ex10138af.htm


    
      
         


      

      
         


        
          

        

      

      
         


        
          Boeing Commercial Airplanes


          P.O. Box 3707 

          Seattle , WA 98124-2207 

          


          [Missing Graphic Reference] 

          


          


          


          


        

      

    


    6-1162-TRW-0667

    


    American
Airlines, Inc.

    P.O. Box
619616

    Dallas-Fort
Worth Airport

    Texas
75261-9616

     

    
      	
              Subject:

            	
              GENX-1B74/75
      Powered 787-9 Performance Retention
Commitment

            


    

     

    
      	
              Reference:

            	
              Purchase
      Agreement No. 3219 (the Purchase
      Agreement) between The Boeing Company (Boeing)
      and American Airlines, Inc. (Customer)
      relating to Model 787-923 Aircraft (Aircraft).

            


    

     

    This
Letter Agreement (Letter
Agreement) amends and supplements the Purchase Agreement.  All
terms used but not defined in this Letter Agreement have the same meaning as in
the Purchase Agreement.

     

    Boeing
recognizes that performance retention within reasonable limits is essential to
maintain the economy of operation of the Aircraft.  Therefore the
parties hereto agree as follows with respect to performance
retention.

     

    
      	
              1.  

            	
              Aircraft
      Commitment.

            


    

     

    For the
purposes of this Letter Agreement, the Covered Aircraft shall be defined as a
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT].

     

    Boeing
commits to Customer that, [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], as
defined in Attachment A, during the Performance Retention Term, as defined in
paragraph 2 below, will not exceed the levels shown in the table below (Aircraft
Commitment).

     

    
      	
              Time
      After Delivery of the First Covered Aircraft

            	
              Cumulative
      Fleet Average Fuel Mileage Deterioration Commitment (%)

            
	 
      	 
      
	 
      	 
      


    

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    


     

    


     

    
      	
              2.  

            	
              Applicability and
      Performance Retention Term.

            


    

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    
      	
              2.1  

            	
              Delivery Schedule for
      Covered Aircraft.

            


    

     

    For the
purposes of this Letter Agreement, it is anticipated that Boeing will deliver
the Covered Aircraft to Customer in accordance with the following delivery
schedule set forth in Attachment C.  If the fleet size and delivery
schedule is significantly different, the Aircraft Commitment may be
appropriately adjusted to reflect such changes.

     

     

    
      	
              2.2  

            	
              Performance Retention
      Term.

            


    

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    
      	
              3.  

            	
              Conditions.

            


    

     

    
      	
              3.1  

            	
              Operation and
      Maintenance.

            


    

     

    Customer shall operate and maintain
the Covered Aircraft in accordance with Customer’s FAA-approved operations and
maintenance programs.  Customer shall operate and maintain the engines
in accordance with the Operation and Maintenance Manuals and Customer's
Maintenance Program and an Engine Management Program mutually defined and agreed
to by the Engine Manufacturer and Customer.

     

    
      	
              3.2  

            	
              Powerback.

            


    

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    3.3                  Flight Cycle Utilization and
Derate.

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    


     

    


     

    


     

    


     

    


     

    


     

    
      	
              4.  

            	
              Determination of Fuel
      Mileage Deterioration.

            


    

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    Following
the delivery of each Covered Aircraft to Customer by Boeing, and continuing
until expiration of the Performance Retention Term, Customer shall record,
analyze, and forward to Boeing cruise fuel mileage data obtained on such Covered
Aircraft as specified in Attachment B (Basic
Data).

    


    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    
      	
              5.  

            	
              Notice of Performance
      Deterioration.

            


    

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    
      	
              6.  

            	
              Election of
      Actions.

            


    

     

    Upon
Boeing's receipt of any notice that the Cumulative Fleet Average Fuel Mileage
Deterioration exceeds, or is likely to exceed the Aircraft Commitment, Boeing
and Customer, as appropriate, will take the following actions:

     

    [Missing
Graphic
Reference]                                6.1           Data.

     

    Boeing
will evaluate the Basic Data.  At its option, Boeing may accomplish
such evaluation by analysis of Customer’s raw ACMS data or by obtaining
additional performance data on such Covered Aircraft in accordance with
Attachment B.  Such additional data may include data acquired during
revenue service with Boeing personnel aboard as observers.  The Basic
Data and any additional data obtained by Boeing in its evaluation shall be
appropriately adjusted to reflect any material changes elected by Customer to
the Covered Aircraft which have occurred subsequent to delivery of the Covered
Aircraft, including any replacement of one or more of the engines installed on a
Covered Aircraft.  Additionally, adjustments will be applied for any
relevant factors as agreed by Customer and Boeing (e.g., inaccuracies in flight
deck instrumentation, a sudden increase in deterioration that is attributed to a
foreign object damage event such as severe hail and the additional rate of
deterioration for Aircraft used for pilot training.)  If Boeing and
Customer are in disagreement as to such evaluation of the Basic Data, such
disagreement shall be resolved by good faith technical negotiation between the
parties including, as necessary, the Engine Manufacturer.

     

    


     

    


     

    


     

    6.2                  Surveys.

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    6.3                  Weight.

     

    Boeing
may request that Customer weigh such Covered Aircraft, in which event Customer
agrees to weigh such Covered Aircraft in conjunction with its normally scheduled
maintenance and will report its findings to Boeing.

     

    
      	
              6.4  

            	
              Corrective
      Actions.

            


    

     

    Boeing shall promptly make such
recommendations to Customer that Boeing believes would result in improvement of
the cruise fuel mileage performance of such Covered Aircraft based on analysis
of the surveys and available data pursuant to Paragraphs 6.1 -
6.3.  Boeing, Engine Manufacturer and Customer shall thereafter
mutually agree on the appropriate corrective action to be taken based on any
such recommendations.  Corrective actions, which involve maintenance
and/or refurbishment, as described in paragraph 6.2, both on-wing and off-wing,
shall be performed at no cost to Boeing and/or Engine Manufacturer.

     

    6.5                  Improvement Parts and Engine
Refurbishment.

     

     

    Following
the completion of any corrective action pursuant to Paragraph 6.4, if subsequent
Basic Data show that the Cumulative Fleet Average Fuel Mileage Deterioration of
the Covered Aircraft exceeds the Aircraft Commitment, Boeing shall have the
option to provide or cause to be provided to Customer, at no charge, (except
life used on engine parts or parts utilized for maintenance) any airplane drag
improvement parts and/or engine TSFC improvement parts (Improvement
Parts) which, when installed in such Covered Aircraft or engines, would
result in an improvement in the cruise fuel mileage
performance.  Boeing shall provide and/or shall cause Engine
Manufacturer to provide, as appropriate, reimbursement for Customer’s
incorporation of such improvements, corrections, or changes at the warranty
labor rate then in effect between Boeing and Customer or Engine Manufacturer and
Customer, as applicable.  Boeing and/or Engine Manufacturer shall give
Customer reasonable advance written notice of the estimated on-dock date at
Customer’s maintenance base for any such Improvement Parts.

     

    If Boeing
elects to provide or causes to be provided Improvement Parts for such Covered
Aircraft or engines, then Customer and Boeing shall mutually agree upon the
details of such an Improvement Parts program.  To the extent Boeing
and/or Engine Manufacturer are required to support such a program, such support
shall be provided at no charge to Customer.

     

    


     

    


     

    


     

    If
Customer elects to incorporate Improvement Parts in such Covered Aircraft and/or
engines, they shall be incorporated in a timely manner and in accordance with
Boeing and Engine Manufacturer instructions.

     

    If
Customer elects not to incorporate Improvement Parts in such Covered Aircraft
and/or engines, or if Customer elects not to refurbish an engine which has
exceeded Four Thousand Five Hundred Fifteen (4,515) cycles since new or for more
than Three Thousand Three Hundred Ten (3,110) cycles since performance
refurbishment, and for which Boeing and/or Engine Manufacturer has recommended
refurbishment as part of its recommended corrective actions, subsequent Basic
Data shall be appropriately adjusted by an amount consistent with the
improvement in cruise fuel mileage performance which would have been realized
had such Improvement Parts been incorporated or had such engine refurbishment
been performed; provided, however, any such improvement in cruise fuel mileage
performance shall be reasonably substantiated by Boeing to
Customer.

     

    
      	
              7.  

            	
              Payments.

            


    

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    7.1                  Annual Excess Fuel Burn
Amount.

     

    
      	
               
      

            	
              [CONFIDENTIAL
      PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
      REQUEST FOR CONFIDENTIAL
TREATMENT].

            


    

     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    7.2                  Credit
Memorandum.

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    7.3.                  Credit
Adjustments.

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    7.4                  Limitation on Amount of
Credits.

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    
      	
              8.  

            	
              Duplication of
      Benefits

            


    

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    
      	
              9.  

            	
              Assignment
      Prohibited.

            


    

     

    Notwithstanding
any other provisions of the Purchase Agreement, the rights and obligations
described in this Letter Agreement are provided to Customer in consideration of
Customer’s becoming the operator of the Aircraft, and cannot be assigned, in
whole or in part, without the prior written consent of Boeing.

     

    
      	
              10.  

            	
              Exclusive
      Remedy.

            


    

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    
      	
              11.  

            	
              Confidential
      Treatment.

            


    

     

    Customer
understands and agrees that the information contained herein represents
confidential business information and has value precisely because it is not
available generally or to other parties.  Customer agrees to limit the
disclosure of its contents to employees of Customer with a need to know the
contents for purposes of helping Customer perform its obligations under the
Purchase Agreement and who understand they are not to disclose its contents to
any other person or entity without the prior written consent of
Boeing.

     

    Very
truly yours,

    


    THE
BOEING COMPANY

    


    


    By                                          

     

    


    


    Its           Attorney-In-Fact           

    


    


    If the
foregoing correctly sets forth your understanding of our agreement with respect
to the matters treated above, please indicate your acceptance and
approval.

    


    


    ACCEPTED
AND AGREED TO this              
day of _____ of 2008

    


    


    AMERICAN
AIRLINES, INC.

     

    By:                                                                                                      

    


    Its:                                                                         

    


    By:                                                                                                      

     

    Its:                                                                             


    
      
        
          P.A. No.
3219

          Performance
Retention Commitment

          BOEING
PROPRIETARY

        

         


      

      
         


        
          

        

      

      
         


        
          


          Attachment
A to

          Letter
Agreement 6-1162-TRW-0667

          Page   

        

      

    


    


     

    Determination of Cumulative
Fleet Average Fuel Mileage Deterioration

     

    For
purposes of this Letter Agreement, the “Cumulative Fleet Average Fuel Mileage
Deterioration” is the average cruise fuel mileage deterioration of the Covered
Aircraft.  The determination of the Fleet Average Mileage
Deterioration will be based on fuel mileage deterioration of individual Covered
Aircraft relative to their Baseline Performance Level cruise fuel mileage
performance as defined below.

     

    1.           Boeing
will provide Customer with the Boeing Airplane Performance Monitoring Program
(APM),
in effect at the time of delivery of the first Covered Aircraft, that shall be
used for data analysis during the Performance Retention Term .  For
purposes of this Letter Agreement, the Model Reference Level cruise fuel mileage
performance for the Covered Aircraft shall be as set forth in the
APM.

     

    2.           [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    3.           [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]..

     

    4.           The
“Current Deterioration” (expressed as a percentage) for each Covered Aircraft is
the difference between the Current Performance Level and the Baseline
Performance Level.

     

    5.           [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    6.           The
“Cumulative Fleet Average Fuel Mileage Deterioration” (expressed as a
percentage) will be determined for each Subsequent Monitoring Period by summing
the Fleet Average Fuel Mileage Deterioration values as determined in Paragraph 5
for each calendar month according to the following equation:

     

                            m

     

    
      	
               
      

            	
              [CONFIDENTIAL
      PORTION OMITTED AND FILE

            


    

     

     

    
      	
               
      

            	
              SEPARATELY
      WITH THE COMMISSION PURSUANT TO A

            


    

     

     

    
      	
               
      

            	
              REQUEST
      FOR CONFIDENTIAL TREATMENT].

            


    

     

     

    


     

     

    7.           [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

     

    



    
      
        
          P.A. No.
3219

          Performance
Retention Commitment

          BOEING
PROPRIETARY

        

         


      

      
         


        
          

        

      

      
         


        
          


          Attachment
B to

          Letter
Agreement 6-1162-TRW-0667

          Page   1

        

      

    


    


     

    Cruise Fuel Mileage
Performance Determination

     

    Customer
shall obtain cruise fuel mileage performance data in revenue service using the
Airplane Condition Monitoring System (ACMS).  This data will be
recorded during level flight cruise in steady state conditions.  Data
shall be obtained in accordance with the then current revision of the Airplane
Performance Monitoring Software User Guide (APM User Guide) and shall include
the parameters defined in the airplane model specific appendix during each such
data recording (Data Events).

     

    Boeing
will provide Customer with the Boeing Airplane Performance Monitoring Software
for data analysis.  Customer shall reduce and analyze data obtained
from the Data Events.  Such analysis shall be in accordance with the
methods set forth in the APM User Guide.  Customer’s analysis shall
include the determination of the fuel mileage, thrust required and fuel flow
required relative to the Model Reference Level.

     

    Customer
will maintain records of factors relating to fuel mileage
deterioration.  These factors will include (a) engine history, cockpit
instrumentation history and airframe history and condition of such Covered
Aircraft, (b) pertinent Covered Aircraft maintenance and operational procedures
used by Customer, (c) drag effects of any post delivery airframe and/or engine
changes incorporated in such Covered Aircraft, (d) sudden shifts in engine EGT
condition monitoring data, and (e) any other relevant factors.


    
      
        
          P.A. No.
3219

          Performance
Retention Commitment

          BOEING
PROPRIETARY

        

         


      

      
         


        
          

        

      

      
         


        
          


          Attachment
C to

          Letter
Agreement 6-1162-TRW-0667

          Page           


        

      

    


    


     

    Delivery Schedule for
Covered Aircraft

     

    [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].

    
      	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      


    


    
      
        
          P.A. No.
3219

          Performance
Retention Commitment

          BOEING
PROPRIETARY

        

         


      

      
         


        
          

        

      

      
         


        
          


          Attachment
D to

          Letter
Agreement 6-1162-TRW-0667

          Page    

        

      

    


    ANNUAL LIMITATION ADJUSTMENT
EQUATION

    


     

    (CALENDAR
YEARS 2012 AND ON)

    


    
      	
               (a)

            	
              [CONFIDENTIAL
      PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
      REQUEST FOR CONFIDENTIAL
TREATMENT].

            


    

    


    


    
      	
              (b)

            	
              [CONFIDENTIAL
      PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
      REQUEST FOR CONFIDENTIAL
TREATMENT].

            


    

    


    
      	
               (c)

            	
              [CONFIDENTIAL
      PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
      REQUEST FOR CONFIDENTIAL
TREATMENT].:

            


    

    


    


    
      	
              (i)  

            	
              [CONFIDENTIAL
      PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
      REQUEST FOR CONFIDENTIAL
TREATMENT].

            


    

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    
      	
               
      

            	
              (ii)

            	
              [CONFIDENTIAL
      PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
      REQUEST FOR CONFIDENTIAL
TREATMENT].

            


    

    


    
      	
               
      

            	
              (iii)

            	
              [CONFIDENTIAL
      PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
      REQUEST FOR CONFIDENTIAL
TREATMENT].

            


    

    


    
      	
              NOTE:

            	
              [CONFIDENTIAL
      PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
      REQUEST FOR CONFIDENTIAL
TREATMENT].

            


    

    



    
      
        
          P.A. No.
3219

          Performance
Retention Commitment

          BOEING
PROPRIETARY