Letter Agreement Amending Purchase Agreement 2285 Between The Boeing Company and American Trans Air, Inc. Regarding Demonstration Flight Waiver for Model 757-33N Aircraft

Summary

This agreement between The Boeing Company and American Trans Air, Inc. allows the airline to waive the pre-delivery demonstration flight for certain aircraft. In exchange, Boeing will provide additional jet fuel at delivery and reimburse the airline for specific costs incurred if any defects are found during the airline's first flight, provided these costs are not already covered by warranty. The agreement also clarifies responsibility for the aircraft if it must be returned to Boeing for corrections. Claims for reimbursement must be submitted within 90 days of the first flight.

EX-10.5 53 0053.txt AMTRAN, INC., 2000 10-K, EXHIBIT 10.5 American Trans Air, Inc. 7337 West Washington St. Indianapolis International Airport Indianapolis, Indiana 46231 Subject: Demonstration Flight Waiver Reference: Purchase Agreement 2285 (the Purchase Agreement) between The Boeing Company (Boeing) and American Trans Air, Inc. (Customer) relating to Model 757-33N aircraft (the Aircraft) This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement shall have the same meaning as in the Purchase Agreement. DEFINITION OF TERMS: CORRECTION COSTS: Customer's direct labor costs and the cost of any material required to correct a Flight Discrepancy where direct labor costs are equal to the warranty labor rate in effect between the parties at the time such labor is expended. FLIGHT DISCREPANCY: A failure or malfunction of an Aircraft, or the accessories, equipment or parts installed on the Aircraft which results from a defect in the Aircraft, Boeing Product, engine or Supplier Product or a nonconformance to the Detail Specification for the Aircraft. The AGTA provides that each aircraft will be test flown prior to delivery for the purpose of demonstrating the functioning of such Aircraft and its equipment to Customer; however, Customer may elect to waive this test flight. For each test flight waived, Boeing agrees to provide Customer an amount of jet fuel at delivery that, including the standard fuel entitlement, totals the following amount of fuel: ---------------------- ----------------------------------------------- AIRCRAFT MODEL TOTAL FUEL ENTITLEMENT (U.S. GALLONS) ---------------------- ----------------------------------------------- ---------------------- ----------------------------------------------- 737 Full tanks (approx. 5,300 to 6,800, depending on model) ---------------------- ----------------------------------------------- ---------------------- ----------------------------------------------- 747 26,000 ---------------------- ----------------------------------------------- ---------------------- ----------------------------------------------- 757 9,600 ---------------------- ----------------------------------------------- ---------------------- ----------------------------------------------- 767 11,000 ---------------------- ----------------------------------------------- ---------------------- ----------------------------------------------- 777 10,300 ---------------------- ----------------------------------------------- Further, Boeing agrees to reimburse Customer for any Correction Costs incurred as a result of the discovery of a Flight Discrepancy during the first flight of the aircraft by Customer following delivery to the extent such Correction Costs are not covered under a warranty provided by Boeing, the engine manufacturer or any of Boeing's suppliers. Should a Flight Discrepancy be detected by Customer which requires the return of the Aircraft to Boeing's facilities at Seattle, Washington, so that Boeing may correct such Flight Discrepancy, Boeing and Customer agree that title to and risk of loss of such Aircraft will remain with Customer. In addition, it is agreed that Boeing will have responsibility for the Aircraft while it is on the ground at Boeing's facilities in Seattle, Washington, as is chargeable by law to a bailee for mutual benefit, but Boeing shall not be chargeable for loss of use. To be reimbursed for Correction Costs, Customer shall submit a written itemized statement describing any flight discrepancies and indicating the Correction Cost incurred by Customer for each discrepancy. This request must be submitted to Boeing's Contracts Regional Director at Renton, Washington, within ninety (90) days after the first flight by Customer. Very truly yours, THE BOEING COMPANY By ------------------------------------------ Its ATTORNEY-IN-FACT -------------------------------------- ACCEPTED AND AGREED TO this Date: , 2000 ------------------------------- AMERICAN TRANS AIR, INC. By ------------------------------------------ Its ------------------------------------------