exhibit1033_05wje-pax051






This copy of the document filed as an Exhibit excludes certain identified information  because such information is both (i) not material and (ii) would likely cause competitive  harm if publicly disclosed. Omissions are designated by the symbol [...***...].     Page 1  BOEING PROPRIETARY        AIRFRAME AND OPTIONAL FEATURES  ESCALATION ADJUSTMENT    between    THE BOEING COMPANY    and    ALLEGIANT AIR, LLC    Supplemental Exhibit AE1    to Purchase Agreement Number PA-05130  





 






WJE-PA-05130-AE1 Page 2  BOEING PROPRIETARY    AIRFRAME AND OPTIONAL FEATURES  ESCALATION ADJUSTMENT    relating to    BOEING MODEL 737-8-200 AND 737-7 AIRCRAFT    1. Formula.  Airframe and Optional Features price adjustments (Airframe Price Adjustment) are  used to allow prices to be stated in current year dollars at the signing of this Purchase  Agreement and to adjust the amount to be paid by Customer at delivery for the effects  of economic fluctuation. The Airframe Price Adjustment will be determined at the time of  Aircraft delivery in accordance with the following formula:  Pa = [...***...]  Where:    Pa = Airframe Price Adjustment.     [...***...] = Airframe Price plus the price of the Optional Features (as set forth in  Table 1 of this Purchase Agreement).  [...***...] [...***...]  [...***...]  Where:    [...***...] is the base year airframe escalation index (as set forth [...***...] of this  Purchase Agreement);    [...***...] is a value determined using the U.S. Department of Labor, Bureau of Labor  Statistics, [...***...], calculated by establishing a [...***...]arithmetic average value  (expressed as a decimal and rounded to the nearest tenth) using the values for the  [...***...] prior to the month of scheduled delivery of the applicable Aircraft. As the  [...***...] values are only released on a quarterly basis, the value released for the first  quarter will be used for the months of January, February, and March; the value released  for the second quarter will be used for the months of April, May, and June; the value  released for the third quarter will be used for the months of July, August, and  September; the value released for the fourth quarter will be used for the months of  October, November, and December.    M =[...***...]       Where:    CPIb is the base year airframe escalation index (as set forth [...***...] of this Purchase  Agreement); and  





 






WJE-PA-05130-AE1 Page 3  BOEING PROPRIETARY    [...***...] is a value determined using the U.S. Department of Labor, Bureau of Labor  Statistics, [...***...] calculated as a [...***...] arithmetic average of the released monthly  values (expressed as a decimal and rounded to the nearest tenth) using the values for  the [...***...] prior to the month of scheduled delivery of the applicable Aircraft.    As an example, for an Aircraft scheduled to be delivered in the month of July, the  months of June, July, and August of the preceding year will be utilized in determining  the value of [...***...].  Note:  (i) In determining the values of L and M, all calculations and  resulting values will be expressed as a decimal rounded to the  nearest ten-thousandth.  (ii) [...***...] is the numeric ratio attributed to labor in the Airframe  Price Adjustment formula.  (iii) [...***...] is the numeric ratio attributed to materials in the  Airframe Price Adjustment formula.  (iv) The denominators (base year indices) are the actual average  values reported by the U.S. Department of Labor, Bureau of  Labor Statistics. The actual average values are calculated as  a [...***...] arithmetic average of the released monthly values  (expressed as a decimal and rounded to the nearest tenth)  using the values for the [...***...]  months prior to the airframe  base year. The applicable base year and corresponding  denominator is provided by Boeing in Table 1 of this Purchase  Agreement.  (v) The final value of Pa will be rounded to the nearest dollar.  (vi) The Airframe Price Adjustment will not be made if it will result  in a decrease in the Aircraft Basic Price.  2. Values to be Utilized in the Event of Unavailability.  2.1 If the Bureau of Labor Statistics substantially revises the methodology  used for the determination of the values to be used to determine the [...***...] values (in  contrast to benchmark adjustments or other corrections of previously released values),  or for any reason has not released values needed to determine the applicable Airframe  Price Adjustment, the parties will, prior to the delivery of any such Aircraft, select a  substitute from other Bureau of Labor Statistics data or similar data reported by non- governmental organizations. Such substitute index will be the same as that applied to  other customers of the aircraft type and will result in the same adjustment, insofar as  possible, as would have been calculated utilizing the original values adjusted for  fluctuation during the applicable time period. However, if within twenty-four (24) months  after delivery of the Aircraft, the Bureau of Labor Statistics should resume releasing  values for the months needed to determine the Airframe Price Adjustment, such values  





 






WJE-PA-05130-AE1 Page 4  BOEING PROPRIETARY  will be used to determine any increase or decrease in the Airframe Price Adjustment for  the Aircraft from that determined at the time of delivery of the Aircraft.  2.2 Notwithstanding Article 2.1 above, if prior to the scheduled delivery month  of an Aircraft the Bureau of Labor Statistics changes the base year for determination of  the [...***...] values as defined above, such re-based values will be incorporated in the  Airframe Price Adjustment calculation.  2.3 In the event escalation provisions are made non-enforceable or otherwise  rendered void by any agency of the United States Government, the parties agree, to the  extent they may lawfully do so, to equitably adjust the Aircraft Price of any affected  Aircraft to reflect an allowance for increases or decreases consistent with the applicable  provisions of paragraph 1 of this Supplemental Exhibit AE1 in labor compensation and  material costs occurring since eleven (11) months prior to the price base year shown in  the Purchase Agreement.  2.4 If within twelve (12) months of Aircraft delivery, the published index values  are revised due to an acknowledged error by the Bureau of Labor Statistics, the  Airframe Price Adjustment will be re-calculated using the revised index values (this does  not include those values noted as preliminary by the Bureau of Labor Statistics). A  credit memorandum or supplemental invoice will be issued for the Airframe Price  Adjustment difference. Interest charges will not apply for the period of original invoice to  issuance of credit memorandum or supplemental invoice.  Note:  (i) The values released by the Bureau of Labor Statistics and  available to Boeing [...***...] prior to the first day of the  scheduled delivery month of an Aircraft will be used to  determine the [...***...] values for the applicable months  (including those noted as preliminary by the Bureau of Labor  Statistics) to calculate the Airframe Price Adjustment for the  Aircraft invoice at the time of delivery. The values will be  considered final and no Airframe Price Adjustments will be  made after Aircraft delivery for any subsequent changes in  published Index values, subject always to paragraph 2.4  above.  (ii) The maximum number of digits to the right of the decimal after  rounding utilized in any part of the Airframe Price Adjustment  equation will be four (4), where rounding of the fourth digit will  be increased to the next highest digit when the 5th digit is  equal to five (5) or greater.