulsion Systems, except that such exclusivity shall
automatically terminate upon the occurrence of a Change of Control Event with
respect to JetBlue or IAE as defined below. 
Nothing in this Section 13 or in any other provision of this Side Letter
No. 13, or the Agreement it is a part of, shall be construed to prevent JetBlue
at any time from either (a) merging with any other airline, (b) acquiring a
controlling interest in any other airline, or (c) acquiring all or
substantially all the assets of any other airline, regardless of the type of
aircraft and engines owned or operated by such other airline at the time of
such merger or acquisition.  Moreover,
in the event of such a merger or acquisition, nothing in this Section 8 or in
any other provision of this Side Letter No. 13 shall be construed to prevent
JetBlue from honoring any aircraft or engine purchase commitments entered into
by such other airline prior to its merger with or acquisition by JetBlue.


 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


4

















 


A “Change of
Control Event” shall mean any event in which (i) JetBlue, or (ii) a third party
other than an existing shareholder of IAE as of the date of this Side Letter
No. 13, sells, leases or otherwise disposes of all or substantially all of its
assets or JetBlue’s or IAE’s registered shares, as the case may be.


 


Except as expressly amended by this Side Letter No. 13 all provisions
of the Agreement remain in full force and effect.


 


	
  Very truly yours,

  	
   

  	
  Agreed to and Accepted on behalf of:

  
	
  IAE International Aero Engines AG

  	
   

  	
  JetBlue Airways Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Date

  



 


5

















 


EXHIBIT B-1


 


AIRCRAFT DELIVERY SCHEDULES


 


As of April 2003


 


Glossary Note:


 


•                  Delivered Aircraft are indicated by Italics typeface


 


•                  Existing Firm Aircraft are indicated by
normal typeface


 


•                  Incremental Aircraft, including all Firm
Incremental Aircraft and all Option Aircraft are indicated by bold typeface


 


	
  Rank No.

  	
   

  	
  Aircraft

  	
   

  	
  Delivery

  
	
  No. 1

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2000

  
	
  No. 2

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2000

  
	
  No. 3

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2000

  
	
  No. 4

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2000

  
	
  No. 5

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2000

  
	
  No. 6

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2000

  
	
  No. 7

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2001

  
	
  No. 8

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2001

  
	
  No. 9

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2001

  
	
  No. 10

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2001

  
	
  No. 11

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2001

  
	
  No. 12

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2001

  
	
  No. 13

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2001

  
	
  No. 14

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 15

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 16

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 17

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 18

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 19

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 20

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 21

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 22

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 23

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 24

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 25

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  



 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


6

















 


	
  No. 26

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 27

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 28

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2002

  
	
  No. 29

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 30

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 31

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 32

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 33

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 34

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 35

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 36

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 37

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 38

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 39

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 40

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 41

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 42

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 43

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 44

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2003

  
	
  No. 45

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 46

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 47

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 48

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 49

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 50

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 51

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 52

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 53

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 54

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 55

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 56

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 57

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 58

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2004

  
	
  No. 59

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 60

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 61

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 62

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 63

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 64

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 65

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 66

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  



 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


7

















 


	
  No. 67

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 68

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 69

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 70

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 71

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 72

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 73

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 74

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2005

  
	
  No. 75

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 76

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 77

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 78

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 79

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 80

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 81

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 82

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 83

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 84

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 85

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 86

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 87

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 88

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 89

  	
   

  	
  Firm Aircraft

  	
   

  	
  *** 2006

  
	
  No. 90

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 91

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 92

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 93

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 94

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 95

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 96

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 97

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 98

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 99

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 100

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 101

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 102

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 103

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
  No. 104

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 105

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 106

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  



 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


8

















 


	
  No. 107

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 108

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 109

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 110

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 111

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 112

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 113

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 114

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 115

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 116

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
  No. 117

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2008

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 118

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
  No. 119

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
  No. 120

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
  No. 121

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
  No. 122

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
  No. 123

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
  No. 124

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
  No. 125

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
  No. 126

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
  No. 127

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2009

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 128

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
  No. 129

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
  No. 130

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
  No. 131

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
  No. 132

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
  No. 133

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
  No. 134

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
  No. 135

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
  No. 136

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
  No. 137

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 138

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2011

  
	
  No. 139

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2011

  
	
  No. 140

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2011

  
	
  No. 141

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2011

  
	
  No. 142

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2011

  
	
  No. 143

  	
   

  	
  Firm Aircraft

  	
   

  	
  Year 2011

  



 


9

















 


	
  New Option Aircraft

  	
   

  	
   

  	
   

  	
   

  
	
  No. 144

  	
   

  	
  Option Aircraft

  	
   

  	
  ***
  2006

  
	
  No. 145

  	
   

  	
  Option Aircraft

  	
   

  	
  *** 2006

  
	
  No. 146

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2007

  
	
  No. 147

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 148

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2008

  
	
  No. 149

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2008

  
	
  No. 150

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2008

  
	
  No. 151

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2008

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 152

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2009

  
	
  No. 153

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2009

  
	
  No. 154

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2009

  
	
  No. 155

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2009

  
	
  No. 156

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2009

  
	
  No. 157

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2009

  
	
  No. 158

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2009

  
	
  No. 159

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2009

  
	
  No. 160

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2010

  
	
  No. 161

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2010

  
	
  No. 162

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2010

  
	
  No. 163

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2010

  
	
  No. 164

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2010

  
	
  No. 165

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2010

  
	
  No. 166

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2010

  
	
  No. 167

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 168

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 169

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 170

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 171

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 172

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 173

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 174

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 175

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 176

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 177

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 178

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 179

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  
	
  No. 180

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2011

  



 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


10

















 


	
  No. 181

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 182

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 183

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 184

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 185

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 186

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 187

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 188

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 189

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 190

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 191

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 192

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  
	
  No. 193

  	
   

  	
  Option Aircraft

  	
   

  	
  Year 2012

  



 


Leased
Aircraft


 


	
  Year

  	
   

  	
  Number

  	
   

  	
  Delivery Dates

  
	
  1999

  	
   

  	
  1

  	
   

  	
  (1) ***

  
	
  2000

  	
   

  	
  3

  	
   

  	
  (1) ***, (1) ***, (1) ***

  
	
  2001

  	
   

  	
  4

  	
   

  	
  (1) ***, (2) ***, (1) ***

  
	
  2003

  	
   

  	
  1

  	
   

  	
  (1) ***

  
	
  2004

  	
   

  	
  1

  	
   

  	
  (1) ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  10

  	
   

  	
  All but the last lease aircraft have been delivered

  



 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


11

















 


EXHIBIT B-2


 


PURCHASED ITEMS, PRICE,


 


ESCALATION FORMULA AND DELIVERY


 


As of April 2003


 


	
  Rank

  No.

  	
   

  	
  Purchased Item

  	
   

  	
  Basic Contract

  Price

  U.S. Dollars

  (January 2003)

  	
   

  	
  Qty.

  	
   

  	
  Delivery Date

  
	
  1

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/99

  
	
  2

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/00

  
	
  3

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/01

  
	
  4

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/02

  
	
  5

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/02

  
	
  6

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/03

  
	
  7

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/04

  
	
  8

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/05

  
	
  9

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/06

  
	
  10

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/07

  
	
  11

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/08

  
	
  12

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/06

  
	
  13

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/07

  
	
  14

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/08

  
	
  15

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/08

  
	
  16

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/09

  
	
  17

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/09

  
	
  18

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/10

  
	
  19

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/10

  
	
  20

  	
   

  	
  V2527-A5 spare Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/11

  
	
  21

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/11

  
	
  22

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/12

  
	
  23

  	
   

  	
  V2527-A5 spare
  Engine:

  	
   

  	
  ***

  	
   

  	
  1

  	
   

  	
  ***/12

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  23

  	
   

  	
   

  



 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


12

















 


	
  Option Spare Engines

  	
   

  	
   

  
	
  V2524-A5 Spare Engine:

  	
   

  	
  $*** 

  
	
  V2527-A5 Spare
  Engine:

  	
   

  	
  $***

  
	
  V2533-A5 Spare
  Engine:

  	
   

  	
  $***

  



 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


13

















 


EXHIBIT B-2


 


ESCALATION FORMULA I


 


1.                                       Any unit base
price or other sum expressed to be subject to escalation from a base month to a
month of delivery or other date of determination in accordance with the IAE
Escalation Formula will be subject to escalation in accordance with the
following formula:


 


	
  P = Pb (***

  	
  L + ***

  	
  M + ***

  	
  E)

  
	
   

  	
  Lo

  	
  Mo

  	
  Eo

  



 


Where:


 


P                                         =
the invoiced purchase price or escalated sum rounded to the nearest U.S.
Dollar.


 


Pb                                  =
unit base price or other sum.


 


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


 


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


 


Mo                             =
the “Producer Price Index, Code 10, for Metals and Metal Products” published by
the Bureau of Labor Statistics in the U.S. Department of Labor for the month
preceding the base month by four months.


 


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


 


Eo                                  =
the “Producer Price Index, Code 5, for Fuel and Related Products and Power”
published by the Bureau of Labor Statistics in the U.S. Department of Labor for
the month preceding the base month by four months.


 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


14

















 


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


 


	
  2.

  	
  The values
  of the factors ***

  	
  L
  and ***

  	
  M
  and ***

  	
  E

  
	
   

  	
   

  	
  Lo

  	
  Mo

  	
  Eo

  



 


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


 


3.                                       If the U.S.
Department of Labor ceases to publish the above statistics or modifies the
basis of their calculation, then IAE may substitute any officially recognized
and substantially equivalent statistics.


 


4.                                       The Basic
Contract Prices contained in this Exhibit B are subject to escalation from a
Base Month of January 1999 to the month of delivery using Lo, Mo and Eo values
for September 1998.


 


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


 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


15

















 


ESCALATION FORMULA II


 


1.               Any unit base price or other sum
expressed to be subject to escalation from a base month to a month of delivery
or other date of determination in accordance with the IAE Escalation Formula
will be subject to escalation in accordance with the following formula:


 


	
  Pi

  	
   

  	
  =

  	
   

  	
  (Pb+F) x CPI where:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pi

  	
   

  	
  =

  	
   

  	
  the invoiced purchase price or escalated sum rounded to the nearest
  U.S. Dollar.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pb

  	
   

  	
  =

  	
   

  	
  unit base price or other sum.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F

  	
   

  	
  =

  	
   

  	
  *** (N)(Pb)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  N

  	
   

  	
  =

  	
   

  	
  the calendar year of scheduled delivery or other date of
  determination minus 2003

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CPI

  	
   

  	
  =

  	
   

  	
  *** (L) + *** (M)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  L

  	
   

  	
  =

  	
   

  	
  Labor Ratio defined below

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M

  	
   

  	
  =

  	
   

  	
  Material Ratio defined below

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IAE’s Composite Price Index (“CPI”) is the sum of *** percent of the
  Labor ratio and *** percent of the Material Ratio, with the sum rounded to
  the nearest ten thousandth.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The quarterly value published for the Employment Cost Index will be
  deemed to apply to each month of the quarter.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Labor Ratio is the “Employment Cost Index (ECI) Wages and
  Salaries for Aircraft Manufacturing, SIC Code 3721” as published at the time
  of scheduled engine delivery by the Bureau of Labor Statistics, U.S.
  Department of Labor for the arithmetic average of the fifth, sixth and
  seventh months (rounded to the nearest tenth) preceding the month of
  scheduled delivery for each engine/equipment; divided by the value of SIC
  Code 3721 for the arithmetic average of the fifth, sixth and seventh months
  (rounded to the nearest tenth) preceding the base month.

  



 












[***]                   Represents material which has been redacted
and filed separately with the Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.


 


16

















 


	
  The Material Ratio is the “Producer Price Indexes, Industrial
  Commodities” as published at the time of scheduled engine delivery by the
  Bureau of Labor Statistics, U.S. Department of Labor, for the arithmetic
  average of the fifth, sixth and seventh months (rounded to the nearest tenth)
  preceding the month of scheduled delivery for each engine/equipment; divided
  by the value for Industrial Commodities for the arithmetic average of the
  fifth, sixth and seventh months (rounded to the nearest tenth) preceding the
  base month

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  For a given month, the escalation shall be computed by using the
  applicable Index value, which the Bureau has published as the time of
  delivery or other date of determination.

  



 


2.                                       If the U.S.
Department of Labor changes the base year for determination of the Index values
as defined above, such re-based values will be incorporated in the escalation
calculation.


 


3.                                       If the U.S. Department
of Labor revises the methodology used for the determination of the values to be
used to determine the CPI or, for any reason, has not released values needed to
determine the CPI, IAE, in its sole discretion, shall select a substitute for
such values from data published by the Bureau of Labor Statistics or otherwise
make revisions to the escalation formula such that the escalation will as
closely as possible approximate the result that would have been attained by
continuing the use of the original escalation formula and values as they may
have fluctuated during the applicable time period.


 


4.                                       The invoiced
purchase price, which in no event shall be less than the unit base price, shall
be the final price.  If the calculated
sum of L + M is less than 1.0000, then the value of the sum is adjusted to
1.0000.


 


17