EXHIBIT 10.12.1

                                                                  EXECUTION COPY

                          ENGINE MAINTENANCE AGREEMENT

                  (GECAS, BOEING AND OTHER - CF6-80C2 ENGINES)

between



Atlas Air, Inc.
Polar Air Cargo, Inc.
2000 Westchester Avenue
Purchase, NY 10577
USA

- hereinafter collectively referred to as "Operator" -


and


MTU Maintenance Hannover GmbH
Muenchner Strasse 31
30855 Langenhagen
Germany

-hereinafter referred to as "MTU-H" -


- Operator and MTU-H individually or together also referred to as the
  "Party/Parties" -


for maintenance services on General Electric CF6-80C2 series.

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                               TABLE OF CONTENTS

RECITAL

Clause       1                    DEFINITIONS

Clause       2                    SCOPE OF SERVICES

Clause       3                    RECORDS AND STANDARDS

Clause       4                    DELIVERY, REDELIVERY AND TRANSPORTATION

Clause       5                    TURNAROUND TIMES AND EXCUSABLE DELAY

Clause       6                    OPERATOR RESPONSIBILITIES

Clause       7                    REJECTED PARTS

Clause       8                    CHARGES

Clause       9                    PAYMENT

Clause       10                   TAXES, DUTIES AND CUSTOMS FEES

Clause       11                   SUBCONTRACTING

Clause       12                   WARRANTY

Clause       13                   LIABILITY, INDEMNIFICATION, INSURANCE

Clause       14                   MISCELLANEOUS

Clause       15                   DURATION AND TERMINATION

Clause       16                   DISPUTE RESOLUTION, LAW, JURISDICTION

Clause       17                   NOTICES

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This Engine Maintenance Agreement ("Agreement") is entered into as of April 30,
2004 among Atlas Air, Inc., a Delaware corporation ("AAI"), Polar Air Cargo,
Inc., a California corporation ("Polar" and, together with AAI, the "Operator"),
and MTU Maintenance Hannover GmbH, a German limited liability company ("MTU-H").

WHEREAS             The Operator requires maintenance, refurbishment, repair and
                    modification services with respect to certain CF6-80C2
                    engines; and

                    MTU-H has the facilities, expertise and experience and is
                    willing and prepared to provide such services according to
                    MTU-H's standards and procedures approved/accepted by
                    FAA/JAA under the bilateral agreement, the Operator's FAA
                    approved maintenance program, and valid airworthiness
                    authority regulations as provided in Appendix G at its
                    facility, the MTU Repair Facilities or the facilities of the
                    sub-contractors listed in Appendix F; and

                    MTU-H shall perform such services based on the terms and
                    conditions set forth in this Agreement

NOW, THEREFORE,     in consideration thereof and reliance on the mutual promises
                    given herein, the Parties hereto agree as follows:

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CLAUSE 1            DEFINITIONS

                    Within the scope of this Agreement, unless otherwise
                    individually stipulated, the following definitions shall
                    apply:

       1.1          "Accessory/Components"

                    Any Quick Engine Change (QEC) item listed in Appendix B.

       1.2          "Airworthiness Directive/AD"

                    A modification to the Equipment classified as compulsory by
                    the airworthiness authority.

       1.3          "AOG"

                    "Aircraft on Ground" indicates that an aircraft is unable to
                    continue or be returned to revenue service until the
                    appropriate action is taken.

       1.4          "Bankruptcy Cases"

                    Shall mean the cases filed by the Operator in the Bankruptcy
                    Court.

       1.5          "Bankruptcy Code"

                    Shall mean title 11 of the United States Code, as amended.

       1.6          "Bankruptcy Court"

                    Shall mean the United States Bankruptcy Court for the
                    Southern District of Florida.

       1.7          "Business Day"

                    Means any day that is not a Saturday, Sunday or any day on
                    which banks in the State of New York, USA or the State of
                    Lower Saxony, Germany are authorized or obligated to be
                    closed.

       1.8          "Credit Balance"

                    Shall have the meaning ascribed thereto in Clause 9.1.2.

       1.9          "CSLSV"

                    The number of cycles an item of Equipment has completed
                    since last Shop Visit.

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       1.10         "CSN"

                    The number of cycles an item of Equipment has completed
                    since manufacture (new).

       1.11         "CSO"

                    The number of Flight Cycles an item of Equipment has
                    completed since last Overhaul.

       1.12         "Days"

                    Any calendar days.

       1.13         "Designated Party"

                    With respect to each Engine, the party designated on
                    Appendix A with respect to such Engine.

       1.14         "Effective Date"

                    Shall have the meaning ascribed thereto in Clause 15.1.

       1.15         "Engine(s)"

                    The CF6-80C2 engine(s) specified from time to time by serial
                    numbers in Appendix A.

       1.16         "Engine Workscope"

                    The applicable Engine Overhaul Workscope attached hereto as
                    Appendix D.

       1.17         "Equipment"

                    Engines, Modules, Parts, Accessory/Component or any other
                    items of associated equipment delivered to MTU-H for the
                    performance of Services pursuant to this Agreement.

       1.18         "FAA"

                    Shall mean the United States Federal Aviation Administration
                    or any successor thereto.

       1.19         "Flight Cycle"

                    A completed take-off and landing sequence.

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       1.20         "Foreign Object Damage (FOD)"

                    Damage to any portion of the Engine caused by an object
                    other than an integral part of the Engine, including but not
                    limited to an impact or ingestion of birds, stones, hail
                    and/or runway, taxiway or apron gravel.

       1.21         "Lease"

                    Shall mean each of the GE Leases and the BCC Lease, as such
                    terms are defined in Appendix A.

       1.22         "Life Limited Part"

                    Any Part which is identified by the manufacturer for a
                    defined service life.

       1.23         "Line Maintenance"

                    Routine checks, inspections and rectifications of
                    malfunctions performed en route and at base stations during
                    transit, turnaround or night stop.

       1.24         "Module"

                    Modular construction - an Engine assembly of which large
                    subassemblies can be removed, exchanged and installed
                    separately without adversely affecting the Engine integrity
                    or performance.

       1.25         "MTU Repair Facilities"

                    All companies within MTU Aero Engines GmbH's ("MTU Munich)"
                    commercial aircraft engine maintenance group, certified by
                    the FAA as a FAA 145 repair station or otherwise accepted by
                    the FAA under FAR 43.17, active in the business of civil
                    aircraft engine maintenance, overhaul, repair and ancillary
                    services, such as MTU Maintenance Canada Ltd. specified in
                    Appendix F hereto, and any other affiliate of MTU-H as
                    notified by MTU-H to Operator in writing and approved by
                    Operator in writing.

       1.26         "Operator's Maintenance Program"

                    Shall mean (i) with respect to Equipment owned or operated
                    by AAI, AAI's FAA-approved B747-400 Maintenance & Inspection
                    Program and (ii) with respect to Equipment owned or operated
                    by Polar, Polar's FAA-approved B747-400 Maintenance &
                    Inspection Program.

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       1.27         "Original Equipment Manufacturer (OEM)"

                    General Electric Co, Cincinnati, Ohio/USA.

       1.28         "Overhaul"

                    Work provided on an Engine in accordance with the applicable
                    Engine Workscope.

       1.29         "Overhaul Price"

                    Shall have the meaning ascribed thereto in Appendix C.

       1.30         "Part"

                    Any part of an Engine.

       1.31         "Prepaid Engine"

                    Shall mean each Engine for which advance payments will be
                    made pursuant to the terms of a restructuring agreement
                    between the Operator and the respective Designated Party, as
                    identified on Appendix A.

       1.32         "Rejected Part"

                    Any item removed by MTU-H from a Module or Engine and
                    consequently replaced by a Part.

       1.33         "Repair Order"

                    A written order stating that it is subject to the terms and
                    conditions of this Agreement issued by Operator to MTU-H and
                    includes:

                    a)   A statement of or reference to the applicable Work
                         Statement or Engine Workscope;

                    b)   Return delivery instructions, including packaging and
                         shipping; and

                    c)   The serial number of the Engine or other Equipment.

       1.34         "Repair Part"

                    Any Part which is repaired to serviceable condition.

       1.35         "Restructuring Agreement"


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                    Shall have the meaning ascribed thereto in Clause 9.1.1.

       1.36         "Services"

                    All Work in

                    - Maintenance       Those actions required for restoring or
                                        maintaining Equipment in serviceable
                                        condition, including servicing, repair,
                                        modification, overhaul, inspection and
                                        determination of condition.

                    - Modification      Services agreed upon between MTU-H and
                                        Operator, which are based upon a
                                        manufacturer's, FAA or other regulatory
                                        agency airworthiness directive,
                                        configuration change, Operator's
                                        engineering order or other change to
                                        Equipment.

                    - Testing           As defined in the applicable Engine
                                        manufacturer's Overhaul and Repair
                                        manual as well as additional Testing if
                                        required by the MTU-H test procedures.

                    - Overhaul          As defined in Clause 1.28.

                    - Performance       To restore at a minimum the
                      Repair            high-pressure core (including the HPT &
                                        HPC Modules) to achieve the guaranteed
                                        level of EGT margin.

                    - Repair            To make an Engine, Part or Modules
                                        serviceable by replacing or processing
                                        failed or damaged Parts.

                    - Restoration       The Work (on/off the aircraft) necessary
                                        to restore Modules or Parts to a
                                        specific standard.

                    - Rework            To carry out Work on uninstalled Modules
                                        or Parts.

                    - Replacement       The action whereby a Module or Part is
                                        removed and another Module or Part is
                                        installed in its place for any reason.

                    - Inspection        An examination of Equipment against a

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                                        specific standard.


       1.37         "Service Bulletin (SB)"

                    A document issued by the manufacturer to notify Operator and
                    MTU-H of recommended Modifications, substitution of Parts,
                    special Inspections/checks, reduction of existing life
                    limits or establishment of first time life limits and
                    conversion from one Module to another.

       1.38         "Shop Visit"

                    The performance of Services at MTU-H's facility on an Engine
                    or Module which makes necessary a total or partial
                    disassembly (breaking of flanges) of the Equipment.

       1.39         "TSLSV" (time since last shop visit)

                    The time expressed in flight hours an item of Equipment has
                    completed since last Shop Visit.

       1.40         "TSN" (time since new)

                    The time expressed in flight hours an item of Equipment has
                    completed since manufacture.

       1.41         "TSO" (time since overhaul)

                    The time expressed in flight hours an item of Equipment has
                    completed since last Overhaul.

       1.42         "Turnaround Time (TAT)"

                    Shall have the meaning ascribed thereto in Clause 5.

       1.43         "Work"

                    The performance of Services according to the terms and
                    conditions of this Agreement.

       1.44         "Work Statement"

                    Statement(s) being part of the Repair Order which include(s)
                    the Work requirements applicable to Engines, Modules or
                    Parts. The Work Statement(s) shall include details relating
                    but not necessarily restricted to:

                    - reason(s) for shop visit

                    - latest in flight readings of the respective Engines.

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CLAUSE 2            SCOPE OF CONTRACT

       2.1          ENGINES SUBJECT TO CONTRACT:

                    Operator may, by written notice to MTU-H, add to this
                    Agreement additional CF6-80C2 engines owned or operated by
                    the Operator which currently are not subject to this
                    Agreement, provided that if any such additional engines are
                    not currently operated by Operator and are not in the same
                    or similar condition as the engines currently operated by
                    Operator, MTU-H and Operator will agree on any necessary
                    adjustments to the Overhaul Price for such engines. The
                    Operator also shall have the right at any time to remove
                    Engines from coverage under this Agreement by providing
                    written notice to MTU-H.

       2.2          PERFORMANCE OF SERVICES:

                    All Services will be performed in accordance with Federal
                    Aviation Regulations ("FAR") of the FAA and supplemented by
                    MTU-H's procedures accepted/approved by the FAA/JAA under
                    the bilateral agreement, and the Engine manufacturer's
                    overhaul and repair manuals, Operator's Maintenance Program
                    Section 7.6 to 7.9 and Operators Engineering Report 99-02 CF
                    6- 80C2B1 / B5F - Engine Shop Inspection and Repair
                    Specification and such other particular conditions as may be
                    expressly agreed in writing by Operator and MTU-H. All major
                    deviations either from the OEM manuals and/or Operator's
                    Maintenance Program shall be approved by a FAA certified
                    DER. It is understood and agreed that Operator's Maintenance
                    Program may be revised from time to time by Operator. MTU-H
                    shall be placed on the distribution list for revisions to
                    this document and MTU-H shall perform Services according to
                    such revision upon receipt thereof, provided that if any
                    such revision represents a material change and has a
                    substantial impact on the Overhaul Price, then Operator and
                    MTU-H will discuss an appropriate change to the Overhaul
                    Price.

                    For all purposes of this Agreement, Operator shall remain
                    responsible in terms of airworthiness compliance as well as
                    responsible for Operator's Maintenance Program as well as
                    the Engine Workscope and its approval by the airworthiness
                    authority.

       2.3          SCOPE OF SERVICES:

                    The Services will include but not be limited to the
                    following:

       2.3.1        Inspection of an Engine or Module upon receipt by MTU-H from
                    the Operator to determine whether any Parts are missing from
                    or

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                    extraneous to the Engine or Module or shipping container
                    including any transportation damages and preparation of a
                    receipt condition report;

       2.3.2        Disassembly, cleaning, Inspection and rebuilding of Engines;

       2.3.3        Exchange of Parts;

       2.3.4        Repair of Engines, Modules and Parts to a serviceable
                    condition;

       2.3.5        Engine Testing according to the specifications of the Engine
                    manufacturer and MTU-H;

       2.3.6        Parts Management

                    Incorporation of Modifications as prescribed or advised from
                    the manufacturer, MTU-H and/or the Operator;

                    Technical support including Engineering Services when
                    requested by the Operator, provided the following Engine
                    documentation is made available to MTU-H:

                    -    Log book or equivalent

                    -    Life of all Life Limited Parts

                    -    Inflight readings of all parameters of the Engine.

       2.3.7        Replacement of Life Limited Parts;

       2.3.8        MTU-H shall comply with the contents of Clause 4 (Delivery).

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CLAUSE 3            RECORDS AND STANDARDS

       3.1          MTU-H will prior to commencement of Services establish and
                    shall maintain throughout the duration of this Agreement a
                    FAR 145 certified repair station and facilities for Services
                    on Engines, Modules and Parts in accordance with the Engine
                    manufacturer's manuals and other applicable documentation.
                    The repair station number for MTU-H's facility is FAA
                    CQ5Y788M as set out in Appendix G hereto.

       3.1.1        Within four (4) months of signature of the Agreement the
                    Parties shall develop and follow the terms of a customer
                    support manual which amongst other items will describe the
                    procedures of information exchange between the Parties
                    technical and commercial departments and will provide that
                    technical performance review meetings including review of
                    Operator's Maintenance Program shall be held at least twice
                    a year at Operator's or MTU-H's facility as agreed by the
                    Parties.

       3.2          In respect of individual Engines or Modules, Operator shall
                    render MTU-H all documents and supply all information
                    necessary to establish the extent of Services required. This
                    includes, but is not limited to:

       3.2.1        Repair Order;

       3.2.2        Any applicable technical or other documentation;

       3.2.3        Any required variations to the Work Statement or, in the
                    case of an Overhaul, the Engine Workscope. Further
                    variations to any specific Work on an Engine or Module will
                    be agreed in writing between MTU-H and Operator;

       3.2.4        Reason for removal;

       3.2.5        Any further information (as mutually agreed upon) in the
                    possession of Operator concerning the condition of the
                    Engine or Module;

       3.2.6        Life of all Life Limited and/or time tracking Parts, i.e.
                    list of hours and cycles (TSN, CSN, TSLSV, CSLSV, TSO, CSO);

       3.2.7        Installed powerplant Accessory/Component sheet, a listing by
                    nomenclature of each Accessory/Component, Part number,
                    quantity, time and cycles and serial number;

       3.2.8        Logbook or equivalent and Part (Module) cards, if available;

       3.2.9        In-flight readings (as mutually agreed upon) of all Engine

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                    parameters on that specific Engine from its last flight
                    prior to removal.

       3.3          The MTU-H record system will include documentation of all
                    Services performed, Rework operations required and
                    disposition of all Parts replaced. MTU-H agrees to keep all
                    records herein described in form and detail sufficient for
                    accurate and expeditious administration of the Agreement and
                    shall furnish to Operator the following records and reports,
                    as applicable for each shop visit:

       3.3.1        Engine, Module, Part or Accessory/Component serial numbers;

                    The general exterior condition of the Engine, Module or Part
                    and shipping conveyance; List of the missing and/or damaged
                    external Parts; Borescope/chamberscope results, as
                    applicable.

       3.3.2        The following information for each cycle controlled and Life
                    Limited Part installed during the shop visit:

                    a)   Nomenclature

                    b)   Part number

                    c)   Serial number

                    d)   Total operating cycles and hours accumulated to date

                    e)   Total cycles remaining

                    f)   Major maintenance events (date, TSN, CSN) if available.

       3.3.3        A list of all Parts determined to be scrap, with identified
                    Part number quantity and reason for scrappage in case of the
                    Life Limited Parts.

       3.3.4        A list by nomenclature of each Accessory/Component, Part
                    number, quantity, Part time and serial number.

       3.3.5        One (1) copy of the applicable Engine and/or
                    Accessory/Component test logs.

       3.3.6        A report summarizing condition detected subsequent to Engine
                    disassembly.

       3.3.7        The following additional records:

                    a)   Engine Cert FAA form 337, FAA 8130 and JAA Form One

                    b)   AD Status

                    c)   SB accomplishment listing

                    d)   Parts tracking list

                    e)   LLP on off log (including TSN/CSN)

                    f)   Missing parts list - incoming and outgoing

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                    g)   Off wing inspection task summary completed

                    h)   Listing of Operator engineering orders accomplished

                    i)   Components on off long including p/n, s/n and TSO

                    j)   Engine test cell performance data sheet

                    k)   Fan blade PN/SN; TSN/CSN; TSO/CSO

                    l)   Fan blade distribution sheet (by position and S/N)

       3.4          MTU-H shall be required to complete and properly execute
                    Federal Aviation Administration (FAA) Form 8130-3 for minor
                    Repairs and FAA Form 337 for major Repairs or its equivalent
                    for Equipment repaired, modified and/or tested by MTU-H
                    under this Agreement.

                    Upon the request from Operator accident and damage reports,
                    including pictures and laboratory investigation results will
                    be issued by MTU-H.

       3.5          MTU-H will provide to Operator on the first and third Monday
                    of each calendar month a summary report showing the Engines
                    then in MTU-H's possession.

       3.6          MTU-H will keep the documentation on Services performed on
                    an Engine during a shop visit until the earlier of (i)
                    termination of this Agreement, (ii) the next performance of
                    Services of equal scope and (iii) five (5) years following
                    such shop visit, after which MTU-H shall ship such
                    documentation to Operator.

       3.7          MTU-H may recommend to Operator the use of certain DER
                    Repairs and the installation of certain PMA parts. No such
                    DER Repairs may be used or PMA Parts installed without
                    Operator's written approval, such approval not to be
                    unreasonably withheld.

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CLAUSE 4            DELIVERY, REDELIVERY AND TRANSPORTATION

       4.1          The Operator shall advise MTU-H when any Equipment is ready
                    to be shipped to MTU-H's facilities to be overhauled,
                    repaired, tested and/or modified by MTU-H.

                    Upon receipt of the Equipment at MTU-H's or other MTU Repair
                    Facilities, MTU-H will or will have inspected the Equipment
                    and complete a receipt condition report.

                    MTU-H will advise the Operator of the completion of the
                    Equipment overhauled, repaired and/or modified by MTU-H.

       4.2          Operator will provide MTU-H with a Repair Order before
                    commencement of Services.

       4.3          In the event that Operator delivers an incomplete Engine or
                    Module, MTU-H will inform Operator in writing within ten
                    (10) Days after receipt of the Engine of missing Parts, if
                    any, and the time when such missing Parts are needed in the
                    course of Repair of the respective Engine or Module.
                    Operator shall provide such missing Parts at the relevant
                    time or advise MTU-H in writing on how to proceed with this
                    matter. In case Operator does not react upon such
                    information, MTU-H will redeliver the Engine or Module upon
                    completion of the Services in received configuration. Should
                    Operator request MTU-H to add the missing Parts, MTU-H will
                    use reasonable efforts to deliver the requested Parts
                    together with the Engine or Module. Should such Accessories/
                    Components not be available at the date of redelivery of an
                    Engine or Module, these Accessories/Components will be sent
                    to Operator separately as expeditiously as possible.

       4.4          The Operator will accept redelivery and complete a
                    redelivery condition report.

                    The Operator shall provide, at its expense, suitable engine
                    shipping containers, stands, including mounting adapters,
                    blanking plugs and covers and shall be responsible for their
                    serviceability. MTU-H will visually inspect all such
                    equipment upon arrival and will provide Operator with a
                    repair cost quotation, in the event these items are found to
                    be defective or otherwise damaged. If such repair cost
                    quotation and repair work is authorized by Operator, the
                    repair cost will not be included in the Overhaul Price set
                    forth in Appendix C.

                    The Operator will box, pack and make all equipment available
                    to the nominated shipping agency for delivery to MTU-H.

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       4.5          Except to the extent provided otherwise in Clause 4.6,
                    transportation of the Operator's Equipment to and from MTU-H
                    will be the responsibility of the Operator. At the request
                    of the Operator, MTU-H will arrange any such transportation
                    for and on behalf of the Operator. The Operator will be the
                    importer/exporter of record.

       4.6          In the event of an Engine Overhaul, transportation charges
                    for Engines of up to $10,000 each way are included in the
                    Overhaul Price set forth in Appendix C. In such event, if
                    air transportation for Engines is provided by the Operator,
                    the Overhaul Price listed in Appendix C will be reduced by
                    $10,000 for each way that transportation is provided by the
                    Operator.

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CLAUSE 5            TURNAROUND TIME (TAT) AND EXCUSABLE DELAY

       5.1          Upon delivery of any item of Equipment to MTU-H, MTU-H shall
                    complete the required Services on each item of Equipment
                    within fifty-eight (58) days (the "Turnaround Time" or
                    "TAT").

       5.2          Turnaround Time shall start the day after receipt at MTU-H's
                    facility or other MTU Repair Facility of (a) any Equipment
                    and (b) all necessary documents, including a Repair Order,
                    and ends upon notification that the Equipment is
                    serviceable. Within two Business Days after receipt of
                    Equipment at a MTU Repair Facility, MTU will deliver to
                    Operator a written notice stating either that the TAT has
                    begun or specifying the documentation required from Operator
                    prior to the beginning of the TAT. If no such notice is
                    delivered to Operator, the TAT will be deemed to begin one
                    Business Day after delivery of the Equipment to the MTU
                    Repair Facility along with the documentation deemed
                    necessary by Operator.

       5.3          Any reasonable technical requests involving issues or
                    changes to the Work Statement or Engine Workscope that could
                    affect the TAT which are delivered in writing by MTU-H and
                    received by the appropriate representative of the Operator
                    (as designated by the Operator in writing) will be answered
                    by Operator within two Business Days after being
                    communicated to such representative in the manner to be
                    agreed between the Operator and MTU-H. If MTU-H communicates
                    such request in accordance with this paragraph and the
                    Operator's designated representative does not respond within
                    two Business Days, the TAT will be increased by each day in
                    excess of two Business Days that elapse prior to receiving a
                    response from the Operator. Any impact on the TAT resulting
                    from this decision will be promptly advised by MTU-H.

       5.4          MTU-H shall not be liable for exceeding the TAT due to
                    reasons contained in Clause 5.6 regarding Excusable Delays.
                    MTU-H shall promptly notify the Operator when such delays
                    occur or impending delays are likely to occur and shall
                    continue to advise the Operator of new shipping schedules
                    and/or changes thereto. Except as provided in Clauses 5.3
                    and 5.6, the TAT shall not be extended for any reason unless
                    the Operator has agreed to such extension in writing.

       5.5          If MTU-H for reasons other than Excusable Delay fails to
                    meet the TAT set forth in this section and as a consequence
                    thereof the Operator's number of Spare Engines (defined
                    below) falls below the Minimum Spare Engine Level (defined
                    below), MTU-H will as the Operator's sole remedy for MTU-H's
                    failure to meet the TAT either (a) provide on request an
                    additional Spare

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                                      -18-

                    Engine(s) at no additional cost to meet the Operator's
                    Minimum Spare Engine Level, or (b) if MTU-H is unable to
                    provide such additional Spare Engine(s), compensate the
                    Operator at the daily Fair Market Lease Rate (as hereinafter
                    defined) for each calendar day that the TAT is exceeded
                    until the Engine is redelivered to the Operator, provided
                    that the Operator shall not be entitled to compensation for
                    any days beyond the eighth day after the concerned Engine(s)
                    is/are notified serviceable, and reimburse to the Operator
                    the reasonable transportation cost incurred when Operator
                    actually leases the Spare Engine using the compensation set
                    forth in this alternative (b). In the event that MTU-H
                    provides any such additional Spare Engine, it will be leased
                    by MTU-H to the Operator on a no charge basis subject to the
                    terms and conditions of a separate lease agreement provided
                    that such additional Spare Engine while installed by the
                    Operator on an aircraft will be subject to payment of fees
                    relating to usage/maintenance reserves at a rate to be
                    agreed by the Parties. The "Minimum Spare Engine Level" to
                    support the Operator's operation is two (2) Spare Engines.

                    "Spare Engine" shall mean any uninstalled serviceable Engine
                    which is not on- wing on a specific aircraft.

                    "Fair Market Lease Rate" shall mean and be determined as
                    follows: MTU-H shall obtain bona fide, at-arms-length offers
                    regarding the lease of an CF6-80C2 engine from three (3)
                    CF6-80C2 engine lessors in the market place for a duration
                    reasonably anticipated to return the Operator's delayed
                    Engine. The average of such offers shall be deemed to
                    constitute the Fair Market Lease Rate.

       5.6          The Operator agrees that delivery dates are based on the
                    assumptions that there will be no delays due to causes
                    beyond the reasonable control of MTU-H. MTU-H shall not be
                    charged with any liability for delay or non-delivery when
                    due to delays of the Operator, acts of God, public enemy,
                    compliance in good faith with any applicable foreign or
                    domestic governmental regulations or order whether or not it
                    proves to be valid or invalid, fires, riots, unusually
                    severe weather or any other cause beyond the reasonable
                    control of MTU-H ("Excusable Delay"). To the extent such
                    causes actually retard the deliveries or render them in part
                    or whole impossible, the time for the performance shall be
                    extended for as many days beyond the agreed date of delivery
                    as is required to obtain removal of such causes. This
                    provision shall, however, not relieve MTU-H from using its
                    reasonable best efforts to avoid or remove such causes and
                    to continue performance with reasonable dispatch whenever
                    such causes are removed.

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CLAUSE 6            OPERATOR RESPONSIBILITIES

       6.1          RIGHTS AGAINST OEM

       6.1.1        In case of defects or deficiencies in the design or
                    manufacture of the Equipment by the OEM, Operator agrees to
                    use all commercially reasonable efforts to assist and to
                    allow MTU-H to recover from the OEM all costs and expenses
                    associated with any measure taken by MTU-H to rectify or
                    repair such defects or deficiencies.

       6.1.2        For Engines subject to this Agreement, Operator agrees to
                    assign to MTU-H, at MTU-H expense, guarantees, warranties or
                    other remedies related to the maintenance or reliability of
                    the Engines that Operator is entitled to assign in
                    accordance with the general terms agreement between Operator
                    and the OEM, including but not limited to campaign change
                    allowances and new Parts guarantees.

                    If these guarantees, warranties or other remedies cannot be
                    assigned, Operator will raise, at MTU-H expense, claims
                    under said non-assigned guarantees, warranties or other
                    remedies and shall transfer any economic benefit to MTU-H.

       6.1.3        Operator agrees to reasonably support MTU-H in the
                    enforcement of any assigned rights as described in this
                    Clause 6.1.

       6.1.4        Notwithstanding anything in this Agreement to the contrary,
                    Operator shall not be required to assign to MTU-H, or to
                    transfer to MTU-H the economic benefit of, any guarantees,
                    warranties, commitment letters or other remedies or claims
                    against the OEM that are related to Services performed by
                    MTU-H that are not included in the applicable Overhaul
                    Price.

       6.2          Operator agrees to cooperate reasonably with MTU-H with
                    respect to the determination of the optimum removal date for
                    each Engine and the joint development of an Engine removal
                    plan, taking into consideration the trends from engine
                    condition monitoring, all financial and operational
                    requirements of Operator, including Operator's business
                    plan, and the Parties' interest in cost-efficient engine
                    removals. Such removal plan, once agreed between the
                    Parties, shall be binding on the Parties, unless amended
                    from time to time.

<PAGE>

                                      -20-

CLAUSE 7            REJECTED PARTS

       7.1          All Parts removed during Work and determined by MTU-H as
                    scrap or rejected with a value of less than US$ 1,000.00
                    shall become MTU-H's property and shall be disposed of
                    locally by MTU-H.

       7.2          All Parts removed during Work and determined by MTU-H as
                    scrap or rejected with a value of US$ 1,000.00 or more will
                    be stored as Operator owned stock subject to inspection by
                    the Parties four times per year to determine further action.
                    At Operator's request, MTU-H shall dispose of any such Parts
                    at MTU-H's expense. MTU-H shall properly document the
                    disposal of scrap or rejected parts with a value of US$
                    1,000.00 or more and shall provide such documentation to
                    Operator.

       7.3          If MTU-H and the Operator cannot agree on any further action
                    for any such stored Parts within six (6) months after
                    delivery of the respective Engine(s), MTU-H shall deliver
                    such Parts to the Operator at Operator's expense in "as is"
                    condition, provided that if any such Parts are related to an
                    Engine that is the subject of an investigation or insurance
                    claim, MTU-H shall store such Parts, at MTU-H's expense, at
                    the applicable MTU Repair Facility until such time as a
                    final determination has been made in such investigation or
                    with respect to such insurance claim.

<PAGE>

                                      -21-

CLAUSE 8            CHARGES

                    For all Services the Operator shall pay the sums charged in
                    accordance with Appendix C.

<PAGE>

                                      -22-

CLAUSE 9            PAYMENT

       9.1          ADVANCE PAYMENTS

       9.1.1        With respect to each Prepaid Engine, the Operator will make
                    advance payments to MTU-H into one or more bank accounts
                    specifically designated by MTU-H to Operator for advance
                    payments pursuant to this Clause 9.1 on the 15th day of each
                    month (beginning May 15, 2004) that this Agreement is in
                    effect as and to the extent required by the terms of the
                    restructuring agreements entered into by Operator with
                    certain of Operator's creditors and lessors (each a
                    "Restructuring Agreement"). As MTU-H is not a party to any
                    Restructuring Agreement nor has knowledge of any
                    Restructuring Agreement, MTU-H shall have no obligation at
                    all to monitor the Operator's compliance with any
                    Restructuring Agreements. The Operator also may, from time
                    to time, make other advance payments under this Agreement.

       9.1.2        All advance payments made under this Agreement shall be made
                    on account of a particular Prepaid Engine, and MTU-H shall
                    keep detailed book-entry records at all times of the credit
                    balance existing from time to time on a per-Engine basis
                    (each a "Credit Balance"). The Credit Balances will be
                    deemed to accrue interest monthly at the 1-month London
                    Inter-Bank Offered Rate (determined as of the first Business
                    Day of each month), less 20 basis points. The Credit
                    Balances will be applied upon the performance of Services on
                    the Prepaid Engine for which the funds have been credited
                    or, upon the direction of the Designated Party with respect
                    to such Prepaid Engine, to another Engine.

       9.1.3        The manner of applying the Credit Balances against
                    outstanding invoices is described in Clause 9.2. MTU-H shall
                    have no obligation to hold any amounts paid hereunder in a
                    separate account. Notwithstanding anything in this Agreement
                    to the contrary, the Operator shall have no obligation to
                    make the monthly payments described in this Clause 9.1 with
                    respect to Engines with the serial numbers listed in
                    Appendix A as "Engines Not Subject to Monthly Payment
                    Provisions".

       9.1.4        Monthly Reporting. Not later than the 25th day of each month
                    that this Agreement is in effect, MTU-H shall provide to
                    each of the Operator and each Designated Party (in each
                    case, or its designee) a report indicating the Credit
                    Balance for each Prepaid Engine as of the end of the prior
                    month.

       9.1.5        Application of Excess Funds. If MTU-H is released from its
                    obligations set forth in this Agreement with respect to any
                    Prepaid Engine, any credit balance held by MTU-H on account
                    of

<PAGE>

                                      -23-

                    such Engine shall be applied to the account of other Prepaid
                    Engines in such manner as directed by the applicable
                    Designated Party or its designee.

       9.2          PAYMENTS FOR OVERHAULS

       9.2.1        Payments for each Overhaul will be made by Operator to MTU-H
                    as follows:

                    a)   25% of the applicable Overhaul Price set forth in
                         Appendix C upon induction,

                    b)   25% of the applicable Overhaul Price upon redelivery of
                         the Engine to the Operator,

                    c)   the balance owed after applying the payments described
                         in (a) and (b) above and any Credit Balance, within
                         thirty (30) days after receipt of a preliminary invoice
                         of such balance, and

                    d)   the balance owed, if any, after applying the payments
                         described in (a), (b) and (c) above and any Credit
                         Balance, within thirty (30) days after receipt of a
                         final invoice.

                    Notwithstanding the foregoing, if (i) any Engine that is not
                    operated by the Operator is submitted for Overhaul under
                    this Agreement, or (ii) the Operator or the applicable
                    Designated Party (as applicable) is in default under this
                    Agreement or any other agreement between MTU-H and the
                    Operator or such Designated Party, payments for such
                    Overhaul will be made 25% of the applicable Overhaul Price
                    upon induction and the remaining balance upon redelivery of
                    the Engine.

                    Any overpayments made by Operator shall be refunded to
                    Operator promptly after the date of the final invoice for
                    each Overhaul, but in no event later than 30 days after the
                    date of such final invoice.

       9.2.2        MTU-H shall apply the Credit Balance for any Prepaid Engine
                    against the last payment to be received by MTU-H from the
                    Operator pursuant to Clause 9.2.1, except that if the Credit
                    Balance at the date of induction exceeds 50% of the Overhaul
                    Price, the excess will be applied first by MTU-H toward the
                    payment required by Clause 9.2.1(b) and then toward the
                    payment required by Clause 9.2.1(c). For example, if a
                    Credit Balance equal to 60% of the Overhaul cost for a
                    Prepaid Engine exists, the Operator will pay the first 40%
                    of the Overhaul cost, and the Credit Balance will be used to
                    satisfy the remaining 60% of the Overhaul cost, in each case
                    in accordance with the

<PAGE>

                                      -24-

                    payment terms described in Clause 9.2.1.

       9.3          PAYMENT TERMS FOR SERVICES OTHER THAN OVERHAULS

       9.3.1        Payments for Services other than Overhaul Services will be
                    made by Operator to MTU-H as follows:

                    a)   25% of the total amount of charges estimated by MTU-H
                         upon induction, such estimate to be delivered to
                         Operator in writing upon induction,

                    b)   25% of the total amount of charges estimated by MTU-H
                         upon redelivery of the Engine to the Operator,

                    c)   the remaining 50% of charges estimated by MTU-H within
                         thirty (30) days after receipt of a preliminary invoice
                         of such balance, and

                    d)   the balance owed, if any, after applying the payments
                         described in (a), (b) and (c) above, within thirty (30)
                         days after receipt of a final invoice.

                    Notwithstanding the foregoing, if the Operator or the
                    applicable Designated Party (as applicable) is in default
                    under this Agreement or any other agreement between MTU-H
                    and the Operator or such Designated Party, payments for such
                    Services will be made 25% of the total amount of charges
                    estimated by MTU-H upon induction and the remaining 75% of
                    the total amount of charges estimated by MTU-H upon
                    redelivery of the Engine.

                    Any overpayments made by Operator shall be refunded to
                    Operator promptly after the date of the final invoice for
                    each Overhaul, but in no event later than 30 days after the
                    date of such final invoice.

       9.4          DISPUTED INVOICES

                    The payment terms above shall not apply to that portion of
                    an invoice disputed by Operator in good faith as notified to
                    MTU-H in writing within thirty (30) Days of receipt of such
                    invoice. However if such disputed invoice amount can not be
                    resolved by the Parties through amicable negotiations within
                    forty-five (45) Days after MTU-H's receipt of Operator's
                    dispute notification, each Party reserves its rights under
                    this Agreement and any other rights or remedies it may have
                    at law or in equity.

<PAGE>

                                      -25-

       9.5          ADDITIONAL PAYMENT TERMS

       9.5.1        Invoices shall be issued in US-Dollar and forwarded to
                    Operator in duplicate.

       9.5.2        Payments shall be effected by wire transfer on the following
                    bank accounts:

                    Advance Payments shall be wired to:

                           Commerzbank Hanover Branch
                           acc.no.: 3 018 975
                           SWIFT-Code: COBADEFF250

                    All other payments shall be wired to:

                           Bayerische Hypo- und Vereinsbank AG, Muenchen
                           Account No.: 802828675
                           Bank Sorting Code: 700 202 70
                           Swift Code: HYVEDEMM

                    At MTU-H request, Operator shall promptly furnish copies of
                    the documents evidencing wire transfer of all such payments
                    to the attention of the Financial Director of MTU-H.

       9.5.3        If Operator is in material default of any payment obligation
                    in respect of any Services MTU-H may, after giving Operator
                    written notice of such default, postpone the fulfillment of
                    its obligation to perform such Services until such payment
                    is made.

       9.5.4        If payments are outstanding for more than thirty (30) Days
                    following receipt of invoice, MTU-H will without prejudice
                    to any other contractual or legal rights be entitled to
                    charge interest of one percent (1%) per month.

       9.6          ADMINISTRATIVE EXPENSE PRIORITY

                    All amounts paid or to be paid to MTU-H under this Agreement
                    are entitled to administrative expense priority status
                    pursuant to section 503(b) of the Bankruptcy Code.

<PAGE>

                                      -26-

CLAUSE 10           TAXES, DUTIES AND CUSTOMS FEES

                    MTU-H shall pay all sales, use, excise or other similar
                    taxes, duties and fees levied on either Party by authorities
                    for Work performed by MTU-H in the Federal Republic of
                    Germany or any other country under this Agreement.

                    Any taxes, duties, customs fees or like charges levied by
                    any authority outside the Federal Republic of Germany and
                    the countries of MTU Repair Facilities on MTU-H or Operator
                    shall be borne by Operator.

                    In the event that either Party shall be held responsible by
                    any taxing authority for the collection or payment of taxes,
                    duties or fees borne by the other Party and shall be
                    required to pay the same to such authority, such Party shall
                    reimburse the other Party the full amount of such payment
                    and any reasonable expenses connected therewith upon first
                    demand therefor.

<PAGE>

                                      -27-

CLAUSE 11           SUBCONTRACTING

                    MTU-H may subcontract with prior written approval of
                    Operator Services hereunder to the Engine manufacturer, MTU
                    Repair Facilities, or to another party deemed qualified by
                    the Operator to perform Services, which approval may not be
                    unreasonably withheld or delayed.

                    Any subcontracting shall not release MTU-H from its
                    obligations under this Agreement.

<PAGE>

                                      -28-

CLAUSE 12           WARRANTY

       12.1         MTU-H warrants that at the time of delivery of serviced
                    Engines the Services will have been performed in a
                    workmanlike manner. This warranty is limited to MTU-H's
                    correcting at its facilities such Services as are shown to
                    MTU-H's reasonable satisfaction being defective, provided
                    that the defect has arisen within twelve (12) months of
                    installation by Operator or the first three thousand (3.000)
                    flight hours following delivery or within eighteen (18)
                    months after the date of delivery whichever shall first
                    occur, provided further that written notice of the defect is
                    received by MTU-H within sixty (60) Days after discovery by
                    Operator. Transportation charges for return of defective
                    Engines to MTU-H and their reshipment will be borne by
                    MTU-H, subject to Clause 12.7 here below. In the event of a
                    justified warranty claim hereunder the warranty period shall
                    be extended by the time required to carry out the work.

       12.2         Non-compliance of an Engine with the specified performance
                    and consumption rates can only be determined and
                    demonstrated by a test run at MTU-H's facilities or any test
                    cell agreed between both parties.

       12.3         MTU-H's warranty shall not apply:

                    a)   if after redelivery by MTU-H, Operator, its servants,
                         agents, sub-contractors or third parties have
                         materially abused, altered or repaired the Engine or
                         Module or have not operated the Engine or Module in
                         accordance with the manufacturer's operating
                         instructions or recommendations, or

                    b)   if Operator has not complied with its obligations under
                         this Agreement.

       12.4         If an Engine defect was caused by the failure of a new Part
                    installed by MTU-H, for avoidance of doubt, MTU-H will
                    correct such defect in accordance with this Clause 12.
                    Operator agrees to work with MTU-H to exhaust all avenues to
                    collect under the manufacturer's warranty. All direct
                    out-of-pocket expenses relating to such efforts will be
                    borne by MTU-H. In any event MTU-H's liability shall be
                    limited to the extent outlined in this Clause 12 and Clause
                    13 below and shall apply if all attempts of judicial actions
                    against the manufacturer have failed.

       12.5         MTU-H assumes no warranty for Parts supplied by Operator and
                    properly installed by MTU-H.

       12.6         Within two (2) months after notification by Operator MTU-H
                    will

<PAGE>

                                      -29-

                    use its reasonable efforts to determine if a warranty claim
                    can be accepted.

       12.7         In case Operator asserts a warranty claim according to this
                    Clause 12 and as a result of the investigation it is
                    established that MTU-H is not liable for the defects
                    claimed, the reasonable costs of investigation as well as
                    any other reasonable costs and expenses connected with such
                    claim shall be borne by Operator and due and payable upon
                    receipt of the respective invoice.

       12.8         EXCLUSIVE WARRANTIES AND REMEDIES

                    THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE GIVEN AND
                    ACCEPTED IN LIEU OF (i) ANY AND ALL OTHER WARRANTIES,
                    EXPRESSED OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE
                    IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
                    PARTICULAR PURPOSE; AND (ii) ANY OBLIGATION, LIABILITY,
                    RIGHT, CLAIM OR REMEDY IN CONTRACT, TORT OR STRICT
                    LIABILITY, WHETHER OR NOT ARISING FROM MTU-H's NEGLIGENCE,
                    ACTUAL OR IMPUTED. THE REMEDIES OF OPERATOR SHALL BE LIMITED
                    TO THOSE PROVIDED IN THIS AGREEMENT TO THE EXCLUSION OF ANY
                    AND ALL OTHER REMEDIES, INCLUDING WITHOUT LIMITATION,
                    INCIDENTAL OR CONSEQUENTIAL DAMAGES. NO AGREEMENT VARYING OR
                    EXTENDING THE FOREGOING WARRANTY, REMEDIES OR THIS
                    LIMITATION WILL BE BINDING UPON MTU-H UNLESS IN WRITING,
                    SIGNED BY TWO DULY AUTHORIZED OFFICERS OF MTU-H.

<PAGE>

                                      -30-

CLAUSE 13           LIABILITY, INDEMNIFICATION, INSURANCE

       13.1         Subject to the liability cap set forth in Clause 13.2, MTU-H
                    shall be liable to, and indemnify and hold harmless the
                    Operator, its directors, officers, agents and employees (the
                    "Operator Indemnified Parties") from Damages (as defined in
                    Clause 13.7) arising directly or indirectly out the Services
                    performed by MTU-H, its officers, directors, employees,
                    agents and authorized subcontractors (the "MTU-H Indemnified
                    Parties") under this Agreement to the extent caused by the
                    negligence or willful misconduct of the MTU-H Indemnified
                    Parties.

       13.2         However, the liability, indemnification and hold harmless
                    obligations set forth in Clause 13.1 of the MTU-H
                    Indemnified Parties is limited for any and all Damages which
                    might arise under or in connection with this Agreement as
                    follows:

                    (i)  in cases of negligence to US Dollars thirty million
                         (US$ 30,000,000) per occurrence or US Dollars one
                         hundred and fifty million (US $150,000,000) in the
                         aggregate per year, or

                    (ii) in cases of gross negligence to US Dollars four hundred
                         million (US$ 400,000,000) per occurrence or in the
                         aggregate per year,

                         provided that the MTU-H indemnified Parties shall in no
                         event be liable to, or be obligated to indemnify the
                         Operator Indemnified Parties for any indirect or
                         consequential loss and/or expense (including loss of
                         profit, loss of use etc.).

       13.3         In order to ensure that the US Dollars four hundred million
                    (US$ 400,000,000) per year limitation contained in Clause
                    13.2 is effective, Operator indemnifies and holds harmless
                    the MTU- H Indemnified Parties from Damages arising directly
                    or indirectly as a result of the negligence of the MTU-H
                    Indemnified Parties insofar as those Damages exceed, in the
                    case of negligence, US Dollars thirty million
                    (US$30,000,000) per occurrence or US Dollars one hundred and
                    fifty million (US$ 150,000,000) in the aggregate per year
                    and, in the case of gross negligence, US Dollars four
                    hundred million (US$ 400,000,000) per occurrence or in the
                    aggregate per year. However this indemnification by Operator
                    of MTU-H Indemnified Parties shall be limited to US
                    $500,000,000 per occurrence and in the aggregate per year.

       13.4         Throughout the term of this Agreement, Operator shall
                    maintain in full force, at its expense, the following
                    insurance:

<PAGE>

                                      -31-

                    a)   Airline liability insurance, including aircraft third
                         party, passenger (including personal injury offences
                         sub-limited to a $25,000,000 liability limit), baggage
                         (checked or unchecked), cargo and mail legal liability
                         insurance for a combined single limit of least US
                         Dollars five hundred million (US$ 500,000,000) per
                         occurrence. Such insurance shall name the MTU-H
                         Indemnified Parties as additional insured.

                    b)   Hull insurance covering Operator's aircraft against
                         loss or damage. Such Hull insurance shall contain a
                         waiver of recourse in favor of the Indemnified Parties,
                         except in cases of the MTU-H Indemnified Parties'
                         liability outlined above in this Clause 13.

       13.5         Throughout the term of this Agreement, MTU-H shall maintain
                    in full force, at its expense, the following insurance:

                    a)   Aviation Products and Completed Operations Liability
                         insurance including but not limited to personal injury,
                         bodily injury, and property damage with limits of at
                         least US Dollar four hundred million (US$ 400,000,000)
                         per occurrence. Such insurance shall include that the
                         insurers accept and insure the indemnification and hold
                         harmless provisions of Clauses 13.1 and 13.2 above
                         regarding the Operator Indemnified Parties, and require
                         the Operator to be provided with thirty (30) days
                         written notice of any cancellation or adverse material
                         change in such insurance.

                    b)   Hangarkeeper's Liability Insurance on the Engine,
                         Accessory/ Components, and Supplies in an amount not
                         less than US Dollars fifty million (US$ 50,000,000).
                         Such insurance shall (1) contain a provision waiving
                         any and all rights of subrogation MTU-H insurers may
                         have or may acquire against Operator as a result of
                         this Agreement or performance hereunder, and (2)
                         contain a provision requiring MTU-H insurers to provide
                         Operator with thirty (30) days written notice of any
                         cancellation or adverse material change in such
                         insurance.

       13.6         Upon request, the Parties shall have their insurers provide
                    certificates of insurance evidencing the coverage required
                    herein. Any insurance deductibles carried by either Party
                    will be the responsibility of the respective policy holder.

<PAGE>

                                      -32-

       13.7         For the purposes of this Clause 13, "Damages" means any and
                    all liabilities, damages, expenses, suits or judgments
                    including reasonable attorneys' fees (based on a solicitor
                    and client basis) for the death of or bodily injury to any
                    person and for the loss of, damage to or destruction of any
                    property in any manner.

<PAGE>

                                      -33-

CLAUSE 14           MISCELLANEOUS

       14.1         Interpretation

                    The rule of construction that ambiguities or inconsistencies
                    are to be resolved against the drafting party shall not be
                    employed in the interpretation of this Agreement to favor
                    any party against the other. Ambiguities or inconsistencies
                    shall be resolved by applying the most reasonable
                    interpretation under the circumstances, giving full
                    consideration to the intentions of the parties at the time
                    of conclusion of this Agreement.

       14.2         Order of Precedence

                    In the event that there are any conflicts or inconsistencies
                    between the provisions of this Agreement and the appendices
                    hereto, the provisions of this Agreement shall prevail.

       14.3         Merger of Negotiations

                    The terms and provisions contained herein constitute the
                    entire agreement between the parties relating to the subject
                    matter hereof. The parties agree that neither of them has
                    placed any reliance whatsoever on any representations,
                    agreements, statements or understandings made prior to the
                    signature of this Agreement whether orally or in writing
                    relating to the scope of this Agreement other than those
                    expressly incorporated in this Agreement which has been
                    negotiated on the basis that its provisions represent their
                    entire agreement relating to the subject matter hereof and
                    shall supersede all such representations, agreements,
                    statements and understandings.

       14.4         Property and Risk

                    The risk in respect of loss of or damage to the supplies
                    shall pass to MTU-H on delivery to MTU-H in accordance with
                    Clause 4 hereof and shall remain with MTU-H until
                    redelivered in accordance with Clause 4 hereof.

                    MTU-H shall maintain adequate insurance coverage for the
                    full replacement cost against loss of or damage to the
                    Equipment while they are in its care, custody and control.

                    Should any of the items delivered to MTU-H according to
                    Clause 4 above while being in MTU-H's care, custody and
                    control due to MTU-H's fault be destroyed or damaged,
                    howsoever, MTU-H as its sole responsibility, and as
                    Operator's sole remedy with regard

<PAGE>

                                      -34-

                    thereto, will either (as MTU-H may in its discretion decide)
                    at its expense provide an adequate replacement or pay to
                    Operator the actual replacement cost of the items concerned.

                    MTU-H shall at all times ensure that Equipment in its care,
                    custody and control do not by its act or omission become the
                    subject of any lien, tax, charge, duty or encumbrance and
                    MTU-H shall indemnify Operator against all costs, expenses
                    and damages which Operator may incur or suffer by reason of
                    MTU-H failing to carry out its obligations under this
                    Clause.

       14.5         Title to Parts

                    Title to Parts provided by MTU-H and incorporated during
                    Services shall pass to Operator upon payment in full of
                    MTU-H's respective invoices for such Services.

       14.6         Title to Exchanged Parts

                    Operator and MTU-H each represent and warrant that they will
                    accomplish transfer of the full legal title of any item
                    exchanged hereunder free and clear of all charges, liens and
                    encumbrances. Operator warrants the authorization of the
                    owner of such items to effect such exchange of title. Either
                    party will only with the prior written consent of the other
                    enter into any arrangement or agreement which might
                    prejudice or impair its ability to perform its obligations
                    under this Clause.

       14.7         Assignability

                    The Operator or its assignees may assign their rights and
                    obligations under this Agreement, in whole or in part, to
                    any Designated Party. The Operator will provide five days
                    prior written notice to MTU-H of any assignment of this
                    Agreement and will identify the party to which this
                    Agreement is assigned. This Agreement is personal to MTU-H
                    and shall not be assigned or transferred, in whole or in
                    part, by MTU-H without the prior written consent of the
                    Operator.

<PAGE>

                                      -35-

       14.8         Alterations and Amendments

                    This Agreement shall not be altered or amended in any way
                    other than by agreement in writing (to include telex)
                    entered into by the parties hereto after the date of this
                    Agreement, which is expressly stated to amend or alter this
                    Agreement.

       14.9         Negation of Waiver

                    Failure of either party at any time to enforce any of the
                    provisions of this Agreement shall not be construed as a
                    waiver or forbearance by such party of such provisions or in
                    any way affect the validity of this Agreement or part
                    thereof.

       14.10        Partial Invalidity

                    In case one or more of the provisions contained in this
                    Agreement should be or become fully or in part invalid,
                    illegal or unenforceable, the validity, legality or
                    enforceability of the remaining provisions contained in this
                    agreement shall not be affected in any way or impaired
                    thereby, and the parties shall to the extent possible
                    replace such invalid, illegal or unenforceable provision(s)
                    by another clause or clauses considering the economic
                    intention of the parties.

       14.11        Operator Representative

                    MTU-H will provide at no additional cost to Operator
                    appropriate office accommodation, telephone and access to
                    facsimile machines within MTU-H facilities. Any expenses
                    incurred through the use of such communication equipment by
                    Operator representative shall be borne by Operator. MTU-H
                    will allow Operator representative reasonable access to all
                    work areas where services under this Agreement are being
                    performed.

       14.12        MTU-H Representative

                    Operator will provide at no additional cost to MTU-H
                    appropriate office accommodation, telephone and access to
                    facsimile machines within Operator's facilities. Any
                    expenses incurred through the use of such communication
                    equipment by MTU-H representative shall be borne by MTU-H.

       14.13        Right of Inspection

                    Operator will have the right to inspect, together with the
                    FAA, if required and deemed necessary, MTU-H facilities and
                    all documents and records pertaining to the Services
                    performed on

<PAGE>

                                      -36-

                    Operator Engine, Accessory/Components and/or Equipment as
                    assigned under this Agreement. Such inspection will be
                    permitted to take place on the condition that reasonable
                    advance notice to this effect will be given by Operator to
                    MTU-H.

       14.14        Third Party Beneficiary

                    MTU-H acknowledges and agrees that this Agreement is for the
                    benefit of

                    a)   the Parties, and

                    b)   with respect to each Prepaid Engine, the applicable
                         Designated Party, as third party beneficiary to this
                         Agreement, which can enforce rights under this
                         Agreement directly against MTU-H as set forth in Clause
                         14.15.

                    MTU-H further acknowledges that the parties ultimately
                    benefiting from the rights being given to the Designated
                    Party pursuant to Clause 14.15 are the parties that entered
                    into the Restructuring Agreements with the Operator and/or
                    its affiliates in reliance upon the existence of this
                    Agreement in particular the advance payment provisions set
                    forth in Clause 9.1 regarding prospective maintenance on
                    Prepaid Engines to be performed by MTU-H pursuant to this
                    Agreement.

       14.15        Third Party Beneficiary Rights

                    After a default by the Operator under this Agreement or an
                    Event of Default (as defined in the applicable Lease) under
                    the applicable Lease, and upon receipt by MTU-H from the
                    Designated Party with respect to any Lease of a written
                    notice (a "Designated Party Rights Notice") of any such
                    occurrence stating that the Designated Party has succeeded
                    to the rights of Operator under this Agreement,

                    a)   this Agreement shall inure to the benefit of, and shall
                         be enforceable by, such Designated Party, to the same
                         extent as if originally named the "Operator", and

                    b)   such Designated Party agrees that upon receipt by MTU-H
                         of the Designated Party Rights Notice the Designated
                         Party shall be subject to all of the terms and
                         conditions of this Agreement to the same extent as if
                         such Designated Party were named the "Operator".

                    Accordingly, notwithstanding an Event of Default,
                    termination or rejection of this Agreement by the Operator
                    (whether in connection with a bankruptcy or any other
                    insolvency

<PAGE>

                                      -37-

                    proceeding or otherwise), upon a Designated Party Rights
                    Notice provided by a Designated Party, MTU-H agrees to
                    perform its obligations under this Agreement but only to the
                    extent MTU-H has been previously paid by the Operator
                    (without offset, recoupment, counterclaim or defense as
                    provided in Clause 14.16). The Operator or any successor to
                    the Operator shall notify MTU-H from time to time of any
                    change in any Designated Party, and MTU-H shall not be
                    obligated to act at the direction of any party unless and
                    until such notice has been given. MTU-H shall be entitled to
                    rely upon instructions received from the Operator or any
                    Designated Party following receipt of notice, and shall not
                    be obligated to confirm the authority of the Operator or any
                    Designated Party or the validity of any instructions
                    received from such parties.

       14.16        No Right of Setoff or Recoupment; Waiver

                    MTU-H shall have no right of reduction, counterclaim, setoff
                    or recoupment for or against the amounts paid to MTU-H under
                    this Agreement with respect to any Prepaid Engine on account
                    of obligations due to MTU-H or its affiliates with respect
                    to any other Engine or any other obligation due from the
                    Operator or any affiliate of the Operator. MTU-H hereby
                    waives and releases (on behalf of itself and each of its
                    affiliates, successors and assigns) any and all claims,
                    whether now existing or hereafter arising, for reduction,
                    setoff or recoupment against the amounts paid to MTU-H under
                    this Agreement in respect of any Prepaid Engine on account
                    of obligations due to MTU-H or its affiliates with respect
                    to any other Engine or any other obligation due from the
                    Operator or any affiliate of the Operator. For the avoidance
                    of doubt, it is expressly agreed between the Parties that
                    nothing contained herein shall limit MTU-H's entitlement to
                    payment on a per Engine basis for actual Services performed
                    on such Engine under this Agreement.

       14.17        Grant of Security Interest; Consent to Amendments

                    The Operator shall have the right to collaterally assign
                    this agreement, in whole or in part, as security or grant a
                    first priority lien and security interest in and to the
                    Operator's rights hereunder in favor of each Designated
                    Party. MTU-H consents to the grant of such security interest
                    as collateral to the applicable Designated Party; any legal
                    or attorneys' fees in connection with the preparation,
                    perfection and/or filing of such security interest shall be
                    borne by the Operator.

                    In addition, the Parties agree that this Agreement may not
                    be amended or terminated without the prior written consent
                    of the other party other than in consequence of failure to
                    cure an Event

<PAGE>

                                      -38-

                    of Default pursuant to the termination provision, and MTU-H
                    agrees not to waive any provision hereof without the written
                    consent of the applicable Designated Party. MTU-H agrees to
                    recognize the applicable Designated Party or its assignee as
                    the party entitled to any Credit Balance with respect to
                    such Designated Party's Prepaid Engines upon termination of
                    this Agreement by written notice of the Designated Party and
                    Operator to MTU-H.

                    Notwithstanding anything contained in this Agreement to the
                    contrary, nothing contained herein shall limit MTU-H's
                    entitlement to payment on a per Engine basis for actual
                    Services performed on such Engine under this Agreement
                    pursuant to Clause 9 which entitlement shall have priority
                    over any security interest created in accordance with the
                    terms and conditions of this Agreement.

       14.18        Confidentiality

                    Each Party agrees not to disclose this Agreement to any
                    third party (other than each Designated Party or any other
                    beneficial owner or lessor of any Engine) without first
                    obtaining the written consent of the other Party, except as
                    required by law or to enforce any provision of this
                    Agreement; provided, however, that Operator may disclose
                    this Agreement to the extent necessary in connection with
                    the Operator's Chapter 11 case to the Operator's
                    stakeholders who have agreed to keep this Agreement
                    confidential. Advertising and promotional material must be
                    approved in writing by the other Party prior to release.

       14.19        Divisibility

                    This Agreement is divisible and severable on a per-Engine
                    basis and may only be assumed or rejected under the
                    Bankruptcy Code on a per-Engine basis. This Agreement shall
                    not be construed to be a master agreement necessarily
                    requiring assumption or rejection of the Agreement IN TOTO
                    as to all Engines at any one time.

<PAGE>

                                      -39-

CLAUSE 15           DURATION AND TERMINATION

       15.1         This Agreement shall commence on February 1, 2004
                    ("Effective Date") regardless of the date that this
                    Agreement is signed by the Parties and shall remain in full
                    force and effect until the third Overhaul has been completed
                    on each Engine.

       15.2         The rights and obligations of the Parties under the
                    following clauses shall survive any termination or
                    expiration of this Agreement:

                    Clause 10         (TAXES)
                    Clause 12         (WARRANTY)
                    Clause 13         (LIABILITY)
                    Clause 14.18      (CONFIDENTIALITY)
                    Clause 16         (APPLICABLE LAW).

       15.3         Termination

                    If either the Operator or MTU-H commits a breach of any of
                    its material obligations under this Agreement and such
                    breach is not cured within thirty (30) days after
                    notification of such breach by the non-defaulting Party,
                    such breach shall constitute an "Event of Default." Upon the
                    occurrence and during the continuance of any Event of
                    Default, the non-defaulting party shall have the right, but
                    not the obligation, unless otherwise expressly stipulated in
                    this Agreement, without prejudice to its other rights or
                    remedies under applicable laws, which rights or remedies
                    shall be cumulative and not exclusive:

                    (a)  to terminate this Agreement by written notice (to
                         include telex), and

                    (b)  to stop any Services already commenced and to refuse to
                         commence any further Services.

                    In no event shall the approval of the Bankruptcy Court be
                    necessary for MTU-H to exercise its rights hereunder.

                    The suspension, surrender or revocation of MTU-H's Federal
                    Aviation Administration foreign repair station certificate
                    shall be deemed to be a breach by MTU-H and will immediately
                    result in an "Event of Default."

                    In the event of termination of this Agreement by the
                    Operator due to an Event of Default caused by MTU-H, MTU-H
                    shall immediately return to the Operator all credit balances
                    held by MTU-H at the date of termination, other than amounts
                    necessary to pay for Services then being performed by MTU-H
                    on the

<PAGE>

                                      -40-

                    Engines. If the Operator terminates this Agreement other
                    than in consequence of an Event of Default caused by MTU-H,
                    the Operator shall have the right to continue to deliver
                    Prepaid Engines to MTU-H for Services to utilize all
                    remaining credit balances and shall have the right to apply
                    any credit balances against Services for any other Prepaid
                    Engines, and MTU-H agrees to continue to provide Services on
                    the Prepaid Engines until all such credits are applied.

       15.4         Bankruptcy-Related Events of Default

                    It shall be an Event of Default if at any time (i) the
                    Bankruptcy Cases are converted to cases under Chapter 7 of
                    the Bankruptcy Code, or (ii) the appointment in the
                    Bankruptcy Case of an examiner or trustee with expanded
                    powers (beyond those set forth in Sections 1106(a)(3) and
                    (4) of the Bankruptcy Code), but only if such expanded
                    powers include that such examiner or trustee assumes all or
                    any substantial part of the responsibilities and duties of
                    Operator's management or its board of directors or the board
                    of directors of any other Debtor.

       15.5         The parties will meet once each year that this Agreement is
                    in effect at a time and location to be mutually agreed (but
                    no later than April 30) for a business review meeting to
                    discuss the overall performance and business expectations.
                    Any such review meeting may result in amended business
                    terms, but only with the consent of each party hereto.

<PAGE>

                                      -41-

CLAUSE 16           DISPUTE RESOLUTION, LAW, JURISDICTION

       16.1         This Agreement shall be governed by and in accordance with
                    the laws of the State of New York, USA, without recourse to
                    its conflict of law principles.

       16.2         The Parties hereby submit to the jurisdiction of the Federal
                    Courts located in the State of New York.

       16.3         If a dispute between the Parties arises under this
                    Agreement, the Parties will use commercially reasonable
                    efforts to amicably resolve their differences prior to
                    initiating any court proceeding. Should such efforts be
                    deemed unsuccessful by either Party, or fail to resolve any
                    such dispute within fourteen (14) Days of its arising,
                    either Party may initiate court proceedings.

<PAGE>

                                      -42-

CLAUSE 17           NOTICES

                    Any notice or communication to be served pursuant to this
                    Agreement shall be sent by registered mail, telefax, telex
                    or delivered personally and shall be deemed to have been
                    duly given when received by the addressees under the
                    following address:

                    FOR OPERATOR:

                    Atlas Air, Inc.
                    Polar Air Cargo, Inc.
                    2000 Westchester Avenue
                    Purchase, NY 10577
                    USA
                    Attention: Vice President - Technical Operations

                    Phone:   914.701.8559
                    Fax:     914.701.8313

                    with a copy to:

                    Attn:    Divisional Controller
                    Phone:   914.701.8023
                    Fax:     914.701.8313


                    FOR MTU-H:

                    MTU Maintenance Hannover GmbH
                    Munchner Strasse 31
                    D-30855 Langenhagen
                    Germany

                    Phone:  + 49 511 78 06 9105
                    Fax:    + 49 511 78 06 200
                    SITA:   HAJMTCR
                    Telex:  9230309 mtuh d
                    Attn:   Executive Vice President - Sales & Marketing

                    or such other place of business as may be notified in
                    writing by the other party to this Agreement from time to
                    time.

                    All notices, reports, certificates, data and communications
                    pertaining to this Agreement shall be in the English
                    language.

<PAGE>

                                      -43-


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<PAGE>

                                      -44-


IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
executed and delivered on its behalf by its duly authorized representative(s) as
of the Day, month and year set forth above.


Atlas Air, Inc.                         MTU Maintenance Hannover
                                        GmbH

By      /s/ Illegible                   By              illegible
       -----------------------------          ----------------------------------

Title  Chief Financial Officer          Title            EUP-OPS
       -----------------------------          ----------------------------------

                                        By              illegible
                                              ----------------------------------

                                        Title        Sup Finance
                                              ----------------------------------



Polar Air Cargo, Inc.


By      /s/ Illegible
       -----------------------------

Title  Chief Financial Officer
       -----------------------------

<PAGE>


                   ATLAS AIR WORLDWIDE HOLDINGS, INC. ("AAWW")
                           EXHIBIT LIST FOR FORM 10-K
                     FOR FISCAL YEAR ENDED DECEMBER 31, 2004

The agreements listed below are substantially  identical to this exhibit and are
not being filed  separately as exhibits  pursuant to instruction 2 to Regulation
S-K, Item 601.

               Engine Maintenance Contract dated April 30, 2004 between the
               Company and MTU Maintenance Hannover GmbH, with regard to CF6
               80C2 Engines in the 1998 EETC Transaction.

               Engine Maintenance Contract dated April 30, 2004 between the
               Company and MTU Maintenance Hannover GmbH, with regard to CF6
               80C2 Engines in the 1999 EETC Transaction.

               Engine Maintenance Contract dated April 30, 2004 between the
               Company and MTU Maintenance Hannover GmbH, with regard to CF6
               80C2 Engines in the 2000 EETC Transaction.