EXHIBIT 10.1
CODE SHARE AGREEMENT
Portions of this document have been omitted pursuant to a
confidential treatment request filed with the Securities and
Exchange Commission. These portions have been replaced in
the text of the document with the language [Confidential
Treatment Requested]. Such portions have been provided
separately to the Securities and Exchange Commission.
CODE SHARING AGREEMENT
This non-exclusive Code Sharing Agreement, dated this
15th day of July, 1997 (the "Agreement"), with American's
(as defined below) AA designator code to be placed on
flights operated by Hawaiian (as defined below), and the
rights and obligations related thereto to commence, as of a
date mutually agreed to in good faith by the Parties (as
defined below) hereto, which date shall be in the fourth
quarter of calendar 1997, subject to the ability of the
Parties to implement all computer automation required for
implementation of this Agreement by or during the fourth
quarter of 1997 (the "Implementation Date"), is entered into
by and between HAWAIIAN AIRLINES, INC., a Hawaii
corporation, whose principal place of business is 0000
Xxxxxxx Xxxxxx, Xxxxx X-000, Xxxxxxxx, Xxxxxx 00000
("Hawaiian") and AMERICAN AIRLINES, INC., a Delaware
corporation, whose principal place of business is 0000 Xxxx
Xxxxxx Xxxx., Xxxx Xxxxx, Xxxxx 00000. Hawaiian and
American are sometimes referred to in this Agreement
individually as a "Party" or "Carrier," or collectively as
the "Parties" or "Carriers."
WITNESSETH:
WHEREAS, Hawaiian and American are each certified air
carriers providing air transportation services in their
respective areas of operation; and
WHEREAS Hawaiian and American desire to cooperate in
providing air transportation of high quality to the
traveling public by allowing American to place its
designator code on certain flights operated by Hawaiian, as
permitted under applicable law, regulations and policy; and
WHEREAS, Hawaiian and American are each willing to
perform in the manner and upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual
covenants and promises in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Parties hereto agree as follows;
1. Schedules to be Operated. It is the intent of
the Parties that American will place its designator code
on certain flights operated by Hawaiian. The Hawaiian
operated Code Share Service will be marketed under not
only Hawaiian's designator code HA, but also under
American's AA designator code. Exhibit A attached hereto
sets forth the flight segments where Code Share Service
will operate commencing on the Implementation Date. The
Parties agree to meet as necessary to discuss the
appropriateness of expanding or contracting the list of
city-pairs on Exhibit A.
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Code Sharing Agreement
Page 2
2. Code Sharing
a. Code Share Service. Subject to the terms and
conditions of this Agreement, Hawaiian grants American the
right to market to the public American's designated
scheduled passenger service on any and all flights operated
by Hawaiian in the markets as set forth on Exhibit A
attached hereto. To the extent the flights operated by
Hawaiian between city-pairs listed on Exhibit A are marketed
and/or ticketed under American's AA designator code, and
only when such flights are marketed and/or ticketed under
American's AA designator code, they are referred to herein
as the "AA Code Shared Segments". The AA Code Shared
Segments shall be marketed to the public using the AA
designator code. AA shall at all times indicate that
Hawaiian is the operator. The Parties shall reasonably
cooperate to ensure that reservations, sales and passenger
handling services for passengers on AA Code Shared Segments
using tickets identifying American in the carrier box ("Code
Shared Passengers") are provided in the most efficient
manner that best meets the needs of all Code Shared
Passengers.
b. Control of AA Code Share Segments. Hawaiian
shall have the sole responsibility for and control over, and
American shall have no responsibility for, control over or
obligations or duties with respect to, each and every aspect
of Hawaiian's operations, including, without limitation,
scheduling, pricing, planning of flight itineraries and
routings, reservations, control/yield management, dispatch,
fueling, weight and balance, flight release, maintenance,
flight operations and compliance with applicable rules and
regulations. Flights operated by Hawaiian shall be operated
with its crews and its owned or leased aircraft.
c. Code Share Flight Procedures. Detailed
procedures for implementing this Agreement and for managing
the ongoing code share services to be provided hereby are
set forth in a procedures manual to be prepared by the
Parties in conjunction with this Agreement. Such procedures
manual, as it may be amended or supplemented by the Parties
from time to time, is, to the extent not in conflict or
inconsistent with the provisions set forth in this
Agreement, incorporated herein and made a part of this
Agreement. Any provisions set forth in the procedures
manual which conflict with the provisions set forth in this
Agreement shall not be deemed to amend this Agreement and
shall be superseded hereby. The foregoing manual, as amended
and supplemented from time to time, is hereinafter referred
to as the "Procedures Manual."
3. Frequent Flyer Program. American shall be solely
responsible for awarding any frequent flyer miles for Code
Shared Passengers traveling on AA Code Shared Segments and
will seek no reimbursement for such mileage from Hawaiian.
Except as otherwise specified in the AAdvantage
Participating Carrier Agreement, as amended, between the
Parties, American shall not be entitled to issue AAdvantage
Award tickets for travel on the AA Code Shared Segments;
provided, however, that in the event that American issues an
AAdvantage Award ticket for travel on an AA Code Shared
Segment, Hawaiian shall provide prompt written notice
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Code Sharing Agreement
Page 3
to American that an AAdvantage Award ticket had been
issued for an AA Code Shared Segment. Hawaiian shall
receive, and American shall pay,
[Confidential Treatment Requested] for any uplifted
AAdvantage Award ticket (which amount shall be billed as
an exceptional item to American through the normal ACH
procedures).
4. Flight Display.
a. To the extent reasonably possible, American
shall include AA Code Shared Segments in the availability
and fare displays of all computerized reservations systems
in which Hawaiian and American participate, the Official
Airline Guide ("OAG"), American's timetables and American's
internal reservation systems, using the AA designator codes.
Hawaiian and American shall take all necessary measures to
ensure the display of AA Code Shared Segments in accordance
with the preceding sentence. American shall publish, to the
extent permitted by governmental rules and regulations, AA
Code Shared Segments in Airline Guides, CRSs and its own
reservations system. Hawaiian shall supply AA with the
necessary schedule information. A separate set of American
flight numbers will be assigned for American designator AA
Code Shared Segments.
b. Hawaiian and American shall disclose and
identify the AA Code Shared Segments to the public as
actually being a flight of and operated by Hawaiian, in at
least the following ways:
i. a symbol will be used in timetables and
computer reservation systems indicating that AA Code Shared
Segments are actually operated by Hawaiian;
ii. American advertising concerning AA Code
Shared Segments and American reservationists will disclose
the operator of each flight; and
iii. in any other manner prescribed by law.
c. American agrees to pay any costs incurred for
the publication of the AA Code Shared Segments in the
Airline Guides, CRSs and reservations systems, CRS vendor
booking fees and transaction fees and Hawaiian agrees to
allow normal Interline Service Charge and ticketing fees as
outlined in paragraph 7.c. below.
5. Airport Operational Assistance.
a. Hawaiian's customer service standards will be
followed without discrimination against American's
passengers. Both Parties shall reasonably cooperate to
coordinate and maintain their schedules to minimize
passenger waiting time and to maximize the convenience of
passengers who are connecting between Hawaiian and American
for the AA Code Shared Segments.
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Code Sharing Agreement
Page 4
b. Hawaiian and American will develop jointly,
to the extent practicable, signage and identification as
needed for display at all Hawaiian stations described in
Exhibit A hereto. [Confidential Treatment Requested.] The
Parties also agree to develop jointly, to the extent
practicable and necessary, information pamphlets and/or
ticket jacket inserts explaining the AA Code Shared
Segments.
c. Both Parties agree to cooperate to
accommodate Code Shared Passengers experiencing flight
irregularities that affect AA Code Shared Segments, and not
to forebear from providing assistance because the other
Party may have been responsible for the flight irregularity,
in which case the Party responsible for the flight
irregularity shall bear all related costs associated with
accommodating the Code Shared Passengers who have been
affected. Code Shared Passengers inconvenienced due to
flight irregularities in AA Code Shared Segments shall be
reaccommodated in accordance with the procedures set forth
in Exhibit B.
6. Announcements.
a. Announcements. Hawaiian shall use its best
efforts to make appropriate announcements to all passengers
on the AA Code Shared Segments and in those airports where
AA Code Shared Segments originate in order to promote the
cooperative service. American shall use its best efforts to
make appropriate announcements to all passengers on
American's flights terminating in HNL in order to facilitate
transfer of Code Shared Passengers. Such announcements
shall be jointly developed between the Parties and approved
in writing prior to their use.
b. Press Release. Except as required by
applicable law, neither Party shall issue any written press
release concerning this Agreement without the prior written
consent of the other Party (which consent shall not be
unreasonably withheld or delayed).
7. Pricing and Revenue Accounting.
a. Fares. American shall establish through
fares applicable to itineraries that include both an
American operated segment between the continental United
States and Hawaii, and an AA Code Shared Segment. American
shall not establish or publish local, inter-island fares
applicable for carriage on AA Code Shared Segments. Nothing
in this section shall in any way be deemed to limit
American's right to establish or publish local, inter-island
fares for local, inter-island flights other than AA Code
Shared Segments.
b. Carriage and Tariff Rules. Hawaiian and
American shall jointly develop those policies and
procedures for AA Code Shared Segments that need to be
uniform in order for the services to be provided in a
seamless manner. Except to the extent otherwise provided
in this Agreement, in the event of a conflict or
inconsistency between the policies and procedures
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Code Sharing Agreement
Page 5
of Hawaiian and the Conditions of Carriage of American
which cannot be resolved through mutual cooperation of
the Parties, Hawaiian shall be entitled to conduct its
services with respect to Code Shared Passengers in
conformity with its own procedures.
c. Revenue Proration. The amount specified in
Exhibit C shall be allocated to Hawaiian for each passenger
traveling on an AA Code Shared Segment, whose ticket
includes the AA designator code in the carrier code box.
Tickets subject to the amounts specified in Exhibit C may
only be issued on AA '001' or HA '173' traffic documents,
including neutral ARC and IATA traffic documents validated
with AA '001' or HA '173' form numbers. [Confidential
Treatment Requested.] Except for the prorate amounts and
other charges specifically noted herein, in Exhibit C and in
the Procedures Manual, all other charges with respect to
transportation furnished hereunder shall be governed by
applicable tariffs, rules and regulations and, except as
provided for herein, shall be settled according to the
Bilateral Traffic Agreement.
American shall request IATA to publish reference
in the IATA Prorate Manual - Passenger indicating that HA
provisos shall apply to the AA Code Shared Segments, other
than those segments between Honolulu and Maui.
d. Baggage. With respect to excess baggage
charges, the Party collecting the excess baggage charges for
passengers ticketed for travel on AA Code Shared Segments
shall retain such charges. Baggage handling and settlement
of baggage claims for passengers ticketed for travel on AA
Code Shared Segments will take place in accordance with the
Bilateral Traffic Agreement. The use of the AA designator
code for AA Code Shared Segments does not extend to system
mail contract rates between each Carrier and the U.S. Postal
Service.
e. Inventory Access. American shall have access
to Hawaiian's inventory through an automated computerized
interface, which both Parties shall maintain throughout the
term of this Agreement, to expedite the sale of inventory on
the AA Code Shared Segments. Detailed procedures for
implementing and maintaining seat inventory access are set
forth in the Procedures Manual. The Parties shall map
inventory classes of American to inventory classes of
Hawaiian as set forth on Exhibit C.
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Code Sharing Agreement
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8. Traffic Document Issuance, Billing and Settlement.
a. Traffic documents for use on AA Code Shared
Segments may be issued by either Party, or third parties
with whom the Parties from time to time have interline
traffic agreements, as for any other flight of American or
Hawaiian.
b. The acceptance of traffic documents used in
connection with the AA Code Shared Segments, and settlements
between the Parties for documents honored by the Parties,
shall be governed by the same procedures as those set forth
in the Bilateral Traffic Agreement and the ACH Manual,
except as described below.
c. All flight coupons (including those issued by
American showing American's designator code in the carrier
code box of the flight coupon ("American Tickets")) used and
honored on AA Code Shared Segments shall be uplifted and
retained by Hawaiian, which shall be responsible for
processing and billing of such documents as follows:
i. Hawaiian shall xxxx uplifted flight
coupons to the carrier, whose traffic documents were used to
issue such ticket (the "Ticketing Carrier"), other than
American, using the applicable ACH or IATA interline
settlement process. Hawaiian will xxxx American for prorate
amounts as designated in Section 7 and Exhibit C on tickets
issued on Hawaiian's '173' or American's '001' traffic
documents.
ii. In the case of tickets on AA Code Shared
Segments issued by third parties, should Hawaiian not have
an interline traffic agreement with the Ticketing Carrier,
Hawaiian will xxxx such flight coupons to American as set
forth in the Procedures Manual. The value of flight coupons
billed to American under this Section 8.c.ii shall be equal
to the value such coupons would have had if issued by
American.
iii. In the event that Hawaiian is unable to
obtain satisfactory settlement of interline accounts with
any third party (other than those referenced in Section
8.c.ii above) that issued tickets on AA Code Shared
Segments, American shall use commercially reasonable efforts
to assist Hawaiian in settling such accounts. In no event,
however, shall American be required to reimburse Hawaiian
for any losses incurred due to unsatisfactory interline
account settlements with third parties.
iv. To support interline billing to third
parties and involuntary rerouting and refunding of tickets
issued by third parties on AA Code Shared Segments by
Hawaiian, American hereby waives endorsement requirements
for Hawaiian with respect to all such tickets. American
shall supply Hawaiian with written confirmation in the form
attached hereto as Exhibit D confirming its blanket waiver
of endorsement requirements for all ticket coupons issued
for use on AA Code Shared Segments.
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Code Sharing Agreement
Page 7
Invoices shall be delivered to:
Hawaiian: Interline Payables
Hawaiian Airlines, Inc.
X.X. Xxx 00000
Xxxxxxxx, XX 00000
American: Passenger Interline Accounting Dept.
American Airlines
P.O. Box 619616
Mail Drop 0000
XXX Xxxxxxx, XX 00000-0000
Payment shall take place in accordance with the
applicable procedures of the ACH.
9. Hawaiian's Representations and Warranties. To
induce American to enter into this Agreement, and any
documents contemplated hereby Hawaiian makes the following
representations and warranties, each of which shall survive
the execution and delivery of this Agreement.
a. Hawaiian is a corporation duly incorporated
under the laws of the Territory of Hawaii and is validly
existing in good standing under the laws of the State of
Hawaii and has its chief executive office in Honolulu,
Hawaii;
b. Hawaiian is a duly certificated air carrier
under 14 C.F.R. Part 121;
c. All services performed by Hawaiian pursuant
to this Agreement shall be conducted and all of its
personnel shall at all times meet and be in full compliance
with any and all applicable federal, state and local laws,
orders, rules and regulations of all governmental agencies
having jurisdiction over its operations, including but not
limited to the U.S. Department of Transportation ("DOT") and
the U.S. Federal Aviation Administration ("FAA");
d. Hawaiian has the requisite corporate power
and authority to enter into and perform its obligations
under this Agreement;
e. The execution and delivery of, and the
performance by Hawaiian of its obligations under, this
Agreement have been duly authorized by all necessary
corporate action and no other corporate proceedings are
necessary in conjunction therewith. This Agreement has been
duly executed and delivered by Hawaiian, and, assuming due
authorization, execution and delivery by American, this
Agreement constitutes the legal, valid and binding
obligation of Hawaiian, enforceable against Hawaiian in
accordance with the terms and conditions hereof,
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 8
except as enforceability may be limited or modified by
the effect of bankruptcy, insolvency or other similar
laws affecting creditors' rights generally and the
application of general principles of equity and public
policy;
f. Neither the execution, delivery or
performance by Hawaiian of this Agreement, nor the
consummation by Hawaiian of any of the transactions
contemplated hereby will (i) contravene or conflict with or
cause a default under (A) any applicable law, rule or
regulation binding on Hawaiian, or (B) any provision of the
Charter or Certificate of Incorporation or the Bylaws or
similar organization instruments or rules of Hawaiian, or
(ii) result in the breach of any agreement or instrument to
which Hawaiian is a party or by which it is bound except
where such conflict, contravention or breach would not have
a material adverse effect on Hawaiian and its subsidiaries
taken as a whole or on its ability to perform its
obligations hereunder;
g. Neither the execution, delivery or
performance by Hawaiian of this Agreement, nor the
consummation by Hawaiian of any of the transactions
described herein, requires the consent or approval of, or
the giving of notice to, the registration with, the
recording or filing of any documents with, or the taking of
any other action in respect of, any competent authority, any
trustee or holder of any indebtedness or obligation of
Hawaiian, any stockholder of Hawaiian, or any other person
or entity, except for where the failure to obtain such
consent or approval, to give notice, to record or file any
documents or to take such other action would not have a
material adverse effect on Hawaiian or a material adverse
effect on the transactions described in the Agreement; and
h. Each of the foregoing representations and
warranties shall survive the execution and delivery of this
Agreement and the termination hereof.
10. American's Representations and Warranties. To
induce Hawaiian to enter into this Agreement, and any
documents contemplated hereby, American makes the following
representations and warranties, each of which shall survive
the execution and delivery of this Agreement.
a. American is a corporation duly incorporated
and is validly existing in good standing under the laws of
the State of Delaware and has its chief executive office in
Fort Worth, Texas;
b. American is a duly certificated air carrier
under 14 C.F.R. Part 121;
c. All services performed by American
pursuant to this Agreement shall be conducted and all of
its personnel shall at all times meet and be in full
compliance with any and all applicable federal, state and
local laws, orders, rules and regulations of all
governmental
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 9
agencies having jurisdiction over its operations,
including but not limited to the DOT and the FAA;
d. American has the requisite corporate power
and authority to enter into and perform its obligations
under this Agreement;
e. The execution and delivery of, and the
performance by American of its obligations under, this
Agreement have been duly authorized by all necessary
corporate action and no other corporate proceedings are
necessary in conjunction therewith. This Agreement has been
duly executed and delivered by American, and, assuming due
authorization, execution and delivery by Hawaiian, this
Agreement constitutes the legal, valid and binding
obligation of American, enforceable against American in
accordance with the terms and conditions hereof, except as
enforceability may be limited or modified by the effect of
bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and the application of general
principles of equity and public policy;
f. Neither the execution, delivery or
performance by American of this Agreement, nor the
consummation by American of any of the transactions
contemplated hereby, will (i) contravene or conflict with or
cause a default under (A) any applicable law, rule or
regulation binding on American, or (B) any provision of the
Charter or Certificate of Incorporation or the Bylaws of
American, or (ii) result in the breach of any agreement or
instrument to which American is a party or by which it is
bound except where such conflict, contravention or breach
would not have a material adverse effect on American and its
subsidiaries taken as a whole or on its ability to perform
its obligations hereunder;
g. Neither the execution, delivery or
performance by American of this Agreement, nor the
consummation by American of any of the transactions
contemplated by this Agreement, requires the consent or
approval of, or the giving of notice to, the registration
with, the recording or filing of any documents with, or the
taking of any other action in respect of, any competent
authority, any trustee or holder of any indebtedness or
obligation of American, any stockholder of American, or any
other person or entity, except for where the failure to
obtain such consent or approval, to give notice, to record
or file any documents or to take such other action would not
have a material adverse effect on American or a material
adverse effect on the transactions described in the
Agreement; and
h. Each of the foregoing representations and
warranties shall survive the execution and delivery of this
Agreement and the termination hereof
11. Independent Parties.
a. Independent Contractor. It is expressly
recognized and agreed that each Carrier, in its
performance and otherwise in this Agreement, is and shall
be engaged and acting
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Code Sharing Agreement
Page 10
as an independent contractor and in its own independent
and separate business; that each Carrier shall retain
complete and exclusive control over its staff and
operations and the conduct of its business; and that,
except as otherwise set forth herein, each Carrier shall
bear and pay all expenses, costs, risk and
responsibilities incurred by it in connection with its
obligations under this Agreement. Neither Party nor any
of its officers, directors, employees, representatives or
agents shall in any manner, directly or indirectly,
expressly or by implication, be deemed to be, or make any
representation or take any action which may give rise to
the existence of any employment, agent, partnership, or
other like relationship as between Hawaiian and American
but each Carrier's relationship with respect to the other
Carrier in connection with this Agreement is and shall
always be that of an independent contractor. Nothing
contained in this Agreement is intended to limit or
condition either Party's control over the other Party's
operation or the conduct of its business as an air
carrier.
b. Directors, Officers, Agents, Employees. No
director, officer, agent or employee of either Party shall
be charged personally or held contractually liable by or to
the other Party under any term or provision of this
Agreement or any supplement, modification or amendment to
this Agreement or because of any breach hereof or thereof.
c. Not a Partnership. The terms of this
Agreement, including its exhibits, or any amendment,
supplement or modification to this Agreement shall not be
construed or interpreted at any time to mean that the
business relationship between Hawaiian and American is a
partnership.
d. Status of Employees. The employees, agents
and/or independent contractors of Hawaiian shall be
employees, agents and/or independent contractors of Hawaiian
for all purposes and under no circumstances shall be deemed
to be employees, agents and/or independent contractors of
American. The employees, agents and/or independent
contractors of American shall be employees, agents and/or
independent contractors of American for all purposes and
under no circumstances shall be deemed to be employees,
agents and/or independent contractors of Hawaiian. Neither
Party shall have any supervisory power or control over any
employees, agents and/or independent contractors employed by
the other Party at any time.
e. Liability for Employee Costs. Each
Carrier, with respect to its own employees (hired
directly or through a third party), accepts full and
exclusive liability for the payment of workers'
compensation and/or employer's liability (including
insurance premiums where required by law) and for the
payment of all taxes, contributions or other payments for
unemployment compensation, vacations, or old age
benefits, pensions and all other benefits now imposed
upon employers with respect to its employees by any
government or agency thereof or any other third party
(whether measured by the wages, salaries, compensation or
other remuneration paid to such employees or otherwise)
and each Carrier further agrees to make such
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Page 11
payment and to make and file all reports and returns, and
to do everything necessary to comply with the laws
imposing such taxes, contributions or other payments
12. Indemnification and Insurance.
a. Hawaiian Indemnification. Hawaiian shall
indemnify, defend and hold harmless American and its
Affiliates and their respective directors, officers,
employees and agents (individually a "Marketing Carrier
Indemnified Party") from and against any and all claims,
suits, penalties, liabilities, judgments, fines, losses and
expenses of any nature or kind ("Damages") arising out of,
caused by or occurring in connection with (or alleged to
arise out of, be caused by or be occurring in connection
with):
i. The death of or injury to persons, or
delay or loss of or damage to property (including aircraft,
baggage or cargo) occurring while such persons or property
are under the control or in the custody of, or being
transported by, Hawaiian (including, for the avoidance of
doubt, Damages arising out of death of or injury to Code
Shared Passengers traveling on American Tickets that
implement limits or conditions of liability or
jurisdictional rules with respect to passenger claims that
differ from those of Hawaiian), except to the extent caused
by the willful misconduct of American; and
ii. Negligent acts or omissions of Hawaiian
that are in any way related to services contemplated by this
Agreement;
b. American Indemnification. American shall
indemnify, defend and hold harmless Hawaiian and its
Affiliates and their respective directors, officers,
employees and agents (individually an "Operating Carrier
Indemnified Party") from and against any and all Damages
arising out of, caused by or occurring in connection with
(or alleged to arise out of, be caused by or be occurring in
connection with):
i. The death of or injury to persons, or
delay or loss of or damage to property (including aircraft,
baggage or cargo) occurring while such persons or property
are under the control or in the custody of, or being
transported by, American, except to the extent caused by the
willful misconduct of Hawaiian; and
ii. Negligent acts or omissions of American
that are in any way related to services contemplated by this
Agreement, except for Damages of the type referred to in
Section 12.a. (in which event Hawaiian shall indemnify
American and other Marketing Carrier Indemnified Parties
notwithstanding such negligent (but not willful) acts or
omissions of American); and
iii. Passenger claims based on American's
failure to properly issue and complete transportation
documentation in accordance with the provisions of the
standard Airlines
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Code Sharing Agreement
Page 12
Clearing House or IATA ticketing procedures, including
the failure to put a proper notice of the limits of
liability on such documentation (it being understood that
in ticketing Code Shared Passengers, American is entitled
to apply the limits of liability provided for in its own
Conditions of Carriage).
c. Indemnification Procedures. 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 written notice (an "Indemnification Notice") of any
third party claim which the Indemnified Party believes gives
rise to a claim for indemnity against the Indemnifying
Party, and the Indemnifying Party shall be entitled, at its
own cost and expense and by its own legal advisors, to
control the defense of or to settle any such third party
claim. If the Indemnifying Party fails to take any action
against the third party claim that is the subject of an
Indemnification Notice within thirty (30) days of receiving
such notice, 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 for the account, and at the expense, of the
Indemnifying Party. Except as otherwise set forth in this
Section 12.c or Section 12.d, the Indemnified Party shall
not enter into any settlement or other compromise or consent
to a judgment with respect to a third party claim to which
the Indemnifying Party has an indemnity obligation without
the prior written consent of the Indemnifying Party.
d. Rights of Indemnified Party. Each
Indemnified Party shall have the right, but not the duty, to
participate in the defense of any claim or litigation with
attorneys of its own choosing and at its own cost, without
relieving the Indemnifying Party of any obligations
hereunder. The Indemnifying Party shall have the right to
elect to settle any such claim or demand, for monetary
damages only, subject to the consent of the Indemnified
Party; provided, however, if the Indemnified Party fails to
give such consent within twenty (20) days of being requested
to do so, the Indemnified Party shall assume the defense of
such claim or demand and regardless of the outcome of such
matter, the Indemnifying Party's liability hereunder shall
be limited to the amount of any such proposed settlement.
In the event the Indemnifying Party assumes the defense of a
claim or demand, the Indemnified Party shall have the right
to assume control of the defense of any claim or demand from
the Indemnifying Party at any time and to elect to settle
such claim or demand; provided, however, the Indemnifying
Party shall have no indemnification obligations with respect
to such claim, demand or settlement except for the costs and
expenses of the Indemnified Party incurred prior to the
assumption of the defense of the claim or demand by the
Indemnified Party.
e. Survival of Indemnification Rights and
Obligations. The rights and obligations of the Parties
under this Section 12.a. and 12.b. shall survive the
termination of this Agreement.
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Code Sharing Agreement
Page 13
f. Insurance. Hawaiian, as the Operating Carrier
shall procure and maintain aircraft hull all risks and hull
war and allied perils insurances for the aircraft provided
by Hawaiian, and shall cause its insurers to waive rights of
subrogation against American, its officers, directors,
agents, servants and employees, except in respect of claims
caused by the gross negligence or willful misconduct of
American, its officers, directors, agents, servants and
employees. Hawaiian shall also procure and maintain
comprehensive airline liability insurance including but not
limited to third party, passenger, baggage, cargo and mail
legal liability insurance [Confidential Treatment Requested]
each occurrence. Such legal liability insurance shall
contain the following provisions:
i. To include American, its agents,
servants and employees as additional insureds except in
respect of claims caused by the gross negligence or willful
misconduct of Its officers, agents, servants and employees
(the "additional insureds");
ii. To provide that all provisions thereof,
except the limits of liability, shall operate in the same
manner as if there were a separate policy issued to each
insured;
iii. To provide that this insurance shall be
primary and without rights of contribution from any other
insurance carried by American;
iv. To provide that the additional insureds
shall have no responsibility for premium;
v. To provide that the cover afforded to
each additional insured by the policy shall not be
invalidated by any act or omission (including
misrepresentation and nondisclosure) of any other person or
party of the policy provided that the additional insured so
protected has not caused, contributed to or knowingly
condoned the said act or omission;
vi. To give American at least thirty (30)
days prior written notice of policy cancellation or material
change except in the case of war and allied perils where
such period of notice shall be seven (7) days or such lesser
period as may be available in accordance with policy
conditions, and
vii To provide that insurers accept and
insure the indemnification provision included in this
Agreement.
Hawaiian shall provide American with certificates of
insurance evidencing such coverage within five (5) business
days of the date of this Agreement and thereafter within
five (5) days of the date of any subsequent renewal of such
coverage.
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 14
13. Notices and Requests. Unless another address is
specified in writing, all notices and requests in connection
with this Agreement shall be given in writing and delivered
at the address specified below, by certified U.S. mail,
postage prepaid, return receipt requested, and by facsimile.
If to Hawaiian: Hawaiian Airlines, Inc.
Attn: Senior Vice President-
Sales & Marketing
0000 Xxxxxxx Xxxxxx, Xxxxx X000
Xxxxxxxx, Xxxxxx 00000
Telephone: 808/000-0000
Facsimile: 808/838-6746
with a copy to Hawaiian Airlines, Inc.
Attn: General Counsel
0000 Xxxxxxx Xxxxxx, Xxxxx X-000
Xxxxxxxx, Xxxxxx 00000
Telephone:808/000-0000
Facsimile:808/835-3687
If to American: American Airlines, Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attn: Vice President -
International Affairs
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: American Airlines, Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attn: Senior Vice President and
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
14. Term of Agreement.
a. Term. This Agreement shall commence on the
date hereof and shall continue for a term of five years from
the Implementation Date, unless sooner terminated by either
Party in accordance with this Agreement; [Confidential
Treatment Requested]. This Agreement will automatically
renew for additional [Confidential Treatment Requested]
periods, unless terminated by either Party in writing
[Confidential Treatment Requested] prior to the desired
termination date.
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 15
b. Termination as a Result of Changes of Law. In
the event there is any change in treaties, statutes or
regulations of air transportation that materially affects
the rights and/or obligations presently in force with
respect to the air transportation services of Hawaiian or
American or both, relating to AA Code Shared Segments, then
the Parties shall consult each other, within thirty (30)
days after any of the occurrences described herein, in order
to determine or seek mutual agreement as to what, if any
changes to this Agreement are necessary or appropriate,
including but not limited to the early termination of this
Agreement.
c. Other Termination Rights. In addition to any
other provisions of this Agreement, this Agreement may be
terminated, without liability, as follows:
i. By either Party upon material default by
the other Party after having given seven (7) days advance
written notice to cure such material default, and the
default having not been cured. Termination under this
Section 14(d)(i) shall not be effective, however, if the
allegedly breaching Party shall, within seven (7) days
following receipt of such notice (a) correct such breach, or
(b) if the breach cannot be completely corrected within
seven (7) days, take actions reasonably contemplated to
correct such breach and completely correct such breach no
later than thirty (30) days following receipt of the notice.
ii. By either Party immediately in the event
the other Party shall (i) file a voluntary petition in
bankruptcy; (ii) make an assignment for the benefit of
creditors of all or substantially all of its assets; (iii)
fail to secure dismissal of an involuntary petition or
bankruptcy filed against it within sixty (60) days after the
filing thereof; (iv) suspend the payment of, admit in
writing its inability to pay, or generally fail to pay its
debts as they become due; (v) have suspended (as declared by
a clearing house) its transactions with banks and other
financial institutions or have proposed or commenced a
moratorium upon or extension of composition of its debts;
(vi) have issued against it any writ, execution, process, or
abstract of judgment which may have a material adverse
effect on such Party and which is not dismissed, satisfied
or stayed within sixty (60) days; (vii) file a petition for
composition, corporate reorganization, corporate
liquidation, arrangement or special liquidation proceedings;
(viii) merge with or into, any other person or entity except
when such Party is the surviving entity and, after such
merger, the shareholders of such Party immediately prior to
the merger continuing to own more than eighty percent (80%)
of the ordinary equity of such Party; or (ix) sell or
otherwise transfer all or substantially all of its assets to
any other person or entity, or have a portion of its
ordinary equity transferred to a person or entity who was
not a holder of more than fifty percent (50%) of its
ordinary equity prior to the transfer and is the holder of
more than fifty percent (50%) after such transfer;
iii. By either Party immediately on notice,
if the other Party shall be dissolved or shall fail to
maintain its corporate existence in good standing, or shall
have its authority to operate as a scheduled airline
suspended or revoked, either in whole or with respect to AA
Code Shared Segments, or shall cease operations as a
scheduled airline;
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 16
iv. By either Party immediately on notice if
the other Party shall be cited by any government authority
for any significant noncompliance with a material law, rule
or regulation with respect to the marketing or operation of
AA Code Shared Segments;
v. By either Party on thirty (30) days'
prior written notice, if a carrier, foreign or domestic,
that competes with the terminating Party on a material
basis, acquires majority ownership of or substantial control
over the other Party;
vi. By American immediately on notice if:
1. Hawaiian shall fail to maintain any
of its aircraft in an airworthy condition and conduct its
flight operations in accordance with the standards, rules
and regulations promulgated by any government authority; or
2. Hawaiian shall have a completion
factor of [Confidential Treatment Requested] during any
thirty (30) day period with respect to AA Code Shared
Segments (including in such calculations all flights
canceled less than one (1) week prior to the date of its
scheduled operation and excluding flights not completed due
to weather conditions); or
3. Hawaiian's operational performance
adversely impacts American's passenger handling after
written notice having been given to Hawaiian three weeks
earlier;
vii. By Hawaiian immediately on notice if:
1. American shall fail to maintain any
of its aircraft in an airworthy condition and conduct its
flight operations in accordance with the standards, rules
and regulations promulgated by any government authority; or
2. American's operational performance
adversely impacts Hawaiian's passenger handling after
written notice having been given to American three weeks
earlier.
d. In the event that this Agreement is
terminated as provided herein by American pursuant to
Section 14.a, or by Hawaiian pursuant to any other Section,
American shall endorse all tickets issued for travel on the
AA Code Shared Segments to Hawaiian. Hawaiian shall accept
all confirmed reservations for passengers traveling on such
tickets as if such reservations had been booked through
Hawaiian using ordinary interline procedures but giving
effect to the revenue proration methodology provided for in
this Agreement.
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 17
e. In the event that this Agreement is
terminated as provided herein by Hawaiian pursuant to
Section 14.a, or by American pursuant to any other Section,
American at its sole discretion, shall have the option to
endorse tickets issued for travel on AA Code Shared Segments
to Hawaiian or any other carrier. American shall also have
the option to transfer confirmed reservations for passengers
traveling on such tickets to Hawaiian or any other carrier.
Whenever such tickets are endorsed to Hawaiian, the revenue
proration methodology provided for in this Agreement shall
apply.
15. Costs of Systems Automation. Each Party shall pay
its own expenses incurred in connection with any systems
automation changes required to implement this Agreement or
otherwise mutually agreed by the Parties (e.g., PNR
exchange, yield management, revenue accounting, etc.) and
for the routine maintenance of the same.
16. Trademarks and Corporate Identification
a. It is understood and agreed that the logos,
trademarks, service marks and tradenames of American shall
be and remain at all times the exclusive property of
American, and that the logos, trademarks, service marks and
tradenames of Hawaiian shall be and remain at all times the
exclusive property of Hawaiian. Neither Party shall use the
logos, trademarks, service marks and tradenames of the other
Party without the other Party's prior written consent.
b. Each Party agrees that, should any right,
title or interest in or to the other Party's logos,
trademarks, service marks or tradenames become vested in it
(by operation of law or otherwise) by reason of this
Agreement, it shall hold the same in trust for the other
Party and shall, at the request of such Party, forthwith
unconditionally assign any such right, title or interest to
such Party.
c. i. From time to time each Party may provide
to the other certain art work, drawings, or technical
information and advice for the purpose of assisting such
other Party in the advertising and promotion of the AA Code
Shared Segments. All such drawings, technical information
and advice will be treated by the receiving Party as
confidential and proprietary information of the providing
Party and will use it only for those purposes specifically
authorized by the providing Party in advance and in writing.
ii. Each Party agrees that all advertising
and promotional materials promoting the AA Code Shared
Segments will meet the quality and presentation standards of
both Parties hereto, as such standards are determined by
each Party in its sole discretion.
iii. Each Party shall, in all cases, be the
sole judge in determining the acceptability of both the
quality and presentation of advertising and promotional
materials using its tradenames or trademarks.
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 18
iv Each Party shall be responsible for
providing agreed upon promotional material to its own
authorized agents and airport locations.
17. Taxes.
a. Subject to Section 17.c, any income or
franchise taxes (or taxes of a similar nature) on the
revenues or income from the sale of air transportation
hereunder shall be the responsibility of and be paid by
Hawaiian.
b. Each Party shall pay any other taxes,
including sales taxes, use taxes, excise taxes, value added
taxes, gross receipts taxes, withholding taxes, import and
export duties, including without limitation all related
fees, licenses or assessments and shall pay any interest or
penalty thereon (together with income, franchise and similar
taxes referred to in Section 17.a hereinafter collectively
referred to as the "Taxes"), imposed by any federal, state,
provincial, local, municipal, airport, port or foreign
authority levied upon it by operation of applicable law. It
is understood that the Ticketing Carrier will collect,
report and remit to the taxing authorities any
noninterlineable Taxes levied on sales of air
transportation. It is further understood that the Ticketing
Carrier shall collect, report and credit to the account of
Hawaiian with ACH any interlineable Taxes levied in
connection with the sale of AA Code Shared Segments.
Hawaiian shall remit to tax authorities all such
interlineable Taxes.
c. Each Party further agrees to indemnify,
defend and hold the other Party harmless from and against
any and all Taxes levied upon the indemnifying Party (or for
which it is otherwise responsible) but paid by the
indemnified Party, resulting from any transaction or
activity contemplated by this Agreement. If either Party
receives notice from any taxing authority with respect to an
assessment or potential assessment or imposition of any Tax
(collectively an "Assessment"), that the other Party would
be responsible for paying, directly or through an
indemnification claim pursuant to this Section 17.c, then
the indemnifying Party shall have the right to defend or
contest such Assessment or imposition in accordance with the
procedures set forth in Sections 12.c and 12.d of this
Agreement and the indemnified Party shall have the right to
participate in such defense or contest in accordance with
such procedures. The foregoing indemnity shall survive
termination of this Agreement.
18. Covenant to Comply with All Laws
a. In performing its obligations under this
Agreement, each Party shall fully comply with, and have all
licenses under, all applicable federal, state, and local
laws of the United States, including rules and regulations
promulgated by the U.S. National Transportation Safety
Board, the DOT, the FAA and the U.S. Department of Defense.
b. Each Party undertakes to comply with the
requirements of any applicable Workers' Compensation
legislation or similar statutory insurance legislation,
and shall keep
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 19
covered by legally mandated insurance all persons
employed by it in connection with this Agreement. Each
Party shall indemnify the other against any Damages
arising out of or relating to a failure to comply with
such legal obligations, such indemnity to survive
termination of this Agreement. Each Party shall, upon
request by the other Party, provide evidence of such
insurance coverage and compliance with such legal
obligations.
c. If either Party finds that any provisions of
this Agreement are contrary to any applicable laws or
governmental regulations, that Party shall notify the other
Party immediately, in writing. Such notice shall include a
description of the perceived breach of regulation, along
with all supporting written materials, or references
thereto, to facilitate the other Party's investigation of
such perceived breach.
19. No Third Party Beneficiaries. All rights, remedies
and obligations of the Parties hereunder shall accrue and
apply solely to the Parties hereto and their permitted
successors and assigns and there is no intent to benefit any
third parties.
20. Confidential Information. Neither Hawaiian nor
American shall disclose to the other Party or be required to
disclose by the other Party any information relating to its
scheduling, pricing, inventory control or flight
profitability. Neither Hawaiian nor American shall disclose
the terms of this Agreement or any proprietary information
with respect to the other obtained as a result of this
Agreement, either during the term hereof or thereafter
except as may be required by law or by any order of a court
or administrative agency, and then upon ten (10) days'
notice to the other Party. Hawaiian and American recognize
that, in the course of the performance of each of the
provisions hereof, each Party may be given and may have
access to confidential and proprietary information of the
other Party, including proposed schedule and fare changes,
statistical data regarding load factors and fares, sales and
promotional programs and other operating and competitive
information (the "Confidential Information"). Hawaiian and
American agree that each shall preserve, and shall ensure
that each of its officers, directors, agents, attorneys,
auditors, consultants and employees who receive Confidential
Information preserve the confidentiality of the other
Party's Confidential Information. This confidentiality
obligation shall survive for two (2) years after the
termination of this Agreement. Hawaiian and American agree
to jointly seek confidential treatment of this document with
the Securities and Exchange Commission.
21. Assignment. This Agreement may not be assigned by
either Party without the prior written consent of the other
Party. Any attempt to do so shall render this Agreement null
and void.
22. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Texas, without regard to conflict of law principles.
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 20
23. Disputes. Any dispute, controversy or claim
arising out of or relating to this Agreement, or the breach
thereof, shall be settled by binding arbitration in
accordance with the Arbitration Rules of the American
Arbitration Association. The Arbitrators shall be
knowledgeable in the airline industry and shall interpret
the agreement in accordance with the laws of the State of
Texas. The arbitration shall take place in Los Angeles,
California. Judgment upon any arbitral award contemplated
above may be entered in any court having jurisdiction.
24. Attorneys Fees. In the event an action (including
arbitration) is brought to enforce or construe the
provisions of this agreement, the prevailing Party in such
action shall be awarded reasonable costs and attorneys' fees
as part of the judgment in such action.
25. Severability. In case any one or more of the
provisions contained herein shall, for any reason, be held
to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall be
construed as if such invalid, illegal or unenforceable
provision or provisions had never been contained herein
unless the deletion of such provision or provisions would
result in such a material change as to cause the agreements
contemplated herein to be unreasonable.
26. Force Majeure. Neither Party shall be liable for
delays or failure in performance in whole or in part
hereunder to the extent that such delay or failure of
performance is not the result of that Party's lack of
reasonable diligence, if caused by any act of God, war,
strike, lockout, labor dispute, fire, act of government,
hurricane, or any other cause, whether similar or
dissimilar, beyond the control of that Party. However, the
Party relying upon this provision shall give prompt notice
to the other Party of the occurrence of any event which will
result in a failure or delay in performance and such other
Party may terminate this Agreement upon five (5) days'
advance notice if such delay is expected to exceed seven (7)
days.
27. Titles and Heading . The titles and headings of
this Agreement are included for convenience only and shall
not be deemed to constitute part of this Agreement or to
affect the construction or interpretation hereof.
28. Entire Agreement; Amendments Waiver. This
Agreement constitutes the full and complete agreement of the
Parties and supersedes any other agreement, understanding or
representation, whether verbal or in writing by or between
the Parties pertaining to AA Code Shared Segments. Any
changes, amendments or other modifications to this Agreement
shall be in writing and executed by both Parties hereto. The
failure of any Party hereto to enforce at any time any
provision of this Agreement shall not be construed to be a
waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right
of such Party thereafter to enforce each and every
provision. No waiver of any breach of this Agreement shall
be held to constitute a waiver of any other subsequent
breach.
Hawaiian Airlines/American Airlines
Code Sharing Agreement
Page 21
IN WITNESS WHEREOF, the Parties have caused this
Agreement to be duly executed in their name and on their
behalf as of the date first written above.
HAWAIIAN AIRLINES, INC. AMERICAN AIRLINES, INC.
By:------------------------ By:------------------------
Xxxx X. Xxxxx Xxxxxx X. Xxxxxxxx
President and Vice President -
Chief Executive Officer International Affairs
By:------------------------
Xxxx X. Xxxxxxxxx
Chief Financial Officer
Exhibit A: City-Pairs
1. Connecting Code Share Service
Code Share Service bearing the AA code shall, at AA's
discretion and subject to this Agreement, apply to as many
as all flights operated by Hawaiian between HNL on the one
hand and other points in the State of Hawaii on the other
hand, as set forth below.
Code Share Service to be implemented on the Implementation
Date will include certain flights between:
HNL-LIH
HNL-KOA
HNL-ITO
HNL-MKK
HNL-LNY
HNL-OGG
2. Other Prospective Code Share Service
As mutually agreed to in writing, Code Share Service may be
expanded to include flights operated by Hawaiian in the
State of Hawaii that do not service HNL and may also be
expanded to include [Confidential Treatment Requested].
Exhibit B: Involuntary Rerouting and Denied Boarding
1. Involuntary Rerouting
1.1. Provision of Services by Hawaiian
In the event of flight interruption, cancellation,
delay, or irregularity on any AA Code Shared
Segment, Hawaiian shall be responsible for all
passenger-related expenses, including
accommodations, protection on other carriers,
Flight Interruption Manifest issuance, etc.
1.2. Policies Governing Involuntary Rerouting
Guidelines
Hawaiian's procedures shall apply.
2. Oversales
2.1. Avoiding Involuntary Denied Boarding
Each Party shall make reasonable efforts to
ensure that confirmed Code Shared Passengers shall
not be denied boarding on an AA Code Shared
Segment.
2.2. Overbookings
In the event that a Code Shared Passenger is
denied boarding by Hawaiian, compensation shall be
offered and paid by Hawaiian in accordance with
any applicable governmental regulation and, in the
absence of same, in accordance with Hawaiian's
procedures.
3. Payment of Denied Boarding Compensation
3.1. Application of Hawaiian's Procedures
Hawaiian's procedures will apply.
Exhibit C: Prorate Amount
The following amounts shall be allocated to Hawaiian as
revenue for the following city-pairs:
[Confidential Treatment Requested]
Exhibit D: Agreement for Waiver of Endorsement Requirements
American Airlines, Inc. ("American") agrees to waive
endorsement requirements for Hawaiian Airlines, Inc.
("Hawaiian") as follows;
I. All flight coupons issued for the following sectors on
American's '001' traffic documents or by third parties for
which American has endorsement rights, but in either case
naming American in the "carrier" box may be accepted without
endorsement by Hawaiian.
ROUTES: HNL-LIH
HNL-KOA
HNL-ITO
HNL-MKK
HNL-LNY
HNL-OGG
II. This agreement shall become valid as of
_________________, 199_.
III. This agreement shall terminate automatically on the
date on which the Code Sharing Agreement between American
and Hawaiian expires.
American Airlines, Inc. Hawaiian Airlines, Inc.
Fort Worth, Texas Honolulu, Hawaii
------------------------------ -------------------------
Xxxxxx X. Xxxxxxxx Xxxx X. Xxxxx
Vice President - International President and Chief
Affairs Executive Officer
-------------------------
Xxxx X. Xxxxxxxxx
Chief Financial Officer
