Airline Participation Agreement and General Agreement [Amendment] - Delta Air Lines Inc., priceline.com Inc. and PriceLine Travel Inc.
AMENDMENT TO THE AIRLINE PARTICIPATION AGREEMENT AND THE GENERAL AGREEMENT
This Amendment ("Amendment"), dated the 17th day of November, 1999, amends the
Airline Participation Agreement ("APA") and the General Agreement ("GA"), dated
August 31, 1998, as amended, between and among Delta Air Lines, Inc. ("Delta")
and priceline.com Incorporated and PriceLine Travel, Inc. which merged with and
into priceline.com Incorporated on March 24, 1999 ("Priceline"). Unless
otherwise defined herein, capitalized terms shall have the meanings set forth in
the APA and the GA, as applicable.
1. The following provision replaces Section 3.1 of the GA in its entirety:
3.1 Subject to Section 3.5 below, Delta and Priceline agree that, during
the term of the GA and APA:
(a) Delta consents to the participation in Priceline by the U.S.
carriers identified in the attached Schedule 3.1; subject to the
following restrictions:
(i) Priceline shall not issue tickets on Northwest Airlines to or
from ATL, except for the following O&D markets: DTW-ATL,
MSP-ATL, and MEM-ATL;
(ii) Priceline shall not issue tickets on Continental Airlines to
or from ATL, except for the following O&D markets: EWR-ATL,
CLE-ATL, HOU-ATL and IAH-ATL;
(iii) Priceline shall not issue tickets on United Airlines to or
from ATL, except for the following O&D markets: ORD- ATL,
DEN-ATL, SFO-ATL, and IAD-ATL;
(iv) Priceline shall not issue tickets on USAirways to or from ATL,
BOS or LGA except for the following O&D markets: PIT-
ATL/BOS/LGA, PHL-ATL/BOS/LGA, and CLT-ATL/BOS/LGA.
Notwithstanding the above restriction, Priceline may issue
tickets on USAirways to or from BOS or LGA in O&D markets not
served by nonstop flights operated by Delta or a carrier
operating a flight under Delta's two letter "DL" designator
code, provided, that Priceline shall restrict its ticket BOS
or LGA sales on USAirways within thirty (30) days of any new
nonstop BOS or LGA service offered by Delta or a carrier
operating a flight under Delta's two letter "DL" designator
code; and
(v) Priceline shall not issue tickets on American Airlines to or
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from ATL, except for the following O&D markets: ORD-ATL,
DFW-ATL and MIA-ATL. In the event that American Airlines (or
an affiliate of American Airlines), merges with or acquires
substantial assets of USAirways in Boston, then, in addition
to the ATL market restriction, Priceline shall not issue
tickets on American Airlines to or from BOS, except for the
following O&D markets: ORD- BOS, DFW- BOS and MIA- BOS;
provided, that Priceline may issue tickets on American
Airlines to or from BOS in O&D markets not served by nonstop
flights operated by Delta or a carrier operating a flight
under Delta's two letter "DL" designator code subject to;
provided, further, that Priceline shall restrict its BOS
ticket sales on American within thirty (30) days of any new
nonstop BOS service offered by Delta or a carrier operating a
flight under Delta's two letter "DL" designator code. In the
event that American acquires or operates a hub airport in PIT,
PHL or CLT as a result of the acquisition of substantially all
of the assets of USAirways in PIT, PHL or CLT, then Priceline
may issue tickets on American Airlines, respectively, in the
PIT-ATL, PHL-ATL, or CLT-ATL markets, respectively.
(b) Delta consents to the participation in Priceline by the
International Carriers identified in the attached Schedule 3.1;
subject to the following restrictions:
(i) Priceline shall not issue tickets for international travel on
Austrian Airlines, Sabena, Swissair, AeroMexico, Air Jamaica,
Korean Airlines, Air Canada, All Nippon Airways, El Al Israel
Airlines, Qantas, Japan Airlines, Alitalia and Aerolineas
Argentinas to or from ATL or BOS, except for offers
originating from O&D markets not served by Delta or a carrier
operating a flight under Delta's two letter ("DL") designator
code.
(c) Notwithstanding the restrictions set forth in Section 3.1(a) and
3.1(b), Priceline may, in addition to other rights set forth in this
Amendment issue tickets (i) on Turkish Airlines solely in the New
York (JFK) - Tel Aviv O&D market, (ii) on flights operated by
Participating Airlines in O&D markets not served by Delta or a
carrier operating a flight under Delta's two letter designator code,
and (iii) on code share flights operated by third party carriers
(including commuter carriers) where the Participating Carrier's two
letter designator code used to identify its flights (as published
and used in the Official Airline Guide (OAG), computer reservation
systems (CRS's) and internal reservations systems) appears in the
carrier code box of the flight coupon; provided, that the market
restrictions set forth in Section 3.1(a) and 3.1(b) are applicable
to such code share flights.
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(d) Priceline shall not issue tickets on carriers that are not listed on
Schedule 3.1. The participation of other domestic and international
carriers in Priceline, and the sale of tickets on such carriers, is
subject to Delta's prior written consent. Delta agrees to meet with
Priceline to discuss objective criteria by which new international
participants could be added.
(e) For purposes of Section 3.1, an O&D market shall be considered to be
served by Delta or a carrier operating a flight under Delta's two
letter designator code at any time scheduled service is offered for
sale by one or more such carriers.
2. The following test is added as Section 7.15 (f) of the GA:
Reporting Audit Rights:
The General Agreement will be amended to state that Priceline will make
available (at no cost to Delta) to all Participating Airlines, on an agreed
production schedule, the following information for all Domestic and
International markets in which such Participating Airlines provide fares and
availability ("Applicable O&D's"):
o Methodology for determination of "Reasonable Demand" where "Reasonable
Demand" denotes offers acceptable to Priceline for possible fulfillment
o Notification of changes to "Reasonable Demand" methodology
o O&D routing, number of passengers, revenue, and average fare data for all
Priceline tickets for each Participating Airline The above data will be
made available to each Participating Airline no later than 30 days
following the end of each calendar month in the case of segment data and
each calendar quarter in the case of data relating to number of
passengers, revenue and average fare data.
o With respect to Delta only
- Weekly frequency distribution of offer price demand by applicable
O&D to include mode, range, minimum/maximum level, mean, median,
standard deviation and bid price trends
- As soon as practical but in any case within six months, make
available to Delta with weekly detail and summary report that
identifies rejected offers and the reasons leading to the rejections
(e.g., "bid was too low by $20, no "L" inventory LGA-ATL Nov 1)
o Priceline will continue to provide to Delta all the data it currently
submits on a regular basis (i.e., Delta Air Lines' Weekly Ticket Report -
Summaries of Ticket Sales by O&D - Domestic and International), including
data routinely submitted in response to Delta ad hoc requests.
Priceline will disclose bookings through Priceline in a format comparable
to the CRS MIDT data on a weekly basis and Priceline shall make available
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such data to all Participating Carriers.
Priceline agrees to make available to Delta the audit plan and the report
prepared by priceline's auditors concerning Priceline's compliance with
the Participation Agreement and Delta General Agreement. In addition,
Delta will have the right to audit Priceline for compliance on all
contractual market, product, and other agreements and to receive regular
reports measuring compliance to such contractual terms.
3. The following provision replaces Section 7.11 of the General Agreement in
its entirety:
7.11 All Participating Carriers will be given the first opportunity to
fill a customer ticket request based on a formula which allocates such
requests in proportion to the aggregate domestic or international market
share (as applicable) of each Participating Carrier for each O&D
requested. If a Participating Carrier fails to respond to a ticket request
on its designated first look, then Priceline will allocate the request
through a second round of preferred looks, which will be allocated in
proportion to the aggregate domestic or international market shares (as
applicable) of all remaining Participating Carriers for each O&D requested
(but excluding the Participating Carrier that failed to fulfill the ticket
request on the first look).
4. The following provision replaces Article III of the Airline Participation
Agreement in its entirety:
III. Priceline Ticket Allocation Methodology
All Participating Carriers will be given the first opportunity to
fill a customer ticket request based on a formula which allocates
such requests in proportion to the aggregate domestic or
international market share (as applicable) of each Participating
Carrier for each O&D requested. If a Participating Carrier fails to
respond to a ticket request on its designated first look, then
Priceline will allocate the request through a second round of
preferred looks, which will be allocated in proportion to the
aggregate domestic or international market shares (as applicable) of
all remaining Participating Carriers for each O&D requested (but
excluding the Participating Carrier that failed to fulfill the
ticket request on the first look).
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5. Except as provided herein, all other terms and conditions of the APA and
the GA shall remain in full force and effect. In the event any term or
provision of the APA or the GA is contrary to or inconsistent with this
Amendment, the terms of this Amendment shall control.
PRICELINE.COM DELTA AIR LINES, INC.
INCORPORATED
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By: Paul E. Francis By: M. Michele Burns
Title: Chief Financial Officer Title: Vice President &
Treasurer
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SCHEDULE 3.1
US CARRIERS
Alaska Airlines
American Airlines
America West Airlines
Continental Airlines
Hawaiian Airlines
Midway Airlines
Northwest Airlines
Sky West
Trans World Airlines
Trans States
USAirways
United Airlines
INTERNATIONAL CARRIERS
Air Jamaica
Aer Lingus
Aerolineas Argentinas
Aeromexico
Air Canada
Air France
Air New Zealand
Alitalia
All Nippon Airways
Austrian Airlines
Cathay Pacific Airways
El Al Israel Airlines
Iberia
Icelandair
Korean Air Lines
Japan Airlines
Lufthansa
Malaysia Airlines
Qantas
SAS (Scandinavian Airlines)
Singapore Airlines
Sabena
South African Airways
Swissair
Varig
Virgin Atlantic
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