**Exhibit 10.25**

 

**[CONFIDENTIAL TREATMENT REQUESTED.  CONFIDENTIAL PORTIONS OFTHIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELYFILED WITH THE COMMISSION]**

 

**AMENDMENTTOAIRLINE SERVICES AGREEMENT**

 

AMENDMENT TO AIRLINE SERVICES AGREEMENT (this “Amendment”) dated as of April 15,2005 by and among MAIR Holdings, Inc., a Minnesota corporation (“MAIR”), MesabaAviation, Inc., a Minnesota corporation (“Mesaba”), and Northwest Airlines,Inc., a Minnesota corporation (“Northwest”).

 

**WITNESSETH:**

 

WHEREAS, Mesaba, MAIR and Northwest have entered into the AirlineServices Agreement dated as of the 1st day of July, 1997 (as amended to date,the “Agreement”); and

 

WHEREAS, Mesaba, MAIR and Northwest desire to amend the Agreement withrespect to on-time incentives, decommissioned aircraft and audit timing and requests.

 

NOW, THEREFORE, in consideration of the premises and other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, MAIR, Mesaba and Northwest do hereby agree as follows:

 

1.                                       Amendmentto Section 2.10(b).  Section 2.10(b)of the Agreement is amended effective retroactively as of July 1, 2003 toread in its entirety as follows:

 

“(b)                           MinimumOn-Time Reliability.  Mesaba shallachieve a *** percent (***%) on-time arrival factor (“On-Time Factor”) for allScheduled Flights operated by Mesaba during each Performance Period.  An arrival will be considered on-time if itarrives not later than *** after its published, scheduled arrival time.  All Scheduled Flights that arrive *** laterthan their published, scheduled arrival time will not be considered on-time,regardless of the reason for the delay. All Scheduled Flights will be included in this calculation, except forthose Schedule Flights operated on days when Northwest and Mesaba mutuallyagree that Mesaba’s on-time performance was significantly degraded by Northwest’simplementation of an Irregular Operating Procedures Program.  Upon mutual agreement between Northwest’sVice President of System Operations Control and Mesaba, all Scheduled Flightsoperated on days with such extraordinary events will be excluded from thecalculation of Mesaba’s On-Time Factor. If Northwest and Mesaba are unable to reach agreement on the exclusionof certain days, then all Scheduled Flights operated on such days will beincluded in the calculation of Mesaba’s On-Time Factor.”

 

2.                                       Amendmentto Section 5.05(b).  Section 5.05(b)of the Agreement is amended effective retroactively as of July 1, 2003 toread in its entirety as follows:

 

“(b)                           On-TimeFactor.  If Mesaba’s On-Time Factor(calculated in accordance with Section 2.10(b)) is less than ***% for aPerformance Period, Northwest shall receive from Mesaba $*** per enplanedrevenue passenger during the applicable Performance Period.  If

 

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Mesaba’s On-Time Factor is equal to orgreater than ***% for a Performance Period, Northwest shall pay to Mesaba $***per enplaned revenue passenger during the applicable Performance Period, and ifMesaba’s On-Time Factor is greater than ***% for such Performance Period,Northwest shall also pay to Mesaba an additional $*** per enplaned revenuepassenger during such Performance Period. The parties acknowledge and agree that the foregoing performance levelsare based on Northwest’s internal on-time goal of ***%.  In the event Northwest’s on-time goal changesfrom ***%, the on-time performance levels that determine minimum reliability(in Section 2.10(b)), and penalty and bonus levels (in this Section 5.05(b))will be modified to correspond to the change made by Northwest.  Northwest and Mesaba will meet and confer onall components of on-time metrics on an as-needed basis.”

 

3.                                       Amendmentto Section 7.04.  Section 7.04of the Agreement is amended effective retroactively as of January 1, 2005 byadding the following sentence to the end of the section:

 

“If any Aircraft covered hereby is to be permanently decommissioned, soldto a third party, returned to a lessor or delivered to a subsequent lessor,prior to surrendering possession of the Aircraft, Mesaba shall first havepainted over the areas of the outside of the Aircraft that would indicateaffiliation with Northwest, which shall include the entire vertical stabilizerof the Aircraft and any areas of the wings or fuselage that would have anyNorthwest Identification, trade names, service marks, and/or trademarks, suchas “NWA”, “Northwest Airlines”, “Northwest Airlink”, etc.”

 

4.                                       Amendmentto Section 6.02.  As acorporation subject to the Sarbanes-Oxley Act of 2002, MAIR and itssubsidiaries are required to implement and maintain a system of internalcontrol over financial reporting (“ICFR”), which will be audited by MAIR’sindependent registered public accounting firm. As part of its ICFR program, MAIR and its subsidiaries are testing andrefining a variety of financial controls intended to prevent or detect, on atimely basis, the occurrence of material misstatements of its financialstatements.  In order to allow MAIR toreport revenues and expenses with respect to the Agreement on a timely basis, Section 6.02of the Agreement shall be amended effective March 1, 2005 by the replacementof Section 6.02 (a) with the following:

 

“(a)                            ComplianceAudits.  Upon the reasonable priorwritten request by Northwest, Mesaba shall make its books and records withrespect to this Agreement for the preceding twelve (12) months available for audit.  Northwest shall also be entitled to makecopies and notes of such information as it deems necessary and to discuss suchrecords and the finances and accounts of Mesaba with its Chief FinancialOfficer or other employee or agent of Mesaba knowledgeable about suchrecords.  Northwest shall give not lessthan fifteen (15) days written notice to Mesaba of its intention to auditMesaba’s books and records, including a request list of the books and recordsthat are to be made available.  Northwestshall have ninety (90) days to complete the audit of such books andrecords.  If the audit has not beencompleted within the time period described above, Northwest forever waives its auditrights for the relevant period.  Northwestand Mesaba agree that all payments or reimbursements from one party to theother resulting from any audit conducted under this Agreement shall relate onlyto services, goods or payments to be performed, provided, or made during the periodunder audit.  For the avoidance of doubtand notwithstanding the foregoing, nothing in this Section 6.02 shallpreclude Northwest from bringing a breach of contract claim against Mesaba withrespect to matters discovered in an audit

 

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or otherwise (even if such matter(s) relatesto a period previously audited or no longer subject to audit).”

 

5.                                       Miscellaneous.  All capitalized terms used herein and nototherwise defined shall have the respective meanings provided such terms in theAgreement.  This Amendment may beexecuted in any number of counterparts and by the different parties hereto onseparate counterparts, each of which counterpart when executed and deliveredshall be original, and all of which shall together constitute one and the sameinstrument.  This Amendment and therights and obligations of the parties hereunder shall be construed inaccordance with and governed by the law of the State of Minnesota.  From and after the date hereof, allreferences in the Agreement to the Agreement shall be deemed to be referencesto the Agreement as amended hereby.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment asof the date and year first set forth above.

 
|   | MAIR HOLDINGS,  INC.      |
|--------|---------------------------|
|   |                      |
|   |                      |
|   | By:                       |   /s/  Paul F. Foley |   |
|   |                      | Paul F.  Foley |
|   |                      | President  and Chief Executive Officer |
|   |                      |
|   |                      |
|   | MESABA  AVIATION, INC.    |
|   |                      |
|   |                      |
|   | By:                       |   /s/  John G. Spanjers |   |
|   |                      | John G.  Spanjers |
|   |                      | President  and Chief Operating Officer |
|   |                      |
|   |                      |
|   | NORTHWEST  AIRLINES, INC. |
|   |                      |
|   |                      |
|   | By:                       |   /s/  J. Timothy Griffin |   |
|   |                      | J. Timothy  Griffin |
|   |                      | Executive  Vice President,  Marketing |

 

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