EXHIBIT 10.1

***Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission pursuant
to a Confidential Treatment Application filed with the Commission.



                AIRBUS A319/A320/A321 PURCHASE AGREEMENT

                   Dated as of October 31, 1997

                         between

                       AVSA, S.A.R.L.,

                         Seller

                          and

                     US Airways Group, Inc.,

                         Buyer



<PAGE>




     0      PURCHASE AGREEMENT

     1      DEFINITIONS

     2      SALE AND PURCHASE

     3      CHANGES

     4      PRICE

     5      PRICE REVISION

     6      PAYMENT TERMS

     7      PLANT REPRESENTATIVES - INSPECTION

     8      BUYER'S ACCEPTANCE

     9      DELIVERY

    10      EXCUSABLE DELAY

    11      INEXCUSABLE DELAY

    12      WARRANTIES AND SERVICE LIFE POLICY

    13      PATENT INDEMNITY

    14      TECHNICAL PUBLICATIONS

    15      FIELD ASSISTANCE

    16      TRAINING AND TRAINING AIDS

    17      VENDORS' PRODUCT SUPPORT

    18      BUYER FURNISHED EQUIPMENT AND DATA

    19      ASSIGNMENT

    20      DATA RETRIEVAL

    21      TERMINATION FOR CERTAIN EVENTS

    22      MISCELLANEOUS PROVISIONS



<PAGE>




     EXHIBIT "A-1"  A319 AIRCRAFT SPECIFICATION

     EXHIBIT "A-2"  A320 AIRCRAFT SPECIFICATION

     EXHIBIT "A-3"  A321 AIRCRAFT SPECIFICATION

     EXHIBIT "B"    CHANGE ORDERS TO STANDARD SPECIFICATIONS
                    (SCNs)

     EXHIBIT "C"    SCN FORM

     EXHIBIT "D"    SELLER SERVICE LIFE POLICY

     EXHIBIT "E"    CERTIFICATE OF ACCEPTANCE

     EXHIBIT "F"    TECHNICAL PUBLICATIONS

     EXHIBIT "G"    AIRFRAME PRICE REVISION FORMULA

     EXHIBIT "H-1"  CFM INTERNATIONAL PRICE REVISION FORMULA
                    FOR A319 AIRCRAFT

     EXHIBIT "H-2"  CFM INTERNATIONAL PRICE REVISION FORMULA
                    FOR A320 AIRCRAFT

     EXHIBIT "H-3"  CFM INTERNATIONAL  PRICE REVISION FORMULA
                    FOR A321 AIRCRAFT



<PAGE>




LETTER AGREEMENT NO. 1        SPARE PARTS PROCUREMENT

LETTER AGREEMENT NO. 2        DELIVERIES

LETTER AGREEMENT NO. 3        ADDITIONAL AIRCRAFT

LETTER AGREEMENT NO. 4        CONVERSION RIGHTS

LETTER AGREEMENT NO. 5        PURCHASE INCENTIVES

LETTER AGREEMENT NO. 6        SPECIFICATION MATTERS

LETTER AGREEMENT NO. 7        PRODUCT SUPPORT

LETTER AGREEMENT NO. 8        A319 PERFORMANCE GUARANTEES -
                              CFM 56-5B-6

LETTER AGREEMENT NO. 8B       A320 PERFORMANCE GUARANTEES -
                              CFM 56-5B-4

LETTER AGREEMENT NO. 8C       A321 PERFORMANCE GUARANTEES -
                              CFM 56-5B-3

LETTER AGREEMENT NO. 9        ***

LETTER AGREEMENT NO. 10       ***

LETTER AGREEMENT NO. 11       PREDELIVERY PAYMENTS

LETTER AGREEMENT NO. 12       ***

LETTER AGREEMENT NO. 13       TECHNICAL DISPATCH RELIABILITY GUARANTEE



<PAGE>




                  P U R C H A S E  A G R E E M E N T


          This agreement is made this 31st day of October 1997 between AVSA, a
          societe a responsabilite limitee organized and existing under the laws
          of the Republic of France, having its registered office located at

          2, rond-point Maurice Bellonte
          31700 BLAGNAC
          FRANCE

          (hereinafter referred to as the "Seller")

and

          US Airways Group, Inc. a corporation organized and existing under the
          laws of the State of Delaware, United States of America, having its
          executive offices located at

          2345 Crystal Drive
          Arlington, VA   22227

          (hereinafter referred to as the "Buyer")


WHEREAS,


a)   the Buyer wishes to purchase and the Seller is willing to sell up to four
     hundred (400) Airbus Industrie aircraft, upon the terms and conditions
     herein provided; and

b)   the Seller is a sales subsidiary of Airbus Industrie, G.I.E., and will
     purchase the A319, A320 and A321 model aircraft from Airbus Industrie,
     G.I.E., for resale to the Buyer.


NOW THEREFORE IT IS AGREED AS FOLLOWS:



<PAGE>




1 -       DEFINITIONS
          -----------

          For all purposes of this agreement, except as otherwise expressly
          provided or unless the context otherwise requires, the following terms
          will have the following meanings:

          A319 Aircraft - any or all of the Firm A319 Aircraft, Reconfirmable
          -------------
          A319 Aircraft and Additional Aircraft that the Buyer selects as A319-
          100 aircraft and Aircraft that the Buyer converts into A319-100
          aircraft to be purchased by the Seller and sold to the Buyer pursuant
          to this Agreement, together with all components, equipment, parts and
          accessories installed in or on such aircraft and the Propulsion
          Systems installed thereon upon delivery.

          A319 Airframe - any A319 Aircraft, excluding the Propulsion Systems
          -------------
          therefor.

          A320 Aircraft - any or all of the Firm A320 Aircraft, Reconfirmable
          -------------
          A320 Aircraft and Additional Aircraft that the Buyer selects as A320-
          200 aircraft and Aircraft that the Buyer converts into A320-200
          aircraft to be purchased by the Seller and sold to the Buyer pursuant
          to this Agreement, together with all components, equipment, parts and
          accessories installed in or on such aircraft and the Propulsion
          Systems installed thereon upon delivery.

          A320 Airframe - any A320 Aircraft, excluding the Propulsion Systems
          -------------
          therefor.

          A321 Aircraft - any or all of  the Additional Aircraft that the Buyer
          -------------
          selects as A321-200 aircraft and Aircraft that the Buyer converts into
          A321-200 aircraft to be purchased by the Seller and sold to the Buyer
          pursuant to this Agreement, together with all components, equipment,
          parts and accessories installed in or on such aircraft and the
          Propulsion Systems installed thereon upon delivery.

          A321 Airframe - any A321 Aircraft, excluding the Propulsion Systems
          -------------
          therefor.

          Additional Aircraft - up to one hundred sixty (160) A319-100, A320-200
          -------------------
          and/or A321-200 model aircraft other than Firm Aircraft and
          Reconfirmable Aircraft that may be purchased by the Seller and sold to
          the Buyer pursuant to this Agreement, together with all components,
          equipment, parts and accessories installed in or on such aircraft and
          the Propulsion Systems installed thereon upon delivery.

          Affiliate - with respect to any person or entity, any other person or
          ---------
          entity directly or indirectly controlling, controlled by or under
          common control with such person or entity, not including any of the
          Associated Contractors.

                                       2



<PAGE>




          Agreement - this Airbus A319/A320/A321 Purchase Agreement, including
          ---------
          all exhibits, appendices and letter agreements attached or otherwise
          incorporated herein and all SCNs, as the same may be amended or
          modified (whether by formal amendment, letter, correspondence or
          otherwise in writing) from time to time, and in effect from time to
          time.

          Aircraft - any or all of the A319 Aircraft, A320 Aircraft and A321
          --------
          Aircraft to be purchased by the Seller and sold to the Buyer pursuant
          to this Agreement, together with all components, equipment, parts and
          accessories installed in or on such aircraft and the Propulsion
          Systems installed thereon upon delivery.

          Airframe - any Aircraft, excluding the Propulsion Systems therefor.
          --------

          Airframe Price Revision Formula - the formula set forth in Exhibit "G"
          -------------------------------
          of this Agreement.

          ASC - Airbus Service Company, Inc., a corporation organized and
          ---
          existing under the laws of the State of Delaware, having its
          registered office located at 198 Van Buren Street, Suite 300, Herndon,
          VA 20170, or any successor thereto.

          Associated Contractors - collectively, the members and, for certain
          ----------------------
          purposes, subcontractors of the Manufacturer from time to time, which
          members presently are:

          (1)  AEROSPATIALE, SOCIETE NATIONALE INDUSTRIELLE ("Aerospatiale"),
               whose principal office is at 37, Boulevard de Montmorency 75016
               Paris France

          (2)  BRITISH AEROSPACE (OPERATIONS) LTD, whose principal office is at
               Warwick House
               PO Box 87
               Farnborough Aerospace Centre
               Farnborough
               Hants GU14 6YU
               England

          (3)  CONSTRUCCIONES AERONAUTICAS, S.A., whose principal office is at
               404 Avenida de Aragon

                                       3



<PAGE>




               28022 Madrid
               Spain



          (4)  DAIMLER-BENZ AEROSPACE AIRBUS, GmbH ("Daimler-Benz"), whose
               principal office is at
               Kreetslag 10
               Postfach 95 01 09
               21111 Hamburg
               Germany

          ATA Specification 100 - the specification issued by the Air Transport
          ---------------------
          Association of America relating to manufacturers' technical data.

          ATA Specification 101 - the specification issued by the Air Transport
          ---------------------
          Association of America relating to ground equipment technical data.

          ATA Specification 102 - the specification issued by the Air Transport
          ---------------------
          Association of America relating to software programs.

          ATA Specification 200 - the specification issued by the Air Transport
          ---------------------
          Association of America relating to integrated data processing.

          ATA Specification 300 - the specification issued by the Air Transport
          ---------------------
          Association of America relating to the packaging of spare parts
          shipments.

          ATA Specification 2000 -  the specification issued by the Air
          ----------------------
          Transport Association of America relating to an industry-wide
          communication system linking suppliers and users for the purposes of
          spares provisioning, purchasing, order administration, invoicing and
          information or data exchange.

          ATA Specification 2100 -  the specification issued by the Air
          ----------------------
          Transport Association of America relating to the standards for the
          presentation of technical information prepared as digital media
          (magnetic tape or CD ROM).

          Base Price - for any Aircraft, Airframe or Propulsion Systems, as
          ----------
          defined in Subclause 4.1 of this Agreement.

          Buyer Furnished Equipment - for any Aircraft, all the items of
          -------------------------
          equipment that will be furnished by the Buyer and installed in the
          Aircraft by the Seller, as defined in the Specification.

          ***


          Commercial Constraints - means delivery positions that are not
          ----------------------
          available

                                       4



<PAGE>




          solely because they are under offer to another customer or because
          they would require unreasonably expensive modifications to meet the
          Specification.

          Courseware - computer-based-training programs developed and owned or
          ----------
          licensed by the Seller in conjunction with the Buyer's training
          programs.

          Customer Originated Changes - as defined in Subclause 14.5.3 of this
          ---------------------------
          Agreement.

          Deposit - as defined in Subclause 6.2.4 of this Agreement.
          -------

          Development Changes - as defined in Subclause 3.2 of this Agreement.
          -------------------

          DGAC - the Direction Generale de l'Aviation Civile of France, or any
          ----
          successor agency thereto.

          Excusable Delay - as defined in Subclause 10.1 of this Agreement.
          ---------------

          FAA - the U.S. Federal Aviation Administration, or any successor
          ---
          agency thereto.

          Failure - as defined in Subclause 12.2 of this Agreement.
          -------

          Final Contract Price - as defined in Subclause 4.2 of this Agreement.
          --------------------

          Firm A319 Aircraft - any or all of the one hundred nine (109) firm
          ------------------
          A319-100 aircraft for which the delivery schedule is set forth in
          Subclause 9.1.1 hereof to be purchased by the Seller and sold to the
          Buyer pursuant to this Agreement, together with all components,
          equipment, parts and accessories installed in or on such aircraft and
          the Propulsion Systems installed thereon upon delivery.

          Firm A320 Aircraft - any or all of the fifteen (15) firm A320-200
          ------------------
          aircraft for which the delivery schedule is set forth in Subclause
          9.1.1 hereof to be purchased by the Seller and sold to the Buyer
          pursuant to this Agreement, together with all components, equipment,
          parts and accessories installed in or on such aircraft and the
          Propulsion Systems installed thereon upon delivery.

          Firm Aircraft - any or all of the Firm A319 Aircraft and Firm A320
          -------------
          Aircraft to be purchased by the Seller and sold to the Buyer pursuant
          to this Agreement, together with all components, equipment, parts and
          accessories installed in or on such aircraft and the Propulsion
          Systems installed thereon upon delivery.

                                       5



<PAGE>




          Industrial Constraints - means delivery positions that are not
          ----------------------
          physically available, because production capacity limits have been
          reached.

          Inexcusable Delay - as defined in Subclause 11.1 of this Agreement.
          -----------------

          In-house Warranty - as referred to in Subclause 12.1.7 of this
          -----------------
          Agreement.

          In-house Warranty Labor Rate - as defined in Subclause 12.1.7(v) of
          ----------------------------
          this Agreement.

          Interface Problem - as defined in Subclause 12.4.1 of this Agreement.
          -----------------

          Item - as defined in Subclause 12.2 of this Agreement.
          ----

          LBA - Luftfahrt-Bundesamt of Germany or any successor agency thereto.
          ---

          LIBOR - for each stated interest period, the rate for deposits in US
          -----
          dollars being quoted to prime banks in the London Interbank Market for
          such an interest period, at 11:00 a.m., London time, on the day that
          is two (2) days (other than a Saturday, Sunday or a day that is a
          legal holiday or a day on which banking institutions are authorized to
          close in the City of New York, New York, London, England, or Paris,
          France) before the first day of an interest period. Such rate may be
          displayed on the Reuters Screen LIBO Page, the Bloomberg LIBOR screen,
          or in the Wall Street Journal or The Financial Times. The Buyer and
                    -------------------    -------------------
          Seller will consult these sources and agree on the rate. In the event
          that agreement cannot be reached, if at least two (2) such offered
          rates appear on the Reuters Screen LIBO Page, the rate for that
          interest period will be the arithmetic mean of such offered rates
          rounded to the nearest basis point (0.5 rounds to 1), otherwise the
          rate for that interest period will be "LIBOR" as quoted by National
          Westminster Bank, plc. "Reuters Screen LIBO Page" means the display
          designated as page "LIBO" on the Reuters Monitor Money Rates Service
          (or any successor to such page or service).

          Manufacturer - Airbus Industrie, a "Groupement d'Interet Economique"
          ------------
          established under "Ordonnance" No. 67-821 dated September 23, 1967, of
          the Republic of France.

          Material - as defined in Subclause 1.1 of Letter Agreement No. 1 to
          --------
          the Agreement.

          Material Breach - as defined in Subclause 21.1 of this Agreement.
          ---------------

          Predelivery Payment - any payment made against the Final Contract
          -------------------
          Price of an Aircraft, the expected schedule for which is set forth in
          Subclause 6.2.2 of this Agreement.

                                       6



<PAGE>




          Predelivery Payment Reference Price - as defined in Subclause 6.2.3 of
          -----------------------------------
          this Agreement.

          Product Support Agreements - as referred to in Subclause 17.1.1 of
          --------------------------
          this Agreement.

          Propulsion Systems - the two (2) powerplants manufactured by CFM
          ------------------
          International to be installed, as applicable, on an A319 Aircraft,
          A320 Aircraft or A321 Aircraft at delivery, each composed of the
          powerplant (as such term is defined in Chapters 70-80 of ATA
          Specification 100 (Revision 21), but limited to the equipment,
          components, parts and accessories included in the powerplant, as so
          defined), that have been sold to the Manufacturer by CFM
          International, which do not include the nacelles or thrust reversers.

          Qualifying Affiliate -  as defined in Subclause 19.5 of this
          --------------------
          Agreement.

          Reconfirmable A319 Aircraft - any or all of the reconfirmable A319-100
          ---------------------------
          aircraft that may be purchased by the Seller and sold to the Buyer
          pursuant to this Agreement, together with all components, equipment,
          parts and accessories installed in or on such aircraft and the
          Propulsion Systems installed thereon upon delivery.

          Reconfirmable A320 Aircraft - any or all of the reconfirmable A320-200
          ---------------------------
          aircraft that may be purchased by the Seller and sold to the Buyer
          pursuant to this Agreement, together with all components, equipment,
          parts and accessories installed in or on such aircraft and the
          Propulsion Systems installed thereon upon delivery.

          Reconfirmable A321 Aircraft - any or all of the reconfirmable A321-200
          ---------------------------
          aircraft that may be purchased by the Seller and sold to the Buyer
          pursuant to this Agreement, together with all components, equipment,
          parts and accessories installed in or on such aircraft and the
          Propulsion Systems installed thereon upon delivery.

          Reconfirmable Aircraft - any or all of the Reconfirmable A319
          ----------------------
          Aircraft, Reconfirmable A320 Aircraft and Reconfirmable A321 Aircraft
          that may be purchased by the Seller and sold to the Buyer pursuant to
          this Agreement, together with all components, equipment, parts and
          accessories installed in or on such aircraft and the Propulsion
          Systems installed thereon upon delivery.

          RFC - as defined in Subclause 3.3 of this Agreement.
          ---

          SCN - as defined in Subclause 3.1 of this Agreement.
          ---

                                       7



<PAGE>




          Seller Parts - industrial proprietary components, equipment,
          ------------
          accessories or parts of the Manufacturer manufactured to the detailed
          design of the Manufacturer or a subcontractor of it and bearing
          official part numbers of the Manufacturer or material for which the
          Seller has exclusive sales rights in the United States of America.

          Service Life Policy - as referred to in Subclause 12.2 of this
          -------------------
          Agreement.

          Specifications - as defined in Subclause 2.2 of this Agreement.
          --------------

          Standard Specifications - as defined in Subclause 2.2 of this
          -----------------------
          Agreement.

          Technical Publications - as defined in Subclause 14.1 of this
          ----------------------
          Agreement.

          Training - as defined in Subclause 16.1 of this Agreement.
          --------

          Training Conference - as defined in Subclause 16.2.1 of this
          -------------------
          Agreement.

          Vendor - each manufacturer of Vendor Parts.
          ------

          Vendor Component - as defined in Subclause 12.4.3 of this Agreement.
          ----------------

          Vendor Parts - any equipment, component, accessory, or part installed
          ------------
          in or intended to be installed in an Aircraft, other than Warranted
          Parts, Propulsion Systems and Buyer Furnished Equipment.

          Warranted Part - as defined in Subclause 12.1.1 of this Agreement.
          --------------

          Warranty Claim - as defined in Subclause 12.1.6(iv) of this Agreement.
          --------------

          Working Day - with respect to any action to be taken hereunder, a day
          -----------
          other than a Saturday, Sunday or other day designated as a legal
          holiday in the jurisdiction in which such action is required to be
          taken, provided that for purposes of determining when any notice or
                 --------
          election, any payment or any delivery of any Aircraft is required to
          be made, "Working Days" will mean any day other than a Saturday,
          Sunday or other day designated as a legal holiday or on which banks
          are permitted to be closed in (a) Toulouse, France, with respect to
          A320 Aircraft, (b) Hamburg, Germany, with respect to A319 Aircraft and
          A321 Aircraft, (c) New York, New York or (d) any other location where
          applicable United States federal offices (such as those of the FAA)
          are located.

          The terms "herein," "hereof" and "hereunder" and other words of
          similar import refer to this Agreement, and not a particular Clause
          thereof.

          The term "including" as used in this Agreement means "including,
          without limitation," unless otherwise specified or unless the context
          otherwise

                                       8



<PAGE>




          requires.

          Technical and trade items not otherwise defined herein will have the
          meanings assigned to them as generally accepted in the aircraft
          manufacturing industry.

                                       9



<PAGE>




2 -       SALE AND PURCHASE
          -----------------

2.1       General
          -------

          The Seller will cause to be manufactured and will sell and deliver,
          and the Buyer will buy and take delivery of the Aircraft subject to
          the terms and conditions contained in this Agreement.

2.2       Specification Documents
          -----------------------

          Each Aircraft will be manufactured, and when delivered will be in
          accordance with the Specification for such Aircraft:

          (i)  in respect of the A319 Aircraft, Standard Specification Document
               No. J.000.01000, Issue 3, Temporary Revision 1, dated August 25,
               1995 (the "A319 Standard Specification"),

          (ii) in respect of A320 Aircraft, Standard Specification Document No.
               D.000.02000, Issue 4, dated March 30, 1995, (the "A320 Standard
               Specification"), and

          (ii) in respect of A321 Aircraft, Standard Specification Document No.
               E.000.02000, Issue 1, dated June 30, 1995 (the "A321 Standard
               Specification").

          Copies of the A319 Standard Specification, A320 Standard Specification
          and A321 Standard Specification are annexed hereto as, respectively,
          Exhibit "A-1," Exhibit "A-2" and Exhibit "A-3" to this Agreement
          (collectively, the "Standard Specifications"). The Standard
          Specifications, as amended by the change orders set forth in Exhibit
          "B" hereto are hereinafter referred to as the "Specifications." The
          Specifications may be further modified from time to time pursuant to
          the provisions of Clause 3 below.

2.3       Certification
          -------------

          Prior to the delivery of the first A319 Aircraft, the first A320
          Aircraft and the first A321 Aircraft, the Seller will obtain or cause
          to be obtained a US FAA Type Certificate (transport category) for the
          Aircraft pursuant to Part 21 and in compliance with the applicable
          provisions of Part 25 of the US Federal Aviation Regulations. At or
          before such time, the Seller will provide the Buyer with a copy of
          each such Type Certificate.

          Each Aircraft will be delivered to the Buyer with (i) the Certificate
          of Airworthiness for Export issued by the LBA for A319 Aircraft and
          A321

                                       10



<PAGE>




          Aircraft and DGAC for A320 Aircraft, ***


                   The Buyer will remain responsible for the United States
          registration of the Aircraft. The Seller will not be liable for any
          failure to obtain the above certificates if the Buyer fails to
          cooperate. The Seller will have no obligation, whether before, at or
          after delivery of any Aircraft, to make any alterations to such
          Aircraft to enable such Aircraft to meet FAA requirements for specific
          operation on routes unique to the Buyer, ***.

          Except as set forth in this Subclause 2.3, the Seller will not be
          required to obtain any other certificate or approval with respect to
          the Aircraft.

                                       11



<PAGE>




3 -       CHANGES
          -------

3.1       Specification Change Notices
          ----------------------------

          The Specifications may be amended from time to time by a Specification
          Change Notice, a written agreement between the parties (each such
          Specification Change Notice being herein called an "SCN" and being
          substantially in the form of Exhibit "C" hereto). Each SCN will set
          forth in detail the particular changes to be made in the
          Specifications, and the effect, if any, of such changes on design,
          performance, weight, balance, time of delivery, Buyer Furnished
          Equipment and price (in base year dollars and, for information
          purposes only, in then current year dollars) of each Aircraft affected
          thereby and interchangeability or replaceability of parts. SCNs will
          not be binding on either party until signed by persons duly authorized
          in writing by the Buyer and the Seller, but upon being so signed will
          constitute amendments to this Agreement. All SCNs will be signed on
          behalf of the Buyer by an officer in its finance department and an
          officer in flight operations or maintenance, or alternatively may be
          signed by the Buyer's chief executive officer or president.

3.2       Development Changes
          -------------------

          *** the Specifications may also be revised by the Seller without an
          SCN or the Buyer's consent solely to in corporate Manufacturer-decided
          changes that are deemed necessary or useful to correct defects,
          improve the Aircraft or its process of manufacture, prevent delay, or
          ensure compliance with this Agreement and that do not increase the
          price or adversely affect the delivery, overall dimensions, weight,
          operational or maintenance requirements or performance of the Aircraft
          or adversely (i) change the interchangeability or replaceability
          requirements of the Specifications with respect to parts or (ii) ***

                   (hereinafter called "Development Changes"). ***


3.3       Requests and Approvals
          ----------------------

          In the event that the Buyer files a Request for Change ("RFC") with
          the Seller and the RFC does not subsequently become an SCN for any
          reason, such RFC will be cancelled without charge to the Buyer. Upon
          receipt of any request for a proposed change, the Seller will consider
          such request in good faith and will respond within ten (10) Working
          Days with (i) if possible, all

                                       12



<PAGE>




          appropriate information, including, a written estimated range of the
          cost thereof, the impact on the delivery dates of the applicable
          Aircraft and any certification requirements, or (ii) if (i) is not
          possible, with a date when the Seller will provide the Buyer with the
          information in (i). In the event that the Buyer requests the Seller in
          writing to incorporate a proposed change (excluding Development
          Changes) in an Aircraft and the Seller agrees to such request and
          incorporates such change, but the change is not subsequently made the
          subject of an SCN for any reason (other than the Seller's unreasonable
          refusal to sign the SCN or otherwise acting in bad faith), the Buyer
          will pay to the Seller the actual direct cost of design and other work
          resulting from such request and incurred by the Seller ***.

                      In the event that the Buyer requests the Seller in writing
          to proceed with a proposed change before any requisite approval of the
          LBA, for A319 Aircraft and A321 Aircraft, DGAC, for A320 Aircraft, and
          FAA has been obtained and subsequently such LBA, DGAC or FAA approval
          is not obtained, any SCN which will have been executed in connection
          with such proposed change will be deemed cancelled. ***


3.4       Specification Changes Before Delivery
          -------------------------------------

          If, pursuant to the promulgation, adoption, issuance, change or
          interpretation of any applicable law or regulation, any change in the
          Specifications has to be made before delivery of any Aircraft to
          enable ***.

                      For each such change, the parties will sign an SCN
          specifying the effect, if any, of such change on design, performance,
          weight, balance, time of delivery, Buyer Furnished Equipment and price
          of each Aircraft affected thereby and interchangeability or
          replaceability of parts. If the Seller anticipates that the scheduled
          delivery of any Aircraft will be postponed by reason of such change,
          the delivery date of such Aircraft as provided in Subclause 9.1 will
          be extended to the extent required by reason of such change, ***.


          The Seller will use all reasonable efforts to ensure that each
          Aircraft that is the subject of such postponement is "ready for
          delivery" without discrimination against the Aircraft.

                                       13



<PAGE>




          ***

          The cost of the changes applicable to Propulsion Systems, will be
          borne by the Buyer or the manufacturer thereof in accordance with such
          arrangements as may be made separately between the Buyer and the
          manufacturer of the Propulsion Systems.

3.5       Specification Changes After Delivery
          ------------------------------------

          Subclause 3.4 will not require the Seller to make any changes or
          modifications to or to make any payments or take any other action with
          respect to any Aircraft delivered to the Buyer before any law or
          regulation referred to in Subclause 3.4 is to be complied with. Any
          such changes or modifications made to an Aircraft after its delivery
          to the Buyer will be at the Buyer's expense, except as otherwise
          agreed between the Buyer and the Seller.

3.6       Specification Evolution
          -----------------------

          The Seller will keep the Buyer advised of any evolution in the design
          of the A320 family of aircraft and of any new relevant option that
          becomes available with respect to the Aircraft.

                                       14



<PAGE>




4 -       PRICE
          -----

4.1       Base Price of the Aircraft
          --------------------------

          The "Base Price" of each Aircraft is the sum of:

          (i)  the Base Price of the Airframe, and

          (ii) the Base Price of the Propulsion Systems.

4.1.1     Base Price of the Airframe
          --------------------------

4.1.1.1   A319 Airframe
          -------------

          The Base Price of the A319 Airframe will be the sum of the Base Prices
          set forth below in (i) and (ii):

          (i)  the Base Price of the Standard A319 Airframe, as defined in the
               A319 Standard Specification set forth in Exhibit "A-1" hereto
               (excluding Buyer Furnished Equipment, Propulsion Systems and
               SCNs), at delivery conditions prevailing in January 1996, which
               is:

                    US $ ***

               (US dollars--***), and

          (ii) the Base Price of any and all SCNs mutually agreed upon prior to
               the signature of this Agreement and set forth in Exhibit "B," at
               delivery conditions prevailing in January 1996, which is:

                    US $   ***

               (US dollars--***).

4.1.1.2   A320 Airframe
          -------------

          The Base Price of the A320 Airframe will be the sum of the Base Prices
          set forth below in (i) and (ii):

          (i)  the Base Price of the Standard A320 Airframe, as defined in the
               A320 Standard Specification set forth in Exhibit "A-2" hereto
               (excluding Buyer Furnished Equipment, Propulsion Systems and
               SCNs), at delivery conditions prevailing in January 1996, which
               is:

                                       15



<PAGE>




                    US $ ***

               (US dollars--***), and

          (ii) the Base Price of any and all SCNs mutually agreed upon prior to
               the signature of this Agreement and set forth in Exhibit "B," at
               delivery conditions prevailing in January 1996, which is:

                    US $ ***

               (US dollars--***).

4.1.1.3   A321 Airframe
          -------------

          The Base Price of the A321 Airframe will be the sum of the Base Prices
          set forth below in (i) and (ii):

          (i)  the Base Price of the Standard A321 Airframe, as defined in the
               A321 Standard Specification set forth in Exhibit "A-3" hereto
               (excluding Buyer Furnished Equipment, Propulsion Systems and
               SCNs), at delivery conditions prevailing in January 1996, which
               is:

                    US $ ***

               (US dollars--***), and

          (ii) the Base Price of any and all SCNs mutually agreed upon prior to
               the signature of this Agreement and set forth in Exhibit "B," at
               delivery conditions prevailing in January 1996, which is:

                    US $ ***

               (US dollars--***).

4.1.1.4        The Base Price of the Airframe of each Aircraft will be revised
               to the actual delivery date of such Aircraft in accordance with
               the Airframe Price Revision Formula.



4.1.2     Base Price of the Propulsion Systems
          ------------------------------------

4.1.2.1   A319 Aircraft
          -------------

                                       16



<PAGE>




4.1.2.1.1 CFM International CFM 56-5B-6/P Propulsion Systems
          --------------------------------------------------

          The Base Price of a set of two (2) CFM 56-5B-6/P Propulsion Systems is
          the sum of the Base Prices quoted below in (i) and (ii):

          (i) Base Price of the CFM 56-5B-6/P Engines
              ---------------------------------------

                The Base Price of a set of two (2) CFM 56-5B-6/P engines and
                additional standard equipment, at delivery conditions prevailing
                in January 1996, which is:

                    US $ ***

                (US dollars--***).

                Said Base Price has been calculated with reference to the
                Reference Price indicated by CFM INTERNATIONAL of US $ *** as
                defined by the Reference Composite Price Index of *** and in
                accordance with economic conditions prevailing in ***

                Said Reference Price is subject to adjustment to the date of
                delivery of the Aircraft in accordance with the CFM
                INTERNATIONAL Price Revision Formula set forth in Exhibit "H-1"
                of this Agreement.

          (ii)  Base Price of Nacelles and Thrust Reversers
                -------------------------------------------

                The Base Price of a set of two (2) nacelles and two (2) thrust
                reversers for the CFM 56-5B-6/P Propulsion Systems at delivery
                conditions prevailing in January 1996, which is:

                    US $ ***

                (US dollars--***).

                Said Base Price is subject to adjustment to the date of delivery
                of the Aircraft in accordance with the Airframe Price Revision
                Formula.

4.1.2.2   A320 Aircraft
          -------------

4.1.2.2.1 CFM International CFM 56-5B-4/P Propulsion Systems
          --------------------------------------------------

          The Base Price of a set of two (2) CFM 56-5B-4/P Propulsion Systems is
          the sum of the Base Prices quoted below in (i) and (ii):

                                       17



<PAGE>




          (i)   Base Price of the CFM 56-5B-4/P Engines
                ---------------------------------------

                The Base Price of a set of two (2) CFM 56-5B-4/P engines and
                additional standard equipment, at delivery conditions prevailing
                in January 1996, which is:

                    US $ ***

                (US dollars--***).

                Said Base Price has been calculated with reference to the
                Reference Price indicated by CFM INTERNATIONAL of US $ *** as
                defined by the Reference Composite Price Index of *** and in
                accordance with economic conditions prevailing in ***

                Said Reference Price is subject to adjustment to the date of
                delivery of the Aircraft in accordance with the CFM
                INTERNATIONAL Price Revision Formula set forth in Exhibit "H-2"
                of this Agreement.

          (ii)  Base Price of Nacelles and Thrust Reversers
                -------------------------------------------

                The Base Price of a set of two (2) nacelles and two (2) thrust
                reversers for the CFM 56-5A-3/P Propulsion Systems at delivery
                conditions prevailing in January 1996, which is:

                    US $ ***

                (US dollars--***).

                Said Base Price is subject to adjustment to the date of delivery
                of the Aircraft in accordance with the Airframe Price Revision
                Formula.


4.1.2.3   A321 Aircraft
          -------------

4.1.2.3.1 CFM International CFM 56-5B-3/P Propulsion Systems
          --------------------------------------------------

          The Base Price of a set of two (2) CFM 56-5B-3/P Propulsion Systems is
          the sum of the Base Prices quoted below in (i) and (ii):

                                       18



<PAGE>




          (i)   Base Price of the CFM 56-5B-3/P Engines
                ---------------------------------------

                The Base Price of a set of two (2) CFM 56-5B-3/P engines and
                additional standard equipment, at delivery conditions prevailing
                in January 1996, which is:

                    US $ ***

                (US dollars--***).

                Said Base Price has been calculated with reference to the
                Reference Price indicated by CFM INTERNATIONAL of US$ *** as
                defined by the Reference Composite Price Index of *** and in
                accordance with economic conditions prevailing in ***

                Said Reference Price is subject to adjustment to the date of
                delivery of the Aircraft in accordance with the CFM
                INTERNATIONAL Price Revision Formula set forth in Exhibit "H-3"
                of this Agreement.

          (ii)  Base Price of Nacelles and Thrust Reversers
                -------------------------------------------

                The Base Price of a set of two (2) nacelles and two (2) thrust
                reversers for the CFM 56-5B-3/P Propulsion Systems at delivery
                conditions prevailing in January 1996, which is:

                    US $ ***

                (US dollars--***).

                Said Base Price is subject to adjustment to the date of delivery
                of the Aircraft in accordance with the Airframe Price Revision
                Formula.


4.2       Final Contract Price
          --------------------

          The Final Contract Price of an Aircraft will be the sum of:

          (i)   the Base Price of the Airframe constituting a part of such
                Aircraft, as adjusted to the date of delivery of such Aircraft
                in accordance with Subclause 5.1 of this Agreement;

          (ii)  the price (as of delivery conditions prevailing in January 1996)
                of

                                       19



<PAGE>




                any SCNs constituting a part of such Aircraft that are entered
                into pursuant to Clause 3 after the date of execution of this
                Agreement, as adjusted to the date of delivery of such Aircraft
                in accordance with Subclause 5.1 of this Agreement;

          (iii) the Reference Price of the installed Propulsion Systems
                constituting a part of such Aircraft, as adjusted to the date of
                delivery of such Aircraft in accordance with Subclause 5.2 of
                this Agreement; and

          (iv)  any other adjustment resulting from any other provisions of this
                Agreement and/or any other written agreement between the Buyer
                and the Seller relating to the Aircraft and specifically stating
                that such adjustment is to be included in or taken into account
                in the Final Contract Price of an Aircraft, such as the Seller's
                purchase of Buyer Furnished Equipment from the Buyer.

4.3       Validity of Propulsion Systems Prices
          -------------------------------------

          It is understood that the prices cited above and the price revision
          formulas referred to in Subclause 5.2 concerning the Propulsion
          Systems and related equipment are based on information received from
          the Propulsion Systems manufacturer and remain subject to any
          modifications that might be jointly communicated by the Propulsion
          Systems manufacturer and the Buyer to the Seller and the Manufacturer.

4.4       Taxes, Duties and Imposts
          -------------------------

4.4.1     The Seller will bear and pay the amount of any and all taxes, duties,
          imposts or similar charges of any nature whatsoever that are (i)
          imposed upon the Buyer, or  any assignee pursuant to an assignment as
          set forth in Clause 19, (ii) imposed upon the Seller with an
          obligation on the Buyer to withhold or collect the amount thereof from
          the Seller or (iii) imposed upon the Buyer with an obligation on the
          Seller to withhold or collect such amount from the Buyer, and that are
          levied, assessed, charged or collected for or in connection with the
          fabrication, manufacture, modification, assembly, sale, delivery, use
          of or payment under this Agreement for any Aircraft, component,
          accessory, service, equipment or part delivered or furnished
          hereunder, provided such taxes, duties, imposts or similar charges
          have been levied, assessed, charged or collected in the Republic of
          France under laws promulgated and enforceable in the Republic of
          France, in respect of A320 Aircraft, and Germany under laws
          promulgated and enforceable in Germany, in respect of A319 Aircraft
          and A321 Aircraft.

                                       20



<PAGE>




4.4.2     The Buyer will bear and pay the amount of any and all taxes, duties,
          imposts or similar charges of any nature whatsoever imposed upon the
          Seller (except for taxes based on or measured by the Seller's income),
          imposed upon the Buyer with an obligation on the Seller to collect the
          amount thereof for the Buyer, or imposed upon the Seller with an
          obligation for the Buyer to withhold such amount from the Seller
          (except for income taxes collected by withholding), which are levied,
          assessed, charged or collected for or in connection with the sale,
          delivery or use of (except any use prior to delivery to the Buyer), or
          payment under this Agreement for any Aircraft, component, accessory,
          equipment or part delivered or furnished hereunder, provided such
          taxes, duties, imposts or similar charges have been promulgated and
          are enforceable under any laws ***

4.4.3     If a claim is made against one party (the "Indemnitee") for any taxes,
          duties, imposts or similar charges for which the other party (the
          "Indemnitor") has agreed to be liable pursuant to the provisions of
          this Agreement, the Indemnitee will promptly notify the Indemnitor.
          In lieu of any direction or request by the Indemnitor received within
          five (5) Working Days of the due date specified in said claim, the
          Indemnitee  may pay the amount of said tax, duty, impost or charge and
          claim against the Indemnitor for reimbursement consistent with
          Subclause 4.4.  However, if requested by the Indemnitor in writing,
          the Indemnitee will, at the Indemnitor's expense, take such action as
          the Indemnitor may reasonably direct with respect to such asserted
          liability and will not pay such taxes, duties, imposts or similar
          charges except under protest, if protest is necessary.  If payment is
          made, the Indemnitee will, at the Indemnitor's expense, take such
          action as the Indemnitor  may reasonably direct to recover payment and
          will, if requested, permit the Indemnitor in the Indemnitee's name to
          file a claim or commence an action to recover such payment.  If the
          Indemnitee will receive a refund or credit for all or any part of such
          taxes, duties, imposts or similar charges, then the Indemnitee will
          promptly repay the Indemnitor the amount of any such refund or credits
          which are attributable to the amount paid by the Indemnitor, including
          any interest received thereon, but less any expenses incurred by the
          Indemnitee in pursuing such refund or credit.

                                       21



<PAGE>




5 -       PRICE REVISION
          --------------

5.1       Airframe Price Revision Formula
          -------------------------------

          Base Price of the Airframe of each Aircraft will be revised to the
          actual delivery date of such Aircraft in accordance with the Airframe
          Price Revision Formula, unless otherwise provided in this Agreement.

5.2       Propulsion Systems Price Revision Formula
          -----------------------------------------

          The Reference Price of the Propulsion Systems will be revised to the
          actual delivery date of the Aircraft on which such Propulsion Systems
          are installed in accordance with the revision formula set forth in, as
          applicable, Exhibit "H-1," Exhibit "H-2" or Exhibit "H-3" hereto,
          unless otherwise provided in this Agreement.

                                       22



<PAGE>




6 -       PAYMENT TERMS
          -------------

6.1       Method and Place of Payment
          ---------------------------

6.1.1     The Buyer will pay all sums due hereunder in immediately available
          funds in United States dollars by credit to the Seller's account at
          Credit Lyonnais, New York Branch, or to such other account located in
          the United States of America as the Seller will designate by notice to
          the Buyer.

6.1.2     The Seller will pay all sums due hereunder to the Buyer in immediately
          available funds in United States dollars by credit to the Buyer's
          account, account no. 2147591, at PNC Bank in Pittsburgh, Pennsylvania,
          or to such other account located in the United States of America as
          the Buyer designates by notice to the Seller.

6.2       Predelivery Payments
          --------------------

6.2.1     ***

6.2.2     Predelivery Payments will be paid according to the following
          schedules.

6.2.2.1   ***

                                       23



<PAGE>




6.2.2.2   ***


6.2.3     The Predelivery Payment Reference Price is defined as:

          A =   Pb (1 + 0.05N)

          where

          A     = the Predelivery Payment Reference Price for Aircraft to be
                delivered in calendar year T.

          Pb    = the Base Price of the Aircraft as defined in Subclause 4.1
                above.

          N = (T -1996).

          T = the year of delivery of the relevant Aircraft.

6.2.4     The Seller acknowledges that it has already received from the Buyer
          the sum of US$***       (US dollars--***),
          which represents a deposit of US$ ***    (US dollars--***)
          for the first one hundred twenty (120) Firm Aircraft (each a
          "Deposit"). Each US$ ***    (US dollars--***)
          deposit paid with respect to each particular Firm Aircraft will be
          credited without interest against the first Predelivery Payment for
          such Firm Aircraft due upon execution of this Agreement.

6.3       Payment of Final Contract Price
          -------------------------------

          Concurrently with the transfer of title to each Aircraft, the Buyer
          will pay to the Seller the Final Contract Price thereof, less the
          total amount of the Predelivery Payments theretofore received by the
          Seller for such Aircraft under Subclause 6.2 above, *** . The Seller's
          receipt of the full amount of all Predelivery Payments and of the
          Final Contract Price *** will be a condition precedent to the Seller's
          obligation to deliver such Aircraft.

                                       24



<PAGE>




6.4       Payment of Other Amounts
          ------------------------

          Unless otherwise expressly provided for herein, any payments due
          hereunder or in respect of an Aircraft in addition to those referred
          to in Subclauses 6.2.2 and 6.3 above will be paid by the Buyer
          concurrently with the delivery of the corresponding Aircraft or, if
          invoiced after delivery of such Aircraft, within one (1) month after
          the invoice date.

6.5       Overdue Payments
          ----------------

          If any payment due under this Agreement is not received on the date or
          dates as agreed upon between the Buyer and the Seller, the person
          entitled to receive payments (the "Recipient") will have the right to
          claim from the person owing such payment (the "Payor") and the Payor
          will promptly pay to the Recipient *** interest at a rate per annum
          equal to *** on the amount of such overdue payment, to be calculated
          from and including the due date of such payment to (but excluding) the
          date such payment is received by the Recipient. For purposes of the
          foregoing sentence, any period of less than one month will be prorated
          to include the period during which the payment is overdue. The
          Recipient's right to receive such interest will be in addition to any
          other rights of the Recipient hereunder or at law. ****

6.6       Refund of Predelivery Payments
          ------------------------------

          The Buyer will have no right to any refund of any deposit or
          Predelivery Payment received by the Seller, except as otherwise
          provided in this Agreement.

6.7       Proprietary Interest
          --------------------

          The Buyer will not, by virtue of anything contained in this Agreement
          (including, without limitation, any Predelivery Payments hereunder, or
          any designation or identification by the Seller of a particular
          Aircraft as an Aircraft to which any of the provisions of this
          Agreement refers), and notwithstanding any provision of law to the
          contrary, acquire any proprietary, insurable or other interest
          whatsoever in any Aircraft prior to delivery of and payment for such
          Aircraft as provided in this Agreement.

6.8       Tender of Delivery
          ------------------

                                       25



<PAGE>




          In addition to any other rights and remedies available to the Seller,
          the Seller will not be obligated to tender delivery of any Aircraft to
          the Buyer, if, *** the Buyer is still in default of its obligation to
          make any Predelivery Payment due with respect to such Aircraft.

6.9       Payment in Full
          ---------------

          The Buyer's obligation to make payments to the Seller hereunder will
          not be affected by and will be determined without regard to any
          setoff, counterclaim, recoupment, defense or other right that the
          Buyer may have against the Seller or any other person and all such
          payments will be made without deduction or withholding of any kind.

                                       26



<PAGE>




7 -       PLANT REPRESENTATIVES - INSPECTION
          ----------------------------------

7.1       Inspection Procedures
          ---------------------

7.1.1     All work to be carried out on the Aircraft and all materials and parts
          thereof will at all reasonable times during business hours be open to
          inspection by duly authorized representatives of the Buyer or its
          designee at the respective works of the Associated Contractors and, if
          possible, at the works of their respective subcontractors, and such
          representatives will, to carry out the aforesaid inspection, have
          access to such relevant technical data as is reasonably necessary for
          this purpose (except that, if access to any part of the respective
          works where construction is in progress or materials or parts are
          stored is restricted for security reasons, the Associated Contractors
          will be allowed a reasonable time to make the items available for
          inspection elsewhere).  The actual detailed inspection of the
          Aircraft, materials and parts thereof will take place only in the
          presence of the respective inspection department personnel of the
          Associated Contractors or their subcontractors.  The procedures for
          such inspections will be agreed upon with the Buyer prior to any
          inspection, based on modifications to the Manufacturer's Quality
          Instruction document.

7.1.2     For the purposes of Subclause 7.1.1 above and commencing with the date
          of this Agreement until the delivery of the last Aircraft, the Seller
          will furnish free-of-charge adequate secretarial assistance and
          suitable, private and secure (with access limited and controlled by
          the Buyer in its sole discretion) space, office equipment,
          telecommunications (including telephone and facsimile lines and
          equipment for professional use only) and facilities in or conveniently
          located with respect to each of Daimler-Benz's works in Hamburg,
          Germany, with respect to A319 Aircraft and A321 Aircraft, and
          Aerospatiale's works in Toulouse, France, with respect to A320
          Aircraft, for the use of not more than six (6) (or more if reasonably
          necessary) representatives of the Buyer during the aforementioned
          period.

7.1.3     All inspections, examinations and discussions with the Seller's, the
          Associated Contractors' or their respective subcontractors'
          engineering or other personnel by the Buyer and its said
          representatives will be performed in such manner as not to
          unreasonably delay or hinder the work to be carried out on the
          Aircraft or the proper performance of this Agreement.  In no event
          will the Buyer or its representatives be permitted to inspect any
          aircraft other than the Aircraft.  The Seller will not permit, and
          will cause the Manufacturer not to permit, any representatives,
          employees, agents or personnel of any other airline or customer to
          inspect, or to have access to, the Aircraft or any designs or
          specifications relating thereto.

                                       27



<PAGE>




7.2       INDEMNITY
          ---------

7.2.1     SCOPE
          -----

          IN CONNECTION WITH THE PROVISION OF SERVICES UNDER THIS CLAUSE 7, THE
          SELLER AND THE BUYER PROVIDE THE INDEMNITIES SET FORTH IN SUBCLAUSES
          7.2.2 AND 7.2.3.

7.2.2     SELLER'S INDEMNITY
          ------------------

          THE SELLER WILL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS DIRECTORS,
          OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES,
          DAMAGES, LOSSES, COSTS AND EXPENSES

          (I)     FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES
                  TO OR DEATH OF THE BUYER'S REPRESENTATIVES PARTICIPATING IN
                  ANY TESTS, CHECKOUTS OR INSPECTIONS OR CONTROLS UNDER THIS
                  CLAUSE 7) CAUSED BY THE BUYER OR ITS REPRESENTATIVES, AND

          (II)    FOR ANY LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR
                  DAMAGE TO PROPERTY OF THE BUYER'S SAID REPRESENTATIVES) CAUSED
                  BY THE BUYER OR ITS REPRESENTATIVES,

          ARISING OUT OF OR IN CONNECTION WITH ANY SUCH TESTS, CHECKOUTS,
          INSPECTIONS OR CONTROLS UNDER THIS CLAUSE 7.

          THIS INDEMNITY OF THE SELLER WILL NOT APPLY FOR ANY SUCH LIABILITIES,
          DAMAGES, LOSSES, COSTS OR EXPENSES ARISING OUT OF OR CAUSED BY THE
          WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER'S SAID
          REPRESENTATIVES.

7.2.3     BUYER'S INDEMNITY
          -----------------

          THE BUYER WILL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE
          MANUFACTURER, EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE
          SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES
          FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES

                                       28



<PAGE>




          (I)     FOR INJURIES TO OR DEATHS OF THE BUYER'S SAID REPRESENTATIVES
                  PARTICIPATING IN ANY TESTS, CHECKOUTS, INSPECTIONS OR CONTROLS
                  UNDER THIS CLAUSE 7,

          (II)    FOR LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER'S SAID
                  REPRESENTATIVES, AND

          (III)   ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS
                  NEGLIGENCE OF THE BUYER'S SAID REPRESENTATIVES.

          WITH RESPECT TO SUBCLAUSES (I) AND (II) OF THE PRECEDING SENTENCE, THE
          BUYER WILL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS THE SELLER
          WHERE THE LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES ARISE FROM
          THE SELLER'S, THE MANUFACTURER'S OR ANY OF THE ASSOCIATED CONTRACTORS'
          OR THEIR RESPECTIVE SUBCONTRACTORS' OR THEIR RESPECTIVE OFFICERS',
          AGENTS' OR EMPLOYEES' WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.

7.2.4     CLAIMS
          ------

          IN THE EVENT ANY CLAIM IS MADE OR LAWSUIT IS BROUGHT AGAINST EITHER
          PARTY (OR ITS RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES) FOR
          DAMAGES FOR DEATH OR INJURY, OR FOR PROPERTY DAMAGE, THE LIABILITY FOR
          WHICH HAS BEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUBCLAUSE
          7.2, THE FORMER (INDEMNITEE) WILL PROMPTLY GIVE NOTICE TO THE OTHER
          PARTY (INDEMNITOR), AND THE INDEMNITOR WILL HAVE THE RIGHT TO
          INVESTIGATE, AND THE RIGHT IN ITS SOLE DISCRETION TO ASSUME AND
          CONDUCT THE DEFENSE OF OR SETTLE OR COMPROMISE, SUCH CLAIM, ACTION,
          PROCEEDING OR LAWSUIT. HOWEVER, IF IN THE REASONABLE OPINION OF THE
          INDEMNITEE, SUCH DEFENSE, SETTLEMENT OR COMPROMISE INVOLVES THE
          POTENTIAL IMPOSITION OF CRIMINAL LIABILITY ON THE INDEMNITEE OR A
          CONFLICT OF INTEREST BETWEEN THE INDEMNITOR AND THE INDEMNITEE, THE
          INDEMNITOR WILL NOT BE ENTITLED TO ASSUME AND CONDUCT THE DEFENSE OF
          ANY SUCH CLAIM, ACTION, PROCEEDING OR LAWSUIT. THE INDEMNITEES WILL BE
          ENTITLED, AT THEIR OWN EXPENSE, ACTING THROUGH ONE (1) COUNSEL, TO
          PARTICIPATE IN ANY CLAIM, ACTION, PROCEEDING

                                       29



<PAGE>




          OR LAWSUIT THE DEFENSE OF WHICH HAS BEEN ASSUMED BY THE INDEMNITOR
          PURSUANT TO THE PRECEDING PROVISIONS, PROVIDED, THAT SUCH
          PARTICIPATION DOES NOT, IN THE REASONABLE OPINION OF INDEPENDENT
          COUNSEL OF THE INDEMNITOR, INTERFERE WITH THE CONDUCT OF SUCH DE
          FENSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY, NO SETTLEMENT OR
          COMPROMISE WILL BE ENTERED INTO WITHOUT THE PRIOR WRITTEN CONSENT OF
          THE INDEMNITEE, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD OR
          DELAYED. EACH INDEMNITEE WILL COOPERATE WITH THE INDEMNITOR IN THE
          INVESTIGATION AND CONDUCT OF THE DEFENSE OF ANY CLAIM, ACTION,
          PROCEEDING OR LAWSUIT INDEMNIFIED HEREUNDER.

          IN THE EVENT THAT THE INDEMNITOR DOES NOT ASSUME AND CONDUCT THE
          DEFENSE OF THE CLAIM OR LAWSUIT, THEN THE INDEMNITEE WILL HAVE THE
          RIGHT TO PROCEED WITH DEFENSE OF THE CLAIM OR LAWSUIT AS IT DEEMS
          APPROPRIATE AND WILL HAVE AN ACTION AGAINST THE INDEMNITOR FOR ANY
          JUDGMENTS, SETTLEMENTS, COSTS OR EXPENSES INCURRED IN CONDUCTING SAID
          DEFENSE. FOR THE PURPOSE OF THIS SUBCLAUSE 7.2, A CLAIM OR LAWSUIT
          AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY
          OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE
          DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES WILL BE DEEMED TO BE A
          LAWSUIT AGAINST THE SELLER.

                                       30



<PAGE>




8 -       BUYER'S ACCEPTANCE
          ------------------

8.1       Acceptance Procedures
          ---------------------

8.1.1     The Seller or any Affiliate thereof acting as the Seller's designee
          will give to the Buyer not less than thirty (30) days' notice of the
          proposed date and time when the  Buyer's acceptance tests will be
          conducted, and, in the event that the Buyer elects to attend the said
          tests, the Buyer will cooperate in complying with the reasonable
          requirements of the Seller with the intention of completing all tests
          within five (5) Working Days after commencement.  The tests will take
          place at  Daimler-Benz's works in Hamburg, Germany, for A319 Aircraft
          and A321 Aircraft, and at Aerospatiale's works near Toulouse, France,
          for A320 Aircraft, and will be carried out by the personnel of the
          Manufacturer (accompanied, if the Buyer so wishes, by representatives
          of the Buyer up to a total of six (6) (or more if reasonably requested
          by the Buyer) acting as observers, of whom not more than two (2) will
          have access to the cockpit at any one time and of whom one (1) may act
          as copilot, subject to such person's appropriate certification).
          During flight tests, these representatives will comply with the
          instructions of the Manufacturer's representatives.  The Manufacturer
          will not normally be required in the course of such acceptance tests
          to fly any of the Aircraft for more than an aggregate of three (3)
          hours, unless more time is necessary to complete the acceptance tests.

8.1.2     The Seller will cause ASC, at no cost to the Buyer, to brief, and
          provide one (1) free-of-charge four (4) hour simulator session for
          each new set of acceptance pilots. This briefing will provide specific
          information related to acceptance flights.

8.1.3     The acceptance tests will be designed to demonstrate the satisfactory
          functioning of the Aircraft and all systems relating thereto, and
          compliance with the terms, requirements and conditions of this
          Agreement, including conformity to the Specifications and ***.


                The successful completion of such acceptance tests will also be
          deemed to demonstrate compliance with the Specifications. The
          acceptance tests will be conducted in accordance with the
          Manufacturer's aircraft acceptance procedure, as amended to
          incorporate the Buyer's reasonable requests. At the time of delivery,
          the Aircraft will comply with all relevant limits and tolerances
          specified in the Aircraft Maintenance

                                       31



<PAGE>




          Manual. In the event that the Buyer does not attend the tests or fails
          to so cooperate, the Seller may complete them in the absence of the
          Buyer, provided that the Seller has given the Buyer reasonable prior
          written notice of not less than seven (7) days of its intention to
          complete such tests and the Buyer remains absent or uncooperative. The
          Buyer will be deemed to have accepted the tests, if such tests are
          reasonably deemed satisfactory by the Seller, and the Seller will
          furnish such data with respect to such tests as the Buyer may
          reasonably request. Notwithstanding the above, said acceptance by the
          Buyer will not impair the rights of the Buyer that derive from the
          warranties relating to the Aircraft.

8.1.4     If the acceptance tests for an Aircraft are not successfully completed
          or there is a defect, the Buyer, within two (2) days after such tests,
          will give notice to the Seller specifying such unsuccessful completion
          or defect.  Thereafter the Seller will, without unreasonable hindrance
          from the Buyer,  carry out any necessary changes and, as soon as
          practicable thereafter, resubmit the Aircraft for new acceptance
          tests, including flight tests if necessary, demonstrate the
          elimination of the defect, such tests to be held and carried out in
          accordance with this Subclause 8.1.  In order to avoid a delay in the
          delivery of any Air craft found to have one or more defects, the Buyer
          may elect with the consent of the Seller (such consent not to be
          unreasonably withheld) to take delivery of such Aircraft prior to the
          correction of such defects and without prejudice to any rights the
          Buyer may have under this Agreement against the Seller by reason of
          such defects.

          In the event the Buyer elects to take delivery of an Aircraft with
          defects pursuant to the preceding paragraph, delivery of such Aircraft
          will be made as originally scheduled, and such defects will be
          corrected, at the Seller's expense, by the Buyer or the Seller at such
          subsequent time as is mutually acceptable to the Buyer and the Seller,
          and as will be set forth in a written agreement that will state the
          settlement agreed by the Buyer and the Seller with respect to such
          defects.

8.1.5     Within three (3) months of execution of the Agreement, the Buyer and
          the Seller will review the technical documentation provided by the
          Seller at delivery of each Aircraft, and, if practicable, will agree
          on any reasonable changes to such documentation deemed necessary by
          the Buyer.

8.2       Seller's Use of Aircraft
          ------------------------

          The Seller will be entitled to use, without compensation to the Buyer,
          each Aircraft prior to its delivery as may be necessary to obtain the
          certificates required under Clause 2 hereof, and such use will not ***
          affect the Buyer's obligation to accept delivery

                                       32



<PAGE>




          of any Aircraft hereunder.  ***



8.3       Certificate of Acceptance
          -------------------------

          When the Aircraft is "ready for delivery" as defined below in
          Subclause 9.2, the Buyer will forthwith give to the Seller a signed
          Certificate of Acceptance in the form attached as Exhibit "E" in
          respect of the relevant Aircraft. Should the Buyer fail to so deliver
          the said Certificate, then the Buyer will be deemed to be in default
          as though it had without warrant rejected delivery of such Aircraft
          when duly tendered to it hereunder and will thereafter bear all costs
          and expenses resulting from such delay in delivery. The execution and
          delivery of a Certificate of Acceptance by the Buyer in respect of an
          Aircraft will not constitute waiver by the Buyer of any rights and
          remedies it may have in respect of any Aircraft under Clauses 12 and
          13 of this Agreement.

8.4       Finality of Acceptance
          ----------------------

          The Buyer's acceptance of delivery of each Aircraft will constitute
          waiver by the Buyer of any right it may have under the Uniform
          Commercial Code or otherwise to revoke such acceptance for any reason,
          whether known or unknown to the Buyer at the time of acceptance.

8.5       INDEMNITY
          ---------

8.5.1     SCOPE
          -----

          IN CONNECTION WITH THE PROVISION OF SERVICES UNDER THIS CLAUSE 8, THE
          SELLER AND THE BUYER PROVIDE THE INDEMNITIES SET FORTH IN SUBCLAUSES
          8.5.2 AND 8.5.3.

8.5.2     SELLER'S INDEMNITY
          ------------------

          THE SELLER WILL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS DIRECTORS,
          OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES,
          DAMAGES, LOSSES, COSTS AND EXPENSES


          (I)     FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES
                  TO AND DEATHS OF THE BUYER'S REPRESENTATIVES PARTICIPATING IN
                  ANY

                                       33



<PAGE>




                  GROUND OR FLIGHT TESTS UNDER THIS CLAUSE 8) CAUSED BY THE
                  BUYER OR ITS REPRESENTATIVES, AND

          (II)    FOR ANY LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR
                  DAMAGE TO PROPERTY OF THE BUYER'S SAID REPRESENTATIVES),
                  CAUSED BY THE BUYER OR ITS REPRESENTATIVES,

          ARISING OUT OF OR IN CONNECTION WITH THE OPERATION OF THE AIRCRAFT
          DURING ANY GROUND OR FLIGHT TESTS UNDER THIS CLAUSE 8.

          THIS INDEMNITY OF THE SELLER WILL NOT APPLY FOR ANY SUCH LIABILITIES,
          DAMAGES, LOSSES, COSTS OR EXPENSES ARISING OUT OF OR CAUSED BY THE
          WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER'S SAID
          REPRESENTATIVES.

8.5.3     BUYER'S INDEMNITY
          -----------------

          THE BUYER WILL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE
          MANUFACTURER, EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE
          SUBCONTRACTORS AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
          AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES,
          LOSSES, COSTS AND EXPENSES

          (I)     FOR INJURIES TO OR DEATHS OF THE BUYER'S SAID REPRESENTATIVES
                  PARTICIPATING IN ANY GROUND OR FLIGHT TESTS UNDER THIS CLAUSE
                  8,

          (II)    FOR LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER'S SAID
                  REPRESENTATIVES, AND

          (III)   ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS
                  NEGLIGENCE OF THE BUYER'S SAID REPRESENTATIVES.


          WITH RESPECT TO SUBCLAUSES (I) AND (II) OF THE PRECEDING SENTENCE, THE
          BUYER WILL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS THE SELLER
          WHERE THE

                                       34



<PAGE>




          LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES ARISE FROM THE
          SELLER'S, THE MANUFACTURER'S OR ANY OF THE ASSOCIATED CONTRACTORS' OR
          THEIR RESPECTIVE SUBCONTRACTORS' OR THEIR RESPECTIVE OFFICERS',
          AGENTS' OR EMPLOYEES' WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.

8.5.4     CLAIMS
          ------

          IN THE EVENT ANY CLAIM IS MADE OR LAWSUIT IS BROUGHT AGAINST EITHER
          PARTY (OR ITS RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES) FOR
          DAMAGES FOR DEATH OR INJURY OR FOR PROPERTY DAMAGE, THE LIABILITY FOR
          WHICH HAS BEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUBCLAUSE
          8.5, THE FORMER (INDEMNITEE) WILL PROMPTLY GIVE NOTICE TO THE OTHER
          PARTY (INDEMNITOR), AND THE INDEMNITOR WILL HAVE THE RIGHT TO
          INVESTIGATE, AND THE RIGHT IN ITS SOLE DISCRETION TO ASSUME AND
          CONDUCT THE DEFENSE OF OR SETTLE OR COMPROMISE, SUCH CLAIM, ACTION,
          PROCEEDING OR LAWSUIT.

          HOWEVER, IF IN THE REASONABLE OPINION OF THE INDEMNITEE, SUCH DEFENSE,
          SETTLEMENT OR COMPROMISE INVOLVES THE POTENTIAL IMPOSITION OF CRIMINAL
          LIABILITY ON THE INDEMNITEE OR A CONFLICT OF INTEREST BETWEEN THE
          INDEMNITOR AND THE INDEMNITEE, THE INDEMNITOR WILL NOT BE ENTITLED TO
          ASSUME AND CONDUCT THE DEFENSE OF ANY SUCH CLAIM, ACTION, PROCEEDING
          OR LAWSUIT. THE INDEMNITEES WILL BE ENTITLED, AT THEIR OWN EXPENSE,
          ACTING THROUGH ONE (1) COUNSEL, TO PARTICIPATE IN ANY CLAIM, ACTION,
          PROCEEDING OR LAWSUIT THE DEFENSE OF WHICH HAS BEEN ASSUMED BY THE
          INDEMNITOR PURSUANT TO THE PRECEDING PROVISIONS, PROVIDED, THAT SUCH
          PARTICIPATION DOES NOT, IN THE REASONABLE OPINION OF INDEPENDENT
          COUNSEL OF THE INDEMNITOR, INTERFERE WITH THE CONDUCT OF SUCH DEFENSE.
          NOTWITHSTANDING ANYTHING TO THE CONTRARY, NO SETTLEMENT OR COMPROMISE
          WILL BE ENTERED INTO WITHOUT THE PRIOR WRITTEN CONSENT OF THE
          INDEMNITEE, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD OR
          DELAYED. EACH INDEMNITEE WILL COOPERATE WITH THE INDEMNITOR IN THE
          INVESTIGATION AND CONDUCT OF THE DEFENSE OF ANY CLAIM, ACTION,
          PROCEEDING OR LAWSUIT INDEMNIFIED HEREUNDER.

                                       35



<PAGE>






          IN THE EVENT THAT THE INDEMNITOR DOES NOT ASSUME AND CONDUCT THE
          DEFENSE OF THE CLAIM OR LAWSUIT, THEN THE INDEMNITEE WILL HAVE THE
          RIGHT TO PROCEED WITH DEFENSE OF THE CLAIM OR LAWSUIT AS IT DEEMS
          APPROPRIATE AND WILL HAVE AN ACTION AGAINST THE INDEMNITOR FOR ANY
          JUDGMENTS, SETTLEMENTS, COSTS OR EXPENSES INCURRED IN CONDUCTING SAID
          DEFENSE. FOR THE PURPOSE OF THIS SUBCLAUSE 8.5, A CLAIM OR LAWSUIT
          AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY
          OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE
          DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES WILL BE DEEMED TO BE A
          LAWSUIT AGAINST THE SELLER.

                                       36



<PAGE>




9 -       DELIVERY
          --------

9.1       Delivery Locations, Schedule and Notice of Delivery Date
          --------------------------------------------------------

          Subject to the provisions of this Agreement, the Seller will have the
          Aircraft ready for delivery at Daimler-Benz's works in Hamburg,
          Germany, or at Aerospatiale's works near Toulouse, France, as the case
          may be.

9.1.1     The Buyer will accept the Aircraft, during the months and years set
          forth below in this Subparagraph 9.1.1.

          (i)  Firm A319 Aircraft
               ------------------

          ***

                                       37



<PAGE>




          ***

                                       38



<PAGE>




          (ii)  Firm A320 Aircraft
                ------------------

          ****



          (iii) Reconfirmable A319 Aircraft
                ---------------------------

          ***

                                       39



<PAGE>




          ***

                                       40



<PAGE>




9.1.2     The Seller and the Buyer will agree on the type selection and delivery
          dates of the remaining thirty-nine (39) Reconfirmable Aircraft not
          later than December 31, 1997.

9.1.3     ***


9.1.4     Not later than thirty (30) days prior to the date scheduled for
          acceptance tests for a particular Aircraft, the Seller will give the
          Buyer notice of the anticipated date on which such Aircraft will be
          ready for delivery.  Not later than fifteen (15) days prior to such
          date notified to the Buyer, the Seller will (i) confirm to the Buyer
          that such anticipated delivery date is firm or (ii) in the event the
          Seller cannot confirm such date as being firm, confirm a new date,
          which will be no more than two (2) Working Days in Germany, for A319
          Aircraft and A321 Aircraft, and France, for A320 Aircraft, before or
          after the originally scheduled date.

9.2       Certificate of Airworthiness
          ----------------------------

          Each Aircraft will for the purpose of this Agreement be deemed to be
          "ready for delivery" upon (a) the satisfactory completion of its
          acceptance tests, (b) the issuance of Certificate of Airworthiness for
          Export in the "Transport Category" with respect thereto by the LBA,
          with respect to A319 Aircraft and A321 Aircraft, and DGAC, with
          respect to A320 Aircraft, and (c) the Seller's compliance with the
          other obligations to be performed by it under Subclauses 2.3 and 9.3
          hereof.

9.3       Title
          -----

          Title to and risk of loss of and damage to the Aircraft will pass to
          the Buyer upon delivery following execution of the Certificate of
          Acceptance and upon payment of the Final Contract Price for such
          Aircraft. The Seller will provide the Buyer with (a) an invoice(s) in
          form and substance satisfactory to the Buyer, (b) a bill of sale duly
          conveying to the Buyer good title to such Aircraft free and clear of
          all liens, claims, charges and encumbrances of any kind whatsoever,
          (c) an FAA-approved form bill of sale executed by the Seller in favor
          of the Buyer, and (d) such other appropriate documents of title or
          other documents as the Buyer may reasonably request.

9.4       Buyer Delays
          ------------

          In the event that:

          (i)  the delivery of and payment of the Final Contract Price for the

                                       41



<PAGE>




               Aircraft is delayed more than five (5) days after the firm
               delivery date established pursuant to Subclause 9.1 due to any
               breach of the Buyer under this Agreement, or

          (ii) within two (2) days after delivery of and transfer of title to
               the Aircraft the Buyer has failed to remove such Aircraft for
               whatever reason (except for reasons attributable to the Seller or
               the Manufacturer),

          then the Buyer will on demand reimburse the Seller for all reasonable
          out-of-pocket costs and expenses sustained by the Seller and resulting
          from any such delay or failure. Such reimbursement will be in addition
          to any other rights that the Seller may have under this Agreement as a
          result of any such delay or failure.

9.5       Flyaway Expenses
          ----------------


          ***

                                       42



<PAGE>




10 -      EXCUSABLE DELAY
          ---------------

10.1      Scope
          -----

          Neither the Seller nor the Manufacturer will be responsible for or be
          deemed to be in default on account of delays in delivery or failure to
          deliver or otherwise in the performance of this Agreement or any part
          hereof due to causes reasonably beyond the Seller's, the
          Manufacturer's or any Associated Contractor's control or not
          occasioned by the Seller's, the Manufacturer's or any Associated
          Contractor's fault, misconduct or negligence ("Excusable Delay").

          It is expressly understood and agreed that each of (i) any delay
          caused directly or indirectly by the Buyer's failure to comply with
          its obligations hereunder, and (ii) any delay in delivery or otherwise
          in the performance of this Agreement by the Seller due in whole or in
          part to any delay in or failure of the delivery of, or any other event
          or circumstance relating to, the Propulsion Systems or Buyer Furnished
          Equipment, will, to the extent attributable to such delay, constitute
          Excusable Delay for the Seller, unless such delay or failure of
          delivery or other event or circumstance is attributable to any default
          by the Seller of its obligations hereunder or any failure of the
          Seller to notify the Buyer and the manufacturer of the Propulsion
          Systems in a timely manner of the Seller's need therefor.

          The Seller will promptly after becoming aware of any delay falling
          within the provisions of this Subclause 10.1 (i) notify the Buyer of
          such delay and of the probable extent thereof, including, without
          limitation, a description of the cause thereof and, if possible, a
          possible date of rescheduled delivery in accordance with the terms of
          this Agreement, and after such prompt initial notice, apprise the
          Buyer of the status of such delay and possible date of such
          rescheduled delivery, and (ii) subject to the following provisions, as
          soon as practicable after the removal of the cause or causes for
          delay, resume the performance of those obligations affected under this
          Agreement. The Seller and the Manufacturer will endeavor to limit the
          extent of any such delay. The Seller will schedule the delivery of the
          Aircraft that is the subject of such delay to a date compatible with
          the Aircraft delivery schedule of the Buyer.

10.2      Unanticipated Delay
          -------------------

          In the event that the delivery of any Aircraft will be delayed by
          reason of an Excusable Delay for a period of more than twelve (12)
          months after the end of the calendar month in which delivery is
          otherwise required hereunder, the Buyer will be entitled to terminate
          this Agreement with respect only to the Aircraft so affected upon
          written notice given to the Seller within thirty (30)

                                      43



<PAGE>




          days after the expiration of such twelve (12) month period. In the
          event such delay will continue for an additional six (6) month period
          after the expiration of such twelve (12) month period, either party
          will have the option to terminate this Agreement with respect to the
          Aircraft so affected upon written notice given to the other within
          thirty (30) days after the end of such additional six (6) month
          period. Any termination of this Agreement in respect of an Aircraft
          pursuant to this Subclause 10.2 will discharge all obligations and
          liabilities of the parties hereunder with respect to such affected
          Aircraft, except that the Seller will repay to the Buyer, within three
          (3) Working Days of receipt of notice from the Buyer, an amount equal
          to the entire amount of any Predelivery Payments received from the
          Buyer hereunder with respect to such affected Aircraft, ***

10.3      Anticipated Delay
          -----------------

          In respect of any Aircraft, the Seller may conclude that Excusable
          Delays will (i) cause delay in delivery of such Aircraft for a period
          of more than twelve (12) months after the end of the calendar month in
          which delivery is otherwise required or (ii) prevent delivery of such
          Aircraft. In such event, in good faith and in accordance with its
          normal scheduling procedures, the Seller will give written notice to
          the Buyer of either (i) such delay and its related rescheduling
          reflecting such delay(s) or (ii) such nondelivery. Within thirty (30)
          days after the Buyer's receipt of such notice, the Buyer may terminate
          this Agreement as to such rescheduled or nondeliverable Aircraft by
          giving written notice to the Seller. Such termination will discharge
          all obligations and liabilities of the parties hereunder with respect
          to such affected Aircraft, except that the Seller will repay to the
          Buyer, within three (3) Working Days of the Buyer's giving notice to
          the Seller, an amount equal to the entire amount of any Predelivery
          Payment received from the Buyer hereunder with respect to such
          affected Aircraft, ***

10.4      Delivery Date
          -------------

          If, following notice of an anticipated delay under Subclause 10.3,
          this Agreement is not terminated in accordance with the provisions of
          Subclause 10.3 (with respect to the affected Aircraft), then the date
          of delivery otherwise required hereunder will be extended by a period
          equal to the delay specified in such notice, with a view towards
          having each Aircraft subject to such

                                      44



<PAGE>




          Excusable Delay ready for delivery as promptly as practicable.  ***


10.5      Lost, Destroyed or Damaged Aircraft
          -----------------------------------

          If any Aircraft suffers a total loss, is destroyed, or is damaged
          beyond economic repair prior to delivery thereof, then this Agreement
          will be terminated with respect to such Aircraft and the obligations
          and liabilities of the parties hereunder with respect to such Aircraft
          will be discharged. The Seller will repay to the Buyer an amount equal
          to the entire amount of any Predelivery Payments received from the
          Buyer hereunder with respect to any such Aircraft that is lost,
          destroyed or damaged beyond economic repair ***.

          ***

10.6      ***






10.7      ***








                                      45



<PAGE>




10.8      REMEDIES
          --------

          THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER
          FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS
          AS ARE COVERED BY CLAUSE 11, AND THE BUYER HEREBY WAIVES ALL RIGHTS,
          INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND
          CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE, TO WHICH IT WOULD
          OTHERWISE BE ENTITLED IN RESPECT THEREOF. THE BUYER WILL NOT BE
          ENTITLED TO CLAIM THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN
          THIS CLAUSE 10 TO THE EXTENT THE DELAY REFERRED TO IN THIS CLAUSE 10
          IS CAUSED BY THE NEGLIGENCE OR FAULT OF THE BUYER OR ITS
          REPRESENTATIVES.

                                      46



<PAGE>




11 -      INEXCUSABLE DELAY
          -----------------

11.1      Should an Aircraft not be ready for delivery to the Buyer within
          thirty (30) days after the date specified in this Agreement (as such
          date may otherwise be changed pursuant to this Agreement) for reasons
          other than as are covered by Clause 10 or for circumstances specified
          in Subclause 11.6 ("Inexcusable Delay"), the Buyer will, in respect of
          any subsequent delay in delivery of such Aircraft, have the right to
          claim and the Seller will in respect of any subsequent delay, at the
          Buyer's option, pay or credit to the Buyer as liquidated damages for
          such subsequent delay in delivery of such Aircraft US $ *** (US
          dollars--***) for each day of subsequent delay in the delivery, until
          the date of actual delivery or the effective date of the written
          notice of termination referred to in Subclause 11.4 plus any amount
          referred to in Subclause 11.4. ----

          The Seller will immediately after becoming aware of any Inexcusable
          Delay or any potential Inexcusable Delay (i) notify the Buyer of such
          delay and the probable extent thereof, including, when possible, a
          detailed description of the cause thereof and, if possible, a possible
          date of rescheduled delivery in accordance with the terms of this
          Agreement and after such immediate initial notice, apprise the Buyer
          of the status of such delay and possible date of such rescheduled
          delivery on a regular basis, and (ii) subject to the following provi
          sions, as soon as practicable after the removal of the cause or causes
          for delay, resume the performance of those obligations affected under
          this Agreement with a view towards having each Aircraft subject to
          such Inex cusable Delay ready for delivery as promptly as practicable.

11.2      Total Liability
          ---------------

          Notwithstanding Subclause 11.1, the total liability of the Seller
          under this Clause 11 and this Agreement with respect to any Aircraft
          will in no event exceed the total sum of US $ *** (US dollars-- *** )
          plus any amount referred to in Subclause 11.3 or 11.4.

11.3      ***
          ---------------------------------

          ***


                                      47



<PAGE>




11.4      Six-Month Delay
          ---------------

          In the event that an Inexcusable Delay exceeds six (6) months, the
          Buyer will have the right, exercisable by written notice to the Seller
          given no less than one (1) month and no more than two (2) months after
          such six (6) month period, to terminate this Agreement in respect only
          of the Aircraft that is subject to such Inexcusable Delay, whereupon
          the Seller will pay the Buyer, within one (1) month after such notice,
          an amount equal to all Predelivery Payments made by the Buyer to the
          Seller in relation to such Aircraft ***

11.5      ***
          ------------------------

          ***


11.6      ***
          ------------------------


11.6.1    ***


11.6.2    ***


11.6.3    ***


11.6.4    ***


                                      48



<PAGE>




11.6.5    ***


11.7      ***
          -------------------------

          ***



11.8      REMEDIES
          --------

          THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER
          FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS
          AS ARE COVERED BY CLAUSE 10, AND THE BUYER HEREBY WAIVES ALL RIGHTS,
          INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND
          CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE, TO WHICH IT WOULD
          OTHERWISE BE ENTITLED IN RESPECT THEREOF.

                                      49



<PAGE>




12 -      WARRANTIES AND SERVICE LIFE POLICY
          ----------------------------------

12.1      STANDARD WARRANTY
          -----------------

12.1.1    Nature of Warranty

12.1.2    Exceptions

12.1.3    Warranty Periods

12.1.4    Buyer's Remedy and Seller's Obligation

12.1.5    Warranty Claim Requirements

12.1.6    Warranty Administration

12.1.7    In-house Warranty

12.1.8    Standard Warranty Transferability

12.1.9    Warranty for Corrected, Replacement or Repaired Warranted Parts

12.1.10   Good Airline Operation - Normal Wear and Tear

12.2      SELLER SERVICE LIFE POLICY
          --------------------------

12.2.1    Definitions

12.2.2    Periods and Seller's Undertakings

12.2.3    Seller's Participation in the Cost

12.2.4    General Conditions and Limitations

12.2.5    Transferability

12.3      VENDOR WARRANTIES
          -----------------

12.3.1    Seller's Support

12.3.2    Vendor's Default

12.4      INTERFACE COMMITMENT
          --------------------

                                      50



<PAGE>




12.4.1    Interface Problem

12.4.2    Seller's Responsibility

12.4.3    Vendor's Responsibility

12.4.4    Joint Responsibility

12.4.5    General

12.5      Performance Standard

12.6      EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS  OF LIABILITY
          ---------------------------------------------------------------

12.7      DUPLICATE REMEDIES
          ------------------

12.8      SURVIVABILITY
          -------------

                                      51



<PAGE>




12 -      WARRANTIES AND SERVICE LIFE POLICY
          ----------------------------------

          The Seller, in its capacity as "Buyer" under its arrangements with the
          Manufacturer, has negotiated and obtained the following Standard
          Warranty, Service Life Policy, Vendor Warranties and Interface
          Commitment from the Manufacturer with respect to the Aircraft, subject
          to the terms, conditions, limitations and restrictions (including, but
          not limited to, the Exclusivity of Warranties and General Limitations
          of Liability and Duplicate Remedies provisions) all as hereinafter set
          out. The Seller hereby guarantees to the Buyer the performance by the
          Manufacturer of the Manufacturer's obligations and assigns to the
          Buyer, and the Buyer hereby accepts, all of the rights and obligations
          of the Seller in the Seller's capacity as "Buyer" as aforesaid under
          the said Standard Warranty, Service Life Policy, Vendor Warranties and
          Interface Commitment and the Seller subrogates the Buyer into all such
          rights and obligations in respect of the Aircraft. The Seller hereby
          warrants to the Buyer that the Seller has all requisite authority to
          make the foregoing assignment and effect the foregoing subrogation to
          and in favor of the Buyer and that the Seller will not enter into any
          amendment of the provisions so assigned without the prior written
          consent of the Buyer. Capitalized terms utilized in the following
          provisions have the meanings assigned thereto in this Agreement,
          except that the term "Seller" refers to the Manufacturer and the term
          "Buyer" refers to the Seller and cross-references herein refer to
          Clauses and Exhibits in this Agreement or to Paragraphs in any Letter
          Agreement hereto.

QUOTE

12.1      STANDARD WARRANTY
          -----------------

12.1.1    Nature of Warranty
          ------------------

          Subject to the limitations and conditions as hereinafter provided, and
          except as provided in Subclause 12.1.2, the Seller warrants to the
          Buyer that each Aircraft and each Warranted Part will at the time of
          delivery to the Buyer:

          (i)   be free from defects in material,

          (ii)  be free from defects in workmanship, including, without
                limitation, processes of manufacture,

          (iii) be free from defects in design (including, without limitation,
                selection of materials, parts and components) having regard to
                the state of the art at the date of such design,

                                      52



<PAGE>




          (iv)  be free from defects arising from failure to conform to the
                Specifications,

          (v)   permit complete interchangeability among Aircraft and parts of
                like part-numbered parts, and


          (vi) be free and clear of all liens and other encumbrances.

          For the purposes of this Agreement, the term "Warranted Part" will
          mean any Seller proprietary component, equipment, accessory or part
          that at the time of delivery of an Aircraft (a) is installed on or
          incorporated in such Aircraft, (b) is manufactured to the detail
          design of the Seller or a subcontractor of it and (c) bears a part
          number of the Seller.

12.1.2    Exceptions
          ----------

          The warranties set forth in Subclause 12.1.1 will not apply to Buyer
          Furnished Equipment, nor to engines, nor to any component, accessory,
          equipment or part purchased by the Buyer that is not a Warranted Part,
          provided, however, that:

          (i)   any defect in the Seller's workmanship in respect of the
                installation of such items in or on the Aircraft, including any
                failure by the Seller to conform to the installation
                instructions of the manufacturers of such items that invalidates
                any applicable warranty from such manufacturers, will constitute
                a defect in workmanship for the purpose of this Subclause 12.1
                and be covered by the warranty set forth in Subclause
                12.1.1(ii), and

          (ii)  any defect inherent in the Seller's design of the installation,
                in view of the state of the art at the date of such design, that
                impairs the use or function of such items will constitute a
                defect in design for the purposes of this Subclause 12.1 and be
                covered by the warranty set forth in Subclause 12.1.1(iii).

12.1.3    Warranty Periods
          ----------------

          The warranties described in Subclauses 12.1.1 and 12.1.2 hereinabove
          will be limited to those defects that become apparent within
          thirty-six (36) months after delivery of the affected Aircraft.

12.1.4    Buyer's Remedy and Seller's Obligation
          --------------------------------------

12.1.4.1  The Buyer's remedy and the Seller's obligation and liability under
          Subclauses 12.1.1 and 12.1.2 hereinabove are limited to, at the
          Seller's expense, the

                                      53



<PAGE>




          repair, replacement or correction of, or the supply of modifications
          kits rectifying the defect for, any defective Warranted Part, as
          mutually agreed between and satisfactory to the Buyer and the Seller.
          ***

          . Nothing herein contained will obligate the Seller to correct any
          failure to conform to the Specifications with respect to components,
          equipment, accessories or parts that the parties agree in writing at
          the time of delivery of the affected Aircraft are acceptable
          deviations or have no material adverse effect on the use, operation or
          performance of an Aircraft.

          ***



12.1.4.2  In the event a defect covered by Subclause 12.1.1 becomes apparent
          within the period set forth in Subclause 12.1.3 and the Seller is
          obligated to correct such defect, the Seller will also, if so
          requested by the Buyer in writing and if reasonably practicable, make
          such correction in any affected Aircraft that has not already been
          delivered to the Buyer.  Rather than accept a delay in delivery of any
          such Aircraft, the Buyer and the Seller may agree to deliver such
          Aircraft with subsequent correction of the defect by the Buyer at the
          Seller's expense, or the Buyer may elect to accept delivery and
          thereafter file a Warranty Claim as though the defect had become
          apparent immediately after delivery of such Aircraft.

12.1.4.3  ***



12.1.5    Warranty Claim Requirements
          ---------------------------

          The Buyer's remedy and the Seller's obligation and liability under
          this Subclause 12.1, with respect to each claimed defect, are subject
          to the

                                      54



<PAGE>




          following conditions precedent:

          (i)   the existence of a defect covered by the provisions of this
                Subclause 12.1,

          (ii)  the defect's having become apparent within the applicable
                warranty period, as set forth in Subclause 12.1.3,

          (iii) the Buyer's having returned as soon as reasonably practicable
                the Warranted Part claimed to be defective to such repair
                facilities as may be designated by the Seller (*** ), except
                where the Buyer elects to repair a defective Warranted Part in
                accordance with the provisions of Subclause 12.1.7, and

          (iv)  the Seller's having received a Warranty Claim fulfilling the
                conditions of and in accordance with the provisions of Subclause
                12.1.6 below.

12.1.6    Warranty Administration
          -----------------------

          The warranties set forth in Subclause 12.1 will be administered as
          hereinafter provided:

          (i)   Transportation Costs
                --------------------

                Transportation costs associated with the sending of a defective
                Warranted Part to the facilities designated by the Seller and
                for the return therefrom of a repaired or replacement Warranted
                Part will be borne by the Buyer ***.


          (ii)  Return of an Aircraft
                ---------------------

                In the event that the Buyer desires to return an Aircraft to the
                Seller for consideration of a Warranty Claim, the Buyer will
                notify the Seller of its intention to do so and the Seller will,
                prior to such return, have the right to inspect such Aircraft
                and thereafter, without prejudice to its rights hereunder, to
                repair such Aircraft, at its sole option, either at the Buyer's
                facilities, provided that space is available, or at another
                mutually acceptable location. Return of any Aircraft by the
                Buyer to the Seller and return of such Aircraft to the Buyer's
                facilities will be ***

                                      55



<PAGE>




          (iii) On-Aircraft Work by the Seller
                ------------------------------

                In the event that a defect subject to this Subclause 12.1 may
                justify the dispatch by the Seller of a working team to repair
                or correct such defect at the Buyer's facilities, or in the
                event of the Seller's accepting the return of an Aircraft to
                perform or have performed such repair or correction, ***


                as determined in accordance with in Subclause 12.1.7(v)(a).

                If the Seller is requested to perform the work, the Seller and
                the Buyer will agree on a schedule and place for the work to be
                performed.

          (iv)  Warranty Claim Substantiation
                -----------------------------

                For each claim under this Subclause 12.1, the Buyer will give
                written notice to the Seller that contains at least the
                following data, to the extent reasonably ascertainable,
                available and relevant, with respect to a part or Aircraft, as
                applicable ("Warranty Claim"). The absence of data from any
                Warranty Claim will not prejudice validity of such Warranty
                Claim. ***



                (a)  description of defect and action taken, if any,

                (b)  date of incident and/or of removal,

                (c)  description of the defective part,

                (d)  part number,

                (e)  serial number (if applicable),

                (f)  position on Aircraft, according to Catalog Sequence Number
                     (CSN) of the Illustrated Parts Catalog, Component
                     Maintenance Manual or Structural Repair Manual (as such
                     documents are defined in Clause 14 and Exhibit "F" hereto)
                     as applicable,

                                      56



<PAGE>




               (g)  total flying hours or calendar times, as applicable, at the
                    date of appearance of a defect,

               (h) time since last shop visit at the date of defect appearance,

               (i)  Manufacturer's serial number of the Aircraft and/or its
                    registration number,

               (j)  Aircraft total flying hours and/or number of landings at the
                    date of defect appearance,

               (k)  claim number,

               (l)  date of claim, and

               (m) date of delivery of an Aircraft or part to the Buyer.

               Claims are to be addressed as follows:

                    AIRBUS INDUSTRIE
                    CUSTOMER SERVICE DIVISION - SG-C
                    WARRANTY ADMINISTRATION
                    ROND-POINT MAURICE BELLONTE
                    F-31707 BLAGNAC
                    FRANCE

               or to the office of the Resident Customer Support Representatives
               assigned to the Buyer under Subclause 15.1.2 of this Agreement.

         (v)   Acceptance and Rejection
               ------------------------

               ***



               The Seller will provide reasonable written substantiation in case
               of rejection of a Warranty Claim. Transportation, insurance, and
               any other costs associated with the sending of any Warranted Part
               or any other item, equipment, component or part for which the
               Buyer's Warranty Claim is rejected by the Seller will be borne by
               the Buyer. The Buyer may at any time appeal the rejection with
               the Customer Support Director referred to in Subclause 15.3 of
               this Agreement.

                                       57



<PAGE>




         (vi)  Replacements
               ------------

               Replacements made pursuant to this Subclause 12.1 will be made
               within the lead time defined in the Seller's Spare Parts Price
               List. The Seller will use all reasonable efforts to achieve
               expedited handling of replacements. Replaced components,
               equipment, accessories or parts will become the Seller's
               property.

               Title to and risk of loss of any Aircraft, component, accessory,
               equipment or part returned by the Buyer to the Seller will at all
               times remain with the Buyer, except that (i) when the Seller has
               possession of a returned Aircraft, component, accessory,
               equipment or part to which the Buyer has title, the Seller will
               have such responsibility therefor as is chargeable by law to a
               bailee for hire, but the Seller will not be liable for loss of
               use, and (ii) title to and risk of loss of a returned component,
               accessory, equipment or part will pass to the Seller upon receipt
               by the Buyer of any item furnished by the Seller to the Buyer as
               a replacement therefor. Upon the Buyer's receipt of any
               replacement component, accessory, equipment or part provided by
               the Seller pursuant to this Subclause 12.1, title to and risk of
               loss of such component, accessory, equipment or part will pass to
               the Buyer.

         (vii) Inspection
               ----------

               The Seller will have the right to inspect the affected Aircraft
               and documents and other records relating thereto in the event of
               any claim under this Subclause 12.1, on reasonable prior written
               notice to the Buyer. Each such inspection will be made during
               reasonable times during the Buyer's normal business day and will
               not unreasonably interfere with the Buyer's operation or
               personnel.

12.1.7   In-house Warranty
         -----------------

         (i)   Authorization
               -------------

               The Buyer is hereby authorized to perform the repair of Warranted
               Parts, subject to the terms of this Subclause 12.1.7 ("In-house
               Warranty"). The Buyer will use reasonable efforts to notify the
               Seller's representative of its decision to perform any In-house
               repairs before such repairs are commenced, unless it is not
               practical to do so, in which case the Buyer will notify the
               Seller of the In-house repair as soon as reasonably practicable.

          (ii) Conditions of Authorization
               ---------------------------

               The Buyer will be entitled to the benefits under this Subclause
               12.1.7 for repair of Warranted Parts:

                                       58



<PAGE>




               (a)  ***


                                    , or

               (b) if the following conditions are satisfied:

                    (i)   only if adequate facilities and qualified personnel
                          are available to the Buyer,

                    (ii)  in accordance with the Seller's written instructions
                          set forth in documents such as the Aircraft
                          Maintenance Manual, Component Maintenance Manual
                          (Manufacturer), Component Maintenance Manual (Vendor)
                          and Structural Repair Manual, and

                    (iii) only to the extent reasonably necessary to correct the
                          defect.

         (iii) Seller's Rights
               ---------------

               The Seller will have the right to have any Warranted Part, or any
               part removed therefrom, which is claimed to be defective,
               returned to the Seller, as set forth in Subclause 12.1.6(i), if,
               in the judgment of the Seller, the nature of the defect requires
               technical investigation.

               Subject to applicable safety rules and the Buyer's contractual
               obligations with labor unions, the Seller will further have the
               right to have a representative present as an observer during the
               disassembly, inspection and testing of any Warranted Part claimed
               to be defective. Such representatives will not unreasonably
               interfere with the Buyer's operation and personnel.

                                       59



<PAGE>




         (iv)  In-house Warranty Claim Substantiation
               --------------------------------------

               Claims for In-house Warranty credit will be filed within the time
               period set forth in and will contain the same information
               required in Warranty Claims under Subclause 12.1.6(iv) and in
               addition, to the extent ascertainable, will include:

               (a)  a report of technical findings with respect to the defect,

               (b) for parts required to remedy the defect:

                    - part numbers,

                    - serial numbers (if applicable),

                    - description of the parts,

                    - quantity of parts,

                    - unit price of parts,

                    - total price of parts,

                    - related Seller's or third party's invoices (if
                      applicable),

               (c)  detailed number of labor hours,

               (d)  agreed In-house Warranty Labor Rate (defined below in
                    Subclause 12.1.7(v)(a)), and

               (e) total claim value.

         (v)   Credit
               ------

               The Buyer's sole remedy, and the Seller's sole obligation and
               liability, in respect of In-house Warranty claims, will be a
               credit to the Buyer's account. The credit to the Buyer's account
               will be equal to the direct labor cost expended in performing a
               repair and to the direct cost of materials associated with the
               repair. Such costs will be determined as set forth below.


               (a)  To determine direct labor costs, only man-hours spent on
                    disassembly, inspection, repair, reassembly, and final
                    inspection

                                       60



<PAGE>




                    and test (including flight tests if flight tests prove
                    necessary to complete a repair under the In-house Warranty)
                    of the Warranted Part will be counted. Man-hours required
                    for maintenance work concurrently being carried out on the
                    Aircraft or Warranted Part will not be included, ***



                    The man-hours counted as set forth above will be multiplied
                    by an agreed labor rate representing the Buyer's composite
                    average hourly labor rate (*** , including all ***
                              , social security charges, business taxes and
                    similar items, but excluding fringe benefits) paid to the
                    Buyer's employees whose jobs are directly related to the
                    performance of the repair (the "In-house Warranty Labor
                    Rate"). It is agreed that for the purpose hereof the In-
                    house Labor Rate is ***




               (b)  Direct material costs are determined by the prices at which
                    the Buyer acquired such replacement material, excluding any
                    parts and materials used for overhaul furnished free of
                    charge by the Seller.

         (vi)  Limitation on Credit
               --------------------

               The Buyer will in no event be credited for repair costs
               (including labor and material) for any Warranted Part exceeding
               sixty-five percent (65%) of the Seller's current catalog price
               for a replacement of such defective Warranted Part or exceeding
               those costs which would have resulted if repairs had been carried
               out at the Seller's facilities.

               Such cost will be substantiated in writing by the Seller upon
               reasonable request by the Buyer.

         (vii) Scrapped Material
               -----------------

               The Buyer will retain any Warranted Part defective beyond
               economic repair and any defective part removed from a Warranted
               Part during repair for a period of either one hundred and twenty
               (120) days after

                                       61



<PAGE>




               the date of completion of repair or ninety (90) days after
               submission of a claim for In-house Warranty credit relating
               thereto, whichever is longer. Such parts will be returned to the
               Seller within thirty (30) days of receipt of the Seller's request
               to that effect, at the Seller's cost.

               Notwithstanding the foregoing, the Buyer may, with the agreement
               of the Seller's Field Representative, scrap any such defective
               parts that are beyond economic repair and not required for
               technical evaluation.

        (viii) LIMITATIONS ON LIABILITY OF SELLER
               ----------------------------------

               THE SELLER WILL NOT BE LIABLE FOR ANY RIGHT, CLAIM OR REMEDY, AND
               THE BUYER WILL INDEMNIFY THE SELLER AGAINST THE CLAIMS OF ANY
               THIRD PARTIES FOR ANY DEFECT, NONCONFORMANCE OR PROBLEM OF ANY
               KIND, ARISING OUT OF OR IN CONNECTION WITH ANY REPAIR OF
               WARRANTED PARTS OR ANY OTHER ACTIONS UNDERTAKEN BY THE BUYER
               UNDER THIS SUBCLAUSE 12.1.7, INCLUDING BUT NOT LIMITED TO: (I)
               LIABILITY IN CONTRACT OR TORT, (II) LIABILITY ARISING FROM THE
               BUYER'S ACTUAL OR IMPUTED NEGLIGENCE, INTENTIONAL TORTS AND/OR
               STRICT LIABILITY, AND/OR (III) LIABILITY TO ANY THIRD PARTIES.

12.1.8   Standard Warranty Transferability
         ---------------------------------

         The warranties provided for in this Subclause 12.1 for any Warranted
         Part will accrue to the benefit of any owner, lessor, lessee or
         operator other than the Buyer, if the Warranted Part enters into the
         possession of any such owner, lessor, lessee or operator as a result of
         a sale, transfer, lease or other conveyance or as a result of a pooling
         or leasing agreement between such owner, lessor, lessee or operator and
         the Buyer (and its successors and assigns), in accordance with the
         terms and subject to the limitations and exclusions of the foregoing
         warranties, and to applicable laws or regulations.

12.1.9   Warranty for Corrected, Replacement or Repaired Warranted Parts
         ---------------------------------------------------------------

         Whenever any Warranted Part that contains a defect for which the Seller
         is liable under Subclause 12.1 has been corrected, repaired or replaced
         pursuant to the terms of this Clause 12, the period of the Seller's
         warranty with respect to such corrected, repaired or replacement
         Warranted Part, whichever may be the case, will be ***
                           . In the event that a defect is attributable to a
         defective repair or replacement by the Buyer, a Warranty Claim with
         respect to such defect will

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<PAGE>




          not be allowable, notwithstanding any subsequent correction or
          repairs.

12.1.10   Good Airline Operation - Normal Wear and Tear
          ---------------------------------------------

          The Buyer's rights under this Subclause 12.1 are subject to the
          Aircraft and each component, equipment, accessory and part thereof
          being maintained, overhauled, repaired and operated in accordance with
          ***.

          The Seller's liability under this Subclause 12.1 will not extend to
          normal wear and tear nor, to the extent caused by any of the
          following, to:

          (i)   any Aircraft or component, equipment, accessory or part thereof
                that has been repaired, altered or modified after delivery by a
                party other than the Seller or ***;

          (ii)  any Aircraft or component, equipment, accessory or part thereof
                that has been willfully operated in a damaged state (other than
                in the case of operational necessity); or

          (iii) any component, equipment, accessory or part from which the
                trademark, trade name, part or serial number or other
                identification marks have been removed.

          This limitation of the Seller's liability will apply in the cases of
          Subclause 12.1.10(i) and Subclause 12.1.10(ii) above only to the
          extent the Seller submits sufficient evidence proving that the defect
          arose from or was contributed to by either of said cases.

12.2      SELLER SERVICE LIFE POLICY
          --------------------------

          In addition to the warranties set forth in Subclause 12.1 above, the
          Seller further agrees that should a Failure occur in any Item, then,
          subject to the general conditions and limitations set forth in
          Subclause 12.2.4 below, the provisions of this Subclause 12.2 will
          apply.



12.2.1    Definitions
          -----------

          For the purposes of this Subclause 12.2, the following definitions
          will apply:

12.2.1.1  "Item" means any of the Seller components, equipment, accessories or
          parts

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<PAGE>




          listed in Exhibit "D" hereto which are installed on an Aircraft at any
          time during the period of effectiveness of the Service Life Policy as
          defined below in Subclause 12.2.

12.2.1.2  "Failure" means any breakage of, defect in or premature failure of, an
          Item that has occurred, or that can reasonably be expected to occur,
          based on the Seller's findings or the experience or expertise of the
          Buyer or any other owner or operator of the Seller's aircraft, and
          that materially impairs the utility or safety of the Item, provided
          that any such breakage of, or defect in, any Item did not result from
          any breakage or defect in any other Aircraft part or component or from
          any other extrinsic force, normally covered under hull insurance
          policy.

12.2.2    Periods and Seller's Undertaking
          --------------------------------

          Subject to the general conditions and limitations set forth in
          Subclause 12.2.4 below, the Seller agrees that if a Failure occurs in
          an Item within twelve (12) years after the delivery of said Aircraft
          to the Buyer, the Seller will, at its own discretion, as promptly as
          practicable and for a price that reflects the Seller's financial
          participation as hereinafter provided, either:

12.2.2.1  design and furnish to the Buyer a terminating correction for such Item
          subject to a Failure and provide any parts required for such
          correction (including Seller designed standard parts but excluding
          industry standard parts), or,

12.2.2.2  replace such Item.

12.2.3    Seller's Participation in the Cost
          ----------------------------------

          Any part or Item that the Seller is required to furnish to the Buyer
          under this Service Life Policy in connection with the correction or
          replacement of an Item will be furnished to the Buyer at the Seller's
          current sales price therefor, less the Seller's financial
          participation, which will be determined in accordance with the
          following formula:

                                       64



<PAGE>




                  C  (N - T)
               ----------------
          P =                  N

          where

          P:   financial participation of the Seller,

          C:   the Seller's then current sales price for the required Item or
               required Seller designed parts,

          T:   total time in months since delivery of the particular Aircraft in
               which the Item subject to a Failure was originally installed, and

          N:   one hundred and forty-four (144) months.

12.2.4    General Conditions and Limitations
          ----------------------------------

12.2.4.1  Notwithstanding Subclause 12.2.3, the undertakings given in this
          Subclause 12.2 will not be valid during the period applicable to an
          Item under Subclause 12.1.

12.2.4.2  The Buyer's remedy and the Seller's obligation and liability under
          this Service Life Policy are subject to compliance by the Buyer with
          the following conditions precedent:

          (i)   ***, the Buyer will maintain log books and other historical
                records with respect to each Item adequate to enable
                determination as to whether the alleged Failure is covered by
                this Service Life Policy and, if so, to define the portion of
                the cost to be borne by the Seller in accordance with Subclause
                12.2.3 above.

          (ii)  ***, the Buyer will keep the Seller informed of any significant
                incidents relating to an Aircraft, howsoever occurring or
                recorded.

          (iii) The conditions of Subclause 12.1.10 will have been complied
                with.

          (iv)  The Buyer will carry out specific structural inspection programs
                for monitoring purposes as may be established from time to time
                by the Seller and the Buyer. Such programs will be compatible
                with the Buyer's operational requirements and will be carried
                out at *** .

          (v)   In the case of any breakage or defect, *** , after any

                                       65



<PAGE>




                breakage or defect in an Item becomes apparent, whether or not
                said breakage or defect can reasonably be expected to occur in
                any other Aircraft, and the Buyer will inform the Seller in
                sufficient detail about the breakage or defect to enable the
                Seller to determine whether said breakage or defect is subject
                to this Service Life Policy, to the extent the Buyer has such
                information available.

12.2.4.3  Except as otherwise provided in this Subclause 12.2, any claim under
          this Service Life Policy will be administered as provided in, and will
          be subject to the terms and conditions of, Subclause 12.1.6.

12.2.4.4  In the event that the Seller will have issued a modification
          applicable to an Aircraft, the purpose of which is to avoid a Failure,
          the Seller will offer the necessary modification kit free of charge or
          under a prorata formula established by the Seller.  If such a kit is
          so offered to the Buyer, then, in respect of such Failure and any
          Failures that could ensue therefrom, the validity of the Seller's
          commitment under this Subclause 12.2 will be subject to the Buyer's
          incorporating such modification in the relevant Aircraft, within a
          reasonable time, as promulgated by the Seller and in accordance with
          the Seller's instructions.

          ***



12.2.4.5  THIS SERVICE LIFE POLICY IS NEITHER A WARRANTY, PERFORMANCE GUARANTEE,
          NOR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME COMPONENTS TO
          CONFORM TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF AIRFRAME DESIGN
          AND MANUFACTURING ART.  THE SELLER'S OBLIGATION UNDER THIS SUBCLAUSE
          12.2 IS TO MAKE ONLY THOSE CORRECTIONS TO THE ITEMS OR FURNISH
          REPLACEMENTS THEREFOR AS PROVIDED IN THIS SUBCLAUSE 12.2. THE BUYER'S
          SOLE REMEDY AND RELIEF FOR THE NONPERFORMANCE OF ANY OBLIGATION OR
          LIABILITY OF THE SELLER ARISING UNDER OR BY VIRTUE OF THIS SERVICE
          LIFE POLICY WILL BE IN MONETARY DAMAGES, LIMITED TO THE AMOUNT THE
          BUYER REASONABLY EXPENDS IN PROCURING A CORRECTION OR REPLACEMENT FOR
          ANY ITEM THAT IS THE SUBJECT OF A FAILURE COVERED BY THIS SERVICE LIFE
          POLICY AND TO WHICH SUCH NONPERFORMANCE IS RELATED, LESS THE AMOUNT
          THAT THE BUYER OTHERWISE WOULD HAVE BEEN REQUIRED TO PAY UNDER THIS
          SUBCLAUSE 12.2 IN RESPECT OF SUCH CORRECTED OR REPLACEMENT ITEM.
          WITHOUT LIMITING

                                       66



<PAGE>




          THE EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY
          PROVISIONS SET FORTH IN SUBCLAUSE 12.5, THE BUYER HEREBY WAIVES,
          RELEASES AND RENOUNCES ALL CLAIMS TO ANY FURTHER DIRECT, INCIDENTAL OR
          CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS AND ALL OTHER RIGHTS,
          CLAIMS AND REMEDIES, ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE
          POLICY.

12.3      VENDOR WARRANTIES
          -----------------

12.3.1    Seller's Support
          ----------------

          Prior to delivery of the first Aircraft, the Seller will obtain from
          all Vendors listed in the Supplier Product Support Agreements manual
          enforceable and transferable warranties, service life policies, and
          indemnities against patent infringements for Vendor Parts. The Seller
          will also obtain enforceable and transferable Vendor service life
          policies from landing gear Vendors for selected structural landing
          gear elements. The Seller undertakes to supply to the Buyer such
          Vendor warranties, Vendor service life policies and indemnities
          against patent infringements substantially in the form summarized in
          the Supplier Product Support Agreements manual.

12.3.2    Vendor's Default
          ----------------

12.3.2.1  In the event that any Vendor under any standard warranty or indemnity
          against patent infringements obtained by the Seller pursuant to
          Subclause 12.3.1 or Clause 13 hereof defaults in the performance of
          any material obligation under such warranty or indemnity against
          patent infringements with respect to a Vendor Part, and the Buyer
          submits within a reasonable time to the Seller reasonable evidence
          that such default has occurred, then Subclause 12.1 or Clause 13 of
          this Agreement will apply to the extent the same would have been
          applicable had such Vendor Part been a Warranted Part except that, for
          obligations covered under Subclause 12.1, the shorter of (i) the
          Vendor's warranty period as indicated in the Supplier Product Support
          Agreements manual and (ii) the Seller's warranty period as indicated
          in Subclause 12.1.3 of this Agreement will apply.

12.3.2.2  In the event that any Vendor under any Vendor service life policy
          obtained by the Seller pursuant to Subclause 12.3.1 hereof defaults in
          the performance of any material obligation with respect thereto, and
          the Buyer submits within reasonable time to the Seller reasonable
          evidence that such default has occurred, then Subclause 12.2 of this
          Agreement will apply to the extent the same would have been applicable
          had such component, equipment, accessory or part been listed in
          Exhibit "D" hereto.

12.3.2.3  At the Seller's request, the Buyer will assign to the Seller, and the
          Seller will be subrogated to, all of the Buyer's rights against the
          relevant Vendor, with

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<PAGE>




          respect to and arising by reason of such default and the Buyer will
          provide reasonable assistance to enable the Seller to enforce the
          rights so assigned.

12.4      INTERFACE COMMITMENT
          --------------------

12.4.1    Interface Problem
          -----------------

          If the Buyer experiences any technical problem in the operation of an
          Aircraft or its systems due to a malfunction, the cause of which,
          after due and reasonable investigation, is not readily identifiable by
          the Buyer, but which the Buyer reasonably believes to be attributable
          to the design characteristics of one or more components of the
          Aircraft (an "Interface Problem"), the Seller will, if requested by
          the Buyer, and without additional charge to the Buyer, promptly
          conduct or have conducted an investigation and analysis of such
          problem to determine, if possible, the cause or causes of the problem
          and to recommend such corrective action as may be feasible. The Buyer
          will furnish to the Seller all data and information in the Buyer's
          possession relevant to the Interface Problem and will reasonably
          cooperate with the Seller in the conduct of the Seller's
          investigations and such tests as may be required.

          At the conclusion of such investigation the Seller will promptly
          advise the Buyer in writing of the Seller's opinion as to the cause or
          causes of the Interface Problem and the Seller's recommendations as to
          corrective action.

12.4.2    Seller's Responsibility
          -----------------------

          If the Interface Problem is attributable to the design of a Warranted
          Part, the Seller will, if requested by the Buyer, take prompt action
          to correct the design of such Warranted Part, pursuant to the terms
          and conditions of Subclause 12.1 or 12.2, as applicable.

12.4.3    Vendor's Responsibility
          -----------------------

          If the Interface Problem is attributable to the design of a component,
          equipment, accessory or part other than a Warranted Part ("Vendor
          Component"), the Seller will, if requested by the Buyer, promptly
          assist and cooperate with the Buyer in processing and enforcing any
          warranty claim the Buyer may have against the manufacturer of such
          Vendor Component. Further, ***

12.4.4    Joint Responsibility
          --------------------

                                       68



<PAGE>




          If the Interface Problem is attributable partially to the design of a
          Warranted Part and partially to the design of any Vendor Component,
          the Seller will, if requested by the Buyer, seek a solution to the
          Interface Problem through cooperative efforts of the Seller and any
          Vendor involved. The Seller will promptly advise the Buyer of such
          corrective action as may be proposed by the Seller and any such
          Vendor. Such proposal will be consistent with any then existing
          obligations of the Seller hereunder and of any such Vendor to the
          Buyer. When the Seller or any Vendor has performed such corrective
          action to the reasonable satisfaction of the Buyer, such correction
          will constitute full satisfaction of any claim the Buyer may have
          against either the Seller or any such Vendor with respect to such
          Interface Problem.

12.4.5    All requests under this Subclause 12.4 will be directed to the Seller.

12.5      Performance Standard 
          --------------------

          ***




12.6      EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY
          --------------------------------

          THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS AND RELATED LETTER
          AGREEMENTS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES
          AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES
          AVAILABLE TO THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE,
          ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY
          AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART OR SERVICE DELIVERED
          UNDER THIS AGREEMENT.

          THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS
          CLAUSE 12 (AND RELATED LETTER AGREEMENTS) ARE ADEQUATE AND SUFFICIENT
          TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF
          ANY KIND IN THE GOODS AND SERVICES SUPPLIED UNDER THIS AGREEMENT. THE
          BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES,
          OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER
          RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER
          EXPRESS OR IMPLIED

                                       69



<PAGE>




         BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY
         NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT,
         COMPONENT, EQUIPMENT, ACCESSORY, PART OR SERVICE DELIVERED UNDER THIS
         AGREEMENT, INCLUDING BUT NOT LIMITED TO, UNLESS OTHERWISE PROVIDED FOR
         IN THIS CLAUSE 12 (AND RELATED LETTER AGREEMENTS):

         (1)  ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
              PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

         (2)  ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

         (3)  ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF
              LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS
              AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS,
              WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT
              LIABILITY OR FAILURE TO WARN;

         (4)  ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL
              CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

         (5)  ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
              STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL
              STATUTE OR AGENCY;

         (6)  ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

              (a)  LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT,
                   EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

              (b)  LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT,
                   EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

              (c)  LOSS OF PROFITS AND/OR REVENUES;

              (d)  ANY OTHER INCIDENTAL OR CONSEQUENTIAL

                                       70



<PAGE>




          DAMAGE.

          THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT WILL
          NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT
          SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF
          THIS CLAUSE 12 (AND RELATED LETTER AGREEMENTS) SHOULD FOR ANY REASON
          BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS
          CLAUSE 12 (AND RELATED LETTER AGREEMENTS) WILL REMAIN IN FULL FORCE
          AND EFFECT.

12.7      DUPLICATE REMEDIES
          ------------------

          THE REMEDIES PROVIDED TO THE BUYER UNDER THIS CLAUSE 12 (AND RELATED
          LETTER AGREEMENTS) AS TO ANY DEFECT IN RESPECT OF THE AIRCRAFT OR ANY
          PART THEREOF ARE NOT CUMULATIVE. THE BUYER WILL BE ENTITLED TO THE ONE
          REMEDY THAT PROVIDES THE MAXIMUM BENEFIT TO IT, AS THE BUYER MAY
          ELECT, PURSUANT TO THE TERMS AND CONDITIONS OF THIS CLAUSE 12 (AND
          RELATED LETTER AGREEMENTS) FOR ANY SUCH PARTICULAR DEFECT FOR WHICH
          REMEDIES ARE PROVIDED UNDER THIS CLAUSE 12 (AND RELATED LETTER
          AGREEMENTS); PROVIDED, HOWEVER, THAT, ALTHOUGH THE BUYER MAY
          SIMULTANEOUSLY PURSUE MULTIPLE REMEDIES FOR THE SAME DEFECT, THE BUYER
          WILL NOT BE ENTITLED TO ELECT A REMEDY UNDER ONE PART OF THIS CLAUSE
          12 (AND RELATED LETTER AGREEMENTS) THAT CONSTITUTES A DUPLICATION OF
          ANY REMEDY ELECTED BY IT UNDER ANY OTHER PART HEREOF FOR THE SAME
          DEFECT.

          THE BUYER'S RIGHTS AND REMEDIES HEREIN FOR THE NONPERFORMANCE OF ANY
          OBLIGATIONS OR LIABILITIES OF THE SELLER ARISING UNDER THESE
          WARRANTIES WILL BE IN MONETARY DAMAGES LIMITED TO THE AMOUNT THE BUYER
          EXPENDS IN PROCURING A CORRECTION OR REPLACEMENT FOR ANY COVERED PART
          SUBJECT TO A DEFECT OR NONPERFORMANCE COVERED BY THIS CLAUSE 12 (AND
          RELATED LETTER AGREEMENTS).

          UNQUOTE

          IN CONSIDERATION OF THE ASSIGNMENT AND SUBROGATION BY THE SELLER UNDER
          THIS CLAUSE 12 (AND RELATED LETTER

                                       71



<PAGE>




          AGREEMENTS) IN FAVOR OF THE BUYER IN RESPECT OF THE SELLER'S RIGHTS
          AGAINST AND OBLIGATIONS TO THE MANUFACTURER UNDER THE PROVISIONS
          QUOTED ABOVE, THE BUYER HEREBY ACCEPTS SUCH ASSIGNMENT AND SUBROGATION
          AND AGREES TO BE BOUND BY ALL OF THE TERMS, CONDITIONS AND LIMITATIONS
          THEREIN CONTAINED, SPECIFICALLY INCLUDING, WITHOUT LIMITATION, THE
          EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY
          PROVISIONS AND DUPLICATE REMEDIES PROVISIONS.

          THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS AND RELATED LETTER
          AGREEMENTS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES
          AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES
          AVAILABLE TO THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE,
          ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY
          AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART OR SERVICE DELIVERED
          UNDER THIS AGREEMENT.

          THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS
          CLAUSE 12 (AND RELATED LETTER AGREEMENTS) ARE ADEQUATE AND SUFFICIENT
          TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF
          ANY KIND IN THE GOODS AND SERVICES SUPPLIED UNDER THIS AGREEMENT. THE
          BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES,
          OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER
          RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER
          EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE,
          WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN
          ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART OR SERVICE
          DELIVERED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO, UNLESS
          OTHERWISE PROVIDED FOR IN THIS CLAUSE 12 (AND RELATED LETTER
          AGREEMENTS):

          (1)  ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
               PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

          (2)  ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

                                       72



<PAGE>




          (3)  ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF
               LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO,
               ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE,
               INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT
               LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

          (4)  ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL
               CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

          (5)  ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
               STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL
               STATUTE OR AGENCY;

          (6)  ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

               (a)  LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT,
                    EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

               (b)  LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT,
                    EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

               (c)  LOSS OF PROFITS AND/OR REVENUES;

               (d)  ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

          THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT WILL
          NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT
          SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF
          THIS CLAUSE 12 (AND RELATED LETTER AGREEMENTS) SHOULD FOR ANY REASON
          BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS
          CLAUSE 12 (AND RELATED LETTER AGREEMENTS) WILL REMAIN IN FULL FORCE
          AND EFFECT.

          The remedies provided to the Buyer under this Clause 12 (and related
          Letter Agreements) as to any defect in respect of the Aircraft or any
          part thereof are

                                       73



<PAGE>




          not cumulative. The Buyer will be entitled to the one remedy that
          provides the maximum benefit to it, as the Buyer may elect, pursuant
          to the terms and conditions of this Clause 12 (and related Letter
          Agreements) for any such particular defect for which remedies are
          provided under this Clause 12 (and related Letter Agreements);
          provided, however, that, ***

                   , the Buyer will not be entitled to elect a remedy under one
          part of this Clause 12 (and related Letter Agreements) that
          constitutes a duplication of any remedy elected by it under any other
          part hereof for the same defect. ***


12.8      SURVIVABILITY
          -------------

          In respect of all delivered Aircraft, the provisions of this Clause 12
          (and related Letter Agreements) will survive any termination of this
          Agreement.

                                       74



<PAGE>




13 -      PATENT INDEMNITY
          ----------------

          The Seller, in its capacity as "Buyer" under its arrangements with the
          Manufacturer, has negotiated and obtained the following Patent
          Indemnity from the Manufacturer with respect to the Aircraft, subject
          to the terms, conditions, limitations and restrictions (including, but
          not limited to, the waiver, release and renunciation provision) all as
          hereinafter set out. The Seller hereby guarantees to the Buyer the
          performance by the Manufacturer of the Manufacturer's obligations and
          assigns to the Buyer, and the Buyer hereby accepts, all of the rights
          and obligations of the Seller in the Seller's capacity as "Buyer" as
          aforesaid under the said Patent Indemnity and the Seller subrogates
          the Buyer into all such rights and obligations in respect of the
          Aircraft. The Seller hereby warrants to the Buyer that the Seller has
          all requisite authority to make the foregoing assignment and effect
          the foregoing subrogation to and in favor of the Buyer and that the
          Seller will not enter into any amendment of the provisions so assigned
          without the prior written consent of the Buyer. Capitalized terms
          utilized in the following provisions have the meanings assigned
          thereto in this Agreement, except that the term "Seller" refers to the
          Manufacturer and the term "Buyer" refers to the Seller and
          cross-references herein refer to Clauses and Exhibits in this
          Agreement or to Paragraphs in any Letter Agreement hereto.

QUOTE

13.1      Scope
          -----

          The Seller will indemnify the Buyer from and against any damages,
          costs and expenses including reasonable legal costs (excluding
          damages, costs, expenses, loss of profits and other liabilities in
          respect of or resulting from loss of use of any Aircraft) in case of
          any actual or alleged infringement by any Aircraft or any Warranted
          Part or the use thereof of

          (i)  any British, French, German, Spanish or US patent, or

          (ii) any patent issued under the laws of any other country in which
               the Buyer may lawfully operate the Aircraft, provided that

               (a)  from the time of design of such Aircraft, accessory,
                    equipment or part and until infringement claims are
                    resolved, such country and the flag country of the Aircraft
                    is each a party to the Chicago Convention on International
                    Civil Aviation of December 7, 1944, and is bound by and
                    entitled to all benefits of Article 27 thereof,

               or in the alternative,

                                       75



<PAGE>




               (b)  from such time of design and until infringement claims are
                    resolved, such country and the flag country of the Aircraft
                    is each a party to the International Convention for the
                    Protection of Industrial property of March 20, 1883 (known
                    as the "Paris Convention").

          The Seller's undertaking under this Clause 13 will not apply to
          components, accessories, equipment or parts which are not Warranted
          Parts.

13.2      Seller's Action
          ---------------

          Should the Buyer be enjoined (temporarily or permanently) from using
          any part of an Aircraft by reason of actual or alleged infringement of
          a patent covered by Subclause 13.1, the Seller will as soon as
          practicable, after good faith consultation with the Buyer and at the
          Seller's expense, either (i) procure for the Buyer the right to use
          such part free of any liability for patent infringement or (ii) as
          soon as possible replace such part with a non-infringing substitute
          otherwise complying with the requirements of this Agreement.

13.3      Seller's Obligation
          -------------------

          The Seller's obligation hereunder with respect to any actual or
          alleged infringement is conditioned upon commencement of suit against
          the Buyer for infringement or the Buyer's receipt of a written claim
          alleging infringement, and upon written notice by the Buyer to the
          Seller within ten (10) days after receipt by the Buyer of notice of
          the institution of such suit or claim, giving particulars thereof. The
          Seller will have the option but not the obligation at any time to
          conduct negotiations with the party or parties charging infringement
          and may intervene in any suit commenced. Whether or not the Seller
          intervenes in any such suit, it will be entitled at any stage of the
          proceedings to assume, conduct or control the defense thereof.

          The Seller's obligation hereunder with respect to any actual or
          alleged infringement is also conditioned upon (i) the Buyer's promptly
          furnishing to the Seller all the data, papers, records and other
          assistance within the control of the Buyer material to the resistance
          of or defense against any such charge or suits for infringement, (ii)
          the Buyer's use of diligent efforts in full cooperation with the
          Seller to reduce royalties, damages, costs and expenses involved,
          (iii) the Seller's prior approval of the Buyer's payment, assumption
          or admission of any liabilities, expenses, costs or royalties for
          which the Seller is asked to respond and (iv) the Buyer's not
          otherwise acting in a manner prejudicial to its or the Seller's
          defense of the action.

                                       76



<PAGE>




13.4      WAIVER
          ------

          THE INDEMNITY PROVIDED IN THIS CLAUSE 13 AND THE OBLIGATIONS AND
          LIABILITIES OF THE SELLER UNDER THIS CLAUSE 13 ARE EXCLUSIVE AND IN
          SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES
          ALL OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS, GUARANTEES AND
          LIABILITIES ON THE PART OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES
          OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR
          OTHERWISE (INCLUDING WITHOUT LIMITATION ANY OBLIGATION, LIABILITY,
          RIGHT, CLAIM OR REMEDY ARISING FROM OR WITH RESPECT TO LOSS OF USE OR
          REVENUE OR CONSEQUENTIAL DAMAGES), WITH RESPECT TO ANY ACTUAL OR
          ALLEGED PATENT INFRINGEMENT OR THE LIKE BY ANY AIRCRAFT, ACCESSORY,
          EQUIPMENT OR PART, OR THE USE OR SALE THEREOF, PROVIDED THAT, IN THE
          EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE
          HELD UNLAWFUL OR OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS
          SUBCLAUSE 13.4 WILL REMAIN IN FULL FORCE AND EFFECT. THIS PATENT
          INDEMNITY WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN
          INSTRUMENT SIGNED BY THE SELLER AND THE BUYER.

UNQUOTE

          In consideration of the assignment and subrogation by the Seller under
          this Clause 13 in favor of the Buyer in respect of the Seller's rights
          against and obligations to the Manufacturer under the provisions
          quoted above, the Buyer hereby accepts such assignment and subrogation
          and agrees to be bound by all of the terms, conditions and limitations
          therein contained (specifically including, without limitation, the
          waiver, release and renunciation provision).

          THE INDEMNITY PROVIDED IN THIS CLAUSE 13 AND THE OBLIGATIONS AND
          LIABILITIES OF THE SELLER UNDER THIS CLAUSE 13 ARE EXCLUSIVE AND IN
          SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES
          ALL OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS, GUARANTEES AND
          LIABILITIES ON THE PART OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES
          OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR
          OTHERWISE (INCLUDING WITHOUT LIMITATION ANY OBLIGATION, LIABILITY,
          RIGHT, CLAIM OR REMEDY ARISING FROM OR WITH RESPECT TO LOSS OF USE OR
          REVENUE OR CONSEQUENTIAL DAMAGES),

                                       77



<PAGE>




          WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT INFRINGEMENT OR THE LIKE
          BY ANY AIRCRAFT, ACCESSORY, EQUIPMENT OR PART, OR THE USE OR SALE
          THEREOF, PROVIDED THAT, IN THE EVENT THAT ANY OF THE AFORESAID
          PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE
          INEFFECTIVE, THE REMAINDER OF THIS CLAUSE WILL REMAIN IN FULL FORCE
          AND EFFECT. THIS PATENT INDEMNITY WILL NOT BE EXTENDED, ALTERED OR
          VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE
          BUYER.

13.5      SURVIVABILITY
          -------------

          In respect of all delivered Aircraft, the provisions of this Clause 13
          will survive any termination of this Agreement.

                                       78



<PAGE>




14 -      TECHNICAL PUBLICATIONS
          ----------------------

14.1      Scope
          -----

          The Seller will provide the Buyer or cause the Buyer to be provided
          with a set of technical publications to support the operation of the
          Aircraft in accordance with the terms set forth in this Clause 14 (the
          "Technical Publications"). Such Technical Publications are listed in
          Exhibit "F" of this Agreement together with the form, type, format and
          quantity of each such Technical Publication.

14.2      Specification
          -------------

14.2.1    The Technical Publications are prepared according to applicable ATA
          specifications. Exhibit "F" references the relevant ATA specification
          for each affected Technical Publication.

14.2.2    Technical Publications will be customized as indicated in Exhibit "F."
          ***.

14.2.3    Technical Publications at delivery of the Aircraft will correspond to
          the Specifications of the Aircraft as defined at least six (6) months
          before such delivery. The Seller will continuously monitor
          technological and ATA specification developments and apply them to the
          production and method of transmission of Technical Publications.

14.3      Delivery
          --------

          The Technical Publications and corresponding revisions that the Seller
          will supply or cause to be supplied in accordance with the terms of
          this Clause 14 will be sent to one address only, as defined by the
          Buyer.

          The quantities of the Technical Publications to be delivered on or
          before the delivery of the first Aircraft will be mutually agreed. The
          Seller will send or cause to be sent additional quantities of
          Technical Publications as required by the Buyer upon thirty (30) days'
          prior notice.

          Technical Publications and their revisions will be shipped by the
          quickest transportation methods.  The shipments ***

                                       79



<PAGE>




14.4      Language
          --------

          The Technical Publications (including drawings) will be supplied in
          the English language using aeronautical terminology in common use.

14.5      Revision Service
          ----------------

14.5.1    General
          -------

          Unless otherwise specifically stated, ***


14.5.2    Service Bulletins
          -----------------

          Service Bulletin (SB) information will be incorporated into the
          Technical Publications after notice from the Buyer of embodiment of a
          Service Bulletin. The split effectivity for the corresponding Service
          Bulletin will remain in the Technical Publications until notification
          from the Buyer that embodiment of such Service Bulletin has been
          completed for all the Aircraft.

14.5.3    Customer Originated Changes
          ---------------------------

14.5.3.1  Buyer-originated data documented in the Buyer's own Request for
          Publication Change ("Customer Originated Changes" or "COC") may be
          introduced into the following customized Technical Publications:

          (i)    Aircraft Maintenance Manual
          (ii)   Illustrated Parts Catalog
          (iii)  Trouble Shooting Manual
          (iv)   Wiring Manual (Schematics, Wirings, Lists)

14.5.3.2  The Buyer will issue COC in accordance with the provisions of the
          "Guidelines for Customer Originated Changes" issued by the Seller and
          will label such data "COC."

14.5.3.3  The Seller will use all reasonable efforts to introduce the COC into
          the relevant Technical Publications as soon as possible following the
          receipt of complete and accurate data for processing, but no later
          than two (2) revisions after submission of the COC.

14.5.3.4  COC data will be incorporated by the Seller in all affected customized
          Technical Publications, unless the Buyer specifies in writing to the
          Seller into

                                       80



<PAGE>




          which Technical Publications the COC data will be incorporated. The
          customized Technical Publications into which the COC data are
          incorporated will only show the Aircraft configuration that reflects
          the COC data and not the configuration before incorporation of such
          COC data.

14.5.3.5  The Buyer hereby acknowledges and accepts that the incorporation of
          any COC into the Technical Publication issued by or caused to be
          issued by the Seller will be entirely at the Buyer's risk.
          Accordingly, the Seller will be under no liability whatsoever in
          respect of either the engineering contents of any COC, including any
          omissions or inaccuracies therein, or the effect that incorporation of
          such COC may have on the Technical Publications.

14.5.3.6  The Seller will not be required to check any COC data submitted for
          incorporation as aforementioned, and the Buyer will ensure that all
          COC data submitted for incorporation into a Technical Publication have
          received prior approval from its local airworthiness authority.

14.5.3.7  IN THE EVENT THAT THE SELLER AND/OR THE MANUFACTURER IS REQUIRED UNDER
          ANY COURT ORDER OR SETTLEMENT TO INDEMNIFY IN WHOLE OR IN PART ANY
          THIRD PARTY FOR INJURY, LOSS OR DAMAGE INCURRED DIRECTLY OR INDIRECTLY
          AS A RESULT OF INCORPORATION OF ANY COC INTO THE TECHNICAL
          PUBLICATIONS ISSUED OR CAUSED TO BE ISSUED BY THE SELLER, THE BUYER
          AGREES TO DEFEND, INDEMNIFY OR HOLD HARMLESS THE SELLER AND/OR THE
          MANUFACTURER FOR ALL PAYMENTS OR SETTLEMENTS MADE IN RESPECT OF SUCH
          INJURY, LOSS OR DAMAGE INCLUDING ANY EXPENSES INCURRED BY THE SELLER
          AND/OR THE MANUFACTURER IN DEFENDING SUCH CLAIMS, PROVIDED THAT THE
          BUYER IS PROVIDED AN OPPORTUNITY TO ASSUME THE DEFENSE AND/OR A
          SETTLEMENT OF SUCH CLAIM.  THIS INDEMNIFICATION BY THE BUYER WILL IN
          NO EVENT BE AFFECTED BY ANY WRITTEN OR ORAL COMMUNICATION THAT THE
          SELLER OR THE MANUFACTURER MAY MAKE TO THE BUYER IN RESPECT OF SUCH
          DOCUMENTATION.

14.5.3.8  The price for the incorporation of any COC as aforesaid will be
          invoiced to the Buyer under conditions specified in the Seller's then
          current Support Services Price Catalog. ***


14.6      Vendor Equipment
          ----------------

                                       81



<PAGE>




14.6.1    Information relating to Vendor equipment that is installed on the
          Aircraft by the Seller will be included free of charge in the basic
          issue of the Technical Publications, to the extent necessary for the
          understanding of the systems concerned.

14.6.2    The Buyer will supply or cause to be supplied to the Seller the data
          related to Buyer Furnished Equipment and Seller Furnished Equipment
          not covered in the Seller's standard Seller Furnished Equipment
          definition at least six (6) months before the scheduled delivery of
          the customized Technical Publications.

14.6.3    The Seller will introduce into the basic issue of the Technical
          Publications the data related to Buyer Furnished Equipment and Seller
          Furnished Equipment, at no charge to the Buyer.

14.7      Aircraft Identification for Technical Publications
          --------------------------------------------------

          For the customized Technical Publications the Buyer agrees to the
          allocation of Fleet Serial Numbers from 001 up to 999. The sequence
          will be interrupted only if two (2) different Propulsion Systems
          manufacturers are selected and/or different aircraft models are
          chosen.

          The Buyer will indicate to the Seller the Fleet Serial Number
          allocated to the Aircraft Manufacturer's Serial Number within
          forty-five (45) days after execution of this Agreement. The allocation
          of Fleet Serial Numbers to Manufacturer's Serial Numbers will not
          constitute any proprietary, insurable or other interest whatsoever of
          the Buyer in any Aircraft prior to delivery of and payment for such
          Aircraft as provided in this Agreement.

          The relevant customized Technical Publications are:

          (i)    Aircraft Maintenance Manual
          (ii)   Illustrated Parts Catalog
          (iii)  Trouble Shooting Manual
          (iv)   Wiring Manuals (Schematics, Wirings, Lists)

14.8      Airworthiness Authority
          -----------------------

          It will be the responsibility of the Buyer to provide its local
          airworthiness authority with such Technical Publications as it may
          require, using the Technical Publications delivered by the Seller to
          the Buyer in accordance with the terms hereof.

14.9      Additional Requirements
          -----------------------

                                       82



<PAGE>




          If feasible the Seller will comply with the Buyer's request to change
          the form, quantity, type and/or revisions of any of the data specified
          in Exhibit "F," upon receipt of the Buyer's purchase order. The
          charges for such changes will be invoiced to the Buyer under
          conditions specified in the Seller's then current Support Services
          Price Catalog.

14.10     Future Developments
          -------------------

          The Seller will continuously monitor technological developments and
          apply them to document production and method of transmission where
          beneficial and economical.

14.11     Proprietary Rights
          ------------------

14.11.1   All proprietary rights, including but not limited to patent, design
          and copyrights, relating to Technical Publications and data supplied
          under this Agreement, will remain with the Seller.  All such Technical
          Publications and data are supplied to the Buyer for the sole use of
          the Buyer, who undertakes not to divulge the contents thereof to any
          third party save as permitted therein, or as provided in Subclause
          14.11.2, or otherwise pursuant to any governmental or legal
          requirement imposed upon the Buyer.  These proprietary rights will
          also apply to any translation into a language or languages or media
          that may have been performed or caused to be performed by the Buyer.

14.11.2   This Agreement does not restrict the Buyer from using any Technical
          Publications or data supplied by the Seller for the purpose of
          maintenance, repair or modification of Aircraft. ***



14.11.3   Drawings of the Manufacturer are provided to the Buyer under the
          express condition that the Manufacturer will have no liability,
          whether in contract or tort, arising from or in connection with the
          use of a drawing of the Manufacturer by the Buyer.

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<PAGE>




14.11.4   In the event that the Seller has authorized the disclosure to third
          parties, either under this Agreement or by express written
          authorization, the Buyer will undertake to bind such third party to
          the same conditions and restrictions as the Buyer with respect to such
          disclosure, as set forth in this Subclause 14.11.

14.12     Warranties as to Technical Publications
          ---------------------------------------

          The Seller warrants that the Technical Publications are prepared in
          accordance with the state of the art at the date of their conception.
          Should a Technical Publication prepared by the Seller contain errors
          or omissions, the sole and exclusive liability of the Seller will be,
          at its option, to correct or replace such Technical Publication. ***

                   . Notwithstanding the above, no warranties of any kind are
          given for the Customer Originated Changes, as set forth in Subclause
          14.5.3. The Exclusivity of Warranties and General Limitations of
          Liability provisions of Subclause 12.6 of this Agreement will apply to
          all Technical Publications.

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15 -      FIELD ASSISTANCE
          ----------------

15.1      Seller's Service
          ----------------

15.1.1    The Seller will provide or cause to be provided at no charge to the
          Buyer the following services at the Buyer's main base or at locations
          to be designated by the Buyer.

15.1.2    The Seller will provide Resident Customer Support Representatives
          acting in an advisory capacity at the Buyer's main base ***

                   .  The actual number of Resident Customer Support
          Representatives allocated to the Buyer will be mutually agreed.

15.1.3    If requested by the Buyer, the Seller will arrange for similar
          services to be procured by competent representatives of the Propulsion
          Systems manufacturer and, by representatives of Vendors (other than
          Vendors of Buyer Furnished Equipment).

15.1.4    The Seller will provide one (1) Customer Support Director based in
          Herndon, Virginia, to liaise between the Manufacturer and the Buyer on
          product support matters after execution of this Agreement for as long
          as any of the Aircraft is operated by the Buyer.

15.2      Buyer's Service
          ---------------

          For as long as the Customer Support Representative(s) specified in
          Subclause 15.1.1 above remain(s) with the Buyer, the Buyer will
          furnish without charge, suitable office space, office equipment and
          facilities in or conveniently near the Buyer's maintenance facilities.
          The Buyer will provide telecommunications facilities at the Seller's
          cost to be invoiced on a monthly basis.

15.3      Advisory Capacity
          -----------------

          In providing the technical services contemplated by this Agreement,
          all of the Seller's, Manufacturer's and Associated Contractors, and
          any of their employees, representatives, or agents are deemed to be
          acting in an advisory capacity only and at no time will they be deemed
          to be acting, either directly or indirectly, as the agents or
          employees of the Buyer.

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<PAGE>




15.4      Temporary Assignment of Customer Support Representative
          -------------------------------------------------------

          The Buyer agrees that the Seller will have the right upon notice to
          and consultation with the Buyer to transfer or recall any Customer
          Support Representative(s) on a temporary or permanent basis. The Buyer
          will receive credit for the man-days during which any Customer Support
          Representative is absent from the Buyer's facility pursuant to this
          Subclause 15.4.

15.5      INDEMNITY AND INSURANCE
          -----------------------

15.5.1    SCOPE
          -----

          IN CONNECTION WITH THE PROVISION OF SERVICES UNDER THIS CLAUSE 15, THE
          BUYER AND THE SELLER PROVIDE THE INDEMNITIES SET FORTH IN SUBCLAUSES
          15.5.2 AND 15.5.3.

15.5.2    BUYER'S INDEMNITY
          -----------------

          THE BUYER WILL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE
          MANUFACTURER, ASC AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR
          RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE AFFILIATES, DIRECTORS,
          OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES,
          DAMAGES, LOSSES, LOSS OF USE, COSTS AND EXPENSES

          (I)  FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO
               AND DEATHS OF THE SELLER'S REPRESENTATIVES PROVIDING THE SERVICES
               UNDER THIS CLAUSE) CAUSED BY THE SELLER OR ITS REPRESENTATIVES,
               AND

          (II) FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO
               PROPERTY OF THE SELLER'S SAID REPRESENTATIVES), CAUSED BY THE
               SELLER OR ITS REPRESENTATIVES.

          ARISING OUT OF OR IN CONNECTION WITH THE PROVISION OF SERVICES UNDER
          THIS CLAUSE 15.

                                       86



<PAGE>




          THIS INDEMNITY OF THE BUYER WILL NOT APPLY FOR ANY SUCH LIABILITIES,
          DAMAGES, LOSSES, COSTS OR EXPENSES ARISING OUT OF OR CAUSED BY THE
          WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE SELLER'S, THE
          MANUFACTURER'S OR ANY OF THE ASSOCIATED CONTRACTORS' OR THEIR
          RESPECTIVE SUBCONTRACTORS' OR THEIR RESPECTIVE OFFICERS', AGENTS' OR
          EMPLOYEES' SAID REPRESENTATIVES.

15.5.3    SELLER'S INDEMNITY
          ------------------

          THE SELLER WILL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS DIRECTORS,
          OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES,
          DAMAGES, LOSSES, COSTS AND EXPENSES

          (I)    FOR INJURIES TO OR DEATHS OF THE SELLER'S SAID REPRESENTATIVES
                 PROVIDING THE SERVICES UNDER THIS CLAUSE,

          (II)   FOR LOSS OF OR DAMAGE TO PROPERTY OF THE SELLER'S SAID
                 REPRESENTATIVES, AND

          (III)  ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS
                 NEGLIGENCE OF THE SELLER'S SAID REPRESENTATIVES.
          WITH RESPECT TO SUBCLAUSES (I) AND (II) OF THE PRECEDING SENTENCE, THE
          SELLER WILL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS THE BUYER
          WHERE THE SELLER'S LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES
          ARISE FROM THE BUYER'S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.

15.5.4    CLAIMS
          ------

          IN THE EVENT ANY CLAIM IS MADE OR LAWSUIT IS BROUGHT AGAINST EITHER
          PARTY (OR ITS RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES) FOR
          DAMAGES FOR DEATH OR INJURY OR FOR PROPERTY DAMAGE, THE LIABILITY FOR
          WHICH HAS BEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUBCLAUSE
          15.5, THE FORMER (INDEMNITEE) WILL PROMPTLY GIVE NOTICE TO THE OTHER
          PARTY (INDEMNITOR), AND THE INDEMNITOR WILL HAVE THE RIGHT TO
          INVESTIGATE, AND THE RIGHT IN ITS SOLE DISCRETION TO ASSUME AND
          CONDUCT THE DEFENSE OF OR SETTLE OR COMPROMISE, SUCH CLAIM, ACTION,
          PROCEEDING OR LAWSUIT.

                                       87



<PAGE>




          HOWEVER, IF IN THE REASONABLE OPINION OF THE INDEMNITEE, SUCH DEFENSE,
          SETTLEMENT OR COMPROMISE INVOLVES THE POTENTIAL IMPOSITION OF CRIMINAL
          LIABILITY ON THE INDEMNITEE OR A CONFLICT OF INTEREST BETWEEN THE
          INDEMNITOR AND THE INDEMNITEE, THE INDEMNITOR WILL NOT BE ENTITLED TO
          ASSUME AND CONDUCT THE DEFENSE OF ANY SUCH CLAIM, ACTION, PROCEEDING
          OR LAWSUIT. THE INDEMNITEES WILL BE ENTITLED, AT THEIR OWN EXPENSE,
          ACTING THROUGH ONE (1) COUNSEL, TO PARTICIPATE IN ANY CLAIM, ACTION,
          PROCEEDING OR LAWSUIT THE DEFENSE OF WHICH HAS BEEN ASSUMED BY THE
          INDEMNITOR PURSUANT TO THE PRECEDING PROVISIONS, PROVIDED, THAT SUCH
          PARTICIPATION DOES NOT, IN THE REASONABLE OPINION OF INDEPENDENT
          COUNSEL OF THE INDEMNITOR, INTERFERE WITH THE CONDUCT OF SUCH DEFENSE.
          NOTWITHSTANDING ANYTHING TO THE CONTRARY, NO SETTLEMENT OR COMPROMISE
          WILL BE ENTERED INTO WITHOUT THE PRIOR WRITTEN CONSENT OF THE
          INDEMNITEE, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD OR
          DELAYED. EACH INDEMNITEE WILL COOPERATE WITH THE INDEMNITOR IN THE
          INVESTIGATION AND CONDUCT OF THE DEFENSE OF ANY CLAIM, ACTION,
          PROCEEDING OR LAWSUIT INDEMNIFIED HEREUNDER.

          IN THE EVENT THAT THE INDEMNITOR DOES NOT ASSUME AND CONDUCT THE
          DEFENSE OF THE CLAIM OR LAWSUIT, THEN THE INDEMNITEE WILL HAVE THE
          RIGHT TO PROCEED WITH THE DEFENSE OF THE CLAIM OR LAWSUIT AS IT DEEMS
          APPROPRIATE AND WILL HAVE AN ACTION AGAINST THE INDEMNITOR FOR ANY
          JUDGMENTS, SETTLEMENTS, COSTS OR EXPENSES INCURRED IN CONDUCTING SAID
          DEFENSE. FOR THE PURPOSE OF THIS SUBCLAUSE 15.5, A CLAIM OR LAWSUIT
          AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY
          OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE
          DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES WILL BE DEEMED TO BE A CLAIM
          OR LAWSUIT AGAINST THE SELLER.

15.5.5    INSURANCE
          ---------

          FOR THE PERIOD OF PERFORMANCE DESCRIBED IN THIS CLAUSE, THE BUYER WILL

          (I)  INDEMNIFY AND WAIVE ANY RIGHTS OF RECOURSE OR SUBROGATION AGAINST
               THE SELLER, THE MANUFACTURER AND ASC, AND EACH OF THE ASSOCIATED
               CONTRACTORS AND THEIR RESPECTIVE

                                       88



<PAGE>




               SUBCONTRACTORS AND THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS,
               EMPLOYEES AND SUBCONTRACTORS IN RESPECT OF ALL RISKS HULL
               INSURANCE POLICY, AND

          (II) EFFECT INSURANCE TO COVER THIRD-PARTY LIABILITY RISKS ARISING
               DURING SAID PERFORMANCE IN AN AMOUNT SATISFACTORY TO THE SELLER,
               NAMING THE SELLER AND ITS DIRECTORS, OFFICERS, AGENTS AND
               EMPLOYEES AS ADDITIONAL INSURED.

          SUCH INSURANCE WILL CONTAIN A CROSS-LIABILITY CLAUSE AND WILL ALSO
          CONTAIN A THIRTY (30)-DAY NOTICE-OF-CANCELLATION PROVISION. UPON
          REQUEST, THE BUYER WILL DELIVER TO THE SELLER A CERTIFICATE OF
          INSURANCE EVIDENCING THE COVERAGE REQUIRED BY THIS CLAUSE.


                                       89



<PAGE>




16 -      TRAINING
          --------

16.1      Scope
          -----

          The Seller will provide or cause to be provided for the Buyer's
          personnel training described in this Clause 16 ("Training").

16.2      Course Organization and Administration
          --------------------------------------

16.2.1    Location and Scheduling
          -----------------------

          In general, Training will be held either at the Airbus Service Company
          Training Center, in Miami, Florida (the "ATC-Miami"), or at the Airbus
          Training Center in Toulouse, France (the "ATC-Toulouse"). Subject to
          availability of training slots at the time and at the selected
          location, the location of the Training will be at the Buyer's choice.
          The Seller will ensure that the Buyer's training plans (to be provided
          to the Seller reasonably in advance of the delivery of Aircraft) are
          implemented for a safe and smooth entry-into-service of the Aircraft.
          However, certain Training courses may also be held at the Buyer's base
          or other location, if practicable, under terms and conditions to be
          mutually agreed. The Buyer's training plans will include: (i)
          just-in-time (determined on a reasonable basis) training of flight
          crews, (ii) all necessary simulator time for regular transition
          courses, and (iii) aircraft experience for check pilots, and (iv)
          maintenance, dispatch and flight attendant training.

          Training courses will be scheduled for a minimum and maximum number of
          participants, at dates mutually agreed during a training conference to
          be held as soon as practicable (the "Training Conference").

16.2.2    Course Content
          --------------

          Training courses will include features of the Specifications required
          for training purposes, as known at the latest six (6) months before
          the first Training course starts. The Seller will endeavor to
          incorporate training features that become known after the six-month
          deadline. When the Seller does not provide maintenance or flight
          attendant training on the Seller's approved Buyer Furnished Equipment,
          the Seller will ensure that the Buyer gets the relevant training
          support from the supplier of the said equipment. Training courses will
          be FAA approved "Transition Courses." The Seller will provide the
          Buyer with A319/A320/A321 differences training for flight crew,
          maintenance, dispatch and/or flight attendant personnel.

          Training equipment used for flight and maintenance crew training will
          reflect

                                       90



<PAGE>




          the Specifications as closely as possible and will meet requirements
          to receive and maintain the relevant FAA course approval. Maintenance
          training will not assume prior knowledge of any Airbus aircraft. The
          Seller will be responsible for all Training course syllabi, training
          aids, equipment and materials.

16.2.3    Course Guidelines
          -----------------

          Courses are designed and approved to bring jet transport specialists
          to a professional knowledge of the Aircraft and satisfy FAA
          requirements for training and checking. The Seller will use reasonable
          efforts to satisfy the Buyer's requirements and policies regarding
          training.

          In addition:

          (i)   Training will be conducted in English, and all training
                materials are written in English using common aeronautical
                terminology.

          (ii)  Pilot trainees will have the prerequisite jet transport category
                experience defined in Appendix "A" to this Clause 16.

          (iii) Avionics courses (listed in Appendix "B" to this Clause 16) are
                designed for avionics specialists knowledgeable of ARINC 429
                liaisons.

          (iv)  The Buyer will give the Seller a list of trainees enrolling in
                each Training course.

          (v)   The Seller will not be liable for the unsatisfactory performance
                of individual trainees for any reason solely and directly
                outside the Seller's control.

          (vi)  The Seller will consult with the Buyer if the Seller finds that
                a trainee lacks entry-level knowledge. After such consultation,
                the trainee will either be cycled through an entry-level
                training program or be withdrawn from the Training course. All
                costs associated with such entry-level program and with the
                cancellation of the scheduled transition training will be
                charged to the Buyer's account.

          (vii) The Seller will give all trainees who satisfactorily complete
                Training courses a certificate of completion including the
                instructor's name and identification number. This certificate
                will not represent authority or qualification by any official
                civil aviation authority, although it may be presented to such
                authority as an attestation of completion of the Seller's
                training courses.

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<PAGE>




          (viii) An extension in duration, a repetition or a deviation from the
                 standard of any course to be given or in progress (for reasons
                 due to the Buyer, including, but not limited to, unsatisfactory
                 performance of the trainees) will be provided on the Buyer's
                 request and/or on the Seller's advice and subject to mutual
                 agreement. ***




16.2.4    Additional Training
          -------------------

          Besides the free-of-charge Training courses provided pursuant to
          Subclause 16.3, the Seller will offer additional training courses and
          training services at the Buyer's expense, subject to availability.

16.2.5    Training at the Buyer's Base
          ----------------------------

16.2.5.1  At the Buyer's request, and if practicable, the Training will be
          provided by the Seller's instructors at any location other than ATC-
          Miami or ATC-Toulouse. ***



          The Buyer may provide the Seller with air travel for the Seller's
          instructors to and from ATC-Miami or ATC-Toulouse, as applicable, and
          the place of assignment.

16.2.5.2  The Training equipment necessary for course performance on the Buyer's
          request at any location other than ATC-Miami or ATC-Toulouse will be
          provided by the Buyer in accordance with the Seller's specifications.
          In the event the Buyer cannot make available the relevant equipment,
          the Seller will use reasonable efforts to provide this equipment and
          send it  by air from Miami, Florida, or Toulouse, France, to the
          course location and back to Miami, Florida, or Toulouse, France,  at
          the Buyer's expense.

16.2.6    Practical Training on Aircraft
          ------------------------------

16.2.6.1  ***

16.2.6.2  Any *** Flight Crew Training involving the use of an aircraft will be
          done on the Buyer's delivered Aircraft. Should the Buyer require on-
          aircraft Flight

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<PAGE>




          Crew Training to be done before delivery of the first Aircraft, then

          (i)  the Seller will help the Buyer find a substitute aircraft, and

          (ii)  ***.

          When on-aircraft Flight Crew Training is performed at ATC-Toulouse,
          the Seller will provide free-of-charge line maintenance, including
          servicing, preflight checks and changing of minor components for the
          contractual training sessions. In the case that the training is
          performed on the Buyer's aircraft, the Buyer will provide a mutually
          agreed batch of spare parts as required to support said training and
          will bear all other expenses such as fuel, oil and landing fees. In
          the event that the Seller is not able to provide sufficient simulator
          time to train the Buyer's crews, and it becomes necessary to use the
          Aircraft instead, the Seller will compensate the Buyer US$ *** (US
          dollars--*** ) (in 1996 dollars) per flight hour.

          Finally, the Buyer will meet the requirement for a certificate of
          insurance set forth below in Subclause 16.6.5.

16.2.7    Buyer's Personnel Transportation
          --------------------------------

          When flight crew, flight attendant, dispatch and maintenance Training
          is done at ATC-Toulouse, the Seller will provide free-of-charge local
          transportation by bus for the Buyer's trainees to and from designated
          pick-up points and the training center. The Seller will also provide
          each flight crew with a rental car (with unlimited mileage, the Buyer
          paying for gas) or taxi transportation at the end of ground school to
          enable crews to attend either simulator or flight sessions.

          When training is done at ATC-Miami, the Seller will provide a free-of-
          charge rental car (with unlimited mileage, the Buyer paying for gas)
          or taxi transportation for all of the Buyer's trainees, at the
          beginning of the Training course. Due to local laws, the Buyer's
          trainees must be over twenty-one (21) years of age to drive rental
          cars.

16.2.8    Duration
          --------

          The Training allowances provided in Subclause 16.3 will be available
          ***            .

16.3      Training Courses
          ----------------

16.3.1    Flight Crew Courses
          -------------------

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<PAGE>




16.3.1.1  Flight Crew Transition Course
          -----------------------------

          The Seller will train free of charge *** flight crews (each of which
          consists of a captain and a first officer) per delivered Aircraft in
          accordance with the Buyer's operational requirements. The training
          manual will be the Airbus Industrie Flight Crew Operating Manual
          (FCOM) or the Buyer's flight crew training manual at the Buyer's
          option. The Buyer's standard operating procedures will be incorporated
          into the Seller's Flight Crew Transition course, provided that the
          Buyer provides the Seller such procedures at least one (1) month prior
          to the start of the first Flight Crew Transition course. The Buyer
          will receive no compensation from the Seller should the Buyer elect to
          perform some Flight Crew Transition courses partially or totally on
          dry lease.

16.3.1.2  Flight Crew Initial Operating Experience
          ----------------------------------------

          To assist the Buyer with Initial Operating Experience during the
          Buyer's introduction of the Aircraft into revenue service, the Seller
          will provide the Buyer instructor-pilots free of charge *** . This
          assistance will be provided on the Aircraft.

          ***



16.3.1.3  Flight Instructor Familiarization Course
          ----------------------------------------

          The Seller will provide a certain number of the Buyer's Instructor
          pilots with a Flight Instructor Familiarization Course.

16.3.2    Maintenance Courses
          -------------------

16.3.2.1  Maintenance Training
          --------------------

          The Seller will provide free-of-charge Training courses for ground
          personnel for a total of *** trainee-days of instruction. The range of
          maintenance courses is listed in Appendix "B" to this Clause 16. The
          Buyer may elect to use part of this Training allowance to perform some
          maintenance training classes at another US carrier on a space
          available basis.

          The trainee days will be counted as follows:

          (i)  For instruction at ATC-Miami or at ATC-Toulouse, the total number
               of trainee days counted will be the number of trainees enrolled
               at the beginning of a Training course multiplied by the number of
               days of

                                       94



<PAGE>




                instruction.

          (ii)  For instruction at locations other than the ATC-Miami or at the
                ATC-Toulouse, the total number of trainee days counted will be
                the greater of twelve (12) and the number of trainees enrolled
                at the beginning of a Training course multiplied by the number
                of days of detachment of the Seller's instructor(s).

16.3.2.2  Maintenance Initial Operating Experience
          ----------------------------------------

          To help the Buyer with maintenance Initial Operating Experience, such
          as Aircraft handling and servicing, flight crew and maintenance
          coordination, use of manuals and any other activities that the
          instructor might deem necessary after delivery of the first Aircraft,
          the Seller will provide the Buyer free of charge *** maintenance
          instructor-days at the Buyer's base. Additional Initial Operating
          Experience will be provided at the Buyer's expense.

16.3.3    Flight Attendants/Operations/Performance Courses
          ------------------------------------------------

          The Seller will provide free of charge *** trainee days of instruction
          to be used for the training courses listed in Appendix "C" to this
          Clause 16. In the event the Buyer would like the main features of the
          Specifications to be covered during the aircraft visit of the Flight
          Attendants Familiarization Course, such visit may be given as of two
          (2) weeks before delivery of the first Aircraft.

16.3.4    Familiarization Training
          ------------------------

          At the Buyer's request the Seller will conduct general familiarization
          courses for the Buyer's employees. Training allowance in Subclause
          16.3.2.1 will be used to cover such courses.

16.3.5    Vendors and Engine Manufacturer Training
          ----------------------------------------

          The Seller will ensure that the major Vendors and the Propulsion
          Systems manufacturer will provide maintenance and overhaul training on
          their products at appropriate times as required by the Buyer.

          A list of such major Vendors will be supplied to the Buyer on request.

16.4      Training Aids and Materials
          ---------------------------

16.4.1    Training Aids for Trainees at the Seller's Training Centers
          -----------------------------------------------------------

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<PAGE>




          For the purposes of this Subclause 16.4.1, it is understood that
          training aids and materials provided to the Buyer's trainees by the
          Seller (a) are supplied for the sole and express purpose of providing
          Training in the courses described in Subclause 16.3 of this Agreement
          and therefore are labeled "For Training Only," (b) are free of charge,
          (c) include all cockpit layouts, all printed course materials,
          including manuals and supporting documents. Computer hardware,
          software and Courseware (including simulators and simulator data
          packages) and all other equipment will be provided to the trainees
          solely for use during the Seller's training courses.

          Since the Training is for the Buyer's trainees only, the Buyer
          undertakes not to divulge the contents of any training aids or
          materials to any third party without the prior agreement of the
          Seller, save as required pursuant to any governmental, contractual or
          legal requirement imposed upon the Buyer or as permitted by Subclause
          16.4.2.

16.4.2    Training Aids for the Buyer's Training Organization
          ---------------------------------------------------

          The Seller will provide free of charge *** of the Courseware related
          to the Aircraft and similar to that used by the Seller for the Buyer's
          training organization, except as provided in this Subclause 16.4.2.
          Such Courseware will be for the training of the Buyer's personnel only
          and will include a revision service ***
                                                       .

          The Courseware to be provided to the Buyer will be:

          (i)  supplied with a license in the Buyer's name, and

          (ii) compatible with the hardware platform defined by the Aviation
               Industry CBT Committee (AICC), which is fully approved by the Air
               Transport Association and International Air Transport
               Association.

          ***



          Any additional sets of Courseware and/or any extension to the Buyer's
          right to use such Courseware will be subject to terms and conditions
          to be mutually agreed. General conditions for the supply of the
          Courseware will apply and will be detailed during the Training
          Conference.

                                       96



<PAGE>




          ***



16.5      Seller's Support
          ----------------

          The Seller will help the Buyer with the development and introduction
          of Aircraft training programs at the Buyer's training center, on the
          Buyer's request and terms to be agreed. The Seller will provide free-
          of-charge technical assistance in modifying the standard Courseware
          routers to the Buyer's in-house training programs.

16.6      INDEMNITY AND INSURANCE
          -----------------------

16.6.1    SCOPE
          -----

          IN CONNECTION WITH THE PROVISION OF SERVICES UNDER THIS CLAUSE 16, THE
          BUYER AND THE SELLER PROVIDE THE INDEMNITIES SET FORTH IN SUBCLAUSES
          16.6.2 AND 16.6.3.

16.6.2    BUYER'S INDEMNITY
          -----------------

          THE BUYER WILL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE
          MANUFACTURER, AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR
          RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE AFFILIATES, DIRECTORS,
          OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES,
          DAMAGES, LOSSES, LOSS OF USE, COSTS AND EXPENSES

          (I)  FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO
               AND DEATHS OF THE SELLER'S REPRESENTATIVES PROVIDING THE SERVICES
               UNDER THIS CLAUSE) CAUSED BY THE SELLER OR ITS REPRESENTATIVES,
               AND

          (II) FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO
               PROPERTY OF THE SELLER'S SAID REPRESENTATIVES), CAUSED BY THE
               SELLER OR ITS REPRESENTATIVES.

          ARISING OUT OF OR IN CONNECTION WITH THE PROVISION OF SERVICES UNDER
          THIS CLAUSE 16.

          THIS INDEMNITY OF THE BUYER WILL NOT APPLY FOR ANY SUCH LIABILITIES,
          DAMAGES, LOSSES, COSTS OR EXPENSES

                                       97



<PAGE>




          ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE
          OF THE SELLER'S, THE MANUFACTURER'S OR ANY OF THE ASSOCIATED
          CONTRACTORS' OR THEIR RESPECTIVE SUBCONTRACTORS' OR THEIR RESPECTIVE
          OFFICERS', AGENTS' OR EMPLOYEES' SAID REPRESENTATIVES.

16.6.3    SELLER'S INDEMNITY
          ------------------

          THE SELLER WILL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS DIRECTORS,
          OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES,
          DAMAGES, LOSSES, COSTS AND EXPENSES

          (I)   FOR INJURIES TO OR DEATHS OF THE SELLER'S SAID REPRESENTATIVES
                PROVIDING THE SERVICES UNDER THIS CLAUSE,

          (II)  FOR LOSS OF OR DAMAGE TO PROPERTY OF THE SELLER'S SAID
                REPRESENTATIVES, AND

          (III) ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS
                NEGLIGENCE OF THE SELLER'S SAID REPRESENTATIVES.

          WITH RESPECT TO SUBCLAUSES (I) AND (II) OF THE PRECEDING SENTENCE, THE
          SELLER WILL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS THE BUYER
          WHERE THE SELLER'S LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES
          ARISE FROM THE BUYER'S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.

16.6.4    CLAIMS
          ------

          IN THE EVENT ANY CLAIM IS MADE OR LAWSUIT IS BROUGHT AGAINST EITHER
          PARTY (OR ITS RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES) FOR
          DAMAGES FOR DEATH OR INJURY OR FOR PROPERTY DAMAGE, THE LIABILITY FOR
          WHICH HAS BEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUBCLAUSE
          16.6, THE FORMER (INDEMNITEE) WILL PROMPTLY GIVE NOTICE TO THE OTHER
          PARTY (INDEMNITOR), AND THE INDEMNITOR WILL HAVE THE RIGHT TO
          INVESTIGATE, AND THE RIGHT IN ITS SOLE DISCRETION TO ASSUME AND
          CONDUCT THE DEFENSE OF OR SETTLE OR COMPROMISE, SUCH CLAIM, ACTION,
          PROCEEDING OR LAWSUIT.

          HOWEVER, IF IN THE REASONABLE OPINION OF THE INDEMNITEE, SUCH DEFENSE,
          SETTLEMENT OR COMPROMISE INVOLVES THE POTENTIAL IMPOSITION OF CRIMINAL
          LIABILITY

                                       98



<PAGE>




          ON THE INDEMNITEE OR A CONFLICT OF INTEREST BETWEEN THE INDEMNITOR AND
          THE INDEMNITEE, THE INDEMNITOR WILL NOT BE ENTITLED TO ASSUME AND
          CONDUCT THE DEFENSE OF ANY SUCH CLAIM, ACTION, PROCEEDING OR LAWSUIT.
          THE INDEMNITEES WILL BE ENTITLED, AT THEIR OWN EXPENSE, ACTING THROUGH
          ONE (1) COUNSEL, TO PARTICIPATE IN ANY CLAIM, ACTION, PROCEEDING OR
          LAWSUIT THE DEFENSE OF WHICH HAS BEEN ASSUMED BY THE INDEMNITOR
          PURSUANT TO THE PRECEDING PROVISIONS, PROVIDED, THAT SUCH
          PARTICIPATION DOES NOT, IN THE REASONABLE OPINION OF INDEPENDENT
          COUNSEL OF THE INDEMNITOR, INTERFERE WITH THE CONDUCT OF SUCH DEFENSE.
          NOTWITHSTANDING ANYTHING TO THE CONTRARY, NO SETTLEMENT OR COMPROMISE
          WILL BE ENTERED INTO WITHOUT THE PRIOR WRITTEN CONSENT OF THE
          INDEMNITEE, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD OR
          DELAYED. EACH INDEMNITEE WILL COOPERATE WITH THE INDEMNITOR IN THE
          INVESTIGATION AND CONDUCT OF THE DEFENSE OF ANY CLAIM, ACTION,
          PROCEEDING OR LAWSUIT INDEMNIFIED HEREUNDER.

          IN THE EVENT THAT THE INDEMNITOR DOES NOT ASSUME AND CONDUCT THE
          DEFENSE OF THE CLAIM OR LAWSUIT, THEN THE INDEMNITEE WILL HAVE THE
          RIGHT TO PROCEED WITH THE DEFENSE OF THE CLAIM OR LAWSUIT AS IT DEEMS
          APPROPRIATE AND WILL HAVE AN ACTION AGAINST THE INDEMNITOR FOR ANY
          JUDGMENTS, SETTLEMENTS, COSTS OR EXPENSES INCURRED IN CONDUCTING SAID
          DEFENSE. FOR THE PURPOSE OF THIS SUBCLAUSE 16.6, A CLAIM OR LAWSUIT
          AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY
          OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE
          DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES WILL BE DEEMED TO BE A CLAIM
          OR LAWSUIT AGAINST THE SELLER.



16.6.5    INSURANCE
          ---------

          FOR THE PERIOD OF PERFORMANCE DESCRIBED IN THIS CLAUSE, THE BUYER WILL

          (I)  INDEMNIFY AND WAIVE ANY RIGHTS OF RECOURSE OR SUBROGATION AGAINST
               THE SELLER, THE MANUFACTURER, AND EACH OF THE ASSOCIATED
               CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR
               RESPECTIVE DIRECTORS,

                                       99



<PAGE>




               OFFICERS, AGENTS, EMPLOYEES AND SUBCONTRACTORS IN RESPECT OF ALL
               RISKS HULL INSURANCE POLICY, AND

          (II) EFFECT INSURANCE TO COVER THIRD-PARTY LIABILITY RISKS ARISING
               DURING SAID PERFORMANCE IN AN AMOUNT SATISFACTORY TO THE SELLER,
               NAMING THE SELLER AND ITS DIRECTORS, OFFICERS, AGENTS AND
               EMPLOYEES AS ADDITIONAL INSUREDS.

          SUCH INSURANCE WILL CONTAIN A CROSS-LIABILITY CLAUSE AND WILL ALSO
          CONTAIN A THIRTY (30)-DAY NOTICE-OF-CANCELLATION PROVISION. UPON
          REQUEST, THE BUYER WILL DELIVER TO THE SELLER A CERTIFICATE OF
          INSURANCE EVIDENCING THE COVERAGE REQUIRED BY THIS CLAUSE.

                                      100



<PAGE>




                           CLAUSE 16 - APPENDIX "A"
                           ------------------------

                         RECOMMENDED PILOT EXPERIENCE
                         ----------------------------
                      IN RELATION TO TRANSITION TRAINING
                      ----------------------------------


1.   CAPTAINS
     --------

     The Seller recommends that captains have a minimum of 1,000 hours'
     experience in command of jet transport category aircraft prior to
     transition training provided under Clause 16 of this Agreement.

2.   SENIOR CO-PILOTS
     ----------------

     Senior co-pilots upgrading to captain and who do not have the recommended
     minimum described above in Paragraph 1 will be considered for transition
     training provided under Clause 16 of this Agreement on a case-by-case.

3.   CO-PILOTS
     ---------

     The Seller recommends that copilots have a minimum of 500 hours' experience
     operating transport aircraft, of which at least 300 hours' should be with
     jet transport aircraft. This recommended minimum includes formal basic
     training.

4.   ALL PILOTS
     ----------

     The Seller recognizes that some pilots have no experience with FMS, AFCS,
     glass cockpits or two-person (as compared to three-person) crews, features
     covered in the Seller's "Introductory Course." Therefore, the Seller
     recommends that those pilots take its "Introductory Course," before taking
     transition training provided under Clause 16 of this Agreement. For pilots
     who do not have jet transport experience, the Seller recommends its "Jet
     Familiarization Course."

                                      101



<PAGE>




                           CLAUSE 16 - APPENDIX "B"
                           ------------------------

           LIST OF STANDARD A319, A320 AND A321 MAINTENANCE COURSES
           --------------------------------------------------------

The letters "J," "E" and "H" below respectively designate courses for A319, A320
and A321 aircraft.

J/E/H M01      GENERAL FAMILIARIZATION

J/E/H M02      RAMP AND TRANSIT

J/E/H M31      LINE MECHANICS/AVIONICS  (LEVEL 2)

J/E/H M42      BASE MECHANICS, ELECTRICS AND AVIONICS (LEVEL 3)

J/E/H M45      BASE MECHANICS AND ELECTRICS (LEVEL 3)

J/E/H M52      BASE ELECTRICS AND AVIONICS (LEVEL 3 )

J/E/H M07      ENGINE RUN-UP

J/E/H M09      MECHANIC CONTROL RIGGING

J/E/H M10      CABIN INTERIOR AND EMERGENCY EQUIPMENT

J/E/H M11      STRUCTURE REPAIR

J/E/H M12      ON THE JOB PRACTICAL TRAINING

J/E/H M16      SPECIFIC NONDESTRUCTIVE TESTING

J/E/H M17      COMPOSITE STRUCTURE REPAIR

J/E/H M18      ETOPS MAINTENANCE

J/E/H M20      AIRCRAFT INTEGRATED DATA SYSTEM MAINTENANCE

J/E/H MG04     CARGO LOADING AND HANDLING

J/E/H M42E     A319/A320/A321 DIFFERENCES

XM15           BASIC DIGITAL AND MICROPROCESSOR

J/E/H M21      STRUCTURE REPAIR FOR ENGINEERS/METALLIC STRUCTURES

J/E/H M23      MATERIALS AND PROCESSES FOR ENGINEERS

Note : The above list of courses is provided for information only and is ----
subject to modifications.

                                      102



<PAGE>




                            CLAUSE 16 - APPENDIX "C"
                            ------------------------

          LIST OF A319, A320 AND A321 OPERATIONS/PERFORMANCE COURSES
          ----------------------------------------------------------

In the list below, the letters "J," "E" and "H" respectively designate courses
for A319, A320 and A321 aircraft.

J/E/H FC3  FLIGHT ATTENDANT FAMILIARIZATION COURSE

J/E/H G01  MANAGEMENT SURVEY COURSE

J/E/H G02  PERFORMANCE ENGINEER'S COURSE

J/E/H G03  DISPATCHER'S COURSE

J/E/H FC5  FLIGHT CREW GROUND INSTRUCTOR'S COURSE

J/E/H G06  WEIGHT AND BALANCE COURSE

J/E/H G07  LOAD MASTER TRANSITION

J/E/H G08  ETOPS DISPATCHER

J/E/H G38  DISPATCHER TRANSITION AND ETOPS QUALIFICATION

J/E/H G67  WEIGHT AND BALANCE, LOAD MASTER TRANSITION

Note:   The above list of courses is provided for information only and is
----    subject to modifications.

                                      103



<PAGE>




17 -      VENDORS' PRODUCT SUPPORT
          ------------------------

17.1      Vendor Product Support Agreements
          ---------------------------------

17.1.1    The Seller has obtained product support agreements transferable to the
          Buyer from Vendors of Seller Furnished Equipment listed in the
          Specifications ("Product Support Agreements").

17.1.2    These Product Support Agreements are based on the "World Airlines and
          Suppliers Guide" and include Vendor commitments as contained in the
          Supplier Product Support Agreements, which include the following
          provisions:

17.1.2.1  Technical data and manuals required to operate, maintain, service and
          overhaul the Vendor items. Such technical data and manuals will be
          prepared in accordance with the applicable provisions of ATA
          Specification 100 and 101 in accordance with Clause 14 of this
          Agreement, will include revision service and will be published in the
          English language.  The Seller recommends that software data, supplied
          in the form of an appendix to the Component Maintenance Manual, be
          provided in compliance with ATA Specification 102 up to level 3.

17.1.2.2  Warranties and guarantees including Vendors' standard warranties. In
          addition, Vendors of landing gear will provide service life policies
          for landing gear structures.

17.1.2.3  Training to ensure efficient operation, maintenance and overhaul of
          the Vendors' items for the Buyer's instructors, shop and line service
          personnel.

17.1.2.4  Spares data in compliance with ATA Specification 200 or 2000, initial
          provisioning recommendations, spares and logistics service, including
          routine and emergency deliveries.

17.1.2.5  Technical service to assist the Buyer with maintenance, overhaul,
          repair, operation and inspection of Vendor items as well as required
          tooling and spares provisioning.

17.2      Vendor Compliance
          -----------------

          The Seller will monitor Vendor compliance with support commitments
          defined in the Product Support Agreements and will promptly take
          remedial action.

                                      104



<PAGE>




17.3      Vendor Part Repair Stations
          ---------------------------

17.3.1    The Manufacturer has developed with the Vendors a program aimed at
          building a comprehensive network of repair stations in North America
          for those Vendor Parts originating from outside this territory.

17.3.2    As a result of the above, most Vendor Parts are now repairable in
          North America, and corresponding repair stations are listed in a
          document, the AOG and Repair Guide, which is issued and regularly
          updated by the Manufacturer.

          The Seller undertakes that the Vendor Parts that have to be forwarded
          for repair outside North America will be sent back to the Buyer with
          proper tagging as required by the FAA.

17.3.3    The Seller will support the Buyer in cases where the agreed repair
          turn time of an approved repair station is not met by causing free-of-
          charge loans or exchanges (as specified in the relevant Supplier
          Product Support Agreements manual) to be offered to the Buyer ***
                                   .

                                      105



<PAGE>




18 -      BUYER FURNISHED EQUIPMENT AND DATA
          ----------------------------------

18.1      Installation and Delivery
          -------------------------

18.1.1    Without additional charge, and in accordance with the Specifications,
          the Seller will cause the Manufacturer to provide for the installation
          of the Buyer Furnished Equipment.

18.1.2    The Seller will cause the Manufacturer to advise the Buyer reasonably
          in advance of the dates by which, in the planned release of
          engineering for an Aircraft, the Manufacturer requires a written
          detailed description of the dimensions and weight of Buyer Furnished
          Equipment for such Aircraft and information necessary for the
          installation and operation thereof, and the Buyer will furnish such
          detailed description and information by the dates so specified.  Such
          dimensions and weights will not thereafter be revised unless mutually
          agreed and set forth in an SCN.

18.1.3    The Seller will also cause the Manufacturer to furnish  reasonably in
          advance (but in no event less than eight (8) months prior to the
          scheduled delivery date) to the Buyer a schedule of dates by and
          locations to which Buyer Furnished Equipment for such Aircraft must be
          delivered to the Manufacturer to permit installation in and delivery
          of such Aircraft in accordance with the delivery schedule referred to
          in Clause 9.  The Buyer will furnish such equipment to the
          Manufacturer at such locations by such dates.  The Buyer, at its own
          expense, will also furnish or cause to be present at the works where
          such Buyer Furnished Equipment is to be installed, when requested by
          the Manufacturer, field service representatives to provide the
          Manufacturer technical advice regarding the installation and
          calibration of Buyer Furnished Equipment.

18.2      Specification and Airworthiness Approvals
          -----------------------------------------

          The Buyer will ensure that all Buyer Furnished Equipment will meet the
          requirements of the Specifications, will comply with applicable LBA,
          for A319 Aircraft and A321 Aircraft, DGAC, for A320 Aircraft, and FAA
          regulations and will be approved by the LBA, DGAC, and the FAA for
          installation and use on an Aircraft at the time of delivery of such
          Aircraft. The Seller will bear no expense in connection with adjusting
          and calibrating Buyer Furnished Equipment to the extent necessary to
          obtain LBA, DGAC and FAA approval, unless such adjusting and
          calibrating is made necessary by improper installation by the Seller
          of the Buyer Furnished Equipment.


18.3      Delay and Nonperformance
          ------------------------

                                      106



<PAGE>




          Any delay or failure in complying with the obligation in the foregoing
          Subclause 18.2, in providing the descriptive information and services
          mentioned in Subclause 18.1 hereof, in furnishing the Buyer Furnished
          Equipment or in obtaining any required approval of such equipment
          under the LBA, for A319 Aircraft and A321 Aircraft, DGAC for A320
          Aircraft, or FAA regulations **** will be, to the extent that such
          delay or failure will in turn,

          (i)  delay the performance of any act to be performed by or on behalf
               of the Seller or the Manufacturer, or

          (ii) cause the Final Contract Price of the Aircraft to be increased by
               the amount of the Seller's reasonable additional costs, if any,
               attributable to such delay or failure by the Buyer, including,
               without limitation, storage, taxes, insurance and costs of out-
               of-sequence installation,

          the responsibility of the Buyer, and any resulting cost will be borne
          by the Buyer.

          Further, in any such event, the Seller may elect to take any of the
          actions set forth below in Subclauses 18.3.2, 18.3.3 or 18.3.4:

18.3.2    The Seller will be entitled to cause the Manufacturer to select,
          purchase and install the Buyer Furnished Equipment involved, in which
          event the Final Contract Price of the affected Aircraft will be
          increased by the purchase price of such Buyer Furnished Equipment plus
          reasonable costs and expenses incurred by the Manufacturer for
          handling charges, transportation, insurance, packaging and, if so
          required and not already provided for in the Final Contract Price of
          such Aircraft, for adjustment and calibration.

18.3.3    If (i) delivery of the Buyer Furnished Equipment is delayed by more
          than thirty (30) days after the date specified by the Manufacturer for
          the delivery of such Buyer Furnished Equipment or (ii) the Buyer
          Furnished Equipment required to obtain certification of the Aircraft
          in accordance with Subclause 2.3 hereof is not approved by the LBA,
          for A319 Aircraft and A321 Aircraft, DGAC, for A320 Aircraft, or FAA
          within thirty (30) days after the date specified by the Manufacturer
          for the delivery of such Buyer Furnished Equipment, then,
          notwithstanding the terms of Subclause 2.3, the Seller will be
          entitled to deliver the affected Aircraft without installing the Buyer
          Furnished Equipment, but otherwise in full compliance with the terms,
          conditions and requirements of this Agreement (including, without
          limitation, Subclause 2.3) and all performance guarantees.  Upon such
          delivery the Seller will be relieved of all obligations to install
          such Buyer Furnished Equipment.

                                      107



<PAGE>




18.3.4    If (i) the Buyer Furnished Equipment is delayed by more than thirty
          (30) days after the date specified by the Manufacturer for the
          delivery of such Buyer Furnished Equipment or (ii) the Buyer Furnished
          Equipment is not required for certification of the Aircraft and is not
          approved by the LBA, for A319 Aircraft and A321 Aircraft, DGAC, for
          A320 Aircraft, or FAA within thirty (30) days after the date specified
          by the Manufacturer for the delivery of such Buyer Furnished
          Equipment, then the Seller will be entitled to deliver the Aircraft
          with no obligation to install such Buyer Furnished Equipment. The
          Buyer may also elect to have the Aircraft so delivered, whereupon the
          Seller will be relieved of all obligations to install such Buyer
          Furnished Equipment.

18.4      Tax-Free Zones
          --------------

          The Buyer will cause all Buyer Furnished Equipment to be delivered at
          its own expense to tax-free zones at the following addresses, unless
          the Seller notifies the Buyer otherwise in writing. Final destinations
          are specified in the Buyer Furnished Equipment delivery instructions.

          For A320 Aircraft, at:

          AEROSPATIALE, SOCIETE NATIONALE INDUSTRIELLE
          316, Route de Bayonne
          31300 TOULOUSE
          FRANCE

          For A319 Aircraft and A321 Aircraft, at:

          DAIMLER-BENZ AEROSPACE AIRBUS GmbH
          Division Hamburger Flugzeugbau
          Kreetslag 10
          21129 HAMBURG
          GERMANY

          The Seller represents and warrants that there are no taxes, duties,
          imposts or similar charges of any nature whatsoever in connection with
          the delivery of Buyer Furnished Equipment in the tax-free zones
          specified above (or subsequently by the Seller).

18.5      Risk of Loss
          ------------

          Title to and risk of loss of Buyer Furnished Equipment will at all
          times remain with the Buyer. When Buyer Furnished Equipment is in the
          possession of the Seller, the Seller will have only such
          responsibility therefor

                                      108



<PAGE>




          as is chargeable by law to a bailee for hire, but will not be liable
          for loss of use.

18.6      Seller-Supplied Buyer Furnished Equipment
          -----------------------------------------

          If the Buyer requests the Seller to cause the Manufacturer to supply
          directly certain items that are considered Buyer Furnished Equipment
          pursuant to the Specifications, and if compliance with such request by
          the Seller and the Manufacturer in their judgment will not affect the
          delivery date of an Aircraft referred to in Clause 9, then the Seller
          will order such items subject to the execution of an SCN reflecting
          the effect on price and any other items and conditions of this
          Agreement. In such a case, the Seller will be entitled to the payment
          of a reasonable handling charge (with respect to Buyer Furnished
          Equipment not manufactured by the Manufacturer) and will bear no
          liability in respect of any delay caused and product support
          commitments assumed by the Vendor of such Buyer Furnished Equipment,
          provided that the Seller has exercised due diligence in procuring such
          Buyer Furnished Equipment. The provisions of Subclauses 18.2 and 18.3
          will apply to Buyer Furnished Equipment covered under this Subclause
          18.6 in the event of any delay in approval or delivery of such Buyer
          Furnished Equipment.

18.7      ***.

                                      109



<PAGE>




19 -      ASSIGNMENT
          ----------

19.1      Successors and Assigns
          ----------------------

          Subject to the provisions of this Subclause 19.1, this Agreement will
          inure to the benefit of and be binding upon the successors and assigns
          of the parties hereto. This Agreement will not be assigned in whole or
          in part by either party without the prior written consent of the other
          party, such consent not to be unreasonably withheld. Notwithstanding
          anything herein to the contrary, the Seller may at any time, without
          the Buyer's consent, assign any of its rights to receive money, and
          any of its duties to effect sale and delivery of any Aircraft, or any
          of its responsibilities, duties or obligations to perform any other
          obligations hereunder to the Manufacturer, any of the Associated
          Contractors, ASC or any Affiliate of the Seller, the Manufacturer or
          of any Associated Contractor provided that (i) such
                                                       --------
          assignment will not release or diminish the obligations and
          liabilities of the Seller hereunder or in respect of any Aircraft and
          (ii) such assignment does not increase the obligations, liabilities,
          risk, burden, costs or expenses of the Buyer hereunder.

19.2      Seller's Designations
          ---------------------

          The Seller may at any time by notice to the Buyer designate particular
          facilities or particular personnel of the Manufacturer, ASC, any of
          the Associated Contractors or any Affiliate of the Manufacturer or any
          Associated Contractor at which or by whom the services to be performed
          under this Agreement will be performed provided that (i) such
          designation will not release or diminish the obligations and
          liabilities of the Seller hereunder or in respect of any Aircraft, and
          (ii) such designation does not increase the obligations, liabilities,
          risk, burden, costs or expenses of the Buyer hereunder. The Seller may
          also designate the Manufacturer, any Associated Contractor or any
          Affiliate of the Manufacturer or any Associated Contractor as the
          party responsible on behalf of the Seller for providing to the Buyer
          all or any of the services described in this Agreement provided that
          (i) such designation will not release or diminish the obligations and
          liabilities of the Seller hereunder or in respect of any Aircraft, and
          (ii) such designation does not increase the obligations, liabilities,
          risk, burden, costs or expenses of the Buyer hereunder.

19.3      Assignment in Case of Resale or Lease
          -------------------------------------

          In the event of the resale or lease of any Aircraft, pursuant to a
          financing arrangement, by the Buyer before, upon, or after delivery
          thereof to the Buyer, the Buyer's rights with respect to such Aircraft
          under this Agreement, other than the Buyer's rights under Clauses 3,
          14, 15, 16 and 17 hereof and

                                      110



<PAGE>




          Letter Agreements hereto, other than Letter Agreement No. 1, may be
          assigned to the extent necessary to complete the financing on
          commercially reasonable terms. The Seller will consent to such
          assignment provided that, prior to such assignment, the Buyer
          furnishes to the Seller a true copy of such agreement with such
          purchaser or lessor, clearly stating that such purchaser or lessor
          acknowledges that it is bound by and will comply with all applicable
          terms, conditions and limitations of this Agreement.

19.4      ***
          ---------------------------------------------------


          ***



19.5      ***
          ----------------------------------------------------

          ***



19.6      ***
          ----------------------------------

                                      111



<PAGE>




          ***

                                      112



<PAGE>




20 -      DATA RETRIEVAL
          --------------

          On the Seller's reasonable request, the Buyer may provide the Seller
          with data customarily compiled by the Buyer and pertaining to the
          operation of the Aircraft, to assist the Seller in making an efficient
          and coordinated survey of all reliability, maintenance, operational
          and cost data with a view to improving the safety, availability and
          operational costs of the Aircraft.

                                      113



<PAGE>




21 -      TERMINATION FOR CERTAIN EVENTS
          ------------------------------

21.1      Seller's Termination Rights
          ---------------------------

21.1.1    Any of the following will be considered a material breach of the
          Buyer's obligations under this Agreement ("Material Breach"):

          (1)  The Buyer or any other party will commence any case, proceeding
               or other action with respect to the Buyer in any jurisdiction
               relating to bankruptcy, insolvency, reorganization or relief from
               debtors or seeking a reorganization, arrangement, winding-up,
               liquidation, dissolution or other relief with respect to its
               debts and such case, proceeding or action remains undismissed or
               unstayed for more than ninety (90) consecutive days.

          (2)  An action is commenced seeking the appointment of a receiver,
               trustee, custodian or other similar official for the Buyer for
               all or substantially all of its assets and such action remains
               undismissed or unstayed for more than ninety (90) consecutive
               days, or the Buyer makes a general assignment for the benefit of
               its creditors.

          (3)  An action is commenced against the Buyer seeking issuance of a
               warrant of attachment, execution, distraint or similar process
               against all or any substantial part of its assets and such action
               remains undismissed or unstayed for more than ninety (90)
               consecutive days.

          (4)  The Buyer generally admits in writing that it is unable to pay
               its debts as they come due.

          (5)  There is a voluntary liquidation, winding up or analogous event
               with respect to the Buyer.

          (6)  The Buyer is in default on its obligation to make any Predelivery
               Payment pursuant to Subclause 6.2 of this Agreement and ***
                               .
          (7)  The Buyer defaults on any payment obligation relating to any
               Aircraft and such default is not cured within the applicable
               grace periods, with respect to ***

                                      114



<PAGE>




          (8)  The Buyer is in default for more than thirty (30) consecutive
               days in its obligation to take delivery of an Aircraft as
               provided in Subclause 9.3 of this Agreement, subject to the
               provisions of Subclause 22.3.4.

21.1.2    In the event of any Material Breach by the Buyer, the Seller will at
          its option by written notice to the Buyer have the right to resort to
          any remedy provided herein or under applicable law, including, without
          limitation, the right by written notice, effective immediately, to (i)
          suspend its performance with respect to undelivered Aircraft under the
          Agreement, (ii) reschedule the delivery dates for Aircraft or for
          other goods and services to be provided with respect to undelivered
          Aircraft, (iii) terminate this Agreement with respect to any or all
          undelivered Aircraft, and to any or all services, data and other items
          with respect to undelivered Aircraft on the effective date of such
          termination and (iv) retain, as part of the damages for breach and not
          as a penalty, an amount equal to all Predelivery Payments and all
          other payments made theretofore under this Agreement.

21.2      ***
          -----------------------------------

21.2.1    ***



21.2.2    ***

                                      115



<PAGE>




22 -      MISCELLANEOUS PROVISIONS
          ------------------------

22.1      Notices
          -------

          All notices and requests required or authorized hereunder will be
          given in writing either by personal delivery to a responsible officer
          of the party to whom the same is given or by commercial express
          courier, facsimile or other mutually agreeable electronic transmission
          at the addresses and numbers set forth below. The date upon which any
          such notice or request is so personally delivered, or if such notice
          or request is given by commercial express courier, facsimile or other
          electronic transmission, the date upon which sent, will be deemed to
          be the effective date of receipt of such notice or request.

          The Seller will be addressed at:

               2, rond-point Maurice Bellonte
               31700 BLAGNAC   FRANCE
               Attention:  Director - Contracts
               Telephone:   (33) 5 61 30 40 12
               Fax: (33) 5 61 30 40 11
               Telex:  AVSA 521155F

          The Buyer will be addressed at:

               2345 Crystal Drive
               Arlington, VA 22227
               Attention:  Treasurer
               Telephone: 703-872-5918
               Fax: 703-872-5936

               with a copy to the attention of the Buyer's Office of the General
               Counsel at the same address:

               Attention:  Aircraft Counsel
               Fax: 703-872-5252

          From time to time, the party receiving the notice or request may
          designate another address or another person.

                                      116



<PAGE>




22.2      Waiver
          ------

          The failure of either party to enforce at any time any of the
          provisions of this Agreement, to exercise any right herein provided or
          to require at any time performance by the other party of any of the
          provisions hereof will in no way be construed to be a present or
          future waiver of such provisions nor in any way to affect the validity
          of this Agreement or any part hereof or the right of the other party
          thereafter to enforce each and every such provision. The express
          waiver by either party of any provision, condition or requirement of
          this Agreement will not constitute a waiver of any future obligation
          to comply with such provision, condition or requirement.

22.3      INTERPRETATION AND LAW; SUBMISSION TO JURISDICTION; WAIVER OF
          -------------------------------------------------------------
          IMMUNITY; DISPUTE RESOLUTION
          ----------------------------

22.3.1    INTERPRETATION AND LAW
          ----------------------

          THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
          THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
          NEW YORK.

          THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON
          THE INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS TRANSACTION.

22.3.2    SUBMISSION TO JURISDICTION
          --------------------------

          EACH OF THE BUYER AND THE SELLER IRREVOCABLY AGREES THAT ANY LEGAL
          ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT MAY BE BROUGHT AND
          DETERMINED IN THE SUPREME COURT OF THE STATE OF NEW YORK, NEW YORK
          COUNTY, IN THE GENERAL DISTRICT COURTS OF FAIRFAX COUNTY OR ARLINGTON
          COUNTY, VIRGINIA, OR IN THE UNITED STATES DISTRICT COURTS FOR THE
          SOUTHERN DISTRICT OF NEW YORK, OR THE EASTERN DISTRICT OF VIRGINIA AND
          IRREVOCABLY ACCEPTS WITH REGARD TO ANY SUCH ACTION OR PROCEEDING THE
          NONEXCLUSIVE JURISDICTION OF THOSE COURTS.

                                      117



<PAGE>




          The Seller hereby irrevocably designates CT Corporation, New York City
          offices, to receive for and on its behalf service of process in any
          proceeding with respect to any matter as to which it submits to
          jurisdiction as set forth above, it being agreed that service upon CT
          Corporation will constitute valid service upon the Seller in any legal
          action or proceeding with respect to this Agreement.

22.3.3    Waiver of Immunity
          ------------------

          The Seller irrevocably waives the benefit of Articles 14 and 15 of the
          French Civil Code, for the purpose of this Agreement. The Seller
          hereby irrevocably waives, and agrees not to assert, the defense of
          sovereign immunity, and, to the extent permitted by law, the defense
          that the action or proceeding is brought in an inconvenient forum,
          that the venue of the action or proceeding is improper, or that this
          Agreement may not be enforced in or by such courts.

22.3.4    ***
          -----------------------------------

          ***



22.4      Confidentiality
          ---------------

          Subject to any legal or governmental requirements of disclosure, the
          parties (which for this purpose will include their employees, agents
          and advisors) will maintain the terms and conditions of this
          Agreement, any reports or other data furnished, and other documents
          furnished by the Seller hereunder strictly confidential. Without
          limiting the generality of the foregoing, each party will use its best
          efforts to limit the disclosure of the contents of this Agreement to
          the extent legally permissible in any filing required to be made by it
          with any governmental agency and will make such applications as will
          be necessary

                                      118



<PAGE>




          to implement the foregoing. With respect to any public disclosure or
          filing, the disclosing party agrees to submit to the other party a
          copy of the proposed document to be filed or disclosed and will give
          the other party a reasonable period of time in which to review the
          said document. The Buyer and the Seller will consult with each other
          prior to the making of any public disclosure or filing, permitted
          hereunder, of this Agreement or the terms and conditions thereof. The
          provisions of this Subclause 22.4 will survive any termination of this
          Agreement.

22.5      Severability
          ------------

          In the event that any provision of this Agreement should for any
          reason be held to be without effect, the remainder of this Agreement
          will remain in full force and effect. To the extent permitted by
          applicable law, each party hereto hereby waives any provision of law
          which renders any provision of this Agreement prohibited or
          unenforceable in any respect.

22.6      Alterations to Contract
          -----------------------

          This Agreement, including its Exhibits, Appendixes and Letter
          Agreements, contains the entire agreement between the parties with
          respect to the subject matter hereof and thereof and supersedes any
          previous understanding, commitments or representations whatsoever,
          whether oral or written (including, without limitation, that certain
          AVSA Term Sheet dated November 5, 1996 (Reference AVSA 5183.8),
          between the Seller and the Buyer and all letter agreements ancillary
          thereto). This Agreement will not be varied except by an instrument in
          writing of even date herewith or subsequent hereto executed by both
          parties or by their fully authorized representatives.

22.7      Inconsistencies
          ---------------

          In the event of any inconsistency between the terms of this Agreement
          and the terms contained in either (i) the Specifications, or (ii) any
          other Exhibit or Letter Agreement attached to this Agreement, in each
          such case the terms of such Specifications, Exhibit or Letter
          Agreement will prevail over the terms of this Agreement. For the
          purpose of this Subclause 22.7, the term Agreement will not include
          the Specifications or any other Exhibit or Letter Agreement hereto.

22.8      Language
          --------

          All correspondence, documents and any other written matters in
          connection with this Agreement will be in English.

                                      119



<PAGE>




22.9      Headings
          --------

          All headings in this Agreement are for convenience of reference only
          and do not constitute a part of this Agreement.

22.10     Counterparts
          ------------

          This Agreement may be executed by the parties hereto in separate
          counterparts, each of which when so executed and delivered will be an
          original, but all such counterparts will together constitute but one
          and the same instrument.

                                      120



<PAGE>




          IN WITNESS WHEREOF, these presents were entered into as of the day and
year first above written.


                       AVSA, S.A.R.L.


                  By:  /s/ Christophe Mourey
                       ------------------------------
                       Title: Chief Executive Officer


                       US Airways Group, Inc.


                  By:  /s/ Thomas A. Fink
                       ------------------------------
                       Title: Treasurer

                                      121



<PAGE>




                             CONSENT AND GUARANTY
                             --------------------

          Airbus Industrie, G.I.E., established under "Ordonnance" No. 67-821
dated September 23, 1967, of the Republic of France (the "Guarantor"), hereby
acknowledges notice of and consents to all of the terms of the Airbus
A319/A320/A321 Purchase Agreement dated as of October 31, 1997 (as amended,
modified, or supplemented from time to time, the "Agreement"), between AVSA,
S.A.R.L. (the "Seller"), and US Airways Group, Inc. (the "Buyer"), including,
without limitation, the assignments of the Seller's rights under its agreements
with the Guarantor, contained in Clauses 12 and 13, Letter Agreements Nos. 1,
8A, 8B, 8C, 9, 10, 12 and 13 of such Agreement, and hereby irrevocably and
unconditionally guarantees the due and punctual payment and performance by the
Seller of all of the latter's liabilities and obligations as set forth in the
said Agreement subject to the terms and limitations therein contained. The
Guarantor hereby agrees that its obligations hereunder will be unconditional and
absolute and, without limiting the generality of the foregoing, will not be
released, discharged or otherwise affected by (i) any modification or amendment
of or supplement to said Agreement (other than release, discharge or waiver of
this guarantee hereunder) or (ii) any assignment of said Agreement or of any
rights or obligations thereunder made in accordance with Clause 19 thereof. The
Guarantor further agrees that it will execute and deliver such other and further
instruments as may be reasonably requested by the Buyer (as such term is defined
in the said Agreement), its successors or assigns to reaffirm its obligations
hereunder. This Consent and Guaranty constitutes a guaranty of performance and
of payment, and the Guarantor agrees that, in case of default by the Seller, the
Buyer will not be required to file suit against the Seller as a condition to
enforcement of this Consent and Guaranty.

          The Guarantor irrevocably agrees that any legal action or proceeding
against the Guarantor with respect to this Consent and Guaranty may be brought
and determined in the Supreme Court of the State of New York, New York County,
in the General District Courts of Fairfax County or Arlington County, Virginia,
in the United States District Courts for the Southern District of New York or
the Eastern District of Virginia, or in the commercial Court ("Tribunal de
Commerce") of Toulouse, France, and irrevocably accepts with regard to any such
action or proceeding the nonexclusive jurisdiction of those courts. The
Guarantor irrevocably waives the benefit of Articles 14 and 15 of the French
Civil Code. The Guarantor hereby irrevocably waives, and agrees not to assert,
the defense of sovereign immunity, and, to the extent permitted by law, the
defense that the action or proceeding is brought in an inconvenient forum, that
the venue of the action or proceeding is improper, or that this Consent and
Guaranty may not be enforced in or by such courts. However, the preceding
sentence will not be construed as a waiver of any requirement of service of
process. The Guarantor hereby irrevocably designates CT Corporation as the
Guarantor's agent to receive service of process in any legal action or
proceeding with respect to this Consent and Guaranty.

                                      122



<PAGE>




          THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.




                    Airbus Industrie, G.I.E.,


                    By      /s/ Jean Pierson
                      ---------------------------------
                      Title: Managing Director

                                      123




<PAGE>




                                                                  EXHIBIT "A-1"



     The A319 Standard Specification is contained in a separate folder.



<PAGE>




                                                                  EXHIBIT "A-2"




     The A320 Standard Specification is contained in a separate folder.



<PAGE>




                                                                  EXHIBIT "A-3"




     The A321 Standard Specification is contained in a separate folder.



<PAGE>




                                                                      EXHIBIT B



                Change Orders to Standard Specification (SCNs)



<PAGE>




                         US AIRWAYS TECHNICAL APPENDIX       EXHIBIT B

<TABLE>
<CAPTION>


------------------------------------------------------------------------------------------------------------------------------------
EPAC-TDU                           TITLE                      VENDOR BFE notes   A320      A319     A321          COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                           <C>                <C>       <C>      <C>           <C>

02-10-111-01    FAA certification                                                ***       ***       ***

03-20-220-02    MTOW Increase to 77T - A320/75.5T - A319/
                 89T - A321                                                      ***       ***       ***
09-10-104-02    737 Tow bar fitting                                              ***       ***       ***

21-28-110-03    Ventilation system aft cargo compt                         1     ***       ***       ***
21-27-107-02    Avionics Ventilation fan alternate            CHOICE             ***       ***       ***
21-27-108-01    Avionics ventilation filter alternate         CHOICE             ***       ***       ***
21-20-108-01    Cabin Recirc filter alternate                 CHOICE             ***       ***       ***
21-43-104-0X    Installation of heating system for aft
                 cargo compt.                                 CHOICE             ***       ***       ***    Liebherr or Hamilton Std

22-70-122-01    FMS/ACARS broadcast/Extended FMS/ACARS                           ***       ***       ***
22-70-106-01    Automatic erasing of flight planning data
                 after landing                                                   ***       ***       ***
22-70-113-02    Time constraint/10 characters                              2     ***       ***       ***
22-70-121-01    FMS cross loading                                          2     ***       ***       ***
22-70-101-04    FMS Data base memory extension                             2     ***       ***       ***

22-70-150-XX    New standard for FMS                          CHOICE     * 2     ***                          Honeywell or Smiths
73-20-107-XX    Selectable derate via the MCDU                           * 3     ***                         study item for new FMS

23-12-147-06    Third VHF system installation                 CHOICE             ***       ***       ***
23-11-111-01    Full provisions for  Dual HF                                     ***       ***       ***
46-21-100-02    Provisions for Air Traffic Services Unit
                 (ATSU) for ACARS                                                ***       ***       ***
46-21-200-01    Installation of Air Traffic Services Unit
                 (ATSU) for ACARS                                                ***       ***       ***
46-21-201-01    ATSU Data loading capability for ACARS               BFE         ***       ***       ***         acars software
23-70-101-01    CVR hot mike capability                                          ***       ***       ***
23-13-101-01    Installation of 3rd RMP                                          ***                 ***
23-71-103-XX    Installation of Cockpit Voice Recorder        CHOICE             ***       ***       ***    charge for 2hr unit only
23-51-136-16    Installation of Alternate Boomsets            CHOICE             ***       ***       ***        Single jack plug
                                                                                 ***
25-11-101-01    3rd occupant seat armrest in cockpit                             ***       ***       ***
25-11-117-02    Pilots seat headrests                                            ***       ***       ***
25-11-108-01    Installation of 4th Occupant seat                                ***       ***       ***

25-20-182-01    Cargo floor panels for heavy usage                               ***       ***       ***
25-50-40x-01    syst/struct provisions for ACE cargo
                 loading system                                            6     ***       ***       ***
25-50-4xx-01    Installation of ACE cargo loading
                 system (SFE)                                              6     ***       ***       ***

26-16-102-01    dual loop smoke detection system aft
                 cargo compartment                                               ***       ***       ***
26-16-103-01    dual loop smoke detection system fwd
                 cargo compartment                                               ***       ***       ***
26-23-103-01    Fire extinguisher system for fwd and aft
                 cargo compartments                                              ***       ***       ***

27-00-113-02    Installation of A319 SFCC on A320                                ***       ***       ***
27-92-101-02    Simultaneous sidestick indication
                 (aural/visual)                                                  ***       ***       ***

29-10-110-01    ABEX alt vendor EDPs                                             ***       ***       ***
29-21-104-01    ABEX alt vendor EHPs                                             ***       ***       ***
29-22-101-01    Installation of Sundstrand RAT on A320                           ***       ***       ***
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     AVSA/TECH APP ISSUE 12  11/5/97
</TABLE>

                                    Page 1




<PAGE>




                         US AIRWAYS TECHNICAL APPENDIX                 EXHIBIT B

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
  EPAC-TDU                TITLE                                       VENDOR  BFE  notes A320   A319   A321       COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                                                 <C>          <C>    <C>   <C>   <C>        <C>

  30-70-108-01    Cold weather package installation                                       ***   ***   ***        latest standard
  30-11-104-01    Grimes alt vendor WAI valve                                             ***   ***   ***

  31-00-107-01    Use of US units rather than metric                                      ***   ***   ***
  31-14-103-01    Overhead toggle panel switch reorientation                        *     ***   ***   ***
  31-36-101-XX    Installation of DMU (AIDS) inc PCMCIA card                              ***   ***   ***        ***w/o pcmcia card
  31-64-100-01    Installation of single cue V-Bar flight
                   director                                                         *     ***   ***   ***
  31-33-200-XX    Installation of SSFDR                               CHOICE              ***   ***   ***

  32-11-104-01    Installation of Radial Tyres 46x17 R20                                  ***   ***   ***
  32-48-103-02    Installation of Brake cooling fans                                      ***   ***   ***
  32-48-xxx-xx    Installation of automatic brake cooling fans                         4  ***

  33-xx-xxx-xx    NO LAPTOP signs in place of illuminated NO
                   SMOKING signs                                                    *  4  ***
  34-10-116-01    ADIRS equipment 4MCU                                CHOICE              ***   ***   ***
  34-20-202-01    Standby instruments on LCD display                                      ***   ***   ***
  34-43-127-25    Installation TCAS II                                CHOICE  BFE         ***   ***   ***      plus @ $ 100,000 BFE
  34-43-129-02    TCAS display option                                                     ***   ***   ***
  34-52-143-02     ATC transponders  Arinc 900                        CHOICE              ***   ***   ***
  34-55-102-01     VOR/Marker alternate vendor                        CHOICE              ***   ***   ***
  34-42-101-01    Radio altimeter alternate vendor                    CHOICE              ***   ***   ***
  34-42-117-01    Radio altitude automatic call outs                                      ***   ***   ***            To be defined
  34-42-XXX-01     Weather radar specific Control panel               CHOICE              ***   ***   ***           Dual sweep/gain
  34-42-XXX-02    Single weather radar and windshear prediction       CHOICE              ***   ***   ***
  34-51-101-08    DME interrogator Arinc 900                          CHOICE              ***   ***   ***
  34-52-XXX-01    System provisions for EGPWS
  34-52-XXX-01    Installation of Enhanced GPWS                                           ***   ***   ***
  34-XX-XXX-01    System provisions for Multi Mode Receiver
                   (Replaces ILS and GPS)                                              1  ***   ***   ***
  34-XX-XXX-02    Installation of a  Multi Mode Receiver
                   (Replaces ILS and GPS)                             CHOICE              ***   ***   ***


  35-11-101-02 Flight crew O2 bottle 115 cuft steel *** *** *** 35-31-XXX-01
  Installation of four oxygen masks per PSU *** *** ***

  49-00-105-01    Installation of APU                                 CHOICE              ***   ***   ***           APIC OR ALLIED

  51-20-10X-XX    Exterior paint process                              CHOICE              ***   ***   *** low voc Courtalds or AKZO
  02-40-101-01    Exterior livery                                                         ***   ***   ***    D112-11135 / D111-77111
  02-40-101-XX    Additional exterior markings                                            ***   ***   ***            USA to advise

  52-33-203-01    Bulk cargo door deletion                                                ***   ***   ***

  56-10-102-05    Cockpit windows (PPG)                               CHOICE              ***   ***   ***

  72-00-112-XX    Engine selection for CFM 56-5Bxx                                        ***   ***   ***     See Purchase Agreement

  77-32-100-01    Installation of ENDEVCO engine vibration
                   monitoring unit (EVMU)                                              5  ***
  79-00-101-01    ESSO 2380 engine and APU oil                                            ***   ***   ***
  79-40-101-XX    IDG oil level viewing port                                              ***   ***   ***
</TABLE>

                                    Page 2        VSA/TECH APP ISSUE 12  11/5/97



<PAGE>




                         US AIRWAYS TECHNICAL APPENDIX                 EXHIBIT B

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
   EPAC-TDU                              TITLE                        VENDOR  BFE  notes A320  A319  A321          COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                                                 <C>     <C>         <C>   <C>   <C>         <C>

  23-32-011-XX    Install. pre-recorded announc. & boarding
                   music                                                      BFE         ***   ***   ***
  23-32-010-XX    System provisions and installation  for
                   pax audio entertainment                            CHOICE  BFE         ***   ***   ***
  23-36-010-XX    Provisions and Installation of video with
                   PSU mounted screens, -VCC in fwd stowage           CHOICE  BFE         ***   ***   ***
  23-36-020-0X    Video (PA) in use light in flight compartment                           ***   ***   ***
  23-73-000-10    CIDS - Common director on A320                                          ***   ***   ***
  23-73-002-22    CIDS - Common handsets on A320                                          ***   ***   ***
  23-73-000-20    CIDS - Common lighting panel on A320                                    ***   ***   ***
  23-73-001-10    2-zone passenger address                                                ***   ***   ***
  23-73-001-20    PA priority for first attendant                                         ***   ***   ***
  23-73-002-30    Conference call between all cabin attendants
                   and flight compartment                                                 ***   ***   ***
  23-73-002-31    Cabin interphone Monitoring via Flight
                   compartment                                                            ***   ***   ***
  23-73-002-61    Installation of an all cabin attendants call
                   push button in the flt compartment                                     ***   ***   ***
  23-73-003-10    2 zone passenger to cabin attendant call                                ***   ***   ***
  23-73-003-40    Passenger call indication on attendant
                   indication panels                                                      ***   ***   ***
  23-73-005-10    2 zone cabin illum. cntl from the fwd
                   attendant panel and the  attendant panel aft                           ***   ***   ***
  23-73-006-21    EVAC signal via all cabin attendant and
                   passenger compt loudspeakers                                           ***   ***   ***
  23-73-007-10    Lav. smoke warning tone via cabin attendant
                   station loudspeakers only                                              ***   ***   ***
  23-73-009-10    Slides ARMED and doors CLOSED indication at
                   fwd attendant station                                                  ***   ***   ***
  23-53-102-01    Cabin ready for takeoff indication from the
                   fwd attendant station (ECAM solution)                                  ***   ***   ***
                                                                                                ***
  Emerg. Equip.   Emergency Equipment installation                    CHOICE  BFE         ***   ***   ***
                  Cabin interior colour spec
    25-28-100     Alternate non-textile floor covering
                   (Taraflex)   -   BFE                               CHOICE  BFE         ***   ***   ***
                  Inst of BFE NTF in Lavs                                     BFE
                  Textile covered dado panels                                 BFE
                  Textile covered Bulkheads                                   BFE
                  Tedlar covering for OHSC doors
                  C/A seats with leather covering                             BFE
 Global cabinX    Cabin layout - one or two class.                    CHOICE  BFE         ***   ***   ***
    25-22-300     Wall-mounted single C/A seat for inst. in
                   front of fwd door and in aft door area                                 ***   ***   ***
    25-22-500     Swivel C/A seat in place of basic single C/A                            ***   ***   ***
    25-31-010     Transversal galley location in front of fwd
                   door RH - GI                                       CHOICE  BFE         ***   ***   ***

    25-33-050     Transversal galley location of aft door - GV        CHOICE  BFE         ***   ***   ***
    25-24-100     Lockable door for OHSC                                                  ***   ***   ***
    25-27-112     Standard literature pocket (SFE)  -  4
                   additional pockets                                                     ***   ***   ***
    25-40-540     Additional handles for handicapped pax. - 3 Lavs                        ***   ***   ***


                                                                                          ***   ***   ***   total see notes


  25-52-100-XX    Inst. of slide rafts at fwd and aft door
                   (Overwater option on selected aircraft only)                           ***   ***   ***          Selected aircraft

      NOTES       Total does not include, Slideraft installation, Selectable
                  derate via the MCDU, installation of Endevco EVMU
                  installation/provisions for ACE cargo loading sytem.

               1) These items offered free of charge as per the termsheet app 2
                  and 3
               2) NEW STANDARD FMS includes ten charactures, X Loading and
                  extended data base memory . This is offered at a price of               ***   ***   ***
                  Scheduled availability of new std FMS is end 1998(Honeywell &
                  mid 1999 for Sextant) AVSA price for retrofit of New FMS will
                  not exeed the production price . This will cover any updates
                  required to peripheral computers but the actual FMS/MCDUs will
                  be the
</TABLE>

                                    Page 3        AVSA/TECH APP ISSUE 12 11/5/97



<PAGE>
<TABLE>
<CAPTION>


                         US AIRWAYS TECHNICAL APPENDIX                 EXHIBIT B

----------------------------------------------------------------------------------------------------------------------------------
EPAC-TDU                         TITLE                      VENDOR  BFE  NOTES   A320     A319    A321   COMMENTS
----------------------------------------------------------------------------------------------------------------------------------
      <S> <C>                                                              <C>    <C>      <C>     <C>   <C>
          responsibility of the selected vendor.
      3)  Selectable derates will be part of the
          new STD FMS the option price will be                             *      ***      ***     ***
      4)  Automatic brake cooling fans and NO
          LAPTOP SIGNS are still under study
          price TBD
      5)  The leadtime for Endevco will be 18 to
          24 months from SCN acceptance at a price of                             ***
      6)  The price for the system provisions for ACE
          cargo loading system is as follows                                      ***      ***     ***
          The price for the Installation of the ACE
          cargo loading system SFE will be:                                       ***      ***     ***   Requires prior AC of
                                                                                                         provisions
      *)  For the marked items AVSA assures that the option price for USA will
          be equal or less than any other Airbus operator. This condition will
          also apply to GPS Sole means of navigation, DGPS, and Primary LCD
          displays when available. All prices are in jan 96 delivery conditions.

                                    Page 4
</TABLE>


<PAGE>




                                                                     EXHIBIT "C"
                                                                     -----------



<PAGE>




================================================================================
               AVSA                            SCN No.
    SPECIFICATION CHANGE NOTICE                Issue
               (SCN)                           Dated
                                               Page No.
--------------------------------------------------------------------------------
TITLE
-----


DESCRIPTION
-----------



EFFECT ON WEIGHT
----------------
Manufacturer's Weight Empty Change:

Operational Weight Empty Change:

Allowable Payload Change:


REMARKS/REFERENCES
------------------
Response to RFC


SPECIFICATION CHANGED BY THIS SCN
---------------------------------



THIS SCN REQUIRES PRIOR OR CONCURRENT ACCEPTANCE OF THE FOLLOWING SCN(s)
------------------------------------------------------------------------



--------------------------------------------------------------------------------
PRICE PER AIRCRAFT
------------------

US DOLLARS: Base Year:____________________     Current Year:__________________

AT DELIVERY CONDITIONS:______________________                __________________

This change will be effective on ______________ Aircraft No. ____________ and
subsequent

provided approval is received by ____________________________________

BUYER APPROVAL                                     SELLER APPROVAL
--------------                                     ---------------

By:                                                By:

Title: (Authorized finance department officer)     Date:


By:

Title:  (Authorized maintenance or flight operations officer)

Date:
================================================================================



<PAGE>




================================================================================
               AVSA                            SCN No.
    SPECIFICATION CHANGE NOTICE                Issue
               (SCN)                           Dated
                                               Page No.
--------------------------------------------------------------------------------
After contractual agreement with respect to weight, performance, delivery, etc.,
the indicated part of the specification wording will read as follows:



















================================================================================



<PAGE>




================================================================================
               AVSA                            SCN No.
    SPECIFICATION CHANGE NOTICE                Issue
               (SCN)                           Dated
                                               Page No.
--------------------------------------------------------------------------------
SCOPE OF CHANGE  (FOR INFORMATION ONLY)
---------------

















================================================================================



<PAGE>




                                                                     EXHIBIT "D"
                                                                     -----------

                          SELLER SERVICE LIFE POLICY
                          --------------------------


1.            The Items of primary and auxiliary structure described hereunder
              are covered by the Service Life Policy described in Subclause 12.2
              of the Agreement.

2.            WINGS - CENTER AND OUTER WING BOX
              ---------------------------------

2.1           Spars, Spar Webs, Chords and Stiffeners
              ---------------------------------------

2.2           Ribs Inside the Wing Box
              ------------------------

2.3           Upper and Lower Panels of the Wing Box
              --------------------------------------

2.4           Fittings
              --------

2.4.1         Attachment fittings for the flap structure

2.4.2         Attachment fittings for the engine pylons and engine mounts

2.4.3         Attachment fittings and support structure for the main landing
              gear

2.4.4         Attachment fittings for the center wing box

2.4.5         Wing-to-body structural attachments

2.5           Auxiliary Support Structure
              ---------------------------

2.5.1         For the slats:
              -------------

2.5.1.1       Ribs supporting the track rollers on wing box structure

2.5.1.2       Ribs supporting the actuators on wing box structure

2.5.2         For the ailerons:
              ----------------

2.5.2.1       Hinge brackets and ribs on wing box rear spar or shroud box

2.5.2.2       Actuator fittings/support stays on wing box rear spar or shroud
              box



<PAGE>




                                                                     EXHIBIT "D"
                                                                     -----------

2.5.3         For airbrakes, spoilers, lift dumpers:
              -------------------------------------

2.5.3.1       Hinge brackets and ribs on wing box rear spar or shroud box

2.5.3.2       Actuator fittings on wing box rear spar or shroud box

2.5.3.3       Trailing edge support structure

2.6           Engine pylons

3.            FUSELAGE
              --------

3.1           Fuselage Structure
              ------------------

3.1.1         Fore and aft bulkheads

3.1.2         Pressurized floors and bulkheads surrounding/including the main
              and nose gear wheel well and center wing box

3.1.3         Skins with doublers, stringers/longitudinal stringers and frames
              from the forward pressure bulkheads to the frame supporting the
              rear attachment of horizontal stabilizer

3.1.4         Window and windscreen attachment structure but excluding
              transparencies

3.1.5         Escape hatches

3.1.6         Passenger and cargo doors internal structure and fixed attachment

3.1.7         Sills excluding scuff plates and upper beams surrounding passenger
              and cargo door apertures

3.1.8         Cockpit floor structure and passenger cabin floor beams excluding
              floor panels and seat rails

3.1.9         Keel beam structure





<PAGE>




                                                                     EXHIBIT "D"
                                                                     -----------

3.2           Fittings
              --------

3.2.1         Landing gear attachment fittings

3.2.2         Support structure and attachment fittings for the vertical and
              horizontal stabilizers

4.            STABILIZERS
              -----------

4.1           Horizontal Stabilizer Main Structural Box
              -----------------------------------------

4.1.1         Spars, chords, webs and stiffeners

4.1.2         Ribs

4.1.3         Upper and lower skins and stringers

4.1.4         Attachment fittings to fuselage and trim screw actuator

4.1.5         Elevator support structure

4.1.5.1       Hinge bracket

4.1.5.2       Servocontrol attachment brackets

4.2           Vertical Stabilizer Main Structural Box
              ---------------------------------------

4.2.1         Spars, chords, webs and stiffeners

4.2.2         Ribs

4.2.3         Skins and stringers

4.2.4         Attachment fittings to fuselage

4.2.5         Rudder support structure

4.2.5.1       Hinge brackets

4.2.5.2       Servocontrol attachment brackets






<PAGE>




                                                                     EXHIBIT "D"
                                                                     -----------

5.            Bearing and roller assemblies, bearing surfaces, bushings, bolts,
              rivets, access and inspection doors, including manhole doors,
              latching mechanisms, all system components, commercial interior
              parts, insulation and related installation and connecting devices
              are excluded from this Seller Service Life Policy.





<PAGE>




                                                                    EXHIBIT "E"
                                                                    ----------

                          CERTIFICATE OF ACCEPTANCE
                          -------------------------

In accordance with the terms of that certain Airbus A319/A320/A321 Purchase
Agreement (the "Purchase Agreement") dated as of ____________, 19___ between
AVSA, S.A.R.L. ("AVSA") and US Airways Group, Inc. (the "Buyer"), the acceptance
inspection relating to the AIRBUS [A319] [A320] [A321] aircraft (the
"Aircraft"), manufacturer's serial no. _____, FAA Registration No.: ________,
with ____ (__) ______________ series propulsion systems installed thereon,
serial nos. ___________ (position #1), and __________ (position #2) has taken
place at [Toulouse, France,] [Hamburg, Germany,] on the ________ day of
---------, ---- .

In view of said inspection having been carried out with satisfactory results,
the Buyer hereby accepts delivery of the Aircraft as being in conformity with
the provisions of the Purchase Agreement.

This acceptance will not impair the rights of the Buyer that derive from the
warranties and patent indemnities relating to the Aircraft set forth in the
Purchase Agreement.

The Buyer specifically recognizes that it has waived any right it may have at
law or otherwise to revoke this acceptance of the Aircraft.

                                          RECEIPT AND ACCEPTANCE OF THE
                                          ABOVE-DESCRIBED AIRCRAFT
                                          ACKNOWLEDGED


                                          US Airways Group, Inc.



                                          By:
                                          -----------------------------------

                                          Title:
                                          -----------------------------------



<PAGE>




                                                                     EXHIBIT "F"
                                                                     -----------


                            TECHNICAL PUBLICATIONS
                            ----------------------

                                    GENERAL
                                    -------

              This Exhibit F lists the form, type, quantity and delivery dates
              for the Technical Publications to be provided to the Buyer
              pursuant to Clause 14 of the Agreement.

              The Technical Publications are published in accordance with ATA
              Specification 100 revision 23, with the exception of certain
              Component Maintenance Manuals, which may be written to an ATA
              Specification 100 revision other than revision 23.

              The designation "C" after the title of a Technical Publication
              indicates that such Technical Publication may be customized.



<PAGE>




                                                                     EXHIBIT "F"
                                                                     -----------


1.            ENGINEERING DOCUMENTS
              ---------------------

1.1           Installation and Assembly Drawings (IAD)--C
              -------------------------------------------

              The IAD will be delivered according to the Buyer's standard for
              the major Assembly and Installation drawings, including detail
              drawings.

1.2           Drawing Number Index (DNI)--C
              -----------------------------

              The DNI lists applicable drawings of the Aircraft delivered under
              the Agreement.

1.3           Process and Material Specification (PMS)
              ----------------------------------------

              The PMS contains data related to manufacturing processes, material
              identification and treatments used in the construction and
              assembly of the Aircraft.

1.4           Standards Manual (SM)
              ---------------------

              The SM contains data about Seller approved standards and includes
              cross reference lists. The SM will include US
              standards/equivalents for all hardware clamps, O-rings, bearings,
              fasteners, sealants, adhesive and compounds, raw materials,
              processes and procedures.

2.            MAINTENANCE AND ASSOCIATED MANUALS
              ----------------------------------

2.1           APU Build-up Manual (ABM)
              ------------------------

              The ABM follows the format adopted for the Power Plant Build-up
              Manual.

2.2           Aircraft Maintenance Manual (AMM)--C
              ------------------------------------

              The component location section of the AMM will show those
              components detailed in the AMM maintenance procedures. The trouble
              shooting part is covered in Subparagraph 2.21 below.

              *Aircraft Maintenance Manual Chapter 05 Time Limits
              (Service Life Limits) and Maintenance Checks are only
              delivered in hard copies.



<PAGE>




                                                                    EXHIBIT "F"
                                                                    -----------

2.3           Aircraft Schematics Manual (ASM)--C
              -----------------------------------

              The ASM is part of the Wiring Manual. Supplied as a separate
              manual for schematics.

2.4           Aircraft Wiring Manual (AWM)--C
              -------------------------------

              The AWM is part of the Wiring Manual. Supplied as a separate
              manual for wirings.

2.5           Aircraft Wiring Lists (AWL)--C
              ------------------------------

              The AWL is part of the Wiring Manual. Supplied as a separate
              document for lists. The AWL includes wire terminations, connector,
              terminal, strip locations, wire routings, and clamping diagrams.

2.6           Consumable Material List (CML)
              -----------------------------

              The CML details the characteristics and gives procurement sources
              of consumable materials such as grease, oil, etc.

2.7           Duct Repair Manual (DRM)
              ------------------------

              The DRM contains all the data necessary to locate, identify,
              repair and/or replace sub-assemblies of metallic ducts. It also
              includes details of tests necessary after repair.

2.8           Fuel Pipe Repair Manual (FPRM)
              ------------------------------

              The FPRM provides workshop repair procedures and data for specific
              fuel pipes, after removal from any aircraft of the Manufacturer of
              the type of the Aircraft.

2.9           Illustrated Parts Catalog (IPC)--C
              ----------------------------------

              The IPC identifies and illustrates all line replaceable parts and
              units of the aircraft, excluding the power plant parts.

2.10          Illustrated Parts Catalog (power plant) (PPIPC)--C
              --------------------------------------------------

              The PPIPC covers line replaceable parts and units of the power
              plant, provided by the Propulsion Systems manufacturer.



<PAGE>




                                                                     EXHIBIT "F"
                                                                     -----------
2.11          Illustrated Tool and Equipment Manual (TEM)
              -------------------------------------------

              The TEM provides information on Ground Equipment and Tools listed
              in the Seller's Aircraft Maintenance Manual.

2.12          Maintenance Facility Planning (MFP)
              -----------------------------------

              The MFP provides information that will assist airline personnel
              concerned with long term planning of ramp or terminal operations,
              Aircraft maintenance on the ramp and in the hangar, overhaul and
              testing of structure and system components.

2.13          Maintenance Planning Document (MPD)
              -----------------------------------

              The MPD provides maintenance data necessary to plan and conduct
              Aircraft maintenance checks and inspections.

2.14          Power Plant Build-up Manual (PPBM)
              ----------------------------------

              The PPBM provides instructions for the installation of a quick
              engine change kit on a bare engine.

2.15          Support Equipment Summary (SES)
              -------------------------------

              The SES lists support equipment recommended by the Seller, the
              Propulsion Systems manufacturer and Vendors.

2.16          Time Limits and Maintenance Checks/Service Limits and
              -----------------------------------------------------
              Maintenance Checks (TLMC\SLMC)
              ------------------------------

              The TLMC\SLMC document provides the Manufacturer's recommended
              scheduled time limits for inspections and maintenance checks.

2.17          Tool\Equipment Drawings (TED)
              -----------------------------

              TED's will be supplied in the form of aperture cards for the
              Seller and, when available, Vendor maintenance tools.

2.18          Tool and Equipment Drawing Index (TEI)
              --------------------------------------



<PAGE>




                                                                    EXHIBIT "F"
                                                                    -----------
              The TEI is an alpha-numeric listing of the TED's.

2.19          Tool and Equipment Bulletin (TEB)
              ---------------------------------

              The TEB provides advance information related to tools and test
              equipment development.

2.20          Trouble Shooting Manual (TSM)--C
              --------------------------------

              The TSM complements the CFDS and provides trouble-shooting data in
              the following three levels:

              Level 1 -             Aimed at line use.  Fault isolation guidance
              -------               for systems or parts of systems monitored
                                    mainly by CFDS.  Also guidance for systems
                                    not monitored by CFDS.

              Level 2 -             Aimed at hangar use.  Fault isolation
              -------               guidance for non-CFDS monitored systems in
                                    the form of functional block diagrams,
                                    charts and tables.

              Level 3 -             Aimed at engineering use.  List of CFDS
              -------               messages and decoding of trouble shooting
                                    data (decoding of coded messages provided by
                                    the CFDS). Level 3 is supplied on floppy
                                    disk.

3.            MISCELLANEOUS DOCUMENTATION
              ---------------------------

3.1           Airplane Characteristics for Airport Planning (AC)
              --------------------------------------------------

              The AC will be in general accordance with Specification NAS 3601.

3.2           Aircraft Recovery Manual (ARM)
              ------------------------------

              The ARM provides the following planning information: preparing and
              moving a disabled aircraft that may be obstructing airport
              traffic.

3.3           Cargo Loading System Manual (CLS)
              ---------------------------------

              The CLS details handling procedures for the Cargo Loading System.

3.4           Crash Crew Chart (CCC)
              ----------------------



<PAGE>




                                                                    EXHIBIT "F"
                                                                    ----------

              The CCC provides information concerning access to the Aircraft
              interior, location of safety equipment, hazardous liquids, etc.

3.5           Guidelines for Customer Originated Changes (GCOC)
              -------------------------------------------------

              The GCOC provides production and presentation rules for the data
              covering Buyer originated changes on the Aircraft to be
              incorporated by the Seller in the Technical Publications as per
              Subclause 14.11 of the Agreement.

3.6           List of Radioactive and Hazardous Elements (LRE)
              ------------------------------------------------

              The LRE provides information on components and materials for which
              specific precautions have to be taken.

3.7           List of Applicable Publications (LAP)--C
              ----------------------------------------

              The LAP will record the Seller's various Airframe Technical
              Publications indicating the last valid revision number and issue
              date.

3.8           Livestock Transportation Manual (LTM)
              -------------------------------------

              The LTM details the facilities, equipment and procedures necessary
              for live animal transportation in aircraft of the Manufacturer of
              the type of the Aircraft.

3.9           Service Bulletins (SB)--C
              -------------------------

              The Buyer will receive all Service Bulletins applicable to the
              Aircraft.

3.10          Service Bulletin Index (SBI)
              ----------------------------

              The SBI is a listing of all Service Bulletins issued in ATA 100
              chapter sequence.

              The SBI provides details of SB number, SB title, associated
              modification number, issue status, Vendor SB number (if
              applicable) and affected fleet.

3.11          Service Information Letters (SIL)
              ---------------------------------

              SILs give information of a general nature and also about minor
              changes or inspections the Buyer may wish to apply under the
              Buyer's authority.



<PAGE>




                                                                    EXHIBIT "F"
                                                                    -----------
3.12          Transportability Manual (TM)
              ----------------------------

              The TM gives cargo hold dimensions for currently available cargo
              Aircraft, transportation information and requirements for large
              Aircraft components. Component dimensions, weights and shelf life
              limitations are also given.

3.13          Supplier Product Support Agreements (SPSA)
              ------------------------------------------

              The SPSA is a collection of product support conditions negotiated
              by the Manufacturer with the suppliers of Aircraft equipment.

3.14          Vendor Information Manual (VIM)
              -------------------------------

              The VIM provides Vendor contact information.

3.15          Vendor Information Manual (GSE) (VIM/GSE)
              -----------------------------------------

              The VIM/GSE gives contact names and addresses of Ground Support
              Equipment (GSE) vendors and their product support organizations.

4.            OPERATIONAL MANUALS
              -------------------

4.1           Abnormal\Emergency Check List\Quick Reference Handbook (CL\QRH)--C
              ------------------------------------------------------------------

              The CL is an extract from the FCOM presented as a booklet for
              quick in-flight use.

4.2           FAA Approved Flight Manual (FM)--C
              ----------------------------------

              The AFM provides Aircraft performance operating limitations and
              other flight data required by the relevant airworthiness
              authorities for certification. It includes the Configuration
              Deviation List (CDL).

4.3           Flight Crew Operating Manual (FCOM)--C
              --------------------------------------

              The FCOM provides Aircraft and systems descriptions, normal,
              abnormal and emergency procedures as well as operational
              performance.

4.4           Master Minimum Equipment List (MMEL)
              ------------------------------------

              The MMEL defines the components and the related conditions under
              which, when the components are defective, the Aircraft may be
              cleared for flight. In addition, the MMEL provides the necessary
              information to establish the Buyer's own Minimum Equipment List
              (MEL).



<PAGE>




                                                                    EXHIBIT "F"
                                                                    -----------
4.5           Performance Engineering Program (PEP)
              -------------------------------------

              The PEP consists of a Low Speed Performance data base and a High
              Speed Performance data base together with their respective
              programs. The Performance Engineering Program may be used by the
              Buyer under the license conditions set forth in Appendix A to this
              Exhibit F.

              The Low Speed Performance programs consist of the Takeoff and
              Landing Chart computation program (TLC) which permits the
              computation of:

              - regulatory take-off and landing performance,

              - noncertified take-off performance accounting for runway data and
              weather, together with the Tabulation and Interpolation program
              (TAB), issued with the AFM, which permits the reading, editing and
              interpolation of the tables listed in the AFM.

              The High Speed Performance programs are the In Flight Performance
              computation program (IFP) which permits computation of Aircraft
              performance for each flight phase and the Aircraft Performance
              Monitoring program (APM) which permits analysis of Aircraft cruise
              performance from data recorded during stabilized flight periods.

4.6           Performance Program Manual (PPM)
              --------------------------------

              The PPM is the users' guide for the Performance Engineering
              Program (PEP).

4.7           Weight and Balance Manual (WBM) and
              Weight and Balance Manual Supplements--C
              ----------------------------------------

              The corresponding supplements:

              -Delivery Weighing Report,
              -Equipment List,

              will be delivered with each Aircraft.

5.            OVERHAUL DATA
              -------------

5.1           Cable Fabrication Manual (CFM)
              ------------------------------
              The CFM contains all the data necessary to locate, identify,
              manufacture and test control cables used on the Aircraft. An
              appendix contains cable end fitting specification sheets, and
              detailed manufacturing instructions.

5.2           Component Documentation Status (CDS)--C
              ---------------------------------------



<PAGE>




                                                                    EXHIBIT "F"
                                                                    -----------

              The CDS lists Component Maintenance Manuals in accordance with
              Subparagraphs 5.4 and 5.5 below.

5.3           Component Evolution List (CEL)
              ------------------------------

              The CEL is a noncustomized document listing all components on the
              Aircraft and also gives the evolution of each component.

              The information is provided in order of:
              - part number
              - FSCM
              - ATA reference.

5.4           Component Maintenance Manual Manufacturer (CMMM)
              ------------------------------------------------

              The CMMM contains all the data necessary to locate, identify and
              maintain Aircraft components manufactured by the Seller.

5.5           Component Maintenance Manual Vendor (CMMV)
              ------------------------------------------

              The Seller will to ensure that each Vendor of repairable
              components will deliver to the Buyer a Component Maintenance
              Manual Vendor with revision service.

6.            STRUCTURAL MANUALS
              ------------------

6.1           Nondestructive Testing Manual (NTM)
              -----------------------------------

              The NTM supplies Airframe data necessary to carry out
              nondestructive testing.

6.2           Structural Repair Manual (SRM)
              ------------------------------

              The SRM contains descriptive information for identification and
              repair of the Airframe primary and secondary structure and will
              include substantial structural analysis.



<PAGE>




                                                                    EXHIBIT "F"
                                                                    -----------


                                     FORM
                                     ----

AC      APERTURE CARD.  Refers to 35mm film contained on punched aperture cards.

CD      CD-ROM.

D       FLOPPY DISK

F       MICROFILM.  Refers to 16mm roll film in 3M type cartridges.

MP      Refers to paper printed one side, unpunched quality will 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.

SMF     SILVER MASTER FILM. Refers to thick diazo film suitable for further
        reproduction.

+       Denotes a combined A319/A320/A321 Technical Publication.

*       Denotes Technical Publications will be supplied in SGML format if such
        format becomes available from the Manufacturer.

                                     TYPE
                                     ----

C       CUSTOMIZED.  Refers to manuals which are customized to specific MSNs.

E       ENVELOPE.  Refers to manuals which are not customized.

P       PRELIMINARY. Refers to preliminary data or manuals which may consist of:

        -either one time issue not maintained by revision service, or

        -preliminary issues maintained by revision service until final manual
         or data delivery, or

        -supply of best available data under final format with progressive
         completion through



<PAGE>




          revision service.

                                                                    EXHIBIT "F"
                                                                    -----------

                                   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 agreed that the number of days indicated will be rounded up to the next
regular revision release date.


MANUALS AVAILABLE (headlines)
-----------------------------

1 - ENGINEERING DOCUMENTS 2 - MAINTENANCE & ASSOCIATED MANUALS 3 - MISCELLANEOUS
PUBLICATIONS 4 - OPERATIONAL MANUALS AND DATA 5 - OVERHAUL DATA 6 - STRUCTURAL
MANUALS



<PAGE>




                                                                    EXHIBIT "F"
                                                                    -----------

<TABLE>

---------------------------------------------------------------------------------------------------------
1. ENGINEERING DOCUMENTS


---------------------------------------------------------------------------------------------------------
<S>     <C>                               <C>        <C>         <C>      <C>        <C>         <C>
+       Installation and Assembly         IAD        AC          C        ***        AN/1/       0
*       Drawings (including detail
        drawings)
---------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------
+       Parts Usage (Effectivity)         PU         P2          E        ***        AN          0
                                                     MT          E        ***        AN          0
---------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------
+       Schedule (Drawing                 S          P2          E        ***        AN          0
*       Nomenclature)
---------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------
+       Drawing Number Index              DNI        P2          C        ***        AN          0
*
---------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------
+       Process and Material              PMS        F           E        ***        AN          0
*       Specification                                SMF         E        ***        AN          0
---------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------
+       Standards Manual                  SM         F           E        ***        AN          0
                                                     SMF         E        ***        AN          0
---------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------
+       Electrical Load Analysis          ELA        P2          E        ***        AN          0
*
---------------------------------------------------------------------------------------------------------
2.      MAINTENANCE & ASSOCIATED MANUALS

---------------------------------------------------------------------------------------------------------
</TABLE>

/1/Revision service for the manufacture drawings is restricted to cover the
   Aircraft configuration at delivery.



<PAGE>




                                                                    EXHIBIT "F"
                                                                    -----------

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------------------
MANUALS AVAILABLE                                Abbr             Form        Type           Qty        Rev         Deliv.
(detailed)                                       ----             ----        ----           ---        ---         ------
---------------------------------------------------------------------------------------------------------------------------------
<S>     <C>                                      <C>              <C>         <C>            <C>        <C>         <C>
---------------------------------------------------------------------------------------------------------------------------------
+       APU Build-up Manual                        ABM              MT          E            ***        AN          90
                                                                    F           E            ***        AN          90
                                                                    SMF         E            ***        AN          90
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
+       Aircraft Maintenance Manual                AMM              F           C            ***        4           90
                                                                    SMF         C            ***        4           90
                                                                    MP          C            ***        4           90
                                                                    P2          C            ***        4           90
                                                                    MT          C            ***        4           90
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
+       Aircraft Schematics Manual                 ASM              SMF         C            ***        4           90
                                                                    MT          C            ***        4           90
                                                                    F           C            ***        4           90
                                                                    MP          C            ***        4           90
                                                                    P1          C            ***        4           90
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
+       Aircraft Wiring Manual                     AWM              F1          C            ***        4           90
                                                                    P1          C            ***        4           90
                                                                    MP          C            ***        4           90
                                                                    MT          C            ***        4           90
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
+       Aircraft Wiring Lists                      AWL              P2          C            ***        4           90
                                                                    MT          C            ***        4           90
                                                                    (text)
                                                                    F           C            ***        4           90
                                                                    SMF         C            ***        4           90
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>





<PAGE>





                                                                     EXHIBIT "F"
                                                                     -----------

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------------
MANUALS AVAILABLE                                  Abbr            Form        Type        Qty         Rev         Deliv.
(detailed)                                         ----            ----        ----        ---         ---         ------
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>                                      <C>              <C>         <C>            <C>        <C>         <C>
-----------------------------------------------------------------------------------------------------------------------------------
+       Consumable Material List                   CML              P2          E         ***          AN           90
*                                                                   F           E         ***          AN           90
                                                                    SMF         E         ***          AN           90
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Component Location Manual                  CLM              P                     ***          4            90
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Duct Repair Manual                         DRM              P2          E         ***          AN           90
                                                                    SMF         E         ***          AN           90
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Fuel Pipe Repair Manual                    FPRM             P2          E         ***          AN           90
                                                                    SMF         E         ***          AN           90
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Illustrated Parts Catalog                  IPC              MT          C         ***          4            90
         (Airframe)                                                 F           C         ***          4            90
                                                                    SMF         C         ***          4            90
                                                                    MP          C         ***          4            90
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Illustrated Parts Catalog                  PIPC             MT          C         ***          4            90
        (Power Plant)/5/                                            MP          C         ***          4            90
                                                                    F           C         ***          4            90
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Illustrated Tool and Equipment             TEM              P2          E         ***          AN           360
*       Manual
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

/5/ Supplied by the Propulsion Systems Manufacturer

                                      154



<PAGE>




                                                                     EXHIBIT "F"
                                                                     -----------

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------------
MANUALS AVAILABLE                                  Abbr           Form        Type        Qty         Rev         Deliv.
(detailed)                                         ----           ----        ----        ---         ---         ------
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>                                      <C>              <C>         <C>         <C>         <C>         <C>
----------------------------------------------------------------------------------------------------------------------------------
+       Maintenance Facility Planning              MFP              P2          E          ***         AN          90
*
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Maintenance Planning                       MPD              P2          E          ***         AN          360
*       Document
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Power Plant Build-up                       PPBM             MT          E            ***        AN          90
        Manual /5/                                                  P2          E            ***        AN          90
                                                                    F           E            ***        AN          90
                                                                    SMF         E            ***        AN          90
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Support Equipment Summary                  SES              P2          E            ***        AN          360
*                                                                   F           E            ***        AN          360
                                                                    SMF         E            ***        AN          360
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Time Limits and Maintenance                TLMC/            P2          C            ***        4           90
        Checks/Service Limits                      SLMC
        and Maintenance Checks
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Tool and Equipment Drawings                TED              MT          E            ***        AN          360
                                                                    AC          E            ***        AN          360
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Tool and Equipment                         TEI              P2          E            ***        AN          360
*       Drawing Index
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


/5/ Supplied by the Propulsion Systems Manufacturer

                                      155



<PAGE>





                                                                 EXHIBIT "F"
                                                                 -----------

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------------
MANUALS AVAILABLE                                  Abbr             Form       Type       Qty         Rev         Deliv.
(detailed)                                         ----             ----       ----       ---         ---         ------
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>                                        <C>              <C>        <C>        <C>         <C>         <C>
----------------------------------------------------------------------------------------------------------------------------------
+       Trouble Shooting                           TSM              F           C         ***          4           90
        Manual                                                      SMF         C         ***          4
                                                                    P2          C         ***          4
                                                                    MT          C         ***          4
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Aircraft Documentation                     ADRES            CD          C         ***          4           90
*       Retrieval System
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Computer Assisted Aircraft                 CAATS            CD          C         ***          4           90
*       Troubleshooting

-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Time Limits and                            TLMC             P2          c         ***          4           90
        Maintenance Checks
-----------------------------------------------------------------------------------------------------------------------------------

3.      MISCELLANEOUS PUBLICATIONS

-----------------------------------------------------------------------------------------------------------------------------------
+       Airplane                                   AC               P2          E         ***          AN          360
*       Characteristics for
        Airport Planning
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Aircraft Recovery Manual                   ARM              P2          E         ***          AN          90
*                                                                   F           E         ***          AN          90
                                                                    SMF         E         ***          AN          90
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
        Crash Crew Chart                           CCC              P1          E         ***          AN          180

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>




<PAGE>




                                                                     EXHIBIT "F"
                                                                     -----------

<TABLE>
<CAPTION>


----------------------------------------------------------------------------------------------------------------------------------
MANUALS AVAILABLE                                  Abbr            Form       Type        Qty           Rev       Deliv.
(detailed)                                         ----            ----       ----        ---           ---       ------
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>                                      <C>              <C>         <C>         <C>           <C>       <C>
----------------------------------------------------------------------------------------------------------------------------------
+       Guidelines for                             GCOC             P2          E         ***           AN          0
        Customer Originated
        Changes
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
+       List of Radioactive                        LRE              P2          E         ***           AN          90
        and Hazardous Elements
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       List of Applicable                         LAP              P2          C         ***           4           90
        Publications
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Livestock                                  LTM              P2          E         ***           AN          90
        Transportation Manual
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Service Bulletins                          SB               P2          C         ***           AN          0
*                                                                   SMF         C         ***           AN          0
                                                                    F           C         ***           AN          0
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Service Bulletin                           SBI              P1          E         ***           AN          90
*       Index
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Service Information                        SIL              P2          E         ***           AN          0
*       Letters
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Technical Publications                     TPCI             CD          C         ***           AN          90
*       Combined Index
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Transportability                           TM               P2          E         ***           AN          90
        Manual                                                      SMF         E         ***           AN
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>





<PAGE>




                                                                     EXHIBIT "F"
                                                                     -----------

<TABLE>
<CAPTION>


----------------------------------------------------------------------------------------------------------------------------------
MANUALS AVAILABLE                                  Abbr           Form        Type           Qty        Rev         Deliv.
(detailed)                                         ----           ----        ----           ---        ---         ------
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>                                      <C>              <C>         <C>            <C>        <C>         <C>
-----------------------------------------------------------------------------------------------------------------------------------
        Supplier Product                           SPSA             P2          E            ***        AN          360
        Support Agreements (SPSA)
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
*       Vendor Information Manual                  VIM              D           E            ***        AN          360
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Vendor Information                         VIM\             P2          E            ***        AN          360
*       Manual GSE                                 GSE
-----------------------------------------------------------------------------------------------------------------------------------

4.      OPERATIONAL MANUALS AND DATA

-----------------------------------------------------------------------------------------------------------------------------------
+       Check                                      CL/QRH           P2          C            ***        AN          90
        List/Abnormal/Emergency/
        Quick Reference
        Handbook
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       FAA Approved Flight                        AFM              P1          C            ***        AN          0
        Manual
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Flight Crew Operating                      FCOM             P2          C            ***        AN          90
        Manual
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Master Minimum                             MMEL             P2          E            ***        AN          90
        Equipment List
-----------------------------------------------------------------------------------------------------------------------------------
+       Performance                                PEP              D           E            ***        AN          90
        Engineering Program
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>





<PAGE>




                                                                     EXHIBIT "F"
                                                                     -----------

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------------
MANUALS AVAILABLE                                 Abbr            Form        Type        Qty         Rev         Deliv.
(detailed)                                        ----            ----        ----        ---         ---         ------
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>                                      <C>              <C>         <C>         <C>         <C>         <C>
-----------------------------------------------------------------------------------------------------------------------------------
+       Performance Program                        PPM              P2          E         ***           AN          90
*       Manual                                                      MT          E         ***           AN          90
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Weight and Balance                         WBM              P1          C         ***           AN          0
        Manual
-----------------------------------------------------------------------------------------------------------------------------------

5.      OVERHAUL DATA

-----------------------------------------------------------------------------------------------------------------------------------
+       Cable Fabrication Manual                   CFM              P2          E         ***           AN          90
*
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Component                                  CDS              P2          C         ***           AN          180
*       Documentation Status                                        F           C         ***           AN          180
                                                                    SMF         C         ***           AN          180
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Component Evolution                        CEL              F           E         ***           AN          180
        List/6/                                                     SMF         E         ***           AN          1
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Component Maintenance                      CMMM             F           E         ***           AN          180
*       Manual Airframe                                             SMF         E         ***           AN          180
        Manufacturer
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Component Maintenance                      CMMV             P2          E         ***           AN          180
*       Manual Vendor
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>




/6/ Optional - Delivered as follow-on for CDS.




<PAGE>




                                                                     EXHIBIT "F"
                                                                     -----------

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------------
MANUALS AVAILABLE                                 Abbr            Form        Type        Qty         Rev         Deliv.
(detailed)                                        ----            ----        ----        ---         ---         ------
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>                                      <C>              <C>         <C>         <C>         <C>         <C>
----------------------------------------------------------------------------------------------------------------------------------
6.    STRUCTURAL MANUALS

-----------------------------------------------------------------------------------------------------------------------------------
+       Nondestructive                             NTM              P2          E         ***          4           90
*       Testing Manual
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
+       Structural Repair                          SRM              F           E         ***          4           90
*       Manual                                                      SMF         E         ***          4           0
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                LICENSE FOR USE
                                ---------------
                 OF THE PERFORMANCE ENGINEERING PROGRAMS (PEP)
                 ---------------------------------------------

1.   GRANT
     -----

     The Seller grants to the Buyer the right to use the Performance Engineering
     Programs (PEP) in machine readable form on a single computer during the
     term of this license agreement (the "License Agreement").

     Use of the PEP in readable form will be limited to one (1) copy. However,
     the Seller may make duplicate copies, provided that they are either
     contained in the same computer as the original copy, or produced for
     checkpoint and restart purposes or made with the consent of the Seller for
     a specific need.

2.   MERGER
     ------

     The PEP may be used and adapted in machine readable form for the purpose of
     merging it into other program material of the Buyer, but, on termination of
     this License Agreement, the Buyer will remove the PEP from the other
     program material with which it has been merged.

     The Buyer agrees to reproduce the copyright and other notices as they
     appear on or within the original media on any copies that the Buyer makes
     of the PEP.

3.   PERSONAL LICENSE
     ----------------

     The above described license is personal to the Buyer, nontransferable and
     nonexclusive.

4.   INSTALLATION
     ------------

     It is the Buyer's responsibility to install the PEP and to perform any
     mergings and checks. The Seller will, however, assist the Buyer's
     operations engineers in the initial phase following the delivery of the PEP
     until such personnel reach the familiarization level required to make
     inputs and correlate outputs.

5.   PROPRIETARY RIGHTS AND NONDISCLOSURE
     ------------------------------------

5.1  The PEP and the copyright and other proprietary rights of whatever nature
     in the PEP are and will remain with the Seller. The PEP and its contents
     are designated as confidential.

5.2  The Buyer undertakes not to disclose the PEP, parts thereof or its contents
     to any third party without the prior written consent of the Seller. Insofar
     as it is necessary to disclose aspects of the PEP to employees, such
     disclosure is permitted only for the purpose for which the PEP is supplied
     and only to the employee who needs to know the same.

6.   CONDITIONS OF USE
     -----------------



<PAGE>



6.1  The Seller does not warrant that the PEP will contain no errors. However,
     should the PEP be found to contain any error at delivery, the Buyer will
     notify the Seller promptly thereof and the Seller will take all proper
     steps to correct the same at its own expense.

6.2  The Buyer will ensure that the PEP is correctly used in appropriate
     machines as indicated in the Performance Programs Manual (PPM) and that
     staff are properly trained to use the same, to trace and correct running
     faults, to restart and recover after fault and to operate suitable checks
     for accuracy of input and output.

6.3  It is understood that the PPM is the user's guide of the PEP and that the
     Buyer will undertake to use the PEP in accordance with the PPM.

6.4  The PEP is supplied under the express condition that the Seller will have
     no liability in contract or in tort arising from or in connection with the
     Buyer's use of or inability to use the PEP.

7.   DURATION
     --------

     Subject to the Buyer's compliance with the terms of this License Agreement,
     the rights under this License Agreement will be granted to the Buyer for as
     long as the Buyer operates an Aircraft to which the PEP refers.



<PAGE>




                                                                     EXHIBIT "G"
                                                                     -----------
                         AIRFRAME PRICE REVISION FORMULA
                         -------------------------------

l.       BASE PRICE
         ----------

         The Base Price of the Airframe is as quoted in Subclause 4.1.1.1,
         4.1.1.2 or 4.1.1.3 of the Agreement, as applicable.

         The Base Price of a set of two (2) nacelles and two (2) thrust
         reversers is as quoted in Subclause 4.1.2.1.1(ii), 4.1.2.2.1(ii), or
         4.1.2.3.1(ii) of the Agreement, as applicable.

2.       BASE PERIOD
         -----------

         ***





         These Base Prices are subject to adjustment for changes in economic
         conditions as measured by data obtained from the United States
         Department of Labor, Bureau of Labor Statistics, and in accordance with
         the provisions of Paragraphs 4 and 5 of this Exhibit "G."

         ECIb and ICb index values indicated in Paragraph 4 of this Exhibit "G"
         are based on publications available at the date of signature of the
         Agreement and are United States Department of Labor Bureau of Labor
         Statistics computations corresponding to certain base years as
         stipulated below in Paragraph 3. Should the Bureau of Labor Statistics
         change such base year, it will be necessary to restate such values in
         an appropriate manner. Other changes (such as benchmark revision),
         except those related to established errors from the Bureau of Labor
         Statistics, will not be taken into consideration.

3.       REFERENCE INDEXES
         -----------------

         ***





         Material Index:  "Industrial Commodities Index" (hereinafter
         --------------
         referred to as "ICI-Index"), published monthly by the United
         States Department of Labor, Bureau of Labor Statistics, in
         "Producer Prices and Price Indexes" (Table 6: "Producer prices



<PAGE>




                                                                    EXHIBIT "G"
                                                                    -----------

         and price indexes for commodity groupings and individual items"). (Base
         year 1982 = 100.)


4 -      REVISION FORMULA
         ----------------

         ***







         In determining the Revised Base Price at delivery of the Aircraft, each
         quotient will be calculated to the nearest ten thousandth (4 decimals).
         If the next succeeding place is five (5) or more, the preceding decimal
         place will be raised to the next higher figure. The final factor will
         be rounded to the nearest ten thousandth (4 decimals).

         After final computation, Pn will be rounded to the next whole number
         (0.5 or more rounded to l).


5.       GENERAL PROVISIONS
         ------------------

5.1      Substitution of Indexes
         -----------------------

         In the event that:

         (i)      the United States Department of Labor substantially
                  revises its methodology for calculating any of the
                  indexes referred to hereabove, or



<PAGE>




                                                                     EXHIBIT "G"
                                                                     -----------


         (ii)     the United States Department of Labor discontinues, either
                  temporarily or permanently, any of the indexes referred to
                  hereabove and publication thereof, or

         (iii)    the data samples used to calculate any of the indexes referred
                  to hereabove are substantially changed,

         The Seller and the Buyer will agree on a substitute index.

         Such substitute index will reflect as closely as possible the actual
         variations in wage rates or in material prices, as the case may be,
         used in the calculation of the original index.

         As a result of this selection of a substitute index, the Seller and the
         Buyer will agree on appropriate adjustments to be made to the price
         revision formula; such adjustments may include, but will not be limited
         to, allowing to combine the successive utilization of the original
         index and of the substitute index, and other methodologies designed to
         ensure consistency in the numerators and denominators of the various
         quotients.

5.2      Final Index Values
         ------------------

         The Revised Base Price at the date of Aircraft delivery will be final
         and will not be subject to further adjustments, of any kind, to the
         applicable indexes as published at the date of Aircraft delivery.





<PAGE>




                                                                   EXHIBIT "H-1"

         CFM INTERNATIONAL PRICE REVISION FORMULA FOR A319 AIRCRAFT
         ----------------------------------------------------------

l.       REFERENCE PRICE
         ---------------

         The Reference Price of a set of two (2) CFM International CFM 56-5B-6/P
         engines and additional equipment is as quoted in Subclause 4.1.2.1.1(i)
         of the Agreement.

         This Reference Price is valid for Aircraft delivered no later than
         December 31, 1999, and is subject to adjustment for changes in economic
         conditions as measured by data obtained from the United States
         Department of Labor, Bureau of Labor Statistics, and in accordance with
         the provisions of Paragraphs 4 and 5 of this Exhibit "H-1."

2.       REFERENCE PERIOD - REFERENCE COMPOSITE PRICE INDEX
         --------------------------------------------------

         The above Reference Price has been established in accordance with the
         economic conditions prevailing in September 1990 (March 1991
         theoretical delivery conditions), as defined, according to CFM
         International, by the Reference Composite Price Index of 126.54.

3.       REFERENCE INDEXES
         -----------------

         Labor Index: "Aircraft Engines and Engine Parts," Standard Industrial
         -----------
         Classification 3724--Average hourly earnings (hereinafter referred to
         as "HE SIC 3724"), published by the United States Department of Labor,
         Bureau of Labor Statistics, in "Employment and Earnings," Establishment
         Data: Hours and Earnings (Table B-15: Average hours and earnings of
         production or nonsupervisory workers on private nonfarm payrolls by
         detailed industry).

         Material Index (I):  "Industrial Commodities" (hereinafter
         ------------------
         referred to as "IC-Index"), published by the United States Department
         of Labor, Bureau of Labor Statistics, in "Producer Prices and Price
         Indexes" (Table 6: Producer prices and price indexes for commodity
         groupings and individual items). (Base year 1982 = 100.)

         Material Index (II): "Metals and Metal Products" Code l0 (hereinafter
         -------------------
         referred to as "MMP-Index"), published by the United States Department
         of Labor, Bureau of Labor Statistics, in "Producer Prices and Price
         Indexes" (Table 6: Producer prices and price indexes for commodity
         groupings and individual items). (Base year 1982 = 100.)



<PAGE>




                                                                   EXHIBIT "H-1"
                                                                   -------------


         Energy Index:  "Fuels and Related Products and Power"  Code 5
         ------------
         (hereinafter referred to as "EP-Index"), published by the United States
         Department of Labor, Bureau of Labor Statistics, in "Producer Prices
         and Price Indexes" (Table 6: Producer prices and price indexes for
         commodity groupings and individual items). (Base year 1982 = 100.)

4.       REVISION FORMULA
         ----------------

         Pn       =        Pb x CPIn
                                ----
                                126.54

         Where

         Pn       =        Revised Reference Price of a set of two (2) engines
                           at delivery of the Aircraft.

         Pb       =        Reference Price as defined above.

         CPIn              = Composite Price Index for the sixth month prior to
                           the month of delivery of the Aircraft.

                           Said Composite Price Index is composed as follows:

         CPIn     =        0.55 (HEn x 100) + 0.10 ICn + 0.25 MMPn + 0.10 EPn
                           ---
                           (11.16         )


                  Where

         HEn               = HE SIC 3724 for the sixth month prior to the month
                           of delivery of the Aircraft; the quotient HEn/11.16
                           is rounded to the nearest third decimal place. The
                           product by 0.55 is rounded to the nearest second
                           decimal place.

         ICn      =        IC-Index for the sixth month prior to the month of
                           delivery of the Aircraft.

         MMPn              = MMP-Index for the sixth month prior to the month of
                           delivery of the Aircraft. The product by 0.25 is
                           rounded to the nearest second decimal place.





<PAGE>




                                                                   EXHIBIT "H-1"
                                                                   -------------

         EPn      =        EP-Index for the sixth month prior to the month of
                           delivery of the Aircraft.



         The Composite Price Index will be determined to the second decimal
         place. If the next succeeding decimal place is five (5) or more, the
         preceding decimal figure will be raised to the next higher figure.

         The final factor will be rounded to the nearest thousandth (3
         decimals).

5.       GENERAL PROVISIONS
         ------------------

5.1      The Revised Reference Price at delivery of the Aircraft will be the
         final price and will not be subject to further adjustments in the
         indexes.

5.2      If no final index value is available for any of the applicable months,
         the published preliminary figures will be the basis on which the
         Revised Reference Price will be computed.

5.3      If the United States Department of Labor substantially revises
         the methodology of calculation of the indexes referred to in
         this Exhibit "H-1" or discontinues any of these indexes, the
         Seller will, in agreement with CFM International, apply a
         substitute for the revised or discontinued index, such
         substitute index to lead in application to the same adjustment
         result, insofar as possible, as would have been achieved by
         continuing the use of the original index as it may have
         fluctuated had it not been revised or discontinued.

         Appropriate revision of the formula will be made to accomplish this
         result.

5.4      Should the above escalation provisions become null and void by action
         of the United States Government, the Reference Price will be adjusted
         to reflect increases in the cost of labor, material and fuel which have
         occurred from the period represented by the applicable Reference Price
         Indexes to the sixth month prior to the scheduled delivery of the
         Aircraft.

5.5      The Revised Reference Price at delivery of the Aircraft in no event
         will be less than the Reference Price defined in Paragraph 1 of this
         Exhibit "H-1."






<PAGE>




                                                                   EXHIBIT "H-2"




         CFM INTERNATIONAL PRICE REVISION FORMULA FOR A320 AIRCRAFT
         ----------------------------------------------------------

l.       REFERENCE PRICE
         ---------------

         The Reference Price of a set of two (2) CFM International CFM 56-5B-4/P
         engines and additional equipment is as quoted in Subclause 4.1.2.2.1(i)
         of the Agreement.

         This Reference Price is subject to adjustment for changes in economic
         conditions as measured by data obtained from the United States
         Department of Labor, Bureau of Labor Statistics, and in accordance with
         the provisions of Paragraphs 4 and 5 of this Exhibit "H-2."

2.       REFERENCE PERIOD - REFERENCE COMPOSITE PRICE INDEX
         --------------------------------------------------

         The above Reference Price has been established in accordance with the
         economic conditions prevailing in October 1985 (April 1986 theoretical
         delivery conditions), as defined, according to CFM International, by
         the Reference Composite Price Index of 108.66.

3.       REFERENCE INDEXES
         -----------------

         Labor Index: "Aircraft Engines and Engine Parts," Standard Industrial
         -----------
         Classification 3724--Average hourly earnings (hereinafter referred to
         as "HE SIC 3724"), published by the United States Department of Labor,
         Bureau of Labor Statistics, in "Employment and Earnings," Establishment
         Data: Hours and Earnings (Table B-15: Average hours and earnings of
         production or nonsupervisory workers on private nonfarm payrolls by
         detailed industry).

         Material Index (I):  "Industrial Commodities" (hereinafter
         ------------------
         referred to as "IC-Index"), published by the United States Department
         of Labor, Bureau of Labor Statistics, in "Producer Prices and Price
         Indexes" (Table 6: Producer prices and price indexes for commodity
         groupings and individual items). (Base year 1982 = 100.)

         Material Index (II): "Metals and Metal Products" Code l0 (hereinafter
         -------------------
         referred to as "MMP-Index"), published by the United States Department
         of Labor, Bureau of Labor Statistics, in "Producer Prices and Price
         Indexes" (Table 6: Producer prices and price indexes for commodity
         groupings and individual items). (Base year 1982 = 100.)



<PAGE>




                                                                   EXHIBIT "H-2"
                                                                   -------------



         Energy Index:  "Fuels and Related Products and Power"  Code 5
         ------------
         (hereinafter referred to as "EP-Index"), published by the United States
         Department of Labor, Bureau of Labor Statistics, in "Producer Prices
         and Price Indexes" (Table 6: Producer prices and price indexes for
         commodity groupings and individual items). (Base year 1982 = 100.)

4.       REVISION FORMULA
         ----------------

         Pn   =   Pb x CPIn
                       ----
                       108.66

         Where

         Pn       =        Revised Reference Price of a set of two (2) engines
                           at delivery of the Aircraft.

         Pb       =        Reference Price as defined above.

         CPIn              = Composite Price Index for the sixth month prior to
                           the month of delivery of the Aircraft.

                           Said Composite Price Index is composed as follows:

         CPIn     = 0.55 (HEn x 100) + 0.10 ICn + 0.25 MMPn + 0.10 EPn
                    ---
                    (11.16         )

                  Where

         HEn               = HE SIC 3724 for the sixth month prior to the month
                           of delivery of the Aircraft; the quotient HEn/11.16
                           is rounded to the nearest third decimal place. The
                           product by 0.55 is rounded to the nearest second
                           decimal place.

         ICn      =        IC-Index for the sixth month prior to the month of
                           delivery of the Aircraft.

         MMPn              = MMP-Index for the sixth month prior to the month of
                           delivery of the Aircraft. The product by 0.25 is
                           rounded to the nearest second decimal place.




<PAGE>




                                                                   EXHIBIT "H-2"
                                                                   -------------


         EPn      =        EP-Index for the sixth month prior to the month of
                           delivery of the Aircraft.


         The Composite Price Index will be determined to the second decimal
         place. If the next succeeding decimal place is five (5) or more, the
         preceding decimal figure will be raised to the next higher figure.

         The final factor will be rounded to the nearest thousandth (3
         decimals).

5.       GENERAL PROVISIONS
         ------------------

5.1      The Revised Reference Price at delivery of the Aircraft will be the
         final price and will not be subject to further adjustments in the
         indexes.

5.2      If no final index value is available for any of the applicable months,
         the published preliminary figures will be the basis on which the
         Revised Reference Price will be computed.

5.3      If the United States Department of Labor substantially revises
         the methodology of calculation of the indexes referred to in
         this Exhibit "H-2" or discontinues any of these indexes, the
         Seller will, in agreement with CFM International, apply a
         substitute for the revised or discontinued index, such
         substitute index to lead in application to the same adjustment
         result, insofar as possible, as would have been achieved by
         continuing the use of the original index as it may have
         fluctuated had it not been revised or discontinued.

         Appropriate revision of the formula will be made to accomplish this
         result.

5.4      Should the above escalation provisions become null and void by action
         of the United States Government, the Reference Price will be adjusted
         to reflect increases in the cost of labor, material and fuel which have
         occurred from the period represented by the applicable Reference Price
         Indexes to the sixth month prior to the scheduled delivery of the
         Aircraft.

5.5      The Revised Reference Price at delivery of the Aircraft in no event
         will be less than the Reference Price defined in Paragraph 1 of this
         Exhibit "H-2."



<PAGE>




                                                                   EXHIBIT "H-3"
                                                                   -------------


         CFM INTERNATIONAL PRICE REVISION FORMULA FOR A321 AIRCRAFT
         ----------------------------------------------------------

l.       REFERENCE PRICE
         ---------------

         The Reference Price of a set of two (2) CFM International CFM 56-5B-3/P
         engines and additional equipment is as quoted in Subclause 4.1.2.3.1(i)
         of the Agreement.

         This Reference Price is valid for Aircraft delivered no later than
         December 31, 1999, and is subject to adjustment for changes in economic
         conditions as measured by data obtained from the United States
         Department of Labor, Bureau of Labor Statistics, and in accordance with
         the provisions of Paragraphs 4 and 5 of this Exhibit "H-3."

2.       REFERENCE PERIOD - REFERENCE COMPOSITE PRICE INDEX
         --------------------------------------------------

         The above Reference Price has been established in accordance with the
         economic conditions prevailing in October 1987 (April 1988 theoretical
         delivery conditions), as defined, according to CFM International, by
         the Reference Composite Price Index of 111.82.

3.       REFERENCE INDEXES
         -----------------

         Labor Index: "Aircraft Engines and Engine Parts," Standard Industrial
         -----------
         Classification 3724--Average hourly earnings (hereinafter referred to
         as "HE SIC 3724"), published by the United States Department of Labor,
         Bureau of Labor Statistics, in "Employment and Earnings," Establishment
         Data: Hours and Earnings (Table B-15: Average hours and earnings of
         production or nonsupervisory workers on private nonfarm payrolls by
         detailed industry).

         Material Index (I):  "Industrial Commodities" (hereinafter
         ------------------
         referred to as "IC-Index"), published by the United States Department
         of Labor, Bureau of Labor Statistics, in "Producer Prices and Price
         Indexes" (Table 6: Producer prices and price indexes for commodity
         groupings and individual items). (Base year 1982 = 100.)

         Material Index (II): "Metals and Metal Products" Code l0 (hereinafter
         -------------------
         referred to as "MMP-Index"), published by the United States Department
         of Labor, Bureau of Labor Statistics, in "Producer Prices and Price
         Indexes" (Table 6: Producer prices and price indexes for commodity
         groupings and individual items). (Base year 1982 = 100.)



<PAGE>




                                                                   EXHIBIT "H-3"
                                                                   -------------




         Energy Index:  "Fuels and Related Products and Power"  Code 5
         ------------
         (hereinafter referred to as "EP-Index"), published by the United States
         Department of Labor, Bureau of Labor Statistics, in "Producer Prices
         and Price Indexes" (Table 6: Producer prices and price indexes for
         commodity groupings and individual items). (Base year 1982 = 100.)

4.       REVISION FORMULA
         ----------------

         Pn       =        Pb x CPIn
                                ----
                                111.82

         Where

         Pn       =        Revised Reference Price of a set of two (2) engines
                           at delivery of the Aircraft.

         Pb       =        Reference Price as defined above.

         CPIn              = Composite Price Index for the sixth month prior to
                           the month of delivery of the Aircraft.

                           Said Composite Price Index is composed as follows:

         CPIn     =        0.55 (HEn x 100) + 0.10 ICn + 0.25 MMPn + 0.10 EPn
                           ---
                           (11.16         )



                  Where

         HEn               = HE SIC 3724 for the sixth month prior to the month
                           of delivery of the Aircraft; the quotient HEn/11.16
                           is rounded to the nearest third decimal place. The
                           product by 0.55 is rounded to the nearest second
                           decimal place.

         Icn      =        IC-Index for the sixth month prior to the month of
                           delivery of the Aircraft.

         MMPn              = MMP-Index for the sixth month prior to the month of
                           delivery of the Aircraft. The product by 0.25 is
                           rounded to the nearest second decimal place.

         EPn      =        EP-Index for the sixth month prior to the month of
                           delivery of the




<PAGE>




                                                                   EXHIBIT "H-3"
                                                                   -------------

                           Aircraft.









<PAGE>




                                                                   EXHIBIT "H-3"
                                                                   -------------

         The Composite Price Index will be determined to the second decimal
         place. If the next succeeding decimal place is five (5) or more, the
         preceding decimal figure will be raised to the next higher figure.

         The final factor will be rounded to the nearest thousandth (3
         decimals).

5.       GENERAL PROVISIONS
         ------------------

5.1      The Revised Reference Price at delivery of the Aircraft will be the
         final price and will not be subject to further adjustments in the
         indexes.

5.2      If no final index value is available for any of the applicable months,
         the published preliminary figures will be the basis on which the
         Revised Reference Price will be computed.

5.3      If the United States Department of Labor substantially revises the
         methodology of calculation of the indexes referred to in this Exhibit
         "H-3" or discontinues any of these indexes, the Seller will, in
         agreement with CFM International, apply a substitute for the revised or
         discontinued index, such substitute index to lead in application to the
         same adjustment result, insofar as possible, as would have been
         achieved by continuing the use of the original index as it may have
         fluctuated had it not been revised or discontinued.

         Appropriate revision of the formula will be made to accomplish this
         result.

5.4      Should the above escalation provisions become null and void by action
         of the United States Government, the Reference Price will be adjusted
         to reflect increases in the cost of labor, material and fuel which have
         occurred from the period represented by the applicable Reference Price
         Indexes to the sixth month prior to the scheduled delivery of the
         Aircraft.

5.5      The Revised Reference Price at delivery of the Aircraft in no event
         will be less than the Reference Price defined in Paragraph 1 of this
         Exhibit "H-3."





<PAGE>




                             LETTER AGREEMENT NO. 1



                             As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:   SPARE PARTS PROCUREMENT
      -----------------------

Ladies and Gentlemen:

         US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the
"Seller"), have entered into an Airbus A319/A320/A321 Purchase Agreement dated
as of even date herewith (the "Agreement"), which covers, among other things,
the sale by the Seller and the purchase by the Buyer of certain Aircraft, under
the terms and conditions set forth in said Agreement. The Buyer and the Seller
have agreed to set forth in this Letter Agreement No. 1 (the "Letter Agreement")
certain additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter Agreement
will have the meanings assigned thereto in the Agreement. The terms "herein,"
"hereof" and "hereunder" and words of similar import refer to this Letter
Agreement.

         Both parties agree that this Letter Agreement will constitute an
integral, nonseverable part of said Agreement, that the provisions of said
Agreement are hereby incorporated herein by reference, and that this Letter
Agreement will be governed by the provisions of said Agreement, except that if
the Agreement and this Letter Agreement have specific provisions which are
inconsistent, the specific provisions contained in this Letter Agreement will
govern.



<PAGE>




                                    CONTENTS
                                    --------
CLAUSES

1  -              GENERAL

2  -              INITIAL PROVISIONING

3  -              STORES

4  -              DELIVERY

5  -              PRICE

6  -              PAYMENT PROCEDURES AND CONDITIONS

7  -              TITLE

8  -              PACKAGING

9  -              DATA RETRIEVAL

10 -              BUY-BACK

11 -              WARRANTIES

12 -              LEASING

13 -              ***

14 -              TERMINATION

15 -              ASSIGNMENT





<PAGE>




1.                GENERAL
                  -------

1.1               Material
                  --------

                  This Letter Agreement covers the terms and conditions for the
                  services offered by the Seller to the Buyer ("Material
                  Support") in respect of Aircraft spare parts and other
                  equipment itemized below in Subparagraphs 1.1(a) through
                  1.1(f) ("Material") and is intended by the parties to be and
                  will constitute an agreement of sale of all Material furnished
                  to the Buyer by the Seller pursuant hereto, except as to
                  Material leased to the Buyer pursuant to Clause 12 of this
                  Letter Agreement.

                  The Material will comprise:

                  (a)      Seller Parts

                  (b)      Vendor Parts classified as rotable line replacement
                           units.

                  (c)      Vendor Parts classified as expendable line
                           maintenance parts.

                  (d)      Ground support equipment (GSE) and special-to-type
                           tools.

                  (e)      Hardware and standard material.

                  (f)      Consumables and raw material.

                  It is expressly understood that Seller Parts will not include
                  parts manufactured pursuant to a Parts Manufacturing
                  Authority.

1.2               Scope of Material Support
                  -------------------------

1.2.1             The Material Support to be provided by the Seller under the
                  conditions hereunder covers the following:

                  (a)      all Material purchased by the Buyer from the Seller
                           during the Initial Provisioning Period (defined below
                           in Paragraph 2) (the "Initial Provisioning") and all
                           items in Subparagraphs 1.1(a) through 1.1(d) for
                           purchases additional to the Initial Provisioning
                           Period, and

                  (b)      the Seller's leasing of Seller Parts to the Buyer for
                           the Buyer's use on its Aircraft in air transport
                           service as set forth in Paragraph 12 of this Letter
                           Agreement.





<PAGE>




1.2.2             Propulsion Systems, including associated parts and spare parts
                  therefore, are not covered under this Letter Agreement and
                  will be subject to direct negotiations between the Buyer and
                  the relevant Propulsion Systems manufacturer(s).

1.2.3             During a period commencing on the date hereof and
                  continuing as long as at least five (5) aircraft of the
                  type of the Aircraft are operated by airlines in commercial
                  air transport service (the "Term"), the Seller will
                  maintain or cause to be maintained such stock of Seller
                  Parts as the Seller deems reasonable (upon consultation
                  with the Buyer) and will furnish  Seller Parts adequate to
                  meet the Buyer's needs for repairs and replacements on the
                  Aircraft.  Such Seller Parts will be priced, sold and
                  delivered in accordance with Paragraphs 4 and 5 of this
                  Letter Agreement, upon receipt of the Buyer's orders.

                  The Seller will use its best efforts to obtain a similar
                  service from all Vendors of parts that are originally
                  installed on the Aircraft and not manufactured by the Seller.

1.3               Purchase Source of Seller Parts
                  -------------------------------

                  The Buyer agrees to purchase from the Seller's designee ASC
                  the Seller Parts required for the Buyer's own needs during the
                  Term, provided that this Paragraph 1.3 will not in any way
                  prevent the Buyer from resorting to the stocks of Seller Parts
                  of other airlines operating aircraft of the type of the
                  Aircraft or from purchasing items equivalent to Seller Parts
                  from said airlines, distributors or dealers, on the condition
                  that said Seller Parts have been designed and manufactured by,
                  or obtained from, the Seller, and provided also that this
                  Paragraph 1.3 will not prevent the Buyer from exercising its
                  rights under Subparagraph 1.4 of this Letter Agreement.

1.4               Manufacture of Seller Parts ***          by the Buyer
                  -----------------------------------------------------

1.4.1             The provisions of Subparagraph 1.3 of this Letter Agreement
                  notwithstanding, the Buyer may manufacture or have
                  manufactured for its own use or may purchase from any other
                  source whatsoever Seller Parts in the following cases:

                  (a)      after expiration of the Term, if at such time the
                           Seller is out of stock of a required Seller Part;

                  (b)      at any time, to the extent Seller Parts are needed to
                           effect AOG repairs on any Aircraft delivered under
                           the Agreement and are not available from the Seller
                           within a lead time shorter than or equal to the time
                           in which the Buyer can provide said Seller Parts,
                           provided the Buyer will sell or lease




<PAGE>




                           such Seller Parts only if
                           they are assembled in an Aircraft that is sold or
                           leased;
                  (c)      in the event that the Seller fails to fulfill its
                           obligations with respect to any Seller Parts pursuant
                           to Subparagraph 1.2 above within a reasonable period
                           after written notice thereof from the Buyer;

                  (d)      when, with respect to certain Seller Parts, the
                           Seller has granted, under the Illustrated Parts
                           Catalog supplied in accordance with this Letter
                           Agreement, the right of local manufacture of Seller
                           Parts, and

                  (e)      ***


1.4.2             ***


1.4.3             The rights granted to the Buyer in Subparagraph 1.4.1 will not
                  in any way be construed as a license, nor will they in any way
                  obligate the Buyer to pay any license fee, royalty or
                  obligation whatsoever, nor will they in any way be construed
                  to affect the rights of third parties.

1.4.4             The Seller will provide the Buyer with all technical data
                  reasonably necessary to manufacture Seller Parts *** , in the
                  event the Buyer is entitled to do so pursuant to Subparagraphs
                  1.4.1 and 1.4.2 of this Letter Agreement. The proprietary
                  rights to such technical data will be subject to the terms of
                  Subclause 14.10.1 of the Agreement.

1.5               ***
                  ---------------------

                  ***





<PAGE>




1.6               Language
                  --------

1.6.1             Words and expressions used in this Letter Agreement will have
                  the same meanings as they do in the rest of the Agreement,
                  unless otherwise stated in this Letter Agreement.


1.6.2             Technical and trade items used but not defined herein or in
                  the Agreement will be defined as generally accepted in the
                  aircraft manufacturing industry.

2.                INITIAL PROVISIONING
                  --------------------

                  The period up to and expiring on the ninetieth (90th) day
                  after delivery of the last Aircraft subject to firm order
                  under the Agreement will hereinafter be referred to as the
                  Initial Provisioning Period.

2.1               Seller-Supplied Data
                  --------------------

                  The Seller will prepare and supply to the Buyer the following
                  documents:

2.1.1             Initial Provisioning Data
                  -------------------------

                  The Seller will provide the Buyer initial provisioning data
                  provided for in Chapter 1 of ATA 2000 for the Aircraft
                  ("Initial Provisioning Data") in a form, format and within a
                  time period to be mutually agreed upon.

                  A revision service will be provided free of charge and will be
                  effected every ninety (90) days or more frequently if
                  reasonably requested by the Buyer, up to the end of the
                  Initial Provisioning Period, or until the configuration of the
                  Buyer's delivered Aircraft is included.

                  In any event, the Seller will ensure that Initial Provisioning
                  Data are released to the Buyer in time to allow the necessary
                  evaluation time by the Buyer and the on-time delivery of
                  ordered Material.

2.1.2             Supplementary Data
                  ------------------

                  The Seller will provide the Buyer with Local Manufacture
                  Tables (X-File), as part of the Illustrated Parts Catalog
                  (Additional Cross-Reference Tables), which will be a part of
                  the Initial Provisioning Data Package.

2.1.3             Initial Provisioning Data for Reconfirmable Aircraft
                  ----------------------------------------------------

2.1.3.1           All Reconfirmable Aircraft and Additional Aircraft which are
                  acquired by the Buyer (the "Reconfirmed Aircraft") pursuant to
                  the terms and conditions of Letter Agreement No. 2 to the
                  Agreement will be included in the revision to the provisioning
                  data that is issued after reconfirmation of a Reconfirmable
                  Aircraft





<PAGE>




                  or the Buyer's exercise of its option to purchase an
                  Additional Aircraft, if such revision is not scheduled to be
                  issued within four (4) weeks from the date of reconfirmation
                  or of the date of exercise of such option. If the date of
                  reconfirmation or the date of the exercise of the option does
                  not allow the Seller four (4) weeks' preparation time, the
                  Aircraft concerned will be included in the next scheduled
                  revision.

2.1.3.2           The Seller will, from the date of reconfirmation of an
                  Aircraft until three (3) months after delivery of such
                  Aircraft, submit to the Buyer details of particular Vendor
                  components being installed on the Aircraft and will recommend
                  the quantity to order. A list of such Vendor components will
                  be supplied at the time of the provisioning data revision as
                  specified above.

2.1.3.3           The Seller will deliver to the Buyer T-files for particular
                  Vendor components, as applicable, in time to allow the Buyer's
                  planning of repair and overhaul tasks.

2.1.3.4           At delivery of each Reconfirmed Aircraft, the data with
                  respect to Material will at least cover such Aircraft's
                  technical configuration as known six (6) months before
                  Aircraft delivery and will be updated to reflect the final
                  build status of such Aircraft. Such update will be included in
                  the data revisions issued three (3) months after delivery of
                  such Aircraft.

2.2               Vendor-Supplied Data
                  --------------------

2.2.1             General
                  -------

                  Vendors will prepare and issue T-files in the English language
                  for those Vendor components for which the Buyer has elected to
                  receive data.

                  Said data (initial issue and revisions) will be transmitted to
                  the Buyer through the Seller. The Seller will review the
                  compliance of such data with relevant ATA requirements, but
                  will not be responsible for the substance of such data, other
                  than any errors or omissions attributable to the Seller's
                  compilation of the data. The Seller will use its best efforts
                  to ensure that such data will be adequate to enable the Buyer
                  to undertake in-house repair and/or overhaul of such
                  components.

                  In any event, the Seller will exert its best efforts to supply
                  Initial Provisioning Data to the Buyer in time to allow the
                  necessary evaluations by the Buyer and on-time deliveries.

2.2.2             Initial Provisioning Data
                  -------------------------

                  Initial Provisioning Data for Vendor products provided for in
                  Chapter 1 of ATA 2000 for the Aircraft will be furnished as
                  mutually agreed upon during a Preprovisioning Meeting (defined
                  below), with free-of-charge revision service assured up to the
                  end of the Initial Provisioning Period, or until it reflects
                  the configuration of the delivered Aircraft.





<PAGE>




2.3               Preprovisioning Meeting
                  -----------------------

2.3.1             The Seller will organize a meeting at its Material Support
                  Center in Hamburg, Germany ("MSC"), to formulate an acceptable
                  schedule and working procedure to accomplish the Initial
                  Provisioning of Material (the "Preprovisioning Meeting").

2.3.2             The date and location of the Preprovisioning Meeting will be
                  mutually agreed upon.

2.4               Initial Provisioning Training
                  -----------------------------

                  The Seller will furnish, at the Buyer's request and at no
                  charge, training courses related to the Seller's provisioning
                  documents, purchase order administration and handling at MSC.

2.5               Initial Provisioning Conference
                  -------------------------------

                  The Seller will organize an Initial Provisioning conference at
                  MSC that will include Vendor participation, as agreed upon
                  during the Preprovisioning Meeting (the "Initial Provisioning
                  Conference").

2.6               Initial Provisioning Data Compliance
                  ------------------------------------

2.6.1             Initial Provisioning Data generated by the Seller and supplied
                  to the Buyer will comply with the latest configuration of the
                  Aircraft to which such data relate, as known three (3) months
                  before the data are issued. Said data will enable the Buyer to
                  order Material conforming to its Aircraft as required for
                  maintenance and overhaul.

                  This provision will not cover parts embodying those Buyer
                  modifications that are unknown to the Seller, and parts
                  embodying modifications neither agreed to nor designed by the
                  Seller.

2.6.2             During the Initial Provisioning Period, Material will conform
                  with the latest configuration standard of the affected
                  Aircraft and with the Initial Provisioning Data transmitted by
                  the Seller. Should the Seller default in this obligation, it
                  will immediately replace such parts and/or authorize return
                  shipment at no transportation cost to the Buyer. The Buyer
                  will make reasonable efforts to minimize such cost, in
                  particular by using its own airfreight system for
                  transportation *** at no charge to the Seller, *** The
                  Seller, in addition, will use its best efforts to cause
                  Vendors to provide a similar service for their items.



<PAGE>




2.7               Delivery of Initial Provisioning Material
                  -----------------------------------------

2.7.1             To support the operation of the Aircraft, the Seller will use
                  its best efforts to deliver Initial Provisioning Material in
                  Subparagraph 1.1(a) of this Letter Agreement against the
                  Buyer's orders from the Seller and according to the following
                  schedule, provided the orders are received by the Seller in
                  accordance with published lead time:

                  Each block of Aircraft referred to in the schedule below will
                  be defined in the Initial Provisioning Conference.

                  (a)      At least fifty percent (50%) of the ordered quantity
                           of each Line Replacement or Line Maintenance item
                           three (3) months before delivery of the first
                           Aircraft of each block of Aircraft for which the
                           Buyer has placed Initial Provisioning orders for
                           Material defined above in Subparagraph 1.1(a).

                  (b)      At least seventy-five percent (75%) of the ordered
                           quantity of each Line Replacement or Line Maintenance
                           item one (1) month (for items identified as line
                           station items, two (2) months) before delivery of the
                           first Aircraft of each block of Aircraft for which
                           the Buyer has placed Initial Provisioning orders for
                           Material defined above in Subparagraph 1.1(a).

                  (c)      Fifty percent (50%) of the ordered quantity of each
                           item except as specified in Subparagraphs 2.7.1 (a)
                           and 2.7.1 (b) above at delivery of the first Aircraft
                           of each block of Aircraft for which the Buyer has
                           placed Initial Provisioning orders for Material
                           defined above in Subparagraph 1.1(a).

                  (d)      One hundred percent (100%) of the ordered quantity of
                           each item, including line station items, three (3)
                           months after delivery of the first Aircraft of each
                           block of Aircraft for which the Buyer has placed
                           Initial Provisioning orders for Material, as defined
                           above in Subparagraph 1.1(a). If said one hundred
                           percent (100%) cannot be accomplished, the Seller
                           will have such items available at its facilities for
                           immediate supply, in case of an AOG.

2.7.2             In the event that less than eighty-five percent (85%) of the
                  Buyer's orders of Initial Provisioning Material defined above
                  in Subparagraph 1.1(a), supporting each block of Aircraft (the
                  "IP Block"), is delivered by the Seller to the Buyer in
                  accordance with the provisions set forth above in Subparagraph
                  2.7.1(d) for reasons other than Excusable Delay as defined in
                  Clause 10 of the Agreement, then the Seller will provide the
                  Buyer with a credit equal to (i) eighty-five percent (85%)
                  minus the actual percentage of the IP Block delivered, up to a
                  maximum





<PAGE>




          of ten percent (10%), multiplied by (ii) the aggregate value of the
          undelivered portion of the IP Block ordered by the Buyer from the
          Seller in accordance with all published lead times. Subparagraph 4.4
          of this Letter Agreement will apply to the Seller's undertakings under
          this Subparagraph 2.7.2.

          Such credit will be made available by the Seller to the Buyer upon
          mutual agreement of the computation.

2.7.3     The Buyer may, subject to the Seller's agreement, cancel or modify
          Initial Provisioning orders placed with the Seller with no
          cancellation charge as follows:

          (a)  "Long Lead-Time Material" (lead time exceeding twelve (12)
               months) not later than six (6) months before scheduled delivery
               of said Material,

          (b)  normal lead time Material not later than three (3) months before
               scheduled delivery of said Material,

          (c)  Buyer-specific Material and Material in Subparagraphs 1.1(b)
               through 1.1(f) no later than the quoted lead time before
               scheduled delivery of said Material.

2.7.4     Should the Buyer cancel or modify any orders for Material outside the
          time limits defined above in Subparagraph 2.7.3, the Seller will have
          no liability for the cancellation or modification, and the Buyer will
          reimburse the Seller for any direct cost incurred in connection
          therewith to the extent that such cost has been properly documented by
          the Seller to the satisfaction of the Buyer.

3.        STORES
          ------

3.1       ASCO Spares Center
          ------------------

          The Seller has established and will maintain or cause to be
          maintained, as long as at least five (5) aircraft of the type of the
          Aircraft are operated by US airlines in commercial air transport
          service (the "US Term"), a US store adjacent to Dulles International
          Airport, Washington, DC, known as the ASCO Spares Center -Washington
          ("ASCO Spares Center"). The ASCO Spares Center will be operated
          twenty-four (24) hours/day, seven (7) days/week, all year, for the
          handling of AOG and critical orders for Seller Parts. ASCO Spares
          Center will maintain a stock of Seller Parts, including Leased Parts
          listed in Appendix A to this Letter Agreement. In the event of the
          recurrence of the nonavailability to the Buyer of a part from the ASCO
          Spares Center, the Seller will take all necessary steps to ensure
          availability thereof at the ASCO Spares Center at the Buyer's next
          request. In the event that the Buyer is still operating one or more
          Aircraft at the end of the Term, the Seller will use its best efforts
          to ensure the Buyer's access to Seller



<PAGE>




          Parts.


3.2       Material Support Center, Germany
          --------------------------------

          The Manufacturer has set up and will maintain or cause to be
          maintained during the Term a store of Seller Parts at MSC. MSC will be
          operated twenty-four (24) hours/day, seven (7) days/week, all year.

3.3       Other Points of Shipment
          ------------------------

          The Seller reserves the right to effect deliveries from distribution
          centers other than the ASCO Spares Center or MSC and from any of the
          production facilities of the Associated Contractors.

4.        DELIVERY
          --------

4.1       General
          -------

          The Buyer's purchase orders will be administered in accordance with
          ATA Specification 2000.

          The provisions of this Paragraph 4 do not apply to Initial
          Provisioning Data and Material.

4.2       Lead Times
          ----------

4.2.1     In general, the lead times are (and, unless otherwise agreed, will at
          all times be) in accordance with the definition in the "World Airline
          and Suppliers Guide" (1994 edition).

4.2.2     Material will be dispatched within the lead times quoted in the
          published Seller's price catalog for Material described in
          Subparagraph 1.1(a), and within the Vendor's or supplier's lead time
          augmented by the Seller's own order and delivery processing time (such
          in-house processing time not to exceed fifteen (15) days) for Material
          described in Subparagraphs 1.1(b) through 1.1(d).  The Seller will
          endeavor to improve its lead times and neither the Seller, the
          Manufacturer nor any of their Affiliates will discriminate against the
          Buyer in delivery processing time.

4.2.3     Expedite Service
          ----------------

          The Seller operates a twenty-four (24) hour-a-day, seven (7) day-a-
          week expedite service to supply the relevant Seller Parts available in
          the Seller's stock, workshops and assembly line, including high-cost
          long- lead-time items, to the international airport nearest the
          location of such items (the "Expedite Service").



<PAGE>




          The Expedite Service is operated in accordance with the "World Airline
          and Suppliers Guide." Accordingly, the Seller will notify the Buyer of
          the action taken to effect the Expedite Service as follows:

          (a)  four (4) hours after receipt of an AOG order,

          (b)  twenty-four (24) hours after receipt of a critical order
               (imminent AOG or work stoppage),

          (c)  seven (7) days after receipt of an expedite order from the Buyer.

          The Seller and its subcontractors will deliver Seller Parts requested
          on expedite basis against normal orders previously placed by the Buyer
          or upon requests by telephone or telex by the Buyer's representatives,
          such requests to be confirmed by the Buyer's subsequent order for such
          Seller Parts within a reasonable time.

4.3       Delivery Status
          ---------------

          The Seller agrees to report to the Buyer the status of supplies
          against orders on a monthly basis.

4.4       Excusable Delay
          ---------------

          Subclause 10.1 of the Agreement will apply to the Material Support as
          defined in Paragraph 1 of this Letter Agreement.

4.5       Shortages, Overshipments, Nonconformance in Orders
          --------------------------------------------------

4.5.1     Within thirty (30) days after receipt of Material delivered pursuant
          to a purchase order, the Buyer will use all best efforts to advise the
          Seller of any alleged shortages or overshipments with respect to such
          order and of all nonconformance to specification of parts in such
          order inspected by the Buyer.

          In the event that the Buyer has not reported such alleged shortages,
          overshipments or nonconformance within the above defined period, the
          Buyer will be deemed to have accepted the deliveries unless the Buyer
          can prove within a reasonable period of time that it did not receive
          the Material.

4.5.2     In the event that the Buyer reports overshipments or nonconformance to
          the specifications within the period defined above in Subparagraph
          4.5.1, the Seller will, if accepted, either replace the Material
          concerned or credit the Buyer for Material returned. In such case,
          transportation charges will be borne by the Seller.

          The Buyer will endeaveor to minimize such costs, particularly by using
          its own airfreight system on a space-available basis for
          transportation at no charge to the Seller.





<PAGE>




4.6       Delivery Performance of Material
          --------------------------------

          The Seller hereby agrees to participate in a Material delivery
          performance incentive.

          Based upon the Material delivery performance criteria for response
          under Expedite Service as set forth in Subparagraph 4.2.3 and for
          routine orders in accordance with the Seller's published lead times,
          and provided all above shipments *** (the "Delivery Criteria"), the
          Seller commits to an overall delivery performance of eighty-five
          percent (85%) on an annual basis. In the event that the Seller's
          performance falls below the eighty-five percent (85%) level, the
          Seller will provide the Buyer with a credit equal to (i) eighty-five
          (85%) minus the actual percentage of orders delivered on time, up to a
          maximum of ten percent (10%), multiplied by (ii) the aggregate value
          of the orders delivered late according to the Delivery Criteria set
          forth above. Subparagraph 4.4 above will apply to the Seller's
          undertakings under this Subparagraph 4.6.

          At the end of each year following delivery of the first Aircraft, the
          Seller will compute the above-described figures in order to determine
          a credit or debit for the account of the Buyer.

          In the event the Seller records a credit for the account of the Buyer,
          the Seller will make available to the Buyer a credit memorandum in the
          amount described in this Subparagraph 4.6 for the purchase of Material
          from the Seller.

4.7       Exclusivity of Remedy
          ---------------------

          The remedies provided to the Buyer under Subparagraphs 2.7.2 and 4.6
          above are mutually exclusive and not cumulative.

4.8       Cessation of Deliveries
          -----------------------

          The Seller reserves the right to stop or otherwise suspend deliveries
          of Material if the Buyer fails to meet its obligations under
          Paragraphs 6 and 7 of this Letter Agreement.

5.        PRICE
          -----

5.1       Point of Shipment
          -----------------

          ***

5.2       Validity of Prices
          ------------------

5.2.1     The prices are the Seller's published prices in effect on the date of
          receipt of the order (subject to reasonable quantities and delivery
          time) and will be expressed in US dollars. Payment will be made by the
          Buyer to the Seller in US dollars as set



<PAGE>




          forth below in Subparagraph 6.1.

5.2.2     Prices of Seller Parts will be in accordance with the then current
          Seller's Spare Parts Price List. Prices will be firm for each calendar
          year. The Seller, however, reserves the right to revise the prices of
          Seller Parts during the course of the calendar year in the event of
          manifest error in estimation or expression of any price.

          In the event of a significant revision in manufacturing costs or a
          significant revision in the purchase price to the Manufacturer of
          Seller Parts (including significant variation in exchange rate) during
          any particular calendar year, the Seller will notify the Buyer of such
          revisions, whereupon the Buyer may, within such quantities of affected
          Seller Parts still available for sale at the former prices, order such
          quantities of said Seller Parts reasonably required to maintain its
          customary stock levels of such Seller Parts for the remainder of the
          calendar year in effect at that time provided the Seller is not
          thereby required to deplete the Seller's AOG inventory level unless
          such Seller Parts are required by the Buyer on an AOG basis. In the
          event the Seller is out of stock of such Seller Parts at the former
          prices, the Seller will, upon request by the Buyer, reasonably
          substantiate the price revisions affecting such Seller Parts.

5.2.3     ***

5.2.4     Prices of Material as defined above in Subparagraphs 1.1(b) through
          1.1(d) will be the valid list prices of the Vendor or supplier
          augmented by the Seller's handling charge. The percentage of the
          handling charge will vary with the Material's value and will be
          determined item by item.

5.2.5     The Seller warrants that, should the Buyer purchase from the Seller
          one hundred percent (100%) of the recommended Initial Provisioning of
          Material defined above in Subparagraphs 1.1(b) through 1.1(d), the
          average handling charge on the total package will not exceed fifteen
          percent (15%). This average handling charge will be increased to
          eighteen percent (18%) in the event that all orders have not been
          placed nine (9) months prior to delivery of the first Aircraft.

5.2.6     Prices of Material as defined above in Subparagraphs 1.1(e) and 1.1(f)
          will be the Seller's purchase prices augmented by a variable
          percentage of handling charge.



<PAGE>




6.        PAYMENT PROCEDURES AND CONDITIONS
          ---------------------------------

6.1       Currency
          --------

          Payment will be made in immediately available funds in US dollars.

6.2       Time and Means of Payment
          -------------------------

          Payment will be made by the Buyer to the Seller within thirty (30)
          days from the date of invoice. It is also agreed that the Seller will
          provide the Buyer with a credit equal to one percent (1%) of each
          payment, provided such payment is received within ten (10) days from
          the date of invoice.

6.3       Bank Accounts
          -------------

          The Buyer will make all payments hereunder in full without setoff or
          counterclaim, and without deduction of any kind to the accounts listed
          below, unless otherwise directed by the Seller:

          (a) For wire transfer, in favor of Airbus Service Company:

               CoreStates Bank N.A.
               Account Number 14096-31312
               ABA Number 031000011

          (b) For direct deposit (lockbox), in favor of Airbus Service Company:

               Airbus Service Company
               PO Box 8500-4555
               Philadelphia, PA 19178-4555

6.4       No Setoff
          ---------

          All payments due the Seller hereunder will be made in full without
          setoff or counterclaim and without deduction or withholding of any
          kind. Consequently, the Buyer will assure that the sums received by
          the Seller under this Letter Agreement will be equal to the full
          amounts expressed to be due the Seller hereunder.

6.5       If any payment due the Seller is not received in accordance with the
          time period provided above in Subparagraph 6.2, the Seller will have
          the right to claim from the Buyer and the Buyer will promptly pay to
          the Seller interest on the unpaid amount at a rate equal to three
          percent (3%) over LIBOR to be calculated from (and including) the due
          date to (but excluding) the date payment is received by the



<PAGE>




          Seller.  The Seller's claim to such interest will not prejudice any
          other rights the Seller may have under this Letter Agreement.

7.        TITLE
          -----

          Title to any Material purchased under this Letter Agreement will ***


8.        PACKAGING
          ---------

          All material will be packaged in accordance with ATA 300
          specification, Category III for consumable/expendable Material and
          Category II for rotables. Category I containers will be used if
          requested by the Buyer and the difference between Category I and
          Category II packaging costs will be paid by the Buyer together with
          payment for the respective Material.

9.        DATA RETRIEVAL
          --------------

          On the Seller's reasonable request, the Buyer may provide periodically
          to the Seller, during the Term, a quantitative list of the parts used
          for maintenance and overhaul of the Aircraft as customarily compiled
          by the Buyer and pertaining to the operation of the Aircraft to assist
          the Seller in making an efficient and coordinated survey of spare
          parts data with a view to improving maintenance and overhaul of the
          Aircraft. The range and contents of this list will be established by
          mutual agreement between the Seller and the Buyer.



<PAGE>




10.       BUY-BACK
          --------

10.1      Buy-Back of Obsolete Material
          -----------------------------

          The Seller agrees to buy back unused Seller Parts that may become
          obsolete for the Buyer's fleet *** to the Buyer as a result of
          mandatory modifications required by the Buyer's or Seller's
          airworthiness authorities, subject to the following:

          (a)  the Seller Parts involved will be those which the Seller directs
               the Buyer to scrap or dispose of and which cannot be reworked or
               repaired to satisfy the revised standard;

          (b)  the Seller will grant the Buyer a credit equal to the purchase
               price paid by the Buyer for any such obsolete parts, such credit
               being limited to quantities ordered in the Initial Provisioning
               recommendation; and

          (c)  the Seller will use its reasonable efforts to obtain for the
               Buyer the same protection from Vendors.

10.2      Buy-Back of Surplus Material
          ----------------------------

10.2.1    The Seller agrees that at any time within twelve (12) months after the
          end of the Initial Provisioning Period, the Buyer will have the right
          to return to the Seller, at a credit of one hundred percent (100%) of
          the original purchase price paid by the Buyer, unused and undamaged
          Material set forth above in Subparagraphs 1.1(a) and 1.1(b) originally
          purchased from the Seller under the terms hereof, provided (i) that
          the selected protection level for all Material does not exceed
          ninety-six percent (96%) with a turnaround time of forty-five (45)
          days, (ii) ***

                         , and (iii) that the Material is returned with the
          Seller's original documentation and any such documentation (including
          tags, certificates) required to identify, substantiate the condition
          of and enable the resale of such Material.

10.2.2    The Seller's agreement in writing is necessary before any Material in
          excess of the Seller's recommendation may be considered for buy-back.

10.2.3    It is expressly understood and agreed that the rights granted to the
          Buyer under this Subparagraph 10.2 will not apply to Material that may
          become obsolete at any time or for any reason other than as set forth
          in Subparagraph 10.1 above.


10.2.4    Further, it is expressly understood and agreed that all credits
          referred to above in Subparagraph 10.1(b) will be provided by the
          Seller to the Buyer exclusively by means of credit notes to be entered
          into the Buyer's account with the Seller for



<PAGE>




          Material.

10.3      All transportation costs for the return of obsolete and surplus
          Material under this Paragraph 10, including any applicable insurance
          and customs duties or other related expenditures, will be borne by the
          Seller, in the case of obsolete Material and by the Buyer, in the case
          of surplus Material.

11.       WARRANTIES
          ----------

          The Seller in its capacity as "Buyer" under its arrangements with the
          Manufacturer has negotiated and obtained the following warranties for
          Seller Parts from the Manufacturer, in its capacity as "Seller", with
          respect to the Seller Parts, subject to the terms, conditions,
          limitations and restrictions all as hereinafter set out. The Seller
          hereby guarantees to the Buyer the performance by the Manufacturer of
          the Manufacturer's obligations and assigns to the Buyer, and the Buyer
          hereby accepts, all of the rights and obligations of the Seller in the
          Seller's capacity as "Buyer" as aforesaid under the said warranties
          for Seller Parts delivered to the Buyer pursuant to this Letter
          Agreement and the Seller subrogates the Buyer as to all such rights
          and obligations in respect of such Seller Parts. The Seller hereby
          warrants to the Buyer that the Seller has all the requisite authority
          to make the foregoing assignment and effect the foregoing subrogation
          to and in favor of the Buyer and that the Seller will not enter into
          any amendment of the provisions so assigned or subrogated without the
          prior written consent of the Buyer. Capitalized terms utilized in the
          following provisions have the meanings assigned thereto in this Letter
          Agreement, except that the term "Seller" refers to the Manufacturer
          and the term "Buyer" refers to the Seller. References to clauses and
          paragraphs in the following provisions refer to clauses in the
          Agreement and/or to paragraphs in this Letter Agreement.

QUOTE

11.1      Seller Parts
          ------------

          Subject to the limitations and conditions as hereinafter provided, the
          Seller warrants to the Buyer that all Seller Parts as defined above in
          Subparagraph 1.1(a) will at the time of delivery to the Buyer:

          (a)  be free from defects in material,

          (b)  be free from defects in workmanship, including, without
               limitation, processes of manufacture,

          (c)  conform to the applicable specification for such part,



<PAGE>




          (d)  be free from defects in design (including, without limitation,
               selection of materials) having regard to the state of the art at
               the date of such design,

          (e)  permit complete interchangeability among Aircraft and parts of
               like part-numbered parts, and

          (f) be free and clear of all liens and other encumbrances.

11.2      Warranty Period
          ---------------

          The standard warranty period for defects (i) for Seller Parts defined
          above in Subparagraphs 1.1(a) is thirty-six (36) months after delivery
          of such Seller Parts to the Buyer (the "Warranty Period(s)").

11.3      Buyer's Remedy and Seller's Obligation
          --------------------------------------

          The Buyer's remedy and Seller's obligation and liability under this
          Paragraph 11 are limited to, at the Seller's expense, the repair,
          replacement or correction of, any defective Seller Part, ***


          The Seller, at its option, may furnish a credit to the Buyer for the
          future purchase of Seller Parts equal to the price at which the Buyer
          is then entitled to acquire a replacement for the defective Seller
          Part.

          The provisions of Subclauses 12.1.5, 12.1.6, 12.1.7 and 12.1.8 of the
          Agreement will, as applicable, also apply to this Paragraph 11.

11.4      Exclusivity of Warranties and General Limitations of Liability
          --------------------------------------------------------------
          and Duplicate Remedies
          ----------------------

          The Buyer and the Seller recognize and agree that the Exclusivity of
          Warranties and General Limitations of Liability provisions and the
          Duplicate Remedies provisions contained in Clause 12 of the Agreement
          will also apply to the foregoing warranties provided for in this
          Paragraph 11.

UNQUOTE


          In consideration of the assignment and subrogation by the Seller under
          this Paragraph 11 in favor of the Buyer in respect of the Seller's
          rights against and obligations to the Manufacturer under the
          provisions quoted above, the Buyer hereby accepts such assignment and
          subrogation and agrees to be bound by all of the terms, conditions and
          limitations therein contained.

          EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS
          -------------------------------------------------
          OF LIABILITY AND DUPLICATE REMEDIES
          -----------------------------------



<PAGE>




          THIS PARAGRAPH 11 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE
          EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS
          OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER,
          WHETHER UNDER THIS LETTER AGREEMENT OR OTHERWISE, ARISING FROM ANY
          DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY SELLER PART
          DELIVERED UNDER THIS LETTER AGREEMENT.

          THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS
          PARAGRAPH 11 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY
          DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND
          SERVICES SUPPLIED UNDER THIS LETTER AGREEMENT. THE BUYER HEREBY
          WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS,
          GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS
          AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR
          IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT
          TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY SELLER
          PART DELIVERED UNDER THIS LETTER AGREEMENT, INCLUDING BUT NOT LIMITED
          TO, UNLESS OTHERWISE PROVIDED FOR IN THIS PARAGRAPH 11:

          (1)  ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
               PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE;

          (2)  ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

          (3)  ANY RIGHT, CLAIM OR REMEDY FOR TORT, INCLUDING ACTIONS FOR
               NEGLIGENCE, RECKLESSNESS, INTENTIONAL TORTS, IMPLIED WARRANTY IN
               TORT AND/OR STRICT LIABILITY;


          (4)  ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL
               CODE, OR ANY OTHER STATE OR FEDERAL STATUTE;

          (5)  ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
               STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL
               STATUTE OR AGENCY;

          (6)  ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE



<PAGE>




               COMPENSATED FOR:

               (a)  LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT,
                    EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THE AGREEMENT;

               (b)  LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT,
                    EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THE AGREEMENT;

               (c)  LOSS OF PROFITS AND/OR REVENUES;

               (d)  ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

          THE WARRANTIES PROVIDED BY THIS LETTER AGREEMENT WILL NOT BE EXTENDED,
          ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER
          AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF THIS PARAGRAPH 11
          SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE,
          THE REMAINDER OF THIS PARAGRAPH 11 WILL REMAIN IN FULL FORCE AND
          EFFECT.

          The remedies provided to the Buyer under this Paragraph 11 as to any
          defect in respect of the Aircraft or any part thereof are not
          cumulative. The Buyer will be entitled to the one remedy that provides
          the maximum benefit to it, as the Buyer may elect, pursuant to the
          terms and conditions of this Paragraph 11 for any such particular
          defect for which remedies are provided under this Paragraph 11;
          provided, however, that, ***
                         , the Buyer will not be entitled to elect a remedy
          under one part of this Paragraph 11 that constitutes a duplication of
          any remedy elected by it under any other part hereof for the same
          defect. ***



12.       LEASING
          -------

12.1      Applicable Terms
          ----------------

          The terms and conditions of this Paragraph 12 will apply to the
          Lessor's (as defined below) stock of Seller Parts listed in Appendix
          "A" to this Paragraph 12 ("Leased Parts") and will form a part of each
          lease of any Leased Part by the



<PAGE>




          Buyer from the Seller after the date hereof. Except for the
          description of the Leased Part, the Lease Term, the Leased Part
          delivery and return locations and the Lease Charges (defined below in
          Subparagraph 12.4), all other terms and conditions appearing on any
          order form or other document pertaining to Leased Parts will be deemed
          inapplicable, and in lieu thereof the terms and conditions of this
          Paragraph 12 will prevail. For purposes of this Paragraph 12, the term
          "Lessor" refers to the Seller and the term "Lessee" refers to the
          Buyer. Parts not included in Appendix "A" to this Paragraph 12 may be
          supplied under a separate lease agreement between the Seller and the
          Buyer.

12.2      Lease Procedure: Spare Parts Leased
          -----------------------------------

          At the Lessee's request by telephone (to be confirmed promptly in
          writing), telegram, letter or other written instrument, the Lessor
          will lease Leased Parts, which will be made available in accordance
          with Subparagraph 4.2.3 of this Letter Agreement, to the Lessee as
          substitutes for parts withdrawn from an Aircraft for repair or
          overhaul. Each lease of Leased Parts will be evidenced by a lease
          document ("Lease") issued by the Lessor to the Lessee no later than
          seven (7) days after delivery of the Leased Part.

12.3      Lease Term: Return
          ------------------

          The term of the lease ("Lease Term") will commence on the date of
          receipt of the Leased Part by the Lessee or its agent at the Lessee's
          facility in a serviceable condition and will end on the date of
          receipt at the Lessor's facility of the Leased Part in a serviceable
          condition. The Lease Term will not exceed ninety (90) days after the
          Lessee's receipt of the Leased Part, unless extended by written
          agreement between Lessor and Lessee within such ninety (90)-day period
          (such extension not to exceed an additional ninety (90) days).
          Notwithstanding the foregoing, the Lease Term will end in the event,
          and upon the date, of exercise of the Lessee's option to purchase the
          Leased Part, as provided herein.

12.4      Lease Charges and Taxes
          -----------------------

          The Lessee will pay the Lessor (a) a daily rental charge for the Lease
          Term in respect of each Leased Part equal to one-three-hundred-sixty-
          fifth (1/365) of the Catalog Price of such Leased Part, as set forth
          in the Seller's Spare Parts Price List in effect on the date of
          commencement of the Lease Term, (b) any reasonable additional costs
          which may be incurred by the Lessor solely and directly as a result of
          such Lease, such as inspection, test, repair, overhaul and repackaging
          costs as required to place the Leased Part in serviceable condition,
          (c) all transportation and insurance charges and (d) any taxes
          (excluding any taxes based on income or gross receipts), charges or
          customs duties imposed upon the Lessor or its property as a result of
          the lease, sale, delivery, storage or transfer of any



<PAGE>




          Leased Part (the "Lease Charges"). All payments due hereunder will be
          made in accordance with Paragraph 6 of this Letter Agreement.

          In the event that the Leased Part has not been returned to the
          Lessor's designated facilities within the time period provided in
          Subparagraph 12.3 above, the Lessor will be entitled, in addition to
          any other remedy it may have at law or under this Paragraph 12, to
          charge to the Lessee, and the Lessee will pay, all of the charges
          referred to in this Subparagraph 12.4 accruing for each day after the
          end of the Lease Term and for as long as such Leased Part is not
          returned to the Lessor and as though the Lease Term were extended to
          the period of such delay.

          Notwithstanding the foregoing, the Lessor hereby agrees not to charge
          the Lessee any daily rental charge as referred to above in
          Subparagraph 12.4(a) from the date that is ninety (90) days after the
          date of receipt of the Leased Part by the Lessee, provided that (i)
          the Lessee reasonably demonstrates that the repair station designated
          by the Lessor and to which the Lessee has sent the damaged item (which
          is the cause of the lease described in this Paragraph 12) (the
          "Damaged Item") has failed to perform the repair of the Damaged Item
          within ninety (90) days, and (ii) the repair station is unable to
          provide adequate and satisfactory reasons for its nonperformance.

12.5      Title
          -----

          Title to each Leased Part will remain with the Lessor at all times
          unless the Lessee exercises its option to purchase or exchange it in
          accordance with Subparagraph 12.8 of this Letter Agreement, in which
          case title will pass to the Lessee in accordance with Paragraph 7 of
          this Letter Agreement.

12.6      Risk of Loss
          ------------

          Except for normal wear and tear, each Leased Part will be returned to
          the Lessor in the same condition as when delivered to the Lessee.
          However, the Lessee will not without the Lessor's prior written
          consent repair, modify or alter any Leased Part (other than routine
          maintenance). Risk of loss or damage to each Leased Part will remain
          with the Lessee until such Leased Part is redelivered to the Lessor at
          the return location specified in the applicable Lease. If a Leased
          Part is lost or damaged beyond repair, the Lessee will be deemed to
          have exercised its option to purchase the part in accordance with
          Subparagraph 12.8 of this Letter Agreement, as of the date of such
          loss or damage.

12.7      Record of Flight Hours
          ----------------------

          All flight hours accumulated by the Lessee on each Leased Part during
          the Lease Term will be documented by the Lessee. Records will be
          delivered to the Lessor upon return of such Leased Part to the Lessor.
          In addition, all documentation pertinent to inspection, maintenance
          and/or rework of the Leased Part to maintain said Leased Part
          serviceable in accordance with the standards of the Lessor will be
          delivered to the Lessor upon return of the Leased Part to the Lessor
          on



<PAGE>




          termination of the Lease.

          Such documentation will include but not be limited to evidence of
          incidents such as hard landings, abnormalities of operation and
          corrective action taken by the Lessee as a result of such incidents.

12.8      Option to Purchase
          ------------------

          The Lessee may at its option, exercisable by written notice given to
          the Lessor, elect during or at the end of the Lease Term to purchase
          the Leased Part, in which case the then current purchase price for
          such Leased Part as set forth in the Seller's Spare Parts Price List
          will be paid by the Lessee to the Lessor. The immediately preceding
          sentence will apply to new Leased Parts only. In the event the Leased
          Part is not new at commencement of the Lease Term, eighty-five percent
          (85%) of the then current purchase price for such Leased Part will be
          paid by the Lessee to the Lessor. Such option will be contingent upon
          the Lessee providing the Lessor with evidence satisfactory to the
          Lessor that the original part fitted to the Aircraft is beyond
          economical repair. Should the Lessee exercise such option, *** (*** )
          of the Lease rental charges already invoiced pursuant to Subparagraph
          12.4 (a) will be credited to the Lessee against the said purchase
          price of the Leased Part.

          Should the Lessee fail to return the Leased Part to the Lessor at the
          end of the Lease Term, such failure will be deemed to be an election
          by the Lessee to purchase the Leased Part.

          In the event of purchase, the Leased Part will be warranted in
          accordance with Clause 11 of this Letter Agreement as though such
          Leased Part were a Seller Part, provided, however, that (i) the Seller
          will prorate the full Warranty Period granted to the Buyer according
          to the actual usage of such Leased Part and (ii) in no event will such
          Warranty Period be less than six (6) months from the date of purchase
          of such Leased Part. A warranty granted under this Subparagraph 12.8.3
          will be in substitution for the warranty granted under Subparagraph
          12.9 at the commencement of the Lease Term.

12.9      Warranties
          ----------

          The Lessor, in its capacity as "Lessee," under its arrangements with
          the Manufacturer, in its capacity as "Lessor," has negotiated and
          obtained the following warranties from the Manufacturer with respect
          to the Leased Parts, subject to the terms, conditions, limitations and
          restrictions all as hereinafter set out. The Lessor hereby assigns to
          the Lessee, and the Lessee hereby accepts, all of the rights and
          obligations of the Lessor in the Lessor's capacity as "Lessee" as
          aforesaid under the said warranties and the Lessor subrogates the
          Lessee as to all such rights and obligations in respect of Leased
          Parts during the Lease Term with respect thereto. The Lessor hereby
          warrants to the Lessee that the Lessor has all requisite authority to
          make the foregoing assignment and effect the foregoing



<PAGE>




          subrogation to and in favor of the Lessee and that the Lessor will not
          enter into any amendment of the provisions so assigned or subrogated
          without the prior written consent of the Lessee. Capitalized terms
          utilized in the following provisions have the meanings assigned
          thereto in this Letter Agreement, except that the term "Lessor" refers
          to the Manufacturer and the term "Lessee" refers to the Lessor.
          References to clauses and paragraphs in the following provisions refer
          to clauses in the Agreement and/or to paragraphs in this Letter
          Agreement.

QUOTE

12.9.1    The Lessor warrants that each Leased Part will at the time of delivery
          thereof:

          (a)  be free from defects in material,

          (b)  be free from defects in workmanship, including, without
               limitation, processes of manufacture,

          (c)  conform to the applicable specification for such part,

          (d)  be free from defects in design (including, without limitation,
               selection of materials) having regard to the state of the art at
               the date of such design,

          (e)  permit complete interchangeability among Aircraft and parts of
               like part-numbered parts, and

          (f) be free and clear of all liens and other encumbrances.

12.9.2    Survival of Warranties
          ----------------------

          With respect to each Leased Part, the warranty set forth above in
          Subparagraph 12.9.1(a) will not survive delivery, and the warranties
          set forth above in Subparagraphs 12.9.1(b) through 12.9.1(f) will
          survive delivery only upon the conditions and subject to the
          limitations set forth below in Subparagraphs 12.9.3 through 12.9.8.

12.9.3    Warranty and Notice Periods
          ---------------------------

          The Lessee's remedy and the Lessor's obligation and liability under
          this Subparagraph 12.9, with respect to each defect, are conditioned
          upon (i) the defect having become apparent within the Lease Term and
          (ii) the Lessor's warranty administrator having received written
          notice of the defect from the Lessee within ***



<PAGE>




12.9.4    Return and Proof
          ----------------

          The Lessee's remedy and the Lessor's obligation and liability under
          this Subparagraph 12.9, with respect to each defect, are also
          conditioned upon:

          (a)  the return by the Lessee as soon as practicable to the return
               location specified in the applicable Lease, or such other place
               as may be mutually agreeable, of the Leased Part claimed to be
               defective, and

          (b)  the submission by the Lessee to the Lessor's warranty
               administrator of reasonable proof that the claimed defect is due
               to a matter embraced within the Lessor's warranty under this
               Subparagraph 12.9 and that such defect did not result from any
               act or omission of the Lessee, including but not limited to any
               failure to operate or maintain the Leased Part claimed to be
               defective or the Aircraft in which it was installed in accordance
               with the Lessee's FAA-approved maintenance program.

12.9.5    Remedies
          --------

          The Lessee's remedy and the Lessor's obligation and liability under
          this Subparagraph 12.9 with respect to each defect are limited to the
          repair of such defect in the Leased Part in which the defect appears,
          or, as mutually agreed, to the replacement of such Leased Part with a
          similar part free from defect.

          Any replacement part furnished under this Subparagraph 12.9.5 will for
          the purposes of this Letter Agreement be deemed to be the Leased Part
          so replaced.

12.9.6    Suspension and Transportation Costs
          -----------------------------------

12.9.6.1  If a Leased Part is found to be defective and is covered by this
          warranty, the Lease Term and the Lessee's obligation to pay rental
          charges as provided in Subparagraph 12.4(a) of this Letter Agreement
          will be suspended from the date on which the Lessee notifies the
          Lessor of such defect until the date on which the Lessor has repaired,
          corrected or replaced the defective Leased Part, provided, however,
          that the Lessee has withdrawn such defective Leased Part from use,
          promptly after giving such notice to the Lessor.  If the defective
          Leased Part is replaced, such replacement will be deemed to no longer
          be a Leased Part under the Lease as of the date on which such part was
          received by the Lessor at the return location specified in the
          applicable Lease.

          If a Leased Part is found to be defective on first use by the Lessee
          and is covered by this warranty, no rental or other charges as
          provided in Subparagraph 12.4(a) will accrue and be payable by the
          Lessee until the date on which the Lessor has repaired, corrected or
          replaced the defective Leased Part in a manner satisfactory to the
          Lessee.

12.9.6.2  All transportation and insurance costs associated with the return of
          the defective



<PAGE>




          Leased Part to the Lessor and the return of the repaired, corrected or
          replacement part to the Lessee will be borne by the Lessor.

12.9.7    Wear and Tear
          -------------

          Normal wear and tear and the need for regular maintenance and overhaul
          will not constitute a defect or nonconformance under this Subparagraph
          12.9.

12.9.8    Exclusivity of Warranties and General Limitations of Liability
          --------------------------------------------------------------
          and Duplicate Remedies
          ----------------------

          The Lessee and the Lessor recognize and agree that the Exclusivity of
          Warranties and General Limitations of Liability provisions and the
          Duplicate Remedies provisions contained in Clause 12 of the Agreement
          will also apply to the foregoing warranties provided for in this
          Subparagraph 12.9.

UNQUOTE


          In consideration of the assignment and subrogation by the Seller under
          this Subparagraph 12.9 in favor of the Buyer in respect of the
          Seller's rights against and obligations to the Manufacturer under the
          provisions quoted above, the Buyer hereby accepts such assignment and
          subrogation and agrees to be bound by all of the terms, conditions and
          limitations therein contained.

          EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS
          -------------------------------------------------
          OF LIABILITY and DUPLICATE REMEDIES
          -----------------------------------

          THIS PARAGRAPH 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE
          EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS
          OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER,
          WHETHER UNDER THIS LETTER AGREEMENT OR OTHERWISE, ARISING FROM ANY
          DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY LEASED PART
          DELIVERED UNDER THIS LETTER AGREEMENT.

          THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS
          PARAGRAPH 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY
          DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND
          SERVICES SUPPLIED UNDER THIS LETTER AGREEMENT. THE BUYER HEREBY
          WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS,
          GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS
          AND REMEDIES OF THE BUYER AGAINST THE



<PAGE>




          SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW
          OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM
          OF ANY KIND IN ANY LEASED PART DELIVERED UNDER THIS LETTER AGREEMENT,
          INCLUDING BUT NOT LIMITED TO, UNLESS OTHERWISE PROVIDED FOR IN THIS
          PARAGRAPH 12:

          (1)  ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
               PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

          (2)  ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

          (3)  ANY RIGHT, CLAIM OR REMEDY FOR TORT, INCLUDING ACTIONS FOR
               NEGLIGENCE, RECKLESSNESS, INTENTIONAL TORTS, IMPLIED WARRANTY IN
               TORT AND/OR STRICT LIABILITY;


          (4)  ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL
               CODE, OR ANY OTHER STATE OR FEDERAL STATUTE;

          (5)  ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
               STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL
               STATUTE OR AGENCY;

          (6) ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

               (a)  LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT,
                    EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THE AGREEMENT;

               (b)  LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT,
                    EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THE AGREEMENT;

               (c)  LOSS OF PROFITS AND/OR REVENUES;

               (d)  ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

          THE WARRANTIES PROVIDED BY THIS LETTER AGREEMENT WILL NOT BE EXTENDED,
          ALTERED OR VARIED EXCEPT BY A WRITTEN



<PAGE>




          INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY
          PROVISION OF THIS PARAGRAPH 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL,
          OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS PARAGRAPH 12 WILL
          REMAIN IN FULL FORCE AND EFFECT.

          The remedies provided to the Buyer under this Paragraph 12 as to any
          defect in respect of the Aircraft or any part thereof are not
          cumulative. The Buyer will be entitled to the one remedy which
          provides the maximum benefit to it, as the Buyer may elect, pursuant
          to the terms and conditions of this Paragraph 12 for any such
          particular defect for which remedies are provided under this Paragraph
          12; provided, however, that, ***
                            , the Buyer will not be entitled to elect a remedy
          under one part of this Paragraph 12 which constitutes a duplication of
          any remedy elected by it under any other part hereof for the same
          defect. ***



<PAGE>




                            APPENDIX "A" TO CLAUSE 12
                                                       -------------------------

                           SELLER PARTS LEASING LIST

                                 (Leased Parts)
                                 --------------


AILERONS

AUXILIARY POWER UNIT (APU) DOORS

CARGO DOORS

PASSENGER DOORS

ELEVATORS

FLAPS

LANDING GEAR DOORS

RUDDER

TAIL CONE

WING SLATS

SPOILERS

AIRBRAKES

WING TIPS

RADOMES



<PAGE>




13.       ***
          --------------------------

13.1      ***



13.2      ***



13.3      ***



13.4      ***



14.       TERMINATION
          -----------

          Any termination under Clause 10, 11 or 21 of the Agreement or under
          the Letter Agreements thereto will discharge all obligations and
          liabilities of the parties hereunder with respect to such undelivered
          Material, services, data or other items to be purchased hereunder that
          are applicable to those undelivered Aircraft as to which the Agreement
          has been terminated. Termination under this Paragraph 14
          notwithstanding new and unused Material in excess of the Buyer's
          requirements due to such Aircraft cancellation will be repurchased by
          the Seller as provided in Subparagraph 10.2 of this Letter Agreement.



<PAGE>




15.       ASSIGNMENT
          ----------

          This Letter Agreement may be assigned in accordance with Clause 19 of
          the Agreement.

          If the foregoing correctly sets forth our understanding, please
          execute the original and one (1) copy hereof in the space provided
          below and return a copy to the Seller.

                                              Very truly yours,

                                              AVSA, S.A.R.L.


                                              By:    /s/Christophe Mourey
                                                     ---------------------------
                                              Its:   Chief Executive Officer
                                                     ---------------------------
                                              Date:  October 31, 1997
                                                     ---------------------------

Accepted and Agreed

US Airways Group, Inc.


By:    /s/Thomas A. Fink
       -----------------------
Its:   Treasurer
       -----------------------
Date:  October 31, 1997
       -----------------------



<PAGE>




                             LETTER AGREEMENT NO. 2


                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:  DELIVERIES
     ----------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 2 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




1.   ***
     ----------------------

     ***



2.   RECONFIRMABLE AIRCRAFT
     ----------------------

     In order to provide the Buyer with flexibility to meet its future fleet mix
     requirements, the Seller grants the Buyer the right to reconfirm its order
     for each and any Reconfirmable Aircraft. The Buyer will notify the Seller
     in writing by no later than *** (*** ) *** before the scheduled month of
     delivery of a Reconfirmable Aircraft as to whether it reconfirms the order
     for the applicable Reconfirmable Aircraft.

     ***



          Upon such nonreconfirmation, the Buyer's rights with respect to the
     Reconfirmable Aircraft that was not reconfirmed will expire and the parties
     will have no further obligations to one another with respect to such
     Reconfirmable Aircraft.



3.   ***
     ---------------------------

3.1  ***



<PAGE>




3.2  ***



4.   ***
     ----------------

4.1  ***



4.2  ***



<PAGE>




5.   LEASED AIRCRAFT
     ---------------

     If the Buyer wishes to lease A319, A320 or A321 aircraft, the Seller will
     assist the Buyer in locating such aircraft (the "Leased Aircraft") from
     leasing companies. In the event that the Leased Aircraft need to have a ***



6.   ***
     --------

6.1  ***



<PAGE>




6.2  ***





     ***





7.   EXCUSABLE DELAYS
     ----------------

7.1  Unanticipated Delay
     -------------------

     Subclause 10.2 of the Agreement is hereby amended as follows:



<PAGE>




7.2  Anticipated Delay
     -----------------

     ***



8.   INEXCUSABLE DELAYS
     ------------------

8.1  Subclause 11.1 of the Agreement is hereby amended as follows:

     ***



8.2  Subclause 11.4 of the Agreement is hereby amended as follows:

     ***



9.   ***
     -----------------

     ***



10.  BUYER FURNISHED EQUIPMENT
     -------------------------



<PAGE>




11.  ASSIGNMENT
     ----------

     This Letter Agreement and the rights and obligations of the Buyer hereunder
     will not be assigned or transferred in any manner without the prior written
     consent of the Seller, and any attempted assignment or transfer in
     contravention of the provisions of this Paragraph 11 will be void and of no
     force or effect. Notwithstanding the preceding sentence, the terms of
     Subclauses 19.5 and 19.6 of the Agreement will apply to this Letter
     Agreement.



<PAGE>




     If the foregoing correctly sets forth our understanding, please execute the
     original and one (1) copy hereof in the space provided below and return a
     copy to the Seller.


                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/Christophe Mourey
                                    --------------------------
                              Its:  Chief Executive Officer
                                    --------------------------
                              Date:  October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/Thomas A. Fink
     ---------------------------
Its:    Treasurer
     ---------------------------
Date:  October 31, 1997
     ---------------------------



<PAGE>




                             LETTER AGREEMENT NO. 3


                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:  ADDITIONAL AIRCRAFT
     -------------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 3 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




1.   SCOPE
     -----

     ***



2.   DELIVERIES
     ----------

     Upon the Buyer's written request from time to time, the Seller will offer
     the Buyer delivery positions for Additional Aircraft by month and year
     subject to the Manufacturer's Commercial Constraints and Industrial
     Constraints at the time of request. ***



     Delivery positions offered by the Seller for Additional Aircraft will be
     held for the Buyer during the five (5) Working Day period following the
     Seller's offer. The Buyer may exercise its option to purchase each such
     Additional Aircraft by written notice to the Seller and by making any
     Predelivery Payment then due as set forth in Subclause 6.2.2.2 of the
     Agreement. ***



3.   ***
     ----------------------

3.1  ***



<PAGE>




3.2  ***



3.3  ***



4.   ASSIGNMENT
     ----------

     This Letter Agreement and the rights and obligations of the Buyer hereunder
     will not be assigned or transferred in any manner without the prior written
     consent of the Seller, and any attempted assignment or transfer in
     contravention of the provisions of this Paragraph 4 will be void and of no
     force or effect. Notwithstanding the preceding sentence, the terms of
     Subclauses 19.5 and 19.6 of the Agreement will apply to this Letter
     Agreement.



<PAGE>




     If the foregoing correctly sets forth our understanding, please execute the
     original and one (1) copy hereof in the space provided below and return a
     copy to the Seller.


                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/Christophe Mourey
                                    --------------------------
                              Its:  Chief Executive Officer
                                    --------------------------
                              Date: October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/Thomas A. Fink
     ---------------------------
Its:  Treasurer
     ---------------------------
Date: October 31, 1997
     ---------------------------



<PAGE>




                             LETTER AGREEMENT NO. 4


                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:  CONVERSION RIGHTS
     -----------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 4 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




1.   CONVERSION RIGHT
     ----------------

1.1  In order to provide the Buyer with additional flexibility to meet its
     future fleet mix requirements, the Seller grants the Buyer aircraft type
     conversion rights under the terms and conditions contained in this
     Paragraph 1 (the "Conversion Right").

     ***



<PAGE>




     (iii)  The Conversion Right will be subject to the Manufacturer's
            Commercial Constraints and Industrial Constraints at the time the
            Buyer elects to exercise its Conversion Right.

1.2  The Buyer's exercise of its Conversion Right with respect to a particular
     Aircraft will result in an adjustment to the Predelivery Payment Reference
     Price and Predelivery Payments due in respect of the converted Aircraft (a
     "Converted Aircraft").

     If the Predelivery Payment Reference Price for a Converted Aircraft is
     higher than it was for the Aircraft from which it was converted (the
     "Original Aircraft"), then the difference between the Predelivery Payments
     the Buyer has paid and what it would have paid had the Converted Aircraft
     been an Original Aircraft will be due within three (3) Working Days of
     conversion, and conversion will be effective when the Buyer pays such
     difference.


     ***



2.   ***
     -----------------------------

     ***



<PAGE>




3.   ASSIGNMENT
     ----------

     This Letter Agreement and the rights and obligations of the Buyer hereunder
     will not be assigned or transferred in any manner without the prior written
     consent of the Seller, and any attempted assignment or transfer in
     contravention of the provisions of this Paragraph 3 will be void and of no
     force or effect. Notwithstanding the preceding sentence, the terms of
     Subclauses 19.5 and 19.6 of the Agreement will apply to this Letter
     Agreement.



<PAGE>




     If the foregoing correctly sets forth our understanding, please execute the
     original and one (1) copy hereof in the space provided below and return a
     copy to the Seller.



                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/ Christophe Mourey
                                    --------------------------

                              Its:  Chief Executive Officer
                                    --------------------------

                              Date: October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
      --------------------------

Its:  Treasurer
      --------------------------

Date: October 31, 1997
      --------------------------



<PAGE>




                             LETTER AGREEMENT NO. 5



                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:   PURCHASE INCENTIVES
     --------------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 5 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




1.   ***
     ------------------------

1.1  ***
     -------------------------



1.2  ***
     ----------------------

     ***



1.3  ***
     ----------------------

     ***



<PAGE>




1.4. ***
     ----------------------

     ***



1.5  ***
     -------------------------

     ***



1.6  ***
     -----------------------

     ***



<PAGE>




1.7    ***
       ---------------------

1.7.1  ***



<PAGE>




1.7.2  ***



1.8    ***
       ------------------------



2.     ***
       ----------------------

2.1    ***
       ----------------------

2.1.1  ***



2.1.2  ***



<PAGE>




2.1.3 ***



2.2   ***
      ---------------------------

      ***



3.    PROPULSION SYSTEMS INCENTIVES
      -----------------------------

      Except as otherwise agreed to by the Buyer and the manufacturer of the
      Propulsion Systems and notified to the Seller, the Propulsion Systems
      Reference Prices for the engines and the CFM Credit are subject to
      escalation to the date of delivery of the applicable Aircraft by applying
      the Propulsion Systems' manufacturers' price revision formulas (set forth
      in Exhibit "H" to the Agreement) and to changes imposed by the Propulsion
      Systems' manufacturers.

      The Buyer will negotiate directly with the Propulsion Systems'
      manufacturers engine pricing, credits, escalation, and other commercial
      issues. As a result of such negotiation, the Propulsion Systems'
      manufacturer's price revision formula in Exhibit "H" to this Agreement may
      be revised.

4.    ASSIGNMENT
      ----------

      This Letter Agreement and the rights and obligations of the Buyer
      hereunder will not be assigned or transferred in any manner without the
      prior written consent of the Seller, and any attempted assignment or
      transfer in contravention of the provisions of this Paragraph 4 will be
      void and of no force or effect. Notwithstanding the preceding sentence,
      the terms of Subclauses 19.5 and 19.6 of the Agreement will apply to this
      Letter Agreement.




<PAGE>




     If the foregoing correctly sets forth our understanding, please execute the
     original and one (1) copy hereof in the space provided below and return a
     copy to the Seller.



                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/ Christophe Mourey
                                    --------------------------
                              Its:  Chief Executive Officer
                                    --------------------------
                              Date: October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
      ---------------------------
Its:  Treasurer
      ---------------------------
Date: October 31, 1997
      ---------------------------



<PAGE>




                            LETTER AGREEMENT NO. 6


                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:   SPECIFICATION MATTERS
      ---------------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 6 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




1.   ***
     -------------------------

     ***



2.   ***
     ------------------------------

2.1  ***












2.2  ***



3.   ***
     -------------------------------

3.1  ***



3.2  ***



<PAGE>




3.3  ***




4.   ***
     ------------------------

4.1  ***



4.2  ***



5.   ***
     ------------------



6.   ***
     --------------------

     ***



<PAGE>




7.   ***
     --------------------

     ***










8.   ***
     ------------------

8.1  ***







8.2  ***








8.3  ***



<PAGE>




9.   ASSIGNMENT
     ----------

     This Letter Agreement and the rights and obligations of the Buyer hereunder
     will not be assigned or transferred in any manner without the prior written
     consent of the Seller, and any attempted assignment or transfer in
     contravention of the provisions of this Paragraph 8 will be void and of no
     force or effect. Notwithstanding the preceding sentence, the terms of
     Subclauses 19.5 and 19.6 of the Agreement will apply to this Letter
     Agreement.



<PAGE>




     If the foregoing correctly sets forth our understanding, please execute the
     original and one (1) copy hereof in the space provided below and return a
     copy to the Seller.



                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/ Christophe Mourey
                                    --------------------------
                              Its:  Chief Executive Officer
                                    --------------------------
                              Date: October 31, 1997
                                    --------------------------


Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
      ---------------------------
Its:  Treasurer
      ---------------------------
Date: October 31, 1997
      ---------------------------



<PAGE>




                            LETTER AGREEMENT NO. 7


                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re: PRODUCT SUPPORT
    ---------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320 Purchase Agreement dated as of even date
herewith (the "Agreement"), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed to
set forth in this Letter Agreement No. 7 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




1.   PRODUCT SUPPORT RESPONSIVENESS
     ------------------------------

1.1  The Seller and the Manufacturer will promptly respond to, and deal with,
     any correspondence or request from the Buyer with respect to product
     support issues.

1.2  The precise contents of the product support package may be adjusted over
     time, by way of exchanges within the envelope of such package, to better
     match the Buyer's product support needs.

2.   ***
     ----------------

2.1  ***
     ----------------

     ***



2.2  ***
     ----------------

     ***



2.3  ***
     -------------------------

     ***



<PAGE>




2.4    ***
       -------------------------

2.4.1  ***





2.4.2  ***



<PAGE>




2.5  No Fault-Found Policy
     ---------------------

     The Seller has developed a "No Fault Found Policy" covering Vendor Parts
     and Seller Parts, as specified in the booklet SG-S/921.0067/96. Such policy
     will not be changed in a manner adverse to the Buyer.



3.   ***
     ---------------------

3.1  ***



3.2  ***








4.   TECHNICAL PUBLICATIONS
     ----------------------

4.1  The Buyer and the Seller agree that an integral portion of the Technical
     Publications product support is the implementation of a functioning "E-
     Pubs" system by the Buyer prior to delivery of the first Aircraft.
     Accordingly, the Buyer and the Seller will together devise a plan to (a)
     make available to the Buyer on such "E-Pubs" system all Technical
     Publications now only available on CD-ROM, (b) the Buyer and the Seller
     will commit to implement "E-Pubs" as soon as practicable, and (c) agree on
     the allocation of the costs of any necessary interim implementation.


4.2  Aircraft MSG-3 analysis will be provided to the Buyer as part of the
     Technical Publications package.



<PAGE>




4.3  The Seller will provide the Buyer an interior and exterior aircraft
     placards manual specifying which placards are required for aircraft
     dispatch.

4.4  ***



4.5  On the Buyer's request, the Seller will provide the Buyer certification
     data for specific material, including flammability coupons, when such data
     is available to the Seller.

4.6  ***



5.   TRAINING
     --------

5.1  ***



5.2  ***



<PAGE>




5.3    ***



5.4.1  ***



5.4.2  ***



5.5    ***



<PAGE>




6.   MAINTENANCE PLANNING
     --------------------

6.1  ***





6.2  ***





7.   ENTRY-INTO-SERVICE
     ------------------

7.1  ***



7.2  ***



<PAGE>




8.   TOOLING
     -------

8.1  ***




8.2  ***




8.3  ***



8.4  ***








9.   ***
     --------------------------

9.1  ***



9.2  ***



<PAGE>




9.3  ***



9.4  ***



9.5  ***



10.  ASSIGNMENT
     ----------

     This Letter Agreement and the rights and obligations of the Buyer hereunder
     will not be assigned or transferred in any manner without the prior written
     consent of the Seller, and any attempted assignment or transfer in
     contravention of the provisions of this Paragraph 10 will be void and of no
     force or effect. Notwithstanding the preceding sentence, the terms of
     Subclauses 19.5 and 19.6 of the Agreement will apply to this Letter
     Agreement.



<PAGE>




     If the foregoing correctly sets forth our understanding, please execute the
     original and one (1) copy hereof in the space provided below and return a
     copy to the Seller.

                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/ Christophe Mourey
                                    --------------------------
                              Its:  Chief Executive Officer
                                    --------------------------
                              Date: October 31, 1997
                                    --------------------------


Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
      ---------------------------
Its:  Treasurer
      ---------------------------
Date: October 31, 1997
      ---------------------------



<PAGE>




A319-112
CFM 56-5B-6 ENGINES


       2) Diversion consisting of climb and cruise in ISA+10 (degrees) C
          conditions over a still air distance of 150 nautical miles starting at
          1,500 ft pressure altitude above the destination airport.
       3) Holding for 45 minutes at 20,000 ft pressure altitude in ISA+10
          (degrees) C conditions.

2.4    The A319 Aircraft will be capable of carrying a fixed payload of *** over
       a guaranteed still air stage distance of not less than *** when operated
       under the conditions defined below:

2.4.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.4.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.4.3  An allowance of 490 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed in ISA+10
       (degrees) C conditions.

2.4.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at pressure
       altitudes of 35,000 ft and 39,000 ft and descent to 1,500 ft pressure
       altitude are conducted in ISA+10 (degrees) C conditions. Climb and
       descent speeds below 10,000 ft will be 250 knots CAS.

2.4.5  An allowance of 200 lb of fuel is included for approach and landing at
       the destination airport.

2.4.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.4.4 above.

2.4.7  At the end of approach and landing 7,080 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10 (degrees) C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in ISA+10
           (degrees) C conditions.



<PAGE>




A319-112
CFM 56-5B-6 ENGINES


2.5    The A319 Aircraft will be capable of carrying a fixed payload of *** a
       guaranteed still air stage distance of not less than 2,845 nautical miles
       when operated under the conditions defined below:

2.5.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.5.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.5.3  An allowance of 470 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed in ISA+10
       (degrees) C conditions.

2.5.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at pressure
       altitudes of 35,000 ft and 39,000 ft and descent to 1,500 ft pressure
       altitude are conducted in ISA+10 (degrees) C conditions. Climb and
       descent speeds below 10,000 ft will be 250 knots CAS.

2.5.5  An allowance of 200 lb of fuel is included for approach and landing at
       the destination airport.

2.5.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.5.4 above.
2.5.7  At the end of approach and landing 6,890 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10 (degrees) C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in ISA+10
           (degrees) C conditions.

2.6    The mission payload guarantee defined in Subparagraph 2.1 and the mission
       fuel burn guarantee defined in Subparagraph 2.3 and the mission ranges
       defined in Subparagraphs 2.4 and 2.5 are based on the Buyer's
       Manufacturer's Weight Empty as defined in Subparagraph 3.3 below plus a
       fixed allowance of 10,730 lb for Customer Changes and Operators Items.



<PAGE>




                           LETTER AGREEMENT NO. 8A


                                                        As of October 31, 1997

US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re: A319-112 PERFORMANCE GUARANTEES
    -------------------------------

Ladies and Gentlemen:

         US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the
"Seller"), have entered into an Airbus A319/A320/A321 Purchase Agreement dated
as of even date herewith (the "Agreement"), which covers, among other things,
the sale by the Seller and the purchase by the Buyer of certain Aircraft, under
the terms and conditions set forth in said Agreement. The Buyer and the Seller
have agreed to set forth in this Letter Agreement No. 8A (the "Letter
Agreement") certain additional terms and conditions regarding the sale of the
Aircraft. Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
"herein," "hereof" and "hereunder" and words of similar import refer to this
Letter Agreement.

         Both parties agree that this Letter Agreement will constitute an
integral, nonseverable part of said Agreement, that the provisions of said
Agreement are hereby incorporated herein by reference, and that this Letter
Agreement will be governed by the provisions of said Agreement, except that if
the Agreement and this Letter Agreement have specific provisions which are
inconsistent, the specific provisions contained in this Letter Agreement will
govern.

         The Seller, in its capacity as "Buyer" under its arrangement with the
Manufacturer, has negotiated and obtained the following performance and weight
guarantees (the "Guarantees") from the Manufacturer, in its capacity as "Seller"
with respect to the Aircraft, subject to the terms, conditions, limitations and
restrictions all as hereinafter set out. The Seller hereby guarantees to the
Buyer the performance by the Manufacturer of the Manufacturer's obligations and
assigns to the Buyer and the Buyer hereby accepts, as to each A319 Aircraft
delivered to the Buyer under the Agreement, all of the rights and obligations of
the Seller with respect to such A319 Aircraft in the Seller's capacity as
"Buyer" as aforesaid under the said Guarantees and the Seller



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subrogates the Buyer into all such rights and obligations in respect of such
A319 Aircraft. The Seller hereby warrants to the Buyer that it has all the
requisite authority to make the foregoing assignment and effect the foregoing
subrogation to and in favor of the Buyer and that it will not enter into any
amendment of the provisions so assigned or subrogated without the prior written
consent of the Buyer.

     Capitalized terms used in the following quoted provisions and not otherwise
defined herein will have the meanings assigned thereto in the Agreement except
that the term "Seller" refers to the Manufacturer and the term "Buyer" refers to
the Seller (as defined in the Agreement).

QUOTE
-----

       PREAMBLE
       --------

       The guarantees defined below (the "Guarantees") are applicable to the
       A319 Aircraft as described in the Technical Specification J.000.02000
       Issue 3 dated 29 March 1995 amended by Specification Change Notices for:

       i)   the fitting CFM International CFM 56-5B-6 propulsion systems

       ii)  the increase in the Maximum Take-Off Weight to 166,450 lb (75,500
            kg)

       without taking into account any further changes thereto as provided in
       the Agreement.

       Notwithstanding the foregoing the Seller reserves the right to increase
       the Design Weights above the weights shown in the Specification in order
       to satisfy the Guarantees.

1      GUARANTEED PERFORMANCE
       ----------------------

1.1    Take-off
       --------

1.1.1  FAR take-off field length at an A319 Aircraft gross weight of 166,450 lb
       (75,500 kg) at the start of ground run at sea level pressure altitude at
       a temperature of 84 (degrees) F will be not more than a guaranteed value
       of 8,980 feet.

1.1.2  When operated under the following conditions (representative of PHX 08R):


       Pressure altitude        : 1,133 ft
       Ambient temperature      : 100 (degrees) F



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       Take-off run available ("TOR")           : 10,300 feet
       Take-off distance available              : 10,300 feet
       Accelerate-stop distance available       : 10,300 feet
       Slope                                    : 0.20% uphill
       Wind                                     : Zero
       Obstacles (height and distance           : 15 feet/1,438 feet
                 from end of TOR)               : 418 feet/17,285 feet

       the maximum permissible weight at the start of ground run will be not
       less than a guaranteed value of 158,250 lb.

1.1.3 When operated under the following conditions (representative of DEN 09):



       Pressure altitude                        : 5,431 ft
       Ambient temperature                      : 84 (degrees) F
       Take-off run available ("TOR")           : 12,000 feet
       Take-off distance available              : 12,000 feet
       Accelerate-stop distance available       : 12,000 feet
       Slope                                    : 0.01% uphill
       Wind                                     : Zero
       Obstacles                                : None

       the maximum permissible weight at the start of ground run will be not
       less than a guaranteed value of 158,700 lb.

1.2    Second Segment
       --------------

       The A319 Aircraft will meet FAR 25 regulations for one engine inoperative
       climb after take-off, undercarriage retracted, at a weight corresponding
       to the stated weight at the start of ground run at the altitude and
       temperature and in the configuration of flap angle and safety speed
       required to comply with the performance guaranteed in Subparagraph 1.1.


1.3    Initial Cruise Altitude
       -----------------------

       At an A319 Aircraft gross weight of 145,000 lb in ISA+10 (degrees) C
       conditions the pressure altitude for :

       1)  Level flight at a true Mach number of 0.78 using a thrust not
           exceeding maximum



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           cruise thrust

       2)  A rate of climb of not less than 300 ft/min at a true Mach number of
           0.78 using a thrust not exceeding maximum climb thrust
       3)  A buffet maneuver margin of not less than 0.3g at a true Mach number
           of 0.78

       will be not less than a guaranteed value of 37,000 ft.

1.4    Speed
       -----

       Level flight speed at an A319 Aircraft gross weight of 145,000 lb at a
       pressure altitude of 35,000 ft in ISA+10 (degrees) C conditions using a
       thrust not exceeding maximum cruise thrust will be not less than a
       guaranteed true Mach number of 0.805.

1.5    Specific Range
       --------------

1.5.1  The nautical miles per pound of fuel at an A319 Aircraft gross weight of
       145,000 lb at a pressure altitude of 35,000 ft in ISA+10 (degrees) C
       conditions at a true Mach number of 0.78 will be not less than a
       guaranteed value of 0.0833 nm/lb.

1.5.2  The nautical miles per pound of fuel at an A319 Aircraft gross weight of
       140,000 lb at a pressure altitude of 37,000 ft in ISA+10 (degrees) C
       conditions at a true Mach number of 0.78 will be not less than a
       guaranteed value of 0.0867 nm/lb.

1.6    En-route One Engine Inoperative
       -------------------------------

       The A319 Aircraft will meet FAR regulations minimum en-route climb one
       engine inoperative and the other operating at the maximum continuous
       thrust with anti-icing off at an A319 Aircraft gross weight of 145,000 lb
       in the cruise configuration in ISA+10 (degrees) C conditions at a
       guaranteed pressure altitude of not less than 16,000 ft.

1.7    Landing Field Length
       --------------------

1.7.1  FAR certified wet landing field length at an A319 Aircraft gross weight
       of 134,480 lb (61,000 kg) at sea level pressure altitude will be not
       greater than 5,720 feet.

1.7.2  FAR certified wet landing field length at an A319 Aircraft gross weight
       of 134,480 lb (61,000 kg) at a pressure altitude of 5,431 ft will be not
       greater than 6,500 feet.

2      MISSION GUARANTEES
       ------------------



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2.1    The A319 Aircraft will be capable of carrying a guaranteed payload of not
       less than *** over a still air stage distance of 2,610 nautical miles
       (representative of PHL to SFO with a 65 knot headwind) when operated
       under the conditions defined below:

2.1.1  The departure airport conditions (representative of PHL 09R) are as
       follows:



       Pressure altitude                        : 21 ft
       Ambient temperature                      : 84 (degrees) F
       Take-off run available ("TOR")           : 10,499 feet
       Take-off distance available              : 10,499 feet
       Accelerate-stop distance available       : 10,499 feet
       Slope                                    : 0.10% downhill
       Wind                                     : Zero
       Obstacles (height and distance           : 17 feet/1,090 feet
                 from end of TOR)               : 57 feet/4,306 feet
                                                : 178 feet/9,500 feet

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction. Pressure altitude is 11
       feet.

2.1.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.1.3  An allowance of 505 lb of fuel is included for take-off and climb to
       1,500 ft above the departure airport at 84 (degrees) F with acceleration
       to climb speed.

2.1.4  Climb from 1,500 ft above the departure airport up to cruise altitude
       using maximum climb thrust and cruise at a fixed Mach number of 0.78 at
       pressure altitudes of 35,000 ft and 39,000 ft and descent to 1,500 ft
       above the destination airport are conducted in ISA+10 (degrees) C
       conditions. Climb and descent speeds below 10,000 ft will be 250 knots
       CAS.

2.1.5  An allowance of 190 lb of fuel is included for approach and land at the
       destination airport.

2.1.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.1.4 above.

2.1.7  At the end of approach and land 7,110 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach



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       2)  Diversion consisting of climb and cruise in ISA+10 (degrees) C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in ISA+10
           (degrees) C conditions.

2.2    The A319 Aircraft will be capable of carrying a guaranteed payload of not
       less than *** over a still air stage distance of 1,545 nautical miles
       (representative of STT to PHL with a 37 knot headwind) when operated
       under the conditions defined below:

2.2.1  The departure airport conditions (representative of STT 10) are as
       follows:



       Pressure altitude                        : 24 ft
       Ambient temperature                      : 84 (degrees) F
       Take-off run available ("TOR")           : 7,000 feet
       Take-off distance available              : 7,000 feet
       Accelerate-stop distance available       : 7,000 feet
       Slope                                    : 0.20% downhill
       Wind                                     : Zero
       Obstacle (height and distance            : 17 feet/2,083 feet
              from end of TOR)

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction. Pressure altitude is 21
       feet.

2.2.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.2.3  An allowance of 445 lb of fuel is included for take-off and climb to
       1,500 ft above the departure airport at 84 (degrees) F with acceleration
       to climb speed.

2.2.4  Climb from 1,500 ft above the departure airport up to cruise altitude
       using maximum climb thrust and cruise at a fixed Mach number of 0.78 at
       pressure altitudes of 35,000 ft and 39,000 ft and descent to 1,500 ft
       above the destination airport are conducted in ISA+10 (degrees) C
       conditions. Climb and descent speeds below 10,000 ft will be 250 knots
       CAS.


2.2.5  An allowance of 200 lb of fuel is included for approach and land at the
       destination airport.

2.2.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.2.4 above.

2.2.7  At the end of approach and land 7,140 lb of fuel will remain in the
       tanks. This



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       represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10 (degrees) C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in ISA+10
           (degrees) C conditions.

2.3    In carrying a fixed payload of 26,760 lb over a still air stage distance
       of 2,000 nautical miles when operated under the conditions defined below
       the Block Fuel will be not more than a guaranteed value of *** .

2.3.1  The departure airport conditions are such as to allow the required
       take-off weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.3.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.3.3  An allowance of 430 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed at a
       temperature of 84 (degrees) F.

2.3.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at pressure
       altitudes of 35,000 ft and 39,000 ft and descent to 1,500 ft pressure
       altitude are conducted in ISA+10 (degrees) C conditions. Climb and
       descent speeds below 10,000 ft will be 250 knots CAS.

2.3.5  An allowance of 200 lb of fuel is included for approach and landing at
       the destination airport.

2.3.6  An allowance of 70 lb of fuel is included for taxi at the destination
       airport.

2.3.7  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.3.4 above.

       Block Fuel is defined as the fuel burnt during taxi, take-off, climb,
       cruise, descent and approach and landing as described in Subparagraphs
       2.3.2 to 2.3.6 inclusive.

2.3.8  At the end of approach and landing 6,890 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach



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       2) Diversion consisting of climb and cruise in ISA+10 (degrees) C
          conditions over a still air distance of 150 nautical miles starting at
          1,500 ft pressure altitude above the destination airport.
       3) Holding for 45 minutes at 20,000 ft pressure altitude in ISA+10
          (degrees) C conditions.

2.4    The A319 Aircraft will be capable of carrying a fixed payload of 31,960
       lb over a guaranteed still air stage distance of not less than *** when
       operated under the conditions defined below:

2.4.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.4.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.4.3  An allowance of 490 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed in ISA+10
       (degrees) C conditions.

2.4.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at pressure
       altitudes of 35,000 ft and 39,000 ft and descent to 1,500 ft pressure
       altitude are conducted in ISA+10 (degrees) C conditions. Climb and
       descent speeds below 10,000 ft will be 250 knots CAS.

2.4.5  An allowance of 200 lb of fuel is included for approach and landing at
       the destination airport.

2.4.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.4.4 above.

2.4.7  At the end of approach and landing 7,080 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10 (degrees) C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in ISA+10
           (degrees) C conditions.




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2.5    The A319 Aircraft will be capable of carrying a fixed payload of 26,760
       lb over a guaranteed still air stage distance of not less than *** when
       operated under the conditions defined below:

2.5.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.5.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.5.3  An allowance of 470 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed in ISA+10
       (degrees) C conditions.

2.5.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at pressure
       altitudes of 35,000 ft and 39,000 ft and descent to 1,500 ft pressure
       altitude are conducted in ISA+10 (degrees) C conditions. Climb and
       descent speeds below 10,000 ft will be 250 knots CAS.

2.5.5  An allowance of 200 lb of fuel is included for approach and landing at
       the destination airport.

2.5.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.5.4 above.
2.5.7  At the end of approach and landing 6,890 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10 (degrees) C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in ISA+10
           (degrees) C conditions.

2.6    The mission payload guarantee defined in Subparagraph 2.1 and the mission
       fuel burn guarantee defined in Subparagraph 2.3 and the mission ranges
       defined in Subparagraphs 2.4 and 2.5 are based on the Buyer's
       Manufacturer's Weight Empty as defined in Subparagraph 3.3 below plus a
       fixed allowance of 10,730 lb for Customer Changes and Operators Items.



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       The mission payload guarantee defined in Subparagraph 2.2 is based on the
       Buyer's Manufacturer's Weight Empty as defined in Subparagraph 3.3 below
       plus a fixed allowance of 12,230 lb for Customer Changes and Operators
       Items.

3      MANUFACTURER'S WEIGHT EMPTY AND USABLE LOAD
       --------------------------------------------

3.1 The Seller guarantees a Buyer's Manufacturer's Weight Empty of *** .

3.2    The Seller guarantees that the difference between the Buyer's
       Manufacturer's Weight Empty and the Maximum Zero Fuel Weight will be not
       less than ***

3.3    For the purposes of this Paragraph 3 and of Subparagraph 2.6 above the
       Buyer's Manufacturer's Weight Empty is the Manufacturer's Weight Empty
       defined in Section 13-10.00.00 of the Specification amended by the
       Specification Changes defined in the Preamble to this Letter Agreement
       and is subject to adjustment as defined in Subparagraph 7.2.

       For information only an analysis of the Buyer's Manufacturer's Weight
       Empty, Customer Changes, Operators Items and Operating Weight Empty is
       shown in Appendix A to this Letter Agreement.



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4      NOISE
       -----

4.1    External
       --------

4.1.1  The Seller guarantees that the A319 Aircraft will be certified in
       accordance with FAR Part 36 Noise Standards, issue 1988, including
       Amendment 36-15, Stage 3. The applicable noise limits are as defined in
       paragraphs 36.201 and c36.5 (3).

4.1.2  ***
       ----------------------------------

       ***



4.1.3  ***
       --------------------------------

       ***



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4.2    Internal
       --------

4.2.1  Cockpit noise
       -------------

       At a pressure altitude of 35,000 ft and a Mach number of M=0.78 in still
       air under ISA conditions, the guaranteed A-weighted Sound Pressure Level
       (SPL) will not exceed *** and the Speech Interference level (SIL) will
       not exceed ***.


4.2.2  Cabin noise
       -----------

       At a pressure altitude of 35,000 ft and a Mach number of M=0.78 in still
       air under ISA conditions, the guaranteed A-Weighted Sound Pressure Level
       (SPL) and the Speech Interference Level (SIL) will be as follows:

       -  the A-Weighted SPL will not exceed ***      over the whole seating
          area.

       -  the SIL will not exceed *** along the front 40% of the passenger
          compartment and will not exceed *** along the remaining 60% of the
          passenger compartment length.

4.2.3  On the ground and under the conditions defined in Subparagraph 5.9 below
       the noise levels in the passenger compartment with passenger doors open
       or closed the A-weighted Sound Pressure Level ("SPL") will not exceed ***
       and the Speech Interference Level ("SIL") will not exceed *** .


5      GUARANTEE CONDITIONS
       --------------------

5.1    The performance and noise certification requirements for the A319
       Aircraft, except where otherwise noted, will be as stated in Section 02
       of the Specification.

5.2    For the determination of FAR take-off and landing performance a hard
       level dry runway surface with no runway strength limitations, no
       obstacles, zero wind, atmosphere according to ISA, except as otherwise
       noted and the use of speedbrakes,



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       flaps, landing gear and engines in the conditions liable to provide the
       best results will be assumed.

       When establishing take-off and second segment performance no air will be
       bled from the engines for cabin air conditioning or anti-icing.

5.3    The en-route one engine inoperative climb performance will be established
       with the amount of engine air bleed associated with the maximum cabin
       altitude as specified in Section 21-30.32 of the Specification and an
       average ventilation rate not less than the amount defined in the
       Specification but no air will be bled from the engines for anti-icing.

5.4    Climb, cruise and descent performance associated with the Guarantees will
       include allowances for normal electrical load and for normal engine air
       bleed and power extraction associated with maximum cabin differential
       pressure as defined in Section 21-30.31 of the Specification. Cabin air
       conditioning management during performance demonstration as described in
       Subparagraph 6.3 below may be such as to optimize the A319 Aircraft
       performance while meeting the minimum air conditioning requirements
       defined above. Unless otherwise stated no air will be bled from the
       engines for anti-icing.

5.5    The engines will be operated using not more than the engine
       manufacturer's maximum recommended outputs for take-off, maximum go-
       round, maximum continuous, maximum climb and cruise for normal operation
       unless otherwise stated.

5.6    Where applicable the Guarantees assume the use of an approved fuel having
       a density of 6.7 lb/US gallon and a lower heating value of 18,590 BTU/lb.

5.7    Speech interference level (SIL) is defined as the arithmetic average of
       the sound pressure levels in the 1,000, 2,000, and 4,000 Hz octave bands.
       A-weighted sound level (dBA) is as defined in the American National
       Standard Specification ANSI.4-1971. ***




5.8    The sound levels guaranteed in Subparagraph 4.2

       i)  will be measured at the positions defined in Section 03-83.10 of the
           Specification
       ii) refer to an A319 Aircraft with standard acoustic insulation and an
           interior completely furnished. The effect on noise of Buyer Furnished
           Equipment other than passenger seats will be the responsibility of
           the Buyer.



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5.9    For the purposes of the sound levels guaranteed in Subparagraph 4.2.3 the
       APU and air conditioning system will be operating. Sound level
       measurements may be made at the prevailing ambient temperature with the
       air conditioning packs controlled to approximate air conditioning
       machinery rotational speed appropriate to an ambient temperature of
       25(degrees)C.

6      GUARANTEE COMPLIANCE
       --------------------

6.1    Compliance with the Guarantees will be demonstrated using operating
       procedures and limitations in accordance with those defined by the
       certifying Airworthiness Authority and by the Seller unless otherwise
       stated.

6.2    Compliance with the take-off, second segment, en-route one engine
       inoperative, landing and certified noise elements of the Guarantees will
       be demonstrated with reference to the approved Flight Manual.

6.3    Compliance with those parts of the Guarantees defined in Paragraphs 1 and
       2 above not covered by the requirements of the certifying Airworthiness
       Authority will be demonstrated by calculation based on data obtained
       during flight tests conducted on one (or more, as agreed between the
       Buyer and the Seller) A319 aircraft of the same aerodynamic configuration
       as those A319 Aircraft purchased by the Buyer.

6.4    Compliance with the Manufacturer's Weight Empty and Usable Load
       guarantees defined in Paragraph 3 will be demonstrated with reference to
       a weight compliance report.

6.5    Compliance with the mission guarantees defined in Paragraph 2 will be
       demonstrated with reference to the weight compliance report described in
       Subparagraph 6.4.

6.6    Compliance with the guarantees defined in Subparagraphs 4.1.2 and 4.1.3
       will be based on data collected for noise certification purposes. ***



6.7    Compliance with the noise guarantees defined in Subparagraph 4.2 will be
       demonstrated with reference to noise surveys conducted on one (or more,
       at the Seller's discretion) A319 aircraft of an acoustically similar
       standard as the A319 Aircraft.



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6.8    Data derived from tests and noise surveys will be adjusted as required
       using conventional methods of correction, interpolation or extrapolation
       in accordance with established aeronautical practices to show compliance
       with the Guarantees.

6.9    Compliance with the Guarantees is not contingent on engine performance
       defined in the engine manufacturer's specification.

6.10   The Seller undertakes to furnish the Buyer with a report or reports
       demonstrating compliance with the Guarantees at, or as soon as possible
       after, the delivery of each of the A319 Aircraft.

7      ADJUSTMENT OF GUARANTEES
       ------------------------

7.1    In the event of any change to any law, governmental regulation or
       requirement or interpretation thereof ("rule change") by any governmental
       agency made subsequent to the date of the Agreement and such rule change
       affects the A319 Aircraft configuration or performance or both required
       to obtain certification the Guarantees will be appropriately modified to
       reflect the effect of any such change.

7.2    The Guarantees apply to the A319 Aircraft as described in the Preamble to
       this Letter Agreement and may be adjusted in the event of:

       a) Any further configuration change which is the subject of a SCN b)
       Variation in actual weights of items defined in Section 13-10 of the
           Specification
       c)  Changes required to obtain certification which cause changes to the
           performance or weight of the A319 Aircraft

8      EXCLUSIVE GUARANTEES
       --------------------

       The Guarantees are exclusive and are provided in lieu of any and all
       other performance and weight guarantees of any nature which may be
       stated, referenced or incorporated in the Specification or any other
       document.

9      UNDERTAKING; REMEDIES
       ---------------------

       ***



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***







UNQUOTE
-------

       In consideration of the assignment and subrogation by the Seller under
       this Letter Agreement in favor of the Buyer in respect of the Seller's
       rights against and obligations to the Manufacturer under the provisions
       quoted above, the Buyer hereby accepts such assignment and subrogation
       and agrees to be bound by all of the terms, conditions and limitations
       therein contained. The Buyer and Seller recognize and agree that, except
       as otherwise expressly provided in Paragraph 8 of this Letter Agreement,
       all the provisions of Clause 12 of the Agreement, including without
       limitation the Exclusivity of Warranties and General Limitations of
       Liability and Duplicate Remedies therein contained, will apply to the
       foregoing performance guarantees.



<PAGE>




A319-112
CFM 56-5B-6 ENGINES

       ASSIGNMENT
       ----------

       This Letter Agreement and the rights and obligations of the Buyer
       hereunder will not be assigned or transferred in any manner without the
       prior written consent of the Seller, and any attempted assignment or
       transfer in contravention of the provisions of this paragraph will be
       void and of no force or effect. Notwithstanding the preceding sentence,
       the terms of Subclauses 19.5 and 19.6 of the Agreement will apply to this
       Letter Agreement.



<PAGE>




A319-112
CFM 56-5B-6 ENGINES

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.


                                       Very truly yours,

                                       AVSA, S.A.R.L.


                                       By:   /s/ Christophe Mourey
                                             --------------------------
                                       Its:  Chief Executive Officer
                                             --------------------------
                                       Date: October 31, 1997
                                             --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
      ---------------------------
Its:  Treasurer
      ---------------------------
Date: October 31, 1997
      ---------------------------



<PAGE>




A319-112                                                              APPENDIX A
CFM 56-5B-6 ENGINES                                                   ----------

1    Manufacturer's Weight Empty and Operating Weight Empty
     ------------------------------------------------------

     At the time of this Agreement the Buyer's Manufacturer's Weight Empty and
     the Operating Weight Empty for the purposes of Subparagraphs 2.6 and
     Paragraph 3 of this Letter Agreement are defined as follows:



     Manufacturer's Weight Empty as defined in the Specification
     Reference J 000.02000 Issue 3                                   : 79,642 lb

     Specification Change for the fitting of CFM56-5B6 engines       :    611 lb

     Specification Change for the increase in Design Weights         :      0 lb
                                                                     -----------

     Buyer's Manufacturer's Weight Empty according to the Preamble
     -------------------------------------------------------------
     of this Letter Agreement and for the purposes of Subparagraph
     -------------------------------------------------------------
     2.6 and Paragraph 3 of this Letter Agreement                    : ***
     --------------------------------------------

     Specification changes as defined in Subparagraph 2.1 of
     this Appendix A (including USAir livery)                        :  1,165 lb

     Operators Items as defined in Subparagraph 2.2.1 of
     this Appendix A                                                 :  9,566 lb
                                                                     -----------
     Operating Weight Empty of  the A319 Aircraft for the purposes
     -------------------------------------------------------------
     of Subparagraphs 2.1 and 2.3 to 2.5 inclusive of this Letter
     ------------------------------------------------------------
     Agreement                                                       : 90,984 lb
     ---------

     Operators items as defined in Subparagraph 2.2.2 of
     this Appendix A                                                 : 11,066 lb
                                                                     -----------
     Operating Weight Empty of the A319 Aircraft for the purposes
     ------------------------------------------------------------
     of Subparagraphs 2.2 of this Letter Agreement                   : 92,484 lb
     ---------------------------------------------

*Note  As of the date hereof the Operating Weight Empty has not been completely
       defined. The payloads, fuel burn and ranges guaranteed in Paragraph 2 are
       based on the estimated Operating Weight Empty as shown above.



<PAGE>




A319-112                                                              APPENDIX A
CFM 56-5B-6 ENGINES                                                   ----------

2     Specification Changes and Operators Items
      -----------------------------------------

2.1   Weight of Specification Changes
      -------------------------------

      As of the date of this draft the complete list of USAir Specification
      Changes is unknown.



      It is estimated that the weight of such
      Specification Changes is:                                 :1,105 lb 
      USAir livery                                              :   60 lb 
                                                                          
2.2   Weights of Operators Items                                          
      --------------------------                                          
                                                                          
                                                                          
                                                                          
      Oil for engines and APU                                   :  117 lb 
      Unusable fuel                                             :  143 lb 
      Water for galleys and toilets                             :  441 lb 
      Waste tank pre-charge                                     :   29 lb 
      A319 Aircraft documents and tool kits                     :   42 lb 
      Passenger seats and life jackets                          :3,504 lb 
      Phone equipment                                           :  170 lb 
      Galley structure and fixed equipment                      :1,225 lb 
      Chillers                                                  :  195 lb 
      Catering and service equipment                            :1,938 lb 
      Cabin supplies                                            :  180 lb 
      Emergency equipment                                       :  542 lb 
      Crew and bags                                             :1,040 lb 
                                                                ---------



2.2.1 Total Operators Items for the purposes of
      Subparagraphs and 2.3 to 2.5 inclusive of
      this Letter Agreement                                     : 9,566 lb 
                                                                           
      Additional items for over water operation                 : 1,500 lb 
                                                                ----------
2.2.2 Total Operators Items for the purposes of
      Subparagraph 2.2 of this Letter Agreement                 :11,066 lb



<PAGE>




                            LETTER AGREEMENT NO. 8B


                                                          As of October 31, 1997

US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:  A320-214 PERFORMANCE GUARANTEES
     -------------------------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 8B (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

     The Seller, in its capacity as "Buyer" under its arrangement with the
Manufacturer, has negotiated and obtained the following performance and weight
guarantees (the "Guarantees") from the Manufacturer, in its capacity as "Seller"
with respect to the A320 Aircraft, subject to the terms, conditions, limitations
and restrictions all as hereinafter set out. The Seller hereby guarantees to the
Buyer the performance by the Manufacturer of the Manufacturer's obligations and
assigns to the Buyer and the Buyer hereby accepts, as to each A320 Aircraft
delivered to the Buyer under the Agreement, all of the rights and obligations of
the Seller with respect to such A320 Aircraft in the Seller's capacity as
"Buyer" as aforesaid under the said Guarantees and the Seller subrogates the
Buyer into all such rights and obligations in respect of such A320 Aircraft. The
Seller hereby warrants to the Buyer that it has all the requisite authority to
make the foregoing assignment and effect the foregoing subrogation to and in
favor of the Buyer and that



<PAGE>




it will not enter into any amendment of the provisions so assigned or subrogated
without the prior written consent of the Buyer.

     Capitalized terms used in the following quoted provisions and not otherwise
defined herein will have the meanings assigned thereto in the Agreement except
that the term "Seller" refers to the Manufacturer and the term "Buyer" refers to
the Seller (as defined in the Agreement).

QUOTE
-----

       PREAMBLE
       --------

       The guarantees defined below (the "Guarantees") are applicable to the
       A320 Aircraft as described in the Technical Specification D.000.02000
       Issue 4 dated 30 March 1995 amended by Specification Change Notices for:

       i)  the fitting CFM International CFM 56-5B-4 (with Enhanced Take-Off
           rating) propulsion systems

       ii)  the increase in the Maximum Take-Off Weight to 169,750 lb
            (77,000 kg)

       without taking into account any further changes thereto as provided in
       the Agreement.

       Notwithstanding the foregoing the Seller reserves the right to increase
       the Design Weights above the weights shown in the Specification in order
       to satisfy the Guarantees.

1      GUARANTEED PERFORMANCE
       ----------------------

1.1    Take-off
       --------

1.1.1  FAR take-off field length at an A320 Aircraft gross weight of 169,750 lb
       (77,000 kg) at the start of ground run at sea level pressure altitude at
       a temperature of 84(degrees)F will be not more than a guaranteed value of
       7,420 feet.

1.1.2  When operated under the following conditions (representative of PHX 08R):

       Pressure altitude                     : 1,133 ft
       Ambient temperature                   : 100(degrees)F
       Take-off run available ("TOR")        : 10,300 feet
       Take-off distance available           : 10,300 feet



<PAGE>




       Accelerate-stop distance available    : 10,300 feet
       Slope                                 : 0.20% uphill
       Wind                                  : Zero
       Obstacles (height and distance        : 15 feet/1,438 feet
                 from end of TOR)            : 418 feet/17,285 feet

       the maximum permissible weight at the start of ground run will be not
       less than a guaranteed value of 166,850 lb.

1.1.3  When operated under the following conditions (representative of DEN 09):

       Pressure altitude                     : 5,431 ft
       Ambient temperature                   : 84(degrees)F
       Take-off run available ("TOR")        : 12,000 feet
       Take-off distance available           : 12,000 feet
       Accelerate-stop distance available    : 12,000 feet
       Slope                                 : 0.01% uphill
       Wind                                  : Zero
       Obstacles                                   : None

       the maximum permissible weight at the start of ground run will be not
       less than a guaranteed value of 165,900 lb.

1.2    Second Segment
       --------------

       The A320 Aircraft will meet FAR 25 regulations for one engine inoperative
       climb after take-off, undercarriage retracted, at a weight corresponding
       to the stated weight at the start of ground run at the altitude and
       temperature and in the configuration of flap angle and safety speed
       required to comply with the performance guaranteed in Subparagraph 1.1.

1.3    Initial Cruise Altitude
       -----------------------

       At an A320 Aircraft gross weight of 160,000 lb in ISA+10(degrees)C
       conditions the pressure altitude for:

       1)  Level flight at a true Mach number of 0.78 using a thrust not
           exceeding maximum cruise thrust

       2)  A rate of climb of not less than 300 ft/min at a true Mach number of
           0.78 using



<PAGE>




           a thrust not exceeding maximum climb thrust

       3)  A buffet maneuver margin of not less than 0.3g at a true Mach number
           of 0.78

       will be not less than a guaranteed value of 35,000 ft.

1.4    Speed
       -----

       Level flight speed at an A320 Aircraft gross weight of 160,000 lb at a
       pressure altitude of 35,000 at in ISA+10(degrees)C conditions using a
       thrust not exceeding maximum cruise thrust will be not less than a
       guaranteed true Mach number of 0.790.

1.5    Specific Range
       --------------

1.5.1  The nautical miles per pound of fuel at an A320 Aircraft gross weight of
       155,000 lb at a pressure altitude of 35,000 ft in ISA+10(degrees)C
       conditions at a true Mach number of 0.78 will be not less than a
       guaranteed value of 0.0783 nm/lb.

1.5.2  The nautical miles per pound of fuel at an A320 Aircraft gross weight of
       145,000 lb at a pressure altitude of 37,000 ft in ISA+10(degrees)C
       conditions at a true Mach number of 0.78 will be not less than a
       guaranteed value of 0.0839 nm/lb.

1.6    En-route One Engine Inoperative
       -------------------------------

       The A320 Aircraft will meet FAR regulations minimum en-route climb one
       engine inoperative and the other operating at the maximum continuous
       thrust with anti-icing off at an A320 Aircraft gross weight of 155,000 lb
       in the cruise configuration in ISA+10(degrees)C conditions at a
       guaranteed pressure altitude of not less than 14,500 ft.

1.7    Landing Field Length
       --------------------

1.7.1  FAR certified wet landing field length at an A320 Aircraft gross weight
       of 142,200 lb (64,500 kg) at sea level pressure altitude will be not
       greater than 6,040 feet.

1.7.2  FAR certified wet landing field length at an A320 Aircraft gross weight
       of 142,200 lb (64,500 kg) at a pressure altitude of 5,431 ft will be not
       greater than 6,800 feet.

2      MISSION GUARANTEES
       ------------------

2.1    The A320 Aircraft will be capable of carrying a guaranteed payload of not
       less than *** over a still air stage distance of 2,610 nautical miles
       (representative of PHL



<PAGE>




       to SFO with a 65 knot headwind) when operated under the conditions
       defined below:

2.1.1  The departure airport conditions (representative of PHL 09R) are as
       follows:

       Pressure altitude                     : 21 ft
       Ambient temperature                   : 84(degrees)F
       Take-off run available ("TOR")        : 10,499 feet
       Take-off distance available           : 10,499 feet
       Accelerate-stop distance available    : 10,499 feet
       Slope                                 : 0.10% downhill
       Wind                                  : Zero
       Obstacles (height and distance        : 17 feet/1,090 feet
                 from end of TOR)            : 57 feet/4,306 feet
                                             : 178 feet/9,500 feet

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction. Pressure altitude is 11
       feet.

2.1.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.1.3  An allowance of 520 lb of fuel is included for take-off and climb to
       1,500 ft above the departure airport at 84(degrees)F with acceleration to
       climb speed.

2.1.4  Climb from 1,500 ft above the departure airport up to cruise altitude
       using maximum climb thrust and cruise at a fixed Mach number of 0.78 at
       pressure altitudes of 35,000 ft and 39,000 ft and descent to 1,500 ft
       above the destination airport are conducted in ISA+10(degrees)C
       conditions. Climb and descent speeds below 10,000 ft will be 250 knots
       CAS.

2.1.5  An allowance of 180 lb of fuel is included for approach and land at the
       destination airport.

2.1.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.1.4 above.

2.1.7  At the end of approach and land 7,210 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in
           ISA+10(degrees)C conditions.



<PAGE>




2.2    The A320 Aircraft will be capable of carrying a guaranteed payload of not
       less than *** over a still air stage distance of 1,545 nautical miles
       (representative of STT to PHL with a 37 knot headwind) when operated
       under the conditions defined below:

2.2.1  The departure airport conditions (representative of STT 10) are as
       follows:

       Pressure altitude                     : 24 ft
       Ambient temperature                   : 84(degrees)F
       Take-off run available ("TOR")        : 7,000 feet
       Take-off distance available           : 7,000 feet
       Accelerate-stop distance available    :  7,000 feet
       Slope                                 : 0.20% downhill
       Wind                                  : Zero
       Obstacle (height and distance         : 17 feet/2,083 feet
                 from end of TOR)

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction. Pressure altitude is 21
       feet.

2.2.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.2.3  An allowance of 500 lb of fuel is included for take-off and climb to
       1,500 ft above the departure airport at 84(degrees)F with acceleration to
       climb speed.

2.2.4  Climb from 1,500 ft above the departure airport up to cruise altitude
       using maximum climb thrust and cruise at a fixed Mach number of 0.78 at a
       pressure altitude of 35,000 ft and descent to 1,500 ft above the
       destination airport are conducted in ISA+10(degrees)C conditions. Climb
       and descent speeds below 10,000 ft will be 250 knots CAS.

2.2.5  An allowance of 190 lb of fuel is included for approach and land at the
       destination airport.

2.2.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.2.4 above.

2.2.7  At the end of approach and land 7,500 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air



<PAGE>




           distance of 150 nautical miles starting at 1,500 ft above the
           destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in
           ISA+10(degrees)C conditions.

2.3    In carrying a fixed payload of 31,665 lb over a still air stage distance
       of 2,000 nautical miles when operated under the conditions defined below
       the Block Fuel will be not more than a guaranteed value of *** .

2.3.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.3.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.3.3  An allowance of 470 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed at a
       temperature of 84(degrees)F.

2.3.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at a pressure
       altitude of 35,000 ft and descent to 1,500 ft pressure altitude are
       conducted in ISA+10(degrees)C conditions. Climb and descent speeds below
       10,000 ft will be 250 knots CAS.

2.3.5  An allowance of 190 lb of fuel is included for approach and landing at
       the destination airport.

2.3.6  An allowance of 70 lb of fuel is included for taxi at the destination
       airport.

2.3.7  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.3.4 above.

       Block Fuel is defined as the fuel burnt during taxi, take-off, climb,
       cruise, descent and approach and landing as described in Subparagraphs
       2.3.2 to 2.3.6 inclusive.

2.3.8  At the end of approach and landing 7,190 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude.



<PAGE>




       3) Holding for 45 minutes at 20,000 ft pressure altitude in
          ISA+10(degrees)C conditions.

2.4    The A320 Aircraft will be capable of carrying a fixed payload of 38,700
       lb over a guaranteed still air stage distance of not less than *** when
       operated under the conditions defined below:

2.4.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.4.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.4.3  An allowance of 510 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed in
       ISA+10(degrees)C conditions.

2.4.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at a pressure
       altitudes of 35,000 ft and descent to 1,500 ft pressure altitude are
       conducted in ISA+10(degrees)C conditions. Climb and descent speeds below
       10,000 ft will be 250 knots CAS.

2.4.5  An allowance of 190 lb of fuel is included for approach and landing at
       the destination airport.

2.4.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.4.4 above.

2.4.7  At the end of approach and landing 7,490 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach

       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude above the destination airport.

       3)  Holding for 45 minutes at 20,000 ft pressure altitude in
           ISA+10(degrees)C conditions.

2.5    The A320 Aircraft will be capable of carrying a fixed payload of 31,665
       lb over a guaranteed still air stage distance of not less than *** when
       operated under the conditions defined below:



<PAGE>




2.5.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.5.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.5.3  An allowance of 500 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed in
       ISA+10(degrees)C conditions.

2.5.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at a pressure
       altitude of 35,000 ft and descent to 1,500 ft pressure altitude are
       conducted in ISA+10(degrees)C conditions. Climb and descent speeds below
       10,000 ft will be 250 knots CAS.

2.5.5  An allowance of 190 lb of fuel is included for approach and landing at
       the destination airport.

2.5.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.5.4 above.

2.5.7  At the end of approach and landing 7,190 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach

       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude above the destination airport.

       3)  Holding for 45 minutes at 20,000 ft pressure altitude in
           ISA+10(degrees)C conditions.

2.6    The mission payload guarantee defined in Subparagraph 2.1 and the mission
       fuel burn guarantee defined in Subparagraph 2.3 and the mission range
       guarantees defined in Subparagraphs 2.4 and 2.5 are based on the Buyer's
       Manufacturer's Weight Empty as defined in Subparagraph 3.3 below plus a
       fixed allowance of 11,970 lb for Customer Changes and Operators Items.

       The mission payload guarantee defined in Subparagraph 2.2 is based on the
       Buyer's Manufacturer's Weight Empty as defined in Subparagraph 3.3 below
       plus a fixed allowance of 13,470 lb for Customer Changes and Operators
       Items.



<PAGE>




3      MANUFACTURER'S WEIGHT EMPTY AND USABLE LOAD
       --------------------------------------------

3.1    The Seller guarantees a Buyer's Manufacturer's Weight Empty of *** .

3.2    The Seller guarantees that the difference between the Buyer's
       Manufacturer's Weight Empty and the Maximum Zero Fuel Weight will be not
       less than ***.

3.3    For the purposes of this Paragraph 3 and of Subparagraph 2.6 above the
       Buyer's Manufacturer's Weight Empty is the Manufacturer's Weight Empty
       defined in Section 13-10.00.00 of the Specification amended by the
       Specification Changes defined in the Preamble to this Letter Agreement
       and is subject to adjustment as defined in Subparagraph 7.2.

       For information only an analysis of the Buyer's Manufacturer's Weight
       Empty, Customer Changes, Operators Items and Operating Weight Empty is
       shown in Appendix A to this Letter Agreement.


4      NOISE
       -----

4.1    External
       --------

4.1.1  The Seller guarantees that the A320 Aircraft will be certified in
       accordance with FAR Part 36 Noise Standards, issue 1978, including
       Amendment 36-15, Stage 3. The applicable noise limits are as defined in
       paragraphs 36.201 and c36.5 (3).

4.1.2  ***
       --------------------------------

       ***



<PAGE>




4.1.3  ***
       --------------------------------

       ***



4.2    Internal
       --------

4.2.1  Cockpit noise
       -------------

       At a pressure altitude of 35,000 ft and a Mach number of M=0.78 in still
       air under ISA conditions, the guaranteed A-Weighted Sound Pressure Level
       (SPL) will not exceed *** and the Speech Interference Level (SIL) will
       not exceed *** .

4.2.2  Cabin noise
       -----------

       At a pressure altitude of 35,000 ft and a Mach number of M=0.78 in still
       air under ISA conditions, the guaranteed A-Weighted Sound Pressure Level
       (SPL) and the Speech Interference Level (SIL) will be as follows:

       -  the A-Weighted SPL will not exceed ***      over the whole seating
          area.

       -  the SIL will not exceed *** along the front 40% of the passenger
          compartment and will not exceed *** along the remaining 60% of the
          passenger compartment length.

4.2.3  On the ground and under the conditions defined in Subparagraph 5.9 below
       the noise levels in the passenger compartment with passenger doors open
       or closed the A-weighted Sound Pressure Level ("SPL") will not exceed ***
       and the Speech Interference Level ("SIL") will not exceed *** .

5      GUARANTEE CONDITIONS
       --------------------

5.1    The performance and noise certification requirements for the A320
       Aircraft, except where otherwise noted, will be as stated in Section 02
       of the Specification.

5.2    For the determination of FAR take-off and landing performance a hard
       level dry runway surface with no runway strength limitations, no
       obstacles, zero wind, atmosphere according to ISA, except as otherwise
       noted and the use of speedbrakes, flaps, landing gear and engines in the
       conditions liable to provide the best results will be assumed.

5.2.1  When establishing take-off and second segment performance no air will be
       bled from the engines for cabin air conditioning or anti-icing.

5.3    The en-route one engine inoperative climb performance will be established
       with the amount of engine air bleed associated with the maximum cabin
       altitude as specified in Section 21-30.32 of the Specification and an
       average ventilation rate not less than the amount defined in the
       Specification but no air will be bled from the engines for anti-icing.

5.4    Climb, cruise and descent performance associated with the Guarantees will
       include allowances for normal electrical load and for normal engine air
       bleed and power extraction associated with maximum cabin differential
       pressure as defined in Section 21-30.31 of the Specification. Cabin air
       conditioning management during performance demonstration as described in
       Subparagraph 6.3 below may be such as to optimize the A320 Aircraft
       performance while meeting the minimum air conditioning requirements
       defined above. Unless otherwise stated no air will be bled from the
       engines for anti-icing.

5.5    The engines will be operated using not more than the engine
       manufacturer's maximum recommended outputs for take-off, maximum go-
       round, maximum continuous, maximum climb and cruise for normal operation
       unless otherwise stated.

5.6    Where applicable the Guarantees assume the use of an approved fuel having
       a density of 6.7 lb/US gallon and a lower heating value of 18,590 BTU/lb.

5.7    Speech interference level (SIL) is defined as the arithmetic average of
       the sound pressure levels in the 1,000, 2,000, and 4,000 Hz octave bands.
       A-weighted sound level (dBA) is as defined in the American National
       Standard Specification ANSI.4-1971. ***


<PAGE>






5.8 The sound levels guaranteed in Subparagraph 4.2:

       i)   will be measured at the positions defined in Section 03-83.10 of the
            Specification

       ii)  refer to an A320 Aircraft with standard acoustic insulation and an
            interior completely furnished. The effect on noise of Buyer
            Furnished Equipment other than passenger seats will be the
            responsibility of the Buyer.

5.9    For the purposes of the sound levels guaranteed in Subparagraph 4.2.3 the
       APU and air conditioning system will be operating. Sound level
       measurements may be made at the prevailing ambient temperature with the
       air conditioning packs controlled to approximate air conditioning
       machinery rotational speed appropriate to an ambient temperature of
       25(degrees)C.

6      GUARANTEE COMPLIANCE
       --------------------

6.1    Compliance with the Guarantees will be demonstrated using operating
       procedures and limitations in accordance with those defined by the
       certifying Airworthiness Authority and by the Seller unless otherwise
       stated.

6.2    Compliance with the take-off, second segment, en-route one engine
       inoperative, landing and certified noise elements of the Guarantees will
       be demonstrated with reference to the approved Flight Manual.

6.3    Compliance with those parts of the Guarantees defined in Paragraphs 1 and
       2 above not covered by the requirements of the certifying Airworthiness
       Authority will be demonstrated by calculation based on data obtained
       during flight tests conducted on one (or more, as agreed between the
       buyer and the Seller) A320 aircraft of the same aerodynamic configuration
       as those A320 Aircraft purchased by the Buyer.

6.4    Compliance with the Manufacturer's Weight Empty and Usable Load
       guarantees defined in Paragraph 3 will be demonstrated with reference to
       a weight compliance report.

6.5    Compliance with the mission guarantees defined in Paragraph 2 will be
       demonstrated with reference to the weight compliance report described in
       Subparagraph 6.4.

6.6    Compliance with the guarantees defined in Subparagraphs 4.1.2 and 4.1.3
       will be based on data collected for noise certification purposes. ***



<PAGE>




6.7    Compliance with the noise guarantees defined in Subparagraph 4.2 will be
       demonstrated with reference to noise surveys conducted on one (or more,
       at the Seller's discretion) A320 aircraft of an acoustically similar
       standard as the A320 Aircraft.

6.8    Data derived from tests and noise surveys will be adjusted as required
       using conventional methods of correction, interpolation or extrapolation
       in accordance with established aeronautical practices to show compliance
       with the Guarantees.

6.9    Compliance with the Guarantees is not contingent on engine performance
       defined in the engine manufacturer's specification.

6.10   The Seller undertakes to furnish the Buyer with a report or reports
       demonstrating compliance with the Guarantees at, or as soon as possible
       after, the delivery of each of the A320 Aircraft.

7      ADJUSTMENT OF GUARANTEES
       ------------------------

7.1    In the event of any change to any law, governmental regulation or
       requirement or interpretation thereof ("rule change") by any governmental
       agency made subsequent to the date of the Agreement and such rule change
       affects the A320 Aircraft configuration or performance or both required
       to obtain certification the Guarantees will be appropriately modified to
       reflect the effect of any such change.

7.2    The Guarantees apply to the A320 Aircraft as described in the Preamble to
       this Letter Agreement and may be adjusted in the event of:

       a) Any further configuration change which is the subject of a SCN

       b) Variation in actual weights of items defined in Section 13-10 of the
       Specification

       c) Changes required to obtain certification which cause changes to the
       performance or weight of the A320 Aircraft

8      EXCLUSIVE GUARANTEES
       --------------------

       The Guarantees are exclusive and are provided in lieu of any and all
       other performance and weight guarantees of any nature which may be
       stated, referenced or incorporated in the Specification or any other
       document.



<PAGE>




9      UNDERTAKING; REMEDIES
       ---------------------

       ***



UNQUOTE
-------

       In consideration of the assignment and subrogation by the Seller under
       this Letter Agreement in favor of the Buyer in respect of the Seller's
       rights against and obligations to the Manufacturer under the provisions
       quoted above, the Buyer hereby accepts such assignment and subrogation
       and agrees to be bound by all of the terms, conditions and limitations
       therein contained. The Buyer and Seller recognize and agree that, except
       as otherwise expressly provided in Paragraph 8 of this Letter Agreement,
       all the provisions of Clause 12 of the Agreement, including without
       limitation the Exclusivity of Warranties and General Limitations of
       Liability and Duplicate Remedies therein contained, will apply to the
       foregoing performance guarantees.

       ASSIGNMENT
       ----------

       This Letter Agreement and the rights and obligations of the Buyer
       hereunder will not be assigned or transferred in any manner without the
       prior written consent of the Seller, and any attempted assignment or
       transfer in contravention of the provisions of this paragraph will be
       void and of no force or effect. Notwithstanding the preceding sentence,
       the terms of Subclauses 19.5 and 19.6 of the Agreement will apply to this
       Letter Agreement.



<PAGE>




If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.


                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/ Christophe Mourey
                                    --------------------------
                              Its:  Chief Executive Officer
                                    --------------------------
                              Date: October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
      ---------------------------
Its:  Treasurer
     ----------------------------
Date: October 31, 1997
      ---------------------------



<PAGE>




                                                                      APPENDIX A
                                                                      ----------

1      Manufacturer's Weight Empty and Operating Weight Empty
       ------------------------------------------------------

       At the time of this Agreement the Buyer's Manufacturer's Weight Empty and
       the Operating Weight Empty for the purposes of Subparagraph 2.6 and
       Paragraph 3 of this Letter Agreement are defined as follows:

       Manufacturer's Weight Empty as defined in the Specification
       Reference D 000.02000 Issue 4                                  :81,966 lb

       Specification Change for the fitting of CFM56-5B4 engines      :   582 lb

       Specification Change for the increase in Design Weights        :   220 lb
                                                                      ----------

       Buyer's Manufacturer's Weight Empty according to the Preamble
       -------------------------------------------------------------
       of this Letter Agreement and for the purposes of Subparagraph
       -------------------------------------------------------------
       2.6 and Paragraph 3 of this Letter Agreement                   : ***
       --------------------------------------------

       Specification changes as defined in Subparagraph 2.1 of
       this Appendix A (including USAir livery)                       : 1,197 lb

       Operators Items as defined in Subparagraph 2.2.1 of
       this Appendix A                                                :10,776 lb
                                                                      ----------
       Operating Weight Empty of the A320 Aircraft for the purposes
       ------------------------------------------------------------
       of Subparagraphs 2.1 and 2.3 to 2.5 inclusive of this Letter
       ------------------------------------------------------------
       Agreement                                                      :94,741 lb
       ---------


       Operators items as defined in Subparagraph 2.2.2 of
       this Appendix A                                                :11,276 lb
                                                                      ----------
       Operating Weight Empty of the A320 Aircraft for the purposes
       ------------------------------------------------------------
       of Subparagraphs 2.2 of this Letter Agreement                  :96,241 lb
       ---------------------------------------------


*Note  As of the date hereof the Operating Weight Empty has not been completely
       defined. The payloads, fuel burn and ranges guaranteed in Paragraph 2 are
       based on the estimated Operating Weight Empty as shown above.



<PAGE>







A320-214                                                           APPENDIX A
CFM 56-5B-4 ENGINES                                                ----------



2       Specification Changes and Operators Items
        -----------------------------------------

2.1     Weight of Specification Changes
        -------------------------------

        As of the date of this draft the complete list of USAir Specification
        Changes is unknown.

        It is estimated that the weight of such
        Specification Changes is:                                    :1,137 lb
        USAir livery                                                 :   60 lb

2.2     Weights of Operators Items
        --------------------------

        Oil for engines and APU                                      :  117 lb
        Unusable fuel                                                :  143 lb
        Water for galleys and toilets                                :  441 lb
        Waste tank pre-charge                                        :   29 lb
        A320 Aircraft documents and tool kits                        :   42 lb
        Passenger seats and life jackets                             :4,216 lb
        Phone equipment                                              :  170 lb
        Galley structure and fixed equipment                         :1,265 lb
        Chillers                                                     :  195 lb
        Catering and service equipment                               :2,354 lb
        Cabin supplies                                               :  213 lb
        Emergency equipment                                          :  551 lb
        Crew and bags                                                :1,040 lb
                                                                     ---------

2.2.1   Total Operators Items for the purposes of Subparagraphs 2.1 and 2.3 to
        2.5 inclusive
        of this Letter Agreement                                     :10,776 lb

        Additional items for over water operation                    : 1,500 lb
                                                                     ---------

2.2.2   Total Operators Items for the purposes of
        Subparagraph 2.2 of this Letter Agreement                    :12,276 lb






<PAGE>




A321-211
CFM 56-5B-3 ENGINES

                            LETTER AGREEMENT NO. 8C



                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:  A321-211 PERFORMANCE GUARANTEES
     -------------------------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 8C (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

     The Seller, in its capacity as "Buyer" under its arrangement with the
Manufacturer, has negotiated and obtained the following performance and weight
guarantees (the "Guarantees") from the Manufacturer, in its capacity as "Seller"
with respect to the A321 Aircraft, subject to the terms, conditions, limitations
and restrictions all as hereinafter set out. The Seller hereby guarantees to the
Buyer the performance by the Manufacturer of the Manufacturer's obligations and
assigns to the Buyer and the Buyer hereby accepts, as to each A321 Aircraft
delivered to the Buyer under the Agreement, all of the rights and obligations of
the Seller with respect to such A321 Aircraft in the Seller's capacity as
"Buyer" as aforesaid under the said Guarantees and the



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

Seller subrogates the Buyer into all such rights and obligations in respect of
such A321 Aircraft. The Seller hereby warrants to the Buyer that it has all the
requisite authority to make the foregoing assignment and effect the foregoing
subrogation to and in favor of the Buyer and that it will not enter into any
amendment of the provisions so assigned or subrogated without the prior written
consent of the Buyer.

       Capitalized terms used in the following quoted provisions and not
otherwise defined herein will have the meanings assigned thereto in the
Agreement except that the term "Seller" refers to the Manufacturer and the term
"Buyer" refers to the Seller (as defined in the Agreement).

QUOTE
-----

       PREAMBLE
       --------

       The guarantees defined below (the "Guarantees") are applicable to the
       A321 Aircraft as described in the Technical Specification E.000.02000
       Issue 1 dated 30 June 1995 and fitted with CFM International CFM 56-5B-3
       propulsion systems without taking into account any further changes
       thereto as provided in the Agreement.

       Notwithstanding the foregoing the Seller reserves the right to increase
       the Design Weights above the weights shown in the Specification in order
       to satisfy the Guarantees.

1      GUARANTEED PERFORMANCE
       ----------------------

1.1    Take-off
       --------

1.1.1  FAR take-off field length at an A321 Aircraft gross weight of 196,210 lb
       (89,000 kg) at the start of ground run at sea level pressure altitude at
       a temperature of 84(degrees)F will be not more than a guaranteed value of
       8,090 feet.

1.1.2 When operated under the following conditions (representative of PHX 08R):

       Pressure altitude                        : 1,133 ft
       Ambient temperature                      : 100 degrees F
       Take-off run available ("TOR")           : 10,300 feet
       Take-off distance available              : 10,300 feet
       Accelerate-stop distance available       : 10,300 feet
       Slope                                    : 0.20% uphill
       Wind                                     : Zero



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

       Obstacles (height and distance           : 15 feet/1,438 feet
                from end of TOR)                : 418 feet/17,285 feet

       the maximum permissible weight at the start of ground run will be not
       less than a guaranteed value of 180,300 lb.

1.1.3 When operated under the following conditions (representative of DEN 09):

       Pressure altitude                        : 5,431 ft
       Ambient temperature                      : 84(degrees)F
       Take-off run available ("TOR")           : 12,000 feet
       Take-off distance available              : 12,000 feet
       Accelerate-stop distance available       : 12,000 feet
       Slope                                    : 0.01% uphill
       Wind                                     : Zero
       Obstacles                                : None

       the maximum permissible weight at the start of ground run will be not
       less than a guaranteed value of 176,400 lb.

1.2    Second Segment
       --------------

       The A321 Aircraft will meet FAR 25 regulations for one engine inoperative
       climb after take-off, undercarriage retracted, at a weight corresponding
       to the stated weight at the start of ground run at the altitude and
       temperature and in the configuration of flap angle and safety speed
       required to comply with the performance guaranteed in Subparagraph 1.1.

1.3    Initial Cruise Altitude
       -----------------------

       At an A321 Aircraft gross weight of 185,000 lb in ISA+10(degrees)C
       conditions the pressure altitude for:

       1)  Level flight at a true Mach number of 0.78 using a thrust not
           exceeding maximum cruise thrust

       2)  A rate of climb of not less than 300 ft/min at a true Mach number of
           0.78 using a thrust not exceeding maximum climb thrust

       3)  A buffet maneuver margin of not less than 0.3g at a true Mach number
           of 0.78



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

       will be not less than a guaranteed value of 33,000 ft.

1.4    Speed
       -----

       Level flight speed at an A321 Aircraft gross weight of 185,000 lb at a
       pressure altitude of 33,000 ft in ISA+10(degrees)C conditions using a
       thrust not exceeding maximum cruise thrust will be not less than a
       guaranteed true Mach number of 0.790.

1.5    Specific Range
       --------------

1.5.1  The nautical miles per pound of fuel at an A321 Aircraft gross weight of
       170,000 lb at a pressure altitude of 35,000 ft in ISA+10(degrees)C
       conditions at a true Mach number of 0.78 will be not less than a
       guaranteed value of 0.0702 nm/lb.

1.5.2  The nautical miles per pound of fuel at an A321 Aircraft gross weight of
       160,000 lb at a pressure altitude of 37,000 ft in ISA+10(degrees)C
       conditions at a true Mach number of 0.78 will be not less than a
       guaranteed value of 0.0741 nm/lb.

1.6    En-route One Engine Inoperative
       -------------------------------

       The A321 Aircraft will meet FAR regulations minimum en-route climb one
       engine inoperative and the other operating at the maximum continuous
       thrust with anti-icing off at an A321 Aircraft gross weight of 170,000 lb
       in the cruise configuration in ISA+10(degrees)C conditions at a
       guaranteed pressure altitude of not less than 15,000 ft.

1.7    Landing Field Length
       --------------------

1.7.1  FAR certified wet landing field length at an A321 Aircraft gross weight
       of 166,450 lb (75,500 kg) at sea level pressure altitude will be not
       greater than 6,270 feet.

1.7.2  FAR certified wet landing field length at an A321 Aircraft gross weight
       of 166,450 lb (75,500 kg) at a pressure altitude of 5,431 ft will be not
       greater than 7,100 feet.


2      MISSION GUARANTEES
       ------------------

2.1       The A321 Aircraft will be capable of carrying a guaranteed payload of
          not less than *** over a still air stage distance of 2,610 nautical
          miles
       (representative of PHL to SFO with a 65 knot headwind) when operated
       under the conditions defined below:



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

2.1.1  The departure airport conditions (representative of PHL 09R) are as
       follows:

       Pressure altitude                        : 21 ft
       Ambient temperature                      : 84(degrees)F
       Take-off run available ("TOR")           : 10,499 feet
       Take-off distance available              : 10,499 feet
       Accelerate-stop distance available       : 10,499 feet
       Slope                                    : 0.10% downhill
       Wind                                     : Zero
       Obstacles (height and distance           : 17 feet/1,090 feet
                from end of TOR)                : 57 feet/4,306 feet
                                                : 178 feet/9,500 feet

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction. Pressure altitude is 11
       feet.

2.1.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.1.3  An allowance of 530 lb of fuel is included for take-off and climb to
       1,500 ft above the departure airport at 84(degrees)F with acceleration to
       climb speed.

2.1.4  Climb from 1,500 ft above the departure airport up to cruise altitude
       using maximum climb thrust and cruise at a fixed Mach number of 0.78 at
       pressure altitudes of 35,000 ft and 39,000 ft and descent to 1,500 ft
       above the destination airport are conducted in ISA+10(degrees)C
       conditions. Climb and descent speeds below 10,000 ft will be 250 knots
       CAS.

2.1.5  An allowance of 230 lb of fuel is included for approach and land at the
       destination airport.

2.1.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.1.4 above.

2.1.7  At the end of approach and land 7,370 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in
           ISA+10(degrees)C conditions.



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

2.2       The A321 Aircraft will be capable of carrying a guaranteed payload of
          not less than *** over a still air stage distance of 1,545 nautical
          miles
       (representative of STT to PHL with a 37 knot headwind) when operated
       under the conditions defined below:

2.2.1  The departure airport conditions (representative of STT 10) are as
       follows:

       Pressure altitude                        : 24 ft
       Ambient temperature                      : 84(degrees)F
       Take-off run available ("TOR")           : 7,000 feet
       Take-off distance available              : 7,000 feet
       Accelerate-stop distance available       : 7,000 feet
       Slope                                    : 0.20% downhill
       Wind                                     : Zero
       Obstacle (height and distance            : 17 feet/2,083 feet
                from end of TOR)

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction. Pressure altitude is 21
       feet.

2.2.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.2.3  An allowance of 670 lb of fuel is included for take-off and climb to
       1,500 ft above the departure airport at 84(degrees)F with acceleration to
       climb speed.

2.2.4  Climb from 1,500 ft above the departure airport up to cruise altitude
       using maximum climb thrust and cruise at a fixed Mach number of 0.78 at
       pressure altitudes of 31,000 ft and 35,000 ft and descent to 1,500 ft
       above the destination airport are conducted in ISA+10(degrees)C
       conditions. Climb and descent speeds below 10,000 ft will be 250 knots
       CAS.

2.2.5  An allowance of 270 lb of fuel is included for approach and land at the
       destination airport.

2.2.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.2.4 above.

2.2.7  At the end of approach and land 8,760 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach



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A321-211
CFM 56-5B-3 ENGINES

       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in
           ISA+10(degrees)C conditions.

2.3    In carrying a fixed payload of 37,690 lb over a still air stage distance
       of 2,000 nautical miles when operated under the conditions defined below
       the Block Fuel will be not more than a guaranteed value of ***

2.3.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.3.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.3.3  An allowance of 630 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed at a
       temperature of 84(degrees)F.

2.3.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at a pressure
       altitude of 35,000 ft and descent to 1,500 ft pressure altitude are
       conducted in ISA+10(degrees)C conditions. Climb and descent speeds below
       10,000 ft will be 250 knots CAS.

2.3.5  An allowance of 260 lb of fuel is included for approach and landing at
       the destination airport.

2.3.6  An allowance of 70 lb of fuel is included for taxi at the destination
       airport.

2.3.7  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.3.4 above.

       Block Fuel is defined as the fuel burnt during taxi, take-off, climb,
       cruise, descent and approach and landing as described in Subparagraphs
       2.3.2 to 2.3.6 inclusive.

2.3.8  At the end of approach and landing 8,300 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in
           ISA+10(degrees)C conditions.

2.4    The A321 Aircraft will be capable of carrying a fixed payload of 48,750
       lb over a guaranteed still air stage distance of not less than *** when
       operated under the conditions defined below:

2.4.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.4.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.4.3  An allowance of 680 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed in
       ISA+10(degrees)C conditions.

2.4.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at pressure
       altitudes of 31,000 ft and 35,000 ft and descent to 1,500 ft pressure
       altitude are conducted in ISA+10(degrees)C conditions. Climb and descent
       speeds below 10,000 ft will be 250 knots CAS.

2.4.5  An allowance of 260 lb of fuel is included for approach and landing at
       the destination airport.

2.4.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.4.4 above.

2.4.7  At the end of approach and landing 8,790 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach

       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude above the destination airport.

       3)  Holding for 45 minutes at 20,000 ft pressure altitude in
           ISA+10(degrees)C conditions.

2.5    The A321 Aircraft will be capable of carrying a fixed payload of 37,690
       lb over a



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

       guaranteed still air stage distance of not less than *** when operated
       under the conditions defined below:

2.5.1  The departure airport conditions are such as to allow the required
       takeoff weight to be used without restriction.

       The destination airport conditions are such as to allow the required
       landing weight to be used without restriction.

2.5.2  An allowance of 220 lb of fuel is included for taxi at the departure
       airport.

2.5.3  An allowance of 640 lb of fuel is included for take-off and climb to
       1,500 ft pressure altitude with acceleration to climb speed in
       ISA+10(degrees)C conditions.

2.5.4  Climb from 1,500 ft pressure altitude up to cruise altitude using maximum
       climb thrust and cruise at a fixed Mach number of 0.78 at a pressure
       altitude of 35,000 ft and descent to 1,500 ft pressure altitude are
       conducted in ISA+10(degrees)C conditions. Climb and descent speeds below
       10,000 ft will be 250 knots CAS.

2.5.5  An allowance of 260 lb of fuel is included for approach and landing at
       the destination airport.

2.5.6  Stage distance is defined as the distance covered during climb, cruise
       and descent as described in Subparagraph 2.5.4 above.

2.5.7  At the end of approach and landing 8,300 lb of fuel will remain in the
       tanks. This represents the estimated fuel required for:

       1)  Missed approach
       2)  Diversion consisting of climb and cruise in ISA+10(degrees)C
           conditions over a still air distance of 150 nautical miles starting
           at 1,500 ft pressure altitude above the destination airport.
       3)  Holding for 45 minutes at 20,000 ft pressure altitude in
           ISA+10(degrees)C conditions.

2.6    The mission payload guarantee defined in Subparagraph 2.1 and the mission
       fuel burn guarantee defined in Subparagraph 2.3 and the mission range
       guarantees defined in Subparagraphs 2.3 and 2.4 are based on the Buyer's
       Manufacturer's Weight Empty as defined in Subparagraph 3.3 below plus a
       fixed allowance of 14,370 lb for Customer Changes and Operators Items.

       The mission payload guarantee defined in Subparagraph 2.2 is based on the
       Buyer's Manufacturer's Weight Empty as defined in Subparagraph 3.3 below
       plus a fixed



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

       allowance of 15,870 lb for Customer Changes and Operators Items.

3      MANUFACTURER'S WEIGHT EMPTY AND USABLE LOAD
       --------------------------------------------

3.1              The Seller guarantees a Buyer's Manufacturer's Weight Empty of
                 *** .

3.2    The Seller guarantees that the difference between the Buyer's
       Manufacturer's Weight Empty and the Maximum Zero Fuel Weight will be not
       less than ***
                 .

3.3    For the purposes of this Paragraph 3 and of Subparagraph 2.6 above the
       Buyer's Manufacturer's Weight Empty is the Manufacturer's Weight Empty
       defined in Section 13-10.00.00 of the Specification and is subject to
       adjustment as defined in Subparagraph 7.2.

       For information only an analysis of the Buyer's Manufacturer's Weight
       Empty, Customer Changes, Operators Items and Operating Weight Empty is
       shown in Appendix A to this Letter Agreement.

4      NOISE
       -----

4.1    External
       --------

4.1.1  The Seller guarantees that the A321 Aircraft will be certified in
       accordance with FAR Part 36 Noise Standards, issue 1978, including
       Amendment 36-15 Stage 3. The applicable noise limits are as defined in
       paragraphs 36.201 and c36.5 (3).



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

4.1.2  ***
       -------------------------------

       ***

4.1.3  ***
       -------------------------------

       ***

4.1.4  John Wayne - Orange County (SNA)
       --------------------------------

       The Seller guarantees that the noise levels of the A321 Aircraft taking
       off at John Wayne - Orange County ("SNA"):

       i)  at take-off weights of 152,110 lb (69,000 kg) or less will not exceed
           the AA-SLOT noise level limit and
       ii) at take-off weights of 143,300 lb (65,000 kg) or less will not exceed
           the E-SLOT noise level limit.

4.2    Internal
       --------

4.2.1  Cockpit noise
       -------------

       At a pressure altitude of 35,000 ft and a Mach number of M=0.78 in still
       air under ISA conditions, the guaranteed A-Weighted Sound Pressure Level
       (SPL) will not exceed *** and the Speech Interference Level (SIL) will
       not exceed ***.

4.2.2  Cabin noise
       -----------

       At a pressure altitude of 35,000 ft and a Mach number of M=0.78 in still
       air under ISA conditions, the guaranteed A-Weighted Sound Pressure Level
       (SPL) and the Speech



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

       Interference Level (SIL) will be as follows:

       -  the A-Weighted SPL will *** over the whole
          seating area.

       -  the SIL will not exceed *** along the front 40% of the passenger
          compartment and will not exceed *** along the remaining 60% of the
          passenger compartment length.

4.2.3  On the ground and under the conditions defined in Subparagraph 5.9 below
       the noise levels in the passenger compartment with passenger doors open
       or closed the A-weighted Sound Pressure Level ("SPL") will not exceed ***
                            and the Speech Interference Level ("SIL") will not
       exceed ***.

5      GUARANTEE CONDITIONS
       --------------------

5.1    The performance and noise certification requirements for the A321
       Aircraft, except where otherwise noted, will be as stated in Section 02
       of the Specification.

5.2    For the determination of FAR take-off and landing performance a hard
       level dry runway surface with no runway strength limitations, no
       obstacles, zero wind, atmosphere according to ISA, except as otherwise
       noted and the use of speedbrakes, flaps, landing gear and engines in the
       conditions liable to provide the best results will be assumed.

       When establishing take-off and second segment performance no air will be
       bled from the engines for cabin air conditioning or anti-icing.

5.3    The en-route one engine inoperative climb performance will be established
       with the amount of engine air bleed associated with the maximum cabin
       altitude as specified in Section 21-30.32 of the Specification and an
       average ventilation rate not less than the amount defined in the
       Specification but no air will be bled from the engines for anti-icing.

5.4    Climb, cruise and descent performance associated with the Guarantees will
       include allowances for normal electrical load and for normal engine air
       bleed and power extraction associated with maximum cabin differential
       pressure as defined in Section 21-30.31 of the Specification. Cabin air
       conditioning management during performance demonstration as described in
       Subparagraph 6.3 below may be such as to optimize the A321 Aircraft
       performance while meeting the minimum air conditioning requirements
       defined above. Unless otherwise stated no air will be bled from the
       engines for anti-icing.



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

5.5    The engines will be operated using not more than the engine
       manufacturer's maximum recommended outputs for take-off, maximum go-
       round, maximum continuous, maximum climb and cruise for normal operation
       unless otherwise stated.

5.6    Where applicable the Guarantees assume the use of an approved fuel having
       a density of 6.7 lb/US gallon and a lower heating value of 18,590 BTU/lb.

5.7    Speech interference level (SIL) is defined as the arithmetic average of
       the sound pressure levels in the 1,000, 2,000, and 4,000 Hz octave bands.
       A-weighted sound level (dBA) is as defined in the American National
       Standard Specification ANSI.4-1971. ***

5.8 The sound levels guaranteed in Subparagraph 4.2:

       i)  will be measured at the positions defined in Section 03-83.10 of the
           Specification
       ii) refer to an A321 Aircraft with standard acoustic insulation and an
           interior completely furnished. The effect on noise of Buyer Furnished
           Equipment other than passenger seats will be the responsibility of
           the Buyer.

5.9    For the purposes of the sound levels guaranteed in Subparagraph 4.2.3 the
       APU and air conditioning system will be operating. Sound level
       measurements may be made at the prevailing ambient temperature with the
       air conditioning packs controlled to approximate air conditioning
       machinery rotational speed appropriate to an ambient temperature of
       25(degrees)C.

6      GUARANTEE COMPLIANCE
       --------------------

6.1    Compliance with the Guarantees will be demonstrated using operating
       procedures and limitations in accordance with those defined by the
       certifying Airworthiness Authority and by the Seller unless otherwise
       stated.

6.2    Compliance with the take-off, second segment, en-route one engine
       inoperative, landing abd certified noise elements of the Guarantees will
       be demonstrated with reference to the approved Flight Manual.

6.3    Compliance with those parts of the Guarantees defined in Paragraphs 1 and
       2 above not covered by the requirements of the certifying Airworthiness
       Authority will be demonstrated by calculation based on data obtained
       during flight tests conducted on one (or more, as agreed between the
       Buyer and the Seller) A321 aircraft of the same aerodynamic configuration
       as those A321 Aircraft purchased by the Buyer.



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

6.4    Compliance with the Manufacturer's Weight Empty and Usable Load
       guarantees defined in Paragraph 3 will be demonstrated with reference to
       a weight compliance report.

6.5    Compliance with the mission guarantees defined in Paragraph 2 will be
       demonstrated with reference to the weight compliance report described in
       Subparagraph 6.4.

6.6    Compliance with the guarantees defined in Subparagraphs 4.1.2 and 4.1.3
       will be based on data collected for noise certification purposes. ***.

6.7    Compliance with the noise guarantees defined in Subparagraph 4.2 will be
       demonstrated with reference to noise surveys conducted on one (or more,
       at the Seller's discretion) A321 aircraft of an acoustically similar
       standard as the A321 Aircraft.

6.8    Data derived from tests and noise surveys will be adjusted as required
       using conventional methods of correction, interpolation or extrapolation
       in accordance with established aeronautical practices to show compliance
       with the Guarantees.

6.9    Compliance with the Guarantees is not contingent on engine performance
       defined in the engine manufacturer's specification.

6.10   The Seller undertakes to furnish the Buyer with a report or reports
       demonstrating compliance with the Guarantees at, or as soon as possible
       after, the delivery of each of the A321 Aircraft.

7      ADJUSTMENT OF GUARANTEES
       ------------------------

7.1    In the event of any change to any law, governmental regulation or
       requirement or interpretation thereof ("rule change") by any governmental
       agency made subsequent to the date of the Agreement and such rule change
       affects the A321 Aircraft configuration or performance or both required
       to obtain certification the Guarantees will be appropriately modified to
       reflect the effect of any such change.

7.2    The Guarantees apply to the A321 Aircraft as described in the Preamble to
       this Letter Agreement and may be adjusted in the event of:

       a) Any further configuration change which is the subject of a SCN 

       b) Variation in actual weights of items defined in Section 13-10 of the
       Specification

       c) Changes required to obtain certification which cause changes to the
       performance or weight of the A321 Aircraft



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

8      EXCLUSIVE GUARANTEES
       --------------------

       The Guarantees are exclusive and are provided in lieu of any and all
       other performance and weight guarantees of any nature which may be
       stated, referenced or incorporated in the Specification or any other
       document.

9      UNDERTAKING; REMEDIES
       ---------------------

       ***



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

       UNQUOTE
       -------

       In consideration of the assignment and subrogation by the Seller under
       this Letter Agreement in favor of the Buyer in respect of the Seller's
       rights against and obligations to the Manufacturer under the provisions
       quoted above, the Buyer hereby accepts such assignment and subrogation
       and agrees to be bound by all of the terms, conditions and limitations
       therein contained. The Buyer and Seller recognize and agree that, except
       as otherwise expressly provided in Paragraph 8 of this Letter Agreement,
       all the provisions of Clause 12 of the Agreement, including without
       limitation the Exclusivity of Warranties and General Limitations of
       Liability and Duplicate Remedies therein contained, will apply to the
       foregoing ***.

       ASSIGNMENT
       ----------

       This Letter Agreement and the rights and obligations of the Buyer
       hereunder will not be assigned or transferred in any manner without the
       prior written consent of the Seller, and any attempted assignment or
       transfer in contravention of the provisions of this paragraph will be
       void and of no force or effect. Notwithstanding the preceding sentence,
       the terms of Subclauses 19.5 and 19.6 of the Agreement will apply to this
       Letter Agreement.



<PAGE>




A321-211
CFM 56-5B-3 ENGINES

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.

                         Very truly yours,

                         AVSA, S.A.R.L.


                         By:     /s/ Christophe Mourey
                              --------------------------
                         Its: Chief Executive Officer
                              --------------------------
                         Date:  October 31, 1997
                              --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
     ---------------------------
Its:   Treasurer
     ---------------------------
Date:  October 31, 1997
     ---------------------------



<PAGE>




A321-211                                                              APPENDIX A
CFM 56-5B-3 ENGINES                                                   ----------

1    Manufacturer's Weight Empty and Operating Weight Empty
     ------------------------------------------------------

     At the time of this Agreement the Buyer's Manufacturer's Weight Empty and
     the Operating Weight Empty for the purposes of Subparagraph 2.6 and
     Paragraph 3 of this Letter Agreement are defined as follows:



     Manufacturer's Weight Empty as defined in the
     Specification Reference E 000.02000 Issue 1                : 93,110 lb

                                                                ----------------
     Buyer's Manufacturer's Weight Empty according
     ---------------------------------------------
     to the Preamble of this Letter Agreement and for
     ------------------------------------------------
     the purposes of Subparagraph 2.6 and Paragraph 3
     ------------------------------------------------
     of this Letter Agreement                                   : ***
     ------------------------

     Specification changes as defined in Subparagraph
     2.1 of this Appendix A (including USAir livery)            :  1,543 lb

     Operators Items as defined in Subparagraph 2.2.1
     of this Appendix A                                         : 12,829 lb
                                                                ----------------

     Operating Weight Empty of the A321 Aircraft for
     -----------------------------------------------
     the purposes of Subparagraphs 2.1 and 2.3 to 2.5
     ------------------------------------------------
     inclusive of this Letter Agreement                         :107,482 lb
     ----------------------------------

     Operators items as defined in Subparagraph 2.2.2
     of this Appendix A                                         : 14,329 lb
                                                                ----------------

     Operating Weight Empty of the A321 Aircraft for
     -----------------------------------------------
     the purposes of Subparagraphs 2.2 of this Letter
     ------------------------------------------------
     Agreement                                                  :108,982 lb
     ---------

     *Note  As of the date hereof the Operating Weight Empty has not been
            completely defined. The payloads, fuel burn and ranges guaranteed in
            Paragraph 2 are based on the estimated Operating Weight Empty as
            shown above.



<PAGE>




A321-211                                                              APPENDIX A
CFM 56-5B-3 ENGINES                                                   ----------




2      Specification Changes and Operators Items
       -----------------------------------------

2.1    Weight of Specification Changes
       -------------------------------

       As of the date of this draft the complete list of USAir Specification
       Changes is unknown. It is estimated that the weight of such Specification
       Changes is:

                                                        : 1,483 lb
       USAir livery                                     :    60 lb

2.2    Weights of Operators Items
       --------------------------

       Oil for engines and APU                          :   117 lb
       Unusable fuel                                    :   154 lb
       Water for galleys and toilets                    :   441 lb
       Waste tank pre-charge                            :    29 lb
       A321 Aircraft documents and tool kits            :    42 lb
       Passenger seats and life jackets                 : 5,184 lb
       Phone equipment                                  :   170 lb
       Galley structure and fixed equipment             : 1,512 lb
       Chillers                                         :   195 lb
       Catering and service equipment                   : 2,829 lb
       Cabin supplies                                   :   252 lb
       Emergency equipment                              :   704 lb
       Crew and bags                                    : 1,200 lb
                                                        -----------

2.2.1  Total Operators Items for the purposes of Subparagraphs 2.1 and 2.3 to
       2.5 inclusive
       of this Letter Agreement                         :12,829 lb

       Additional items for over water operation        : 1,500 lb
                                                        -----------
2.2.2  Total Operators Items for the purposes of
       Subparagraph 2.2 of this Letter Agreement        :14,329 lb



<PAGE>




                            LETTER AGREEMENT NO. 9



                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:  ***
     ----

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320 Purchase Agreement dated as of even date
herewith (the "Agreement"), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed to
set forth in this Letter Agreement No. 9 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




     The Seller, under its arrangement with the Manufacturer, has negotiated and
obtained the following *** from the Manufacturer with respect to the Aircraft,
subject to the terms, conditions, limitations and restrictions all as
hereinafter set out. The Seller hereby warrants the performance by the
Manufacturer of the Manufacturer's obligations and hereby assigns to the Buyer,
and the Buyer hereby accepts, all of the rights and obligations of the Seller as
aforesaid under the said *** and the Seller subrogates the Buyer into all such
rights and obligations in respect of the Aircraft. The Seller hereby warrants to
the Buyer that the Seller has all requisite authority to make the foregoing
assignment and effect the foregoing subrogation to and in favor of the Buyer and
that the Seller will not enter into any amendment of the provisions so assigned
or subrogated without the prior written consent of the Buyer. Capitalized terms
used in the following quoted provisions and not otherwise defined therein will
have the meanings assigned thereto in the Agreement, except that the term
"Seller" refers to the Manufacturer and the term "Buyer" refers to the Seller.

          QUOTE

1.        ***

1.1       ***.


1.2       ***.

1.3       ***.



<PAGE>




2.        ***

          ***

3.        ***
 
          ***

4.        ***

4.1       ***



<PAGE>





4.2       ***.




4.3       ***.




5         ***.

5.1       ***



<PAGE>




5.2       ***



<PAGE>




6.        ***

7.        ***

7.1       ***

7.2       ***

7.3       ***

8.        ***

          ***



<PAGE>




          UNQUOTE

          In consideration of the assignment and subrogation by the Seller under
          this Letter Agreement in favor of the Buyer in respect of the Seller's
          rights against and obligations to the Manufacturer under the
          provisions quoted above, the Buyer hereby accepts such assignment and
          subrogation and agrees to be bound by all of the terms, conditions and
          limitations therein contained. The Buyer and the Seller recognize and
          agree that the Exclusivity of Warranties and General Limitations of
          Liability provisions contained in Clause 12 of the Agreement will
          apply to the foregoing ***.


          ASSIGNMENT
          ----------

          This Letter Agreement and the rights and obligations of the Buyer
          hereunder will not be assigned or transferred in any manner without
          the prior written consent of the Seller, and any attempted assignment
          or transfer in contravention of the provisions of this paragraph will
          be void and of no force or effect. Notwithstanding the preceding
          sentence, the terms of Subclauses 19.5 and 19.6 of the Agreement will
          apply to this Letter Agreement.



<PAGE>




          If the foregoing correctly sets forth our understanding, please
          execute this Letter Agreement in the space provided below.



                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/ Christophe Mourey
                                    --------------------------
                              Its:  Chief Executive Officer
                                    --------------------------
                              Date: October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
     ---------------------------
Its:  Treasurer
     ---------------------------
Date: October 31, 1997
     ---------------------------



<PAGE>




                                                                      Appendix 1

***



<PAGE>




                                                                      Appendix 1

***



<PAGE>




                                                                      Appendix 1

***



<PAGE>




                                                                      Appendix 2

***



<PAGE>




                            LETTER AGREEMENT NO. 10



                                                          As of October 31, 1997

US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:  ***
     -----------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 10 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




     The Seller, under its arrangement with the Manufacturer, has negotiated and
obtained the following *** from the Manufacturer with respect to the Aircraft,
subject to the terms, conditions, limitations and restrictions all as
hereinafter set out. The Seller hereby warrants the performance by the
Manufacturer of the Manufacturer's obligations and hereby assigns to the Buyer,
and the Buyer hereby accepts, all of the rights and obligations of the Seller as
aforesaid under the said *** and the Seller subrogates the Buyer into all such
rights and obligations in respect of the Aircraft. The Seller hereby warrants to
the Buyer that the Seller has all requisite authority to make the foregoing
assignment and effect the foregoing subrogation to and in favor of the Buyer and
that the Seller will not enter into any amendment of the provisions so assigned
or subrogated without the prior written consent of the Buyer. Capitalized terms
used in the following quoted provisions and not otherwise defined therein will
have the meanings assigned thereto in the Agreement, except that the term
"Seller" refers to the Manufacturer and the term "Buyer" refers to the Seller.

     QUOTE

1.        ***

1.1       ***

          ***

1.2       ***

1.2.1     ***

1.2.2     ***

1.2.3     ***




<PAGE>




1.3       ***

          ***

1.4       ***

          ***

2.        ***

          ***

2.1       ***

          ***

2.2       ***

          ***

2.3       ***

          ***



<PAGE>




2.4       ***

          ***

2.5       ***

          ***

2.6       ***
 
2.6.1     ***

2.6.2     ***

2.7       ***

          ***



<PAGE>




3.        ***

          ***

4.        ***

4.1       ***

4.1.1     ***

4.1.2     ***



<PAGE>




4.2       ***

          ***

5.        ***
 
5.1       ***

5.2       ***

6.        ***

          ***



<PAGE>




7.        ***

          ***


UNQUOTE

In consideration of the assignment and subrogation by the Seller under this
Letter Agreement in favor of the Buyer in respect of the Seller's rights against
and obligations to the Manufacturer under the provisions quoted above, the Buyer
hereby accepts such assignment and subrogation and agrees to be bound by all of
the terms, conditions and limitations therein contained. The Buyer and the
Seller recognize and agree that the Exclusivity of Warranties and General
Limitations of Liability provisions contained in Clause 12 of the Agreement will
apply to the foregoing ***.

ASSIGNMENT
----------

This Letter Agreement and the rights and obligations of the Buyer hereunder will
not be assigned or transferred in any manner without the prior written consent
of the Seller, and any attempted assignment or transfer in contravention of the
provisions of this paragraph will be void and of no force or effect.
Notwithstanding the preceding sentence, the terms of Subclauses 19.5 and 19.6 of
the Agreement will apply to this Letter Agreement.





<PAGE>




          If the foregoing correctly sets forth our understanding, please
execute this Letter Agreement in the space provided below, whereupon this Letter
Agreement will constitute part of the Agreement.



                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/ Christophe Mourey
                                    --------------------------

                              Its:  Chief Executive Officer
                                    --------------------------

                              Date: October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
      -------------------------

Its:  Treasurer
      -------------------------

Date: October 31, 1997
      -------------------------



<PAGE>




                                   Appendix 1
                                   ----------


--------------------------------------------------------------------------------

***



<PAGE>




                            LETTER AGREEMENT NO. 11


                                                          As of October 31, 1997
US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:   PREDELIVERY PAYMENTS
      --------------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 11 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




     ***

2.  PREDELIVERY PAYMENT REFERENCE PRICE VALUES
    ------------------------------------------

     ***


3.   ASSIGNMENT
     ----------

     This Letter Agreement and the rights and obligations of the Buyer hereunder
     will not be assigned or transferred in any manner without the prior written
     consent of the Seller, and any attempted assignment or transfer in
     contravention of the provisions of this Paragraph 3 will be void and of no
     force or effect. Notwithstanding the preceding sentence, the terms of
     Subclauses 19.5 and 19.6 of the Agreement will apply to this Letter
     Agreement.



<PAGE>




If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.


                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/ Christophe Mourey
                                    --------------------------

                              Its:  Chief Executive Officer
                                    --------------------------

                              Date: October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/ Thomas A. Fink
     --------------------------

Its:   Treasurer
     --------------------------

Date:  October 31, 1997
     --------------------------



<PAGE>




                                     TABLE 1



Predelivery Payment Reference Prices for All Aircraft


***



<PAGE>




                            LETTER AGREEMENT NO. 12



                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:  ***
     ---------------------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 12 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




     The Seller, in its capacity as "Buyer" under its arrangement with the
Manufacturer, has negotiated and obtained the following *** from the
Manufacturer, in its capacity as "Seller" with respect to the Aircraft, subject
to the terms, conditions, limitations and restrictions all as hereinafter set
out. The Seller hereby guarantees to the Buyer the performance by the
Manufacturer of the Manufacturer's obligations and assigns to the Buyer and the
Buyer hereby accepts, as to each Aircraft delivered to the Buyer under the
Agreement, all of the rights and obligations of the Seller with respect to such
Aircraft in the Seller's capacity as "Buyer" as aforesaid under the said *** and
the Seller subrogates the Buyer into all such rights and obligations in respect
of such Aircraft. The Seller hereby warrants to the Buyer that it has all the
requisite authority to make the foregoing assignment and effect the foregoing
subrogation to and in favor of the Buyer and that it will not enter into any
amendment of the provisions so assigned or subrogated without the prior written
consent of the Buyer.

     Capitalized terms used in the following quoted provisions and not otherwise
defined herein will have the meanings assigned thereto in the Agreement except
that the term "Seller" refers to the Manufacturer and the term "Buyer" refers to
the Seller (as defined in the Agreement).

QUOTE
-----

1         ***

1.1       ***



1.2       ***



1.3       ***



<PAGE>




1.4       ***


2         ***

2.1       ***

2.2       **

2.3       ***

2.4       ***

2.5       ***



<PAGE>




3         ***

3.1       ***

3.1.1     ***



<PAGE>




3.2       ***

3.3       ***

4         ***

4.1       ***

4.2       ***

4.3       ***

4.4       ***

4.5       ***

4.6.1     ***

4.6.2     ***

4.6.3     ***

5         ***
 
5.1       ***


5.2       ***

5.2.1     ***



<PAGE>




5.3       ***

5.3.1     ***

5.3.2     ***

6         ***

6.1       ***

6.2       ***

6.3       ***

6.4       ***

7         ***

7.1       ***

7.2       ***

8         ***

8.1       ***

8.2       ***

8.3       ***

8.4       ***

9         ***

9.1       ***

9.2       ***



<PAGE>




UNQUOTE
-------

          In consideration of the assignment and subrogation by the Seller under
          this Letter Agreement in favor of the Buyer in respect of the Seller's
          rights against and obligations to the Manufacturer under the
          provisions quoted above, the Buyer hereby accepts such assignment and
          subrogation and agrees to be bound by all of the terms, conditions and
          limitations therein contained. The Buyer and Seller recognize and
          agree that, except as otherwise expressly provided in Paragraph 7 of
          this Letter Agreement, all the provisions of Clause 12 of the
          Agreement, including without limitation the Exclusivity of Warranties
          and General Limitations of Liability and Duplicate Remedies therein
          contained, will apply to the foregoing ***.

          ASSIGNMENT
          ----------

          This Letter Agreement and the rights and obligations of the Buyer
          hereunder will not be assigned or transferred in any manner without
          the prior written consent of the Seller, and any attempted assignment
          or transfer in contravention of the provisions of this paragraph will
          be void and of no force or effect. Notwithstanding the preceding
          sentence, the terms of Subclauses 19.5 and 19.6 of the Agreement will
          apply to this Letter Agreement.



<PAGE>




     If the foregoing correctly sets forth our understanding, please execute the
     original and one (1) copy hereof in the space provided below and return a
     copy to the Seller.



                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:    /s/Christophe Mourey
                                    --------------------------
                              Its:   Chief Executive Officer
                                    --------------------------
                              Date:  October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/Thomas A. Fink
     ---------------------------
Its:  Treasurer
     ---------------------------
Date: October 31, 1997
     ---------------------------



<PAGE>




                                                                      APPENDIX A
                                                                      ----------

     ***


1    ***

2    ***

3    ***

4    ***

5    ***



<PAGE>




                                                                      APPENDIX A
                                                                      ----------

6    ***



<PAGE>




                            LETTER AGREEMENT NO. 13



                                                          As of October 31, 1997


US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227

Re:  TECHNICAL DISPATCH RELIABILITY GUARANTEE
     ----------------------------------------

Ladies and Gentlemen:

     US Airways Group, Inc. (the "Buyer"), and AVSA, S.A.R.L. (the "Seller"),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the "Agreement"), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 13 (the "Letter Agreement") certain
additional terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will have
the meanings assigned thereto in the Agreement. The terms "herein," "hereof" and
"hereunder" and words of similar import refer to this Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.



<PAGE>




     The Seller, under its arrangement with the Manufacturer, has negotiated and
obtained the following Technical Dispatch Reliability Guarantee from the
Manufacturer with respect to the Aircraft, subject to the terms, conditions,
limitations and restrictions all as hereinafter set out. The Seller hereby
guarantees to the Buyer the performance by the Manufacturer of its obligations
under this Technical Dispatch Reliability Guarantee and hereby assigns to the
Buyer, and the Buyer hereby accepts, all of the rights and obligations of the
Seller as aforesaid under the said Technical Dispatch Reliability Guarantee, and
the Seller subrogates the Buyer into all such rights and obligations in respect
of the Aircraft. The Seller hereby warrants to the Buyer that it has all
requisite authority to make the foregoing assignment and effect the foregoing
subrogation to and in favor of the Buyer and that it will not enter into any
amendment of the provisions so assigned or subrogated without the prior written
consent of the Buyer. Capitalized terms used in the following quoted provisions
and not otherwise defined therein will have the meanings assigned thereto in the
Agreement, except that the term "Seller" refers to the Manufacturer and the term
"Buyer" refers to the Seller.

     QUOTE

1.   SCOPE, COMMENCEMENT, DURATION
     -----------------------------

     This dispatch reliability guarantee (the "Guarantee") extends to the
     Aircraft fleet, will commence with delivery of the first Aircraft and will
     remain in force for a period of *** years (the "Term"), ***


2.   DEFINITION
     ----------

2.1  Revenue Flight
     --------------

     A "Revenue Flight" is a flight as stipulated in the Buyer's time table, and
     any scheduled charter flight of the Aircraft.

2.2  Aircraft Inherent Malfunction
     -----------------------------

     An "Aircraft Inherent Malfunction" is a condition whereby maintenance
     action is necessary to reestablish serviceability of the Aircraft.

2.3  Dispatched
     ----------

     An Aircraft will be deemed to have been "Dispatched" when it leaves the
     gate for a Revenue Flight.



<PAGE>




2.4  Chargeable Delay
     ----------------

     A "Chargeable Delay" will be deemed to have occurred when, by more than
     fifteen (15) minutes and for reasons other than those defined under
     "Excluded Delay," a primary Aircraft Inherent Malfunction causes a Revenue
     Flight to depart later than the scheduled departure time.

2.5  Excluded Delay
     --------------

     Any delay which is not a Chargeable Delay is an "Excluded Delay." Excluded
     Delays are specifically excluded from this Guarantee, even if consequently
     the Aircraft is subject to a delay. These Excluded Delays include delays in
     scheduled departure due to:

     -    SERVICING - NO CORRECTIVE MAINTENANCE PERFORMED Struts Oil Hydraulic
          fluid Lubrication All servicing activities that do not require the
          mechanic to
          physically adjust or replace or defer structural repair and replace
          hardware/software Fueling related Deicing Water and waste Sanitizing /
          flushing Moisture condensation Printer paper replacement Routine
          cleaning Tire pressure servicing

     -    PRECAUTIONARY MAINTENANCE - NO CORRECTIVE MAINTENANCE PERFORMED
          Hydraulic leaks - within limits
          Fuel leak - within limits
          Manual closing or cycling passenger/crew/cargo door
          Decals/paint/appearance items
          Passenger amenity lamps
          Tires - worn past limits
          Brakes - worn past limits
          Resetting circuit breakers - no corrective maintenance performed
          according to FAA-approved FCOM



<PAGE>




     -    SCHEDULED MAINTENANCE ACTIVITIES
          COMPLETION OF SCHEDULED/PLANNED WORK CONTENT OF SCHEDULED:
          Maintenance checks
          Maintenance set-ups

     -    PARTS DELAYS AND CANCELLATIONS

     -    EXTERNAL FORCE DAMAGE: AIRCRAFT DAMAGE/LIGHTNING STRIKES, ETC.

     -    KNOWN PERSONNEL ERROR

     -    SECONDARY DELAY/CANCELLATION:
          A previous delay(s) or cancellation(s) of subsequent scheduled flights
          on the same day caused by the same problem that caused the primary
          delay(s) or cancellation(s).

     -    Delays caused by systems or components being designated as "Go if" in
          the Minimum-Equipment List (MEL) as approved by the Buyer's
          airworthiness authorities for the Buyer's operation of the Aircraft.

     -    Delays attributable to the Propulsion Systems.

2.6  Cancellation
     ------------

     A "Cancellation" occurs when a Revenue Flight does not take place. The
     cancellation of any or all of the flight legs of a multi-leg flight
     constitutes only one (1) Cancellation. One (1) Cancellation is counted as
     one (1) event.

2.7  Achieved Dispatch Reliability
     -----------------------------

     "Achieved Dispatch Reliability" is the actual Dispatch Reliability obtained
     by the Aircraft fleet in regular revenue service and adjusted to the
     clauses of this Guarantee. ETOPS flights are not included in this
     Guarantee.

     Achieved Dispatch Reliability, expressed as a percent, will be computed
     every three months ("the Computation Period") and will be compared to the
     Guaranteed Dispatch Reliability level (as defined in Paragraph 3) at the
     end of each Computation Period.



<PAGE>




                                      Total number of  Revenue Flights
                                      without Chargeable Delays or
          Achieved                    Cancellations during the
          Dispatch             =      Computation Period
                                      --------------------------------------
                                            X 100
          Reliability                 Total number of Scheduled Revenue
                                      Flights during the Computation Period

3.   GUARANTEE
     ---------

     The Seller guarantees the "Guaranteed Dispatch Reliability," set forth
     below in Subparagraph 3.1 and 3.2.

3.1  First *** Years of  Guarantee
     -----------------------------

     The Seller guarantees that, from the first three-month Computation Period
     following delivery of the first Aircraft and for Aircraft in commercial
     service, an Aircraft available for dispatch will, on average, have a ***
     percent probability of being dispatched without a Chargeable Delay. This
     probability will be maintained until the end of the *** year of operation
     of the Aircraft fleet following delivery of the first Aircraft.

3.2  Remaining Years of Guarantee
     ----------------------------

     The Seller guarantees that, from the first three-month Computation Period
     after the beginning of the *** year of operation of the Aircraft fleet in
     commercial service until the end of the Term, on average, an Aircraft
     available for dispatch will have a *** percent probability of being
     Dispatched without a Chargeable Delay.

4.   BUYER'S AND SELLER'S OBLIGATION
     -------------------------------

4.1  Buyer's and Seller's Obligations
     --------------------------------

     The Buyer's and Seller's specialists will mutually agree on the details of
     a Chargeable Delay reporting procedure not later than three (3) months
     before delivery of the first Aircraft.

4.2  Buyer's Obligations
     -------------------

     a)  The Buyer will regularly submit Chargeable Delay data on a monthly
         basis not later than twenty (20) days after the end of the reporting
         month. Such data must contain detailed information on delays and
         Cancellations to allow the Seller to



<PAGE>




         assess the nature of system or component malfunctions.

     b)  The Buyer will notify the Seller at any time that the Achieved Dispatch
         Reliability is below the Guaranteed Dispatch Reliability Level. After
         such notice, the Seller will promptly take corrective actions. Upon
         request, all reasonably necessary additional detailed operational and
         engineering information will be provided by the Buyer in order to allow
         the Seller to determine the necessary action.

     c)  The Buyer will incorporate in and apply to the Aircraft the procedures
         and modifications recommended by the Seller to the extent necessary in
         order to improve the Achieved Dispatch Reliability. Said modifications
         will be incorporated and such procedures will be applied as soon as is
         reasonably possible, consistent with the Buyer's maintenance program,
         following receipt of instructions and parts (if applicable) by the
         Buyer, provided that:

         i)   the effect of such a procedure or modification is substantiated to
              the Buyer's satisfaction,

         ii)  application of such a procedure or modification is economical and
              practical as determined by the Buyer's customary analysis
              practice, and

         iii) ***

         In the event of a disagreement between the Seller and the Buyer as to
         the effectiveness of procedures or modifications proposed by the Seller
         to increase the achieved level, the Buyer will demonstrate to the
         Seller that pursuant to its analysis, such a modification or procedure
         is not effective.

         Notwithstanding the Buyer's obligations above, the Buyer may, at its
         option, decline to install such modification or decline to follow such
         revised procedures as are referred to above. If the Buyer so declines,
         the Seller may adjust the Guaranteed Dispatch Reliability Level
         downwards by an amount consistent with the improvement in the Achieved
         Dispatch Reliability Level, based on reasonable substantiation to the
         Buyer and on other operators' experience, if any, that of the
         reliability benefits of such modification or such revised procedures
         are expected to cause.

     d)  Furthermore, the Buyer agrees to set its Aircraft fleet technical
         dispatch reliability goals as shown in the Buyer's regular reliability
         report (or equivalent) at a level equal to or greater than the
         Guaranteed Dispatch Reliability Level, so that both the Buyer's and
         Seller's technical staff can aggressively pursue attainment of the
         Guaranteed Dispatch Reliability Level.



<PAGE>




4.3  Seller's Obligations
     --------------------

     During the Term, the Seller will provide technical and operational analyses
     of delays and cancellations and will develop corrections intended to reduce
     delays and, in the event that the Achieved Dispatch Reliability is below
     the Guaranteed Dispatch Reliability Level the Seller will, not later than
     six (6) months where practicable after notification by the Buyer and at no
     charge to the Buyer:

     a)  provide modified Manufacturer's items, either hardware of software, to
         improve Achieved Dispatch Reliability,

     b)  make recommendations concerning the Aircraft operation and maintenance
         programs, publications, and policies to improve Achieved Dispatch
         Reliability,

     c)  assist the Buyer to cause Vendors action to improve the Achieved
         Dispatch Reliability.

5.   ADJUSTMENT
     ----------

     Any design, certification, regulatory, organizational structure or Aircraft
     operation changes outside the Seller's control that may have an effect upon
     the operation and dispatch characteristics of the Aircraft will be cause
     for reevaluation or adjustment of this Guaranteed Dispatch Reliability
     Level by mutual agreement between the Buyer and the Seller.

6.   ACHIEVED DISPATCH RELIABILITY REVIEW MEETINGS
     ---------------------------------------------

     An Achieved Dispatch Reliability review meeting between the Seller's and
     the Buyer's representatives will be scheduled at the end of each six (6)
     month period of Aircraft operation, or at some other period to be mutually
     agreed. Representatives of the Buyer and the Seller will participate in the
     meeting and will:

     a)  review current Achieved Dispatch Reliability,

     b)  eliminate unsupported or non-Aircraft-inherent delay claims from delay
         records to compute Achieved Dispatch Reliability,

     c)  consider corrective action, if required,



<PAGE>




     d)  review the Buyer's incorporation of modifications as stated in
         Subparagraph 4.2 of this Letter Agreement and requirements, if any, for
         reduction of the Guaranteed Dispatch Reliability Level,

     e)  review possible design, certification, regulatory, organizational
         structure or Aircraft operation changes and requirements, if any,
         necessitating adjustment of the Guaranteed Dispatch Reliability Level.

7.   LIABILITY LIMITATION
     --------------------

     The Seller's liability for failure to meet the Dispatch Reliability
     Guarantee values will be governed solely by the terms of this Dispatch
     Reliability Guarantee.

8.   ASSIGNMENT
     ----------

     This Letter Agreement and the rights and obligations of the Buyer hereunder
     will not be assigned or transferred in any manner without the prior written
     consent of the Seller, and any attempted assignment or transfer in
     contravention of the provisions of this Paragraph 8 will be void and of no
     force or effect. Notwithstanding the preceding sentence, the terms of
     Subclauses 19.5 and 19.6 of the Agreement will apply to this Letter
     Agreement.



<PAGE>




     If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.



                              Very truly yours,

                              AVSA, S.A.R.L.


                              By:   /s/Christophe Mourey
                                    --------------------------
                              Its:  Chief Executive Officer
                                    --------------------------
                              Date: October 31, 1997
                                    --------------------------

Accepted and Agreed

US Airways Group, Inc.



By:   /s/Thomas A. Fink
     ---------------------------
Its:  Treasurer
     ---------------------------
Date: October 31, 1997
     ---------------------------




<PAGE>








                          *** LETTER AGREEMENT




As of October 31, 1997

US Airways, Inc.
2345 Crystal Drive
Arlington, VA 22227
Attention: Treasurer

Re: ***
    ---------------------

Ladies and Gentlemen:

US Airways Group, Inc. and AVSA, S.A.R.L. (together with its successors and
permitted assigns, the "Seller") have entered into an Airbus A319/A320/A321
Purchase Agreement dated as of even date herewith (together with all exhibits
thereto and all letter agreements currently existing or hereafter entered into
that by their terms constitute part of such purchase agreement, and as such
purchase agreement may be amended, modified or supplemented from time to time,
the "Purchase Agreement"), which covers, among other things, the sale by the
Seller and the purchase by the Buyer (as hereinafter defined) of the A319, A320
and A321 aircraft referred to therein (the "Aircraft"). Clause 19 of the
Purchase Agreement outlines the terms and conditions upon which Buyer may assign
its rights and responsibilities under the Purchase Agreement to another party or
other parties. The term "Buyer" as used in this *** Letter Agreement shall mean
US Airways Group, Inc. or any and all assignees of US Airways Group, Inc. in
accordance with the provisions of Clause 19 of the Purchase Agreement and any
successors of US Airways Group, Inc. Any references to Buyer in the singular are
intended to include the plural and vice versa, and to include each, any or all
Buyers. As an inducement for the Buyer to enter into the Purchase Agreement and
consummate the transactions therein described, Seller has agreed to enter into
this *** Letter Agreement with US Airways, Inc. (together with all successors
and permitted assigns ("Airways"). *** . The Seller and Airways have agreed to
set forth in this *** Letter Agreement (as amended, supplemented or otherwise
modified from time to time, the "Letter Agreement") the terms ** in connection
with the Buyer's acquisition of the Aircraft. (*** The terms "herein", "hereof"
and "hereunder" and words of similar import refer to this Letter Agreement. Any
references to *** (as defined in Paragraph 4 hereof) in the singular are
intended to include the plural and vice versa.

***

1.       ***

         (a)  ***





         (b)  ***


         (c)  ***

2.       ***

3.       ***

4.       ***

5.       ***

6.       ***

7.       ***

8.       ***


9.       Miscellaneous
         -------------

         (a)      Notices
                  -------



<PAGE>



                  All notices and requests required or authorized hereunder
                  shall be given and shall become effective in the manner set
                  forth in Clause 22.1 of the Purchase Agreement. As of the date
                  hereof, the addresses for notices to Airways are the same as
                  for notices to Buyer.

         (b)      Waiver
                  ------

                  The failure of either party to enforce at any time any of the
                  provisions of this Letter Agreement, or to exercise any right
                  herein provided, or to require at any time performance by the
                  other party of any of the provisions hereof, shall in no way
                  be construed to be a present or future waiver of such
                  provisions nor in any way to affect the validity of this
                  Letter Agreement or any part thereof or the right of the other
                  party thereafter to enforce each and every such provision. The
                  express waiver by either party of any provision, condition or
                  requirement of this Letter Agreement shall not constitute a
                  waiver of any future obligation to comply with such provision,
                  condition or requirement.

         (c)      INTERPRETATION AND LAW
                  ----------------------

                  THIS LETTER AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND
                  THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH
                  THE LAWS OF THE STATE OF NEW YORK.

         (d)      SUBMISSION TO JURISDICTION
                  --------------------------

                  EACH xxx AND THE SELLER IRREVOCABLY AGREE THAT ANY LEGAL
                  ACTION OR PROCEEDING ARISING UNDER THIS LETTER AGREEMENT MAY
                  BE BROUGHT AND DETERMINED IN THE SUPREME COURT OF THE STATE OF
                  NEW YORK, NEW YORK COUNTY, IN THE GENERAL DISTRICT COURTS OF
                  FAIRFAX COUNTY OR ARLINGTON COUNTY, VIRGINIA, OR IN THE UNITED
                  STATES DISTRICT COURTS FOR THE SOUTHERN DISTRICT OF NEW YORK,
                  OR IN THE EASTERN DISTRICT OF VIRGINIA, AND IRREVOCABLY
                  ACCEPTS WITH REGARD TO ANY SUCH ACTION OR PROCEEDINGS THE
                  NONEXCLUSIVE JURISDICTION OF THOSE COURTS. The Seller hereby
                  irrevocably designates CT Corporation, New York City offices,
                  to receive for and on its behalf service of process in any
                  proceeding with respect to any matter as to which it submits
                  to jurisdiction as set forth above, it being agreed that
                  service upon CT Corporation will constitute valid service upon
                  the Seller in any legal action or proceeding with respect to
                  this Letter Agreement.

         (e)      Confidentiality
                  ---------------

                  Subject to any legal or governmental requirements of
                  disclosure, the parties (which for this purpose shall include
                  their employees, agents, and advisors) shall maintain the
                  terms and conditions of this Letter Agreement strictly
                  confidential. Without limiting the generality of the
                  foregoing, each *** and the Seller will limit the disclosure
                  of the contents of this Letter Agreement, to the extent
                  legally permissible, in any filing required to be made with
                  any governmental agency and shall make such applications as
                  shall be necessary to implement the foregoing. Each *** and
                  the Seller shall consult with each other prior to the making
                  of any public disclosure or filing, otherwise permitted
                  hereunder, of this Letter Agreement or the terms and
                  conditions hereof. The provisions of this Paragraph 9(e) shall
                  survive any termination of this Letter Agreement.


         (f)      Severability
                  ------------

                  In the event that any provision of this Letter Agreement
                  should for any reason be held to be without effect, the
                  remainder of this Letter Agreement shall remain in full force
                  and effect. To the extent permitted by applicable law, each
                  party hereto hereby waives any provision of law which renders
                  any provision of this Letter Agreement prohibited or
                  unenforceable in any respect.

         (g)      Alterations to Contract
                  -----------------------

                  This Letter Agreement contains the entire agreement between
                  the parties with respect to the subject matter hereof and
                  supersedes any previous understanding, commitments or
                  representations whatsoever, oral or written. This Letter
                  Agreement shall not be varied except by an instrument in
                  writing executed by both parties.

         (h)      Language
                  --------

                  All correspondence, documents and any other written matters in
                  connection with this Letter Agreement shall be in English.

         (i)      Headings


<PAGE>



                  --------

                  All headings in this Letter Agreement are for convenience of
                  reference only and do not constitute a part of this Letter
                  Agreement.

         (j)      Counterparts
                  ------------

                  This Letter Agreement may be executed by the parties hereto in
                  separate counterparts, each of which when so executed and
                  delivered shall be an original, but all such counterparts
                  shall together constitute but one and the same instrument.

         (k)      ***
                  -------------

                  ***








If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.

                                                     Very truly yours,

                                                     AVSA, S.A.R.L.


                                                     By:  /s/Christophe Mourey
                                Christophe Mourey
                          Its: Chief Executive Officer

                             Date: October 31, 1997


Accepted and Agreed

US Airways, Inc.

By: /s/ Thomas A. Fink
         Thomas A. Fink
Its: Treasurer

Date: October 31, 1997


US Airways Group, Inc.

By: /s/ Thomas A. Fink
         Thomas A. Fink
Its: Treasurer

Date: October 31, 1997
<PAGE>





                                                         Attachment A
                                                         ------------




<PAGE>




                           Partners of Airbus Industrie G.I.E.
                                As of October 31, 1997


<TABLE>
<CAPTION>

Name                                                                     Percentage Share
----                                                                     ----------------
<S>                                                                       <C>

Aerospatiale, Societe National Industrielle                                     37.9%

Daimler-Benz Aerospace Airbus, GmbH                                             37.9%

British Aerospace (Operations) LTD                                                20%

Construcciones Aeronauticas, S.A.                                                4.2%
</TABLE>
<PAGE>





                              CONSENT AND GUARANTY
                              --------------------


Airbus Industrie G.I.E., established under "Ordonnance" No. 67-821 dated
September 23, 1967, of the Republic of France (the "Guarantor"), hereby
acknowledges notice of and consents to all of the terms of the *** Letter
Agreement dated as of October 31, 1997 (as amended, modified, or supplemented
from time to time, (the "Agreement"), between AVSA, S.A.R.L. (the "Seller"), and
US Airways, Inc. ("Airways"), and hereby irrevocably and unconditionally
guarantees the due and punctual payment and performance by the Seller of all of
the latter's liabilities and obligations as set forth in the said Agreement
subject to the terms and limitations therein contained. The Guarantor hereby
agrees that its obligations hereunder will be unconditional and absolute and,
without limiting the generality of the foregoing, will not be released,
discharged or otherwise affected by (i) any modification or amendment of or
supplement to said Agreement (other than release, discharge or waiver of this
Guaranty hereunder) or (ii) any assignment of said Agreement or of any rights or
obligations thereunder made in accordance with Paragraph 8 thereof. The
Guarantor further agrees that it will execute and deliver such other and further
instruments as may be reasonably requested by Airways, its successors or assigns
to reaffirm its obligations hereunder. This Consent and Guaranty constitutes a
guaranty of performance and of payment, and Guarantor agrees that, in case of
default by the Seller, Airways will not be required to file suit against the
Seller as a condition to enforcement of this Consent and Guaranty.

         The Guarantor irrevocably agrees that any legal action or proceeding
against the Guarantor with respect to this Consent and Guaranty may be brought
and determined in the Supreme Court of the State of New York, New York County,
in the General District Court of Fairfax County or Arlington County, Virginia,
in the United States District Courts for the Southern District of New York or
the Eastern District of Virginia, or in the commercial Court ("Tribunal de
Commerce") of Toulouse, France, and irrevocably accepts with regard to any such
action or proceeding the nonexclusive jurisdiction of those courts. The
Guarantor irrevocably waives the benefit of Articles 14 and 15 of the French
Civil Code. The


<PAGE>



Guarantor hereby irrevocably waives, and agrees to assert, the defense of
sovereign immunity, and, to the extent permitted by law, the defense that any
such action or proceeding is brought in an inconvenient forum, that the venue of
any such action or proceeding is improper, or that this Consent and Guaranty may
not be enforced in or by such courts. However, the preceding sentence will not
be construed as a waiver of any requirement of service of process. The Guarantor
hereby irrevocably designates CT Corporation as the Guarantor's agent to receive
service of process in any legal action or proceeding with respect to this
Consent and Guaranty.





         THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                            Airbus Industrie, G.I.E.,

                            /s/Jean Pierson
                            -------------------------------
                            By: Jean Pierson

                            Title: Managing Director
<PAGE>











                              *** LETTER AGREEMENT




As of October 31, 1997


US Airways, Inc.
2345 Crystal Drive
Arlington, VA 22227
Attention: Treasurer

Re: ***

Ladies and Gentlemen:


US Airways Group, Inc. and AVSA, S.A.R.L. (together with its successors and
permitted assigns, the "Seller") have entered into an Airbus A319/A320/A321
Purchase Agreement dated as of even date herewith (together with all exhibits
thereto and all letter agreements currently existing or hereafter entered into
that by their terms constitute part of such purchase agreement, and as such
purchase agreement may be amended, modified or supplemented from time to time,
the "Purchase Agreement"), which covers, among other things, the sale by the
Seller and the purchase by the Buyer (as hereinafter defined) of the A319, A320
and A321 aircraft referred to therein (the "Aircraft"). Clause 19 of the
Purchase Agreement outlines the terms and conditions upon which Buyer may assign
its rights and responsibilities under the Purchase Agreement to another party or
other parties. The Term "Buyer" as used in this *** Letter Agreement shall mean
US Airways Group, Inc. or any and all assignees of US Airways Group, Inc. in
accordance with the provisions of Clause 19 of the Purchase Agreement and any
successors of US Airways Group, Inc. Any references herein to Buyer in the
singular are intended to include the plural and vice versa, and to include each,
any or all Buyers. As an inducement for the Buyer to enter into the Purchase
Agreement and consummate the transactions therein described, Seller has agreed
to enter into this *** Letter Agreement with US Airways, Inc. (together with all
successors and permitted assigns ("Airways"). The Seller and Airways have agreed
to set forth in this *** Letter Agreement (as amended, supplemented or otherwise
modified from time to time, the "Letter Agreement") the terms of *** in
connection with the Buyer's acquisition of the Aircraft. The terms "herein",
"hereof" and "hereunder" and words of similar import refer to this Letter
Agreement. Any references herein to *** (as defined in Paragraph 4 hereof) in
the singular are intended to include the plural and vice versa.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.

                                                     Very truly yours,

                                                     AVSA, S.A.R.L.



                            By: /s/Christophe Mourey
                               ----------------------------
                                Christophe Mourey

                            Its: Chief Executive Officer
                                ---------------------------

                            Date: October 31, 1997


Accepted and Agreed

US Airways, Inc.

By: /s/Thomas A. Fink
   -----------------------
    Thomas A. Fink
Its:   Treasurer
    ----------------------

Date:  October 31, 1997
     ---------------------


US Airways Group, Inc.

By: /s/Thomas A. Fink
   -----------------------
    Thomas A. Fink

Its:   Treasurer
    ----------------------

Date:  October 31, 1997
     ---------------------
<PAGE>




                              CONSENT AND GUARANTY
                              --------------------


Airbus Industrie G.I.E., established under "Ordonnance" No. 67-821 dated
September 23, 1967, of the Republic of France (the "Guarantor"), hereby
acknowledges notice of and consents to all of the terms of the *** Letter
Agreement dated as of October 31, 1997 (as amended, modified, or supplemented
from time to time, (the "Agreement"), between AVSA, S.A.R.L. (the "Seller"), and
US Airways, Inc. ("Airways"), and hereby irrevocably and unconditionally
guarantees the due and punctual payment and performance by the Seller of all of
the latter's liabilities and obligations as set forth in the said Agreement
subject to the terms and limitations therein contained. The Guarantor hereby
agrees that its obligations hereunder will be unconditional and absolute and,
without limiting the generality of the foregoing, will not be released,
discharged or otherwise affected by (i) any modification or amendment of or
supplement to said Agreement (other than release, discharge or waiver of this
Guaranty hereunder) or (ii) any assignment of said Agreement or of any rights or
obligations thereunder made in accordance with Paragraph 8 thereof. The
Guarantor further agrees that it will execute and deliver such other and further
instruments as may be reasonably requested by Airways, its successors or assigns
to reaffirm its obligations hereunder. This Consent and Guaranty constitutes a
guaranty of performance and of payment, and Guarantor agrees that, in case of
default by the Seller, Airways will not be required to file suit against the
Seller as a condition to enforcement of this Consent and Guaranty.

         The Guarantor irrevocably agrees that any legal action or proceeding
against the Guarantor with respect to this Consent and Guaranty may be brought
and determined in the Supreme Court of the State of New York, New York County,
in the General District Court of Fairfax County or Arlington County, Virginia,
in the United States District Courts for the Southern District of New York or
the Eastern District of Virginia, or in the commercial Court ("Tribunal de
Commerce") of Toulouse, France, and irrevocably accepts with regard to any such
action or proceeding the nonexclusive jurisdiction of those courts. The
Guarantor irrevocably waives the benefit of Articles 14 and 15 of the French
Civil Code. The


<PAGE>


Guarantor hereby irrevocably waives, and agrees to assert, the defense of
sovereign immunity, and, to the extent permitted by law, the defense that any
such action or proceeding is brought in an inconvenient forum, that the venue of
any such action or proceeding is improper, or that this Consent and Guaranty may
not be enforced in or by such courts. However, the preceding sentence will not
be construed as a waiver of any requirement of service of process. The Guarantor
hereby irrevocably designates CT Corporation as the Guarantor's agent to receive
service of process in any legal action or proceeding with respect to this
Consent and Guaranty.




         THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                            Airbus Industrie, G.I.E.,

                            /s/Jean Pierson
                            ----------------------------------
                            By: Jean Pierson

                            Title: Managing Director