SOUTH COAST GROUND SERVICE EQUIPMENT ?· “Participating Airlines” means the collective group of…

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Final GSE MOU; 11/27/02

SOUTH COAST GROUND SERVICE EQUIPMENT MEMORANDUM OF UNDERSTANDING

An Innovative Agreement to Achieve Cleaner Air

CALIFORNIA AIR RESOURCES BOARD AIRBORNE EXPRESS

ALASKA AIRLINES AMERICA WEST AIRLINES

AMERICAN AIRLINES AMERICAN TRANS AIR

CONTINENTAL AIRLINES DELTA AIR LINES

DHL AIRWAYS FEDERAL EXPRESS

HAWAIIAN AIRLINES JETBLUE AIRWAYS CORP.

MIDWEST EXPRESS AIRLINES NORTHWEST AIRLINES

SOUTHWEST AIRLINES UNITED AIRLINES

UNITED PARCEL SERVICE US AIRWAYS

Final GSE MOU; 11/27/02 i of ii

Table of Contents I. MUTUAL UNDERSTANDINGS AND AGREEMENTS..................................................1

A. The Participating Airlines Affirmative Proposal for the South Coast Ozone Nonattainment Area .................................................................................................1

B. The Role of GSE in Commercial Aviation ..............................................................1

C. The South Coasts Unique Air Quality Problems....................................................1

D. Reservation of Rights...............................................................................................2

II. GLOSSARY OF TERMS USED.........................................................................................2

III. THE PARTICIPATING AIRLINES EMISSION REDUCTION GOALS FOR THE SOUTH COAST ..................................................................................................................5

A. 1997 Existing Fleet Emissions Rate Goal................................................................5

B. 1997 Existing Fleet ZEV Goal.................................................................................5

C. New GSE ZEV Goal ................................................................................................5

D. Diesel Particulate Obligations..................................................................................6

E. Interim Goals............................................................................................................9

F. Fate Of Old Equipment Obligations ........................................................................9

IV. ADMINISTRATIVE PROVISIONS .................................................................................10

A. Recordkeeping .......................................................................................................10

B. Reports ...................................................................................................................11

C. Compliance Process ...............................................................................................13

D. Remedies................................................................................................................15

V. MISCELLANEOUS PROVISIONS ..................................................................................24

A. 2006 Technology Review ......................................................................................24

B. Modifications .........................................................................................................24

C. Effective Term .......................................................................................................24

D. Confidentiality .......................................................................................................25

Final GSE MOU; 11/27/02 ii of ii

E. The District Airports ..............................................................................................25

F. Notices ...................................................................................................................25

G. Force Majeure ........................................................................................................25

H. Termination............................................................................................................26

I. Good Faith Undertakings .......................................................................................28

J. No Operating Restriction or Limit on GSE, Aircraft, or Commercial Aviation Activity...................................................................................................................29

K. Effect on Grants and Other Aid .............................................................................29

L. Entire Understanding/References ..........................................................................29

M. Participating in the South Coast Emissions Credit Trading Program....................29

N. Intercarrier Averaging............................................................................................29

O. Choice of Law........................................................................................................30

P. Counterparts...........................................................................................................30

Q. Transactions ...........................................................................................................30

R. Bankruptcy of an Individual Participating Airline.................................................32

S. Severability ............................................................................................................33

T. Time .......................................................................................................................33

Final GSE MOU; 11/27/02

SOUTH COAST GROUND SERVICE EQUIPMENT MEMORANDUM OF UNDERSTANDING

This South Coast Ground Service Equipment Memorandum of Understanding (GSE MOU or MOU) is entered into between the California Air Resources Board (ARB) and the Participating Airlines (collectively the Parties). In order to achieve the emission reductions contemplated herein, the Parties have voluntarily arrived at the following mutual understandings and agreements.

I. MUTUAL UNDERSTANDINGS AND AGREEMENTS

A. The Participating Airlines Affirmative Proposal for the South Coast Ozone Nonattainment Area. This MOU reflects several years of negotiations among the airlines and federal, state, and local government agencies targeted at reaching a voluntary agreement to address the unique air quality problems of the South Coast Air Basin (South Coast or Basin) in a manner consistent with a safe, efficient, and competitive National Airspace System. The airlines have participated in these negotiations principally through the Air Transport Association of America, Inc. (ATA), although major South Coast carriers have participated as well. The government agencies involved in this dialogue have been the U.S. Environmental Protection Agency (EPA), Federal Aviation Administration (FAA), ARB, and the South Coast Air Quality Management District (District or SCAQMD). The five major airports in the South Coast have also been participants. As a result of this cooperative public/private effort, the Participating Airlines, together with the airports, have voluntarily agreed to join ARB and EPA in an innovative effort to achieve cleaner air in the South Coast through reduction of emissions from Ground Support Equipment (GSE). Broad support for this MOU is evidenced by the Statement of Principles (SOP), which is Appendix 3 attached hereto.

B. The Role of GSE in Commercial Aviation. GSE is critical to the safe and efficient functioning of the National Airspace System. GSE perform a myriad of functions, including, but not limited to: starting aircraft, aircraft maintenance, aircraft fueling, transporting cargo to and from aircraft, loading cargo, transporting passengers to and from aircraft, baggage handling, lavatory service, and food service.

C. The South Coasts Unique Air Quality Problems. The South Coasts high levels of ozone pollution result from the large amount of emissions generated in the Basin, combined with the region's meteorology and topography. The South Coast is the only area currently classified under the Clean Air Act (CAA) as an Extreme Ozone Nonattainment Area. The South Coast has unique air quality problems that call for unique, exceptional solutions. Because of these circumstances, many industries operating in the South Coast have been required to achieve more stringent levels of control of air pollutant emissions than are required for any other area of the nation.

Final GSE MOU; 11/27/02 2 of 51

D. Reservation of Rights. The Participating Airlines voluntarily agree to this MOU in light of the South Coasts unique air quality circumstances. The Parties acknowledge that this MOU does not constitute an admission by any of the Participating Airlines as to the legal authority of any federal, state, or local legislative body or administrative agency with respect to GSE. The Participating Airlines expressly reserve the right to challenge the exercise of any such legal authority.

II. GLOSSARY OF TERMS USED

1997 Existing Fleet means the collective GSE of the Participating Airlines at the District Airports as of December 31, 1997, as provided in Appendix 1 attached hereto, Table 4, and replacements of such GSE.

2010 Goals refers to those goals set forth in Section III.A. through III.C.

ARB means the California Air Resources Board.

ATA means the Air Transport Association of America, Inc.

Average industry aggregate or Aggregate means the average of all of the Participating Airlines GSE fleets at all District Airports.

Baseline means the