Document:

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                                                                   EXHIBIT 10.52

                                                                  EXECUTION COPY

                                DELTA CONNECTION
                                    AGREEMENT

          This Agreement (this "Agreement"), dated and effective the 7th day of
June, 2002, is between Delta Air Lines, Inc., 1030 Delta Boulevard, Atlanta,
Georgia 30320 ("Delta") Chautauqua Airlines, Inc. ("Chautauqua" or "Operator"),
2500 S. High School Road, Suite 160, Indianapolis, Indiana 46241 and Republic
Airways Holdings, Inc. ("Republic"), 2500 S. High School Road, Suite 160,
Indianapolis, Indiana 46241.

          WHEREAS, Delta operates the Delta Connection program; and

          WHEREAS, Operator desires for Delta to perform and provide various
marketing, schedule and fare related, and other services for Chautauqua in
connection with the Delta Connection program; and

          WHEREAS, Delta desires for Operator to operate the Aircraft (as
hereinafter defined) as a Delta Connection Carrier in connection with the Delta
Connection program; and

          WHEREAS, Delta is willing to perform and provide various marketing,
schedule and fare related, and other services for Chautauqua in connection with
the Delta Connection program; and

          WHEREAS, this Agreement will enhance the ability of Operator and Delta
to serve the public and the communities that they serve or may choose to serve;
and

          NOW, THEREFORE, for and in consideration of the mutual undertakings
set for herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Delta, Operator and Republic,
intending to be legally bound, hereby agree as follows:

ARTICLE 1. FARES AND RULES PUBLICATION.

A.   DELTA CONNECTION PROGRAM AND APPOINTMENT OF DELTA AS AGENT. Chautauqua
hereby appoints Delta as its agent to publish its fares, schedules and related
information under Delta's two letter flight designator code in city pairs
specified by Delta on the fifteen (15), including one (1) spare, Embraer ERJ 135
aircraft and seven (7) Embraer ERJ 145 aircraft set forth on EXHIBIT A attached
hereto and any other aircraft subsequently agreed by the parties to be operated
by Chautauqua (collectively, the "Aircraft"), and Delta hereby accepts such
appointment. Delta hereby grants Chautauqua the authority to operate as a Delta
Connection Carrier, and Chautauqua hereby accepts such grant, to conduct air
transportation operating the Aircraft utilizing certain services together with
certain trademarks and service marks owned by Delta or which Delta has the right
to use, all as provided herein.

B.   FARES, RULES AND SEAT INVENTORY. Delta, in its sole discretion, shall
establish and publish all fares and related tariff rules for all seats on the
Aircraft, including fares and rules for local traffic in

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Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 406 of the Securities Act. The omitted
materials have been filed separately with the Securities and Exchange
Commission.
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the city pairs served by such Aircraft. Operator shall not schedule the
Aircraft, nor publish any fares, tariffs, or related information for the
Aircraft. In addition, Delta will control all seat inventory and revenue
management decisions for the Aircraft.

C.   SCHEDULES PUBLICATION. Delta, in its sole discretion, shall establish and
publish all schedules for the Aircraft, including city-pairs served,
frequencies, and timing of scheduled departures. Chautauqua shall operate the
Aircraft in the city pairs designated by Delta, subject to the frequency,
scheduling and other requirements established by Delta from time to time and in
a manner at least comparable to Chautauqua's operational standards as of the
date hereof.

     Delta will notify Chautauqua of schedule times, frequencies and related
information for the Aircraft as sufficiently in advance of the schedule
publication date so that the information can be properly disseminated to
Chautauqua for pilot and flight attendant staffing, and related operational
requirements. In all cases schedules shall make reasonable accommodation for
Chautauqua's operational needs, including without limitation, crew overnights
and maintenance requirements for the Aircraft.

     In the event Delta changes the hub location served by the Aircraft from
Orlando (MCO) to another location, Delta shall provide Chautauqua with 90 days
prior written notice of such change and Delta and Chautauqua shall meet as soon
as practicably possible to review and revise the Direct Costs and corresponding
Base Compensation as a result of such change in the manner provided in Section
4(E) hereof. In the event Delta opens or closes a non-hub station served or to
be served by Chautauqua, Delta shall provide Chautauqua with 60 days prior
written notice of such opening or closing unless such station is staffed by, or
to be staffed by, Chautauqua, in which case Delta shall provide Chautauqua with
90 days prior written notice of such opening or closing.

     Notwithstanding any other provision of this Agreement, Delta shall not
change the hub location served by Chautauqua to STL, MEM, BNA, MCI or any other
location within 50 statute miles of St. Louis, Missouri.

ARTICLE 2. EXCLUSIVITY.

A.   With the exception of (i) aircraft operated or committed to be operated for
American Airlines ("AA"), America West Airlines ("HP") and US Airways ("US")
pursuant to (a) codeshare agreements in place as of the date hereof between
Operator and each such carrier (each such agreement, an "Existing Codeshare
Agreement," and such agreements, collectively, the "Existing Codeshare
Agreements," and such aircraft, collectively, the "Committed Aircraft"), or (b)
any amendment to or modification of a Existing Codeshare Agreement, including an
agreement with a successor to such carrier that assumes an Existing Codeshare
Agreement by operation of law, in each case that does not increase the number of
aircraft that is subject to such Existing Codeshare Agreement beyond the number
of Committed Aircraft and the Option Aircraft (as defined below) subject to the
Existing Codeshare Agreement prior to such amendment or modification (a
"Permitted Codeshare Amendment"), (ii) the following option aircraft allocated
to existing Chautauqua codeshare partners as follows: AA-20 options, HP-12
options and US-25 options (collectively, the "Option Aircraft"), (iii) subject
to the rights and restrictions set forth below in Section 2(D), any Committed
Aircraft and/or Option Aircraft

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that need to be repositioned with another carrier due to the termination (on
whole or in part) or breach of an Existing Codeshare Agreement or a Permitted
Codeshare Amendment (the "Repositioned Aircraft" and together with the Committed
Aircraft and the Option Aircraft, the "Excluded Aircraft"), and (iv) any
Excluded Aircraft that are operated under a Reverse Codeshare Agreement (as
defined below), Operator agrees to list its flights only under Delta's code
during the Term of this Agreement (the "Delta Connection Flights"). For purposes
of this Agreement, a "Reverse Codeshare Agreement" is an agreement pursuant to
which Chautauqua operates Excluded Aircraft under the designator code of another
carrier or under Chautauqua's RP designator code and the other party to an
Existing Codeshare Agreement or a Permitted Codeshare Amendment remains
obligated to compensate Chautauqua with respect to flights operated under such
designator code.

B.   Operator must obtain prior written approval from Delta if it chooses to
enter into a code-sharing (or similar) arrangement with another carrier,
excluding, however (i) the Existing Codeshare Agreements with AA, HP or US (or
any successors to such carriers who assume an Existing Codeshare Agreement by
operation of law), (ii) the Permitted Codeshare Amendments, (iii) subject to the
rights and restrictions set forth below in Section 2(D), a code-sharing
arrangement that relates to the Repositioned Aircraft, and (iv) a Reverse
Codeshare Agreement. Notwithstanding anything herein to the contrary except as
provided in Section 2(D), any such new code-sharing arrangement shall strictly
prohibit Operator from operating any aircraft, other than Repositioned Aircraft
as set forth in Section 2(D), for the new code share partner into or out of [*]

C.   During the Term of this Agreement, Operator shall not operate any flights
under its own flight designator code into or out of [*] excluding flights
operated under a Reverse Codeshare Agreement.

D.   With respect to any Repositioned Aircraft, but subject to the rights of AA
under its existing Codeshare Agreement:

     (i)  prior to entering into an agreement with a third party to operate any
          such aircraft for another party or operating any such aircraft for
          itself, Operator shall first provide written notice to Delta offering
          the opportunity to purchase, lease, or codeshare (or any combination
          thereof) such aircraft on terms no less favorable as offered to any
          third party (the "Right of First Refusal for Repositioned Aircraft");
          and

     (ii) in the event that Delta does not exercise its Right of First Refusal
          for Repositioned Aircraft within 10 business days after receipt of
          notice thereof, Operator shall be prohibited during the remaining term
          of this Agreement from flying greater than [*] flights per day into
          each of [*] with the Repositioned Aircraft without Delta's prior
          written consent.

ARTICLE 3. COMPENSATION.

A. BASE COMPENSATION.

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     In exchange for the flying and operation of the Aircraft, Delta shall pay
Chautauqua one hundred percent (100%) of the Base Rate Costs, the Reimbursable
Costs and the Pass Through Costs (each as such term is defined below, and
collectively, the "Direct Costs") and 100% of the Other Reimbursable Costs
relating to all flights undertaken by Chautauqua in connection with the Delta
Connection Program using the Aircraft. In addition, in any month in which
Chautauqua achieves a completion rate for the Delta Connection Flights of at
least [*]% (or at least [*]% until such time as Chautauqua has taken delivery of
10 of the Aircraft plus 1 spare) Delta shall pay Chautauqua a mark-up of [*]
([*]%) of such Direct Costs incurred during such month (the "Mark-Up"), subject
to certain limitations set forth below.

(i)  The "Base Rate Costs" shall include all direct, cash operating costs,
(specifically excluding any prepayments except as expressly provided herein)
based upon the model attached hereto as EXHIBIT B and subject to the
minimum/maximum Aircraft Utilization Requirements set forth on EXHIBIT D (the
"Minimum Utilization Requirements").

(ii) The "Reimbursable Costs" shall include the following:

     (1)  ENGINE MAINTENANCE EXPENSE - Chautauqua's engine maintenance costs
          incurred pursuant to its agreement with Rolls Royce in the form and
          substance attached hereto as EXHIBIT F which has been approved by
          Delta.

     (2)  AIRCRAFT RENT/OWNERSHIP COSTS - Chautauqua's actual aircraft
          rent/ownership expenses for the Aircraft; provided, however any
          Mark-Up of the Aircraft Rent/Ownership Costs shall be capped at an
          amount equivalent to a monthly rate of $[*] for each ERJ-145 Aircraft
          and $[*] for each ERJ-135 Aircraft. In the event that Chautauqua
          leases an Aircraft, the Aircraft Rent/Ownership Costs for such
          Aircraft shall be the amount payable by Chautauqua under the
          respective lease. In the event Chautauqua owns an Aircraft subject to
          debt financing, the Aircraft Rent/Ownership Costs for such Aircraft
          shall be the amount payable by Chautauqua as debt payments in respect
          of such Aircraft, calculated as if [*]% of the Aircraft purchase price
          was financed by such debt. In the event that the amounts financed
          under such lease or debt financing do not include Chautauqua's third
          party costs and expenses incurred in connection with the acquisition
          and financing of such Aircraft, the Aircraft Rent/Ownership costs
          shall include, in addition to the amount of such lease payments or
          debt payments, the additional costs that would have been reflected in
          the lease or debt service payments, under the terms of the respective
          lease or debt financing, [*]% of such costs and expenses, not to
          exceed [*]% of the purchase price of the respective Aircraft (the
          "Additional Financing Amount").

     (3)  FUEL EXPENSE - Chautauqua's actual Aircraft fuel expenses; provided,
          however, any Mark-Up of the Fuel Expense shall be capped at an amount
          equivalent to a $[*] per gallon fuel price.

(iii) The "Pass Through Costs" shall include the following variable costs for
which Delta shall bear the risk of price fluctuations, provided that such costs
shall be reconciled on a monthly basis to reflect the actual costs incurred by
Operator:

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     (1)  Landing Fees;
     (2)  Hull Insurance and any other insurance required by Delta under
          Article 14;
     (3)  Passenger Liability Costs;
     (4)  War Risk Insurance;
     (5)  Glycol (but not if provided by Delta or an affiliate of Delta);
     (6)  Catering Costs;
     (7)  Recurring Training Costs;
     (8)  Property Taxes on the Aircraft; provided, however, any Mark-Up of any
          Property Tax shall be capped at an amount equivalent to [*]% of the
          value of the Aircraft.
     (9)  The cost of any Support Services (as defined below) and any ticketing
          services, in each case only if not provided by Delta at its own
          expense; and
     (10) All costs to change the livery of any Aircraft pursuant to any request
          by Delta.

B. OTHER REIMBURSABLE COSTS.

     Delta shall reimburse Chautauqua for one hundred percent (100%) of the
costs incurred for the following items, but it is expressly agreed that no
Mark-Up of such costs shall be paid by Delta:

          (1)  Any Federal Aviation Administration ("FAA") or Department of
               Transportation ("DOT") fines administered or levied against
               Operator due to an action or omission principally caused by Delta
               or an affiliate of Delta; and

          (2)  Start-Up Training Costs associated with operating the Aircraft;
               provided, however in no event shall Delta be required to
               reimburse Chautauqua in excess of $[*] in aggregate for such
               costs.

C. NON-REIMBURSABLE COSTS.

     The parties hereby acknowledge and agree that Delta SHALL NOT be
responsible, nor reimburse, Operator for any of the following costs:

          (1)  Any and all [*] and/or [*];

          (2)  Any and all FAA or DOT fines administered or levied against
               Operator due to action or omission not principally caused by
               Delta or an affiliate of Delta; and

          (3)  Any depreciation, amortization or interest expense relating to
               the Aircraft, except to the extent included in the Aircraft
               Rent/Ownership Costs or the model attached as EXHIBIT B.

D. INCENTIVE COMPENSATION.

1.   MONTHLY INCENTIVE COMPENSATION. In addition to the Base Compensation (as
defined below), Chautauqua shall have the opportunity to earn additional
compensation (the "Monthly Incentive Compensation") based upon its completion
rate (actual) and on-time arrival rate for each month,

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each in connection with the operation of the Aircraft. For each month during the
Term of this Agreement that Chautauqua has a completion rate for its Delta
Connection Flights of [*]% or greater, Delta shall pay Chautauqua an additional
[*] ([*]%) Mark-Up of the Direct Costs relating to such month. In addition, for
each month during the Term of this Agreement that Chautauqua has an on-time
arrival rate (i.e. within 15 minutes of the scheduled arrival time) for its
Delta Connection Flights of [*]% or greater, Delta shall pay Chautauqua an
additional [*] ([*]%) Mark-Up of the Direct Costs relating to such month.

2.   SEMI-ANNUAL INCENTIVE COMPENSATION. In addition to the Base Compensation
and the Monthly Incentive Compensation, Chautauqua shall have the opportunity to
earn additional compensation (the "Semi-Annual Incentive Compensation") based
upon its performance in certain performance categories as set forth herein.
During each six-month period (measured from each January 1 through June 30 and
July 1 through December 31) during the Term of this Agreement, Delta shall pay
Chautauqua an additional [*] ([*]%) Mark-Up of the Direct Costs for each of the
following performance goals that Chautauqua achieves during the applicable
six-month period:

          (i)    a completion rate for its Delta Connection Flights of [*]
                 ([*]%) or greater;

          (ii)   an on-time arrival rate for its Delta Connection Flights of [*]
                 ([*]%) or greater; and

          (iii)  a baggage claim rate for its Delta Connection Flights of less
                 than [*] claims per thousand passengers.

C. ACCOUNTING PROVISIONS.

     Delta shall retain all revenues (passenger, cargo, mail or any other
revenue, including without limitation, any guaranteed or incentive payments from
airport, local or municipal authorities in connection with scheduling flights to
such airport or locality) in connection with the operation of the Delta
Connection Flights. Operator shall promptly forward to Delta all monies with
respect to all airline ticket sales, on-board sales, baggage charges, passenger
charges, cargo sales and all other revenue collected in connection with the
operation of the Aircraft (including credit card transactions).

     On the 5th, 10th, 15th and 20th day of each month (or if not a business
day, on the following business day) Delta will advance to Chautauqua twenty-five
percent (25%) of the estimated monthly Direct Costs and Mark-Up (collectively,
the "Base Compensation"). In computing the amount of the advance, Delta will use
the projected fuel costs, and Delta will estimate the anticipated number of
weekly block hours based on the greater of (i) the scheduled block hours of the
Aircraft and (ii) the Minimum Utilization Requirements.

     Not later than twenty-five (25) days following the end of each month, Delta
and Operator will reconcile the actual costs incurred by Chautauqua for the Base
Compensation (subject to the Minimum Utilization Requirements), with the
estimated payments made pursuant to the previous paragraph. The reconciliation
will include a comparison of Chautauqua's actual completion rate for such month
with the minimum completion rate required to achieve the Mark-Up pursuant to
Section 3(A) hereof, any applicable Monthly Incentive Compensation based on
Chautauqua's actual

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completion rate and on-time arrival rate for the applicable month, and in the
event such month is the end of a Semi-Annual Incentive Compensation measuring
period, will also include any applicable Semi-Annual Incentive Compensation that
may be due based upon Operator's performance during such period. Within two (2)
business days of completing such reconciliation, Delta or Operator, as the case
may be, shall wire transfer to an account designated by the other party, monies
equal to the reconciled amount.

     Notwithstanding anything herein to the contrary, in the event Chautauqua is
unable to operate any of the Aircraft, or any of the Delta Connection Flights,
due to a strike, labor dispute, work stoppage or similar event, provided in each
such case that such event is substantially within the control of, or caused by,
some action or inaction of Operator or relates to the Aircraft, Delta shall not
be obligated to pay Chautauqua any Base Compensation, incentive compensation, or
other amounts, in connection with such non-operated Aircraft and Delta
Connection Flights. However, in the event Chautauqua is unable to operate any of
the Aircraft, or any of the Delta Connection Flights, due to a strike, labor
dispute, work stoppage, or similar event, that is substantially within the
control of, or caused by, some action or inaction of Delta, Delta shall be
obligated to pay Chautauqua Base Compensation based on the Minimum Utilization
Requirements, and Chautauqua's eligibility for any Monthly Incentive
Compensation or Semi-Annual Incentive Compensation shall be calculated without
regard to any cancellations, delays or complaints caused by or relating to such
events. In the event Chautauqua is unable to operate any of the Aircraft, or any
of the Delta Connection Flights, due to an event that is not substantially
within the control of, or caused by, some action or inaction of either
Chautauqua or Delta, Delta shall be obligated to pay Chautauqua's fixed costs
(i.e. labeled as "Per Scheduled Aircraft Per Day" and "Fixed Per Day" on EXHIBIT
B attached hereto, as well as Aircraft Rent/Ownership Costs, Hull Insurance,
Property Taxes and Heavy Inspection Costs for inspections already in process
prior to any such event), but not any variable costs or Mark-Up, with respect to
such non-operated Aircraft and Delta Connection Flights during the period that
Chautauqua is unable to operate such Aircraft or the Delta Connection Flights.

D. REVIEW OF BASE AMOUNT AND SERVICE LEVELS.

     Operator shall maintain complete and accurate books and records to support
and document all revenues, costs and expenses related to the Aircraft hereunder,
in accordance with generally accepted accounting principles consistently applied
and in accordance with the accounting policies and procedures used by the
parties to develop the Direct Costs. Prior to the setting of the Annual Rate
Plan, Delta's in-house accounting staff and any independent accountants selected
by Delta shall be entitled, following reasonable notice to Operator, to review
and inspect Operator's books, records and costs incurred with respect to
services provided in prior periods, the service levels achieved, and the
determination of charges due pursuant to this Agreement for the purpose of (i)
prospectively adjusting the Base Rate Amount in connection with an annual review
pursuant to Section 3(E) hereof, or (ii) auditing Reimbursable Costs, Pass
Through Costs or Other Reimbursable Costs.. Any such review will be conducted
during regular business hours at Operator's offices.

E. COST CHANGES.

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     Operator shall provide Delta an estimate of the next calendar year's
projected operating costs by September 30th of each year during the Term. Delta
will have the right to review and provide comments and suggestions to such
estimate, and such suggestions will be duly considered by Operator. Operator and
Delta hereby agree to meet promptly after each September 30th of each year
during the Term in order to review and revise the Direct Costs and corresponding
Base Compensation, as appropriate, for the subsequent calendar year utilizing
the same methodology as initially used to determine the Direct Costs and Base
Compensation (the "Annual Operating Plan") and will use commercially reasonable
efforts to reach agreement on an Annual Operating Plan for the next calendar
year prior to December 31 of each year. In the event that the parties are unable
to agree on any Annual Operating Plan, the parties further agree that (i) at the
request of either party, and at the expense of the requesting party, the parties
shall engage a mutually agreed independent consultant, to determine the
applicable Annual Operating Plan, [*], and (ii) if no new Annual Operating Plan
has been adopted by the beginning of the next calendar year, the existing Annual
Operating Plan shall be used on an interim basis to determine the Direct Costs
and Base Compensation, subject to reconciliation and retroactive adjustment upon
the adoption of a new Annual Operating Plan. Any determination by the
independent consultant shall be binding on and implemented by the parties. The
Annual Rate Plan will apply for all completed flights during the calendar year
applicable to such plan, and with respect to the Base Rate Costs only, Operator
will bear any risks of additional expenses not reflected therein. Operator shall
be entitled to payment of all Reimbursable Costs, Pass Through Costs and Other
Reimbursable Costs based on the actual amounts incurred without regard to the
Annual Rate Plan. Operator will use its commercially reasonable efforts
consistent with the business practices and policies used to develop the first
years Direct Cost model and with the prudent operation of its business to
minimize its costs to operate the Aircraft in accordance with this Agreement.
Operator and Delta each agree to notify the other as soon as reasonably
practicable of any anticipated or potentially substantial change of cost or
operational performance.

ARTICLE 4. AIRPORT RELATED AND TICKETING SERVICES.

A.   TICKETING SERVICES. Delta will provide its own primary airport ticketing
services, and, if applicable, Chautauqua will provide supplemental ticketing
services for Delta Connection Flights at Delta's airport ticketing locations and
will use Delta ticket stock for such purposes.

B.   SIGNAGE. Delta will design, provide and pay for appropriate airport and
other signage to reflect the Delta Connection and the relationship between
Chautauqua and Delta. The nature and type of such signage will be in the sole
discretion of Delta, subject to any airport, governmental or quasi-governmental
restrictions or requirements. Delta will be responsible for installing and
maintaining all such signage, but the parties will mutually determine which
party will obtain any necessary formal or informal approvals from appropriate
airport or other authorities to install such signage. The parties will fully
cooperate with each other in all endeavors relating to such signage and any
necessary approvals.

ARTICLE 5. CUSTOMER SERVICES.

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A.   Operator will handle all customer related services in connection with the
Delta Connection Flights in a professional, businesslike and courteous manner.
In order to insure a high level of customer satisfaction for the Delta
Connection Flights, Operator will:

     1.   establish and maintain customer handling procedures and policies that
          are similar to those utilized by Delta; and

     2.   establish, maintain and enforce employee conduct, appearance and
          training standards and policies that are similar to those utilized by
          Delta.

B.   Operator and Delta will periodically meet to discuss and review Operator's
customer handling procedures and policies and Operator's employee conduct,
appearance and training standards and policies to insure compliance with this
Article 5. Each party will seek to set forth concerns and complaints under this
Article 5 in writing to the other party. To the extent Delta advises Operator of
any deviation from Article 5(A) hereof, the parties shall meet to mutually
determine appropriate solutions and to agree to the terms of a written
corrective action plan and the timing of its implementation. In the event
Operator shall fail, in any material respect, to adopt or implement any such
agreed written corrective action plan in the time period described therein, such
failure may be deemed a material breach of this Agreement.

C.   Chautauqua shall adopt as its own Delta's Terms and Conditions of Contract
of Carriage ("Contract of Carriage"), as amended from time to time, and be bound
by its terms with respect to its operation of Delta Connection Flights.

ARTICLE 6. TRAFFIC DOCUMENTS AND RELATED PROCEDURES. To the extent that
Chautauqua will handle traffic documents or passenger handling services in
connection with any Delta Connection Flights, the following terms and conditions
shall apply:

A.   Pursuant to mutually acceptable procedures, Delta will periodically provide
Chautauqua with Delta machine and manual ticket stock, miscellaneous charges
orders, credit card refund drafts, credit card refund vouchers, FIMS, expense
vouchers, expense checks, travel credit vouchers and other related documents
(collectively referred to as "Traffic Documents"). Delta will maintain a supply
of Traffic Documents at a suitable location and, upon written request from
Chautauqua, will provide Chautauqua with appropriate supplies of Traffic
Documents.

B.   Unless otherwise agreed to by Delta in writing, Traffic Documents may be
used, completed, validated and issued only by Chautauqua and only in connection
with transactions related to Delta Connection Flights and for no other purpose.

C.   Chautauqua will promptly surrender and return all Traffic Documents to
Delta upon Delta's written request.

D.   Chautauqua will maintain records of the Traffic Documents in a manner and
format acceptable to Delta. Chautauqua will acknowledge receipt in writing of
all Traffic Documents in the manner prescribed by Delta.

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E.   Chautauqua will conform with and abide by all of Delta's rules and
regulations regarding the Traffic Documents.

F.   Chautauqua will take all reasonable and necessary measures to safeguard the
Traffic Documents as of the time of receipt and thereafter and will maintain the
Traffic Documents in accordance with mutually agreed upon security procedures.
Chautauqua shall be responsible for all risk of loss, use, misuse,
misappropriation or theft of Traffic Documents as of the time Chautauqua takes
possession of the Traffic Documents.

G.   REPORTING AND REMITTING WITH RESPECT TO TRAFFIC DOCUMENTS.

     1.   On a daily basis, Chautauqua will provide Delta with a report for each
Chautauqua ticketing location of all ticketing and related transactions on
Traffic Documents for the prior day. Such report will be in a format determined
by Delta and will include, without limitation, all credit card transactions and
supporting documentation.

     2.   Chautauqua will issue all Traffic Documents, and will collect
appropriate charges, in accordance with the tariffs, fares, rates, rules and
regulations of Delta and any other applicable carriers. Operator shall be
responsible for all undercharges and incorrect fares, rates and charges on
Traffic Documents issued by or for Chautauqua, and Delta may deduct from sums
due Operator or bill Operator for the amount of any such undercharges or
incorrect fares, rates and charges. The amount of such undercharges will be
determined by utilizing the ACH Procedures for passenger tickets and on a direct
billing basis for baggage/cargo related items.

H.   REFUND VOUCHERS.

     1.   Delta will use Delta refund vouchers for all refund transactions
handled by Delta involving Chautauqua.

     2.   Chautauqua will use Delta refund vouchers, and Delta credit card
refund vouchers for credit card sales refunds, and will comply with Delta's
rules and regulations for handling and processing such refunds. Delta will
supply Chautauqua with an adequate supply of refund vouchers and credit card
refund vouchers.

ARTICLE 7. FREQUENT FLYER PARTICIPATION. During the Term of this Agreement, the
parties agree that passengers on Chautauqua's Delta Connection Flights will be
eligible to participate in the Delta SkyMiles frequent flyer program or any
other similar program developed by Delta (the "Program") and all Program award
tickets will be honored for travel on Delta Connection Flights on the following
terms and conditions:

A. ADMINISTRATION. Administration of the Program shall be performed by and at
the cost of Delta. Delta will promote and administer the Program.

B. PROGRAM INFORMATION. Title and full and complete ownership rights to
Program membership data and information developed by Delta, wherever located,
shall remain with Delta or an affiliate of Delta. Operator understands and
agrees that such data and information constitutes Delta's (or its

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affiliates') proprietary information. Any membership lists, labels, data, or
other compiled membership information supplied to Operator in any form and any
and all copies thereof are to be used by Operator exclusively in the performance
of its obligations under this Agreement and will not be otherwise used, sold,
licensed, leased, transferred, stored, duplicated or transmitted, in any form or
by any means, without Delta's prior written consent. All such information will
either be returned to Delta or destroyed at Delta's request.

ARTICLE 8. SUPPORT SERVICES. Delta may provide certain support services to
Chautauqua, including customer reservations, customer service, ground handling,
ramp handling, station operations, on call maintenance, fuel service, de-icing,
baggage transfers, security and passenger screening, pricing, scheduling,
revenue accounting, revenue management, frequent flyer, advertising and similar
support services (collectively, "Support Services") in connection with the
operation of the Aircraft, and Delta will be responsible for all taxes and fees
associated therewith. Any and all services provided by Delta to Operator shall
be at no cost to Operator and shall not be subject to any reimbursement or any
Mark-Up.

ARTICLE 9. AUTOMATION SERVICES. Delta agrees to provide Chautauqua the following
automation and related services for the Delta Connection Flights, and Chautauqua
agrees to participate in such services in the manner described below.

A. INTERNAL RESERVATIONS EQUIPMENT. Delta shall provide or arrange for the
provision to Chautauqua of an electronic reservations system (currently referred
to as "Deltamatic" but including any successor reservations system adopted by
Delta) and shall provide Chautauqua with: (i) the ability to access passenger
name records, (ii) automated ticketing capabilities, (iii) operational messaging
switching capabilities, (iv) the ability to update Delta Connection Flight
information, (v) the ability to distribute flight releases and weather packages,
and (vi) perform other reservations-related functions for the Delta Connection
Flights (Deltamatic and any successor system are hereinafter referred to as the
"Res System"). Delta reserves the right to modify the functionality of the Res
System at any time. Chautauqua will use the Res System made available by Delta
for the Delta Connection Flights only.

B. DELTA'S RIGHTS AND OBLIGATIONS.

     1.   Delta will install or cause to be installed the equipment requested by
Chautauqua at the locations set forth on EXHIBIT C to this Agreement and shall
provide Chautauqua connection to the Res System. The equipment described on
EXHIBIT C and any software installed on the Equipment at the time of its
delivery to Chautauqua are hereinafter referred to as the "Equipment."
Chautauqua understands and agrees that: (i) all Equipment shall remain the sole
property of Delta; (ii) Chautauqua shall not remove any identifying marks from
the Equipment; (iii) Chautauqua shall not subject the Equipment to any lien; and
(iv) Delta may enter Chautauqua's premises to remove the Equipment immediately
upon termination of this Agreement. EXHIBIT C may be amended from time to time
by mutual agreement of the parties to reflect the installation, removal or
relocation of Equipment.

     2.   Delta will provide initial and recurrent training to Chautauqua
training staff and other key designated personnel in the use of the Res System,
at Delta's training centers unless otherwise

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agreed. Delta may remove from a training program any Chautauqua employee who is
not satisfactorily participating therein.

     3.   Delta will provide, or arrange to provide, all repairs and maintenance
services required for the Equipment and will use reasonable business efforts to
keep the Equipment and the Res System in good repair and condition. Chautauqua
will not perform or attempt to perform repairs or maintenance of any kind on the
Equipment without prior consultation with Delta and will promptly contact Delta
regarding the need for repairs or maintenance.

C.   CHAUTAUQUA'S RIGHTS AND OBLIGATIONS.

     1.   Chautauqua will not for any reason relocate or remove any of the
Equipment without Delta's prior written consent. Delta will pay all costs
associated with the installation, relocation or removal of Equipment.

     2.   Chautauqua will use the Equipment and the Res System in strict
conformity with the training and operating instructions provided by, or arranged
to be provided by, Delta. Without limiting the generality of the foregoing,
Chautauqua will not use the Res System to develop or publish any reservation,
ticketing, sales, cargo, tariff or other guide, to provide services not
authorized by this Agreement to third parties, to train persons other than
Chautauqua's employees in the use of the Equipment or the Res System, or for
other uses designated by Delta in writing as prohibited. Chautauqua may not
publish, disclose or otherwise make available to any third party the
compilations of air carrier service or fares obtained from the Res System;
provided, however, that Chautauqua may use specific air carrier service and fare
data for the benefit of its customers.

     3.   Chautauqua will ensure that its employees attend training sessions
related to the Res System, and it is Chautauqua's responsibility to insure that
each employee receives full and adequate training on the Res System.

     4.   Chautauqua will protect the Equipment from loss, damage or theft and
shall prevent its unauthorized use or improper operation. Chautauqua will make
no alterations to the Equipment and will return the Equipment to Delta upon the
termination of this Agreement in the same condition as received, excepting only
ordinary wear and tear in the normal course of Chautauqua's operations.
Chautauqua will obtain and maintain insurance for the Equipment against all
risks of damage and loss, including without limitation loss by fire, theft and
such other risks of loss as are customarily insured in a standard all-risk
policy. Such insurance shall also provide the following:

          (a)  Full replacement value coverage for the Equipment (subject to
policy deductibles);

          (b)  An endorsement naming Delta as the loss payee to the extent of
its interest in the Equipment; and

          (c)  An endorsement requiring the insurer to give Delta at least
thirty (30) days prior written notice of any intended cancellation, nonrenewal
or material change of coverage; provided that only ten (10) days prior written
notice of cancellation, nonrenewal or material change

                                     - 12 -
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of coverage need be given in the event that such cancellation, nonrenewal or
material change in coverage is caused solely by failure to make a premium
payment.

Upon request by Delta, Operator will promptly provide satisfactory evidence of
the insurance required pursuant to this Section 9(C)(4). Notwithstanding the
foregoing, Operator shall be liable to Delta for any loss or damage to the
Equipment, regardless of cause, occurring while the Equipment is in the
possession, custody or control of Operator.

     5.   Operator waives any proprietary rights that it may have with respect
to information entered into the Res System.

D.   ENTRY AND INSPECTION. Delta personnel and persons designated or authorized
by Delta may enter Operator's premises during normal business hours for the
purposes of (a) monitoring, inspecting, and reviewing Operator's use of and
operations with respect to the Res System, (b) performing repairs or maintenance
on the Equipment, (c) installing, removing, replacing or relocating the
Equipment (unless otherwise permitted by this Agreement), or (d) training or
retraining Operator's employees in the use of the Res System; provided that such
activities may not unreasonably interfere with Operator's business.

E.   LIMITATIONS ON LIABILITY. In addition to any other limitations on liability
set forth herein:

     1.   Delta is not responsible for errors or inaccuracies in the
availability records, fare quotes, or other information contained in the Res
System at any time, for any planned or unplanned interruptions, delays or
malfunctions in the operation of the Res System or the Equipment or for the
merchantability or fitness for a particular purpose of any of the data or
Equipment made available to Operator.

     2.   OPERATOR HEREBY WAIVES AND RELEASES DELTA AND ITS AFFILIATES AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM ANY AND ALL
OBLIGATIONS AND LIABILITIES AND ALL RIGHTS, CLAIMS AND REMEDIES OF OPERATOR
AGAINST DELTA OR ITS AFFILIATES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, DUE TO ANY
DEFECTS OR INTERRUPTIONS OF SERVICE IN, OR ERRORS OR MALFUNCTIONS BY, SOFTWARE,
THE EQUIPMENT OR THE RES SYSTEM, INCLUDING ALL LIABILITY, OBLIGATION, RIGHT,
CLAIM, OR REMEDY IN TORT, AND INCLUDING ALL LIABILITY, OBLIGATION, RIGHT, CLAIM
OR REMEDY FOR LOSS OF REVENUE OR PROFIT OR ANY OTHER DIRECT, INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES. FURTHER, DELTA DISCLAIMS AND
OPERATOR HEREBY WAIVES ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR INTENDED USE RELATING
TO THE RES SYSTEM, THE EQUIPMENT, DATA, OR SERVICES FURNISHED HEREUNDER.

F.   PATENT AND COPYRIGHT INDEMNITY. Delta will defend or settle, at its own
expense, any action brought against Operator to the extent that it is based on a
claim that the Res System provided by Delta pursuant to this Agreement, in its
normal use, or any part thereof, infringes any U.S. copyright or patent; and
Delta will pay those costs, damages and attorney's fees finally awarded against

                                     - 13 -
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Operator in any such action attributable to any such claim, but such defense,
settlements and payments are conditioned on the following: (1) that Delta shall
be notified promptly in writing by Operator of any such claim; (2) that Delta
shall have sole control of the defense of any action on such claim and of all
negotiations for its settlement or compromise; (3) that Operator shall cooperate
with Delta in a reasonable way to facilitate the settlement or defense of such
claim, provided that Delta shall pay all of Operator's reasonable expenses
(including legal fees) in connection with any such cooperation requested by
Delta; and (4) should such Res System become, or in Delta's opinion be likely to
become, the subject of such claim of infringement, then Operator shall permit
Delta, at Delta's option and expense, either to (a) procure for Operator the
right to continue using the Res System, or (b) replace or modify the same so
that it becomes noninfringing and functionally equivalent, or (c) upon failure
of (a) and (b) above despite the reasonable efforts of Delta, accept immediate
termination of this Agreement as it relates to such system. This paragraph (F)
states the entire liability of Delta with respect to the infringement of
copyrights and patents by the Res System provided hereunder or the operation
thereof.

ARTICLE 10. OPERATION PERFORMANCE.

A.   Operator agrees to provide the following information to Delta for each
month during the Term of this Agreement on a daily basis within three (3) days
after each day; provided, however, the information in sub-paragraph (iii) below
shall be provided monthly within ten (10) days after the last day of each such
month:

               (i)   The number of scheduled Delta Connection Flights that do
not arrive at their scheduled destination prior to 15 minutes after their
respective scheduled arrival times for such day. Operator understands that it is
Delta's current goal that participants in the Delta Connection Program maintain
a monthly percentage of on-time arrivals at [*]% of all flights flown or
greater.

               (ii)  The completion rate (actual) of the Delta Connection
Flights for such day. Operator understands that it is Delta's current goal that
participants in the Delta Connection Program maintain a monthly completion rate
(actual) of [*]% or greater.

               (iii) The number of complaints per 1,000 passengers flown on
Delta Connection Flights during such month. Operator understands that it is
Delta's current goal that participants in the Delta Connection Program maintain
a number of complaints at [*] per 1,000 passengers flown or lower.

B.   In the event Operator fails to meet any of the standards set forth in
Section 10(A), Operator agrees to discuss with Delta such performance and
potential ways to improve such performance at Delta's request. Operator agrees
to develop in consultation with Delta a written remedial plan designed to
correct such failure and promptly implement any such written remedial plan.

ARTICLE 11. TERM AND TERMINATION.

A.   This Agreement is effective on the date first written above and shall
continue until the tenth (10th) anniversary of such date (such period, and any
extension or renewal thereof, the "Term"). At

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the end of such initial ten-year term, Delta shall have the right to extend the
term of the Agreement for an additional five (5) years on the same terms and
conditions. In the event of a Merger (as defined below) or Change of Control (as
defined below) of Chautauqua or Republic, Delta shall have the right to extend
the term of the Agreement for an additional ten (10) years beyond the applicable
termination date of this Agreement pursuant to this Section 11(A).

B.   Notwithstanding the provisions of Section 11(A), either party may terminate
this Agreement immediately upon the delivery of written notice to the other
party if the other party files a voluntary petition in bankruptcy, makes an
assignment for the benefit of creditors, fails to secure dismissal of any
involuntary petition in bankruptcy within sixty (60) days after the filing
thereof, or petitions for reorganization, liquidation, or dissolution under any
federal or state bankruptcy or similar law, or if any such actions are imminent.

C.   Notwithstanding the provisions of Section 11(A), in the event of a material
breach of this Agreement by either party remaining uncured for more than thirty
(30) days after receipt of written notification of such breach by the
nonbreaching party, or in the case of a matter which cannot reasonably be cured
within such thirty (30) day period, as to which the party receiving such notice
has not substantially made progress toward curing such breach, then the
nonbreaching party may immediately terminate this Agreement at its sole option.

D.   Notwithstanding the provisions of Section 11(A), in the event a Force
Majeure Event (as defined in Article 21) substantially prevents one party's
performance of its obligations pursuant to this Agreement, for a period of two
(2) or more consecutive months, the other party may terminate this Agreement
upon thirty (30) days prior written notice to the party affected by the Force
Majeure Event.

E.   Notwithstanding the provisions of Sections 11(A), (B), (C) and (D), Delta
shall have the right to terminate this Agreement immediately and at its sole
option upon the occurrence of one or more of the following events by providing
written notice of such termination to Operator:

          (i)    Republic or Chautauqua agrees to merge into or with any entity,
agrees to be acquired by any entity, agrees to sell substantially all of its
assets or enters into a letter of intent, or similar document, to merge into or
with any entity, to be acquired by any entity, or to sell substantially all of
its assets unless (A) Republic or Chautauqua, as applicable, is the acquiring or
surviving entity, or (B) the ultimate beneficial ownership of the surviving
entity immediately following such transaction is substantially similar (i.e. at
least 75% common ownership) to the ultimate beneficial ownership of Republic or
Chautauqua as the case may be immediately prior to such transaction (each such
event that is not subject to such exceptions, a "Merger");

          (ii)   The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
(the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of more than forty-nine
percent (49%) of either (a) the then outstanding shares of common stock of
Republic or Chautauqua, or (b) the combined voting power of the then outstanding
voting securities of Republic or Chautauqua entitled to vote generally in the
election of such party's directors, unless such Person is (A) Wexford Capital
LLC or an affiliate

                                     - 15 -
<Page>

thereof, or (B) a Person whose ultimate beneficial ownership immediately
following such transaction is substantially similar (i.e. at least 75% common
ownership) to the ultimate beneficial ownership of Republic or Chautauqua as the
case may be immediately prior to such transaction, (each such event that is not
subject to such exceptions, a "Change of Control");

          (iii)  Chautauqua's product quality with respect to its operation of
the Aircraft is not reasonably satisfactory to Delta thirty (30) days after
Delta has provided Chautauqua with written notice specifying Delta's
dissatisfaction with the product quality and proposing remedial measures to be
implemented by Chautauqua;

          (iv)   in the event Chautauqua fails to maintain a completion rate of
[*]% with respect to the Delta Connection Flights during any [*] period
commencing with the date that at least 11 Aircraft (10 Aircraft and 1 Spare)
have been scheduled to be placed into service in the Delta Connection Program;

          (v)    Chautauqua's failure to pass, in Delta's reasonable judgment, a
safety and codeshare audit to be conducted by Delta prior to the commencement of
any operation of any Delta Connection Flights; and

          (vi)   Chautauqua's level of safety is not reasonably satisfactory to
Delta; provided, however, in such event, this Agreement shall first be suspended
for up to thirty (30) days from the date that Delta provides written notice to
Chautauqua of its dissatisfaction, and then at the end of such up to 30-day
period, Chautauqua's level of safety is still not reasonably satisfactory to
Delta, Delta may immediately terminate this Agreement by delivery of written
notice to Chautauqua. In the event this Agreement is suspended under this
Section 11(E)(vi), Delta shall not be obligated to make any payments to
Chautauqua in respect of any services that would have been provided by
Chautauqua during the period of such suspension or to reimburse Chautauqua for
any costs or expenses incurred by Chautauqua during such period.

F.   Notwithstanding the provisions of Sections 11(A), (B), (C), (D) and (E)
hereof, Delta may terminate this Agreement, with or without cause, in its sole
discretion, in whole or in part, on not less than one hundred eighty (180) days'
prior written notice to Operator; provided, however, that such notice shall not
be given prior to thirty-six (36) months after the 22nd Aircraft is scheduled to
be placed into service in the Delta Connection Program, and provided further,
that Delta may not initially reduce the number of Aircraft in service to a
number that is less than twelve (12) other than through a complete termination
of the Agreement. [*]

 G.  (i)   In the event Delta terminates this Agreement, in whole or in part,
pursuant to Section 11(F) hereof, or in the event Operator terminates this
Agreement pursuant to Section 11(B), 11(C) or 11(D) hereof, Operator shall have
the right to require Delta (a) with respect to

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all or any of the terminated Aircraft that are owned by Operator at Operator's
option (I) to purchase the Aircraft for the Agreed Amount (as defined below), or
(II) to sublease the Aircraft from Operator on the Sublease Terms (as defined
below), or (b) with respect to all or any of the terminated Aircraft that are
leased by Operator to assume the lease with respect to such Aircraft, provided
that any assumption by Delta of such lease must be on terms that are no more
onerous than the terms that applied to Operator (with no assumption penalties,
fees or similar costs to Delta other than taxes, if any, and Delta's own fees
and expenses incurred to consummate such transfer or assumption) (the "Put
Right"). Operator shall have the right to exercise the Put Right by providing
written notice to Delta within thirty (30) days after the effective date of any
event giving rise to the Put Rights (the "Put Deadline").

     (ii)  In the event Delta terminates this Agreement, in whole or in part and
Operator does not exercise its Put Right within the Put Deadline, Delta shall
have the right, which it may exercise by providing written notice to Operator
within thirty (30) days after the earlier of (a) the expiration of the Put
Deadline, (b) Delta's receipt of written notice from Operator that Operator will
not exercise the Put Right with respect to any or all of the terminated
Aircraft, or (c) in the event Operator does not have a Put Right, the effective
date of such termination, to require Operator (y) with respect to all or any of
the terminated Aircraft that are owned by Operator at Delta's option (I) to sell
the Aircraft for the Agreed Amount, or (II) to sublease the Aircraft to Delta on
the Sublease Terms, or (z) with respect to all or any of the terminated Aircraft
that are leased by Operator to assume the lease with respect to such Aircraft,
provided that any assumption by Delta of such lease must be on terms that are
the same or better than the terms that applied to Operator (with no assumption
penalties, fees or similar costs to Delta other than taxes, if any, and Delta's
own fees and expenses incurred to consummate such transfer or assumption) (the
"Call Right"). In connection with any leased Aircraft, Operator hereby covenants
and agrees that Operator shall obtain any and all third party consents,
including, without limitation, the lessors of the Aircraft, necessary to
effectuate the Put Right and the Call Right without penalty, fee or additional
cost (other than taxes, if any, and transaction fees and expenses) to Delta
simultaneously with the execution of any such lease.

     (iii) For purposes of this Section 11(G): (a) the Agreed Amount for an
Aircraft shall be [*]

H.   In the event that Delta terminates this Agreement, in whole or in part,
pursuant to Section 11(F), during the period commencing on the date Operator
receives Delta's notice of termination and ending on the effective termination
date of the portion of the Agreement being terminated by Delta, the Mark-Up of
the Direct Costs attributable to the operation of the to-be-terminated Aircraft
shall be [*]; provided, however, during such same period, such operations shall
not be eligible for any Monthly Incentive Compensation or Semi-Annual Incentive
Compensation.

I.   In the event Delta terminates this Agreement pursuant to Section 11(B),
(C), (D) or (E), Delta shall also have the Call Right as set forth in Section
11(G), which must be exercised in the manner and within the time periods set
forth therein.

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J.   Termination of this Agreement for any reason shall not relieve either party
of rights and obligations incurred prior to the effective date of termination.

K.   Notwithstanding any other provision of this Agreement, in the event either
party has cause to terminate this Agreement under Section 11(B), (C), (D), or
(E), such party shall provide written notice of such termination within 45 days
after the events constituting cause for such termination plus any applicable
cure period or it shall be conclusively deemed to have waived its right to
terminate the Agreement based upon such events.

L.   [*].

M.   In the event of any transfer of any of the Aircraft pursuant to Section
11(G), Delta shall reimburse Chautauqua for any prepaid rent paid by Chautauqua
under any Aircraft lease to the extent not previously included in the Aircraft
Rent/Ownership Costs paid by Delta, provided that Delta previously approved the
terms of such lease.

ARTICLE 12. LIABILITY PROVISIONS.

A.   Chautauqua and Republic, jointly and severally, shall be liable for and
hereby agrees fully to defend, release, discharge, indemnify, and hold harmless
Delta and its affiliates, and each of their respective directors, officers,
employees and agents (each, a "Delta Indemnitee") from and against any and all
claims, demands, damages, liabilities, suits, judgments, actions, causes of
action, losses, costs and expenses of any kind, character or nature whatsoever
(in each case whether groundless or otherwise), including reasonable attorneys'
fees, costs and expenses in connection therewith and expenses of investigation
and litigation thereof, which may be suffered by, accrued against, charged to,
or recoverable from any Delta Indemnitee in any manner arising out of, connected
with, or attributable to this Agreement, the performance, improper performance,
or nonperformance of any and all obligations to be undertaken by Operator
pursuant to this Agreement, the loss, theft, use, misuse or misappropriation of
Traffic Documents, or the operation, non-operation, or improper operation of
Operator's aircraft, equipment or facilities at any location, excluding only
claims, demands, damages, liabilities, suits, judgments, actions, causes of
action, losses, costs and expenses resulting from the gross negligence or
willful misconduct of Delta, its affiliates, and their respective directors,
officers, agents or employees. Operator will do all things necessary to cause
and assure, and will cause and assure, that Operator will at all times be and
remain in custody and control of all aircraft, equipment, and facilities of
Operator, and no Delta Indemnitee shall, for any reason, be deemed to be in
custody or control, or a bailee, of Operator's aircraft, equipment or
facilities.

B.   Delta shall be liable for and hereby agrees fully to defend, release,
discharge, indemnify, and hold harmless each of Republic and Chautauqua and any
direct or indirect subsidiary of Republic or Chautauqua, and each of their
respective directors, officers, employees, and agents (each, an "Operator
Indemnitee") from and against any and all claims, demands, damages, liabilities,
suits, judgments, actions, causes of action, losses, costs and expenses of any
kind, character or nature whatsoever, including reasonable attorneys' fees,
costs and expenses in connection therewith and expenses of investigation and
litigation thereof, which may be suffered by, accrued against, charged to, or
recoverable from any Operator Indemnitee in any

                                     - 18 -

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manner arising out of, connected with, or attributable to this Agreement, the
performance, improper performance or nonperformance of any and all obligations
to be undertaken by Delta pursuant to this Agreement, or the operation,
non-operation or improper operation of Delta's aircraft, equipment or facilities
at any location, excluding only claims, demands, damages, liabilities, suits,
judgments, actions, causes of action, losses, costs and expenses resulting from
the gross negligence or willful misconduct of Republic and Operator, their
affiliates, and their respective directors, officers, agents or employees. Delta
will do all things necessary to cause and assure, and will cause and assure,
that Delta will at all times be and remain in custody and control of any
aircraft, equipment and facilities of Delta, and no Operator Indemnitee shall,
for any reason, be deemed to be in the custody or control, or a bailee, of
Delta's aircraft, equipment or facilities.

C.   Operator and Delta agree to comply with all rules, regulations, directives
and similar instructions of appropriate governmental, judicial and
administrative entities including, but not limited to, airport authorities, the
Federal Aviation Administration and the Department of Transportation (and any
successor agencies).

D.   OTHER THAN ANY WARRANTIES SPECIFICALLY CONTAINED IN THIS AGREEMENT, EACH
PARTY DISCLAIMS AND THE OTHER PARTY HEREBY WAIVES ANY WARRANTIES, EXPRESS OR
IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THIS AGREEMENT OR ITS PERFORMANCE OF
ITS OBLIGATIONS HEREUNDER INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR INTENDED USE RELATING TO ANY EQUIPMENT, DATA,
INFORMATION OR SERVICES FURNISHED HEREUNDER. EACH PARTY AGREES THAT THE OTHER
PARTY IS NOT LIABLE TO IT OR ANY OTHER PERSONS FOR CONSEQUENTIAL OR PUNITIVE
DAMAGES UNDER ANY CIRCUMSTANCES.

E.   INDEMNIFICATION CLAIMS. A party (the "Indemnified Party") entitled to
indemnification from the other party under the terms of this Agreement (the
"Indemnifying Party") shall provide the Indemnifying Party with prompt written
notice (an "Indemnity Notice") of any third party claim which the Indemnified
Party believes gives rise to a claim for indemnity against the Indemnifying
Party hereunder, and the Indemnifying Party shall be entitled, if it accepts
financial responsibility for the third party claim, to control the defense of or
to settle any such third party claim at its own expense and by its own counsel;
PROVIDED that the Indemnified Party's prior written consent (which may not be
unreasonably withheld or delayed) must be obtained prior to settling any such
third party claim. If the Indemnifying Party does not accept financial
responsibility for the third party claim or fails to defend against the third
party claim that is the subject of an Indemnity Notice within thirty (30) days
of receiving such notice (or sooner if the nature of the third party claim so
requires), or otherwise contests its obligation to indemnify the Indemnified
Party in connection therewith, the Indemnified Party may, upon providing written
notice to the Indemnifying Party, pay, compromise or defend such third party
claim. The Indemnified Party shall provide the Indemnifying Party with such
information as the Indemnifying Party shall reasonably request to defend any
such third party claim and shall otherwise cooperate with the Indemnifying Party
in the defense of any such third party claim. Except as set forth above in this
Section 12(E), the Indemnified Party shall

                                     - 19 -
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not enter into any settlement or other compromise or consent to a judgment with
respect to a third party claim as to which the Indemnifying Party has an
indemnity obligation hereunder without the prior written consent of the
Indemnifying Party (which may not be unreasonably withheld or delayed), and the
entering into any settlement or compromise or the consent to any judgment in
violation of the foregoing shall constitute a waiver by the Indemnified Party of
its right to indemnity hereunder to the extent the Indemnifying Party was
prejudiced thereby. Any Indemnifying Party shall be subrogated to the rights of
the Indemnified Party to the extent that the Indemnifying Party pays for any
Loss suffered by the Indemnified Party hereunder. Notwithstanding anything
contained in this Section 12(E) to the contrary, Republic, Chautauqua and Delta
will cooperate in the defense of any claim imposed jointly against them or as
the result of the conduct of the other.

ARTICLE 13. WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE PROVISIONS.

A.   For purposes of workers' compensation insurance, Delta's employees, agents
and independent contractors under no circumstances shall be deemed to be, or
shall be, employees, agents or independent contractors of Operator.

B.   For purposes of workers' compensation insurance, Operator's employees,
agents and independent contractors under no circumstances shall be deemed to be,
or shall be, the employees, agents or independent contractors of Delta.

C.   Each party assumes full responsibility for, and liability to, its own
employees on account of injury, or death resulting therefrom, sustained in the
course of their employment. Each party, with respect to its own employees,
accepts full and exclusive liability for the payment of applicable workers'
compensation and employers' liability insurance premiums with respect to such
employees, and for the payment of all taxes, contributions or other payments for
unemployment compensation and old age benefits, and other similar benefits now
or hereafter imposed upon employers by any government or agency thereof having
jurisdiction in respect of such employee. Each party also agrees to make such
payments and to make and file all reports and returns and to do all things
necessary to comply with all applicable laws at any time imposing such taxes,
contributions, or payments.

D.   Each party will have their workers' compensation insurance carrier endorse
its policy to provide a waiver of subrogation against the other party.

ARTICLE 14. INSURANCE PROVISIONS.

A.   Operator shall procure and maintain in full force and effect during the
term of this Agreement policies of insurance of the types and in the minimum
amounts set forth below, with such insurers and under such terms and conditions
as are satisfactory to Delta:

     1.   All risk hull insurance on an agreed value basis, not to exceed
          replacement value, except as required by financing agreements.

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     2.   Comprehensive aviation liability including, without limitation,
          premises, products and completed operations, covering bodily injury,
          personal injury and property damage in an amount not less than [*] per
          occurrence; provided, however, that non-passenger personal injury
          coverage may be limited to [*] per occurrence.

     3.   Workers' compensation for statutory limits.

     4.   Employer's liability in an amount not less than [*].

     5.   Baggage liability in an amount not less than [*] per occurrence.

     6.   Cargo liability in an amount not less than [*] per loss, casualty or
          disaster.

     7.   Automobile liability in an amount not less than [*].

     8.   War, Hijacking and Other Allied Perils insurance protecting against
          the perils outlined in AVN52D or its U.S. equivalent in an amount not
          less than [*] per occurrence. Such insurance may be maintained through
          a combination of primary and excess layers.

B.   Operator shall cause the policies of insurance described in Article 14(A)
above to be duly and properly endorsed by Operator's insurance underwriters as
follows:

     1.   As to the policies of insurance described in Articles 14(A)(1),
          (A)(2), (A)(3), (A)(4), (A)(5), (A)(6), (A)(7) and (A)(8): (a) to
          provide that any waiver of rights of subrogation against other parties
          by Operator will not affect the coverage provided hereunder with
          respect to Delta, its affiliates, and their directors, officers,
          employees and agents; and (b) to provide that Operator's underwriters
          shall waive all subrogation rights arising out of this Agreement
          against Delta, its affiliates, and their directors, officers,
          employees and agents without regard to any breach of warranty on the
          part of Operator.

     2.   As to the policies of insurance described in Articles 14(A)(2),
          (A)(5), (A)(6), (A)(7) and (A)(8): (a) to provide that Delta, its
          affiliates, and their directors, officers, employees and agents shall
          be named as additional insured parties thereunder; and (b) to provide
          that such insurance shall be primary insurance.

     3.   As to the policies of insurance described in Articles 14(A)(2) and
          (A)(7): (a) except for the limits of liability, to provide a
          cross-liability clause as though separate policies were issued for
          Delta and Operator and their respective affiliates, and their
          directors, officers, employees and agents; and (b) to provide
          contractual liability insurance coverage for liability assumed by
          Operator under this Agreement.

     4.   As to any insurance obtained from foreign underwriters, to provide
          that Delta may maintain against such underwriters a direct action in
          the United States upon such

                                     - 21 -

----------
*Confidential
<Page>

          insurance policies and, to this end, to include a standard service of
          process clause designating a United States attorney in Washington,
          D.C. or New York, New York.

     5.   All insurance policies shall provide that the insurance shall not be
          invalidated by any action or inaction of Operator.

C.   Operator shall cause each of the insurance policies to be duly and properly
endorsed to provide that such policy or policies or any part or parts thereof
shall not be canceled, terminated or materially altered, changed or amended by
Operator's insurance underwriters until after thirty (30) days' written notice
to Delta, which thirty (30) days' notice shall commence to run from the date
such notice is actually received by Delta.

D.   Not later than the effective date of this Agreement, and from time to time
thereafter upon request by Delta, Operator shall furnish Delta evidence
satisfactory to Delta of the aforesaid insurance coverages and endorsements,
including certificates certifying that the aforesaid insurance policy or
policies with the aforesaid limits are duly and properly endorsed as aforesaid
and are in full force and effect.

E.   In the event Operator fails to maintain in full force and effect any of
the insurance and endorsements required to be maintained by Operator pursuant to
Article 14(A), Delta shall have the right (but not the obligation) to procure
and maintain such insurance or any part thereof on behalf of Operator. The cost
of such insurance shall be payable by Operator to Delta upon demand by Delta.
The procurement of such insurance or any part thereof by Delta does not
discharge or excuse Operator's obligation to comply with the provisions set out
herein. Operator agrees not to cancel, terminate or materially alter, change or
amend any of the policies until after providing thirty (30) days' advance
written notice to Delta of Operator's intent to so cancel, terminate or
materially alter, change or amend such policies of insurance, which thirty (30)
day notice period shall commence to run from the date notice is actually
received by Delta.

F.   With respect to all claims against Operator (but not against Delta) with
respect to which Operator is not entitled to be indemnified by Delta pursuant to
Article 12(B), whether or not covered by the insurance policies set forth in
this Article 14 or otherwise, Delta is responsible only for filing an initial
report and has no other obligations with respect to such claims, and Operator is
fully responsible for handling all adjustments, settlements, negotiations,
litigation and similar activities in any way related to or connected with such
claims.

G.   The parties hereby agree that from time to time during the term of this
Agreement Delta may require Operator to procure and maintain insurance coverages
in amounts in excess of the minimum amounts set forth in Article 14(A) should
the circumstances and conditions of Operator's operations under this Agreement
be deemed, in Delta's sole discretion, to require reasonable increases in any or
all of the foregoing minimum insurance coverages.

ARTICLE 15. OPERATIONS OF CHAUTAUQUA AS A DELTA CONNECTION CARRIER.

                                     - 22 -
<Page>

A.   Delta and Operator agree that, subject to the provisions of this Agreement,
Chautauqua will operate for the Delta Connection Flights exclusively as a Delta
Connection carrier.

B.   Operator acknowledges and agrees that participation in the Delta Connection
program obligates Chautauqua to offer and maintain a professional, high quality
level of service in terms of schedules, customer service and the like.
Accordingly, not less than once each year during the term of this Agreement, the
parties will: (a) meet to mutually review and discuss the services, operations
and plans of Operator and Delta for the Delta Connection program; and (b)
jointly develop a written business plan for the Delta Connection operations and
services of Chautauqua. Operator will comply with the business plans so
developed and all reasonable recommendations of Delta in this area.

ARTICLE 16. REPRESENTATIONS AND WARRANTIES.

A.   REPRESENTATIONS AND WARRANTIES OF REPUBLIC AND OPERATOR. Republic and
Chautauqua, jointly and severally, represent and warrant to Delta as of the date
hereof as follows:

               (1)  ORGANIZATION AND QUALIFICATION. Each of Republic and
Chautauqua is a duly organized and validly existing corporation in good standing
under the laws of the State of New York in the case of Chautauqua and Delaware
in the case of Republic, and Chautauqua has the corporate power and authority to
own, operate and use its assets and operate the Delta Connection Flights.

               (2)  AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Republic and
Chautauqua has the corporate power and authority to execute and deliver this
Agreement, and each of the Equity Agreements (as defined in Article 27) and to
consummate the transactions contemplated hereby and thereby in accordance with
the terms hereof and thereof. The execution and delivery of this Agreement and
the Equity Agreements, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate action
on the part of Republic and Chautauqua. This Agreement and the Equity Agreements
have been duly and validly executed and delivered by Republic and/or Chautauqua
and are, assuming due execution and delivery thereof by Delta, valid and binding
obligations of Republic and/or Chautauqua as the case may be, enforceable
against the respective party each in accordance with its respective terms.

               (3)  CONFLICTS; DEFAULTS. Neither the execution or delivery of
this Agreement or the Equity Agreements nor the performance by each of Republic
and Chautauqua of the transactions contemplated hereby or thereby will (i)
violate, conflict with, or constitute a default under any of the terms of either
of Republic's or Chautauqua's articles of incorporation, by-laws, or any
provision of, or result in the acceleration of any obligation under, any
contract, sales commitment, license, purchase order, security agreement,
mortgage, note, deed, lien, lease, agreement or instrument, including without
limitation, any order, judgment or decree relating to the Delta Connection
Flights, (ii) result in the creation or imposition of liens in favor of any
third person or entity, (iii) violate any law, statute, judgment, decree, order,
rule or regulation of any governmental authority, or (iv) constitute any event
which, after notice or

                                     - 23 -
<Page>

lapse of time or both, would result in such violation, conflict, default,
acceleration or creation or imposition of liens.

               (4)  BROKER. Neither Republic nor Chautauqua has retained or
agreed to pay any broker or finder with respect to this Agreement and the
transactions contemplated hereby.

B.   REPRESENTATIONS AND WARRANTIES OF DELTA. Delta represents to Republic
and Chautauqua as of the date hereof as follows:

               (1)  ORGANIZATION AND QUALIFICATION. Delta is a duly incorporated
and validly existing corporation in good standing under the laws of the State of
Delaware.

               (2)  AUTHORITY RELATIVE TO THIS AGREEMENT. Delta has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby in accordance with the terms
hereof. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Delta. This Agreement has been duly and validly
executed and delivered by Delta and is, assuming due execution and delivery
thereof by Republic or Chautauqua and that Republic or Chautauqua each has full
legal power and right to enter into this Agreement, a valid and binding
obligation of Delta, enforceable against Delta in accordance with its terms.

               (3)  CONFLICTS; DEFAULTS. Neither the execution or delivery of
this Agreement nor the performance by Delta of the transactions contemplated
hereby will (i) violate, conflict with, or constitute a default under any of the
terms of Delta's articles of incorporation, by-laws, or any provision of, or
result in the acceleration of any obligation under, any contract, sales
commitment, license, purchase order, security agreement, mortgage, note, deed,
lien, lease, agreement or instrument, including without limitation, any order,
judgment or decree relating to the Delta Connection Flights, (ii) result in the
creation or imposition of any liens in favor of any third person or entity,
(iii) violate any law, statute, judgment, decree, order, rule or regulation of
any governmental authority, or (iv) constitute any event which, after notice or
lapse of time or both, would result in such violation, conflict, default,
acceleration or creation or imposition of liens.

               (4)  BROKER. Delta has not retained or agreed to pay any broker
or finder with respect to this Agreement and the transactions contemplated
hereby.

ARTICLE 17. RIGHT OF FIRST REFUSAL ON REGIONAL JETS.

     Subject to the rights of AA and AMR Corporation pursuant to its Existing
Codeshare Agreement (or any Permitted Codeshare Amendment of such Existing
Codeshare Agreement), and excluding any transaction (including without
limitation any lease, sale/leaseback, leveraged lease, single investor lease or
similar transaction) undertaken to finance or refinance the purchase or
acquisition of any Aircraft or Excluded Aircraft, if at any time during the Term
of this Agreement, Operator receives an offer, bid, inquiry or other expression
of interest ("Offer") to purchase, lease, sublease, encumber or otherwise
acquire any interest in, or to operate on

                                     - 24 -
<Page>

behalf of any third party, any aircraft owned or leased by Operator (the "ROFR
Aircraft"), which Offer Operator desires to accept, Operator will, within ten
(10) business days after the material terms and conditions of such Offer have
been determined, notify Delta in writing of such Offer and the material terms
and conditions thereof, including the time period for consummating such Offer
(the "Offer Notice"). Upon receipt of an Offer Notice, Delta will have fifteen
(15) days to either (i) exercise its right of first refusal by providing written
notice to Operator that it will consummate the transaction for or in connection
with the ROFR Aircraft set forth in the Offer (the "Offered Aircraft") on the
same terms and conditions that are set forth in the Offer Notice, or (ii) notify
Operator that it does not wish to exercise its right of first refusal (failure
to reply in such 15 day period shall be deemed to be an election by Delta not to
exercise its right of first refusal). In the event Delta elects to exercise its
right of first refusal, such election shall be binding and irrevocable and
Operator and Delta shall consummate the transaction contemplated in the Offer
Notice on the same terms and conditions that are set forth in the Offer Notice
within the time period set forth in the Offer Notice. If Delta elects not to
exercise its right of first refusal, Operator may consummate such transaction
with the third party or parties making the Offer. Notwithstanding anything to
the contrary herein, this Article 17 shall not be applicable to, and Operator
shall have no obligation to provide Delta with an Offer Notice in connection
with, (i) any Committed Aircraft, or (ii) any Option Aircraft; provided,
however, such Option Aircraft are converted into firm orders by the appropriate
designated carrier as set forth in Section 2(A) within the third anniversary of
the effective date of this Agreement.

ARTICLE 18. MOST FAVORED NATIONS.

A.   If at any time during the Term of this Agreement, Operator reaches an
agreement in principle with any third party with respect to any new, amended
and/or restated codesharing (or similar) relationship, other than a Permitted
Codeshare Amendment, utilizing ERJ 135LR or ERJ 145LR aircraft (the "Third Party
Agreement"), Operator must offer Delta, in writing, the right, on an all or
nothing basis, to modify and amend this Agreement to incorporate the terms and
conditions of such Third Party Agreement (the "MFN Offer"). The MFN Offer shall
include all the material terms and conditions of the Third Party Agreement.
Delta shall have thirty (30) days from receipt of the MFN Offer to elect whether
or not to accept such MFN Offer. Upon Delta electing to accept the MFN Offer,
the terms and conditions of such MFN Offer shall govern the Aircraft and this
Agreement shall be modified and amended as appropriate.

B.   The parties acknowledge and agree that the rights granted to Delta in
Section 18(A) above shall not apply to any Excluded Aircraft.

ARTICLE 19. COVENANTS OF OPERATOR. Operator or Republic, as appropriate, hereby
covenants and agrees that:

A.   If requested by Delta at any time during the Term of this Agreement,
Chautauqua shall place its flight designator code, "RP", on certain flights
operated by Delta or an affiliate of Delta.

B.   [*]

                                     - 25 -

----------
*Confidential
<Page>

C.   In the event that any of the Aircraft are owned and debt financed by
Chautauqua, as soon as reasonably practicable, Chautauqua shall use commercially
reasonable efforts to convert any such debt financing into an operating lease
arrangement; provided any such lease (i) is financially more favorable than the
existing debt financing and (ii) shall be subject to the prior written approval
of Delta.

D.   Upon the addition of any and each aircraft to the original twenty-two (22)
Aircraft set forth on Exhibit A to be operated by Chautauqua pursuant to the
terms and conditions of this Agreement, and any amendment thereto, Republic
shall promptly issue to Delta a warrant to purchase 60,000 shares of Republic
Common Stock in the form attached hereto as EXHIBIT E.

ARTICLE 20. CONTRACT INTERPRETATION.

A.   This Agreement is subject to, and will be governed by and interpreted in
accordance with, the internal laws of the State of New York, excluding conflicts
of laws rules, and of the United States of America. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may only be brought in the courts of the State of Georgia, or, if it
has or can acquire jurisdiction, in the United States District Court for the
Northern District of Georgia, and each of the parties hereto irrevocably
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives, to the fullest
extent permitted by law, any objection to venue laid therein. Process in any
action or proceeding referred to in the proceeding sentence may be served on any
party anywhere in the world. Each party further agrees to waive any right to a
trial by jury.

B.   The descriptive headings of the several articles and sections of this
Agreement are inserted for convenience only, confer no rights or obligations on
either party, and do not constitute a part of this Agreement.

C.   Time is of the essence in interpreting and performing this Agreement.

D.   This Agreement, together with the Equity Agreements, constitutes the entire
understanding between the parties with respect to the subject matter hereof, and
any other prior or contemporaneous agreements, whether written or oral, are
expressly superseded hereby.

E.   If any part of any provision of this Agreement shall be invalid or
unenforceable under applicable law, such part shall be ineffective to the extent
of such invalidity or unenforceability only, without in any way affecting the
remaining parts of such provision or the remaining provisions.

F.   This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which, taken together, shall
constitute one and the same instrument.

ARTICLE 21. CIRCUMSTANCES BEYOND THE PARTIES' CONTROL.

                                     - 26 -
<Page>

With the exception of outstanding rights and obligations and payments that are
due, each party will be relieved of its obligations under this Agreement in the
event, to the extent and for the period of time that performance is delayed or
prevented caused by any acts of God, acts of terrorism or hostilities, war,
strike, labor disputes, work stoppage, fire, act of government, court order, in
each case reasonably beyond the control of that party, including but not limited
to, non-delivery or delay in delivery of the Aircraft or delay in the completion
of required training of the Operator's employees by the Aircraft manufacturer or
delay in the receipt of any necessary government or regulatory approvals (each,
a "Force Majeure Event"). Each of the parties acknowledges that it may or may
not realize the full economic or other benefits that it expects to realize from
this Agreement and that any failure to realize any or all of such benefits shall
not constitute a Force Majeure Event.

ARTICLE 21A. NON-EXCLUSIVE LICENSE GRANTED.

A.   Operator will conduct all operations described herein under the service
mark "Delta Connection." Delta hereby grants to Operator a nonexclusive,
nontransferrable license to use certain trademarks, service marks, logos and
trade names that Delta owns or has the right to use, including, "Delta," "Delta
Connection," "SkyMiles," and the Delta widget design (collectively, the "Delta
Marks") in connection with the services to be rendered by Operator pursuant to
this Agreement; provided, however, that at any time during the Term of this
Agreement, Delta may alter, amend or revoke the license hereby granted and
require Operator's use of a new or different Delta Mark in connection with the
services provided hereunder as Delta may determine in its sole discretion.

B.   Operator hereby acknowledges Delta's right to use the Delta Marks, further
acknowledges the validity of the Delta Marks, and agrees that it will not do
anything in any way to infringe or abridge Delta's, or any of its affiliates',
rights in the Delta Marks or directly or indirectly to challenge the validity of
the Delta Marks.

C.   Operator shall not use any of the Delta Marks without Delta's prior written
consent.

D.   Nothing in this Agreement shall be construed to give Operator the exclusive
right to use any of the Delta Marks, or to abridge Delta's right to use or
license any of its trademarks, service marks, trade names or logos
(collectively, "Identification") and to license such other uses of such
Identification as Delta or its affiliates may desire.

E.   Should this Agreement be canceled or otherwise terminated for any reason as
set forth in Article 11 hereof, all right to use the Delta Marks shall revert to
Delta and shall not thereafter be used by Operator in any form or fashion.

F.   BRANDING.

     1. LIVERY. Each of the Aircraft shall be in the color scheme, including
exterior paint and interior upholstery and appointments ("Livery") of the Delta
Connection Livery, as provided by Delta to Chautauqua from time to time.

                                     - 27 -
<Page>

     2. ON BOARD BRANDING. Delta shall control and provide to Chautauqua at
no cost all on board branding and in-flight materials including, without
limitation, in-flight publications, food and beverage products, paper goods,
service ware and flight attendant uniforms.

ARTICLE 22. MODIFICATION AND WAIVER.

No amendment, modification, supplement, termination or waiver of any provision
of this Agreement, and no consent to any departure by any party therefrom, shall
in any event be effective unless in writing signed by authorized representatives
of all parties, and then only in the specific instance and for the specific
purpose given.

ARTICLE 23. NOTICES.

     Unless otherwise provided herein, all notices, requests and other
communications required or provided for hereunder shall be in writing (including
telecopy or similar teletransmission or writing) and shall be given at the
following addresses:

               (1) If to Delta:

                    Delta Air Lines, Inc.
                    1030 Delta Boulevard
                    Atlanta, GA  30354
                    Dept. 663
                    Attention: Senior Vice President - Network and Revenue
                     Management
                    Telecopy: (404) 773-5310

               with copies to:

                    Delta Air Lines, Inc.
                    1030 Delta Boulevard
                    Atlanta, GA  30354
                    Dept. 856
                    Attn: Sr. V.P. - Finance, Treasury and Corporate Development
                    Telecopy: (404) 677-1182

                    Delta Connection, Inc.
                    1025 Virginia Avenue
                    Suite 410
                    Atlanta, GA  30354
                    Dept. 009
                    Attn: Chief Financial Officer
                    Telecopy: (404) 677-6247

                    Delta Air Lines, Inc.

                                     - 28 -
<Page>

                    1030 Delta Boulevard
                    Atlanta, GA  30354
                    Dept. 981
                    Attn: Sr. V.P. and General Counsel
                    Telecopy: (404) 715-2233

               (2)  If to Operator:

                    Chautauqua Airlines, Inc.
                    2500 South High School Road
                    Suite 160
                    Indianapolis, IN  46241
                    Attention:  President
                    Telecopy:  317-484-6060

               with a copy to:

                    Wexford Capital LLC
                    411 West Putnam Avenue
                    Greenwich, CT  06830
                    Attention:  President
                    Telecopy:  203-862-7320
                       and
                    Attention: General Counsel
                    Telecopy:  203-862-7312

               (3)  If to Republic:

                    Republic Airways Holdings, Inc.
                    2500 South High School Road
                    Suite 160
                    Indianapolis, IN  46241
                    Attention: President
                    Telecopy:  317-484-6060

Any such notice, request or other communication shall be effective (i) if given
by mail, upon the earlier of receipt or the third business day after such
communication is deposited in the United States mails, registered or certified,
with first class postage prepaid, addressed as aforesaid or (ii) if given by any
other means including, without limitation, by air courier, when delivered at the
address specified herein. Any party may change its address for notice purposes
by notice to the other party in the manner provided herein.

ARTICLE 24. ASSIGNMENT.

                                     - 29 -
<Page>

This Agreement shall bind and inure to the benefit of Delta and Operator and
their respective successors and assigns; provided, however, neither party may
assign or transfer this Agreement or any portion hereof to any person or entity
without the express written consent of the other party. Any assignment or
transfer, by operation of law or otherwise, without such consent shall be null
and void and of no force or effect.

ARTICLE 25. GOOD FAITH.

Each party shall exercise good faith in its dealings with the other party hereto
and in performance of its obligations under this Agreement.

ARTICLE 26. CONFIDENTIALITY.

A.   Except as otherwise provided below, each party shall, and shall ensure that
its directors, officers, employees, affiliates and professional advisors
(collectively, the "Representatives"), at all times, maintain strict confidence
and secrecy in respect of all Confidential Information (as defined below) of the
other party (including its affiliates) received directly or indirectly as a
result of this Agreement. If a party (the "Disclosing Party") in good faith
determines that it is required to disclose any Confidential Information of other
party (the "Affected Party") in order to comply with any applicable law or
government regulation, or under the terms of a subpoena or order issued by a
court or governmental body, it shall (a) notify the Affected Party immediately
of the existence, terms and circumstances surrounding such request, (b) consult
with the Affected Party on the advisability of taking legally available steps to
resist or narrow such request and (c) if any disclosure of Confidential
Information is required to prevent the Disclosing Party from being held in
contempt or subject to other legal penalty, furnish only such portion of the
Confidential Information as it is legally compelled to disclose and use
commercially reasonable efforts (at the cost of the party whose Confidential
Information is being protected) to obtain an order or other reliable assurance
that confidential treatment shall be accorded to the disclosed Confidential
Information. Each party agrees to transmit Confidential Information only to such
of its Representatives as required for the purpose of implementing and
administering this Agreement, and shall inform such Representatives of the
confidential nature of the Confidential Information and instruct such
Representatives to treat such Confidential Information in a manner consistent
with this Article 26.

     For purposes of this Agreement, "Confidential Information" shall mean
(a) all confidential or proprietary information of a party, including, without
limitation, trade secrets, information concerning past, present and future
research, development, business activities and affairs, finances, properties,
methods of operation, processes and systems, customer lists, customer
information (such as passenger name record or "PNR" data) and computer
procedures and access codes; and (b) the terms and conditions of this Agreement,
and any reports, invoices or other communications between the parties given in
connection with the negotiation or performance of this Agreement; and (c)
excludes (i) information already in a party's possession prior to its disclosure
by other party; (ii) information obtained from a third person or entity that is
not prohibited from transmitting such information to the receiving party as a
result of a contractual, legal or fiduciary obligation to the party whose
information is being disclosed; (iii) information that is or becomes generally
available to the public, other than as a result of

                                     - 30 -
<Page>

disclosure by a party in violation of this Agreement; or (iv) information that
has been or is independently acquired or developed by a party, or its affiliate,
without violating any of its obligations under this Agreement.

B.   Each party acknowledges and agrees that in the event of any breach of this
Article 26, the Affected Party shall be irreparably and immediately harmed and
could not be made whole by monetary damages. Accordingly, it is agreed that, in
addition to any other remedy at law or in equity, the Affected Party shall be
entitled to an injunction or injunctions (without the posting of any bond and
without proof of actual damages) to prevent breaches or threatened breaches of
this Article 26 and/or to compel specific performance of this Article 26.

C.   The confidential obligations of the parties under this Article 26 shall
survive the termination or expiration of this Agreement.

ARTICLE 27. ADDITIONAL DOCUMENTS. Simultaneously with the execution of this
Agreement, Republic shall provide to Delta the following securities, documents
and agreements (the "Equity Agreements"), each in form and substance reasonably
satisfactory to Delta and duly and validly executed and delivered by Republic:

     (i)    an IPO Warrant to purchase  1.5  million  shares of Republic  Common
            Stock;

     (ii)   a Private  Placement  Warrant  to  purchase  1.5  million  shares of
            Republic Common Stock at a price per share of $12.50;

     (iii)  an Agreement relating to participation  rights in Republic's initial
            public offering and other matters; and

     (iv)   a Registration Rights Agreement.

                                     - 31 -
<Page>

     IN WITNESS WHEREOF, the parties have executed this Agreement by their
undersigned duly authorized representatives:

Republic Airways Holdings, Inc.            Delta Air Lines, Inc.

By: /s/ Robert H. Cooper                   By: /s/ Frederick Buttrell

Name: /s/ Robert H. Cooper                 Name: /s/ Frederick Buttrell

Title: EVP & CFO                           Title: /s/ President and CEO
                                                      Delta Connection, Inc.

Chautauqua Airlines, Inc.

By: /s/ Robert H. Cooper

Name: /s/ Robert H. Cooper

Title: EVP & CFO

                                     - 32 -
<Page>

                                      EXHIBIT A

                                      THE AIRCRAFT

             FIRM AIRCRAFT DELIVERY SCHEDULE

<Table>
<Caption>
 Aircraft       Delivery             Date of:
  Number         Model       Delivery      In-Service
 --------       --------     --------      ----------
  <S>             <C>         <C>           <C>
   DL-1           145         Oct-02        01-Nov-02
   DL-2           145         Nov-02        15-Nov-02
   DL-3           135         Nov-02        01-Dec-02
   DL-4           145         Dec-02        15-Dec-02
   DL-5           135         Dec-02        05-Jan-03
   DL-6           145         Jan-03        01-Feb-03
   DL-7           135         Feb-03        01-Mar-03
   DL-8           145         Mar-03        01-Apr-03
   DL-9           135         Apr-03        15-Apr-03
  DL-10           145         Apr-03        01-May-03
  DL-11           135         May-03        15-May-03
  DL-12           145         May-03        01-Jun-03
  DL-13           135         Jun-03        15-Jun-03
  DL-14           135         Jun-03        01-Jul-03
  DL-15           135         Jul-03        15-Jul-03
  DL-16           135         Jul-03        01-Aug-03
  DL-17           135         Aug-03        15-Aug-03
  DL-18           135         Aug-03        01-Sep-03
  DL-19           135         Sep-03        15-Sep-03
  DL-20           135         Sep-03        01-Oct-03
  DL-21           135         Oct-03        15-Oct-03
  DL-22           135         Oct-03        01-Nov-03
</Table>

                                     - 33 -
<Page>

                                    EXHIBIT B

                                       [*]

                                     - 34 -

----------
*Confidential
<Page>

                                    EXHIBIT C

                                       [*]

                                     - 35 -

----------
*Confidential
<Page>

                                    EXHIBIT D

                                       [*]

                                     - 36 -

----------
*Confidential
<Page>

                                    EXHIBIT E

                           FORM OF ADDITIONAL WARRANT

                                See Exhibit 10.51

                                     - 37 -
<Page>

                                    EXHIBIT F

                  ENGINE MAINTENANCE AGREEMENT WITH ROLLS ROYCE

                                 (SEE ATTACHED)

                                     - 38 -
<Page>

Our ref: RRC-CHA-02

June 7, 2002
Chautauqua Airlines
2500 High School Road
Indianapolis, IN

ROLLS-ROYCE CORPORATION ("ROLLS-ROYCE") PROPOSAL IN RESPECT OF CHAUTAUQUA
AIRLINES ("CHAUTAUQUA") ACQUIRING 7 EMBRAER ERJ 145 AIRCRAFT AND 15 EMBRAER ERJ
135 AIRCRAFT POWERED BY ROLLS-ROYCE CORPORATION AE 3007A ENGINES ("ENGINES").

We refer to the recent discussions between Delta Air Lines, Chautauqua and
Rolls-Royce Corporation in respect of Chautauqua's decision to purchase 7 Firm
Embraer ERJ 145 Aircraft and 15 Firm Embraer ERJ 135 Aircraft and 30 Option
Aircraft. These Aircraft shall be purchased generally in accordance with a ratio
of two thirds ERJ-135 Aircraft and one third ERJ-145 Aircraft.

We understand the delivery stream of the Firm Aircraft to be as follows:

                              ERJ - 145 Aircraft

                              1 - October 02,
                              1 - October 02,
                              1 - November 02,
                              1 - November 02,
                              1 - December 02,
                              1 - December 02,
                              1 - January 03.

                              ERJ - 135 Aircraft

                              1 - January 03,
                              1 - February 03,
                              1 - March 03,
                              2 - April 03,
                              2 - May 03,
                              2 - June 03,
                              2 - July 03,
                              2 - August 03,
                              2 - September 03,

<Page>

                                                              [ROLLS-ROYCE LOGO]

SPARE ENGINES

Rolls-Royce has assessed that Chautauqua will require 4 Spare Engines to support
the fleet of 22 Firm aircraft:

Quantity:               Four (4)

Firm Engines:

<Table>
<Caption>
                                                       DELIVERY DATE
                              ENGINE TYPE         (EX-WORKS INDIANAPOLIS)
                     ----------------------------------------------------
                     <S>                              <C>
                     one (1) AE3007A1P                 October 2002

                     one (1) AE3007A1P                February 2003

                     one (1) AE3007A1P                   May 2003

                     one (1) AE3007A1P                  July 2003
</Table>

[*]

INITIAL PROVISIONING

In order to support the 22 Firm Aircraft Rolls-Royce Corporation will require
Chautauqua to purchase US$[*] (2002 levels) of Initial Provisioning spare parts.

[*]

----------
* Confidential
<Page>

FLEET HOUR AGREEMENTS

In accordance with the letter dated May 23rd from Rolls-Royce to Delta Air
Lines, reference CH-DL-052202 and the letter dated June 3rd reference
CH-DL-060302; Rolls-Royce is pleased to offer Chautauqua a [*] Fleet Hour
Agreement, from EIS of the first Aircraft, at the following Fleet Hour Agreement
rates.

The rates contained herein are predicated upon 22 Firm Aircraft and 30 Option
Aircraft, the operating assumptions contained in this proposal, the purchase of
the required levels of Spare Engines, Initial Provisioning and Tooling [*]

ENGINE SHOP VISIT COVERAGE

The Engine Shop Visit rates contained in the tables in Attachment A cover the
following services for all Qualified Engine Events,

     -  Engine Shop Labor (strip, inspect, rework, rebuild, test, dispatch),
     -  All parts requiring replacement or rework during engine shop visit (with
        the exception of time expired Life Limited Parts and Line Replaceable
        Units),
     -  All shop visit subcontract charges.

The Engine Shop Visit rate assumes use of normal take off rating (AT/O-1) for
[*] of all take offs, and use of normal climb and normal cruise ratings for all
flights. To the extent Chautauqua's usage of AT/O-1 differs from this
assumption, then the Shop Visit Rate will vary in accordance with the table in
Attachment C.

In the event of an early termination of the Fleet Hour Agreement, a
reconciliation will be performed in accordance with Article 12.3 to the Fleet
Hour Agreement between Rolls-Royce and Chautauqua dated March 23rd 2001.

LINE REPLACEABLE PARTS COVERAGE

Line Replaceable Parts may be covered within the Fleet Hour Agreement for $[*]
per Engine Flying Hour at 2002 economics.

Line Replaceable Parts (LRPs) are defined as all Rolls-Royce supplied line
replaceable external engine hardware on the AE 3007A Series engine, (including
LRU's), having suffered a Qualified Event with the following exceptions:

-  Any line replaceable internal engine components damaged by FOD (e.g. fan
   blades, spinner, fan bypass vanes, fan case, etc.)
-  All life limited parts (LLPs), including those LLPs which are line
   replaceable.
-  All industry standard "common-consumable" external parts without Rolls-Royce
   part number (e.g. nuts, bolts, o-rings, gaskets, etc.)

LIFE LIMITED PARTS COVERAGE

Life Limited Parts may be covered for the duration of the Fleet Hour Agreement
at the rates contained in the matrices in Attachment B.

----------
*Confidential

<Page>

MINOR FOREIGN OBJECT DAMAGE COVERAGE

Minor FOD would provide for parts repair or replacement as a result of
non-negligent FOD damage or erosion during a non-FOD related engine shop visit,
for a $[*] per Engine Flying Hour at 2002 economics.

----------
*Confidential

<Page>

All of the above rates are provided at 2002 economics and are subject to
escalation in accordance with the Supplemental Agreement between Rolls-Royce and
Chautauqua reference RRC-CHA 140-01. [*]

Unless as specifically amended above, the terms and conditions of the existing
Agreements between Rolls-Royce and Chautauqua shall apply.

FOR AND ON BEHALF OF ROLLS-ROYCE CORPORATION

/s/ Ian Crawford

Ian Crawford
Vice President Customer Business - Rolls-Royce Corporation
June 7th 2002.

----------
*Confidential

<Page>

ATTACHMENT A
ENGINE SHOP VISIT MATRIX

The Engine Shop Visit rates contained below are stepped rates from EIS of the
first aircraft at 2002 economics.

ERJ -145 FLEET - AE3007A1P

           STEPPED FHA RATES FOR AE3007A1P ENGINE SHOP VISIT COVERAGE

<Table>
<Caption>
Step 1: Years 1-3                            Mission Length (FH/Cycle)
--------------------    ----------------------------------------------------------------
Utilization (FH/yr.)    0.7   0.8   0.9    1    1.1   1.2   1.3   1.4   1.5   1.6    1.7
--------------------    ----------------------------------------------------------------
         <S>            <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
         1800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2400           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2600           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]
</Table>

<Table>
<Caption>
Step 2: Years 4-6                            Mission Length (FH/Cycle)
--------------------    ----------------------------------------------------------------
Utilization (FH/yr.)    0.7   0.8   0.9    1    1.1   1.2   1.3   1.4   1.5   1.6    1.7
--------------------    ----------------------------------------------------------------
         <S>            <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
         1800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2400           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2600           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]
</Table>

<Table>
<Caption>
Step 3: Years 7-10                           Mission Length (FH/Cycle)
--------------------    ----------------------------------------------------------------
Utilization (FH/yr.)    0.7   0.8   0.9    1    1.1   1.2   1.3   1.4   1.5   1.6    1.7
--------------------    ----------------------------------------------------------------
         <S>            <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
         1800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2400           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2600           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]
</Table>

----------
*Confidential
<Page>

ERJ -135 FLEET - AE3007A1/3

           STEPPED FHA RATES FOR AE3007A1/3 ENGINE SHOP VISIT COVERAGE

<Table>
<Caption>
Step 1: Years 1-3                            Mission Length (FH/Cycle)
--------------------    ----------------------------------------------------------------
Utilization (FH/yr.)    0.7   0.8   0.9    1    1.1   1.2   1.3   1.4   1.5   1.6    1.7
--------------------    ----------------------------------------------------------------
         <S>            <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
         1800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2400           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2600           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]
</Table>

<Table>
<Caption>
Step 2: Years 4-6                            Mission Length (FH/Cycle)
--------------------    ----------------------------------------------------------------
Utilization (FH/yr.)    0.7   0.8   0.9    1    1.1   1.2   1.3   1.4   1.5   1.6    1.7
--------------------    ----------------------------------------------------------------
         <S>            <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
         1800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2400           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2600           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]
</Table>

<Table>
<Caption>
Step 3: Years 7-10                           Mission Length (FH/Cycle)
--------------------    ----------------------------------------------------------------
Utilization (FH/yr.)    0.7   0.8   0.9    1    1.1   1.2   1.3   1.4   1.5   1.6    1.7
--------------------    ----------------------------------------------------------------
         <S>            <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
         1800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2400           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2600           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]
</Table>

----------
*Confidential
<Page>

ATTACHMENT B
LIFE LIMITED PARTS MATRIX

The Life Limited Parts rates contained below are a $ per Engine Flight Hour rate
from EIS of the first aircraft at 2002 economics.

ERJ - 145 FLEET - AE3007A1P

<Table>
<Caption>
                                             Mission Length (FH/Cycle)
                        ----------------------------------------------------------------
                        0.7   0.8   0.9    1    1.1   1.2   1.3   1.4   1.5   1.6    1.7
                        ----------------------------------------------------------------
         <S>            <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
         1800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2400           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2600           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]
</Table>

ERJ - 135 FLEET - AE3007A1/3

<Table>
<Caption>
                                             Mission Length (FH/Cycle)
                        ----------------------------------------------------------------
                        0.7   0.8   0.9    1    1.1   1.2   1.3   1.4   1.5   1.6    1.7
                        ----------------------------------------------------------------
         <S>            <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
         1800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2400           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2600           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         2800           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3000           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]

         3200           [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]    [*]
</Table>

----------
*Confidential
<Page>

ATTACHMENT C
AT/O-1 USAGE MATRIX

The Shop Visit rate assumes use of normal take off rating (AT/O-1) for [*]% of
all take offs, and use of normal climb and normal cruise ratings for all
flights. To the extent Chautauqua's usage of AT/O-1 differs from this
assumption, then the Shop Visit Rate will vary in accordance with the following
table:

<Table>
<Caption>
        PERCENT OF FLIGHTS   PERCENT OF FLIGHTS   RATE ADJUSTMENT FOR AE 3007 ENGINES
        USING AT/0-1 POWER   USING T/0-1 POWER
        ------------------   ------------------   -----------------------------------
              <S>                 <C>                             <C>
              100.0%                0.0%                          [*]

               95.0%                5.0%                          [*]

               90.0%               10.0%                          [*]

               85.0%               15.0%                          [*]

               80.0%               20.0%                          [*]

               75.0%               25.0%                          [*]

               70.0%               30.0%                          [*]

               65.0%               35.0%                          [*]

               60.0%               40.0%                          [*]

               55.0%               45.0%                          [*]

               50.0%               50.0%                          [*]

               45.0%               55.0%                          [*]

               40.0%               60.0%                          [*]

               35.0%               65.0%                          [*]

               30.0%               70.0%                          [*]

               25.0%               75.0%                          [*]

               20.0%               80.0%                          [*]

               15.0%               85.0%                          [*]

               10.0%               90.0%                          [*]

                5.0%               95.0%                          [*]

                0.0%              100.0%                          [*]
</Table>

----------
*Confidential<Page>

                                                                Exhibit 10.54(b)

                     AMENDED & RESTATED EMPLOYMENT AGREEMENT

      THIS AMENDED & RESTATED AGREEMENT is made and entered into as of the
Effective Date provided in Section 2, by and between REPUBLIC AIRWAYS HOLDINGS,
INC. (hereinafter referred to as the "Company"), a Delaware corporation, and
BRYAN K. BEDFORD (hereinafter referred to as the "Executive").

                                 R E C I T A L S

      WHEREAS, the Executive is party to an Employment Agreement dated as of
June 25, 1999 with Chautauqua Airlines, Inc. ("CAI"), a subsidiary of the
Company (the "Prior Agreement"); and

      WHEREAS, subject to the successful completion of the IPO as provided in
Section 2 hereof, the Company and the Executive desire to amend certain
provisions of the Prior Agreement and to enter into this Amended & Restated
Employment Agreement,

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth, and intending to be legally bound, the parties hereto
agree as follows:

      1. EMPLOYMENT. Subject to the satisfaction of the conditions set forth in
Section 2, the Company agrees to employ the Executive, and the Executive agrees
to render his services to the Company, as its President and Chief Executive
Officer, during the Term (as defined below). In connection with his employment
as President and Chief Executive Officer, (a) the Company shall use its best
efforts to nominate the Executive for membership on the Board of Directors of
the Company, and (b) the Executive shall serve without additional payment or
compensation of any kind as the President and Chief Executive Officer of CAI and
of any other direct or indirect subsidiary or affiliate of the Company
designated by the Board of Directors of the Company (collectively, with CAI, the
"Subsidiaries"). The Executive shall render his services at the direction of the
Board of Directors of the Company at the Company's offices in Indianapolis,
Indiana. The Executive agrees to use his best efforts to promote and further the
business, reputation and good name of the Company and the Subsidiaries
(collectively, the "Company Group") and the Executive shall promptly and
faithfully comply with all instructions, directions, requests, rules and
regulations made or issued from time to time by the Company.

      2. INITIAL PUBLIC OFFERING. The effectiveness of this Amended and Restated
Employment Agreement is expressly conditioned upon and subject to the successful
completion on or before September 30, 2002 of an initial public offering by the
Company of shares of its common stock (an "IPO"). The Effective Date of this
Amended & Restated Employment Agreement shall be the effective date of the IPO.
In the event the Company does not successfully complete an IPO on or before
September 30, 2002, this Amended and Restated Employment Agreement shall be null
and void and shall have no force or effect and the Prior Agreement shall
continue according to its terms.

      3. TERM. The term of employment pursuant to this Agreement (the "Term")
shall continue until June 30, 2005; provided that either party may terminate
this Agreement by providing the other with 30 days prior written notice of such
termination. Notwithstanding the foregoing, this Agreement may be terminated by
the Company or by the Executive in the event

<Page>

that "Cause" for such termination exists as provided in Section 8 below. In the
event (i) the Company terminates this Agreement or the Executive's employment
other than for Cause, or (ii) the Executive terminates this Agreement or the
Executive's employment for Cause, the Company shall pay the Executive Severance
Compensation as provided in Section 4(c) hereof. In the event the Company
terminates this Agreement or the Executive's employment for Cause, or in the
event the Executive terminates this Agreement or his employment other than for
Cause, the Executive shall not be entitled to any Severance Compensation or
other compensation of any kind following the effective date of such termination.

      4. COMPENSATION. As full and complete compensation for all the Executive's
services hereunder, the Company shall pay the Executive the compensation
described below.

(a)   CASH COMPENSATION.

            (i) During the Term, the Company shall pay the Executive an annual
      base salary of $340,000 ("Base Salary"). The Board of Directors shall
      review the Executive's Base Salary each year and shall have the right in
      its discretion to increase such Base Salary. In the event this Agreement
      is terminated prior to the expiration of the Term, the Company shall pay
      to the Executive, in addition to any Severance Compensation payable under
      Section 4(c), any accrued but unpaid Base Salary through the termination
      date.

            (ii) In addition to the Base Salary, during the Term, the Company
      shall pay to the Executive an annual deferred compensation payment (a
      "Deferred Compensation Payment") in the amount of $170,000. The Deferred
      Compensation Payment shall be paid each year during the Term at the end of
      the calendar year and shall be prorated for the 2005 calendar year for the
      period from January 1, 2005 through the end of the Term. In the event this
      Agreement or the Executive's employment is terminated (x) by the Company
      for Cause or (y) by the Executive other than for Cause, the Executive
      shall not be entitled to any Deferred Compensation Payment for such year
      or any subsequent period. In the event this Agreement or the Executive's
      employment is terminated (x) by the Company other than for Cause, or (y)
      by the Executive for Cause, the Executive's right with respect to a
      Deferred Compensation Payment for the year in which such termination
      occurs shall be governed by Section 4(c).

            (iii) In addition to the Base Salary and Deferred Compensation
      Payment, during the Term, the Company may pay to the Executive an annual
      bonus (a "Bonus") in an amount, if any, as the Board of Directors of the
      Company shall determine in its discretion. The Bonus, if any, may be paid
      each year during the Term at the end of the calendar year and may be
      prorated for the 2005 calendar year for the period from January 1, 2005
      through the end of the Term. In the event this Agreement or the
      Executive's employment is terminated, the Executive shall not be entitled
      to any Bonus Compensation for such year or any subsequent period.

(b)   EQUITY COMPENSATION.

            (i) On the Effective Date of this Agreement, the Company shall issue
      to the Executive pursuant to the Republic Airways Holdings Inc. 2002
      Equity Incentive Plan

                                      -2-
<Page>

      (the "Plan"), as compensation and without cost to the Executive, options
      (the "New Options") to purchase [216,000 - BASED ON AN ASSUMED 20MM
      SHARES]OUTSTANDING AFTER THE IPO, OTHERWISE SUBJECT TO RATABLE
      ADJUSTMENT] shares of the Company's Common Stock, par value $.001 per
      share (the "Common Stock"). The New Options shall be in addition to the
      options to purchase Common Stock previously granted to the Executive.
      The New Options shall have an exercise price per share that is
      equivalent to 110% of the price at which shares of Common Stock are
      offered to the public in the IPO. The New Options shall vest and become
      immediately exercisable as to 1/24 of the shares subject to the New
      Options on the last day of each month beginning in July 2003, subject
      to termination as provided in the Plan. The terms and conditions of the
      New Options shall be governed in all respects by the Plan, and in the
      event of any conflict or inconsistency between the terms of this
      Section 3(b) and the Plan, the terms of the Plan shall control.

            (ii) The vesting of any options to purchase stock of the Company
      previously granted to the Executive under the terms of the Prior Agreement
      or any agreement entered into contemporaneously with the Prior Agreement
      shall be governed by the terms of such agreement notwithstanding that
      other terms and provisions of such agreement are superseded by this
      Amended & Restated Employment Agreement.

(c) SEVERANCE COMPENSATION. In the event (i) the Company terminates this
Agreement or the Executive's employment with the Company other than for Cause,
or (ii) the Executive terminates this Agreement or his employment with the
Company for Cause, the Company shall pay to the Executive as Severance
Compensation $680,000, provided that in the event the remainder of the Term is
less than 24 months, such Severance Compensation shall be prorated for the
remainder of the Term, but shall not be less than $170,000. For example, if the
Company terminates this Agreement other than for Cause with 20 months remaining
in the Term, the Company shall pay the Executive Severance Compensation of
$566,667. The Executive shall also receive as Severance Compensation (i) subject
to the next following sentence, an immediate vesting of all New Options that
would have vested during the 24 months after such termination, or such lesser
period through the end of the Term, if the Executive's employment had not been
terminated, and (ii) continuation of medical benefits for the lesser of 12
months or the remainder of the Term. Notwithstanding the foregoing, in the event
the Executive terminates this Agreement or his employment for Cause as a result
of a Change of Control (as defined herein), all unvested New Options shall
immediately vest.

      5. NO OTHER COMPENSATION. Except as otherwise expressly provided herein,
or in any other written document executed by the Company and the Executive, no
other compensation or other consideration shall become due or payable to the
Executive on account of the services rendered to the Company Group. The Company
shall have the right to deduct and withhold from the compensation payable to the
Executive hereunder any amounts required to be deducted and withheld under the
provisions of any statute, regulation, ordinance, order or any other amendment
thereto, heretofore or hereafter enacted, requiring the withholding or deduction
of compensation.

      6. MEDICAL & 401K BENEFITS. The Company agrees that the Executive shall be
entitled to participate in any retirement, 401K, disability, medical, pension,
profit sharing, group insurance, or any other plan or arrangement, or in any
other benefits now or hereafter generally

                                      -3-
<Page>

available to executives of the Company, in each case to the extent that the
Executive shall be eligible under the general provisions thereof.

      7. VACATION. The Executive shall be entitled to take three weeks of paid
vacation which shall accrue monthly during each 12 months of the Executive's
employment hereunder, and which vacation shall be taken on dates to be selected
by mutual agreement of the Company and the Executive.

      8. TERMINATION FOR CAUSE.

(a) TERMINATION FOR CAUSE BY THE COMPANY. The Company, by written notice to the
Executive, may immediately terminate this Agreement and the Executive's
employment hereunder for Cause. As used herein, a termination by the Company
"for Cause" shall mean that the Executive has (i) willfully or materially
refused to perform a material part of his duties hereunder, (ii) materially
breached the provisions of Sections 9, 10 or 11 hereof, (iii) acted fraudulently
or dishonestly in his relations with the Company, (iv) committed larceny,
embezzlement, conversion or any other act involving the misappropriation of
Company funds or assets in the course of his employment, or (v) been indicted or
convicted of any felony or other crime involving an act of moral turpitude.

(b) TERMINATION FOR CAUSE BY THE EXECUTIVE. The Executive, by 20 business days
prior written notice to the Company, may terminate this Agreement and his
employment hereunder for Cause, provided that the Company shall have the right
to cure such Cause within such 20 business day period. As used herein, a
termination by the Executive "for Cause" shall mean that (i) the Company has
materially diminished the duties and responsibilities of the Executive with
respect to the Company, (ii) the Company has required the Executive to relocate
his residence from Indianapolis to another location without the consent of the
Executive or (iii) a Change of Control has occurred. As used herein, a "Change
of Control" shall mean a transaction, other than a public or private offering of
Common Stock by the Company, pursuant to which a shareholder other than Wexford
Capital LLC ("Wexford") and its Affiliates acquires majority voting control of
the Company.

      9. CONFIDENTIAL INFORMATION. The Executive recognizes and acknowledges
that he shall receive in the course of his employment hereunder certain
confidential information and trade secrets concerning the Company Group's
business and affairs which may be of great value to the Company Group. The
Executive therefore agrees that he will not disclose any such information
relating to the Company Group, the Company Group's personnel or their operations
other than in the ordinary course of business or in any way use such information
in any manner which could adversely affect the Company Group's business. For
purposes of this Agreement, the terms "trade secrets" and "confidential
information" shall include any and all information concerning the business and
affairs of the Company Group and any division or other affiliate of the Company
Group that is not generally available to the public.

      10. NON-COMPETITION. The Executive agrees that without the prior written
consent of the Board of Directors during the Term and for a period of 12 months
following the termination or expiration of this Agreement, he will not
participate as an advisor, partner, joint venturer, investor, lender, consultant
or in any other capacity in any business transaction or proposed

                                      -4-
<Page>

business transaction (a) with respect to which the Executive had a material
personal involvement on behalf of the Company Group during the last 12 months of
his employment with the Company, or (b) that could reasonably be expected to
compete with the Company Group's business or operations or proposed or
contemplated business or transactions of the Company Group that are (I) known by
the Executive as of the date of such termination or expiration, and (II)
contemplated by the Company Group to proceed during the 12 month period
following such termination or expiration. For these purposes, the mere ownership
by the Executive of securities of a public company not in excess of 2% of any
class of such securities shall not be considered to be competition with the
Company Group.

      11. NON-SOLICITATION. The Executive agrees that during the Term, and for a
period of 12 months following the termination or expiration of this Agreement,
he shall not, without the prior written consent of the Company, directly or
indirectly, employ or retain, or have or cause any other person or entity to
employ or retain, any person who was employed by the Company Group or any of its
divisions or affiliates while the Executive was employed by the Company.

      12. BREACH OF THIS AGREEMENT. If the Executive commits a breach, or
threatens to commit a breach, of any of the provisions of Sections 9, 10 or 11
of this Agreement, then the Company shall have the right and remedy to have
those provisions specifically enforced by any court having equity jurisdiction,
it being acknowledged and agreed by the Executive that the rights and privileges
of the Company granted in Sections 9, 10 and 11 are of a special, unique and
extraordinary character and any such breach or threatened breach will cause
great and irreparable injury to the Company and that money damages will not
provide an adequate remedy to the Company.

      13. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing (including facsimile, telegraphic, telex or cable
communication) and shall be deemed to have been duly given when delivered by
hand, or mailed, certified or registered mail, return receipt requested and
postage prepaid:

      If to the Company:      Republic Airways Holdings, Inc.
                              2500 South High School Road
                              Indianapolis, IN 46241
                              Attn: Chief Operating Officer

      With a copy to each member of the Board of Directors

      If to the Executive:    Bryan K. Bedford
                              3334 Walnut Creek Drive
                              Carmel, IN 46032

      14. APPLICABLE LAW. This Agreement was negotiated and entered into within
the State of Indiana. All matters pertaining to this Agreement shall be governed
by the laws of the State of Indiana applicable to contracts made and to be
performed wholly therein. Nothing in this Agreement shall be construed to
require the commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement and any material present or
future statute, law, governmental regulation or ordinance as a result of which
the parties have no legal

                                      -5-
<Page>

right to contract or perform, the latter shall prevail, but in such event the
provision(s) of this Agreement affected shall be curtailed and limited only to
the extent necessary to bring it or them within the legal requirements.

      15. ENTIRE AGREEMENT; MODIFICATION; CONSENTS AND WAIVERS. This Agreement
contains the entire agreement of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements or understandings, written or
oral, between the parties with respect to the subject matter hereof. No
interpretation, change, termination or waiver of or extension of time for
performance under any provision of this Agreement shall be binding upon any
party unless in writing and signed by the party intended to be bound thereby.
Except as otherwise provided in this Agreement, no waiver of or other failure to
exercise any right under or default or extension of time for performance under
any provision or this Agreement shall affect the right of any party to exercise
any subsequent right under or otherwise enforce said provision or any other
provision hereof or to exercise any right or remedy in the event of any other
default, whether or not similar.

      16. SEVERABILITY. The parties acknowledge that, in their view, the terms
of this Agreement are fair and reasonable as of the date signed by them,
including as to the scope and duration of post-termination activities.
Accordingly, if any one or more of the provisions contained in this Agreement
shall for any reason, whether by application of existing law or law which may
develop after the date of this Agreement, be determined by an arbitrator or
court of competent jurisdiction to be excessively broad as to scope of activity,
duration or territory, or otherwise unenforceable, the parties hereby jointly
request such court to construe any such provision by limiting or reducing it so
as to be enforceable to the maximum extent in favor of the Company compatible
with then-applicable law. If any one or more of the terms, provisions, covenants
or restrictions of this Agreement shall nonetheless be determined by an
arbitrator or court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

      17. ASSIGNMENT. The Company may, at its election, assign this Agreement or
any of its rights hereunder. This Agreement may not be assigned by the
Executive.

      18. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.

      19. ARBITRATION. Each of the parties hereby irrevocably and
unconditionally consents to arbitrate any dispute arising out of or relating
in any manner to this Agreement or the employment relationship contemplated
hereby or the termination thereof, or any alleged breach of any term or
provision of this Agreement. Such arbitration shall be conducted by a single
arbitrator in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award
in any federal or state court in Indiana (and the parties expressly consent
to the jurisdiction of such court), or in any other court having
jurisdiction. Each of the Parties agrees that in any arbitration arising out
of or relating to this Agreement or the employment relationship contemplated
hereby or the termination thereof, or

                                      -6-
<Page>

any alleged breach of any term or provision of this Agreement or in any
action to enter judgment on an award in such arbitration each party shall
bear its own fees and expenses.

      20. SURVIVAL. The provisions of Sections 9 through 19 of this Agreement
shall survive any expiration or termination of this Agreement.

      IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.

                                      REPUBLIC AIRWAYS HOLDINGS, INC.

                                      By:  /s/ JAY MAYMUDES
                                         ---------------------------------
                                           Name:
                                           Title:

                                      BRYAN K. BEDFORD

                                      /s/ BRYAN K. BEDFORD
                                      ------------------------------------

                                      -7-

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