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HomeMy WebLinkAboutDelta TWF REV GUAR Fall 2023-24 (Executed Copy) REVENUE GUARANTEE AGREEMENT This Revenue Guarantee Agreement (this "Agreement") made and entered.into as of the 51h day bf September2C23, (the "Effective Date"), is beitWeen DELTA AIR LINES, ING., (",Delta"), a Delaware corporation, on the one hand, and the OltY OF TWIN FALLS, IDANO (''-Guarantor"), on the other hand'. Recitals: Delta is an airline providing scheduled air trah6l)ortatiori to domestic United States and international destinations. SkyWest.Airlines ("SkyWest") is a Delta Connection regional carrier that provides contract:scheduled air service for Delta to destinations in Borth America. • 'Guarantor desires.Prat Delta cause SkyWest or'a similar Delta Connection carrier("the Q, perator") to.pr6Ade scheduled air service between Salt Lake City, UT(SLC) and Twin Faits, ID (TVIfF), as more.fiully.described_in Exhibit A (the "Scheduled Service"). • Guarantor is willing to provide Delta with a,revenue guarantee#or.causing the operator to 'operate the Scheduled Service. In consideration of the revenue guarantee provided by Guarantor; Delta is willing to cause the Operator to operate the Scheduled Service 0h,the terms and conditions set forth herein, The parties agree as follows: 1, Definitions.- The defined terms set Forth below shall have the meanings assigned to theft. 1.1 "Gov_ernme.nt.Fees'°.shall,mean all applicable taxes, user-fees and other similar charges including,.v+iithout Ilrhitation, transportation tax-(arrival/departura), government ,inspections„customs taxes„immigration and local airport PFC charges. 1,2' "Guarantee Period" shall mean the period of the Scheduled Service as specified in Exhibit A, 1.3 "Material Cost Circumstance shall mean that,.at any time during the term of this Agreement, Total Non-Fuel Expense per flight increases by twenty peroerit (M) or more aver the Total Non-Fuel EXpense per flight at the start of th.e.Scheduled Service, 1.4 "Minimum Revenues" shall mean the amounts specified in Exhibit A for the Scheduled Service multiplied by the numbbr of one-way Scheduled Flights operated as part of the Scheduled Service.. 1.5 "Passenger Revenue" shall mean the prorated revej)ues Delta receives for.pasaenger tickets sold on the.Scheduled Flights., less.the amount of Government.Fe.es associated with such tights, For local Origin and'destination passengers, the Passenger Revenue arriount'sh'all be the ticket price minus Government Fees. For pass6ngers who purchase a ticket which includes a segment beyond W SLC�TF,the Passenger iRevenue amount shall be the SLC�-TVVF prorated portion of the ticket price; as determined in accordance:with Delta's standard proration policy, minus Government Fees, 1A "Scheduled Flight°' shall mean-each scheduled flight operated on the Scheduled Service during the Guarantee Period. 1.7 "Scheduled Service" shall mean nonstop scheduled air transpQrtation service by.an Operator durih.g the Guarantee Period in accordance with the applicable schedule set forth in Exhibit A, The schedule times in Exhibit are.approximate and maybe adjusted from time to time by Delta. t:8 "Total ReuenLier' shall tnea6 the sum of Passenger. Revenue and all other revenue allocated by Delta-urider its standard revenue accounting practices to the Scheduled Flights, 21. Scheduled Service, .2,1 In consideration of the revenue guarantee provided by'Guarantor(as described in Se.ctloh 3-hereof}, subject to the terms and conditions of this Agreement, Delta.agree,s to.cause an Operator to operate.the Scheduled Service during.the Guarantee Period. .2.2 Delta reserves.the right'for itself or the.Operator.to cancel or divert any Scheduled Flight_ for any reason,.including, without limitation,weather, maintenance, national emergency; pandemic, low demand or operational reasons; If Delta cancels a Scheduled Flight, that flight will`not be.counted for purposes of this Agreement, and passengers, tickets and revenues for such cancelled.flight will not be included in calculatingWinimum Revenues, Passenger Revenues, Total`Revenues; or Scheduled Flights. 2.3 Delta reserves theright.to change, from time.to`tirime, the type of aircraft operating any of the 5chedul, d Service as warranted by passenger demand,'in Delta's reasonable judgment, during the Guarantee Period, 2.4. All parties acknowledge and: agree-that the departure and arrival times are estimates only and.that actual departure and arrival times may vary. Delta reserves the right`to,adjust the scheduled departure and/or.arriyal times from time to time during the Guarantee Period provided.:such adjustment.is cohsistent with Delta's normal cvurs.e of'business conduct, 3. Revenue Guarantees. 3.1 In ordet fd induce.Delta to cause an Operator to operate the Scheduled Service, GuWahtor has agreed to..guarantee,jointly and severally.,that Delta will receive each of the Minimum Revenues for the Scheduled Service during the Guarantee'Peeiad. Upon the_ completion of the Guarantee Period, Delta will calculate the number of Scheduled Flights operated, Total revenues, and Minimum Revenues, and Delta will,deliver an operafional report summarizing,this data'to GuararttQr. Delta expects..to issue this operational report.within sixty (80) days following the close of the Guarantee Period. -2 - 3A,1 If Total Revenues exceed:Minimum Revenues in`the Guarantee Period, then no payment by Guarantor will be due to Delta. 3.1.2 If Minirnum Revenues exceed Total Revenues in the Guarantee PE:riod, then Guarantor shall rem' it the 1.difference (a "Guaranty Payment")to Delta within thirty'(3p) days of receipt of Delta's operational report. Delta's calculation of Scheduled Flights. operated, Total Revenues, and Minimum Revenues in the operational report shall be binding and conclusive-on Guarantor-, absentmahifest error. 3.1.3 The Guaranty Payment for the Scheduled Service shall not exceed Five Hundred Thousand and 001100 U.S. Dollars (US$500,000.00) (the "Guaranty Cap'). 3.2 The parties recognize that there is an inherent risk that the Total Revenues on the Scheduled Service may not be sufficient to.generate the Minimum Revenues required to avoid the payment of the revenue guarantee by Guarantor. Nevertheless, Guarantor'rs willing to assurriie fhat risk in order to induce Delta to enter into this Agreement, 3,3 Guarantor does hot have the rtgh"t.to cancel individual Scheduled Flights based on advance bookings or far any other,reason 3.4 Guarantor represents and Warrants to Delta that (i).no airport revenues or other revenues generated by airport operations.at TWF will be used to fund this Revenue Guarantee or any other payments to Delta under this Agreement and (5)Guarantor will.not-.unjustly discrirnihate amohg carriers with respect to.its revenue guarantee 'program and Will comply with all applicable.grant asturandos., 4, Revenue Adtusttnent. In the event that Delta notifies.Guarantor of a Material Cost Circumstance, Delta may request a renegotiation of'the amounts of Minimum. Rdvohues, If, within fifteen (15) business days of any such request, negotiations do not result.in the.establishmenf of revised Minimum Revenues amounts reasonably acceptable to Delta,. Delta may terminate this Agreement.upon five(5) days'written notice to Guarantor, at which time all of Delta's and Guarantor's obligations under this.Agreement shall cbp6e, and Guarantor shall only be.liable for the revenue guarantee amount (as determined.in accordance with Section 3.1.2 ofthis Agreement).acor.ued up to the effective date of the termination. 5. Reports, 5A FolloWing the execution of this Agreement, on.a weekly bast$ beginning no later than thirty (30)days prior to.the start of the Guarantee Period, Delta.shall provide Guarantor with a report setting forth time current status of.passenger bookings on each future Scheduled Flight.. Beginnitng with.the comrnencerrnent of the Guarantee Period, such reports shall include the revenue passenger loads for the Scheduled Flights flown the precious week, 5.2 Ott or before the last calendar day. each month.during the Guarantee Period,.pelta shall provide Guarantor with a statement setting forth, for each Scheduled Flight-d.uring the immediately preceding monfh, the following data: - 3 - Number of revenue passengers flown; Load factor for each flight Total Revenues.received by Delta-far each Scheduled Flight; The variant..® between Total Revenues received and the Minimum Revenues for Scheduled:Flights operated, and Summary of passengers and-Passenger Revenues carried on the.Sched0ed Service routes brokers down by actual origin and destination rnark'et, These figures shall be provided for the-prior month and, on an aggregate.basis, for all. .Scheduled Flights operated to date. .a. [Intentionally Omifted.) 7. Term'and Terminatlon.. 7.1 This Agreement shall be effective on the Effective Date.set forth above and shall continue thereafter until six.(6) months following the end of the Guarantee Period, unless terminated e'arlier.in'.accordance with the terms and cdnditions of this Agreement. The termination of this Agreement shall not affect any outstanding rights and obligations arising prior 'to such1ermination„ 7,2 Either party may terminate the..Agreemen,t upon the occurrence of an "Event of Default." .For purposes of this Agreement an "Event of Default" shall be defined as a party's failure to comply with the material terms of this Agreement within thirty (30)'days of'receipt of written notice from:the non-defaulting party. 7,3 This Agreement may be terminated by Delta or the Guarantor at any time, with or Without cause, provided twenty. (20).days prior written notice is given. 7.4 In the event of an early termination of this Agreement prior to the end of the Guarantee Period, the Guarantor shall be liable for the revenue guarantee amount (as determined in accordance with Section 3A of this Ag(eement),accrued up to the effective date of any such termination. In such instance, the.revenue guarantee, if any; that shali.be deemed to have been accrued.for the portion of the Guarantee Period prior to the effective date of such termination (the`Short Period") shall be determined.under Section 3.1 hereof base on the Minimum Revenues.for the Short Period, and the aggregate Total Revenues for the Short Period, 715 In the event that one party shall be declared.bankrupt ar petition under the.bankruptcy laws for protection from creditors, either as a voluntary orinvoluntary matter, then the other party shall have the right, upon immediate written.notice, to declare.thisAgreement to be terminated,.provided, however, that the foreping'shall in rio way constitute a.waiver of any Qbligations accrued and ,existing upon.the date ofterrninaton under this Agreement, 7.6 Subject to the limitations on revenue guarantees and damages herein, the rights and remedies set forth herein are without W' aiver of each party's rights and,remedies at law and equity. 8. Miscellaneous. -4 - 8.1. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof;and supersedes'all prior agreerrienis and understandings.relatipcd thereto. This Agreement may be modified and.amanded only by awritiing:signed by the.party against whom enforcement of the modification or amendment is-sought. All indemnities, agreements and covenants made lay any party herein shall survive any termination of this Agreement. 3,2 Neither this Agreement nor any of the rights or oh.ligations hereunder may be assigped Pr transferred, by operation of law or otherMse, by either party witfzout the prior written consent of the other party. Any attempted assignment or transfer without such consent sha(I be of no forge or effect. 8.3 All notices, requests,, demands, consents and other communications to or upon the parties.to this Agreement shall.be in writing and shall be delivered by hand or sent by other written telecornmurdcation in any such case with mechanical or other probf of delivery or deposited in.the mail by first-class registered or certified mail, return-receipt requested, postage prepaid., addressed as follows: Notices to Guarantor: To the address'specified in Exhibit Notices'to Delta: Delta Air Lines, Inc. Department.#661 103.0 Delta Boulevard Atlanta, Georgia 30320-600.1 Attention: Sbnior Vice President - Network Planning or to .s.uch..other address as may be hereafter designated in writing by the respective parties hereto by notice similarly given. Ail notices .shall be effective upon receipt thereof; provided that absent such receipt.,. no notice shall be deemed to have been given. 8.4 Except for parties entitled to indemnification hereunder, no third party is intended to benefit from, hor may any third'party seek.to enforce any of the provisions of, this Agreement, .8,5 Guarantor will indemnify, defend,_and hold harmless Delta, and its directors, officers, employees; aind agents, from and against all claims and liabillties`o.f any kind whatsoever,, including attorneys'fees, court costs and other costs and expenses, incurred by Delta or its directors, officers, employees, and agents arising out of, or-in connection W'Ith; any failure by Guarantor to Make any of the.payments provided for in this.Agreement, provided such indemnity shall not.exceed Twenty-flue Thousand an"d 0011 Q0 Dollars ($25,000M), 8.6 Neither party will be liable for delays or failure in its performance under this Agreerent caused by any act of God, war, terrorism, strike, labor dispute, work stoppage, substantial reduction of services from any Country or region, fire, act of government, or' - 5 - a.ny other cause, whether similar or dissimilar, beyond the control of that party (any single or combination of such -excuses is ,a ";Force Majeure Event"), 8.7 EACH PARTY WAIVES AND RELEASES THE OTHER PARTY FROM ANY AND ALL CLAIMS`FOR INOIR. FCT, CONSEQUENTIAL, PUNITIVE, OFF. SPECIAL DAMAGES IN CONNECT[ORWITH THIS AGREEMENT, 8.8 The parties expressly agree that tho laws of the State of.ktaho gpverri this Agreement and the validity, construction, interpretatidn, and effedt of this Agreement, without regard to principles of conflicts of laws. Each party;agrees, that any civil suit or action brought against it as'a result of any'of its obligations under this Agreement:may be.brought against it dither in-the state.or federalvo cour.ts located in Salt Lake.City, Utah, and each party.hereby irrecably' submits to the Jurisdiction of such courts and Irrevocably waives., to the fiMlest extent permitted by law, any objections that it may now or hereafter have to the laying.of the venue of such civil suit or action and any claim that such civil suit or action has been brought In an ihdonvenlent 'forum, and each part -further agrees that.firial judgment in any such oivi[ suit or action shall be conclusive and binding upon,it.and shall be enforceable.against it by suit upon such judgment.in any court of competent jurisdiction, Further, the parties mutually agree that'they will:waive trial by jury in any action, proceeding or couhterclaini brought.�y either party against the other arising out of or in any way connected with the.Agreament. 8.9 Farthe'purposes of this Pigreement, neither party shall.be deemed to be the agent, partner, employee,joint venturer, or fiduciary of the other party. £1.10 If.any ola�rse o provislon of this Agreement shall be held to be invalid in whoEc�or in part, then the remaining clauses.and provisions,or portions thereof, shall nevertheless be and remain 'in full force and.effect'. 8.11 The captions of each section are added as a -matter of convenience only a,nd shall. be considered of no effect in the construction of any provision of this:Agreement. tRemainder of Page.Intentionally Left Blank] - 6 - IN WITNESS W.IIEPEQF,the parties.have.sigried this Agreement bytheir undersigned duly authorizdd representatives. Delta Air Lines, Inc. Guarahtor; City of Twirl. Falls,.Idaho r, sposito Ru,h Pierce Se 1 r.Vice President Mayor, City of Twirl Falls N twork planning EXH11331T A To the..Revenue Guarantee Agreement between Delta Air LlnQs and City ofTwln Falls, Idaho Name of Guarantors: City of Twin Falls, Idaho P.P. Box 19.0.7 Guarantor Address: 2.0.3.Main AVenue Fast Twin Falls, ID 83301 -Weative Date: September 611,2023 Revenue.Guarantee for Salt Lake.City,'UT (SLC)—Twin Falls, ID.(TV1lF) Service Minimum Revenues per E-176 US S.7,430 per.each one-way Srheduled Flight Operation: Minimum Revenues per Guarantee (.US$7,430 per Scheduled Flight)times:the number df one-way Period: Scheduled. Flights.0perated'betwe0 SLC-TVVF and TVVF-SLC during, the Guarantee Period Maximum Revenue Guarantee amount: US $500,000,.00 Guarantee Period: September 5, 2023 through March 5, 2024 Scheduled Service Effective Dates Aircraft"" Depart Arrive* Frequency September 5,2023—March 5., 2024 E-175. SLC 11;20. TWF 12;16 Daily E-175' -TVVF13:10 SL.C.14:09 Daiiy E-175 8LC.2j.,QO TVVF 21:56 Daily E-1175 TWF07:30 SLC 08126 Daily Note: Delta reserves the right to substitute similar aircraft fbr Operational reasons. Times are approximat% actual arrival and departure times may vary.