AMERICA WEST AIRLINES INC, 10-Q, 1994-08-12

AMERICA WEST AIRLINES INC
10-Q, 1994-08-12
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<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)

X Quarterly report pursuant to Section 13 or 15(d) of the Securities
====== Exchange Act of 1934

For the quarterly period ended JUNE 30, 1994 or
-------------

Transition report pursuant to Section 13 or 15(d) of the
====== Securities Exchange Act of 1934

For the transition period from ______________ to _______________

Commission file number 1-10140
-------------------------------------------------

AMERICA WEST AIRLINES, INC.
- - ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

DELAWARE 86-0418245
- - ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

4000 EAST SKY HARBOR BLVD, PHOENIX, ARIZONA 85034
- - -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (602) 693-0800
- - -------------------------------------------------------------------------------

N/A
- - -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes XX No
---- ----

1
<PAGE> 2

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by
a court.

X
Yes _____ No _____ (Not Applicable) _____

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

The number of shares of the Company's common stock outstanding as of July 31,
1994 was 25,720,743 shares.

2
<PAGE> 3
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements

AMERICA WEST AIRLINES, INC., D.I.P.
Condensed Balance Sheets

<TABLE>
<CAPTION>
(in thousands)
---------------------------
June 30, December 31,
Assets 1994 1993
------ ------------- ------------
(Unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . .$ 176,922 $ 99,631
Accounts receivable, less allowance for doubtful accounts of
$3,756,000 in 1994 and $3,030,000 in 1993 . . . . . . . . . . 78,207 65,744
Expendable spare parts and supplies, less allowance for
obsolescence of $7,754,000 in 1994 and $7,231,000 in 1993 . . 28,622 28,111
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . 32,888 34,939
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . 316,639 228,425
------------ ------------

Property and equipment
Flight equipment. . . . . . . . . . . . . . . . . . . . . . . . 895,662 872,104
Other property and equipment. . . . . . . . . . . . . . . . . . 183,765 180,607
------------ ------------
1,079,427 1,052,711
Less accumulated depreciation and amortization. . . . . . . . 422,109 385,776
------------ ------------
657,318 666,935
Equipment purchase deposits. . . . . . . . . . . . . . . . . . 51,836 51,836
------------ ------------
709,154 718,771
------------ ------------

Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . . 50,468 46,296

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,280 23,251

------------ ------------
$ 1,100,541 $ 1,016,743
============ ============
</TABLE>

See accompanying notes to condensed financial statements.

3
<PAGE> 4
AMERICA WEST AIRLINES, INC., D.I.P.
Condensed Balance Sheets

<TABLE>
<CAPTION>
(in thousands)
----------------------------
June 30, December 31,
Liabilities and Stockholders' Deficiency 1994 1993
------------------------------------------------- ------------- -----------
(Unaudited)
<S> <C> <C>
Current liabilities
Current maturities of long-term debt. . . . . . . . . . . . . .$ 118,621 $ 125,271
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . 71,463 62,957
Air traffic liability . . . . . . . . . . . . . . . . . . . . . 166,383 118,479
Accrued compensation and vacation benefits. . . . . . . . . . . 12,525 11,704
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . 7,812 8,295
Accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . 27,304 14,114
Other accrued liabilities . . . . . . . . . . . . . . . . . . . 19,291 11,980
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . 423,399 352,800
------------ ------------
Estimated liabilities subject to Chapter 11 proceedings. . . . . . 379,814 381,114

Long-term debt, less current maturities. . . . . . . . . . . . . . 381,397 396,350
Manufacturers' and deferred credits. . . . . . . . . . . . . . . . 71,366 73,592
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 59,903 67,149

Commitments and contingencies

Stockholders' deficiency
Preferred stock, $.25 par value. Authorized 50,000,000 shares:
Series C 9.75 percent convertible preferred stock, issued and
outstanding 73,099 shares; $1.33 per share cumulative
dividend (liquidation preference $1,000,000) . . . . . . . . . 18 18
Common stock, $.25 par value. Authorized 90,000,000 shares;
issued and outstanding 25,694,469 shares in 1994 and
25,291,102 in 1993 . . . . . . . . . . . . . . . . . . . . . . 6,424 6,323
Additional paid-in capital . . . . . . . . . . . . . . . . . . . 200,013 197,010
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . (403,315) (438,626)
------------ -----------
(196,860) (235,275)
Less deferred compensation and notes receivable -
employee stock purchase plans. . . . . . . . . . . . . . . . . 18,478 18,987
------------ -----------
Total stockholders' deficiency . . . . . . . . . . . . . (215,338) (254,262)
------------ ------------
$ 1,100,541 $ 1,016,743
============ ============
</TABLE>

See accompanying notes to condensed financial statements.

4
<PAGE> 5
AMERICA WEST AIRLINES, INC., D.I.P.
Condensed Statements of Operations and Accumulated Deficit
(in thousands except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -------------------------
1994 1993 1994 1993
----------- ----------- -------------------------
<S> <C>
Operating revenues
Passenger. . . . . . . . . . . . . . . $ 340,617 $ 306,129 $ 665,044 $ 603,790
Cargo. . . . . . . . . . . . . . . . . 10,998 9,376 21,489 18,971
Other. . . . . . . . . . . . . . . . . 11,736 9,405 22,082 18,754
----------- ----------- ----------- -----------
Total operating revenues . . . . . . 363,351 324,910 708,615 641,515
----------- ----------- ----------- -----------
Operating expenses
Salaries and related costs . . . . . . 83,013 75,830 162,484 149,990
Rentals and landing fees . . . . . . . 66,576 68,065 132,835 140,555
Aircraft fuel. . . . . . . . . . . . . 37,862 41,147 75,794 83,553
Agency commissions . . . . . . . . . . 30,820 26,629 59,931 52,093
Aircraft maintenance materials and repairs 10,973 7,425 18,902 14,619
Depreciation and amortization. . . . . 22,045 20,156 43,198 39,879
Other. . . . . . . . . . . . . . . . . 67,916 60,479 133,575 118,479
----------- ----------- ----------- -----------
Total operating expenses . . . . . . 319,205 299,731 626,719 599,168
----------- ----------- ----------- -----------
Operating income . . . . . . . . . . 44,146 25,179 81,896 42,347
----------- ----------- ----------- -----------
Nonoperating income (expenses)
Interest income. . . . . . . . . . . . 183 174 344 411
Interest expense . . . . . . . . . . . (12,893) (13,666) (26,068) (27,563)
Loss on disposition of property
and equipment. (728) (415) (1,270) (613)
Reorganization expense, net. . . . . . (9,862) (806) (18,258) (1,892)
Other, net . . . . . . . . . . . . . . 129 3 138 (43)
----------- ----------- ----------- -----------
Total nonoperating expenses, net . . (23,171) (14,710) (45,114) (29,700)
----------- ----------- ----------- -----------
Income before income taxes . . . . . . . 20,975 10,469 36,782 12,647
----------- ----------- ----------- -----------
Income taxes . . . . . . . . . . . . . . 839 209 1,471 253
----------- ----------- ----------- -----------
Net income . . . . . . . . . . . . . . . 20,136 10,260 35,311 12,394

Accumulated deficit at beginning of period (423,451) (473,657) (438,626) (475,791)
----------- ----------- ----------- -----------
Accumulated deficit at end of period . . $ (403,315) $ (463,397) $ (403,315) $ (463,397)
=========== =========== =========== ===========
Earnings per share
Primary . . . . . . . . . . . . . . $ 0.74 $ 0.39 $ 1.30 $ 0.52
----------- ----------- ----------- -----------
Fully diluted . . . . . . . . . . . $ 0.52 $ 0.27 $ 0.92 $ 0.36

Shares used for computation =========== =========== =========== ===========
Primary . . . . . . . . . . . . . . 28,255 29,658 28,704 29,669
=========== =========== =========== ===========
Fully diluted . . . . . . . . . . . 40,158 42,744 40,607 42,804
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed financial statements.

5
<PAGE> 6
AMERICA WEST AIRLINES, INC., D.I.P.
Condensed Statements of Cash Flows
(in thousands)
(unaudited)
<TABLE>
<S> <C>
Six Months Ended
June 30,
---------------------
1994 1993
--------- ---------
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 35,311 $ 12,394
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . 43,198 39,879
Amortization of manufacturers' and deferred credits . . . (2,225) (2,451)
Loss on disposition of property and equipment . . . . . . 1,270 613
Reorganization items. . . . . . . . . . . . . . . . . . . 3,703 -
Other . . . . . . . . . . . . . . . . . . . . . . . . . . (283) (247)

Changes in operating assets and liabilities:
Increase in accounts receivable, net. . . . . . . . . . . (12,463) (8,227)
Decrease (increase) in spare parts and supplies, net. . . (511) 2,941
Increase in prepaid expenses. . . . . . . . . . . . . . . 2,051 2,666
(Decrease) increase in other assets and restricted cash . (5,201) 2,078
Increase (decrease) in accounts payable . . . . . . . . . 8,923 (10,331)
Increase in air traffic liability . . . . . . . . . . . . 45,467 33,312
Increase in accrued compensation and vacation benefits .. 821 195
Increase in accrued interest. . . . . . . . . . . . . . . 5,130 5,013
Increase in accrued taxes . . . . . . . . . . . . . . . . 13,190 8,168
Increase in other accrued liabilities . . . . . . . . . . 7,141 1,984
Decrease in other liabilities . . . . . . . . . . . . . . (6,337) (6,901)
--------- ---------
Net cash provided by operating activities . . . . . . . 139,185 81,086

Cash flows from investing activities:
Purchases of property and equipment. . . . . . . . . . . . . (34,981) (23,586)
Proceeds from disposition of property. . . . . . . . . . . . 269 619
--------- ---------
Net cash used in investing activities . . . . . . . . . (34,712) (22,967)

Cash flows from financing activities:
Repayment of debt. . . . . . . . . . . . . . . . . . . . . . (27,182) (39,532)
--------- ---------
Net cash used in financing activities . . . . . . . . . (27,182) (39,532)
--------- ---------
Net increase in cash and cash equivalents . . . . . . . 77,291 18,587
--------- ---------
Cash and cash equivalents at beginning of period . . . . . . 99,631 74,383
--------- ---------
Cash and cash equivalents at end of period . . . . . . . . . $ 176,922 $ 92,970
========= =========
</TABLE>

See accompanying notes to condensed financial statements.

6
<PAGE> 7
AMERICA WEST AIRLINES, INC., D.I.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1994

1. REORGANIZATION UNDER CHAPTER 11, LIQUIDITY AND FINANCIAL CONDITION

On August 10, 1994, the United States Bankruptcy Court for the
District of Arizona (the "Bankruptcy Court") confirmed the Company's
Plan of Reorganization ("Plan"). The Company currently anticipates
that the Plan will be effective after expiration of the Bankruptcy
Code 10-day appeal period on or about August 23, 1994 (the "Effective
Date").

In connection with the confirmation hearing on August 10, 1994, the
Company filed certain motions with the Bankruptcy Court to secure
approval to pay the following confirmation bonuses or success fees:

- $9.3 million to be paid based upon length of service to
non-officer employees.
- $1.2 million to be paid to officers and other members of
management.
- 125,000 shares of stock in the reorganized Company
to be issued to the Company's Chairman and Chief Executive
Officer.

A hearing on these motions has been scheduled for August 24, 1994.

Historical Chapter 11 Events and Events Leading to Plan Confirmation
--------------------------------------------------------------------

On June 27, 1991, the Company filed a voluntary petition in the United
States Bankruptcy Court for the District of Arizona to reorganize
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy
Code"). The Company is currently operating as a debtor-in-possession
("D.I.P.") under the supervision of the Bankruptcy Court. As a
debtor-in-possession, the Company is authorized to operate its
business but may not engage in transactions outside its ordinary
course of business without the approval of the Bankruptcy Court.

Subject to certain exceptions under the Bankruptcy Code, the Company's
filing for reorganization automatically enjoined the continuation of
any judicial or administrative proceedings against the Company. Any
creditor actions to obtain possession of property from the Company or
to create, perfect or enforce any lien against the property of the
Company are also enjoined. As a result, the creditors of the Company
are precluded from collecting pre-petition debts without the approval
of the Bankruptcy Court.

The Company had the exclusive right for 120 days after the Chapter 11
filing on June 27, 1991 to file a plan of reorganization and 60
additional days to obtain necessary acceptances of such plan. Such
periods were extended at the discretion of the Bankruptcy Court, but
only on a showing of good cause. On May 17, 1994, the Company filed a
Disclosure Statement with the Bankruptcy Court which includes its Plan
of Reorganization. On June 28, 1994, the Bankruptcy Court approved
the adequacy of the Disclosure Statement and set into motion a
balloting process for the approval of the Plan of Reorganization.
Subject to certain exceptions set forth in the Bankruptcy

<PAGE> 8
Code, acceptance of a Plan of Reorganization requires approval of the
Bankruptcy Court and the affirmative vote (i.e. 50 percent of the
number and 66-2/3 percent of the dollar amount) of each class of
creditors and equity holders whose claims are impaired by the plan.
(See "Plan of Reorganization" for further discussion of the contents
of the Plan of Reorganization).

Certain pre-petition liabilities have been paid after obtaining the
approval of the Bankruptcy Court, including certain wages and benefits
of employees, insurance costs, obligations to foreign vendors and
governmental agencies, travel agent commissions and ticket refunds.
The Company has also been allowed to honor all tickets sold prior to
the date it filed for reorganization. In addition, the Company is
authorized to pay pre-petition liabilities to essential suppliers of
fuel, food and beverages and to other vendors providing critical goods
and services. Subsequent to filing and with the approval of the
Bankruptcy Court, the Company assumed certain executory contracts of
essential suppliers.

Parties to executory contracts may, under certain circumstances, file
motions with the Bankruptcy Court to require the Company to assume or
reject such contracts. Unless otherwise agreed, the assumption of a
contract will require the Company to cure all prior defaults under the
related contract, including all pre-petition liabilities. Unless
otherwise agreed, the rejection of a contract is deemed to constitute
a breach of the agreement as of the moment immediately preceding the
Chapter 11 filing, giving the other party to the contract a right to
assert a general unsecured claim for damages arising out of the
breach.

February 28, 1992 was set as the last date for the filing of proofs of
claim under the Bankruptcy Code and the Company's creditors have
submitted claims for liabilities not paid and for damages incurred.
There may be differences between the amounts at which any such
liabilities are recorded in the financial statements and the amount
claimed by the Company's creditors. In connection with the
confirmation of the Company's Plan of Reorganization, the Bankruptcy
Court will be requested to fix the total amount of allowed claims as
well as the total amount of disputed claims that may become allowed
claims.

The Company has incurred and will continue to incur significant costs
associated with the reorganization. The amount of these costs, which
are being expensed as incurred, is expected to significantly affect
the results of operations.

As a result of its filing for protection under Chapter 11 of the
Bankruptcy Code, the Company is in default of substantially all of its
debt agreements. All outstanding pre-petition unsecured debt of the
Company has been presented in these financial statements within the
caption Estimated Liabilities Subject to Chapter 11 Proceedings.

Additional liabilities subject to the proceedings may arise in the
future as a result of the rejection of executory contracts, including
leases, and from the determination by the Bankruptcy Court (or
agreement by parties in interest) of allowed claims for contingencies
and other disputed amounts. Conversely, the assumption of executory
contracts and unexpired leases may convert liabilities shown as
subject to Chapter 11 proceedings to post-petition liabilities.

Substantially all of the aircraft, engines and spare parts in the
Company's fleet are

8
<PAGE> 9

subject to lease or secured financing agreements that entitle the
Company's aircraft lessors and secured creditors to rights under
Section 1110 of the Bankruptcy Code. Pursuant to Section 1110, the
Company had 60 days from the date of its Chapter 11 filing, or
until August 26, 1991, to bring its obligations to these aircraft
lessors and secured creditors current and/or reach other mutually
satisfactory negotiated arrangements. In September 1991, as a
condition to the borrowings under the initial $55 million D.I.P.
facility, the Company arranged for rent, principal and interest
payment deferrals from a majority of its aircraft providers as a
condition to the assumption of the related lease or secured borrowing
by the Company. As a result of these arrangements, the Company was
able to assume the executory contracts associated with 83 aircraft in
its fleet without having to bring its obligations to these aircraft
providers current. In addition, as part of the initial D.I.P.
facility, the Company assumed and brought current certain agreements
for 16 Airbus A320 aircraft, three CFM engines, a Boeing 757-200 and
a Boeing 737-300.

Twenty-two aircraft were deemed surplus to the Company's needs and the
associated executory contracts were rejected. Included in 1991
reorganization costs was $35.2 million in write-offs of leasehold
improvements, security deposits, accrued maintenance, accrued rents
and other costs to return the aircraft which were subject to the
rejected aircraft agreements. In certain cases, final agreements were
reached with such aircraft providers and no further claims by such
providers will be pursued as a result of the rejections. In other
instances, the aircraft providers have filed claims in the normal
course of the bankruptcy and as of June 30, 1994, significant claims
for rejected aircraft have not yet been settled.

Due to the uncertain nature of many of the potential claims, the
Company is unable to project the magnitude of such claims with any
degree of certainty. However, the claims (pre-petition claims and
administrative claims) that have been filed against the Company are in
excess of $2 billion. Such aggregate amount includes claims of all
character, including, but not limited to, unsecured claims, secured
claims, claims that have been scheduled but not filed, duplicative
claims, tax claims, claims for leases that were assumed, and claims
which the Company believes to be without merit; however, claims filed
for which an amount was not stated, are not reflected in such amount.
The Company is unable to estimate the potential amount of such
unstated claims; however, the amount of such claims could be material.

The Company is in the process of reviewing and seeking allowance or
disallowance, as appropriate, of the general unsecured claims asserted
against the Company. In many instances, such allowance process will
include the commencement of Bankruptcy Court proceedings in order to
determine the amount at which such claims should be allowed. The
Company has accrued its estimate of claims that will be allowed or the
minimum amount at which it believes the asserted general unsecured
claims will be allowed if there is no better estimate within the range
of possible outcomes. However, the ultimate amount of allowed claims
will be different and such differences could be material. In its
Disclosure Statement, the Company estimates the range of allowed
general unsecured claims to be from a low of approximately $300
million to a high of approximately $360 million. This range does not
include, nor can the Company currently estimate, claims which may
arise and be allowed as a result of the renegotiation of certain
aircraft purchase agreements.

The Bankruptcy Code requires that all administrative claims be paid on
the effective date of a plan of reorganization unless the respective
claimants agreed to different treatment. The Company is actively
negotiating with claimants to achieve mutually

9
<PAGE> 10
acceptable dispositions of these claims. Since the
commencement of the bankruptcy proceeding, claims alleging
administrative expense priority totaling more than $153 million have
been filed. As of June 30, 1994, $115 million of the filed claims
have been allowed and settled for $50.2 million in the aggregate.
Additionally, the Company has obtained Bankruptcy Court approval of an
agreement which settled the remaining $38 million filed administrative
expense claim (which relates to a rejected lease of a Boeing 737-300
aircraft) for $5 million. Pursuant to an order dated May 18, 1994,
the Bankruptcy Court fixed July 1, 1994 as the bar date for filing
such administrative claims. In response to the notice of this bar
date, certain claims were filed asserting status as non-ordinary
course administrative expense claims. These include claims for
administrative rent, breach of return conditions on aircraft,
guarantees and obligations under tax indemnity agreements. The amount
of such asserted claims, if allowed, could be material; however, the
Company is optimistic that the claims, except to the extent previously
known and provided for by the Company, will be either disallowed,
withdrawn or negotiated to a mutually acceptable amount.

Plan of Reorganization

On December 8, 1993 and February 16, 1994, the Bankruptcy Court
entered certain orders which provided for a procedure through which
interested parties could submit proposals to participate in a plan of
reorganization for America West. The Bankruptcy Court also set
February 24, 1994 as the date for America West to select a "Lead Plan
Proposal" from the proposals submitted.

On February 24, 1994, America West selected as its Lead Plan Proposal
an investment proposal submitted by AmWest Partners, L.P., a limited
partnership ("AmWest"), which includes TPG Partners, L.P., Continental
Airlines, Inc. and Mesa Airlines, Inc. Certain funds managed or
advised by Fidelity Management Trust Company and its affiliates and
Lehman Brothers, Inc. are participating in the proposal as assignees
of AmWest. On March 11, 1994, the Company and AmWest entered into an
Investment Agreement which was filed with the Bankruptcy Court on
March 11, 1994 (the "Original Investment Agreement"). The Original
Investment Agreement was superseded by a Revised Investment Agreement
dated as of March 11, 1994 and filed with the Bankruptcy Court on
March 28,1994 (the "Revised Investment Agreement"). The Revised
Investment Agreement was superseded by a Second Revised Investment
Agreement dated as of April 7, 1994 and filed with the Bankruptcy
Court on April 8, 1994 (the "Second Revised Investment Agreement").
The Second Revised Investment Agreement was superseded by a Third
Revised Investment Agreement dated as of April 21, 1994 and filed with
the Bankruptcy Court on April 26, 1994 (the "Third Revised Investment
Agreement"). The Third Revised Investment Agreement is substantially
identical to the Second Revised Investment Agreement except for a
change in the configuration of the expanded 15-member board of
directors of the Company. The Third Revised Investment Agreement
substantially incorporates the terms of the AmWest investment
proposal. It provides that AmWest will purchase from America West
equity securities representing a 33.5 percent ownership interest
(subject

<PAGE> 11
to adjustment) in the Company for $114.8 million and $100
million in new senior unsecured debt securities. The Third Revised
Investment Agreement also provides that, in addition to the 33.5
percent ownership interest in the Company, AmWest would also obtain
71.2 percent of the total voting interest (subject to adjustment) in
America West after the Company is reorganized. The terms of the Third
Revised Investment Agreement have been incorporated into a Plan of
Reorganization which was filed with the Bankruptcy Court on May 17,
1994. By Order dated June 28, 1994, the Bankruptcy Court approved the
Company's Disclosure Statement, finding that it contained adequate
information as required by Section 1125 of the Bankruptcy Code. The
Bankruptcy Court also entered an order fixing August 3, 1994 as the
last date for filing objections to confirmation of the Plan of
Reorganization, voting to accept or reject the Plan and making any
available elections under the Plan. In addition, the Court fixed
August 10, 1994 as the hearing date for confirmation of the Plan of
Reorganization. Consummation of the Plan of Reorganization is subject
to satisfaction of the closing conditions specified therein, including
(among others) the accuracy of certain representations and warranties
of the Company and the absence of any material adverse change in the
Company's condition (financial or otherwise), business, assets,
properties, operations or relations with employees or labor unions
since December 31, 1993.

In addition to the interest in the reorganized America West that would
be acquired by AmWest pursuant to the Plan of Reorganization, the Plan
also provides for the following:

1. The D.I.P. financing would be repaid in full with cash on the
date the Plan of Reorganization is effective ("Effective
Date") or on such other terms as may be agreed to.

2. On the Effective Date, unsecured creditors would receive 59.5
percent of the new common equity in the reorganized Company.
In addition, unsecured creditors would have the right to elect
to receive cash at $8.889 per share up to an aggregate maximum
amount of $100 million, through a purchase by AmWest of the
shares otherwise allocable to such unsecured creditors making
the election under the Plan of Reorganization.

3. Holders of common stock equity interests would receive
5 percent of the new common equity of the Company. In
addition, such holders of equity interests would have the
right to subscribe to purchase up to 1,615,179 shares of the
new Class B common stock of the Company for $8.889 per share
from AmWest, and would also receive warrants entitling them to
purchase 6,230,769 shares of the reorganized Company's common
stock. With respect to establishing the price of the
warrants, the Bankruptcy Court will be requested to fix the
total amount of allowed unsecured claims as well as the total
amount of disputed claims that may become allowed claims. In
turn, the aggregate amount established by the Bankruptcy
Court would be multiplied by 1.1 and the resultant product
divided by the number of shares of new common equity to be
issued to unsecured creditors (26,775,000 shares) to establish
the price. Holders of preferred stock equity interests would
receive $500,000 cash and the right to subscribe to the
purchase of the first 250,000 shares of the over-subscription
stock otherwise allocable to holders of common stock equity
interests.

4. In exchange for certain concessions principally arising from
cancellation of the right of Guinness Peat Aviation ("GPA")
affiliates to put to America West 10 Airbus A320 aircraft at
fixed rates, GPA, or certain affiliates thereof, would receive
(i) 2.0 percent of the new common equity in the reorganized
11

<PAGE> 12

Company, (ii) warrants to purchase up to 1,384,615 shares
of the reorganized Company's common stock on the same terms
as the AmWest warrants, (iii) $30.5 million in cash, and
(iv) the right to require the Company to lease from GPA
prior to June 30, 1999 up to eight aircraft of types operated
by the Company on terms which the Company believes to be more
favorable than those currently applicable to the put aircraft.
(See Note 8(c) for further discussion of the new put
agreement.)

5. Continental Airlines, Inc., Mesa Airlines, Inc. and America
West would enter into certain alliance agreements which would
include code-sharing, schedule coordination and certain other
relationships and agreements. A condition precedent to the
Effective Date of the Plan of Reorganization is that these
agreements be in form and substance satisfactory to America
West, including the Company's reasonable satisfaction that
such alliance agreements when fully implemented will result in
an increase in pre-tax income of not less than $40 million per
year.

6. The expansion of the Company's board of directors to 15
members for a period not less than three years following
Effective date. Nine members would be designated by
AmWest and other members reasonably acceptable to AmWest would
include three members designated by the Creditors' Committee,
one member designated by the Equity Committee, one member
designated by the Company's current board of directors and one
member designated by GPA.

7. The pre-petition executory contract for the purchase of 24
A320-200 aircraft between the Company and AVSA would be
amended to provide the Company with greater flexibility,
reduced pricing and enhanced terms for the acquisition of the
aircraft than is presently provided in the contract. Under
the modified terms, delivery dates of the aircraft would fall
in the years 1998 through 2000 with an option to further defer
deliveries. In addition, if A320 aircraft are delivered as a
result of the new GPA Put Agreement (see item 4 above), the
Company would have the right to cancel on a one-for-one basis,
up to a maximum of eight non-consecutive aircraft deliveries
hereunder, subject to certain conditions. In exchange for
these modifications, the contract, as modified, would be
assumed and certain promissory notes relating thereto would be
reinstated on the Effective Date of the Plan of
Reorganization.

8. The Plan of Reorganization also provides for many other
matters, including the disposition of the various types of
claims asserted against the Company, the adherence to the
Company's aircraft lease agreements, the renegotiation,
assumption as modified or rejection of certain pre-petition
aircraft purchase agreements and release of the Company's
employees from all obligations presently existing under the
notes issued in connection with the Company's employee stock
purchase plan, concurrent with abandonment of such notes by
the Company and the cancellation of the shares of Company
stock securing such notes.

In connection with the selection of AmWest's proposal as the Lead Plan
Proposal and pursuant to an order of the Bankruptcy Court, America
West and AmWest entered into an Interim Procedures Agreement setting
forth, among other things, the rights and obligations of AmWest and
America West pending Confirmation of the Plan of Reorganization.
After a series of hearings, and certain modifications, a Third Revised
Interim Procedures Agreement (the "Interim Procedures Agreement") was

12
<PAGE> 13
approved by the Bankruptcy Court on May 4, 1994. Among other terms
governing the relationship of America West and AmWest and its partners
until the Effective Date of the Plan of Reorganization, the Interim
Procedures Agreement provides, subject to certain exceptions, that
America West is prohibited from directly soliciting additional
investment proposals. However, the Interim Procedures Agreement
provides that, until an order approving a Disclosure Statement is
entered, America West may consider unsolicited proposals subject to
certain rights of AmWest to match any alternative proposal. If
America West accepts any such alternative proposal, or a competing
plan of reorganization proposed by another party in interest is
confirmed by the Bankruptcy Court, the Interim Procedures Agreement
provides that AmWest may apply to the Bankruptcy Court, on a substantial
contribution basis consistent with Section 503(b) of the Bankruptcy
Code for recovery of an additional amount not to exceed $4 million as
reasonable compensation for its actions in connection with the proposed
investment in America West and the benefits it provided to America West
and its constituents in connection therewith and with the Chapter 11
Case, provided, however, that making the proposed investment
will not, in and of itself, entitle AmWest to any additional payment.
Further, should America West breach the Interim Procedures
Agreement at any time, AmWest has agreed that any damages it may be
entitled to recover shall be limited to an amount not to exceed
$4 million, subject to the approval of the Bankruptcy Court.
Upon the entry of an order by the Bankruptcy Court approving the
Disclosure Statement, America West has agreed not to consider any
other proposals. (An order approving the Disclosure Statement was
entered by the Bankruptcy Court on June 28, 1994.)

The Interim Procedures Agreement also provides that America West will
reimburse AmWest for all out-of-pocket and third-party expenses
actually incurred by AmWest through February 28, 1994, subject to a
cap of $550,000. The Interim Procedures Agreement also provides for
America West to reimburse AmWest for expenses covered under the
Interim Procedures Agreement and incurred by AmWest on and after March
1, 1994 in an amount of up to $300,000 per month, provided that any
unused portion of such $300,000 for any month shall accumulate and be
carried forward and be available in any subsequent month, through the
Effective Date of the Plan of Reorganization. On the Effective Date,
America West will be obligated to reimburse AmWest for all expenses
covered under the Interim Procedures Agreement, irrespective of the
foregoing monthly limitations. All such fees will be subject to final
approval of the Bankruptcy Court.

On June 28, 1994, the Bankruptcy Court entered an order fixing August
3, 1994, as the last date for filing objections to confirmation of the
Plan of Reorganization, voting to accept or reject the Plan of
Reorganization and making any applicable elections available under the
Plan. Additionally, the Court fixed August 10, 1994, as the hearing
date for confirmation of the Plan of Reorganization. The Plan of
Reorganization must be approved by the Bankruptcy Court and by
specified majorities of each class of creditors and equity holders
whose claims are impaired by the Plan. Alternatively, absent the
requisite approvals, the Company may seek Bankruptcy Court approval of
its Reorganization Plan under Section 1129(b) of the Bankruptcy Code,
assuming certain tests are met.

If at any time the Creditors Committee, the Equity Committee or any
creditor of the Company or equity holder of the Company believes that
the Company is or will not be in a position to sustain operations,
such party can move in the Bankruptcy Court to compel a liquidation of
the Company's estate by conversion to Chapter 7 bankruptcy

<PAGE> 14

proceedings or otherwise. In the event that the Company is forced
to sell its assets and liquidate, it is unlikely that unsecured
creditors or equity holders will receive any value for their claims
or interests.

The Company anticipates that the reorganization process will result in
the restructuring, cancellation and/or replacement of the interest of
its existing common and preferred stockholders. Because of the
"absolute priority rule" of Section 1129 of the Bankruptcy Code, which
requires that the Company's creditors be paid in full (or otherwise
consent) before equity holders can receive any value under a plan of
reorganization, the Company previously disclosed that it anticipated
that the reorganization process would result in the elimination of the
Company's existing equity interests. Due to recent events, including
sustained improvement in the Company's operating results as well as
general improvement in the condition of the United States' economy and
airline industry, existing holders of equity interests are anticipated
to receive 5 percent of the new common equity under the proposed Plan
of Reorganization.

The accompanying financial statements have been prepared on a going
concern basis which assumes continuity of operations and realization
of assets and liquidation of liabilities in the ordinary course of
business. The financial statements do not include any adjustments as
a result of the effects of the Plan of Reorganization.

Fresh Start Reporting (pro forma)

In connection with its emergence from Chapter 11 protection, which is
anticipated to occur on or about August 23, 1994, the Company will be
adopting fresh start reporting in accordance with SOP 90-7 of the
American Institute of Certified Public Accountants. The pro forma
effects of the Company's Plan of Reorganization and fresh start
reporting on the Company's condensed balance sheet as of June 30, 1994
are as follows (in thousands):
<TABLE>
<CAPTION>
June 30, 1994 Fresh Start and Other June 30, 1994
Assets (Historical) Adjustments (net) (Pro forma)
------ ------------- --------------------- -------------
<S> <C> <C> <C>
Cash and cash equivalents $ 176,922 $108,005 $ 284,927
Other current assets 139,717 (8,825) 130,892
---------- -------- ---------
Total current assets 316,639 99,180 415,819

Property and equipment (net) 709,154 (162,559) 546,595

Other assets 74,748 (30,701) 44,047

Reorganization value in excess
of amounts allocable to
identifiable assets - 697,278 697,278
---------- -------- ----------
Total assets $1,100,541 $603,198 $1,703,739
========== ======== ==========
</TABLE>

<PAGE> 15

Liabilities and Stockholders' June 30, 1994 Fresh Start and Other June 30, 1994
Equity (Deficit) (Historical) Adjustments (net) (Pro Forma)
--------------- ------------- --------------------- -------------
<S> <C> <C> <C>
Current maturities of
long-term debt $ 118,621 $ (59,172) $ 59,449

Other current liabilities 304,778 13,078 317,856
---------- ---------- ----------
Total current liabilities 423,399 (46,094) 377,305

Estimated liabilities subject
to Chapter 11 proceedings 379,814 (379,814) -

Long-term debt 381,397 197,525 578,922
Other liabilities 131,269 28,743 160,012

Stockholders' equity
(deficiency) (215,338) 802,838 587,500
---------- ---------- ----------

Total liabilities and
stockholders' equity
(deficiency) $1,100,541 $ 603,198 $1,703,739
========== ========== ==========
</TABLE>

The pro forma fresh start reporting common equity value was estimated
by the Company with the assistance of its financial advisors. The
significant factors used in estimating this value were analyses of
publicly available information of other companies believed to be
comparable to the Company, industry, economic and overall market
conditions and historical and estimated performance of the airline
industry and certain financial analyses. There may be differences
between the amounts estimated above and those actually recorded when
fresh start reporting is applied as of the Effective Date, and such
differences may be material.

Under fresh start reporting, the pro forma reorganization value of the
Company has been assumed to be allocated to the reorganized Company's
assets and liabilities on a basis substantially consistent with the
purchase method of accounting. Pro forma reorganization value not
attributable to specific assets of the reorganized Company has been
included as "Reorganization value in excess of amounts allocable to
identifiable assets" in the pro forma condensed balance sheet above.
The pro forma fresh start reporting adjustments relate primarily to
the adjustment of the reorganized Company's assets and liabilities to
fair market values as well as reflecting the issuance of new stock and
debt and the discharge of certain pre-petition liabilities under the
Plan. The ultimate amount of such adjustments, when actually
recorded, will likely have a significant effect on the reorganized
Company's future operations.

As a result of elections made and subscription rights exercised
in connection with the balloting for the Plan of Reorganization, the
Company expects the allocation of its common shares post-emergence,
excluding success bonuses, to approximate the following (in
thousands):

<TABLE>
<CAPTION>
PERCENT OF
CLASS A CLASS B TOTAL TOTAL
------- ------ ------ ----------
<S> <C> <C> <C> <C>
Am West....................................... 1,200 13,366 14,566 32.4%
Unsecured Creditors........................... -- 25,669 25,669 57.0%
Common Equity Interests....................... -- 3,615 3,615 8.0%
Preferred Equity Interests.................... -- 250 250 .6%
GPA........................................... -- 900 900 2.0%
------- ------ ------ ----------
1,200 43,800 45,000 100.0%
====== ====== ====== =======
</TABLE>

The allocation as discussed above is based upon the preliminary balloting
results as of August 3, 1994 and is subject to change.

15
<PAGE> 16

Estimated Liabilities Subject to Chapter 11 Proceedings and
Reorganization Expense

Under Chapter 11, certain claims against the Company in existence
prior to the filing of the petitions for relief under the Code are
stayed while the Company continues business operations as
debtor-in-possession. These pre-petition liabilities are expected to
be settled as part of the plan of reorganization and are classified as
"Estimated liabilities subject to Chapter 11 proceedings".

Estimated liabilities subject to Chapter 11 proceedings as of June 30,
1994 consisted of the following (in thousands):
<TABLE>
<CAPTION>
June 30,
1994
--------------
(in thousands)
<S> <C>
Long-term debt (including convertible
subordinated debentures of $138.9 million) $223,023
Accounts payable and accrued liabilities 112,919
Accrued interest 18,153
Accrued taxes 25,719
--------
$379,814
--------
</TABLE>

The debt balance included above consists of unsecured and secured
obligations and other obligations that have not been affirmed by the
Company through the Bankruptcy Court.

Reorganization expense is comprised of items of income, expense, gain
or loss that were realized or incurred by the Company as a result of
reorganization under Chapter 11 of the Federal Bankruptcy Code. Such
items consisted of the following:

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1994 1993 1994 1993
---- ---- ---- ----
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Provisions for pre-petition and
administrative claims $ 4,500 $ - $ 8,680 $ -
Professional fees 6,388 1,306 11,656 2,827
D.I.P. financing issuance costs - - 209 -
Interest income (1,701) (557) (2,549) (1,025)
Other 675 57 262 90
------- ------- ------- -------
$ 9,862 $ 806 $18,258 $ 1,892
------- ------- ------- -------
</TABLE>
2. PER SHARE DATA

Primary earnings per share is based upon the weighted average number
of shares of common stock outstanding and dilutive common stock
equivalents (stock options and

<PAGE> 17
warrants). Primary earnings per share reflect net income
adjusted for interest on borrowings effectively reduced by the
proceeds from the assumed conversion of common stock equivalents.

Fully diluted earnings per share is based on the average number of
shares of common stock and dilutive common stock equivalents
outstanding adjusted for conversion of outstanding convertible
preferred stock and convertible debentures. Fully diluted earnings
per share reflect net income adjusted for interest on borrowings
effectively reduced by the proceeds from the assumed conversion of
common stock equivalents.

3. LONG-TERM DEBT

On June 13, 1994, the Company filed a motion seeking authorization
to amend the terms and extend the maturity of approximately $77.6
million of the D.I.P. financing to the earlier of December 31, 1994,
or the Effective Date of the Plan. On June 28, 1994, the Bankruptcy
Court granted the extension of the D.I.P. financing. One of the D.I.P.
lenders has elected to be repaid as of June 30, 1994 (the prior
maturity date), in the approximate amount of $1 million. Accordingly,
the outstanding principal amount of the extended D.I.P. financing will
be approximately $77.6 million. While there are certain fees to be
paid in the event that the D.I.P. financing is not fully repaid prior
to September 30, 1994, there is an interest rate reduction to 90-day
LIBOR plus 250 basis points for the period July 1, 1994 through
September 30, 1994, unless the extended D.I.P. financing is not repaid
by such date. Under the terms of the amended D.I.P. financing, the
Company is required to notify the lenders if the unrestricted cash
balance of the Company exceeds $175 million. Subsequent to June 30,
1994, the Company notified the D.I.P. lenders that the Company's
unrestricted cash exceeded $175 million. The amended D.I.P. financing
contains a minimum unencumbered cash balance requirement of $74
million and certain other covenants with which the Company was in
compliance at June 30, 1994.

4. COMMON STOCK

In May 1994, the Company entered into a settlement agreement with the
Patrician Corporation for its preferred dividend claim and issued
336,277 shares of common stock. In return, Patrician agreed not to
bring litigation seeking to compel the issuance of such shares, or, in
the alternative, to either rescind its prior conversion of the Series
B preferred stock into common stock, or assert a claim for such
dividends senior to common equity.

5. EMPLOYEE STOCK PURCHASE PLANS

Under the Plan of Reorganization, the remaining obligations of
approximately $17.6 million under notes issued in connection with the
Employee Stock Purchase Plan will be forgiven on the Effective Date in
return for the cancellation of the shares held as security for such
obligations. Such notes will be abandoned by the Company as provided
for in the Bankruptcy Code.

As of June 30, 1994, 7,486,427 shares of common stock had been sold
under the plans. No shares were sold during the second quarter of
1994. At June 30, 1994, the unamortized deferred compensation and
outstanding receivable balance relating to such plans amounted to
$875,000 and $17,603,000, respectively.

<PAGE> 18

6. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS

Cash paid for interest and income taxes during the six months ended
June 30, 1994 and 1993 was as follows:

<TABLE>
<CAPTION>
1994 1993
---- ----
(in thousands)
<S> <C> <C>
Interest (net of amounts
capitalized) $20,615 $22,356
Income taxes $ 1,207 $ 55
</TABLE>

In addition, during the six months ended June 30, 1994 and 1993, the
Company had the following non-cash financing and investing activities:

<TABLE>
<CAPTION>
1994 1993
---- ----
(in thousands)
<S> <C> <C>
Equipment acquired through
capital leases $ 138 $ 43
Conversion of long-term debt to
common stock $ - $ 1,918
Accrued interest reclassified to
long-term debt $ 4,268 $ 9
Notes payable issued to seller $ - $ 574
</TABLE>

7. INCOME TAX

For the quarter and six months ended June 30, 1994, the Company
recorded income tax expense as follows based upon its estimate of its
annual effective rate:

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
---- ---- ---- ----
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Current taxes
Federal $ 713 $ 178 $1,163 $ 215
State 126 31 308 38
------ ------ ------ ------
$ 839 $ 209 $1,471 $ 253
====== ====== ====== ======

Deferred taxes $ - $ - $ - $ -
====== ====== ====== ======
</TABLE>

For the quarter and six months ended June 30, 1994, income tax expense is solely
attributable to income from continuing operations. The difference in income
taxes at the federal statutory rate ("expected taxes") to those reflected in
the financial

18
<PAGE> 19
statements (the "effective rate") primarily results from the benefit
of net operating loss carryforwards resulting in an effective tax
rate of 4 percent.

As of June 30, 1994, to the best of the Company's knowledge, it has
not undergone a statutory "ownership change" (as defined in Section
382 of the Internal Revenue Code) that would result in any material
limitation of the Company's ability to use its net operating loss and
business tax credit carryforwards in future tax years. Should an
"ownership change" occur prior to the Effective Date of a plan of
reorganization, the Company's ability to utilize said carryforwards
would be significantly restricted. Further, the net operating loss
and business tax credit carryforwards may be limited as a result of
the Company's reorganization under the United States Bankruptcy Code.

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" (SFAS 109).
Since there was no cumulative effect of this change in accounting
method, prior year financial statements have not been restated.

8. COMMITMENTS AND CONTINGENCIES

(a) LEASES

During 1991, the Company restructured its lease commitment for
Airbus A320 aircraft with the lessors. As a result of the
restructuring, the Company's obligation to lease ten A320
aircraft was canceled and the basic rental rate for twelve
aircraft was revised to provide for the repayment to the
lessor over the then remaining lease term of certain advanced
credits received by the Company which relate to the ten
canceled aircraft.

In the third quarter of 1991, the Company requested a deferral
of rent and other periodic payments from its aircraft
providers. The deferral was requested in an effort to
conserve cash and improve the Company's liquidity position.
As a condition of securing the $78 million D.I.P. financing,
the Company was required to obtain from most aircraft
providers rent, principal and interest payment deferrals in
excess of $100 million covering the six-month period of June
through November 1991. These deferrals will generally be
repaid with interest at 10.5 percent over the remaining term
of the lease or secured borrowing with repayment commencing
generally in December 1991. At June 30, 1994 and December 31,
1993, the remaining unpaid deferrals are reported as follows:

<TABLE>
<CAPTION>
June 30, December 31
1994 1993
--------- -----------
<S> <C> <C>
(in thousands)
Accounts payable $ 5,744 $ 5,744
Other liabilities 20,071 22,912
Long-term debt 17,547 18,671
------- -------
$43,362 $47,327
======= =======
</TABLE>

<PAGE> 20
In the third quarter of 1992, the Company requested an
additional deferral of rent and other periodic payments from
its aircraft providers. The deferral was requested to assure
sufficient liquidity to sustain operations while additional
debtor-in-possession financing was obtained. The 1992
deferrals are generally scheduled to be repaid either without
interest during the first quarter of 1993 or with interest
over a period of seven years. At June 30, 1994 and December
31, 1993, the remaining unpaid deferrals are reported as
follows:

<TABLE>
<CAPTION>
June 30, December 31
1994 1993
-------- -----------
(in thousands)
<S> <C> <C>
Accounts payable $ 1,823 $ 1,823
Other liabilities 6,922 8,513
Long-term debt 20,064 21,539
------- -------
$28,809 $31,875
======= =======
</TABLE>

As of June 30, 1994, the Company had 66 aircraft under
operating leases with remaining terms ranging from one year to
25 years. The Company has options to purchase most of the
aircraft at fair market value at the end of the lease term.
Certain of the agreements require security deposits and
maintenance reserve payments. The Company also leases certain
terminal space, ground facilities and computer and other
equipment under noncancelable operating leases.

Future minimum rental payments for years ending December 31
under noncancelable operating leases with initial terms of
more that one years are as follows:

<TABLE>
<CAPTION>
(in thousands)
<S> <C>
1994 $ 194,379
1995 186,978
1996 184,152
1997 171,357
1998 160,759
Thereafter 1,333,187
----------
$2,230,812
==========
</TABLE>

Rent expense (excluding landing fees) was approximately $118.3
million and $126.1 million for the six months ended June 30,
1994 and 1993, respectively.

Collectively, the operating lease agreements require security
deposits with lessors of $8.1 million and bank letters of
credit of $17.7 million. The letters of credit are
collateralized by $17.6 million in restricted cash.

<PAGE> 21

(b) Revenue Bonds

Special facility revenue bonds issued by a municipality have
been used to fund the acquisition of leasehold improvements at
the airport which have been leased by the Company. Under the
operating lease agreements, which commenced in 1990, the
Company is required to make rental payments sufficient to pay
principal and interest when due on the bonds. The Company
ceased rental payments in June 1991. The principal amount of
such bonds outstanding at December 31, 1992 and 1991 was $40.7
million. In October 1993, the Company and the bondholder
agreed to reduce the outstanding balance of the bonds to $22.5
million and adjust the related operating lease payments
sufficient to pay principal and interest on the reduced amount
effective upon the confirmation of a plan of reorganization.
The remaining principal balance of $18.2 million will be
accorded the same treatment under the plan of reorganization
as a pre-petition unsecured claim. The Company also agreed to
make adequate protection payments in the amount of $150,000
per month from August 1993 to plan confirmation.

At June 30, 1994, the Company had on order a total of 49
aircraft of the types the Company currently operates, of which
29 are firm orders and 20 are option orders. The table below
details such deliveries.

<TABLE>
<CAPTION>
Firm Orders
---------------------------------------------- Option
1994 1995 1996 1997 Thereafter Total Orders Total
---- ---- ---- ---- ---------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Boeing: 737-300 - - 2 2 - 4 10 14
757-200 - - 1 - - 1 10 11
Airbus: A320-200 - - - - 24 24 - 24
-- -- -- -- -- -- -- --
Total - - 3 2 24 29 20 49
-- -- -- -- -- -- -- --
</TABLE>

At June 30, 1994, the estimated aggregate cost for delivery
positions under existing contracts for the acquisition of
B737's, B757's and A320 aircraft from manufacturers listed in
the above table is approximately $2.7 billion. The table does
not include any deliveries under put arrangements more fully
discussed below nor does it include orders for B747-400
aircraft.

With respect to various contracts with Boeing, a purchase
agreement to acquire B737-300 aircraft has been affirmed in
the Company's bankruptcy proceedings. With timely notice to
the manufacturer, all or some of these deliveries may be
converted to B737-400 aircraft. Existing purchase agreements
for B757-200 and B747-400 aircraft have not been affirmed nor
rejected. All Boeing purchase agreements require a 24-month
reconfirmation notice for the delivery of each aircraft. As
of June 30, 1994, ten B737-300 and nine B757-200 delivery
positions have expired due to the lack of reconfirmation by
the Company,

21
<PAGE> 22
leaving 14 and 11 delivery positions, respectively, as
reflected above. The failure to reconfirm such delivery
positions exposes the Company to loss of pre-delivery deposits
and other claims which may be asserted in the bankruptcy
proceeding. The Company also has a pre-petition executory
contract under which the Company holds delivery positions for
four B747-400 aircraft under firm order and four B747-400
aircraft under option order. This executory contract allows
the Company, with the giving of adequate notice, to substitute
B737-400 aircraft for those delivery positions. The Company
is currently renegotiating all of its aircraft purchase
agreements with Boeing.

With respect to the purchase of aircraft from AVSA presented
in the table above, a single executory contract for the
purchase of 24 A320 aircraft has not been affirmed nor
rejected by the Company. As part of the investment by AmWest,
the A320 purchase agreement was amended to provide the Company
with greater flexibility and reduced pricing. Under the
modified terms, delivery dates of the aircraft will fall in
the years 1998 through 2000 with an option to further defer
deliveries. In addition, if new A320 aircraft are delivered
as a result of the renegotiated put agreement (see below), the
Company will have the right to cancel on a one-for-one basis,
up to a maximum of eight non-consecutive aircraft deliveries
hereunder, subject to certain conditions. Negotiations are
currently continuing between AVSA and the Company to finalize
the details of this amendment.

In June 1994, the Company renegotiated a put agreement for ten
A320 aircraft. The new agreement reduced the number of put
aircraft from ten to eight and rescheduled the deliveries to
start not earlier than June 30, 1995 and end on June 30, 1999.
Under the new agreement, new or used A320-200 aircraft,
B737-300 or B757-200 aircraft may be put to the Company but
at a rate of no more than two in 1995, and with respect to
each ensuing year during the put period, of no more than
three. In addition, no more than five used aircraft may be
put to the Company and for every new A320 aircraft put to the
Company, the Company has the right to reduce the AVSA A320
purchase contract on a one-for-one basis. During each January
of the put period, the Company will negotiate the type and
delivery dates of the put aircraft for that year. The puts
will require 150-day notice and will be leased at fair market
rates for terms ranging from three to eighteen years,
depending on the type and condition of the aircraft. As part
of the renegotiated agreement, certain cash payments and
securities will be issued to the put holder pursuant to the
Plan of Reorganization (see Note 1).

In connection with the $78 Million D.I.P. Facility, in
December 1991, the Company terminated its agreement with a
D.I.P. lender to lease 24 aircraft and replaced it with a put
agreement to lease up to ten of the aircraft. In September
1992, the put agreement was amended and the number of put
aircraft was reduced from ten to four with aircraft scheduled
for delivery in 1994. In June 1994, the Company reached a
settlement for the cancellation of the right to put four
aircraft to the Company for $4.5 million of which $2.5 million
was paid in June 1994 and $2.0 million will be paid on the
Effective Date of the Plan of Reorganization.

<PAGE> 23

(d) Concentration of Credit Risk

The Company does not believe it is subject to any significant
concentration of credit risk. At June 30, 1994, approximately
82 percent of the Company's receivables related to tickets
sold to individual passengers through the use of major credit
cards or to tickets sold by other airlines and used by
passengers on America West. These receivables are short-term,
generally being settled shortly after sale or in the month
following usage. Bad debt losses, which have been minimal in
the past, have been considered in establishing allowances for
doubtful accounts.

<PAGE> 24

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

On August 10, 1994, the United States Bankruptcy Court for the District of
Arizona (the "Bankruptcy Court") confirmed the Company's Plan of Reorganization
("Plan"). The Company currently anticipates that the Plan will be effective
after expiration of the Bankruptcy Code 10-day appeal period, on or about
August 23, 1994 (the "Effective Date").

In connection with the confirmation hearing on August 10, 1994, the Company
filed certain motions with the Bankruptcy Court to secure approval to pay the
following confirmation bonuses or success fees:

- $9.3 million to be paid based upon length of service to non-officer
employees.
- $1.2 million to be paid to officers and other members of management.
- 125,000 shares of stock in the reorganized Company to be issued to the
Company's Chairman and Chief Executive Officer.

A hearing on these motions has been scheduled for August 24, 1994.

On June 27, 1991, the Company filed a voluntary petition in the United States
Bankruptcy Court for the District of Arizona (the "Bankruptcy Court") to
reorganize under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code"). The Company is currently operating as a
debtor-in-possession ("D.I.P.") under the supervision of the Bankruptcy Court.
As a debtor-in-possession, the Company is authorized to operate its business
but may not engage in transactions outside its ordinary course of business
without approval of the Bankruptcy Court.

The accompanying financial statements have been prepared on a going concern
basis which assumes continuity of operations and realization of assets and
liquidation of liabilities in the ordinary course of business. The financial
statements do not include any adjustments that might be necessary as a result
of the outcome of the Plan of Reorganization.

Due to the bankruptcy proceedings, current economic conditions and the
competitive nature of the airline industry, no measure of comparability can be
drawn from past results in order to measure those that may occur in the future.
Among the uncertainties which might adversely impact the Company's future
operations are: economic recession; changes in the cost of fuel, labor,
capital and other operating items; increased level of competition resulting in
significant discounting of fares; changes in capacity, load factors and yields;
or reduced levels of passenger traffic due to war or terrorist activities.

During the second quarter of 1994, the following significant bankruptcy related
events occurred.

PLAN OF REORGANIZATION. On February 24, 1994, America West selected
as its Lead Plan Proposal an investment proposal submitted by AmWest
Partners, L.P., a limited partnership ("AmWest"), which includes TPG
Partners, Continental Airlines, Inc. and Mesa Airlines, Inc. Certain
funds managed by Fidelity Management Trust Company and

<PAGE> 25
its affiliates and Lehman Brothers are participating in the proposal as
assignees of AmWest. On April 21, 1994, the Company and AmWest
entered into the Third Revised Investment Agreement (the "Investment
Agreement") which substantially incorporates the terms of the AmWest
Investment Proposal. The Investment Agreement provides that AmWest
will purchase from America West equity securities representing a 33.5
percent ownership interest in the Company (subject to adjustment).
AmWest would also obtain 71.2 percent of the total voting interest in
America West (subject to adjustment) after the Company is reorganized.
The terms of the Third Revised Investment Agreement were incorporated
into a Plan of Reorganization which was filed with the Bankruptcy
Court on May 17, 1994. There can be no assurance that such Plan of
Reorganization will be accepted by the parties entitled to vote
thereon or confirmed by the Bankruptcy Court.

In addition to the interest in the reorganized America West that would
be acquired by AmWest pursuant to the Plan of Reorganization ("Plan"),
the Plan also provides for the following:

1. The D.I.P. financing would be repaid in full with cash on the
date a Plan of Reorganization is effective ("Effective Date")
or on such other terms as may be agreed to.

2. On the Effective Date, unsecured creditors would receive 59.5
percent of the new common equity in the reorganized Company.
In addition, unsecured creditors would have the right to elect
to receive cash at $8.889 per share up to an aggregate maximum
amount of $100 million, through a purchase by AmWest of the
shares to be otherwise allocable to such unsecured creditors
making the election under the Plan of Reorganization.

4. In exchange for certain concessions principally arising from
cancellation of the right of GPA affiliates to "put" to
America West 10 Airbus A320 aircraft at fixed rates, GPA, or
certain affiliates thereof, would receive (i) 2 percent of the
new common equity in the reorganized Company, (ii) warrants to
purchase up to 1,384,615 shares of the reorganized Company's
common stock on the same terms as the AmWest warrants, (iii)
$30.5 million in cash, and (iv) the right to require the
Company to lease up to eight aircraft of types operated by the
Company from GPA prior to June 30, 1999 on terms which the
Company believes to be more favorable than those currently
applicable to the put aircraft.

<PAGE> 26

precedent to the Effective Date of the Plan of Reorganization
would be that these agreements be in form and substance
satisfactory to America West, including the Company's
reasonable satisfaction that such alliance agreements, when
fully implemented, will result in an increase in pre-tax
income to the Company of not less than $40 million per year.

6. The expansion of the Company's Board of Directors to 15
members for a period of not less than three years following
the Effective Date. Nine members would be designated by
AmWest and other members reasonably acceptable to AmWest would
include three members designated by the Creditors' Committee,
and one member each designated by the Equity Committee, the
Company's current Board of Directors and GPA.

7. The pre-petition executory contract for the purchase of 24
A320-200 aircraft between the Company and AVSA would be
amended to provide the Company with greater flexibility,
reduced pricing and enhanced terms for the acquisition of the
aircraft than is presently provided in the contract. Under
the modified terms, delivery dates of the aircraft would fall
in the years 1998 through 2000 with an option to further defer
deliveries. In addition, if new A320 aircraft are delivered
as a result of the new GPA Put Agreement (see item 4 above),
the Company would have the right to cancel on a one-for-one
basis, up to a maximum of eight non-consecutive aircraft
deliveries hereunder, subject to certain conditions. In
exchange for these modifications, the contract, as modified,
would be assumed and certain promissory notes relating thereto
would be reinstated on the Effective Date of the Plan of
Reorganization.

8. The Plan of Reorganization also provides for many other
matters, including the disposition of the various types of
claims asserted against the Company, the adherence to the
Company's aircraft lease agreements, the renegotiation,
assumption as modified or rejection of certain pre-petition
aircraft purchase agreements and release of the Company's
employees from all obligations presently existing under the
notes issued in connection with the Company's employee stock
purchase plan, concurrent with the abandonment of such notes
by the Company and the cancellation of the shares of Company
stock securing such notes.

The Company has also entered into a Third Revised Procedures Agreement (the
"Procedures Agreement") with AmWest dated April 21, 1994. The Procedures
Agreement sets forth terms and conditions upon which the Company must operate
prior to the Effective Date of a confirmed Plan of Reorganization based upon
the terms of the Third Revised Investment Agreement. The Procedures Agreement
provides for the reimbursement of expenses up to $550,000 for the period prior
to March 1, 1994 and up to $300,000 per month subsequent to March 31, 1994.
The Third Revised Procedures Agreement was approved by the Bankruptcy Court on
May 4, 1994.

On June 28, 1994, the Bankruptcy Court entered an order approving the adequacy
of the Disclosure Statement under Section 1125 and set into motion a balloting
process for the approval of the Plan of Reorganization. The Court fixed August
3, 1994 as the last date for filing objections to the Plan of Reorganization,
voting to accept or reject the Plan and making any applicable elections under
the Plan. A confirmation hearing for the Plan was set for August 10, 1994.

<PAGE> 27

POSSIBLE LIMITATION ON NOL AND BUSINESS TAX CREDIT CARRYFORWARDS. As of
December 31, 1993, the Company has net operating loss ("NOL") and general
business tax credit carryforwards of approximately $530 million and $12.7
million, respectively. Under Section 382 of the Internal Revenue Code of 1986,
if a loss corporation has an "ownership change" within a designated testing
period, its ability to use its NOL and credit carryforwards is subject to
certain limitations. The Company is a loss corporation within the meaning of
Section 382. To the best of the Company's knowledge as of June 30, 1994, the
Company has not undergone an "ownership change" that would result in any
material limitation of the Company's ability to use its NOL and business credit
carryforwards in future tax years. However, should an "ownership change" occur
prior to the Effective Date of a Plan of Reorganization, the Company's ability
to utilize such carryforwards would be significantly restricted. The issuance
of certain common stock by the Reorganized Company pursuant to the Plan will
result in an ownership change within the meaning of Section 382. Such an
ownership change would entail the imposition of an annual limitation (the
Section 382 Limitation) upon the Company's ability to offset any post-change
taxable income with pre-change NOL. Should the Reorganized Company generate
insufficient taxable income in any post-change taxable year to fully utilize
the Section 382 Limitation for that year, any excess limitation will be carried
forward to use in subsequent tax years, provided the pre-change NOL has not
been exhausted nor has the carryforward period expired.

Certain motions filed and adversary proceedings commenced by the Company during
the first quarter of 1994 to restrict the sale or transfer of the Company's
stock so as to preserve the Company's net operating loss and general business
tax credit carryforwards have been withdrawn without prejudice.

KAWASAKI PUT AGREEMENT. On June 28, 1994, the Bankruptcy Court entered an
order approving a motion by the Company to terminate the Kawasaki Put
Agreement. In consideration of payments totaling $4.5 million, Kawasaki agreed
to waive its rights to put up to four A320 aircraft at predetermined lease
rates to the Company in 1994. On June 29, 1994, the Company paid $2.5 million
of the settlement amount with the remaining $2 million to be paid on the
Effective Date of the Plan of Reorganization.

RESULTS OF OPERATIONS

The Company realized net income of $20.1 million ($.74 per common share) for
the second quarter of 1994, the highest such level in the Company's history and
the Company's sixth consecutive quarter of profitability. The continuation of
the positive trend in operating results, which commenced during the fourth
quarter of 1992, is attributable to several factors which include improved
economic and competitive fare conditions, the continuation of relatively low
fuel prices as well as the benefits derived from the reduction in fleet size
from 104 aircraft to 85 aircraft, the implementation of numerous cost reduction
and revenue enhancement programs, the elimination of the Company's commuter
operation and the introduction of three code sharing agreements. During second
quarter of 1994, the Company incurred $9.9 million of reorganization expenses.
For the second quarter of 1993, the Company reported net income of $10.3
million ($.39 per common share) which included reorganization expenses of $.8
million.

For the six months ended June 30, 1994, the Company realized net income of
$35.3 million ($1.30 per common share) compared to $12.4 million ($.52 per
common share) for the comparable period of 1993. The results for the six
months include reorganization expenses of $18.3 million and $1.9 million for
1994 and 1993, respectively.

<PAGE> 28

Passenger revenues for the second quarter of 1994 increased 11.3 percent to
$340.6 million compared to the corresponding period of 1993. The impact on the
quarter resulting from a 4.5 percent decline in average passenger yield was
more than offset by the 16.4 percent increase in the level of traffic (RPMs).
In addition, available seat miles (ASMs) increased 6.8 percent to 4.502 billion
miles compared to the second quarter of 1993. The increase in available seat
miles is the result of increased utilization as the fleet remained at the same
level as the prior period. Passenger revenues for the six months ended June
30, 1994 increased 10.1 percent to $665.0 million compared to the 1993 period.
Although average passenger yield declined by 4.6 percent during the period,
revenue passenger miles increased by 15.3 percent more than offsetting the
decline in yield. Passenger revenues per available seat mile increased 5.9
percent to 7.55 cents for the six months of 1994 on the strength of the
increase in revenue passenger miles.

Revenues from sources other than passenger fares increased during the 1994
quarter to $22.7 million compared to $18.8 million for 1993. This improvement
of 20.7 percent was primarily due to increases in freight and mail revenues.
For the six months ended June 30, such revenues increased 15.6% to $43.6 million
for 1994 from $37.7 million for 1993 due to increases in freight and mail
revenues.

The following table details certain key operating statistics for the applicable
periods.

<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30
----------------------------------------------------------
Percentage
1994 1993 Increase or (Decrease)
---- ---- ------------------------
<S> <C> <C> <C>
Number of Aircraft (end of period) 85 85 -
ASMs (millions) 4,502 4,214 6.8
RPMs (millions) 3,222 2,767 16.4
Load Factor (percent) 71.6 65.6 9.2
Yield (cents/RPM) 10.57 11.07 (4.5)
Revenue Per ASM (cents):
Passenger 7.57 7.26 4.3
Total 8.07 7.71 4.7
</TABLE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
-------------------------------------------------------
Percentage
1994 1993 Increase or (Decrease)
---- ---- ----------------------
<S> <C> <C> <C>
Number of Aircraft (end of period) 85 85 -
ASMs (millions) 8,804 8,467 4.0
RPMs (millions) 6,139 5,324 15.3
Load Factor (percent) 69.7 62.9 10.8
Yield (cents/RPM) 10.82 11.34 (4.6)
Revenue Per ASM (cents):
Passenger 7.55 7.13 5.9
Total 8.05 7.58 6.2
</TABLE>

Operating expense per ASM decreased to 7.09 cents for the
second quarter of 1994 compared to the same period of the prior year but
increased to 7.12 cents for the 1994 six month period compared to 7.08 for the
comparable 1993 period. The table below sets forth the major categories of
operating expense per ASM for the applicable periods.

28
<PAGE> 29

<TABLE>
<CAPTION>
SECOND QUARTER FIRST SIX MONTHS
---------------- ----------------
(in cents/ASM) (in cents/ASM)
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Salaries and Related Costs 1.84 1.80 1.85 1.77
Rentals and Landing Fees 1.48 1.61 1.51 1.66
Aircraft Fuel .84 .98 .86 .99
Agency Commissions .69 .63 .68 .62
Aircraft Maintenance Materials
and Repairs .24 .18 .21 .17
Depreciation and Amortization .49 .48 .49 .47
Other 1.51 1.43 1.52 1.40
---- ---- ---- ----
7.09 7.11 7.12 7.08
---- ---- ---- ----
</TABLE>

The changes in the components of operating expense per ASM between the second
quarter and first six months of 1994 and 1993 are explained as follows:

* Approximately $3.8 million of the second quarter increase in salaries
and related costs is attributable to the program commencing April 1,
1994 under which employees base wages were increased from 2% to 8%
depending on length of service. Additionally, the Company reinstated
its matching contribution under the America West 401(k) Plan to its
pre-bankruptcy level which increased costs by approximately $ .6
million. The remaining balance is attributable to increased costs
associated with medical claims and a higher staffing level. For the
six month period of 1994, salaries and related costs have increased
primarily due to performance and employment award distributions under
the transition pay program which was instituted in the second quarter
of 1993 as well as the new pay program instituted in the second
quarter of 1994, as discussed above.

* Rentals and landing fees for both the second quarter and the six month
period of 1994 decreased due to the reduction in airport rent expense
at New York's JFK and Phoenix's Sky Harbor International and the
return of certain administrative office space as part of the Company's
facilities consolidation program. In addition, rentals and landing
fees have decreased for the first six months of 1994 compared to the
1993 period due to the return of a wet leased L-1011 aircraft on
March 31, 1993.

* Aircraft fuel expense decreased during the second quarter due to the
decline in the average price per gallon to 52.65 cents in 1994 from
62.40 cents for 1993. For the six month period, the average price per
gallon of fuel declined to 53.66 cents for 1994 from 62.87 cents for
1993.

* The increase in the level of agency commission expense is primarily
due to the significant increase in passenger revenue per ASM
to 7.57 cents for 1994 from 7.26 cents for the second quarter of 1993.
For the six month period, agency commission expense has increased due
to an increase in passenger revenue per ASM to 7.55 cents for 1994
from 7.13 cents for 1993.

* The level of aircraft maintenance materials and repairs expense has
increased

29
<PAGE> 30
primarily as a result of higher aircraft utilization. Average daily
utilization of the aircraft fleet has increased from 10.7 hours per
day for the first six months of 1993 to 11.1 hours per day for the
first six months of 1994. This higher level of utilization has
resulted in increases to engine and engine component repair expense
and to increases in line maintenance materials usage.

* The increase in depreciation and amortization expense is primarily
attributable to increased scheduled heavy engine overhauls.

* The increase in other operating expenses is primarily due to increased
media advertising costs as well as expenses related to increased
traffic such as credit card discount fees, booking fees, telephone
charges, catering expenses and supplies.

Non-operating expenses (net of non-operating income) amounted to $23.2 million
and $14.7 million for the second quarter of 1994 and 1993, respectively.
Interest expense for the second quarter of 1994 was $12.9 million, slightly
below the $13.7 million for the same period of 1993. In conformity with
SOP90-7, the Company has ceased accruing and paying interest on unsecured
pre-petition long-term debt. Interest expense for the second quarter of 1994
would have been $17.5 million, if the Company had continued to accrue interest
on such debt.

During the second quarter, the Company incurred expenses of $9.9 million in
1994 and $.8 million in 1993 in connection with its effort to reorganize under
Chapter 11. Such expenses for 1994 include increased professional fees and
charges of $7.5 million related to the settlement of the Kawasaki Put
Agreement and an administrative claim. Reorganization related expenses are
expected to significantly affect future results and to continue until such
time as the Company has obtained approval for its Plan of Reorganization.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a working capital deficiency of $106.8 million and $124.4
million at June 30, 1994 and December 31, 1993, respectively. The decline in
the deficiency is primarily due to the increase in cash position and receivable
balances at June 30, 1994 resulting from improved operating results.

Cash and cash equivalents increased to $176.9 million at June 30, 1994 from
$99.6 million at December 31, 1993. Cash generated from operating activities
for the six months ended June 30, 1994 and 1993 amounted to $139.2 million and
$81.1 million, respectively. During the six months of 1994, the Company
incurred capital expenditures of $34.9 million compared to $23.6 million in
1993. The capital expenditures for 1994 and 1993 consisted largely of aircraft
spare parts and heavy engine overhauls.

The Company's transition pay program, which was implemented in the second
quarter of 1993, terminated in the second quarter of 1994. In connection with
the termination of the transition pay program, the Company announced certain
amendments to its compensation program on March 24, 1994. Effective April 1,
1994, employee base wages were increased between two percent to eight percent
depending on the employee's length of service with the Company. Generally,
each employee whose anniversary date occurs between April and December 1994
will also receive an additional increase on such date approximating 4 percent
with certain exceptions. The Chairman of the Board and the President will not
participate in

30
<PAGE> 31
the salary increase program. Due to the current collective bargaining process
with the representatives of the pilots, increase in pilots' salaries will not
be fully paid but will be accrued. Although a partial distribution was paid in
May 1994, the final distribution of such amounts will be determined through the
collective bargaining discussions. The Company is currently in the process of
revising its entire compensation program with the assistance of a consulting
firm and anticipates implementing such program effective January 1, 1995.

The Company has also announced that, effective April 1, 1994, matching
contributions by the Company under the America West 401(k) plan will be
increased from 25 percent to 50 percent of the first six percent contributed by
the employees, subject to certain limitations. This change restores the
Company's matching contribution to the level that existed prior to the Chapter
11 filing.

The Company estimates that the implementation of the increases in pay and the
401(k) matching contributions will result in increased costs of approximately
$12 million during the last six months of 1994.

On June 13, 1994, the Company filed a motion seeking authorization to amend the
terms and extend the maturity of approximately $77.6 million of the D.I.P.
financing to the earlier of December 31, 1994, or the Effective Date of the
Plan. On June 28, 1994, the Bankruptcy Court granted the extension of the
D.I.P. financing. One of the D.I.P. lenders has elected to be repaid as of
June 30, 1994 (the prior maturity date), in the approximate amount of $1
million. Accordingly, the outstanding principal amount of the extended D.I.P.
financing will be approximately $77.6 million. While there are certain fees to
be paid in the event that the D.I.P. financing is not fully repaid prior to
September 30, 1994, there is an interest rate reduction to 90-day LIBOR plus
250 basis points for the period July 1, 1994 through September 30, 1994, unless
the extended D.I.P. financing is not repaid by such date. Under the terms of
the amended D.I.P. financing, the Company is required to notify the lenders if
the unrestricted cash balance of the Company exceeds $175 million. Subsequent
to June 30, 1994, the Company notified the D.I.P. lenders that the Company's
unrestricted cash exceeded $175 million. The amended D.I.P. financing contains
a minimum unencumbered cash balance requirement of $74 million and certain
other covenants with which the Company was in compliance at June 30, 1994.

The reorganization process is expected to result in the cancellation and/or
restructuring of substantial debt obligations of the Company. Under the
Bankruptcy Code, the Company's pre-petition liabilities are subject to
settlement under a Plan of Reorganization. The Bankruptcy Code also requires
that all administrative claims be paid on the Effective Date of a Plan of
Reorganization unless the respective claimants agree to different treatment.
There are differences between the amounts at which claims liabilities are
recorded in the financial statements and the amounts claimed by the Company's
creditors and such differences are material. Significant litigation may be
required to resolve any disputes.

Due to the uncertain nature of many of the potential claims, America West is
unable to project the magnitude of such claims with any degree of certainty.
However, the claims (pre-petition claims and administrative claims) that have
been filed against the Company are in excess of $2 billion. Such aggregate
amount, includes claims of all character, including, but not limited to,
unsecured claims, secured claims, claims that have been scheduled but not
filed, duplicative claims, tax claims, claims for leases that were assumed, and
claims which the Company believes to be without merit; however, claims filed
for which an amount was not stated are not reflected in such amount. The
Company is unable

31
<PAGE> 32
to estimate the potential amount of such unstated claims; however, the amount
of such claims could be material.

The Company is in the process of reviewing the general unsecured claims
asserted against the Company including those claims that could arise as a
result of the Company's rejection of executory contracts. In many instances,
such allowance process will include the commencement of Bankruptcy Court
proceedings in order to determine the amount at which such claims should be
allowed. The Company has accrued its estimate of claims that will be allowed
or the minimum amount at which it believes the asserted general unsecured
claims will be allowed if there is no better estimate within the range of
possible outcome. However, the ultimate amount of allowed claims will be
different and such differences could be material. In its Disclosure Statement,
the Company estimates the range of allowed general unsecured claims to be from
a low of approximately $300 million to a high of approximately $360 million.
This range does not include claims which may arise and be allowed as a result
of the renegotiation of certain aircraft purchase agreements.

The Bankruptcy Code requires that all administrative claims be paid on the
Effective Date of a Plan of Reorganization unless the respective claimants
agree to different treatment. Consequently, depending on the ultimate amount
of administrative claims allowed by the Bankruptcy Court, the Company may be
unable to obtain confirmation of a Plan of Reorganization. The Company is
actively negotiating with the claimants to achieve mutually acceptable
dispositions of these claims. Since the commencement of the bankruptcy
proceeding, claims alleging administrative expense priority totaling more than
$153 million have been filed. As of June 30, 1994, $115 million of the filed
claims have been allowed and settled for $50.2 million in the aggregate. The
Company is seeking Bankruptcy Court approval of an agreement which would settle
the remaining $38 million filed administrative expense claim (which relates to
a rejected lease of a Boeing 737-300 aircraft). Pursuant to an order dated May
18, 1994, the Bankruptcy court fixed July 1, 1994 as the bar date for filing
non-ordinary course administrative expense claims. In response to the notice of
this bar date, certain claims were filed asserting status as non-ordinary
course administrative expense claims. The amount of such asserted claims, if
allowed, could be material; however, the Company is optimistic that the claims,
except to the extent previously known and provided for by the Company will be
either disallowed, withdrawn or negotiated to a mutually acceptable amount.

At June 30, 1994, the Company had on order a total of 49 aircraft of the types
the Company currently operates, of which 29 are firm and 20 are options. The
current estimated aggregate cost for the acquisition of the 49 aircraft is
approximately $2.7 billion ( which amount may change as a result of current
negotiations and does not reflect any deliveries pursuant to put arrangements
more fully described below). All of these aircraft are to be purchased from
Boeing or AVSA. Future aircraft deliveries are planned in some instances for
incremental additions to the Company's existing aircraft fleet and in other
instances as replacements for aircraft with lease terminations.

With respect to the contracts to purchase aircraft from Boeing, a contract to
purchase B737-300 aircraft has been affirmed in the Company's bankruptcy
proceedings. With timely notice to the manufacturer, all or some of these
deliveries may be converted to B737-400 aircraft. Existing purchase
agreements for B757-200 and B747-400 aircraft have neither been affirmed nor
rejected. All Boeing purchase agreements require a 24-month reconfirmation
notice for the delivery of the aircraft. As of June 30, 1994, ten B737-300 and
nine B757-200 delivery positions have expired due to the lack of reconfirmation
by the Company, leaving 14 and 11 delivery positions for the B737-300s and
B757-200s,
32

<PAGE> 33
respectively. The failure to reconfirm such delivery positions exposes the
Company to loss of pre-delivery deposits and other claims which may be asserted
in the bankruptcy proceeding. The Company also has a pre-petition executory
contract under which the Company holds delivery positions for four B747-400
aircraft under firm order and four B747-400 aircraft under option order. This
executory contract allows the Company, with the giving of adequate notice, to
substitute B737-400 aircraft for those delivery positions. Currently, the
Company is renegotiating all of its aircraft purchase agreements with Boeing.

With respect to the purchase of aircraft from AVSA, a single executory
contract for the purchase of 24 A320 aircraft has not been affirmed nor
rejected by the Company. As part of the investment by AmWest, the A320
purchase agreement was amended to provide the Company with greater flexibility
and reduced pricing. Under the modified terms, delivery dates of the aircraft
will fall in the years 1998 through 2000 with an option to further defer
deliveries. In addition if new A320 aircraft are delivered as a result of the
renegotiated put agreement (see discussion below), the Company will have the
right to cancel on a one-for-one basis, up to a maximum of eight nonconsecutive
aircraft deliveries hereunder, subject to certain conditions. Negotiations are
currently continuing between AVSA and the Company to finalize the details of
this amendment.

During 1994, leases relating to four Boeing 737-200 aircraft, two Airbus A320
aircraft and two Boeing 757 aircraft are scheduled to expire. The Company has
negotiated extensions of the leases of all but one of the Airbus A320 aircraft
for terms ranging from one to three years. One Airbus A320 aircraft was
returned to the lessor and was replaced by a Boeing 757 aircraft which has been
leased for a term of three years. In June 1994, the Company renegotiated a put
agreement for ten A320 aircraft. The new put agreement reduced the number of
aircraft from ten to eight and rescheduled the deliveries to start not earlier
than June 30, 1995 and end on June 30, 1999. Under the new agreement, new or
used A320 aircraft, B737-300 or B757-200 aircraft may be put to the Company at
a rate of no more than two in 1995, and with respect to each ensuing year
during the put period, of no more than three. In addition, no more than five
used aircraft may be put to the Company and for every new A320 aircraft put to
the Company, the Company has the right to reduce the AVSA A320 purchase
contract on a one-for-one basis. During each January of the put period, the
Company will negotiate the type and delivery dates of the put aircraft for that
year. The puts will require 150-day notice and will be leased at the fair
market rate for terms ranging from three to eighteen years, depending on the
type and condition of the aircraft. As part of the renegotiated agreement,
certain cash payments and securities will be issued to the put holder.

In connection with the $78 million D.I.P. facility, in December 1991, the
Company terminated its agreement with a D.I.P. lender to lease 24 aircraft and
replaced it with a put agreement to lease up to ten of the aircraft. In
September 1992, the put agreement was amended and the number of put aircraft
was reduced from ten to four and the aircraft were scheduled for delivery from
1994 through 1996. In June 1994, the Company reached a settlement for the
cancellation of the right to put four aircraft to the Company for $4.5 million.

As of June 30, 1994, the Company had deposits on aircraft orders of
approximately $52 million of which approximately $21 million were financed.

33
<PAGE> 34

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

On June 27, 1991, the Company filed a voluntary petition in the United
States Bankruptcy Court for the District of Arizona to reorganize
under Chapter 11 of Title 11 of the United States Bankruptcy Code.
See: Notes to Financial Statement under Item 1 and Item 2,
Management's Discussion and Analysis of Financial Condition and
Results of Operations.

In August 1991, the Securities and Exchange Commission ("SEC")
informally requested that the Company provide the SEC with certain
information and documentation underlying disclosures made by the
Company in annual and quarterly reports filed with the SEC by the
Company in 1991. The Company has cooperated with the SEC's informal
inquiry. On March 29, 1994, the Company submitted an offer of
settlement for the purpose of resolving the inquiry through the entry
of a consent decree pursuant to which the Company would, while neither
admitting nor denying any violation of the securities laws, agree to
comply with its future reporting obligations under Section 13 of the
Securities Exchange Act of 1934. On May 6, 1994, the Securities and
Exchange Commission accepted the Company's offer of settlement. In
order to implement the settlement on May 12, 1994, the SEC issued an
"Order Instituting Proceedings Pursuant to Section 21C of the
Securities Exchange Act of 1934 and Opinion and Order of the
Commission" finding that the Company's Form 10-K for the year ending
December 31, 1990, violated Section 13(a) of the Exchange Act and Rule
13a-1 thereunder, and that the Company's Form 10-Q for the first
quarter 1991 violated Section 13(a) of the Exchange Act and Rule
13a-13 thereunder, and ordering that the Company cease and desist from
future violations of such provisions. The Order does not contain any
findings of intentional wrongdoing and expressly provides that the
Company neither admits or denies any violation of the securities laws.

Item 2. CHANGES IN SECURITIES

None.

Item 3. DEFAULT UPON SENIOR SECURITIES

As a result of the Chapter 11 filing, the Company is in default of
substantially all of its debt and lease agreements. In addition, the
Company has not made scheduled dividend payments on its outstanding
preferred stock.

34
<PAGE> 35

Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

On June 28, 1994, the Bankruptcy Court approved the adequacy of the
Disclosure Statement and set into motion a balloting process for the
approval of the Plan of Reorganization with a voting deadline of
August 3, 1994.

Of the 22,967,411 votes available to vote on the Plan of
Reorganization, 13,955,661 votes were in favor, 1,361,464 votes were
against, 5,918,964 votes abstained from voting and 1,731,322 votes were
declared invalid.

Item 5. OTHER INFORMATION

During the second quarter of 1994, the Company's Board of Directors
approved the acquisition by certain entities of shares of the
Company's Common Stock and Preferred Stock. Absent such approval,
such acquisitions may have resulted in a Triggering Event under the
terms of the Company's Amended and Restated Rights Agreement. Such
approval was also necessary in order to avoid having the acquisition
deemed a "business combination" (as such term is defined under the
General Corporation Law of the State of Delaware) between the
purchasers and the Corporation.

On October 26, 1993, the Air Line Pilots Association (ALPA) was
certified by the NMB as the collective bargaining representative of
America West's pilots. Negotiations with ALPA pursuant to the Railway
Labor Act as amended commenced on April 19, 1994. Proposals for
certain sections of a future collective bargaining agreement have been
exchanged. Negotiations are continuing.

On April 15, 1994, the NMB advised the Company that it had instituted
an investigation in case number R-6277 to determine whether the
Company's Fleet Service employees should be represented for collective
bargaining purposes by the Transport Workers Union of America. The
NMB has not yet determined which employees would be eligible as
members of the class or craft of Fleet Service employees. Nor has the
NMB announced whether the TWU has submitted sufficient number of
interest cards to warrant an election.

On June 28, 1994, the NMB officially dismissed AFA's prior petition
and accepted a new petition for representation of America West's
in-flight CSR's. An eligibility list for this representational
election was submitted by America West on July 8, 1994. Disputes as
to who will be considered eligible to vote have not yet been resolved
by the NMB. However, ballots will be mailed to all eligible flight
attendants in August. The ballot count will be held in Washington on
September 15, 1994.

On August 1, 1994, the NMB notified America West that the
International Brotherhood of Teamsters had filed an application with
the NMB for representation of mechanics and related personnel.
America West filed its eligibility list on this same date. The NMB
has yet to announce whether the IBT has submitted a sufficient number
of interest cards to warrant an election.

35
<PAGE> 36

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

a. Exhibits

EXHIBIT
NUMBER DESCRIPTION AND METHOD OF FILING
------- --------------------------------
2. The Company's Plan of Reorganization under Chapter 11
of the Bankruptcy Code. Filed herewith.

10.1 Fourth Amended and Restated Credit Agreement dated
June 30, 1994 (without
exhibits). Filed herewith.

10.2 America West Airlines Management Resignation
Allowance Guidelines, as amended, dated November 18,
1993. Filed herewith.

10.3 Key Employee Protection Agreement dated as of June
27, 1994 between America West Airlines, Inc. and
William A. Franke. Filed herewith.

b. Reports on Form 8-K

None

<PAGE> 37

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

AMERICA WEST AIRLINES, INC.

By _____________________________
Raymond T. Nakano
Vice President and Controller

DATED: August 12, 1994

<PAGE> 1

EXHIBIT 2

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF ARIZONA
IN RE

AMERICA WEST AIRLINES, INC.,
CASE NO.
91-07505-PHX-RGM
CHAPTER 11
Debtor.

PLAN OF REORGANIZATION UNDER CHAPTER 11
OF THE UNITED STATES BANKRUPTCY CODE

AMERICA WEST AIRLINES, INC.
Martin J. Whalen, Esq.
4000 East Sky Harbor Blvd.
Phoenix, Arizona 85034

LEBOEUF, LAMB, GREENE & MACRAE
633 17th Street, Suite 2800
Denver, Colorado
(303) 291-2600

Of Counsel:
Carl A. Eklund
John Edward Maas

GALLAGHER & KENNEDY
2600 North Central Avenue
Phoenix, Arizona 85004
(602) 530-8000

Of Counsel:
Charles R. Sterbach

Co-Counsel to the Debtor and
Debtor In Possession,
Co-Proponent of this
Plan of Reorganization

Dated: Phoenix, Arizona
June 28, 1994

ARNOLD & PORTER
1200 New Hampshire Avenue, N.W.
Washington, D.C. 20036
(202) 872-6700

Of Counsel:
Richard P. Schifter
Samuel A. Flax
Brian P. Leitch

Counsel to AmWest Partners,
L.P., Co-Proponent of this
Plan of Reorganization
<PAGE> 2

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<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1
DEFINITIONS.............................................................................
ARTICLE 2
TREATMENT OF UNCLASSIFIED CLAIMS........................................................ 9
2.1. Treatment of Post-Petition Agreement Claims................................ 9
2.2. Treatment of Administrative Claims......................................... 9
2.3. Allowed Priority Tax Claims................................................ 10
ARTICLE 3
DESIGNATION OF AND PROVISIONS FOR TREATMENT OF CLASSES
OF CLAIMS AND EQUITY INTERESTS.......................................................... 10
3.1. Class 1 -- Allowed Priority Wage Claims.................................... 10
3.2. Class 2 -- Allowed Priority Benefit Plan Contribution Claims............... 10
3.3. Class 3 -- Allowed Secured Claims.......................................... 10
3.4. Class 4 -- Allowed Convenience Claims...................................... 12
3.5. Class 5 -- Allowed General Unsecured Claims................................ 13
3.6. Class 6 -- Preferred and Common Stock...................................... 13
3.7. Class 7 -- Certain Other Claims and AWA Warrants, Options
and Other Equity Interests................................................. 14
ARTICLE 4
PROVISIONS OF NEWAWA SECURITIES ISSUED PURSUANT TO THE PLAN............................. 15
4.1. NewAWA Class A Common Stock................................................ 15
4.2. NewAWA Class B Common Stock................................................ 15
4.3. NewAWA Warrants............................................................ 15
4.4. NewAWA Senior Unsecured Notes.............................................. 16
ARTICLE 5
EXECUTORY CONTRACTS AND UNEXPIRED LEASES................................................ 16
5.1. Assumption of Certain Executory Contracts and Unexpired Leases............. 16
5.2. Rejection of Certain Executory Contracts and Unexpired Leases.............. 17
5.3. Claims Based on Rejection of Contracts or Unexpired Leases................. 17
ARTICLE 6
IDENTIFICATION OF CLASSES OF CLAIMS NOT IMPAIRED BY THE PLAN AND THE CLASS OF CLAIMS AND
EQUITY INTERESTS DEEMED TO HAVE REJECTED THE PLAN.....................................
17
6.1. Unimpaired Classes......................................................... 17
6.2. Class Deemed to Have Rejected the Plan..................................... 17
6.3. Other Impaired Classes..................................................... 18
ARTICLE 7
ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY
ONE OR MORE CLASSES..................................................................... 18
7.1. Impaired Classes to Vote................................................... 18
7.2. Acceptance by Class of Holders of Claims or Equity Interests............... 18
7.3. Cramdown................................................................... 18
</TABLE>

i
<PAGE> 4

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 8
MEANS FOR IMPLEMENTATION OF THE PLAN.................................................... 18
8.1. Investment Agreement....................................................... 18
8.2. Stockholders' and Registration Rights Agreements........................... 18
8.3. Delivery of Alliance Agreements............................................ 18
8.4. GPA Settlement............................................................. 18
8.5. Corporate Governance....................................................... 19
8.6. Release of Certain Claims and Actions...................................... 19
8.7. Indemnification Obligations................................................ 19
8.8. Exemption from Certain Taxes............................................... 20
8.9. Directors and Officers..................................................... 20
8.10. Revesting of Assets; No Further Supervision................................ 20
8.11. Implementation............................................................. 20
8.12. Cancellation of Securities................................................. 20
ARTICLE 9
CONDITIONS PRECEDENT TO THE EFFECTIVE DATE.............................................. 21
9.1. Effectiveness of the Plan.................................................. 21
ARTICLE 10
PROVISIONS COVERING DISTRIBUTIONS AND PAYMENTS.......................................... 21
10.1. Making of Distributions and Payments....................................... 21
10.2. Distributions by the Distribution Agent.................................... 21
10.3. Service of Indenture Trustee............................................... 23
10.4. Reserves for Distributions for Disputed Claims and Disputed Equity
Interests.................................................................. 25
10.5. Fractional Interests; Odd Lots; De Minimis Distributions................... 26
10.6. Delivery of Distributions; Unclaimed Property.............................. 26
10.7. Method of Payment.......................................................... 27
10.8. Payment Dates.............................................................. 27
10.9. Compliance with Tax Requirements........................................... 27
ARTICLE 11
PROCEDURES FOR RESOLVING DISPUTED CLAIMS OR EQUITY INTERESTS............................ 27
11.1. Filing of Objections to Claims or Equity Interests......................... 27
11.2. Settlement of Objections to Claims or Equity Interests After Effective
Date....................................................................... 27
11.3. Payment or Distribution to Holders of Disputed Claims or Equity
Interests.................................................................. 27
11.4. Reserves for Disputed Claims and Disputed Equity Interests................. 28
ARTICLE 12
MISCELLANEOUS PROVISIONS................................................................ 28
12.1. Modification of Payment Terms.............................................. 28
12.2. Discharge of Debtor........................................................ 28
12.3. Termination of Subordination Rights........................................ 28
12.4. Termination of the Creditors and Equity Committees......................... 28
12.5. Setoffs.................................................................... 29
12.6. Opt-Out.................................................................... 29
12.7. Section Headings........................................................... 29
12.8. Severability............................................................... 29
12.9. Computation of Time........................................................ 29
12.10. Governing Law.............................................................. 29
</TABLE>

ii
<PAGE> 5

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 13
PROVISIONS FOR EXECUTION AND SUPERVISION OF THIS PLAN................................... 30
13.1. Retention of Jurisdiction.................................................. 30
13.2. Amendment of Plan.......................................................... 31
13.3. Post-Effective Date Notice................................................. 31
13.4. Revocation of Plan......................................................... 31
LIST OF EXHIBITS
Exhibit A -- Investment Agreement
Exhibit B -- Stockholders' Agreement
Exhibit C -- GPA Term Sheet
LIST OF SCHEDULES
Schedule 1 -- Section 1110 Stipulations
Schedule 2 -- Certain Final Orders Related to Settlements
Schedule 3 -- Certain Assumed Agreements
</TABLE>

iii
<PAGE> 6

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<PAGE> 7

PLAN OF REORGANIZATION UNDER CHAPTER 11
OF THE UNITED STATES BANKRUPTCY CODE

AMERICA WEST AIRLINES, INC., the Debtor and Debtor in Possession in the
above-captioned Chapter 11 Case, and AMWEST PARTNERS, L.P., as co-proponents
hereof, hereby jointly propose the following Plan of Reorganization pursuant to
Section 1121(a), Title 11, United States Code for the resolution of the Debtor's
outstanding creditor claims and equity interests. Reference is made to the
Debtor's Disclosure Statement, filed contemporaneously with the Plan of
Reorganization, for a discussion of the Debtor's history, business, properties,
results of operations and projections for future operations and for a summary
and analysis of the Plan of Reorganization and certain related matters.

ALL HOLDERS OF CLAIMS AGAINST AND EQUITY INTERESTS IN THE DEBTOR ARE
ENCOURAGED TO READ THE PLAN OF REORGANIZATION AND THE DISCLOSURE STATEMENT IN
THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE PLAN.

ARTICLE 1

DEFINITIONS

As used in the Plan, the following terms shall have the respective meanings
specified below:

1.1. Administrative Claim: A Claim for any cost or expense of
administration of the Chapter 11 Case allowed under Section 503(b), Section
507(b), Section 546(c)(2) or Section 1114(e)(2) of the Bankruptcy Code and
entitled to priority under Section 507(a)(1) of the Bankruptcy Code, including,
without limitation, fees payable pursuant to Section 1930 of Title 28 of the
United States Code, but not including the Post-Petition Agreement Claims. To the
extent that a Claim is allowed as an administrative claim pursuant to Section
365(d)(3) of the Bankruptcy Code, such Claim shall also be deemed an
Administrative Claim under this Section.

1.2. Allowed Claim and Allowed . . . Claim: Any Claim against the Debtor
(i) proof of which, request for payment of which or application for allowance of
which was filed or deemed to be filed on or before the Bar Date for filing
proofs of claim or requests for payment for Claims of such type against the
Debtor, (ii) if no proof of claim is filed, which has been or hereafter is
listed by the Debtor in the Schedules as liquidated in amount and not disputed
or contingent, or (iii) a Claim that is allowed in any contract, instrument,
indenture or other agreement entered into in connection with the Plan and, in
any case, a Claim as to which no objection to the allowance thereof has been
interposed within the applicable period of limitation fixed by the Plan, the
Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court. A Disputed Claim
shall be an Allowed Claim if, and only to the extent that, such Disputed Claim
has been Allowed by a Final Order or otherwise pursuant to Section 11.2. The
term "Allowed," when used to modify a reference in the Plan to any Claim or
class of Claims, shall mean a Claim (or any Claim in any such class) that is so
Allowed, e.g., an Allowed Secured Claim is a Claim that has been Allowed to the
extent of the value, as determined by the Bankruptcy Court pursuant to Section
506(a) of the Bankruptcy Code, of any interest in property of the estate of the
Debtor securing such Claim. Unless otherwise specified in the Plan, the
Confirmation Order or in the Final Order of the Bankruptcy Court allowing such
Claim, "Allowed Claim" shall not include interest on the amount of such Claim
from and after the Petition Date.

1.3. AmWest: AmWest Partners, L.P., a Texas limited partnership, and, as
the context requires, parties purchasing NewAWA Securities as a part of the
AmWest investment in NewAWA, even though such parties may or may not actually be
partners or investors in AmWest itself.

1.4. Assumed Agreement: Each executory contract and unexpired lease of the
Debtor which (i) has been assumed during the Chapter 11 Case prior to the
Confirmation Date pursuant to Section 365 of the Bankruptcy Code, (ii) is the
subject of a motion to assume pending on the Confirmation Date, or (iii) is
listed on Schedule 3 hereto in accordance with Section 5.1.1, either without
amendment, or with such amendments thereto as shall be agreed upon between the
Debtor and the other parties thereto.
<PAGE> 8

1.5. Avoidance Litigation: The Debtor's interest in any and all claims,
rights and causes of action which have been or may be commenced by or on behalf
of the Debtor to avoid and recover any transfers of property determined to be
preferential, fraudulent or otherwise avoidable pursuant to Sections 544, 545,
547, 548, 549, 553(b) or 550 of the Bankruptcy Code.

1.6. AWA: America West Airlines, Inc., a Delaware corporation, as the
Debtor and Debtor in Possession in the Chapter 11 Case, or, as the context may
require, NewAWA.

1.7. AWA Common Stock: The duly authorized and validly issued shares of
common stock of AWA, $.25 par value, which are outstanding immediately prior to
the Effective Date.

1.8. AWA Debenture Claims: All Claims of the holders of AWA Debentures and
the Indenture Trustee as of the Distribution Record Date for (i) payment,
pursuant to the Indentures, of principal in the face amount of the AWA
Debentures, plus interest accrued as of the Petition Date or (ii) the fees,
costs and expenses of the Indenture Trustee pursuant to the Indentures, but
excluding any Claims for damages in excess of the face amount of the AWA
Debentures arising from the purchase or sale of such AWA Debentures, and
excluding any Claims for equitable relief.

1.9. AWA Debentures: Collectively, the AWA 11 1/2% Convertible Subordinated
Debentures, the AWA 7 3/4% Convertible Subordinated Debentures, and the AWA
7 1/2% Convertible Subordinated Debentures.

1.10. AWA 11 1/2% Convertible Subordinated Debentures: The 11 1/2%
Convertible Subordinated Debentures due 2009, issued by AWA pursuant to the AWA
11 1/2% Subordinated Indenture and outstanding immediately prior to the
Effective Date.

1.11. AWA 11 1/2% Subordinated Indenture: The Indenture of Trust dated
December 15, 1986 between AWA and First Interstate Bank of Arizona, N.A.

1.12. AWA Preferred Stock: The duly authorized and validly issued shares of
Series C 9 3/4% Convertible Preferred Stock of AWA, $.25 par value, outstanding
immediately prior to the Effective Date.

1.13. AWA 7 1/2% Convertible Subordinated Debentures: The 7 1/2%
Convertible Subordinated Debentures due 2011, issued by AWA pursuant to the AWA
7 1/2% Subordinated Indenture and outstanding immediately prior to the Effective
Date.

1.14. AWA 7 1/2% Subordinated Indenture: The Indenture of Trust dated March
15, 1986 between AWA and First Interstate Bank of Arizona, N.A.

1.15. AWA 7 3/4% Convertible Subordinated Debentures: The 7 3/4%
Convertible Subordinated Debentures due 2010, issued by AWA pursuant to the AWA
7 3/4% Subordinated Indenture and outstanding immediately prior to the Effective
Date.

1.16. AWA 7 3/4% Subordinated Indenture: The Indenture of Trust dated
August 1, 1985 between AWA and First Interstate Bank of Arizona, N.A.

1.17. AWA Warrants, Options and Other Equity Interests: All Equity
Interests in AWA outstanding immediately prior to the Effective Date, except for
the AWA Common Stock and the AWA Preferred Stock, but including without
limitation all rights, options or warrants, authorized, adopted or distributed
to holders of Equity Interests or officers, directors or employees of AWA,
whether under one or more contracts or plans, to sell, purchase, grant or
otherwise transfer any issued and outstanding or authorized but unissued Equity
Interests of AWA under any and all applicable terms and conditions.

1.18. Ballot: The form for (i) acceptance or rejection of the Plan
distributed to those holders of Claims or Equity Interests entitled to vote on
the Plan and (ii) the election of (a) the option to purchase Equity Subscription
Stock and Over-Subscription Stock and (b) the option to become an Electing
Unsecured Creditor, as such form may be approved by the Bankruptcy Court and
which shall otherwise comply with the requirements of Bankruptcy Rule 3018(c).

1.19. Bankruptcy Code: The Bankruptcy Reform Act of 1978, Title 11, United
States Code, as applicable to the Chapter 11 Case, as now in effect or hereafter
amended.

2
<PAGE> 9

1.20. Bankruptcy Court: The unit of the United States District Court for
the District of Arizona having jurisdiction over the Chapter 11 Case.

1.21. Bankruptcy Rules: Collectively, the Federal Rules of Bankruptcy
Procedure and the local rules of the Bankruptcy Court, as applicable to the
Chapter 11 Case, as now in effect or hereinafter amended.

1.22. Bar Date: In the case of Claims other than Administrative Claims,
February 28, 1992, and in the case of Administrative Claims (other than
Preserved Ordinary Course Administrative Claims and Professional Fees), July 1,
1994.

1.23. Business Day: Any day other than a Saturday, Sunday or other day on
which commercial banks in New York or Arizona are authorized or required by law
to close.

1.24. Cash: Currency, checks and wire transfers of immediately available
funds.

1.25. Chapter 11 Case: The case under Chapter 11 of the Bankruptcy Code in
which AWA is the Debtor pending in the Bankruptcy Court with Case No.
91-07505-PHX-RGM, including all adversary proceedings pending in connection
therewith.

1.26. Claim: Any right to payment from the Debtor, whether or not such
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
arising at any time before the Effective Date or relating to any event that
occurred before the Effective Date; or any right to an equitable remedy for
breach of performance if such breach gives rise to a right of payment from the
Debtor, whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed, secured or
unsecured. Any alleged right to payment which is listed by the Debtor on the
Schedules as disputed, unliquidated or contingent will not be a Claim hereunder
if the holder thereof has not filed a timely proof of claim with regard thereto.

1.27. Class: A category of holders of Claims or Equity Interests as
classified in the Plan.

1.28. Confirmation: The entry by the Bankruptcy Court of the Confirmation
Order.

1.29. Confirmation Date: The date upon which the Bankruptcy Court enters
the Confirmation Order.

1.30. Confirmation Hearing: The duly noticed hearing held by the Bankruptcy
Court on Confirmation of the Plan pursuant to Section 1128 of the Bankruptcy
Code. The Confirmation Hearing may be adjourned by the Bankruptcy Court from
time to time without further notice other than the announcement of the adjourned
date at the Confirmation Hearing.

1.31. Confirmation Order: An order of the Bankruptcy Court, in form and
substance satisfactory to the Debtor and AmWest, confirming the Plan.

1.32. Contingent Claim: A Claim which is either contingent or unliquidated
on or immediately before the Confirmation Date.

1.33. Convenience Claims: All Allowed General Unsecured Claims which are in
an amount of five hundred dollars ($500) or less.

1.34. Creditors' Committee: The Official Committee of Unsecured Creditors
appointed by the United States Trustee in the Chapter 11 Case pursuant to
Section 1102(a)(1) of the Bankruptcy Code.

1.35. Debt Instrument: A debenture, promissory note or other transferable
instrument evidencing a payment obligation.

1.36. Debtor and Debtor in Possession: AWA, as a debtor in possession in
the Chapter 11 Case pursuant to Sections 1107 and 1108 of the Bankruptcy Code.

1.37. DIP Credit Agreement: The Third Amended and Restated Credit Agreement
dated as of September 30, 1993, between AWA and the DIP Lenders, as approved by
Final Order of the Bankruptcy Court dated September 29, 1993, together with all
integrally related documents, schedules and exhibits, as

3
<PAGE> 10

such agreement and such integrally related documents, schedules and exhibits may
be amended or amended and restated from time to time.

1.38. DIP Lenders: BT Commercial Corp., as Administrative Agent, GPA
Leasing USA I, Inc., GPA Leasing USA Sub I, Inc., Kawasaki Leasing
International, Inc., B&B Holdings, Inc. d/b/a Phoenix Cardinals, Bank of America
Arizona, Bank One Arizona, N.A., Commerce and Economic Development Division, The
Dial Corp., DMB Holding Limited Partnership, El Dorado Investment Company, First
Interstate Bank of Arizona, N.A., Phelps Dodge Corporation, Phoenix Newspapers,
Inc., and Phoenix Suns, Ltd. Partnership and each substitute or additional
lender under any permitted assignment, amendment or amendment and restatement of
the DIP Credit Agreement.

1.39. DIP Loan Claims: Any and all Claims, whether a Secured Claim or an
Unsecured Claim, of the DIP Lenders, arising under the DIP Credit Agreement.

1.40. Disclosure Statement: The Disclosure Statement dated as of June 28,
1994, including exhibits and any supplements, amendments or modifications
thereto, prepared pursuant to Sections 1125(a) and 1126(b) of the Bankruptcy
Code, and Bankruptcy Rule 3018(b), as approved by the Bankruptcy Court.

1.41. Disputed Claim and Disputed . . . Claim: A Claim which is (i) the
subject of a timely objection interposed by the Debtor, NewAWA or any party in
interest (including the Creditors' Committee and the Equity Committee) in the
Chapter 11 Case, if at such time such objection remains unresolved, (ii) a Claim
that is listed by the Debtor as disputed, unliquidated or contingent in the
Schedules or (iii) if no objection has been timely filed, a Claim which has been
asserted in a timely filed proof of claim in an amount greater than or in a
class different than that listed by the Debtor in the Schedules as liquidated in
amount and not disputed or contingent; provided, however, that the Bankruptcy
Court may estimate a Disputed Claim for purposes of allowance pursuant to
Section 502(c) of the Bankruptcy Code. The term "Disputed," when used to modify
a reference in the Plan to any Claim or class of Claims, shall mean a Claim (or
any Claim in such class) that is a Disputed Claim as defined herein. In the
event there is a dispute as to classification or priority of a Claim, it shall
be considered a Disputed Claim in its entirety. Until such time as a Contingent
Claim becomes fixed and absolute, such Claim shall be treated as a Disputed
Claim and not an Allowed Claim for purposes related to allocations and
distributions under the Plan.

1.42. Disputed Equity Interest: An Equity Interest which is the subject of
a timely objection interposed by the Debtor, NewAWA or any party in interest
(including the Equity Committee) in the Chapter 11 Case, if at such time such
objection remains unresolved.

1.43. Distribution Agent: NewAWA or such disbursing agent(s) as NewAWA
shall from time to time employ at its expense for the purpose of making
distributions under the Plan.

1.44. Distribution Agent Charges: Any Taxes imposed upon or with respect to
(i) the Distribution Agent in its capacity as such, or (ii) the assets held by
the Distribution Agent in its capacity as such or any income realized thereon.

1.45. Distribution Date: With respect to any Allowed Claim or Equity
Interest, each date on which a payment is made with respect to such Allowed
Claim or Equity Interest.

1.46. Distribution Record Date: For the purposes under Bankruptcy Rules
3001 and 3021 for any distribution under the Plan to the holders of Claims or
Equity Interests and for the determination of which Claims or Equity Interests
may be disallowed, the Effective Date.

1.47. Effective Date: The last to occur of (i) the first Business Day that
is at least eleven (11) days after the Confirmation Date and on which no stay of
the Confirmation Order is in effect, and (ii) the Business Day on which all of
the conditions set forth in Section 9.1 shall have been satisfied.

1.48. Electing Creditor Cash: The Cash to be received by Electing Unsecured
Creditors in accordance with Section 3.5.

1.49. Electing Creditor Stock: The NewAWA Class B Common Stock to be
distributed under certain circumstances to Electing Unsecured Creditors pursuant
to Section 3.5.

4
<PAGE> 11

1.50. Electing Unsecured Creditors: Holders of General Unsecured Claims who
elect to receive Electing Creditor Cash instead of NewAWA Class B Common Stock
in accordance with Section 3.5.

1.51. Employee Stock Purchase Notes: Any and all Debt Instruments executed
and delivered by any current or former director, officer or employee of AWA
under the Employee Stock Purchase Plan.

1.52. Employee Stock Purchase Plan: Any and all of the Debtor's stock
purchase plan(s) whereby directors, officers or employees of AWA were authorized
(whether on a mandatory or optional basis) to acquire or finance the purchase of
AWA Common Stock on certain terms and conditions and subject to certain
repayment obligations.

1.53. Equity Committee: The Official Committee of Equity Security Holders
of AWA appointed in the Chapter 11 Case pursuant to Section 1102(a)(2) of the
Bankruptcy Code.

1.54. Equity Interest: Any interest in the Debtor represented by any class
or series of common or preferred stock issued by the Debtor and any warrants,
options or rights to purchase any such common or preferred stock. Equity
Interests include, without limitation, all AWA Common Stock, AWA Preferred Stock
and AWA Warrants, Options and Other Equity Interests.

1.55. Equity Interests Stock: The 2,250,000 shares of NewAWA Class B Common
Stock to be issued to holders of AWA Common Stock as provided in Section 3.6.2.

1.56. Equity Interests Warrants: The NewAWA Warrants to purchase 6,230,769
shares of NewAWA Class B Common Stock to be issued to holders of AWA Common
Stock as provided in Section 3.6.2.

1.57. Equity Subscription Stock: The up to 1,615,179 shares of NewAWA Class
B Common Stock of which each holder of AWA Common Stock is entitled to purchase
up to its Pro Rata Share as provided in Section 3.6.2.

1.58. ERISA: The Employee Retirement Income Security Act of 1974, as
amended.

1.59. Escrow Agent: The bank, trust company or other organization
independent of NewAWA, selected by AWA or NewAWA and retained pursuant to an
agreement approved by order of the Bankruptcy Court, designated to act as escrow
agent with respect to the Reserves as provided in Section 10.4, which entity may
be the Distribution Agent, if the Distribution Agent is not affiliated with
NewAWA.

1.60. Fidelity: Fidelity Management Trust Company, its affiliates and funds
and accounts managed by it and its affiliates.

1.61. Final Distribution Date: The Distribution Date for a Class after
which the Reserve Amount for such Class will be zero.

1.62. Final Order: An order or judgment which has not been reversed,
stayed, modified or amended and is no longer subject to appeal, certiorari
proceeding or other proceeding for review or rehearing, and as to which no
appeal, certiorari proceeding, or other proceeding for review or rehearing shall
then be pending.

1.63. General Unsecured Claim: Any Unsecured Claim other than a
Post-Petition Agreement Claim, an Administrative Claim, a Priority Wage Claim, a
Priority Benefit Plan Contribution Claim, a Priority Tax Claim, a Convenience
Claim or a Claim treated in accordance with Section 3.7 of the Plan.

1.64. GPA: GPA Group plc and affiliates thereof.

1.65. Indenture Trustee: Texas Commerce Bank, National Association (f/k/a
Ameritrust Company of New York), as Successor Trustee to First Interstate Bank
of Arizona, N.A., or any successor under the Indentures.

1.66. Indentures: Collectively, the AWA 11 1/2% Subordinated Indenture, the
AWA 7 1/2% Subordinated Indenture and the AWA 7 3/4% Subordinated Indenture.

1.67. Interim Procedures Agreement. The Third Revised Interim Procedures
Agreement dated April 21, 1994 between AWA and AmWest, as amended from time to
time.

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1.68. Investment Agreement: The Third Revised Investment Agreement, dated
April 21, 1994, as amended from time to time, between AWA and AmWest, in the
form of Exhibit A hereto, which is incorporated herein by reference.

1.69. IRS: The Internal Revenue Service.

1.70. Lehman: Lehman Brothers, Inc.

1.71. Net Proceeds: The gross proceeds received from the sale, lease,
disposition, liquidation and collection of assets, less amounts actually
incurred for (i) necessary and reasonable costs and expenses in connection with
such sale, lease, disposition, liquidation or collection, including, but not
limited to, attorneys' fees related thereto, and (ii) all liabilities, charges,
Taxes, offsets and encumbrances required to be discharged with respect to such
assets and in connection with the sale, lease, disposition, liquidation and
collection thereof.

1.72. NewAWA: AWA on and after the Effective Date.

1.73. NewAWA By-laws: The Restated By-laws of NewAWA.

1.74. NewAWA Charter: The Restated Certificate of Incorporation of NewAWA.

1.75. NewAWA Class A Common Stock: The Class A Common Stock, par value $.01
per share, of NewAWA which NewAWA shall be authorized to issue on and after the
Effective Date.

1.76. NewAWA Class B Common Stock: The Class B Common Stock, par value $.01
per share, of NewAWA which NewAWA shall be authorized to issue on and after the
Effective Date.

1.77. NewAWA Common Stock: Collectively, the NewAWA Class A Common Stock
and the NewAWA Class B Common Stock.

1.78. NewAWA Securities: Collectively, the NewAWA Common Stock, NewAWA
Warrants and NewAWA Senior Unsecured Notes.

1.79. NewAWA Senior Unsecured Notes: The Senior Unsecured Notes which
NewAWA shall be authorized to issue on or after the Effective Date.

1.80. NewAWA Warrants: The warrants to purchase shares of NewAWA Class B
Common Stock which NewAWA shall be authorized to issue on or after the Effective
Date.

1.81. Non-Electing Creditor Stock: The NewAWA Class B Common Stock to be
distributed to Non-Electing Unsecured Creditors in accordance with Section
3.5.2.

1.82. Non-Electing Unsecured Creditors: Holders of General Unsecured Claims
that do not elect to be Electing Unsecured Creditors in accordance with Section
3.5.

1.83. Notice and a Hearing: This phrase shall have the same meaning as
provided for in Section 102(1) of the Bankruptcy Code.

1.84. Official Service List: The then-current Official Service List in the
Chapter 11 Case, as required by the Bankruptcy Court's "Order Establishing
Notice Requirements With Respect to All Matters Herein" entered on June 28,
1991, and "Order Modifying Noticing Procedures and Requirements" entered on
October 21, 1991.

1.85. Over-Subscription Stock: The shares of NewAWA Class B Common Stock
which were available for purchase as Equity Subscription Stock and which were
not so purchased. Over-Subscription Stock shall be available for sale to holders
of AWA Preferred Stock in accordance with Section 3.6.1 and, if there are more
than 250,000 such shares or if holders of AWA Preferred Stock subscribe for
fewer shares than they are entitled to subscribe for, to Purchasing Stockholders
in accordance with Section 3.6.2.

1.86. Person: An individual, a corporation, a limited liability company, a
partnership, an association, a joint stock company, a joint venture, an estate,
a trust, an unincorporated organization or a government, governmental unit or
any subdivision thereof or any other entity.

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1.87. Petition Date: June 27, 1991, the date on which the Debtor filed a
voluntary petition commencing the Chapter 11 Case.

1.88. Plan: This Plan of Reorganization, either in its present form or as
it may be amended, supplemented or modified from time to time, including all
exhibits and schedules annexed hereto or referenced.

1.89. Plan Discount Rate: The rate of interest equal to eight percent (8%)
per annum.

1.90. Post-Petition Agreement Claim: Any Claim against the Debtor of the
type listed in Section 2.1 but not including an Administrative Claim arising as
a result of the assumption of an executory contract or lease listed on Schedule
3 hereto.

1.91. Present Value: As the context requires, the present value as of the
Effective Date of a stream of Cash payments computed using the Plan Discount
Rate.

1.92. Preserved Ordinary Course Administrative Claim: Administrative Claims
that are based on liabilities incurred in (a) AWA's purchase, lease or use of
goods and services in the ordinary course of its business or (b) AWA's sale or
provision of air transportation services (including the sale of tickets to
passengers) in the ordinary course of its business, including Administrative
Claims due on account of services provided to AWA after the Petition Date by its
employees.

1.93. Prime Rate: The rate of interest which under current practice is
listed as such under the heading "Money Rates" in the Eastern Edition of The
Wall Street Journal and if a range of rates is listed, the lowest such rate. In
the event that such a listing is not available, the Prime Rate shall be such
other measure of the prime rate generally in effect as is reasonably selected by
NewAWA. For purposes of the Plan and any notes or other instruments delivered
pursuant hereto, the Prime Rate shall be deemed to adjust on and only on the
last Business Day of each December, March, June and September to the Prime Rate
then in effect.

1.94. Priority Benefit Plan Contribution Claim: Any Claim entitled to
priority in payment under Section 507(a)(4) of the Bankruptcy Code.

1.95. Priority Tax Claim: Any Claim entitled to priority in payment under
Section 507(a)(7) of the Bankruptcy Code.

1.96. Priority Wage Claim: Any Claim entitled to priority in payment under
Section 507(a)(3) of the Bankruptcy Code.

1.97. Professional Fees: The Administrative Claims for compensation and
reimbursement submitted pursuant to Section 330, Section 331 or Section 503(b)
of the Bankruptcy Code by Persons (i) employed pursuant to an order of the
Bankruptcy Court under Section 327 or Section 1103 of the Bankruptcy Code or
(ii) for whom compensation and reimbursement has been allowed by the Bankruptcy
Court pursuant to Section 503(b) of the Bankruptcy Code.

1.98. Pro Rata Share: The ratio of an Allowed Claim or Equity Interest in a
particular Class to the aggregate amount of all Allowed Claims or Equity
Interests in that Class.

1.99. Purchasing Stockholder: A holder of AWA Common Stock who elects to
purchase Equity Subscription Stock or Over-Subscription Stock as provided in
Section 3.6.2.

1.100. Registration Rights Agreement: The Registration Rights Agreement to
be entered into by and among NewAWA, AmWest and certain other parties pertaining
to certain NewAWA Securities to be purchased or otherwise issued pursuant to the
Investment Agreement or the Plan.

1.101. Rejected Agreement: Each executory contract or unexpired lease of
Debtor that is rejected pursuant to Section 5.2.

1.102. Reserve: As to any Class, the amount held at any particular time by
the Escrow Agent, as provided in Section 10.4, including the Reserve Amounts at
such time, and any interest, dividends or other income earned upon investment of
the Reserve Amount.

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<PAGE> 14

1.103. Reserve Amount: The NewAWA Securities and/or Cash reserved as of a
particular date for the Disputed Claims or Disputed Equity Interests of a
particular Class pursuant to Section 10.4.

1.104. Reserve Order: Any Final Order of the Bankruptcy Court establishing
the Reserve Amount for any Reserve, as established in Section 10.4.

1.105. Schedules: The schedules of assets and liabilities and any
amendments thereto filed by the Debtor with the Bankruptcy Court in accordance
with Section 521(1) of the Bankruptcy Code.

1.106. Secured Claim: A Claim to the extent of the value of any interest in
property of the Debtor's estate securing such Claim or to the extent of the
amount of such Claim subject to setoff in accordance with Section 553 of the
Bankruptcy Code, in either case as determined pursuant to Section 506(a) of the
Bankruptcy Code. To the extent that the value of such interest or setoff is less
than the amount of the Claim which has the benefit of such security or is
subject to such setoff, such Claim is an Unsecured Deficiency Claim unless, in
the case of a Claim secured by a lien on property of the Debtor's estate, the
Class of which such Claim is a part makes a valid election under Section 1111(b)
of the Bankruptcy Code no later than the Voting Deadline to have such Claim
treated as a Secured Claim to the extent allowed.

1.107. Securities Action: The presently uncertified class action lawsuit
pending in the Superior Court of the State of Arizona for the County of Maricopa
styled Clark v. Beauvais, Case No. CV 92-07197.

1.108. Stock Rescission or Damage Claim: Any Claim pursuant to Section
510(b) of the Bankruptcy Code (i) for rescission of the purchase or sale of AWA
Common Stock, (ii) for damages arising from the purchase or sale of AWA Common
Stock, or (iii) for reimbursement, contribution or indemnification on account of
such rescission or damage claim.

1.109. Stock Payment Escrow Account: The escrow account to be established
in accordance with Section 10.2.2 to receive payment for Equity Subscription
Stock and Over-Subscription Stock.

1.110. Stockholders' Agreement: The Stockholders' Agreement for America
West Airlines, Inc., to be dated as of the Effective Date, substantially in the
form of Exhibit B hereto, which is incorporated herein by reference.

1.111. Subordinated Claim: Any Claim or Equity Interest subordinated, for
purposes of distribution, pursuant to Section 510(c) of the Bankruptcy Code.

1.112. Taxes: All income, franchise, excise, sales, use, employment,
withholding, property, payroll or other taxes, assessments, or governmental
charges, together with any interest, penalties, additions to tax, fines, and
similar amounts relating thereto, imposed or collected by any federal, state,
local or foreign governmental authority.

1.113. Unsecured Claim: A Claim not secured by a charge against or interest
in property in which the Debtor's estate has an interest, including any
Unsecured Deficiency Claim.

1.114. Unsecured Deficiency Claim: A Claim by a holder of a Secured Claim
arising out of the same transaction as a Secured Claim to the extent that the
value of such holder's interest in property of the Debtor's estate securing such
Claim or subject to setoff is less than the amount of the Claim which has the
benefit of such security or setoff, as provided by Section 506(a) of the
Bankruptcy Code.

1.115. Voting Deadline: The deadline for filing Ballots, as fixed by the
Bankruptcy Court in the order approving the Disclosure Statement or otherwise.

1.116. Voting Record Date: June 8, 1994.

1.117. Other Definitions: Unless the context otherwise requires, any
capitalized term used and not defined herein or elsewhere in the Plan but that
is defined in the Bankruptcy Code or Bankruptcy Rules shall have the meaning set
forth therein. Wherever from the context it appears appropriate, each term
stated in either of the singular or the plural shall include the singular and
the plural, and pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, the feminine and the neuter. The words

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<PAGE> 15

"herein," "hereof," "hereto," "hereunder," and others of similar inference refer
to the Plan as a whole and not to any particular Article, Section, subsection,
or clause contained in the Plan.

ARTICLE 2

TREATMENT OF UNCLASSIFIED CLAIMS

The Claims against the Debtor covered in this Article 2 are not designated
as Classes pursuant to Section 1123(a)(1) of the Bankruptcy Code. The holders of
such Claims are not entitled to vote on the Plan.

2.1. Treatment of Post-Petition Agreement Claims. This Section 2.1 contains
provisions dealing with the Post-Petition Agreement Claims.

2.1.1. DIP Credit Agreement. The DIP Loan Claims will be paid in full,
in Cash, by AWA on the Effective Date or such later date as may be agreed by AWA
and the DIP Lenders, or shall be paid in such other manner as may be agreed to
by AWA and the DIP Lenders.

2.1.2. Kawasaki Priority Facility. Any and all Claims arising from
that certain Loan Restructuring Agreement, dated as of December 1, 1991, between
AWA and Kawasaki Leasing International, Inc., as amended and supplemented from
time to time, and as approved by Final Order of the Bankruptcy Court dated
December 12, 1991, will be treated exclusively in accordance with the terms and
conditions of such agreement or as otherwise agreed by the holder of such Claims
and the Debtor or NewAWA.

2.1.3. Section 1110 Stipulations. Any and all Claims arising from the
stipulations entered into pursuant to Section 1110 of the Bankruptcy Code
between AWA and other parties during the Chapter 11 Case including, without
limitation, the stipulations listed on Schedule 1 hereto, and as approved by
Final Order of the Bankruptcy Court, shall in each case be treated exclusively
in accordance with the terms and conditions of such stipulations and Final
Orders, and such terms and conditions shall be binding upon NewAWA.

2.1.4. Settlement Stipulations and Other Post-Petition Orders. Any and
all Claims arising from obligations of AWA which were or are the subject of
settlement or other agreements entered into between AWA and other parties,
whether prior to or after the Effective Date, which settlement or other
agreements were or are approved by Final Order of the Bankruptcy Court,
including, without limitation, those Final Orders listed on Schedule 2 hereto,
shall be treated exclusively in accordance with the terms and conditions of such
settlement and other agreements and Final Orders.

2.2. Treatment of Administrative Claims.

2.2.1. This Section 2.2 contains provisions dealing with the treatment
of Administrative Claims. Such treatment is consistent with the requirements of
Section 1129(a)(9)(A) of the Bankruptcy Code.

2.2.2. Each Allowed Administrative Claim, other than Preserved
Ordinary Course Administrative Claims, shall be paid in full in Cash (or
otherwise satisfied in accordance with its terms) by NewAWA at such time or
times as provided in Section 10.1 or as otherwise agreed by the holder of such
Allowed Administrative Claim and the Debtor or NewAWA. Each Preserved Ordinary
Course Administrative Claim shall be paid by NewAWA pursuant to the terms and
conditions under which such Claim arose, without further action by the holder of
such Claim.

2.2.3. All requests for payment of Administrative Claims, except for
Professional Fees and Preserved Ordinary Course Administrative Claims, must be
filed by the Bar Date or the holders thereof shall be forever barred from
asserting such Administrative Claims against the Debtor. All final applications
for allowance and disbursement of Professional Fees must be filed not later than
sixty (60) days after the Effective Date. All such applications must be in
compliance with all of the terms and provisions of any applicable order of the
Bankruptcy Court, including the Confirmation Order, and all orders governing
payment of Professional Fees. AWA will request the Bankruptcy Court to set the
hearing on final allowance of Professional Fees in the Confirmation Order. Such
applications may be later amended to include any fees and costs incurred after
the Confirmation Date but prior to the Effective Date, or hearing date, as the
case may be.

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2.3. Allowed Priority Tax Claims. Each Allowed Priority Tax Claim, if any,
will be paid in full in Cash by NewAWA at such time or times as provided in
Section 10.1 hereof; provided, however, that NewAWA may elect to pay such
Claims, in any such case, through deferred Cash payments over a period not
exceeding six (6) years after the date of assessment of such Claim, of a value
as of the Effective Date equal to the Allowed amount of such Claim, in each case
unless otherwise agreed between NewAWA and the holder of such Allowed Priority
Tax Claim. Such payments shall be made in equal annual installments of
principal, plus simple interest accruing from the Effective Date at 6% per annum
on the unpaid portion of Allowed Priority Tax Claim or such other rate as the
Bankruptcy Court may approve. The first such payment shall be payable on the
latest of: (i) the Effective Date; (ii) 60 days after the date on which an order
allowing such Claim becomes a Final Order; and (iii) such other time as is
agreed upon by the holder of such Claim and AWA or NewAWA; provided, however,
that NewAWA shall have the right to prepay any such Allowed Priority Tax Claim,
or any remaining balance of such Claim, in full or in part, at any time on or
after the Effective Date, without premium or penalty. The foregoing treatment of
Allowed Priority Tax Claims is consistent with the requirements of Section
1129(a)(9)(C) of the Bankruptcy Code.

ARTICLE 3

DESIGNATION OF AND PROVISIONS
FOR TREATMENT OF CLASSES OF
CLAIMS AND EQUITY INTERESTS

All Claims and Equity Interests, except Post-Petition Agreement Claims,
Administrative Claims and Priority Tax Claims are placed in the Classes
described below. A Claim or Equity Interest is classified in a particular Class
only to the extent that the Claim or Equity Interest qualifies within the
description of that Class and is classified in other Classes only to the extent
that any remainder of the Claim or Equity Interest qualifies within the
description of such other Classes. A Claim is also classified in a particular
Class only to the extent that such Claim is an Allowed Claim in that Class and
has not been paid, released or otherwise satisfied prior to the Effective Date.

3.1. Class 1 -- Allowed Priority Wage Claims. Each Allowed Priority Wage
Claim shall be paid in full in Cash by NewAWA at such time or times as provided
in Section 10.1 hereof. Class 1 is unimpaired under the Plan.

3.2. Class 2 -- Allowed Priority Benefit Plan Contribution Claims. All
Allowed Priority Benefit Plan Contribution Claims shall be paid in full in Cash
by NewAWA at such time or times as provided in Section 10.1 hereof. Class 2 is
unimpaired under the Plan.

3.3. Class 3 -- Allowed Secured Claims.

3.3.1. Class 3.1 -- U.S. Leasing (Ford) Ramp Equipment Loan. This
Class consists of any Secured Claims arising from that certain Promissory Note
dated December 13, 1988, between AWA and Ford Equipment Leasing Co., as amended
and supplemented from time to time and as in effect as of the Petition Date. The
principal collateral securing this Claim consists of certain group transport
support equipment and jetway equipment. On the Effective Date, the holder of the
Allowed Class 3.1 Claim will receive a promissory note in the amount of such
Allowed Claim, bearing interest at the Prime Rate plus 100 basis points per
annum payable over a term of five years in level monthly principal installments,
plus interest. The holder of such Claim will retain all of the liens securing
such Claim as such liens may exist as of the Effective Date to the extent of the
amount of the Note. Class 3.1 is impaired under the Plan.

3.3.2. Class 3.2 -- Bank of America Revolver. This Class consists of
any Secured Claims arising from that certain Revolving Loan Agreement dated
April 17, 1990, among AWA, Bank of America National Trust & Savings Association,
as Agent and for itself, First Interstate Bank of Arizona, the Industrial Bank
of Japan Limited, Los Angeles Agency, The Valley National Bank of Arizona and
First Hawaiian Bank, as amended and supplemented from time to time and as in
effect as of the Petition Date. The principal collateral securing this Claim
consists of Boeing 747 and 757 spare parts, certain expendable aircraft parts,
inventory and six spare Pratt & Whitney Model JT8D-9A engines. On the Effective
Date, the holder of the Allowed

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<PAGE> 17

Class 3.2 Claim will receive a promissory note in the amount of such Allowed
Claim, bearing interest at the Prime Rate plus 100 basis points per annum,
payable over a term of four years in level quarterly principal installments,
plus interest. The holder of such Claim will retain all of the liens securing
such Claim as such liens may exist as of the Effective Date to the extent of the
amount of the Note. Class 3.2 is impaired under the Plan.

3.3.3. Class 3.3 -- Bank One of Arizona f/k/a Valley National
Bank -- Spare Parts Loan. This Class consists of any Secured Claims arising from
(a) that certain Master Reimbursement Agreement, dated as of April 15, 1989
between AWA and Valley National Bank of Arizona, a national banking association,
n/k/a Bank One of Arizona, N.A. ("BOAZ"), as amended and supplemented from time
to time and as in effect as of July 25, 1991, and (b) that certain Amended and
Restated Reimbursement Agreement, dated June 29, 1990 among AWA, BOAZ and Bank
of America National Trust and Savings Association, as amended and supplemented
from time to time and as in effect on the Petition Date. The principal
collateral securing these Claims consists of certain spare rotable nonconsumable
parts, accessories, appliances, equipment and other items that are appropriate
for installation or use on, in or with any Boeing model 737 aircraft or any part
thereof. On the Effective Date, the holder of such claim shall receive either
(i) a cash payment in an amount equal to the sum of (A) $21,212,953.98, if the
Effective Date occurs on June 10, 1994, $21,760,297.61, if the Effective Date
occurs on August 1, 1994, $22,099,874.80, if the Effective Date occurs on
September 1, 1994, $22,433,542.61, if the Effective Date occurs on November 1,
1994, provided that such amount shall be appropriately adjusted at an identical
compounded rate if the Effective Date occurs on any other date other than as set
forth above; plus (B) $65,000; plus (C) $1,976,000, if the Effective Date occurs
on June 10, 1994, $2,027,998.16, if the Effective Date occurs on August 1, 1994,
$2,059,645.79, if the Effective Date occurs on September 1, 1994, $2,090,742.69,
if the Effective Date occurs on October 1, 1994, $2,123,369.47, if the Effective
Date occurs on November 1, 1994, provided, that such amount shall be
appropriately adjusted at an identical compounded rate if the Effective Date
occurs on any other date other than as set forth above, and provided, further,
that if an unexpired letter of credit expires at any time prior to the Effective
Date, such amount shall be appropriately adjusted at an identical compounded
rate such that interest shall have ceased to accrue on the principal amount
represented by such expired letter of credit as of the date of such expiration;
minus (D) $1,976,000; plus (E) the principal amount drawn under any unexpired
letters of credit on or after June 10, 1994 and prior to the Effective Date; or
(ii) such other treatment as shall be agreed upon by the Debtor and the holders
of such Claims as is approved by the Bankruptcy Court. Class 3.3 is impaired
under the Plan.

3.3.4. Class 3.4 -- Hangar Facility Bonds. This Class consists of any
Secured Claims arising from that certain Indenture of Trust dated August 1,
1986, between the Industrial Development Authority of the City of Phoenix,
Arizona, and First Interstate Bank of Arizona, N.A., as Indenture Trustee, as
amended and supplemented from time to time and as in effect as of the Petition
Date and pursuant to which the Variable Rate Airport Facility Revenue Bonds
(America West Airlines, Inc. Project) Series 1986 were issued. The principal
collateral securing this Claim consists of the AWA maintenance and technical
support facility located at Phoenix Sky Harbor International Airport. On the
Effective Date, the holder of the Allowed Class 3.4 Claim will receive a
promissory note in the amount of such Allowed Claim, bearing interest at the
rate of 6% per annum, payable over a term of twelve years in level quarterly
principal installments plus interest. The holder of such Claim will retain all
of the liens securing such Claim as such liens may exist as of the Effective
Date to the extent of the amount of the Note. Class 3.4 is impaired under the
Plan.

3.3.5. Class 3.5 -- Lockheed Finance No. 2. This Class consists of any
Secured Claims arising from that certain Master Equipment Lease Agreement No.
0134 dated as of November 12, 1987, between AWA and Lockheed Finance
Corporation, as amended and supplemented from time to time and as in effect as
of the Petition Date. The principal collateral securing this Claim consists of
certain ground support equipment. On the Effective Date, the holder of the
Allowed Class 3.5 Claim will receive a promissory note in the amount of $750,000
bearing interest at the 30-day LIBOR rate (as provided for in such Master Lease
Agreement) plus 200 basis points per annum, payable over a term of five years in
level monthly principal installments, plus interest. The holder of such Claim
will have no Unsecured Deficiency Claim and will retain all of the liens

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<PAGE> 18

securing such Claim as such liens may exist as of the Effective Date to the
extent of the amount of the Note. Class 3.5 is impaired under the Plan.

3.3.6. Class 3.6 -- Other Secured Claims. This Class consists of
Allowed Secured Claims not specifically provided for above. On the Effective
Date, as to such Allowed Secured Claim, at AWA's option either:

(a) the holder of such Claim shall be treated in accordance with
the terms and conditions of all documents respecting such Claim and the legal,
equitable or contractual rights to which each holder of such Claim is entitled
shall not otherwise be altered;

(b) (i) any default, other than a default of the kind specified
in Section 365(b)(2) of the Bankruptcy Code, shall be cured, provided that any
accrued and unpaid interest, if any, which the Debtor may be obligated to pay
with respect to such default shall be simple interest at the contract rate and
not at any default or penalty rate of interest;

(ii) the maturity of the Claim shall be reinstated as such
maturity existed before any default;

(iii) the holder of the Claim shall be compensated for any
actual damages incurred as a result of any reasonable reliance by the holder on
any contractual provision that entitled the holder to accelerate maturity of the
Claim; and

(iv) the other legal, equitable or contractual rights to
which the holder of the Claim is entitled shall not otherwise be altered;
provided, however, that as to any Allowed Secured Claim which is a nonrecourse
claim and exceeds the value of the collateral securing the Claim, the collateral
may be sold at a sale at which the holder of such Claim has an opportunity to
bid;

(c) on the Effective Date, or on such other date thereafter as
may be agreed to by the Debtor and the holder of such Claim, the Debtor shall
abandon the collateral securing such Claim to the holder thereof in full
satisfaction and release of such Claim;

(d) on the Effective Date, the holder of such Claim shall
receive, on account of such Claim, Cash equal to its Allowed Secured Claim, or
such lesser amount to which the holder of such Claim shall agree, in full
satisfaction and release of such Claim;

(e) the holder of such Claim shall retain the liens securing such
Claim and shall receive, on account of such Claim, deferred Cash payments,
pursuant to Section 1129(b)(2)(A)(i)(II) of the Bankruptcy Code, totalling at
least the Allowed amount of such Claim, of a Present Value, as of the Effective
Date, of at least the value of such holder's interest in the Debtor's interest
in the property securing such Claim;

(f) on the Effective Date, any property that is subject to the
liens securing such Claim shall be sold, subject to Section 363(k) of the
Bankruptcy Code, free and clear of such liens, with payment of the net proceeds
thereof to the holder of such Claim to the extent of the value of such holder's
respective interest in such property; or

(g) the holder of such Claim shall otherwise realize the
indubitable equivalent of such Claim.

Each holder of an Allowed Claim in Class 3.6 shall be considered to be in its
own separate subclass within Class 3.6, and each such subclass will be deemed to
be a separate Class for purposes of this Plan. In the event that AWA does not
make such designation, the holder of an Allowed Secured Claim shall, at any time
prior to the Effective Date, be entitled to petition the Bankruptcy Court for an
order requiring AWA to make such designation, but shall not be entitled to any
other relief or to exercise any other remedies, except in accordance with such
designation and any applicable Final Order(s) of the Bankruptcy Court.

3.4. Class 4 -- Allowed Convenience Claims. This Class consists of
Convenience Claims. Each Allowed Convenience Claim shall be paid by NewAWA Cash
in the amount of such Allowed Convenience Claim to be distributed as provided in
Section 10.1. Class 4 is not impaired under the Plan.

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3.5. Class 5 -- Allowed General Unsecured Claims. This Class consists of
General Unsecured Claims.

3.5.1. Each holder of an Allowed General Unsecured Claim shall receive
its Pro Rata Share of 26,775,000 shares of NewAWA Class B Common Stock;
provided, however, that if the holder is an Electing Unsecured Creditor in
accordance with Section 3.5.2, such holder shall receive Electing Creditor Cash
equal to $8.889 for each share of NewAWA Class B Common Stock otherwise
allocable to it under this sentence.

3.5.2. A holder of an Allowed General Unsecured Claim may become an
Electing Unsecured Creditor only by providing notice of such election on the
Ballot which such holder submits. Any holder of a Disputed General Unsecured
Claim that wishes to become an Electing Unsecured Creditor must provide notice
to the Debtor of the exercise of such right by no later than the Voting
Deadline. Each such election by a holder of a General Unsecured Claim shall be
irrevocable and must pertain to the entire amount of such holder's General
Unsecured Claim. In the event that the aggregate amount of the Electing Creditor
Cash would be in excess of $100,000,000, then each Electing Unsecured Creditor
shall receive only its Pro Rata Share of $100,000,000 in Cash and shall also
receive a number of shares of Electing Creditor Stock equal to the number of
shares of NewAWA Class B Common Stock it would have received if it were a
Non-Electing Unsecured Creditor minus the result of dividing the Electing
Creditor Cash it receives by $8.889. For purposes of allocating Electing
Creditor Cash among Electing Unsecured Creditors, each Disputed General
Unsecured Claim held by an Electing Unsecured Creditor shall initially be valued
at its face amount; provided, however, in the event that the aggregate amount of
Electing Creditor Cash would exceed $100,000,000 and one or more holders of
Disputed General Unsecured Claims have become Electing Unsecured Creditors, then
any party in interest with regard thereto (including, without limitation, the
Creditors' Committee), may seek an order of the Bankruptcy Court estimating the
amount of any and all such Disputed General Unsecured Claims at a lower amount
and, then, regardless of the amount at which such Disputed General Unsecured
Claims are eventually Allowed, the holders thereof will be paid Electing
Creditor Cash in an amount which does not exceed the amount of Electing Creditor
Cash which would be payable for a Claim in the amount of such estimate and for
any amount of the Disputed Claim which is Allowed in excess of such estimate,
the holder shall receive Electing Creditor Stock in accordance with Section
10.4. NewAWA Class B Common Stock distributed to Non-Electing Unsecured
Creditors, Electing Creditor Stock and Electing Creditor Cash shall be
distributed in accordance with Section 10.2.

3.5.3. Any holder of an Unsecured Claim asserting that payment to any
other holder of an Unsecured Claim should be subordinated to such first holder
under Section 510(a) of the Bankruptcy Code, may only make such assertion by
filing an adversary proceeding in the Chapter 11 Case on or before the Voting
Deadline, or such other date as may be established by Final Order of the
Bankruptcy Court. Any such subordination of one Unsecured Claim to another
Unsecured Claim shall be made only upon Final Order of the Bankruptcy Court and
no distribution hereby to any holder of an Allowed Claim which is the subject of
such an adversary proceeding shall be delayed or withheld except upon Final
Order of the Bankruptcy Court. Any such adversary proceeding involving holders
of AWA Debenture Claims shall name as defendants the Debtor and on behalf of all
such holders, the Indenture Trustee.

3.5.4. Class 5 is impaired under the Plan.

3.6. Class 6 -- AWA Preferred and Common Stock.

3.6.1. Class 6.1 -- AWA Preferred Stock. This Class consists of AWA
Preferred Stock. Each holder of shares of AWA Preferred Stock shall receive its
Pro Rata Share of $500,000 in Cash plus the right to purchase as of the
Effective Date its Pro Rata Share of the first 250,000 shares of
Over-Subscription Stock at the price of $8.889 per share or such lesser amount
of Over-Subscription Stock as is available after the purchase of Equity
Subscription Stock in accordance with Section 3.6.2. Such Cash shall be
distributed in accordance with Section 10.1. Payment for such Over-Subscription
Stock shall be made no later than the Effective Date. Such Cash and rights shall
be deemed to be in full satisfaction for all Claims and Equity Interests arising
in connection with the AWA Preferred Stock including accrued and unpaid
dividends thereon. Class 6.1 is impaired under the Plan. All shares of AWA
Preferred Stock shall be deemed to be cancelled, annulled and extinguished on
the Effective Date.

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<PAGE> 20

3.6.2. Class 6.2 -- AWA Common Stock.

(a) This Class consists of shares of AWA Common Stock other than
shares of AWA Common Stock which are pledged as collateral for Employee Stock
Purchase Notes. Each holder of such AWA Common Stock shall receive its Pro Rata
Share of (i) the Equity Interests Stock and (ii) the Equity Interests Warrants,
to be distributed in accordance with the procedure set forth in Section 10.2.

(b) Additionally, each such holder of AWA Common Stock other than
the holder of a Disputed Equity Interest shall have the right to purchase its
Pro Rata Share of the Equity Subscription Stock at the price of $8.889 per
share; provided, however, that for purposes of determining such Pro Rata Share
there shall be considered to be an aggregate of 22,100,000 shares of AWA Common
Stock outstanding. Such right is not transferrable and may only be exercised by
the beneficial holder of such AWA Common Stock as of the Voting Record Date by
the irrevocable indication thereof on the Ballot which such holder delivers or
causes to be delivered. Each such holder may also indicate on the Ballot that it
wishes to purchase Over-Subscription Stock, if available. The Over-Subscription
Stock available to Purchasing Stockholders shall consist of the Equity
Subscription Stock not subscribed for in accordance with the second preceding
sentence and less the Over-Subscription Stock sold to holders of AWA Preferred
Stock in accordance with Section 3.6.1. Each Purchasing Stockholder must
irrevocably indicate on the Ballot the maximum number of shares of Equity
Subscription Stock and Over-Subscription Stock which it desires to purchase. As
set forth more fully in Section 10.2, either full payment or a satisfactory
guarantee of payment for all Equity Subscription Stock and Over-Subscription
Stock must be delivered by the Voting Deadline. The procedure for allocating
Over-Subscription Stock is set forth in Section 10.2.

(c) Class 6.2 is impaired under the Plan. All shares of AWA
Common Stock will be cancelled, annulled and extinguished on the Effective Date.

3.7. Class 7 -- Certain Other Claims and AWA Warrants, Options and Other
Equity Interests.

3.7.1. Class 7.1 -- Employee Stock Purchase Note Claims and Certain
AWA Common Stock. This Class consists of Stock Rescission or Damage Claims
(including, without limitation, Claims by members of the putative plaintiff
class in the Securities Action) which are held by Persons who are obligated
under one or more Employee Stock Purchase Notes. This Class also includes AWA
Common Stock pledged as collateral for Employee Stock Purchase Notes. Each
holder of an Allowed Claim or Equity Interest in this Class shall receive in
exchange for and in consideration of the dismissal with prejudice and permanent
enjoinment of the Securities Actions, a release of any and all indebtedness
incurred under the Employee Stock Purchase Plan, including the forgiveness,
abandonment and cancellation of any liability under the Employee Stock Purchase
Notes, but shall receive no other distribution under the Plan. In addition, all
liens on AWA Common Stock securing Employee Stock Purchase Notes will be
released and such AWA Common Stock will be returned to AWA and cancelled,
annulled and extinguished as of the Effective Date and will not be entitled to
any distribution under Section 3.6.2. Pursuant to Sections 1123(a)(5)(E), (F)
and 1123(b)(3)(A) of the Bankruptcy Code, the treatment provided Class 7.1
Claims constitutes a compromise and settlement of the Securities Action and any
and all objections to such Claims. The Debtor will either file appropriate
pleadings seeking to effect the treatment provided Class 7.1 Claims in this
Section 3.7.1 as a compromise and settlement prior to the Confirmation Hearing
or request the Bankruptcy Court to approve this compromise and settlement at the
Confirmation Hearing as in the best interests of the Debtor and holders of
Claims and Equity Interests and fair, equitable and reasonable. Class 7.1 is
impaired under the Plan.

3.7.2. Certain AWA Warrants, Options and Other Equity Interests and
Other Claims. This Class consists of the following Claims and Equity Interests
(except to the extent they are included in Class 7.1): (i) AWA Warrants,
Options, and Other Equity Interests, (ii) Stock Rescission or Damage Claims,
(iii) Subordinated Claims and (iv) all Claims, if any, arising from the
cancellation or rejection (to the extent they constitute executory contracts) of
AWA Warrants, Options and Other Equity Interests. Holders of such Claims and
Equity Interests will not be entitled to receive or retain any property under
the Plan on account of such Claims or Equity Interests, and pursuant to Section
1126(g) of the Bankruptcy Code, are deemed not to have accepted the Plan. Class
7.2 is impaired under the Plan. All AWA Warrants, Options and Other Equity
Interests will be cancelled, annulled and extinguished on the Effective Date.

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<PAGE> 21

ARTICLE 4

PROVISIONS OF NEWAWA SECURITIES
ISSUED PURSUANT TO THE PLAN

4.1. NewAWA Class A Common Stock. Principal provisions of the NewAWA Class
A Common Stock are summarized as follows:

(a) Authorization. The NewAWA Charter shall authorize the issuance of
1,200,000 shares of NewAWA Class A Common Stock.

(b) Par Value. The NewAWA Class A Common Stock shall have a par value
of $.01 per share.

(c) Rights. The NewAWA Class A Common Stock shall have such rights
with respect to dividends, liquidation, voting and other matters as are set
forth in the NewAWA Charter and as provided under applicable law,
including, without limitation, the right to fifty votes per share which
shall be voted together as a single class with the NewAWA Class B Common
Stock.

(d) Convertibility. Each share of NewAWA Class A Common Stock will be
convertible, at the option of the holder, into one share of NewAWA Class B
Common Stock.

4.2. NewAWA Class B Common Stock. Principal provisions of the NewAWA Class
B Common Stock are summarized as follows:

(a) Authorization. The NewAWA Charter shall authorize the issuance of
100,000,000 shares of NewAWA Class B Common Stock.

(b) Par Value. The NewAWA Class B Common Stock shall have a par value
of $.01 per share.

(c) Rights. The NewAWA Class B Common Stock shall have such rights
with respect to dividends, liquidation, voting and other matters as are set
forth in the NewAWA Charter and as provided under applicable law,
including, without limitation, the right to one vote per share which shall
be voted together as a single class with the NewAWA Class A Common Stock.

(d) Exchange Listing. NewAWA will seek a listing of the NewAWA Class B
Common Stock on a national securities exchange or automated quotation
system and will use its reasonable efforts to obtain such listing prior to
the distribution to holders of Allowed Claims and Equity Interests of
NewAWA Class B Common Stock.

4.3. NewAWA Warrants. Principal provisions of the NewAWA Warrants are as
follows:

(a) Authorization. The Plan hereby authorizes the issuance of NewAWA
Warrants to purchase 10,384,615 shares of NewAWA Class B Common Stock.

(b) Exercise Price. The proponents of the Plan will seek to have the
exercise price for the NewAWA Warrants determined in the Confirmation Order
or otherwise pursuant to a Final Order of the Bankruptcy Court to be issued
before the Effective Date or as soon thereafter as possible, which exercise
price shall equal the aggregate amount of Allowed General Unsecured Claims
on the date of such order plus the Bankruptcy Court's estimate of the
Disputed General Unsecured Claims which will become Allowed General
Unsecured Claims, which sum shall be multiplied by 1.1 and divided by
26,775,000.

(c) Exercise. The NewAWA Warrants will be exercisable by the holder
thereof at any time on or prior to the fifth anniversary of the Effective
Date.

(d) Rights. The NewAWA Warrants will not be redeemable. The number of
shares of NewAWA Class B Common Stock purchasable upon exercise of each
NewAWA Warrant will be adjusted upon (i) payment of a dividend payable in,
or other distribution of, NewAWA Class B Common Stock to all of the
then-current holders of NewAWA Class B Common Stock, (ii) a combination,
subdivision or a reclassification of NewAWA Class B Common Stock, and (iii)
a rights issuance. The holders of the NewAWA Warrants will not have any
voting rights in respect thereof.

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<PAGE> 22

(e) Exchange Listing. NewAWA will seek a listing of the NewAWA
Warrants on the same securities exchange or automated quotation system as
the NewAWA Class B Common Stock is listed.

4.4. NewAWA Senior Unsecured Notes. Principal provisions of the NewAWA
Senior Unsecured Notes are as follows:

(a) Authorization. The Plan hereby authorizes the issuance of the
NewAWA Senior Unsecured Notes in a maximum principal amount of
$100,000,000.

(b) Maturity. The NewAWA Senior Unsecured Notes will mature seven
years from issuance.

(c) Interest Rate. The NewAWA Senior Unsecured Notes will bear
interest, payable semiannually, in arrears at a fixed rate equal to 425
basis points over the yield of seven-year United States Treasury Notes as
of the Effective Date, but not to exceed 11.5% per annum.

(d) Ranking. The NewAWA Senior Unsecured Notes will rank pari passu
with all existing and future senior unsecured indebtedness of NewAWA.

(e) Mandatory Redemption. If within three years after the Effective
Date, NewAWA completes an underwritten public offering of primary equity,
NewAWA shall use 50% of the Net Proceeds thereof to redeem up to
$20,000,000 in principal amount of the NewAWA Senior Unsecured Notes at
104% of the principal amount plus accrued interest, provided, however, that
in the event that at the time of such offering the unrestricted cash
balance of NewAWA is less than $100,000,000, then such redemption will be
at the option of NewAWA. Thereafter, the NewAWA Senior Unsecured Notes will
be redeemable at NewAWA's option, in whole or in part. The redemption price
will be equal to the following percentage of the principal amount redeemed
in each of the following years plus accrued interest:

<TABLE>
<S> <C>
Year 4:..................................................... 105.0%
Year 5:..................................................... 103.3%
Year 6:..................................................... 101.7%
Year 7 and thereafter:...................................... 100.0%
</TABLE>

(f) Special Redemption. During the first three years after the
Effective Date, the New AWA Senior Unsecured Notes will be callable by
NewAWA (i) as a whole, without regard to the source of funding, at 105% of
the principal amount redeemed plus accrued interest or (ii) in part, out of
the proceeds of a primary equity offering at 105% of the principal amount
plus accrued interest, less the $20 million in principal amount redeemed of
NewAWA Senior Unsecured Notes subject to Mandatory Redemption as described
above.

ARTICLE 5

EXECUTORY CONTRACTS AND UNEXPIRED LEASES

5.1. Assumption of Certain Executory Contracts and Unexpired Leases.

5.1.1. Except as otherwise provided in the Plan or in any contract,
instrument, release, indenture or other agreement or document entered into in
connection with the Plan, on the Effective Date, pursuant to Section 365 of the
Bankruptcy Code, AWA shall assume or assume and assign, as indicated, each of
the Assumed Agreements including, without limitation, the executory contracts
and unexpired leases listed on Schedule 3 hereto; provided, however, that AWA or
NewAWA shall have the right, at any time prior to the Effective Date, to amend
Schedule 3: (a) unless indicated otherwise on Schedule 3, to delete any
executory contract or unexpired lease listed therein, thus providing for its
rejection pursuant to Section 5.2; or (b) to add any executory contract or
unexpired lease, thus providing for its assumption or assumption and assignment
pursuant to this Section 5.1.1. The Debtor or NewAWA shall provide notice of any
amendments to Schedule 3 to the parties to the executory contracts or unexpired
leases affected thereby and, if such amendments are made before the Effective
Date, to the parties on the Official Service List. Pursuant to Section
1123(b)(2) of the Bankruptcy Code, the Confirmation Order shall constitute an
order of the

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<PAGE> 23

Bankruptcy Court approving the assumptions and assignments described
in this Section 5.1.1, pursuant to Section 365 of the Bankruptcy Code, as of the
Effective Date.

5.1.2. Unless otherwise agreed by AWA and the counterparty to any such
Assumed Agreement, (i) all cure payments which may be required by Section
365(b)(1) of the Bankruptcy Code under any Assumed Agreement, if not previously
made, shall be made on the Effective Date or promptly thereafter, and (ii) in
the event of a dispute regarding the amount or timing of any cure payments, the
ability of NewAWA to provide adequate assurance of future performance, or any
other matter pertaining to assumption or assignment, such dispute shall be
resolved by the Bankruptcy Court and NewAWA shall make such cure payments, if
any, or provide such assurance as may be required by the Final Order resolving
such dispute on the terms and conditions of such Final Order.

5.1.3. Except as otherwise provided in the Plan (including any such
provision on Schedule 3) or in any contract, instrument, release or indenture or
other agreement or document entered into in connection with the Plan, each
Assumed Agreement shall, at AWA's option, be assumed only to the extent that any
such contract or lease constitutes an executory contract or unexpired lease.
Listing a contract or lease on Schedule 3 shall not, in and of itself,
constitute an admission by the Debtor or NewAWA that such contract or lease is
an executory contract or unexpired lease or that the Debtor or NewAWA has any
liability thereunder. Contracts and leases which are within the definition of
Assumed Agreements and which are later determined to have not been in fact
executory contracts or unexpired leases, shall be treated in accordance with the
provisions in the Plan for the treatment of that type of Claim which properly
arises from the true nature of the legal relationship between the parties as
determined by the Bankruptcy Court or by settlement; provided, however, that
either the Debtor or NewAWA may in its sole discretion amend the Plan to provide
for different treatment of any such Claim after Notice and a Hearing.

5.1.4. Except as otherwise provided in the Plan (including any such
provision on Schedule 3) or in any contract, instrument, release or indenture or
other agreement or document entered into in connection with the Plan, all
assumptions of executory contracts and unexpired leases under the Plan shall be
without prejudice to the rights of the Debtor or NewAWA to assign later such
assumed executory contracts or unexpired leases, notwithstanding any prohibition
to the contrary in any such contract or lease.

5.2. Rejection of Certain Executory Contracts and Unexpired Leases. On the
Effective Date, except for every Assumed Agreement, each executory contract and
unexpired lease entered into by AWA prior to the Petition Date that has not
previously expired or terminated pursuant to its own terms and (to the extent
they are executory contracts) all AWA Warrants, Options and Other Equity
Interests shall be rejected pursuant to Sections 365 and 1123(b)(2) of the
Bankruptcy Code and considered a Rejected Agreement hereunder.

5.3. Claims Based on Rejection of Executory Contracts or Unexpired Leases.
All proofs of claim with respect to Claims arising from the rejection of any
Rejected Agreement shall be filed with the Bankruptcy Court within the later to
occur of thirty (30) days after the Effective Date. Any Claims not filed within
such time shall be forever barred from assertion against the Debtor, its estate
and property, or NewAWA.

ARTICLE 6

IDENTIFICATION OF CLASSES OF CLAIMS NOT IMPAIRED
BY THE PLAN AND THE CLASS OF CLAIMS AND EQUITY
INTERESTS DEEMED TO HAVE REJECTED THE PLAN

6.1. Unimpaired Classes. Claims in Classes 1, 2 and 4 are not impaired
under the Plan. Any Class not specifically designated in the Plan as unimpaired
is impaired under the Plan. Claims in unimpaired Classes are not entitled to
vote on the Plan.

6.2. Class Deemed to Have Rejected the Plan. Claims and Equity Interests in
Class 7.2 are not entitled to receive or retain any property under the Plan and
are therefore deemed not to have accepted the Plan, and such Class shall not be
entitled to vote on the Plan.

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<PAGE> 24

6.3. Other Impaired Classes. Claims in Classes 3.1, 3.2, 3.3, 3.4, 3.5,
3.6, 5, 6.1, 6.2 and 7.1 are impaired under the Plan and shall be entitled to
vote on the Plan.

ARTICLE 7

ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY ONE OR MORE CLASSES

7.1. Impaired Classes to Vote. Except as otherwise required by the
Bankruptcy Code or the Bankruptcy Court, each holder of a Claim or Equity
Interest that is impaired under the Plan is entitled to vote to accept or reject
the Plan if, as of the Voting Record Date, (i) its Claim is an Allowed Claim,
(ii) its Claim has been temporarily allowed for voting purposes only by order of
the Bankruptcy Court pursuant to Bankruptcy Rule 3018 (in which case such Claim
may be voted in such temporarily allowed amount), (iii) its Claim has been
scheduled by the Debtor (but only if such Claim is not scheduled as disputed,
contingent or unliquidated) and no objection to such Claim has been filed, (iv)
it has filed a proof of claim on or before the Bar Date (or such later date as
the Bankruptcy Court may have established with respect to any particular Claim,
but not later than the date of the order approving such Disclosure Statement),
and such Claim is not a Disputed Claim, or (v) its Equity Interest is registered
on the stock ledger or equivalent of the Debtor. Notwithstanding the foregoing,
a holder of a Disputed Claim which has not been temporarily allowed as provided
above may nevertheless vote such Disputed Claim in an amount equal to the
portion, if any, of such Claim which is not disputed and is shown as fixed,
liquidated and undisputed in the Debtor's Schedules or such amount which the
Debtor concedes is Allowed in a filing made by the Debtor in the Bankruptcy
Court. Each holder of an AWA Debenture Claim, and not the Indenture Trustee with
respect to such Claim, shall have the right to vote to accept or reject the
Plan.

7.2. Acceptance by Class of Holders of Claims or Equity Interests. A Class
of holders of Claims shall have accepted the Plan if the Plan is accepted by at
least two-thirds in amount and more than one-half in number of the Allowed
Claims of such Class that have voted to accept or reject the Plan. A Class of
Equity Interests shall have accepted the Plan if acceptance is voted for by the
holders of at least two-thirds in amount of the Equity Interests of such Class
who have voted to accept or reject the Plan.

7.3. Cramdown. Inasmuch as Class 7.2 is deemed not to have accepted the
Plan in accordance with Section 1129(a) of the Bankruptcy Code, and in the event
that one or more other Classes of impaired Claims or Equity Interests does not
accept or is deemed not to have accepted the Plan, the Debtor requests that the
Bankruptcy Court confirm the Plan in accordance with Section 1129(b) of the
Bankruptcy Code. AWA and AmWest reserve the right to modify the Plan to the
extent, if any, that confirmation pursuant to Section 1129(b) of the Bankruptcy
Code requires or permits such modification.

ARTICLE 8

MEANS FOR IMPLEMENTATION OF THE PLAN

8.1. Investment Agreement. On the Effective Date, the investment and sale
of securities contemplated by the Investment Agreement shall be consummated in
accordance with such agreement. In the event of conflict between the terms of
the Plan and of the Investment Agreement, the terms of the Plan shall control.

8.2. Stockholders' and Registration Rights Agreements. On the Effective
Date, the Stockholders' Agreement and Registration Rights Agreement shall become
effective.

8.3. Delivery of Alliance Agreements. On or before the Effective Date, AWA,
Continental Airlines, Inc., and Mesa Airlines, Inc., as applicable, shall enter
into the Alliance Agreements, as such term is defined in the Investment
Agreement.

8.4. GPA Settlement. On the Effective Date, NewAWA and GPA will consummate
the transactions described in the term sheet attached hereto as Exhibit C and
incorporated herein by reference.

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<PAGE> 25

8.5. Corporate Governance. On or as of the Effective Date, the NewAWA
Charter shall be filed with the Secretary of State of the State of Delaware and
the NewAWA By-laws shall take effect, each containing such provisions as are
necessary to satisfy the terms of the Plan and Section 1123(a)(6) of the
Bankruptcy Code.

8.6. Release of Certain Claims and Actions.

8.6.1. On the Effective Date, in consideration for services rendered
in the Chapter 11 Case, the Debtor shall be deemed to have finally and
irrevocably waived, released and relinquished any and all claims and causes of
action, if any, that it has or may have against the Creditors' Committee, the
Equity Committee or any member thereof or against their respective professional
advisors arising out of or related to each such Person's actions or omissions to
act in all of such Person's capacities in connection with the Chapter 11 Case,
including the formulation, preparation, dissemination, implementation or
confirmation of the Plan or the Disclosure Statement or any contract,
instrument, release or other agreement or document created or entered into, or
any other act taken or omitted to be taken in connection therewith, and the
Debtor is enjoined from asserting any such claim or cause of action in any court
or forum; provided, however, that this provision shall not operate as a release,
waiver or relinquishment of, or injunction against asserting, any such claims or
causes of action (i) provided in or contemplated by the Plan or (ii) arising
from any actual fraud (but not constructive fraud) or willful misconduct of any
such Person.

8.6.2. On the Effective Date, in consideration for benefits realized
in the Chapter 11 Case, the Debtor shall be deemed to have finally and
irrevocably waived, released and relinquished any and all claims and causes of
action, if any, that it has or may have against AmWest, any of AmWest's
partners, Fidelity or Lehman or their respective partners, affiliates, employees
or professional advisors arising out of or related to such Person's actions or
omissions to act in connection with the Chapter 11 Case, including the
formulation, preparation, dissemination, implementation or confirmation of the
Plan or the Disclosure Statement or any contract, instrument, release or other
agreement or document created or entered into, or any other act taken or omitted
to be taken in connection therewith, and the Debtor is enjoined from asserting
any such claim or cause of action; provided, however, that this provision shall
not operate as a release, waiver or relinquishment of, or injunction against
asserting, any such claims or causes of action (i) provided in or contemplated
by the Plan, (ii) arising from any actual fraud (but not constructive fraud) or
willful misconduct of any such Person, and (iii) reserved to the Debtor pursuant
to the Investment Agreement or the Interim Procedures Agreement.

8.6.3. On the Effective Date, the Creditors' Committee and each member
thereof, the Equity Committee and each member thereof, AmWest and each of its
partners, Fidelity and Lehman shall be deemed to have finally and irrevocably
waived, released and relinquished any and all claims and causes of action, if
any, that any of them have or may have against the Debtor or its professional
advisors arising out of or related to such Person's actions or omissions to act
in connection with the Chapter 11 Case, including the formulation, preparation,
dissemination, implementation or confirmation of the Plan or the Disclosure
Statement or any contract, instrument, release or other agreement or document
created or entered into, or any other act taken or omitted to be taken in
connection therewith, and such Persons are enjoined from asserting any such
claims or causes of action; provided, however, that this provision shall not
operate as a release, waiver or relinquishment of, or injunction against
asserting any such claims or causes of action (i) provided in or contemplated by
the Plan, (ii) arising from any actual fraud (but not constructive fraud) or
willful misconduct of the Debtor, and (iii) reserved to AmWest and/or any of its
partners pursuant to the Investment Agreement or the Interim Procedures
Agreement; and, provided, further, this Section 8.6.3 shall not apply to any
claims made against the Debtor arising from third party claims against the
Creditors' Committee or any member thereof or the Equity Committee or any member
thereof. Any Person who as of the Effective Date is or was an officer or
director of AWA, shall be a beneficiary of the releases provided under Section
8.6.3 if such Person, no later than the Effective Date, delivers a release in
substantially the form of Sections 8.6.1 and 8.6.2.

8.7. Indemnification Obligations.

8.7.1. Upon, and at all times after the Effective Date, the NewAWA
Charter shall contain provisions which (i) eliminate the personal liability of
AWA's former, present and future directors for monetary damages resulting from
breaches of their fiduciary duties to the fullest extent permitted by

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<PAGE> 26

applicable law and (ii) require NewAWA, subject, to appropriate procedures, to
indemnify AWA's former, present and future directors and executive officers to
the fullest extent permitted by applicable law.

8.7.2. On or as of the Effective Date, NewAWA shall enter into written
agreements with each person who is a director or executive officer of AWA as of
the date of the Investment Agreement providing for similar indemnification of
such person and providing that no recourse or liability whatsoever with respect
to the Investment Agreement, the Plan or the consummation of the transactions
contemplated hereby or thereby shall be had, directly or indirectly, by or in
the right of AWA against such person.

8.7.3. For purposes of the Plan, except as limited hereinafter, any
obligations of the Debtor to indemnify its current and former directors,
officers, employees, and any officer, director or employee serving as a
fiduciary of any employee benefit plan or program of AWA, pursuant to charter,
by-laws, contract or applicable state law shall be deemed to be, and may be
treated as though they are, executory contracts that are Assumed Agreements
under the Plan, and such obligations (subject to any defenses thereto) shall
survive confirmation of the Plan and remain unaffected thereby, irrespective of
whether indemnification is owed in connection with a pre-Petition Date or
post-Petition Date occurrence; provided however, that the foregoing assumption
shall not affect any release of such obligations given to the Debtor before the
Effective Date or to NewAWA on or after the Effective Date.

8.8. Exemption from Certain Taxes. Pursuant to Section 1146(c) of the
Bankruptcy Code, none of the transactions contemplated to take place on the
Effective Date shall subject the Debtor or NewAWA to any state or local sales,
use, transfer, documentary, recording or gains tax.

8.9. Directors and Officers. A list of the initial post-Effective Date
directors and officers of NewAWA shall be filed by the Debtor with the
Bankruptcy Court prior to the Confirmation Date.

8.10. Revesting of Assets; No Further Supervision. The assets of the Debtor
and all property of the Debtor's estate (including without limitation, all
rights of the Debtor to recover property under Sections 542, 543, 550 and 553 of
the Bankruptcy Code, all Avoidance Litigation and all proceeds thereof) and any
property acquired by AWA or NewAWA under or in connection with the Plan shall
vest or revest in NewAWA, in each case free and clear of all Claims, liens,
charges, encumbrances or Equity Interests, other than as specifically set forth
in the Plan. The Plan does not contain any restrictions or prohibitions on the
conduct of the business of NewAWA and NewAWA shall have all of the powers of a
corporation under the Delaware General Corporation Law, consistent with its
obligations under the Stockholders' Agreement. From and after the Effective
Date, NewAWA may use, operate and deal with its assets, and may conduct and
change its business, without any supervision by the Bankruptcy Court or the
Office of the United States Trustee, and free of any restrictions imposed on the
Debtor by the Bankruptcy Code or by the Bankruptcy Court during the Chapter 11
Case. Nothing contained in this Section shall be construed to prohibit, limit,
restrict or condition the Debtor's authority in any lawful manner to sell or
otherwise dispose of any other assets.

8.11. Implementation. The Debtor and AmWest shall be authorized and are
directed to take all necessary steps, and perform all necessary acts, to
consummate the terms and conditions of the Plan, including, without limitation,
the Investment Agreement.

8.12. Cancellation of Securities. As of the Effective Date, all previously
issued and outstanding securities of the Debtor, including without limitation:
all AWA Common Stock, all AWA Preferred Stock, all AWA Warrants, Options and
Other Equity Interests and all AWA Debentures; any certificate or other
instrument evidencing any such security; except as otherwise specifically
provided in Section 10.3 hereof, any indenture relating to any of the foregoing;
and the Debtor's obligations thereunder shall be deemed void, cancelled, and of
no further force or effect, without any further action on the part of any
Person. Holders of Allowed Claims and Equity Interests represented by such
securities shall have such rights to receive distributions as are set forth in
the Plan.

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ARTICLE 9

CONDITIONS PRECEDENT TO THE EFFECTIVE DATE

9.1. Effectiveness of the Plan. The effectiveness of the Plan, and the
occurrence of the Effective Date, shall be subject to the satisfaction of the
following conditions precedent:

(a) The Confirmation Order shall have been entered and no stay of the
Confirmation Order shall be in effect;

(b) Each of the conditions precedent to the obligations of AmWest
under the Investment Agreement shall have been satisfied or waived by
AmWest and the purchase and sale of securities and the other transactions
contemplated by the Investment Agreement shall have been simultaneously
consummated; and

(c) Each of the conditions precedent to the obligations of the Debtor
under the Investment Agreement shall have been satisfied or waived by the
Debtor and the purchase and sale of securities and other transactions
contemplated by the Investment Agreement shall have been simultaneously
consummated.

ARTICLE 10

PROVISIONS COVERING DISTRIBUTIONS AND PAYMENTS

10.1. Making of Distributions and Payments. NewAWA, or a Distribution Agent
on its behalf, shall make the payments and distributions expressly required to
be made by it in respect of the Post-Petition Agreement Claims, Allowed
Administrative Claims (other than Preserved Ordinary Course Administrative
Claims), Allowed Priority Wage Claims, Allowed Priority Benefit Plan
Contribution Claims, Allowed Priority Tax Claims, Allowed Convenience Claims and
AWA Preferred Stock upon the latest of (i) the Effective Date, or as soon
thereafter as practicable, (ii) such date as may be fixed by the Bankruptcy
Court, or as soon thereafter as practicable, (iii) the fifth Business Day after
such Claim is Allowed, or as soon thereafter as practicable, and (iv) such date
as the holder of such Claim and NewAWA have agreed or shall agree.

10.2. Distributions by the Distribution Agent.

10.2.1. On the Effective Date, NewAWA will issue in the name of the
Distribution Agent, as trustee, the Non-Electing Creditor Stock for distribution
to Non-Electing Unsecured Creditors in accordance with Section 3.5, and the
Electing Creditor Stock for distribution to Electing Unsecured Creditors in
accordance with Section 3.5. Additionally, NewAWA will deliver to the
Distribution Agent the Electing Creditor Cash for distribution to Electing
Unsecured Creditors in accordance with Section 3.5. As promptly as practicable
after the issuance of such NewAWA Securities and delivery of Electing Creditor
Cash to the Distribution Agent, the Distribution Agent will distribute such
securities and Cash to the holders of Allowed Claims entitled thereto in
accordance with Section 3.5, but shall reserve from such distributions the
Reserve Amount as required by Section 10.4.

10.2.2. Not later than thirty (30) days after the Voting Deadline, the
Debtor shall allocate among the Purchasing Stockholders, the Equity Subscription
Stock and the Over-Subscription Stock in accordance with this Section 10.2.2 and
advise the Distribution Agent of such allocation. Each Purchasing Stockholder
shall be allocated initially the lesser of (i) the number of shares for which it
has made a valid purchase election on its Ballot and (ii) its Pro Rata Share of
the Equity Subscription Stock. Holders who hold shares of AWA Common Stock for
the account of others such as brokers, trustees or depositories may only
exercise the right to purchase Equity Subscription Stock and Over-Subscription
Stock upon receipt of instructions and appropriate payment or guarantee of
payment from the beneficial owners of such shares as of the Voting Record Date.
The shares of Equity Subscription Stock not allocated as above will be
considered Over-Subscription Stock and will be allocated first to holders of AWA
Preferred Stock in accordance with Section 3.6.1 and then to holders of AWA
Common Stock who have indicated on the Ballot that they wish to acquire more
than their Pro Rata Share of the Equity Subscription Stock. If sufficient shares
of Over-

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<PAGE> 28

Subscription Stock are available, all subscriptions therefor will be honored in
full. If sufficient shares of Over-Subscription Stock are not available to honor
all such subscriptions, the available shares of Over-Subscription Stock will be
allocated among those who subscribed based on their proportional number of
shares of AWA Common Stock. The allocation process may involve a series of
allocations in order to assure that the total number of shares of
Over-Subscription Stock is distributed on a Pro Rata Share basis. The right to
purchase Equity Subscription Stock and Over-Subscription Stock may be exercised
through a holder's broker, who may charge such holder a servicing fee in
connection with such exercise. No such fees shall be paid by the Debtor or
NewAWA. The Debtor shall establish the Stock Payment Escrow Account for the
purpose of receiving payment for Equity Subscription Stock and Over-Subscription
Stock, which shall be held by the Escrow Agent or another bank, trust company or
other organization independent of AWA and designated by the Debtor and approved
by the Bankruptcy Court. Purchasing Stockholders may choose one of the following
methods of payment:

(a) The Purchasing Stockholder may deliver full payment for the Equity
Subscription Stock and the Over-Subscription Stock, together with its
Ballot, with the check made payable to AWA Subscription Stock Escrow
Account, by no later than the Voting Deadline. The Debtor shall deposit all
such checks in the Stock Payment Escrow Account with any interest thereon
to accrue to the benefit of Debtor or NewAWA pending distribution of the
Equity Subscription Stock and Over-Subscription Stock; or

(b) The Purchasing Stockholder may deliver or cause to be delivered to
the Escrow Agent, by no later than the Voting Deadline, a notice of
guaranteed delivery by telegram or otherwise, from a bank or trust company
or a New York Stock Exchange member firm, guaranteeing delivery of payment
of the full price of the subscribed for Equity Subscription Stock and
Over-Subscription Stock. In such case, full payment for the Equity
Subscription Stock and the Over-Subscription Stock (as such amount may be
reduced as set forth below) must be received by the Escrow Agent by no
later than 5:00 p.m. on the fifth Business Day after the Confirmation Date.

Promptly after completing the allocation required by the first sentence of this
Section 10.2.2, a confirmation will be sent to each Purchasing Stockholder
showing the number of shares of Equity Subscription Stock and the number of
shares, if any, of Over-Subscription Stock allocated to such holder. In the
event that such number of shares of Over-Subscription Stock is less than the
number of shares of Over-Subscription Stock for which such holder has either
paid for or guaranteed payment for, such notice shall also state such fact and
if full payment shall have already been made for such stock, such notice shall
also include a check representing the excess payment. Whichever of the two above
methods of payment is used, issuance and delivery of the Equity Subscription
Stock, the Over-Subscription Stock and any refunds of payments therefor shall be
subject to collection of checks and actual payment pursuant to any notice of
guaranteed delivery. All offers to purchase Equity Subscription Stock and
Over-Subscription Stock shall be irrevocable. In the event that the Effective
Date has not occurred by the date the Interim Procedures Agreement is
terminated, all amounts in the Stock Payment Escrow Account (other than interest
accrued thereon) shall be returned to the Purchasing Stockholders who have made
payment for the Equity Subscription Stock and/or Over-Subscription Stock.

10.2.3. On the Effective Date, NewAWA will issue in the name of the
Distribution Agent, as trustee, (i) the number of shares of Equity Subscription
Stock and Over-Subscription Stock to be issued to Purchasing Stockholders and
holders of AWA Preferred Stock in accordance with Sections 3.6.1, 3.6.2 and
10.2.2, and (ii) the Equity Interests Stock and the Equity Interests Warrants
for distribution to holders of AWA Common Stock as provided in Section 3.6.2. As
promptly as practicable after the Effective Date, but in any event within
fifteen (15) Business Days, the Distribution Agent will distribute (i) to each
holder of AWA Preferred Stock, the number of shares of Over-Subscription Stock
purchased in accordance with Section 3.6.1, (ii) to each Purchasing Stockholder,
the number of shares of Equity Subscription Stock and Over-Subscription Stock
purchased by such Purchasing Stockholder pursuant to Section 3.6.2 and (iii) to
each holder of AWA Common Stock as of the Distribution Record Date other than
the holder of a Disputed Equity Interest, such holder's Pro Rata Share of the
Equity Interests Stock and of the Equity Interests Warrants, less any Reserve
Amount required pursuant to Section 10.4; provided, however, that holders of AWA
Common Stock whose stock is held of record by Cede or by any other depository or
nominee on their behalf or their

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<PAGE> 29

broker-dealer's behalf will have their NewAWA Securities credited to the account
of Cede or such other depository or nominee.

10.2.4. The Distribution Agent in its capacity as trustee holding
issued but undistributed NewAWA Securities and Electing Creditor Cash shall (i)
similarly hold in trust for distribution pursuant to this Section 10.2 any
dividend or distribution made thereon, and (ii) whenever any matter (including
election of directors) is presented for a vote by holders of such NewAWA
Securities, vote all of the NewAWA Securities so held by it in trust in the same
manner and proportion as the shares of NewAWA Class B Common Stock are voted.

10.2.5. If, after the Effective Date, NewAWA (i) pays a dividend or
makes a distribution on the outstanding NewAWA Securities held by the
Distribution Agent, (ii) subdivides the outstanding shares of NewAWA Securities
held by the Distribution Agent into a greater number of shares or units, (iii)
combines the outstanding shares or units of NewAWA Securities held by the
Distribution Agent into a smaller number of shares or units, (iv) issues by
reclassification of the outstanding NewAWA Securities held by the Distribution
Agent any shares of its capital stock, or (v) is a party to a consolidation,
merger or transfer of assets providing for any change in or exchange of the
outstanding NewAWA Securities held by the Distribution Agent, then the
Distribution Agent's obligation to distribute NewAWA Securities to any holder of
an Allowed Claim or Equity Interest arising after the record date in the case of
a dividend or distribution and after the Effective Date of any of the other
foregoing transactions shall be adjusted so as to take into account such
dividend, distribution or other event. Any such distribution shall be made net
of any Distribution Agent Charges incurred in connection with such event.

10.2.6. The duties of the Distribution Agent (including its duties as
trustee pursuant to this Section 10.2) are expressly limited to the ministerial
functions set forth in this Article 10. The Distribution Agent shall incur no
liability for its actions (or failure to act) or conduct as Distribution Agent,
or as trustee holding issued but undistributed NewAWA Securities or Cash except
to the extent attributable to the gross negligence or willful misconduct of the
Distribution Agent. The Distribution Agent shall at all times maintain a
segregated account for any Cash being held in trust, and shall deposit or invest
all such Cash in (i) direct obligations of the United States of America or
obligations for which the full faith and credit of the United States of America
is pledged, (ii) certificates of deposit and interest bearing deposits with
banks having a long-term bond rating of AA or better and capital, surplus and
undivided profits of not less than $100,000,000, or (iii) commercial paper
having one of the two highest ratings by Standard & Poor's, Inc. or Moody's
Investor Services, Inc., except as otherwise authorized by the Bankruptcy Court;
provided, however, that no such deposit or investment shall have a maturity of
more than 90 days. All Distribution Agent Charges shall be deducted from the
applicable NewAWA Securities or Cash held by the Distribution Agent. All Cash
and NewAWA Securities held by or transferred to the Distribution Agent for
distribution to holders of Allowed Claims or Equity Interests pursuant to the
Plan shall be held by the Distribution Agent (including NewAWA in its capacity
as Distribution Agent) solely as trustee of an express trust and shall not be or
constitute property of the Distribution Agent (including NewAWA as Distribution
Agent) for any purpose whatsoever, and the Distribution Agent shall not have any
right or interest to any such Cash or stock for its own account, except as
expressly provided in the Plan.

10.2.7. AWA shall deliver to the Distribution Agent its stock ledger
for the AWA Common Stock or provide access thereto, which ledger shall reflect
the cancellation of certain AWA Common Stock in accordance with Section 3.7.1.
The Distribution Agent shall cause a register for the transfer of Allowed Claims
(other than Allowed AWA Debenture Claims) and of AWA Common Stock to be
maintained. Transfers after the Distribution Record Date shall be registered
only (i) upon Final Order of the Bankruptcy Court directing such transfer or
(ii) in the event of a transfer by operation of law.

10.3. Service of Indenture Trustee.

10.3.1. Subject to the right of the Indenture Trustee to resign and
terminate an Indenture as set forth in Section 10.3.2, the Indenture Trustee
shall receive and act as disbursing agent for all distributions to each holder
of record of an Allowed AWA Debenture Claim. Unless terminated pursuant to
Section 10.3.2 below, the Indentures shall continue in effect after the
Effective Date for the sole purpose of allowing the

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<PAGE> 30

Indenture Trustee to make the distributions to be made on account of such
Allowed AWA Debenture Claims under the Plan and for defending any subordination
action brought under Section 3.5. AWA and NewAWA shall be required to reimburse
the Indenture Trustee solely for fees, costs and expenses (including reasonable
costs of counsel associated therewith) in connection with activities required
under this Section 10.3.1. Any fees, costs, or expenses incurred by the
Indenture Trustee for any other activities it may undertake shall be collectible
solely from the holders of AWA Debentures. Notwithstanding anything to the
contrary herein, the Indenture Trustee shall retain any and all charging liens
or similar rights provided in the Indentures for so long as it is Indenture
Trustee.

10.3.2. Notwithstanding the foregoing, the Indenture Trustee may at
any time terminate any or all of the AWA Indentures and all of the Indenture
Trustee's duties and obligations and authority to act thereunder, with or
without cause, by giving fifteen (15) days written notice of termination to
NewAWA and the Distribution Agent and by turning over to the Distribution Agent
a list of record holders of Debentures under such Indenture as of the
Distribution Record Date, together with such other information and documents as
may be reasonably necessary in order to permit the Distribution Agent to make
distributions to holders of Allowed AWA Debenture Claims arising out of the AWA
Debentures issued pursuant to such Indenture. If distributions under the Plan
have not been completed at the time of termination of such Indenture, the
Distribution Agent shall thereafter act in place of such Indenture Trustee, and
all references in the Plan to the Indenture Trustee for purposes of making
distributions under the Plan with regard to such Indenture shall be deemed to
apply to such Distribution Agent. Any actions taken by the Indenture Trustee not
for a purpose authorized in the Plan shall be of no force or effect.

10.3.3. For purposes of any distributions under the Plan to holders of
AWA Debenture Claims, the Indenture Trustee (or if the Indenture Trustee has
resigned in accordance with Section 10.3.2, the Distribution Agent as its
successor) shall be deemed to be the sole holder of all AWA Debenture Claims
evidenced by the AWA Debentures issued under each Indenture. Accordingly, all
distributions provided for in the Plan on account of Allowed AWA Debenture
Claims shall be distributed to the Indenture Trustee as disbursing agent or, if
the Indenture Trustee has resigned pursuant to Section 10.3.2, to the
Distribution Agent as its successor, for further distribution to individual
holders of Allowed AWA Debenture Claims pursuant to the Plan. The transfer books
of the Indenture Trustee for the Debentures shall close as of the Distribution
Record Date and no further transfers shall be recognized.

10.3.4. Any provision of the Plan to the contrary notwithstanding, no
distribution under the Plan shall be required to be made by the Indenture
Trustee or the Distribution Agent to any holder of an AWA Debenture Claim until
such time as the certificate representing the AWA Debenture in respect of which
such AWA Debenture Claim is made shall have been surrendered in accordance with
Section 10.3.5. Notwithstanding any provision of this Section 10.3.4 to the
contrary, any holder of an AWA Debenture Claim based on a certificate
representing an AWA Debenture that has been lost, stolen, mutilated or destroyed
may, in lieu of surrendering such certificate as provided in this Section 10.3,
deliver to the Indenture Trustee, or if the Indenture Trustee has resigned, to
the Distribution Agent as its successor, (i) evidence satisfactory to the
Indenture Trustee or the Distribution Agent, as the case may be, of the loss,
theft, mutilation or destruction of such certificate and (ii) such security or
indemnity as may reasonably be required by the Indenture Trustee or the
Distribution Agent, as the case may be, to save the Indenture Trustee or the
Distribution Agent, as the case may be, harmless with respect thereto, and upon
providing such evidence and such security or indemnity the holder of such AWA
Debenture Claim shall, for all purposes under the Plan, be deemed to have
surrendered such certificate.

10.3.5. A holder of record on the Distribution Record Date of a
certificate relating to an AWA Debenture Claim shall surrender such holder's
certificate representing such AWA Debenture Claim to the Indenture Trustee, or
if the Indenture Trustee has resigned in accordance with Section 10.3.2, to the
Distribution Agent as its successor, in accordance with written instructions
given not more than thirty (30) days after the Effective Date to such holder by
the Indenture Trustee or the Distribution Agent, as the case may be. Upon
receipt of any certificate relating to such AWA Debenture Claim, the Indenture
Trustee or the Distribution Agent shall cancel such certificate and deliver such
canceled certificate to such Person as the Distribution Agent shall designate.

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<PAGE> 31

10.3.6. On the Final Distribution Date, all rights under the Plan of
any holder of an Allowed AWA Debenture Claim which has not surrendered its
certificate representing such AWA Debenture Claim in accordance with this
Section 10.3 shall lapse and be automatically terminated without any further
action and the Indenture Trustee or the Distribution Agent as its successor
shall at such time return to the Distribution Agent any funds or property it
then holds in respect of such unsurrendered certificate to be treated as
unclaimed property pursuant to Section 10.6 and, upon such return, the Indenture
Trustee or the Distribution Agent as its successor shall have no further
obligation in respect of such funds or property.

10.4. Reserves for Distributions for Disputed Claims and Disputed Equity
Interests.

10.4.1. Except as may be otherwise agreed with respect to any Disputed
Claim or Disputed Equity Interest and as approved by the Bankruptcy Court, no
distributions shall be made with respect to all or any portion of a Disputed
Claim or Disputed Equity Interest unless and until such Disputed Claim or
Disputed Equity Interest (or portion thereof) shall have become an Allowed Claim
or Equity Interest and such Allowed Claim or Equity Interest is otherwise
entitled to distributions hereunder.

10.4.2. Prior to making any distribution to holders of Allowed Claims
or Equity Interests in Class 5 or Class 6.2 in accordance with Section 10.2, the
Distribution Agent shall deposit in a Reserve established separately for each
such Class an amount of NewAWA Securities and/or Cash equal to the amount of
such distribution that would have been distributed to holders of Disputed Claims
or Disputed Equity Interests in such Class if such Disputed Claims or Equity
Interests were Allowed Claims or Equity Interests in their full face amount at
the time of the calculation of such distribution. A separate Reserve shall be
established and thereafter maintained for each Class as to which any Claims or
Equity Interests remain Disputed as of the Effective Date. The Distribution
Agent shall at all times until any Disputed Claim or Disputed Equity Interest is
resolved by Final Order, retain in the Reserve all amounts that would have been
distributed to the holder of such Disputed Claim or Disputed Equity Interest had
such Claim or Equity Interest been an Allowed Claim or Equity Interest in its
full face amount on the Effective Date. Notwithstanding the foregoing, upon
motion by the Debtor or NewAWA, the Bankruptcy Court may enter a Reserve Order,
establishing a Reserve Amount to be escrowed in the Reserve for any Class which
may be less than the amount otherwise required hereunder, which amount shall
reflect the Bankruptcy Court's estimate of the level of Reserves for a
particular Class reasonably required to protect the legitimate rights and
interests of holders of Disputed Claims or Disputed Equity Interests in such
Class. In the event a Reserve Order is entered, the Distribution Agent shall
deposit or retain in the Reserve with respect to any Class subject to such order
only the Reserve Amount required by such Reserve Order. Any amount not so
deposited or retained shall be distributed to all holders of Allowed Claims or
Equity Interests in the Class for which such Reserve Amount was established as
provided for in the Plan. The date of each such distribution shall be a
Distribution Date.

10.4.3. As soon as practicable after a Disputed Claim or Disputed
Equity Interest, or portion thereof, becomes an Allowed Claim or Equity
Interest, the Distribution Agent shall make a distribution to the holder of such
Allowed Claim or Equity Interest from the Reserve in the amount of (i) the
portion of the NewAWA Securities or Cash in the Reserve that should be
distributed pursuant to the terms of the Plan in view of the amount of the
Allowed Claim or Equity Interest; plus (ii) the proportional share of any
interest, earnings or dividends actually earned and received on such Reserve;
less (iii) the proportional share of any Distribution Agent Charges incurred on
account of such escrowed assets. To the extent that sufficient New AWA
Securities or Cash are not available to make the full distribution required by
the preceding sentence, in view of the then-appearing rights of the holders of
other Disputed Claims and Disputed Equity Interests, the Distribution Agent
shall make such lesser distribution as shall then be ordered by the Bankruptcy
Court. No holder of a Disputed Claim or Disputed Equity Interest shall have any
claim against the Reserve for the Class in which such Disputed Claim or Disputed
Equity Interest is included until such Disputed Claim or Disputed Equity
Interest shall become an Allowed Claim or Equity Interest. In no event shall any
holder of any Disputed Claim or Disputed Equity Interest have any recourse
against or be entitled to receive (under the Plan or otherwise) or recover from
the Debtor, NewAWA, the Distribution Agent or any Reserve, any payment (in Cash,
NewAWA Securities or other property) in the event that the Reserve therefor is
insufficient to pay an Allowed Claim or Equity Interest in full. In no event
shall the Distribution Agent, the Debtor or NewAWA have any responsibility or
liability for any loss to or of any Reserve.

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10.4.4. The Reserve for a Class shall be terminated when all Disputed
Claims and Disputed Equity Interests are finally resolved in such Class. All
remaining assets, if any, in the Reserve shall be distributed, first, to
holders, if any, who received less than a proportionate distribution pursuant to
order of the Bankruptcy Court under Section 10.4.3 and thereafter to all holders
of Allowed Claims or Equity Interests in the Class for which such Reserve was
established, on a pro rata basis. The date of such distribution shall be the
Final Distribution Date with regard to such Class.

10.5. Fractional Interests; Odd Lots; De Minimis Distributions.

10.5.1. Fractional shares or units of NewAWA Securities shall not be
issued or distributed and no Cash payments shall be made in respect thereof. All
holders of Allowed Claims or Equity Interests in such Class which would
otherwise be entitled to a fractional interest in such NewAWA Security shall be
placed on a list in descending order according to the size of the fractional
interest in the NewAWA Security to be distributed. For purposes of the preceding
sentence, Electing Unsecured Creditors and Non-Electing Unsecured Creditors
shall be placed on separate lists. In the event that two or more holders of
Allowed Claims or Equity Interests are entitled to the same fractional portion
(rounded to six decimal places) in such NewAWA Security, their relative ranking
on any such list shall be determined by lot. The fractional shares or units
which each such holder would have received will be aggregated. Then, one share
or unit, as applicable, will be distributed to each of the holders on such list
in descending order until the total amount of aggregated shares or units is
exhausted.

10.5.2. In the event that any holder of an Allowed Claim or Equity
Interest would receive fewer than ten (10) shares or units of NewAWA Securities
in a distribution made under this Article 10, the Distribution Agent may instead
sell such NewAWA Securities on behalf of any or all of such holders and they
distribute to each such holder its pro rata share of the Net Proceeds of such
sale. Such sale may be either a private sale or through a securities exchange or
automated quotation system on which such NewAWA Securities are listed and absent
manifest error or intentional wrongdoing on the part of the Distribution Agent
in connection with such sale, the Net Proceeds realized from such sale shall be
conclusively determined to be reasonable. The distribution of a pro rata share
of such Net Proceeds to each such holder shall be deemed to be in full
satisfaction of the payment to be made to such holder of Allowed Claims or
Equity Interests in such distribution. These procedures are intended to result
in the affected holders receiving appropriate distributions while saving
expenses in the administration of the Debtor's estate that would be associated
with maintaining such holders as stockholders of NewAWA.

10.6. Delivery of Distributions; Unclaimed Property. Distributions and
deliveries to holders of (i) Allowed General Unsecured Claims shall be made at
the addresses set forth on the proofs of claim filed by such holders (or at the
last known addresses of such holders if no proof of claim is filed or if NewAWA
has been notified of a change of address), (ii) AWA Debenture Claims shall be
made at the address contained in the records of the Indenture Trustee (or, if
the Indenture Trustee has resigned pursuant to Section 10.3.2 of the Plan, in
such records it has delivered to the Distribution Agent as its successor) and
(iii) Equity Interests shall be made to the address shown on the stock ledger of
AWA. If any holder's distribution is returned as undeliverable, no further
distributions to such holder shall be made unless and until the Distribution
Agent, NewAWA or the Indenture Trustee is notified in writing of such holder's
then-current address, at which time all missed distributions shall be made to
such holder without interest (except to the extent that such missed
distributions have become unclaimed property). Amounts in respect of
undeliverable distributions made through the Distribution Agent or through the
Indenture Trustee, shall be returned to NewAWA until such distributions are
claimed. All claims for undeliverable distributions shall be made on or before
the second (2nd) anniversary of the applicable Distribution Date, and after such
date, such undeliverable distributions shall be unclaimed property. All
unclaimed property attributable to any Claim or Equity Interest shall revert to
the Reserve, if any, then existing with regard to Claims or Equity Interests of
such Class and, if none exists, to NewAWA, and the Claim of any holder with
respect to such property shall be discharged and forever barred and shall no
longer be deemed an Allowed Claim or Equity Interest.

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<PAGE> 33

10.7. Method of Payment. Payments of Cash required to be made pursuant to
the Plan shall be made by check drawn on a domestic bank or by wire transfer
from a domestic bank at the election of the Person making such payment.

10.8. Payment Dates. Whenever any payment or distribution to be made under
the Plan shall be due on a day other than a Business Day, such payment or
distribution shall instead be made, without interest, on the immediately
following Business Day.

10.9. Compliance with Tax Requirements. In connection with the Plan, to the
extent applicable, the Distribution Agent and the Indenture Trustee shall comply
with all tax withholding and reporting requirements imposed on it by any
governmental unit, and all distributions pursuant to the Plan shall be subject
to such withholding and reporting requirements. The Distribution Agent and
Indenture Trustee shall be authorized to take any and all actions that may be
necessary or appropriate to comply with such withholding and reporting
requirements. Notwithstanding any other provision of the Plan, (i) each Person
(including holders of Allowed Claims and Equity Interests) receiving a
distribution of Cash or NewAWA Securities pursuant to the Plan shall have sole
and exclusive responsibility for the satisfaction and payment of any tax
obligations imposed by any governmental unit, including income, withholding and
other tax obligations, on account of such distribution and (ii) at the option of
NewAWA, no distribution pursuant to the Plan shall be made to or on behalf of
such entity unless and until such entity has made arrangements satisfactory to
NewAWA for the satisfaction and payment of such tax obligations. At the option
of NewAWA, any Cash or NewAWA Securities to be distributed pursuant to the Plan
shall, pending the implementation of such arrangements, be treated as an
undeliverable distribution pursuant to Section 10.6 above.

ARTICLE 11

PROCEDURES FOR RESOLVING DISPUTED
CLAIMS OR EQUITY INTERESTS

11.1. Filing of Objections to Claims or Equity Interests. After the
Effective Date, objections to Claims or Equity Interests shall be made and
objections to Claims or Equity Interests made previous thereto shall be pursued
only by NewAWA and, upon leave of the Bankruptcy Court for good cause shown, the
Creditors' Committee (if it is then still in existence). Any objections made by
NewAWA or the Creditors' Committee after the Effective Date shall be served and
filed not later than 180 days after the Effective Date; provided, however, that
such period may be extended by order of the Bankruptcy Court for good cause
shown.

11.2. Settlement of Objections to Claims or Equity Interests After
Effective Date. From and after the Effective Date, NewAWA may litigate to
judgment, propose settlements of, or withdraw objections to, all pending or
filed Disputed Claims or Disputed Equity Interests, and NewAWA may settle or
compromise any Disputed Claim or Disputed Equity Interest, without notice and a
hearing and without approval of the Bankruptcy Court; provided, however, notice
of any settlement or compromise involving the allowance of a General Unsecured
Claim in excess of $100,000 shall be provided to the Indenture Trustee (if the
AWA Indentures have not been previously terminated) and to the Creditors'
Committee (if still then in existence), who shall each have ten (10) days to
object to such settlement or compromise and in such case, such settlement or
compromise must be approved by the Bankruptcy Court.

11.3. Payment or Distribution to Holders of Disputed Claims or Equity
Interests. Except as the Debtor or NewAWA, as applicable, may otherwise agree
with respect to any Disputed Claim or Disputed Equity Interest, no payments or
distributions shall be made with respect to any portion of a Disputed Claim or
Disputed Equity Interest unless and until all objections to such Disputed Claim
or Disputed Equity Interest have been settled or determined by a Final Order of
the Bankruptcy Court. Payments and distributions to each holder of a Disputed
Claim or Disputed Equity Interest to the extent that it ultimately becomes an
Allowed Claim or Equity Interest shall be made in accordance with Section 10.4.
A Disputed Claim or Disputed Equity Interest that is estimated for purposes of
allowance and distribution pursuant to Section 502(c) of the Bankruptcy Code and
which is estimated and Allowed at a fixed amount by Final Order of the
Bankruptcy

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Court shall thereupon be an Allowed Claim or Equity Interest for all purposes in
the amount so estimated and Allowed.

11.4. Reserves for Disputed Claims and Disputed Equity Interests.
Appropriate Reserves for Disputed Claims and Disputed Equity Interests shall be
established and maintained as provided in Section 10.4.

ARTICLE 12

MISCELLANEOUS PROVISIONS

12.1. Modification of Payment Terms. NewAWA reserves the right to modify
the treatment of any Allowed Claim in any manner adverse only to the holder of
such Claim at any time after the Effective Date upon the consent of the holder
whose Allowed Claim treatment is being adversely affected.

12.2. Discharge of Debtor. The rights afforded and the treatment of Claims
and Equity Interests under the Plan shall be in exchange for and in complete
satisfaction, discharge, release and termination of all Claims of any nature
whatsoever against the Debtor or any of its assets or properties and all Equity
Interests in the Debtor; and upon the Effective Date (i) the Debtor shall be
deemed discharged and released pursuant to Section 1141(d)(1)(A) of the
Bankruptcy Code from any and all Claims, including but not limited to demands
and liabilities that arose before the Effective Date, all debts of the kind
specified in Section 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or
not (a) a proof of claim based upon such debt is filed or deemed filed under
Section 501 of the Bankruptcy Code, (b) a Claim based upon such debt is allowed
under Section 502 of the Bankruptcy Code or (c) the holder of a Claim based upon
such debt has accepted the Plan; and (ii) all rights and interests of holders of
Equity Interests in the Debtor shall be terminated pursuant to Section
1141(d)(1)(B) of the Bankruptcy Code. The Confirmation Order shall be a judicial
determination of discharge and termination of all liabilities of and all Claims
against, and all Equity Interests in, the Debtor, except as otherwise
specifically provided in the Plan. On the Effective Date, as to every discharged
debt, Claim and Equity Interest, the holder of such debt, Claim or Equity
Interest shall be permanently enjoined and precluded from asserting against
NewAWA or against its assets or properties or any transferee thereof, any other
or further Claim or Equity Interest based upon any document, instrument or act,
omission, transaction or other activity of any kind or nature that occurred
prior to the Effective Date, except as expressly set forth in the Plan or the
Confirmation Order.

12.3. Termination of Subordination Rights. Except as specifically provided
elsewhere herein, on the Confirmation Date, all contractual, legal or equitable
subordination rights that a holder of a Claim or Equity Interest may have with
respect to any distribution to be made pursuant to the Plan shall be discharged
and terminated, and all actions related to the enforcement of such subordination
rights shall be permanently enjoined. Accordingly, distributions pursuant to the
Plan to holders of Allowed Claims and Equity Interests shall not be subject to
payment to a beneficiary of such terminated subordination rights, or to levy,
garnishment, attachment or other legal process by any beneficiary of such
terminated subordination rights. Pursuant to Bankruptcy Rule 9019 and in
consideration for the distribution and other benefits provided under the Plan,
the provisions of this Section 12.3 shall constitute a good faith compromise and
settlement of all claims or controversies relating to the termination of all
contractual, legal and equitable subordination rights that a holder of a Claim
or Equity Interest may have with respect to any Allowed Claim or Equity
Interest, or any distribution to be made on account of such Allowed Claim or
Allowed Equity Interest.

12.4. Termination of the Creditors' and Equity Committees.

12.4.1. The Creditors' Committee shall, unless theretofore terminated,
terminate on the Effective Date and shall thereafter have no further
responsibilities in respect of the Chapter 11 Case except (i) with respect to
preparation and filing of applications for compensation and reimbursement of
expenses in accordance with Section 2.2.3, (ii) with respect to any contested
matter or adversary proceeding commenced prior to the Effective Date in which
the Creditors' Committee is an indispensable litigant or any appeal of an order
in the Chapter 11 Case in which the Creditors' Committee is an indispensable
litigant and if, in each case, the Creditors' Committee's participation in such
proceeding is consistent with the orders of the Bankruptcy Court establishing
the Creditors' Committee and with Section 1103 of the Bankruptcy Code, and

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<PAGE> 35

(iii) with respect to monitoring and participating in matters and proceedings
which could give rise to General Unsecured Claims (including, without
limitation, Avoidance Litigation, rejection of executory contracts and unexpired
leases and resolution of Unsecured Deficiency Claims and Disputed General
Unsecured Claims) for a period of five months after the Effective Date, unless
such period is extended by the Bankruptcy Court for good cause shown. In
connection with such activities, the Creditors' Committee may continue the
retention of its counsel, its local counsel and its accountants and may replace
one or more of such professional advisors, if necessary, but shall not retain
additional professional advisors. NewAWA shall pay the reasonable fees and
expenses of the Creditors' Committee incurred in connection with such
activities, provided, however, that the aggregate fees related to matters and
proceedings which could give rise to General Unsecured Claims shall not exceed
an average of $75,000 per month for the first two months after the Effective
Date and an average of $50,000 per month for any subsequent month. All such fees
and expenses shall be paid only in accordance with the fee and expense
guidelines promulgated by the Debtor in the Bankruptcy Case and shall be paid by
NewAWA within thirty (30) days of receipt of invoice therefor, except in the
case of an objection to any such fees and expenses, which, if not resolved by
NewAWA and the Creditors' Committee, may be noticed by either such entity for a
hearing before the Bankruptcy Court. Notwithstanding anything to the contrary in
this Section 12.4.1, all such activities shall cease when the aggregate amount
of Disputed Claims is less than $3,000,000 or one year after the Effective Date,
whichever occurs first, except in a case where the Creditors' Committee is an
indispensable litigant as contemplated by clause (ii) above.

12.4.2. The Equity Committee shall, unless theretofore terminated,
terminate on the Effective Date and shall thereafter have no further
responsibilities in respect of the Chapter 11 Case except (i) with respect to
preparation and filing of a final application for compensation and reimbursement
of expenses in accordance with Section 2.2.3 and (ii) with respect to any
contested matter or adversary proceeding commenced prior to the Effective Date
in which the Equity Committee is an indispensable litigant or any appeal of an
order in the Chapter 11 Case in which the Equity Committee is an indispensable
litigant and, in each case, if the Equity Committee's participation in such
proceeding is consistent with the orders of the Bankruptcy Court establishing
the Equity Committee and with Section 1103 of the Bankruptcy Code.

12.5. Setoffs. The Debtor and NewAWA may, but shall not be required to, set
off or recoup against any Claim and the payments or other distributions to be
made pursuant to the Plan in respect of such Claim, claims of any nature
whatsoever which the Debtor or NewAWA may have against the holder of such Claim
to the extent such Claim may be set off or recouped under applicable law, but
neither the failure to do so nor the allowance of any Claim hereunder shall
constitute a waiver or release by the Debtor or NewAWA, of any such claim that
it may have against such holder.

12.6. Opt-Out. Pursuant to Section 203(b)(3) of the Delaware General
Corporation Law, AWA elects, as of the Effective Date, that it will no longer be
governed by the provisions of Section 203 of the Delaware General Corporation
Law.

12.7. Section Headings. The Section headings contained in the Plan are for
reference purposes only and shall not affect in any way the meaning or
interpretation of the Plan.

12.8. Severability. If any provision of the Plan is found by the Bankruptcy
Court to be invalid, illegal or unenforceable, then, at the option of the Debtor
or NewAWA, such provision shall not affect the validity or legality of any other
provisions of the Plan which shall remain effective.

12.9. Computation of Time. In computing any period of time prescribed or
allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.

12.10. Governing Law. Except to the extent that the Bankruptcy Code, the
Bankruptcy Rules or any other statutes, rules or regulations of the United
States are applicable, and subject to the provisions of any contract,
instrument, release, indenture or other agreement or document entered into in
connection with the Plan, the rights and obligations arising under the Plan
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Arizona, without giving effect to the principles of conflicts of
law thereof. Notwithstanding anything to the contrary herein, the laws of
escheat and abandoned property of no state shall be applicable to any property
distributed or abandoned hereunder.

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<PAGE> 36

ARTICLE 13

PROVISIONS FOR EXECUTION AND
SUPERVISION OF THE PLAN

13.1. Retention of Jurisdiction. Except as otherwise provided herein, from
and after the Effective Date, the Bankruptcy Court shall retain and have
exclusive jurisdiction over the Chapter 11 Case for all legally permissible
purposes, including, without limitation, the following purposes:

(a) to determine any and all objections to the allowance of Claims;

(b) to resolve any and all matters related to the rejection,
assumption, or assumption and assignment, as the case may be, of executory
contracts or unexpired leases to which the Debtor is a party or with
respect to which the Debtor may be liable, and to hear and determine, and
if need be to liquidate, any and all Claims arising therefrom;

(c) to determine any and all applications for the determination of any
priority of any Claim including without limitation Claims arising from any
event that occurred prior to the Petition Date or from the Petition Date
through the Effective Date and for payment of any alleged Administrative
Claim, Priority Tax Claim, Priority Benefit Plan Contribution Claim or
Priority Wage Claim;

(d) to determine any and all applications, motions, adversary
proceedings and contested or litigated matters that may be pending on the
Effective Date;

(e) to determine all controversies, suits and disputes that may arise
in connection with the interpretation, enforcement or consummation of the
Plan or in connection with the obligations of the Debtor, NewAWA or AmWest
under the Plan, or in connection with the performance by any Distribution
Agent of its duties hereunder, and to enter such orders as may be necessary
or appropriate to implement any distributions to holders of Allowed General
Unsecured Claims;

(f) to consider any modification, remedy any defect or omission, or
reconcile any inconsistency in the Plan or any order of the Bankruptcy
Court, including the Confirmation Order, all to the extent authorized by
the Bankruptcy Code;

(g) to issue such orders in aid of execution of the Plan to the extent
authorized by Section 1142 of the Bankruptcy Code;

(h) to determine such other matters as may be set forth in the
Confirmation Order or as may arise in connection with the Plan or the
Confirmation Order;

(i) to determine any suit or proceeding brought by NewAWA on behalf of
the Debtor's estate to recover property under Section 542, 543 or 553 of
the Bankruptcy Code or any Avoidance Litigation;

(j) to consider and act on the compromise and settlement of any Claim
against or cause of action by or against the Debtor's estate;

(k) to estimate Claims for purposes of allowance pursuant to Section
502(c) of the Bankruptcy Code;

(l) to hear and determine any dispute or controversy relating to any
Allowed Claim or any Claim alleged or asserted by any Person to be an
Allowed Claim;

(m) to determine any and all applications for allowances of
compensation and reimbursement of expenses and any other fees and expenses
authorized to be paid or reimbursed under the Bankruptcy Code or the Plan;

(n) to determine any issues arising in connection with elections made
on a Ballot by a holder of a Claim or Equity Interest;

(o) to determine the appropriate Reserve Amounts;

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<PAGE> 37

(p) to determine whether the payment of any Claims hereunder should be
subordinated to the payment of other Claims;

(q) to hear and determine any tax disputes concerning AWA, including
the amount and preservation of AWA's tax attributes, to determine and
declare any tax effects under the Plan, and to determine any Taxes which
the Debtor's bankruptcy estate may incur as a result of the transactions
contemplated herein, pursuant to Sections 346, 505 and 1146 of the
Bankruptcy Code; and

(r) to enter a final decree closing the Chapter 11 Case.

13.2. Amendment of Plan. The Plan may be amended by the Debtor before the
Effective Date and by NewAWA thereafter as provided in Section 1127 of the
Bankruptcy Code.

13.3. Post-Effective Date Notice. From and after the Effective Date, any
notice to be provided under the Plan shall be sufficient if provided to (i) the
Official Service List as contained in the records of the Bankruptcy Court on the
Effective Date; or (ii) all parties whose rights may be affected by the action
which is the subject of the notice; or (iii) in any case, such notice as is
approved as sufficient by order of the Bankruptcy Court.

13.4. Revocation of Plan. Subject to the approval of AmWest as required by
the Investment Agreement, the Debtor reserves the right to revoke and withdraw
the Plan prior to entry of the Confirmation Order. If the Debtor revokes or
withdraws the Plan, then the Plan shall be deemed null and void and nothing
contained herein shall be deemed to constitute a waiver or release of any Claims
by or against the Debtor or any other person or to prejudice in any manner the
rights of the Debtor or any Person in any further proceedings involving the
Debtor.

Dated: Phoenix, Arizona
June 28, 1994

Respectfully submitted,

AMERICA WEST AIRLINES, INC.

By: /s/ WILLIAM A.
FRANKE
William A. Franke
Chairman of the Board and
Chief Executive Officer

AMWEST PARTNERS, L.P.

By: AMWEST GENPAR, INC.,
its general partner

By: /s/ JAMES G.
COULTER
James G. Coulter
Vice President

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[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 39

PLAN OF REORGANIZATION

EXHIBIT A

INVESTMENT AGREEMENT

[EXHIBITS TO INVESTMENT AGREEMENT OMITTED]
<PAGE> 40

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 41

EXHIBIT A

[Certain terms of the following Investment Agreement have been modified by
the Plan of Reorganization to which this Exhibit A is attached.]

THIRD REVISED INVESTMENT AGREEMENT

April 21, 1994

America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ 85034

Attention: William A. Franke
Chairman of the Board

Gentlemen:

This letter agreement (this "Agreement") sets forth the agreement between
America West Airlines, Inc., a Delaware corporation (including, on or after the
effective date of the Plan, as defined herein, its successors, as reorganized
pursuant to the Bankruptcy Code, as defined herein) (the "Company"), and AmWest
Partners, L.P., a Texas limited partnership ("Investor").

The Company will issue and sell to Investor, and Investor hereby agrees and
commits to purchase from the Company, a package of securities of the Company for
$244,857,000 in cash (subject to adjustment as herein provided), consisting of
(i) shares of Class A Common Stock of the Company ("Class A Common"), (ii)
shares of Class B Common Stock of the Company ("Class B Common" and, together
with the Class A Common, "Common Stock"), (iii) senior unsecured notes of the
Company ("Notes") and (iv) warrants to purchase shares of Class B Common
("Warrants"), all on the terms and subject to the terms and conditions
hereinafter set forth.

Investor's purchase of the securities referred to above (the "Investment")
will be made in connection with and as part of the transactions to be
consummated pursuant to a joint Plan of Reorganization of the Company (the
"Plan") and an order (the "Confirmation Order") confirming the Plan issued by
the Bankruptcy Court, as defined herein. The Plan will contain provisions called
for by, or otherwise consistent with, this Agreement.

In consideration of the agreements of Investor hereunder, and as a
precondition and inducement to the execution of this Agreement by Investor, the
Company has entered into the Third Revised Interim Procedures Agreement with
Investor, dated the date hereof (the "Procedures Agreement").

SECTION 1. Definitions. For purposes of this Agreement, except as
expressly provided herein or unless the context otherwise requires, the
following terms shall have the following respective meanings:

"Affiliate" shall mean (i) when used with reference to any
partnership, any Person that, directly or indirectly, owns or controls 10%
or more of either the capital or profit interests of such partnership or is
a partner of such partnership or is a Person in which such partnership has
a 10% or greater direct or indirect equity interest and (ii) when used with
reference to any corporation, any Person that, directly or indirectly, owns
or controls 10% or more of the outstanding voting securities of such
corporation or is a Person in which such corporation has a 10% or greater
direct or indirect equity interest. In addition, the term "Affiliate," when
used with reference to any Person, shall also mean any other Person that,
directly or indirectly, controls or is controlled by or is under common
control with such Person. As used in the preceding sentence, (A) the term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of the entity
referred to, whether through ownership of voting securities, by contract or
otherwise and (B) the terms "controlling" and "controls" shall have
meanings correlative to the foregoing. Notwithstanding the foregoing, the
Company will be deemed not to be an Affiliate of Investor or any of its
partners or assignees.

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"Alliance Agreements" shall have the meaning specified in Section 5.

"Approvals" shall have the meaning specified in Section 8(b).

"Bankruptcy Code" shall mean Chapter 11 of the United States
Bankruptcy Code.

"Bankruptcy Court" shall mean the United States Bankruptcy Court for
the District of Arizona.

"Business Combination" means:

(i) any merger or consolidation of the Company with or into
Investor or any Affiliate of Investor;

(ii) any sale, lease, exchange, transfer or other disposition of
all or any substantial part of the assets of the Company to Investor
or any Affiliate of Investor;

(iii) any transaction with or involving the Company as a result
of which Investor or any of Investor's Affiliates will, as a result
of issuances of voting securities by the Company (or any other
securities convertible into or exchangeable for such voting
securities) acquire an increased percentage ownership of such voting
securities, except pursuant to a transaction open on a pro rata basis
to all holders of Class B Common; or

(iv) any related series or combination of transactions having or
which will have, directly or indirectly, the same effect as any of
the foregoing.

"Class A Common" shall have the meaning specified in the second
paragraph of this Agreement.

"Class B Common" shall have the meaning specified in the second
paragraph of this Agreement.

"Common Stock" shall have the meaning specified in the second
paragraph of this Agreement.

"Company" shall have the meaning specified in the first paragraph of
this Agreement.

"Confirmation Date" shall mean the date on which the Confirmation
Order is entered by the Bankruptcy Court.

"Confirmation Order" shall have the meaning specified in the third
paragraph of this Agreement.

"Continental" shall mean Continental Airlines, Inc.

"Creditors' Committee" shall mean the Official Committee of the
Unsecured Creditors of America West Airlines, Inc. appointed in the
Company's Chapter 11 case pending in the Bankruptcy Court.

"Disclosure Statement" shall mean a disclosure statement with respect
to the Plan.

"Effective Date" shall mean the effective date of the Plan; provided
that in no event shall the Effective Date be (a) earlier than 11 days after
the Bankruptcy Court approves and enters the Confirmation Order providing
for the confirmation of the Plan or (b) before all material Approvals are
obtained.

"Electing Party" shall have the meaning specified in Section
4(a)(2)(ii).

"Equity Committee" shall mean the Official Committee of Equity Holders
of America West Airlines, Inc. appointed in the Company's Chapter 11 case
pending in the Bankruptcy Court.

"Equity Holders" shall mean the Company's equity security holders
(including holders of common stock and preferred stock) of record as of the
applicable record date fixed by the Bankruptcy Court.

"Governance Agreements" shall have the meaning specified in Section 6.

"GPA" shall mean GPA Group plc or, if applicable, any direct or
indirect subsidiary thereof.

"GPA Put Agreement" shall have the meaning specified in Section 7(j).

"Independent Directors" shall have the meaning specified in Section
6(a).

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"Initial Order" shall have the meaning specified in Section 8(a).

"Investment" shall have the meaning specified in the third paragraph
of this Agreement.

"Investor" shall have the meaning specified in the first paragraph of
this Agreement.

"Mesa" shall mean Mesa Airlines, Inc.

"Monthly Targets" shall mean the amounts specified in the Monthly
Targets Schedule.

"Monthly Targets Schedule" shall mean the letter agreement between the
Company and Investor dated the date hereof.

"Notes" shall have the meaning specified in the second paragraph of
this Agreement. The Notes shall be subject to the terms and conditions set
forth in Exhibit B hereto.

"Outside Date" shall mean August 31, 1994; provided that Investor
shall have the right from time to time to irrevocably extend the Outside
Date to a date not later than November 30, 1994, but only if Investor gives
the Company prior written notice of its election to extend the then current
Outside Date (which notice shall specify the new Outside Date) and then
only if, at the time of the giving of such notice, Investor is not in
breach of any of its representations, warranties, covenants or obligations
under this Agreement, the Procedures Agreement or any Related Agreement
(excluding any breach by Investor which is not willful or intentional and
which is capable of being cured on or before the new Outside Date). Unless
waived by the Company, any notice given pursuant to this definition shall
be delivered to the Company not less than 15 days prior to the then current
Outside Date except that, in the event the Effective Date has not occurred
for any reason arising within such 15-day period not due to a breach by
Investor of any of its representations, warranties, covenants or agreements
hereunder, such notice shall be given as soon as practicable but in no
event later than the then current Outside Date.

"Person" means a natural person, a corporation, a partnership, a
trust, a joint venture, any Regulatory Authority or any other entity or
organization.

"Plan" shall have the meaning specified in the third paragraph of this
Agreement.

"Plan 9" means the Company's Plan Revision No. 9 which consists of the
Summary Pro Forma Financial Statements: June 1993 Through December 1994,
dated July 15, 1993.

"Plan R-2" shall mean the Company's Summary Pro Forma Financial
Statements, 5 Year Plan: 1994 Through 1998, Plan No. R-2, dated January 13,
1994.

"Procedures Agreement" shall have the meaning specified in the fourth
paragraph of this Agreement.

"Projections" shall mean the projections set forth in Plan 9 on pages
15 and 18 of Tab E and pages 7 and 8 of Tab F.

"Purchase Price" shall have the meaning specified in Section 2.

"Regulatory Approvals" shall mean all approvals, permits,
authorizations, consents, licenses, rulings, exemptions and agreements
required to be obtained from, or notices to or registrations or filings
with, any Regulatory Authority (including the expiration of all applicable
waiting periods, if any, under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended) that are necessary or reasonably appropriate to
permit the Investment and the other transactions contemplated hereby and by
the Related Agreements and to permit the Company to carry on its business
after the Investment in a manner consistent in all material respects with
the manner in which it was carried on prior to the Effective Date or
proposed to be carried on by the reorganized Company.

"Regulatory Authority" shall mean any authority, agency, commission,
official or other instrumentality of the United States, any foreign country
or any domestic or foreign state, county, city or other political
subdivision.

"Related Agreements" shall have the meaning specified in Section 3.

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"Securities" shall mean the securities of the Company issued to the
Unsecured Parties, Investor and its assigns and GPA under this Agreement.
The Securities are described in Section 4.

"Unsecured Creditors" shall mean, as of any date, the Persons holding
of record as of such date the allowed or allowable prepetition unsecured
claims without priority of the Company.

"Unsecured Parties" shall mean the Equity Holders and the Unsecured
Creditors.

"Warrants" shall have the meaning specified in the second paragraph of
this Agreement.

SECTION 2. Commitment to Make Investment. Subject to the terms and
conditions of this Agreement and the Procedures Agreement, on the Effective
Date, the Company shall issue and sell and Investor shall purchase Securities in
accordance with this Agreement and the Plan. Such Securities shall be issued,
sold and delivered to Investor, its designees and/or one or more third party
investors, and the $244,857,000 purchase price therefor, as such purchase price
may be adjusted pursuant hereto (the "Purchase Price"), shall be paid by wire
transfer of immediately available funds on the Effective Date.

SECTION 3. Related Agreements. The agreements necessary to effect the
Investment (the "Related Agreements," such term to include the Alliance
Agreements and the Governance Agreements) shall be in form and substance
reasonably satisfactory to Investor and the Company, and shall contain terms and
provisions, including representations, warranties, covenants, warranty
termination periods, materiality exceptions, cure opportunities, conditions
precedent, anti-dilution provisions (as appropriate), and indemnities, as are in
form and substance reasonably satisfactory to such parties; provided, however,
that the Related Agreements shall contain provisions called for by, or otherwise
consistent with, this Agreement.

SECTION 4. Capitalization. (a) Upon consummation of the Plan, the
capitalization of the Company shall be as follows:

(1) Class A Common. There shall be 1,200,000 shares of Class A
Common, all of which shares shall, in accordance with the Plan, be issued
to Investor. Investor shall pay $8,960,400 for the Class A Common. At the
option of the holders thereof, shares of Class A Common shall be
convertible into shares of Class B Common on a share for share basis.

(2) Class B Common. There shall be 43,800,000 shares of Class B
Common, all of which shares shall, in accordance with the Plan, be issued
as follows:

(i) Investor. Investor shall be issued 13,875,000 shares plus the
number of shares (if any) to be acquired by Investor pursuant to clause
(ii) below minus the number of shares, if any, purchased by the Equity
Holders pursuant to the second sentence of clause (iii) below. For each
share of Class B Common issued to it, Investor shall pay $7.467;
provided that (A) for each share acquired by Investor pursuant to clause
(ii) below and (B) for each share not purchased by the Equity Holders
pursuant to clause (iii) below, Investor shall pay $8.889.

(ii) Unsecured Creditors. The Unsecured Creditors (or a trust
created for their benefit) shall be issued 26,775,000 shares.
Notwithstanding the foregoing, each Unsecured Creditor shall have the
right to elect to receive cash equal to $8.889 for each share of Class B
Common otherwise allocable to it under this clause (ii). The election of
each such Person (the "Electing Party") must be made on or before the
date fixed by the Bankruptcy Court for voting with respect to the Plan;
provided, however, that in the event that such elections of all Electing
Parties aggregate to more than $100 million, then (A) the amount of cash
so paid shall be limited to $100 million and (B) the Electing Parties
shall each receive proportionate amounts of cash and Class B Common in
accordance with the Plan. Subject to the foregoing proviso, Investor
shall increase the Investment by the amount necessary to pay all
Electing Parties the cash amounts payable to them under this clause (ii)
in respect of the shares of Class B Common specified in their elections
and, upon payment of such amounts, such shares shall be issued to
Investor without further consideration. Notwithstanding the foregoing,
Investor's acquisition of shares of Class B Common pursuant to this
clause (ii) shall, if permitted by applicable securities and other laws,
be consummated immediately after the issuance of such shares to the
Electing Parties on the Effective Date. If such shares are not so
acquired post-

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consummation of the Plan, all shares of Class B Common acquired by
Investor pursuant to this clause (ii) shall, for all purposes hereof,
be deemed to be part of the Securities acquired by Investor hereunder.

(iii) Equity Holders. The Equity Holders (or a trust created for
their benefit) shall be issued 2,250,000 shares. In addition, the Equity
Holders shall have the right to purchase up to 1,615,179 shares
allocable to Investor pursuant to clause (i) above at $8.889 per share.
Such election must be made by each Equity Holder on or before the date
fixed by the Bankruptcy Court for voting with respect to the Plan. The
Plan shall set forth the terms and conditions on which the foregoing
rights may be exercised.

(iv) GPA. 900,000 shares shall be issued to GPA.

(3) Warrants. There shall be Warrants to purchase 10,384,615 shares
of Class B Common at the exercise price as specified in and subject to the
terms of Exhibit A hereto, and such Warrants shall, in accordance with the
Plan, be issued as follows:

(i) Warrants to purchase up to 2,769,231 shares of Class B Common
shall be issued to Investor; and

(ii) Warrants to purchase up to 6,230,769 shares of Class B Common
shall be issued to the Equity Holders or a trust or trusts created for
their benefit; and

(iii) Warrants to purchase up to 1,384,615 shares of Class B Common
shall be issued to GPA.

(4) Senior Unsecured Notes. Investor shall, in accordance with the
Plan and subject to the terms of Exhibit B hereto, be issued $100 million
principal amount of Notes against payment in cash of not less than 100% of
the principal amount thereof to the Company; provided, however, that the
Company shall have the right, exercised at any time prior to the date fixed
by the Bankruptcy Court for voting with respect to the Plan, to increase
the principal amount of the Notes to be so purchased by Investor to up to
$130 million. GPA shall, in accordance with the Plan, be issued $30,525,000
principal amount of Notes; provided, however, that GPA shall have the right
to elect to receive cash in lieu of all or any portion of the Notes
otherwise issuable to it under this paragraph (4), such election to be made
on or before the date fixed by the Bankruptcy Court for voting with respect
to the Plan.

(b) Holders of the Class A Common shall have fifty votes per share. Holders
of Class B Common shall have one vote per share. Holders of Class A Common and
holders of Class B Common shall vote together as a single class except as
otherwise required by law or the provisions of this Agreement. Investor may
elect, with respect to any shares of Class B Common held by it, to suspend the
voting rights relating to such shares by giving prior written notice to the
Company, which notice shall describe such shares in reasonable detail and state
whether or not the voting suspension is permanent or temporary and, if
temporary, specify the period thereof.

(c) Neither Investor nor any Affiliate of Investor or of any partner of
Investor will transfer or otherwise dispose of any Common Stock (other than to
an Affiliate of the transferor) if, after giving effect thereto and to any
concurrent transaction, the total number of shares of Class B Common
beneficially owned by the transferor is less than 200% of the total number of
shares of Class A Common beneficially owned by the transferor; provided,
however, than nothing in this paragraph (c) shall prohibit any Person from
transferring or otherwise disposing, in a single transaction or a series of
concurrent transactions, of all shares of Common Stock owned by such Person.

SECTION 5. Business Alliance Agreements. Continental and the Company
shall enter into mutually acceptable business alliance agreements on the
Effective Date, which agreements may include, but shall not be limited to,
agreements to share ticket counter space, ground handling agreements, agreements
to link frequent flier programs, and combined purchasing agreements, and
schedule coordination and code sharing agreements. On the Effective Date, Mesa
shall enter into agreements with the Company extending the existing contractual
arrangements between the Company and Mesa for five years from the Effective Date
and

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modifying the termination provisions thereof consistent with such extension.
Such agreements with Continental and Mesa are herein collectively referred to as
the "Alliance Agreements".

SECTION 6. Governance Agreements. On the Effective Date, the Company,
Investor and Investor's partners (other than any such partner holding shares of
Class B Common the voting rights with respect to which have been suspended as
contemplated by Section 4(b)) shall enter into one or more written agreements
(the "Governance Agreements") effectively providing as follows:

(a) At all times during the three-year period commencing on the
Effective Date, the Company's board of directors shall consist of 15
members designated as follows:

(i) nine members (at least 8 of whom are U.S. citizens) shall be
designated by Investor, with certain of the partners of Investor having
the right to designate certain of Investor's designated directors;

(ii) three members (at least two of whom are U.S. citizens) shall
be designated by the Creditors Committee; provided that each such member
shall be reasonably acceptable to Investor at the time of his or her
initial designation;

(iii) one member shall be designated by the Equity Committee;
provided that such member shall be a U.S. citizen reasonably acceptable
to Investor at the time of his or her initial designation;

(iv) one member shall be designated by the Company's board of
directors as constituted on the date preceding the Effective Date;
provided that such member shall be a U.S. citizen reasonably acceptable
to Investor at the time of his or her initial designation; and

(v) one member shall be designated by GPA for so long as GPA shall
own at least 2% of the voting equity securities of the Company; provided
that such member shall be reasonably acceptable to Investor at the time
of his or her initial designation.

The directors (and their successors) referred to in clauses (ii), (iii) and
(iv) above are hereinafter referred to collectively as the "Independent
Directors."

(b) In the case of the death, resignation, removal or disability of an
Independent Director after the Effective Date, his or her successor shall
be designated by the Stockholder Representatives, except that if such
Independent Director was initially designated by the Creditors' Committee
or the Equity Committee and if, at the time of such Independent Director's
death, resignation, removal or disability (as the case may be), the
Creditors' Committee or the Equity Committee (as the case may be) remains
in effect, the successor to such Independent Director shall be designated
by the Creditors' Committee or the Equity Committee (as the case may be).
As used herein, "Stockholder Representatives" shall mean, collectively, (A)
one individual who, on the date hereof, is serving as a director of the
Company, (B) one individual who, on the date hereof, is serving as a member
of the Creditors' Committee and (C) one individual who, on the date hereof,
is serving as a member of the Equity Committee. The initial Stockholder
Representatives shall be selected on or before the Effective Date (x) by
the Company's board of directors in the case of the individual referred to
in clause (A) above, (y) by the Creditors' Committee in the case of the
individual referred to in clause (B) above and (z) by the Equity Committee
in the case of the individual referred to in clause (C) above. In case of
the death, resignation, removal or disability of a Stockholder
Representative after the Effective Date, his or her successor shall be
designated by the remaining Stockholder Representatives.

(c) Until the third anniversary of the Effective Date, Investor will
vote and cause to be voted all shares of Common Stock (other than those the
voting rights of which have been suspended) owned by Investor or any of its
partners or by the assignees or transferees of all or substantially all of
the Common Stock owned by Investor or any of its partners (other than a
Person who acquires such stock pursuant to a tender or exchange offer open
to all stockholders of the Company) in favor of the election as directors
of any and all individuals designated for such election as contemplated by
clauses (ii), (iii), (iv) and (v) of paragraph (a) above.

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(d) No director nominated by Investor shall be an officer or employee
of Continental. All Company directors, if any, who are selected by, or who
are directors of, Continental shall recuse themselves from voting on, or
otherwise receiving any confidential Company information regarding, matters
in connection with negotiations between Continental and the Company
(including, without limitation, those relating to the Alliance Agreements)
and matters in connection with any action involving direct competition
between Continental and the Company. All Company directors, if any, who are
selected by, or who are directors, officers or employees of, Mesa shall
recuse themselves from voting on, or otherwise receiving any confidential
Company information regarding, matters in connection with negotiations
between Mesa and the Company (including, without limitation, those relating
to the Alliance Agreements) and matters in connection with any action
involving direct competition between Mesa and the Company.

(e) During the three-year period commencing on the Effective Date, the
Company will not consummate any Business Combination unless such
transaction shall be approved in advance by at least three Independent
Directors or by a majority of the stock voted at the meeting held to
consider such transaction which is owned by stockholders of the Company
other than Investor or any of its Affiliates; provided, however, that
neither Mesa nor any fund or account managed or advised by Fidelity
Management Trust Company or its Affiliates (or any of their non-Affiliated
transferees) will be deemed an Affiliate of Investor for purposes of voting
on any Business Combination involving Continental.

SECTION 7. Plan of Reorganization. The Plan shall (i) be proposed jointly
by the Company and Investor, (ii) contain terms and conditions reasonably
satisfactory to Investor and the Company, and (iii) include the following
provisions; provided that Investor and the Company may, by mutual agreement,
modify the Plan or otherwise restructure the Investment in a manner consistent
with the contemplated economic consequences to the Company, Investor, the
Unsecured Parties and GPA in order to enable the Company, as reorganized, to
more fully utilize its existing tax attributes:

(a) Debtor-in-Possession Financing. The Company's
debtor-in-possession financing shall be repaid in full in cash on the
Effective Date.

(b) Administrative Claims. All allowed administrative claims shall be
paid as required pursuant to Section 1129(a) of the Bankruptcy Code,
provided that such claims do not exceed the amount set forth in Plan R-2
plus $15 million, and provided further that payment of such claims in
excess of those set forth in Plan R-2 would not, if payment was to be made
in the month immediately preceding the Effective Date, cause the Company to
fail to meet any of the Monthly Targets for such month.

(c) Tax Claims. All priority tax claims shall be paid over the
maximum term permitted by the Bankruptcy Code, as determined by the
Bankruptcy Court, with interest accruing at a rate determined by the
Bankruptcy Court, provided that such claims do not exceed the amounts set
forth in Plan R-2 plus $8.5 million, and provided further that payment of
such claims in excess of those set forth in Plan R-2 would not, if payment
was to be made in the month immediately preceding the Effective Date, cause
the Company to fail to meet any of the Monthly Targets for such month.

(d) Nontax Priority Claims. All nontax priority claims shall be paid
as required pursuant to Section 507 of the Bankruptcy Code, provided that
such claims do not exceed the amounts set forth in Plan R-2.

(e) Secured Claims. Secured debt claims shall be treated as provided
in Plan R-2 subject to (i) modification based on updated appraisals of
collateral values to be conducted by the Company and consistent with the
applicable provisions of the Bankruptcy Code, or (ii) such other terms as
shall be reasonably satisfactory to the Company and Investor.

(f) Unsecured Creditors. In consideration for the shares and cash
issued or paid, as the case may be, to the Unsecured Creditors pursuant to
Section 4(a)(2)(ii), the unsecured claims of the Unsecured Creditors shall
be cancelled as specified in the Plan.

(g) Equity Holders. In consideration for (A) the right to purchase
shares pursuant to Section 4(a)(2)(iii), (B) the shares issued to the
Equity Holders pursuant to Section 4(a)(2)(iii), and (C) the

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Warrants issued to the Equity Holders pursuant to Section 4(a)(3)(ii), the
equity interests of the Equity Holders shall be cancelled as specified in
the Plan.

(h) Leases. All aircraft leases which have been assumed prior to the
date hereof will be honored by the Company in accordance with their terms
and without reduction of rentals thereunder, provided that with the consent
of the Company, Investor and any applicable lessor, any such lease may be
amended to reduce the rentals payable thereunder, it being understood that,
in consideration of any such amendment and with the consent of the
Creditors' Committee, securities of the Company may be issued to such
lessors from securities otherwise allocable to the Unsecured Parties to the
extent consistent with any agreement in writing entered into by Investor
and the Equity Committee on or before the date hereof.

(i) Kawasaki. The contractual right of Kawasaki Leasing International
Inc. ("Kawasaki") to require the Company to lease certain aircraft and
aircraft engines shall be modified on terms satisfactory to the Company,
Investor and Kawasaki or, in the absence of such modification, honored.

(j) GPA. In consideration for (A) the shares issued to GPA pursuant
to Section 4(a)(2)(iv), (B) the Warrants issued to GPA pursuant to Section
4(a)(3)(iii), (C) the Notes and cash issued or paid, as the case may be, to
GPA pursuant to Section 4(a)(4) and (D) the granting to GPA on the
Effective Date of the right (the "New GPA Put") to require the Company to
lease from GPA on or prior to June 30, 1999, up to eight aircraft of types
consistent with the fleet currently operated by the Company, GPA shall, as
specified in the Plan, cancel and waive all rights to put any aircraft to
the Company which it may have pursuant to the Put Agreement between GPA and
the Company, dated as of June 25, 1991 (the "GPA Put Agreement") and/or the
related Agreement Regarding Rights of First Refusal for A320 Aircraft,
dated as of September 1, 1992 (the "First Refusal Agreement") and all other
claims of any kind or nature arising out of or in connection with the GPA
Put Agreement and/or the First Refusal Agreement (other than claims for
reimbursement of expenses incurred by GPA in connection therewith). Each
such lease shall provide for the payment by the Company of a fair market
rental (determined at or about the time of delivery of the related aircraft
to the Company on the basis of rentals then prevailing in the marketplace
for comparable leases of comparable aircraft to lessees of comparable
creditworthiness); and each such lease shall have such other terms and
provisions and be in such form as is agreed upon by the Company and GPA
with the approval of Investor (which approval shall not be unreasonably
withheld or delayed) and attached to the agreement pursuant to which GPA is
granted the New GPA Put.

(k) Prepetition Aircraft Purchase Contracts. The prepetition contract
for the purchase of aircraft between the Company and The Boeing Company
shall either be modified on terms satisfactory to Investor, the Company and
The Boeing Company or, in the absence of such agreement, rejected. The
Company's aircraft purchase contract with AVSA, S.A.R.L. ("Airbus") shall
be amended on terms consistent with the provisions of the AmWest-A320 Term
Sheet, dated as of February 23, 1994 by and between Investor and Airbus.

(l) Employees. The Company shall have the right to release employees
from all currently existing obligations to the Company in respect of shares
of Company stock purchased by such employees pursuant to the Company's
stock purchase plan, such release to be in consideration for the
cancellation of such shares.

(m) Exculpation. The Plan will contain customary exculpation
provisions for the benefit of the Creditors' Committee and the Equity
Committee and their respective professionals.

SECTION 8. Conditions to Investor's Obligations Relating to the
Investment. The obligations of Investor to consummate the Investment and the
other transactions contemplated herein shall be subject to the satisfaction, or
the written waiver by Investor, of the following conditions:

(a) an initial order approving the Procedures Agreement, which order
shall be in form and substance reasonably satisfactory to Investor (the
"Initial Order"), shall have been entered by the Bankruptcy Court on or
prior to May 6, 1994 and, once entered, shall be in effect and shall not be
modified in any material respect or stayed;

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(b) subject to Section 10(b), the Company and Investor, as applicable,
shall have received all Regulatory Approvals, which shall have become final
and nonappealable or any period of objection by Regulatory Authorities
shall have expired, as applicable, and all other material approvals,
permits, authorizations, consents, licenses and agreements from other third
parties that are necessary or appropriate to permit the Investment and the
other transactions contemplated hereby and by the Related Agreements and to
permit the Company to carry on its business after the Effective Date in a
manner consistent in all material respects with the manner in which it was
carried on prior to the Effective Date (collectively with Regulatory
Approvals, the "Approvals"), which Approvals shall not contain any
condition or restriction that, in Investor's reasonable judgment,
materially impairs the Company's ability to carry on its business in a
manner consistent in all material respects with prior practice or as
proposed to be carried on by the reorganized Company;

(c) the certificate of incorporation and bylaws of the Company shall
contain the terms contemplated by this Agreement and shall otherwise be
reasonably satisfactory to Investor;

(d) there shall be in effect no injunction, stay, restraining order or
decree issued by any court of competent jurisdiction, whether foreign or
domestic, staying the effectiveness of any of the Approvals, the Initial
Order or the Confirmation Order, and there shall not be pending any request
or motion for any such injunction, stay, restraining order or decree;
provided, however, that the foregoing condition shall not apply to any such
injunction, stay, order or decree requested, initiated or supported by
Investor or any of its partners or other Affiliates or to any such request
or motion made, initiated or supported by Investor or any its partners or
other Affiliates;

(e) there shall not be threatened or pending any suit, action,
investigation, inquiry or other proceeding (collectively, "Proceedings") by
or before any court of competent jurisdiction or Regulatory Authority
(excluding the Company's bankruptcy case, but including adversary
proceedings and contested matters in such bankruptcy case, and excluding
any such Proceedings fully and accurately disclosed by the Company in
Schedule I hereto), or any adverse development occurring since December 31,
1993 in any such Proceedings, which Proceedings or development, singly or
in the aggregate, in the good faith judgment of Investor, are reasonably
likely to have a material adverse effect on the Company's ability to carry
on its business in a manner consistent in all material respects with prior
practices or are reasonably likely to impair in any material respect
Investor's ability to realize the intended benefits and value of this
Agreement, the Procedures Agreement or any Related Agreement; provided,
however, that the foregoing condition shall not apply to any such
Proceeding or development requested, initiated or supported by Investor or
any of its partners or other Affiliates;

(f) the Company shall have delivered to Investor appropriate closing
documents, including the instruments evidencing the Securities being issued
to Investor, certifications of the Company officers (including, but not
limited to, incumbency certificates, and certificates as to the truth and
correctness of statements made in the Disclosure Statement or any other
offering document distributed in connection with any securities issued in
respect of this Agreement or the Related Agreements) and opinions of legal
counsel, all of which shall be reasonably satisfactory to Investor;

(g) by no later than March 31, 1994, the Company shall have delivered
to Investor audited financial statements as of December 31, 1993, and for
the year then ended, which statements shall reflect a financial performance
and a financial position of the Company consistent in all material respects
with the unaudited results previously announced by the Company for such
year, and, if requested by Investor, the Company shall have discussed such
financial statements with Investor and provided an opportunity for Investor
to discuss such financial statements with the Company's auditors;

(h) since December 31, 1993, except for the matters disclosed in
Schedule I hereto, no material adverse change in the Company's condition
(financial or otherwise), business, assets, properties, operations or
relations with employees or labor unions shall have occurred and no matter
(except for the matters disclosed in Schedule I hereto) shall have occurred
or come to the attention of Investor that, in the reasonable judgment of
Investor, is likely to have any such material adverse effect;

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(i) the following shall be true in all material respects (in each case
based on the Company's actual monthly or daily financial statements, which
shall be prepared by the Company in a manner consistent in all material
respects with its historical monthly and daily financial statements
previously furnished to Investor): (A) the Company's actual monthly
Operating Cash Flow (as defined on the Monthly Targets Schedule) shall not,
in any month, be less than the minimum amount therefor established as part
of the Monthly Targets, (B) the Company's actual 4 month Rolling Cash Flow
(as defined on the Monthly Targets Schedule) shall not be less, as of the
end of any four calendar month period, than the minimum amount therefor
established as part of the Monthly Targets, (C) the Company's actual end of
month Reported Cash Balance (as defined in the Monthly Targets Schedule)
shall not, as of the end of any calendar month, be less than the minimum
amount therefor established as part of the Monthly Targets, (D) the
Company's actual five-day average Minimum Cash Balance (as defined in the
Monthly Targets Schedule) shall not be, as of the end of any five day
period, less than the minimum amount therefor established as part of the
Monthly Targets; (E) the Company shall not have taken any actions which the
Company knew or reasonably should have known would likely impair or hinder
in any material respect the Company's ability to achieve the Projections;
(F) the amount and nature of the obligations and liabilities (including,
without limitation, tax liabilities and administrative expense claims)
required to be paid by the Company on the Effective Date or to be paid by
the Company following the Effective Date pursuant to obligations assumed by
the Company during the course of its bankruptcy proceedings shall not be in
excess of the amounts reflected in Plan R-2 plus any additional allowances
provided in Section 7 (as reduced by any repayments of the existing
debtor-in-possession loan made on or prior to the Effective Date) and shall
not be materially different in nature than those specified in Plan R-2
(except with respect to administrative claims not known to the Company when
Plan R-2 was developed); and (G) the Company shall have paid all fees and
expenses due Investor under the Procedures Agreement;

(j) since the date hereof, there shall have occurred no outbreak or
escalation of hostilities or other international or domestic calamity,
crisis or change in political, financial or economic conditions or other
adverse change in the financial markets that impairs (or could reasonably
be expected to impair) in any material respect the Company's ability to
carry on its business in a manner consistent in all material respects with
prior practice or impairs (or could reasonably be expected to impair) in
any material respect Investor's ability to realize the intended benefits
and value of this Agreement or any Related Agreement;

(k) the Related Agreements, including all Alliance Agreements, to be
executed by the Company shall have been executed by the Company on or
before the Effective Date and, once executed, shall not have been modified
without the consent of Investor, shall be in effect and shall not have been
stayed;

(l) the Company shall have performed in all material respects all
obligations on its part required to be performed on or before the Effective
Date under this Agreement, the Procedures Agreement and the Related
Agreements and all orders of the Bankruptcy Court in respect thereof that
are consistent with the provisions of such instruments;

(m) all representations and warranties of the Company under this
Agreement, the Procedures Agreement and the Related Agreements shall be
true in all material respects as of the Effective Date;

(n) the Plan and Disclosure Statement each shall have been filed by
the Company on or prior to May 15, 1994, and, once filed, shall have been
served by the Company on all appropriate parties and, once served, shall
not have been modified in any material respect without the prior consent of
Investor (which consent shall not be unreasonably withheld), withdrawn by
the Company or dismissed;

(o) the Disclosure Statement (in the form approved by the Bankruptcy
Court and as amended or supplemented, if applicable) shall have been true
and correct in all material respects as of the date first mailed to
Unsecured Parties and as of the date fixed by the Bankruptcy Court for
voting on the Plan and such Disclosure Statement shall not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein (taken as a whole),
in light of the circumstances under which they were made, not misleading;
provided, however, that the foregoing

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condition shall not apply to statements or other information furnished or
provided by Investor or any of its Affiliates for use in the Disclosure
Statement;

(p) the order approving the Disclosure Statement shall have been
entered by the Bankruptcy Court on or prior to June 30, 1994, and, once
entered, shall not have been modified in any material respect, shall be in
effect and shall not have been stayed;

(q) the Plan (including all securities of the Company to be issued
pursuant thereto and all contracts, instruments, agreements and other
documents to be entered into in connection therewith), the Disclosure
Statement and the Confirmation Order shall be consistent with the terms of
this Agreement and otherwise reasonably satisfactory in form and substance
to Investor;

(r) the Confirmation Order shall have been entered by the Bankruptcy
Court in form reasonably satisfactory to Investor on or before August 15,
1994, and, once entered, shall not have been modified in any material
respect, shall be in effect and shall not have been stayed and shall not be
subject to any appeal;

(s) the Effective Date shall have occurred on or prior to the Outside
Date unless the reason therefor shall be attributable to the breach by
Investor or its Affiliates of any of their respective representations,
warranties, covenants or obligations contained herein or in the Procedures
Agreement or any Related Agreement;.

(t) either pursuant to the Confirmation Order or otherwise, the
Bankruptcy Court shall have established one or more bar dates for
administrative expense claims pursuant to an order reasonably acceptable to
Investor, which bar date or dates shall occur on or before dates reasonably
acceptable to Investor; and

(u) the Securities and Exchange Commission shall have declared
effective a shelf registration statement with respect to the Securities
issuable to Investor.

In the event any of the conditions set forth in clause (a)-(n), (p) or (r) is
not satisfied by the date specified in such clause (the "Deadline"), then, on
the 15th day following the then current Deadline, the Deadline shall be
automatically extended on a day-to-day basis unless the Company and Investor
otherwise agree in writing or unless Investor gives a notice of termination to
the Company pursuant to Section 20(b) of the Procedures Agreement within such
15-day period. If any Deadline is automatically extended as aforesaid, Investor
may thereafter establish a new Deadline by giving notice to the Company
specifying the new Deadline, provided that the new Deadline may not be sooner
than 30 days after the date of such notice.

SECTION 9. Conditions to Company's Obligations Relating to
Investment. The Company's obligations to consummate or to cause the
consummation of the issuance and sale of the Securities and the other
transactions contemplated by this Agreement shall be subject to the
satisfaction, or to the effective written waiver by the Company, of the
condition described in Section 8(b) and the following additional conditions:

(a) payment of the Purchase Price;

(b) Investor shall have delivered to the Company appropriate closing
documents, including, but not limited to, executed counterparts of the
Related Agreements and certifications of officers, and opinions of legal
counsel, all of which shall be reasonably satisfactory to the Company;

(c) there shall be in effect no injunction, stay, restraining order or
decree issued by any court of competent jurisdiction, whether foreign or
domestic, staying the effectiveness of any of the Approvals, the Initial
Order or the Confirmation Order, and there shall not be pending any request
or motion for any such injunction, stay, restraining order or decree;
provided, however, that the foregoing condition shall not apply to any such
injunction, stay, order or decree requested, initiated or supported by the
Company or to any such request or motion made, initiated or supported by
the Company;

(d) the Related Agreements to be executed by Investor or any of its
partners shall have been executed by such parties on or before the
Effective Date and, once executed, shall not have been modified without the
consent of the Company, shall be in effect and shall not have been stayed;

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(e) Investor, Continental and Mesa shall have performed in all
material respects all obligations on their part required to be performed on
or before the Effective Date under this Agreement, the Procedures Agreement
and the Related Agreements and all orders of the Bankruptcy Court in
respect thereof that are consistent with the provisions of such
instruments;

(f) all representations and warranties of Investor, Continental and
Mesa under this Agreement, the Procedures Agreement and the Related
Agreements shall be true and correct in all material respects as of the
Effective Date;

(g) the Company shall be reasonably satisfied that the Alliance
Agreements, when fully implemented, shall result in an increase to the
Company's pretax income of not less than $40 million per year; provided,
however, that Investor shall have no liability for any failure of the
Company to achieve any such increase in net income except to the extent
such failure results from a default by Investor or its partners pursuant to
the terms of such Alliance Agreements;

(h) since the date hereof, there shall have occurred (A) no outbreak
or escalation of hostilities or other international or domestic calamity,
crisis or change in political, financial or economic conditions or other
adverse change in the financial markets or (B) any adverse change in the
condition (financial or otherwise), business, assets, properties or
prospects of Continental or Mesa, in each case that materially impairs the
ability of either Continental or Mesa to perform its obligations under the
Alliance Agreements or the Company's ability to realize the intended
benefits and value of this Agreement, the Alliance Agreements (as
contemplated by clause (g) above) or the other Related Agreements;

(i) since the time of their initial filing by the Company, neither the
Plan nor the Disclosure Statement shall have been modified in any material
respect without the prior consent of the Company (which consent shall not
be unreasonably withheld or delayed), withdrawn by Investor or dismissed;

(j) the certificate of incorporation and bylaws of the Company shall
contain the terms contemplated by this Agreement and shall otherwise be
reasonably satisfactory to the Company;

(k) the Plan (including all Securities to be issued pursuant thereto
and all contracts, instruments, agreements and other documents to be
entered into in connection therewith), the Disclosure Statement and the
Confirmation Order shall be consistent with the terms of this Agreement and
otherwise reasonably satisfactory in form and substance to the Company;

(l) the Confirmation Order shall have been entered by the Bankruptcy
Court in form reasonably acceptable to the Company and, once entered, shall
not have been modified in any material respect, shall be in effect and
shall not have been stayed and shall not be subject to any appeal; and

(m) the Effective Date shall have occurred on or prior to the Outside
Date unless the reason therefor shall be attributable to the breach by the
Company of any of its representations, warranties, covenants or obligations
contained herein or in the Procedures Agreement or any Related Agreement.

SECTION 10. Cooperation. (a) The Company and Investor will cooperate in a
commercially reasonable manner, and will use their respective commercially
reasonable efforts, to consummate the transactions contemplated hereby,
including all commercially reasonable efforts to satisfy the conditions
specified in this Agreement. The Company will use commercially reasonable
efforts, and Investor will cooperate in a commercially reasonable manner in
seeking, to obtain all Approvals.

(b) Notwithstanding anything in Section 8 or 9 to the contrary, if prior to
the Outside Date, the Department of Justice or any other Regulatory Authority
raises any antitrust objection to the consummation of the Investment or the
implementation of any Alliance Agreement, which objection has not been resolved
on or before the Outside Date, Investor nevertheless shall be required to
consummate the Investment and, to that end, agrees to timely make such
adjustment to the composition of its partnership and to the Alliance Agreements
as required to resolve such antitrust objection; provided, however, that nothing
in this paragraph (b) shall affect the rights of the Company under Section 9(g)
or obligate the Company to enter into or approve any adjustment or modification
of the Alliance Agreements which, in the Company's reasonable judgment, is
prejudicial to the Company or the Unsecured Parties in any material respect and
which, if

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entered into or approved, would materially impair the Company's ability to
realize the reasonably anticipated benefits of such Alliance Agreements.

SECTION 11. Registration Rights Agreement. Investor and the Company will
enter into a registration rights agreement on terms acceptable to Investor and
the Company. The registration rights agreement will reflect the understanding of
the parties with respect to their registration rights and obligations and will
provide that Investor, its partners and any assignees and transferees, shall
have the right to cause the Company to (i) include the Securities issuable to
Investor pursuant to the Plan (including any such Securities issued or issuable
in respect of the Warrants or by way of any stock dividend or stock split or in
connection with any combination of shares, merger, consolidation or similar
transaction), on customary terms, in "piggyback" underwritings and registrations
and (ii) to effect, on customary terms, one demand registration under the
Securities Act for the public offering and sale of the Securities issued to
Investor under the Plan at any time after the third anniversary of the Effective
Date.

SECTION 12. Applicable Provisions of Law and Regulations. It is
understood and agreed that this Agreement shall not create any obligation of, or
restriction upon, the Company or Investor or the partners of Investor that would
violate applicable provisions of law or regulation relating to ownership or
control of a U.S. air carrier. At all times after the Effective Date, the
certificate of incorporation of the Company shall provide that, in the event
persons who are not U.S. citizens shall own (beneficially or of record) or have
voting control over shares of Common Stock, the voting rights of such persons
shall be subject to automatic suspension as required to ensure that the Company
is in compliance with applicable provisions of law or regulation relating to
ownership or control of a U.S. air carrier.

SECTION 13. Representations and Warranties of the Company. The Company
represents and warrants to Investor as follows:

(a) The Company has complied in all material respects with the terms
of all orders of the Bankruptcy Court in respect of the Investment, this
Agreement and the Procedures Agreement.

(b) The Company has delivered to Investor copies of the audited
balance sheets of the Company as of December 31, 1992 and the statements of
income, stockholders equity and cash flows for the years then ended,
together with the notes thereto. Such financial statements, and when
delivered to Investor the financial statements of the Company referred to
in Section 8(g) will, present fairly, in accordance with generally accepted
accounting principles (applied on a consistent basis except as disclosed in
the footnotes thereto), the financial position and results of operations of
the Company as of the dates and for the periods therein set forth.

(c) When delivered to Investor, the unaudited financial statements of
the Company referred to in Section 15(b)(ii) will (i) present fairly, in
accordance with generally accepted accounting principles (applied on a
consistent basis except as disclosed therein and subject to normal year-end
audit adjustments), the financial position and results of operations of the
Company as of the date and for the period therein set forth, it being
understood and agreed, however, that the foregoing representation relating
to conformity with generally accepted accounting principles is being made
only to the extent such principles are applicable to interim unaudited
reports and (ii) reflect a financial position and results of operations not
materially worse than those set forth in the pro forma financial statements
contained in Plan 9.

(d) The Projections and the Monthly Targets were prepared in good
faith on a reasonable basis, and when prepared represented the Company's
best judgment as to the matters set forth therein, taking into account all
relevant facts and circumstances known to the Company. Nothing has come to
the Company's attention since the dates on which the Projections and the
Monthly Targets, respectively, were prepared which causes the Company to
believe that any of the projections and other information contained therein
were misleading or inaccurate in any material respect as of such dates. It
is specifically understood and agreed that the delivery of the Projections
and the Monthly Targets shall not be regarded as a representation, warranty
or guarantee that the particular results reflected therein will in fact be
achieved or are likely to be achieved.

A-13
<PAGE> 54

(e) No written statement, memorandum, certificate, schedule or other
written information provided (or to be provided) to Investor or any of its
representatives by or on behalf of the Company in connection with the
transactions contemplated hereby, when viewed together with all other
written statements and information provided to Investor and its
representatives by or on behalf of the Company, in light of the
circumstances under which they were made, (i) contains or will contain any
materially misleading statement or (ii) omits or will omit to state any
material fact necessary to make the statements therein not misleading.

(f) The board of directors of the Company has approved the Investment
and Investor's acquisition of Securities hereunder for purposes of, and in
accordance with the provisions and requirements of, Section 203(a)(1) of
the General Corporation Law of the State of Delaware and, as a consequence,
Investor will not be subject to the provisions of such Section with respect
to any "business combination" between Investor and the Company (as such
term is defined in said Section 203).

SECTION 14. Representations and Warranties of Investor. Investor
represents and warrants to the Company as follows:

(a) The general and limited partners of Investor (other than one such
partner which will elect to suspend the voting rights of its Securities as
contemplated by Section 4(b)) are U.S. citizens within the meaning of
Section 101(16) of the Federal Aviation Act of 1958, as amended.

(b) Investor has, or has commitments for, sufficient funds to pay the
Purchase Price and otherwise perform its obligations under this Agreement.

(c) No written statement, memorandum, certificate, schedule or other
written information provided (or to be provided) to the Company or any of
its representatives by or on behalf of Investor in connection with the
transactions contemplated by the Alliance Agreements, when viewed together
with all other written statements and information provided to the Company
and its representatives by or on behalf of Investor, in light of the
circumstances under which they were made, (i) contains or will contain any
materially misleading statement or (ii) omits or will omit to state any
material fact necessary to make the statements therein not misleading.

SECTION 15. Covenants. (a) Investor covenants (i) to support, subject to
management's recommendation, increases in employee compensation through 1995 at
least equal to those set forth in Plan R-2 and (ii) after the Effective Date, to
cause the board of directors of the Company to consider implementation of a
broad based employee incentive compensation plan and a management stock
incentive plan.

(b) The Company covenants (i) to use commercially reasonable efforts to
cause the shelf registration statement referred to in Section 8(u) to remain
effective for three years following its effective date and (ii) as soon as
available, to deliver to Investor a copy of the unaudited balance sheet of the
Company as of the end of each fiscal quarter of the Company prior to the
Effective Date and the unaudited statements of income and cash flows for the
periods then ended.

SECTION 16. Certain Taxes. The Company shall bear and pay all transfer,
stamp or other similar taxes (if any are not exempted under Section 1146 of the
Bankruptcy Code) imposed in connection with the issuance and sale of the
Securities.

SECTION 17. Administrative Expense. All amounts owed to Investor or its
assignees by the Company under this Agreement, the Related Agreements, the
Procedures Agreement and all orders of the Bankruptcy Court in respect thereof
shall be treated as an allowed administrative expense priority claim under
Section 507(a)(1) of the Bankruptcy Code.

SECTION 18. Incorporation by Reference. The provisions set forth in the
Procedures Agreement, including, but not limited to, the provisions regarding
confidentiality, liability indemnity and termination, are hereby incorporated by
reference and such provisions shall have the same force and effect herein as if
they were expressly set forth herein in full.

A-14
<PAGE> 55

SECTION 19. Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) or by prepaid express courier to the parties at the following addresses
or facsimile numbers:

<TABLE>
<C> <S>
If to the Company: America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, Arizona 85034
Attention: William A. Franke and Martin J. Whalen
Fax Number: (602) 693-5904
with a copy to: LeBoeuf, Lamb, Greene & MacRae
633 17th Street, Suite 2800
Denver, Colorado 80202
Attention: Carl A. Eklund
Fax Number: (303) 297-0422
and a copy to: Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Attention: David G. Elkins
Fax Number: (713) 220-4285
and a copy to: Murphy, Weir & Butler
101 California Street, 39th Floor
San Francisco, California 94111
Attention: Patrick A. Murphy
Fax Number: (415) 421-7879
and a copy to: Lord, Bissell and Brook
115 South LaSalle Street
Chicago, IL 60603
Attention: Benjamin Waisbren
Fax Number: (312) 443-0336
If to Investor: AmWest Partners, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: James G. Coulter
Fax Number: (817) 871-4010
with a copy to: Arnold & Porter
1200 New Hampshire Ave., N.W.
Washington, D.C. 20036
Attention: Richard P. Schifter
Fax Number: (202) 872-6720
and a copy to: Jones, Day, Reavis & Pogue
North Point 901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske
Fax Number: (216) 586-7864
</TABLE>

A-15
<PAGE> 56

<TABLE>
<C> <S>
and a copy to: Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Attention: Laura Hodges Taylor, P.C.
Fax Number: (617) 523-1231
and a copy to: Murphy, Weir & Butler
101 California Street, 39th Floor
San Francisco, California 94111
Attention: Patrick A. Murphy
Fax Number: (415) 421-7879
and a copy to: Lord, Bissell and Brook
115 South LaSalle Street
Chicago, IL 60603
Attention: Benjamin Waisbren
Fax Number: (312) 443-0336
</TABLE>

All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail or by express courier in the manner described above to the address as
provided in this Section, be deemed given upon receipt (in each case regardless
of whether such notice is received by any other person to whom a copy of such
notice, request or other communication is to be delivered pursuant to this
Section). Either party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other party hereto.

SECTION 20. Governing Law. Except to the extent inconsistent with the
Bankruptcy Code, this Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of Arizona, without reference
to principles of conflicts or choice of law under which the law of any other
jurisdiction would apply.

SECTION 21. Amendment. This Agreement may only be amended, waived,
supplemented or modified by a written instrument signed by authorized
representatives of Investor and the Company. Investor may extend the time for
satisfaction of the conditions set forth in Section 8 (prior to or after the
relevant date) by notifying the Company in writing. The Company may extend the
time for satisfaction of the conditions set forth in Section 9 (prior to or
after the relevant date) by notifying Investor in writing.

SECTION 22. No Third Party Beneficiary. This Agreement and the Procedures
Agreement are made solely for the benefit of the Company and Investor and their
respective permitted assigns, and no other Person (including, without
limitation, employees, stockholders and creditors of the Company) shall have any
right, claim or cause of action under or by virtue of this Agreement or the
Procedures Agreement, except to the extent such Person is entitled to protection
as contemplated by Section 28(b) or to expense reimbursement pursuant to the
Procedures Agreement or may assert a claim for indemnity pursuant to the
Procedures Agreement.

SECTION 23. Assignment. Except as otherwise provided herein, Investor may
assign all or part of its rights under this Agreement to any of its partners
(each of whom may assign all or part to its Affiliates) or to any fund or
account managed or advised by Fidelity Management Trust Company or any of its
Affiliates and may assign any Securities (or the right to purchase any
Securities) to any lawfully qualified Person or Persons, and the Company may
assign this Agreement to any Person with which it may be merged or consolidated
or to whom substantially all of its assets may be transferred in facilitation of
the consummation of the Plan and the effectuation of the issuance and sale of
the Securities as contemplated hereby or by the Related Agreements. None of such
assignments shall relieve the Company or Investor of any obligations hereunder,
under the Procedures Agreement or under the Related Agreements.

A-16
<PAGE> 57

SECTION 24. Counterparts. This Agreement may be executed by the parties
hereto in counterparts and by telecopy, each of which shall be deemed to
constitute an original and all of which together shall constitute one and the
same instrument. With respect to signatures transmitted by telecopy, upon
request by either party to the other party, an original signature of such other
party shall promptly be substituted for its facsimile.

SECTION 25. Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future laws,
rules or regulations, and if the rights or obligations of Investor and the
Company under this Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable, (b) this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom, and
(d) in lieu of such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible. If the rights and obligations of Investor or the
Company will be materially and adversely affected by any such provision held to
be illegal, invalid or unenforceable, then unless such provision is waived in
writing by the affected party in its sole discretion, this Agreement shall be
null and void.

SECTION 26. Tagalong Rights. On the Effective Date, Investor shall enter
into a written agreement for the benefit of all holders of Class B Common (other
than Investor and its Affiliates) whereby Investor shall agree, for a period of
three years after the Effective Date, not to sell, in a single transaction or
related series of transactions, shares of Common Stock representing 51% or more
of the combined voting power of all shares of Common Stock then outstanding
unless such holders shall have been given a reasonable opportunity to
participate therein on a pro rata basis and at the same price per share and on
the same economic terms and conditions applicable to Investor; provided,
however, that such obligation of Investor shall not apply to any sale of shares
of Common Stock made by Investor (i) to any Affiliate of Investor, (ii) to any
Affiliate of Investor's partners, (iii) pursuant to a bankruptcy or insolvency
proceeding, (iv) pursuant to judicial order, legal process, execution or
attachment, (v) in a widespread distribution registered under the Securities Act
of 1933, as amended ("Securities Act") or (vi) in compliance with the volume
limitations of Rule 144 (or any successor to such Rule) under the Securities
Act.

SECTION 27. Stock Legend. All securities issued to Investor pursuant to
the Plan shall be conspicuously endorsed with an appropriate legend to the
effect that such securities may not be sold, transferred or otherwise disposed
of except in compliance with (i) Section 26 and (ii) applicable securities laws.

SECTION 28. Directors' Liability and Indemnification. (a) Upon, and at
all times after, consummation of the Plan, the certificate of incorporation of
the Company shall contain provisions which (i) eliminate the personal liability
of the Company's former, present and future directors for monetary damages
resulting from breaches of their fiduciary duties to the fullest extent
permitted by applicable law and (ii) require the Company, subject to appropriate
procedures, to indemnify the Company's former, present and future directors and
executive officers to the fullest extent permitted by applicable law. In
addition, upon consummation of the Plan, the Company shall enter into written
agreements with each person who is a director or executive officer of the
Company on the date hereof providing for similar indemnification of such person
and providing that no recourse or liability whatsoever with respect to this
Agreement, the Procedures Agreement, the Related Agreements, the Plan or the
consummation of the transactions contemplated hereby or thereby shall be had,
directly or indirectly, by or in the right of the Company against such person.
Notwithstanding anything contained herein to the contrary, the provisions of
this Section 28(a) shall not be applicable to any person who ceased being a
director of the Company at any time prior to March 1, 1994.

(b) Investor agrees, on behalf of itself and its partners, that no recourse
or liability whatsoever (except as provided by applicable law for intentional
fraud, bad faith or willful misconduct) shall be had, directly or indirectly,
against any person who is a director or executive officer of the Company on the
date hereof with respect to this Agreement, the Procedures Agreement, the
Related Agreements, the Plan or the consumma-

A-17
<PAGE> 58

tion of the transactions contemplated hereby or thereby, such recourse and
liability, if any, being expressly waived and released by Investor and its
partners as a condition of, and in consideration for, the execution and delivery
of this Agreement.

SECTION 29. Jurisdiction of Bankruptcy Court. The parties agree that the
Bankruptcy Court shall have and retain exclusive jurisdiction to enforce and
construe the provisions of this Agreement.

SECTION 30. Interpretation. In this Agreement, unless a contrary
intention appears, (i) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Section or other subdivision and (ii) reference to any Section means
such Section hereof. The Section headings herein are for convenience only and
shall not affect the construction hereof. No provision of this Agreement shall
be interpreted or construed against either party solely because such party or
its legal representative drafted such provision.

SECTION 31. Termination. This Agreement shall terminate concurrently with
the termination of the Procedures Agreement.

SECTION 32. Entire Agreement. The Agreement supersedes any and all other
agreements (oral or written) between the parties in respect to the subject
matter hereof other than the Procedures Agreement.

AMWEST PARTNERS, L.P.

By: AmWest Genpar, Inc.,
its General Partner

By:
--------------------------------------
Title:
--------------------------------------

Accepted and Agreed to
this 21st day of April, 1994.

AMERICA WEST AIRLINES, INC.
as Debtor and Debtor-in-Possession

By:
- - --------------------------------------
Title:
- - --------------------------------------

A-18
<PAGE> 59

PLAN OF REORGANIZATION

EXHIBIT B

STOCKHOLDERS' AGREEMENT
<PAGE> 60

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 61

STOCKHOLDERS' AGREEMENT FOR
AMERICA WEST AIRLINES, INC.

THIS STOCKHOLDERS' AGREEMENT FOR AMERICA WEST AIRLINES, INC. (this
"Agreement") is entered into as of this day of , 1994 by and
among AmWest Partners, L.P., a Texas limited partnership ("AmWest"), GPA Group
plc, a corporation organized under the laws of Ireland ("GPA"),
, and (collectively,
the "Stockholder Representatives"), and America West Airlines, Inc., a Delaware
corporation (the "Company").

RECITALS:

WHEREAS, on June 27, 1991, the Company filed a case seeking relief under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
District of Arizona (the "Bankruptcy Court"); and

WHEREAS, on December 8, 1993, the Bankruptcy Court entered an Order on
Motion to Establish Procedures for Submission of Investment Proposals (the
"Procedures Order"); and

WHEREAS, pursuant to the Procedures Order, AmWest and the Company have
entered into that certain Third Revised Investment Agreement dated April 21,
1994 (the "Investment Agreement"), contemplating an investment by AmWest in the
Company (the "Investment") and providing for the consummation of the Company's
Plan of Reorganization (the "Plan"); and

WHEREAS, on , 1994, the Bankruptcy Court entered an order
confirming the Plan; and

WHEREAS, in consideration of the Investment, the Company has issued common
stock of the Company ("Common Stock") consisting of Class A Common Stock ("Class
A Common") and Class B Common Stock ("Class B Common") and warrants to purchase
Class B Common to AmWest; and

WHEREAS, in exchange for the release and modification of certain agreements
and claims, the Company has issued shares of Class B Common and warrants to
purchase Class B Common to GPA; and

WHEREAS, pursuant to Section 6(b) of the Investment Agreement, the Official
Committee of Equity Holders of America West Airlines, Inc., appointed in the
Company's Chapter 11 case (the "Equity Committee") has appointed
as a Stockholder Representative; and

WHEREAS, pursuant to Section 6(b) of the Investment Agreement, the Official
Committee of Unsecured Creditors of America West Airlines, Inc., appointed in
the Company's Chapter 11 case (the "Creditors' Committee") has appointed
as a Stockholder Representative; and

WHEREAS, pursuant to Section 6(b) of the Investment Agreement, the Board of
Directors of the Company, as constituted prior to consummation of the Plan, has
appointed as a Stockholder Representative; and

WHEREAS, the parties hereto have agreed to enter into this Agreement
pursuant to Section 218(c) of Title 8 of the Delaware Code (the "General
Corporation Law").

NOW, THEREFORE, in consideration of the premises herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. DEFINITIONS.

"Affiliate" shall mean (i) when used with reference to any partnership, any
person or entity that, directly or indirectly, owns or controls ten percent
(10%) or more of either the capital or profit interests of such partnership or
is a partner of such partnership or is a person or entity in which such
partnership has a ten percent (10%) or greater direct or indirect equity
interest and (ii) when used with reference to any corporation, any person or
entity that, directly or indirectly, owns or controls ten percent (10%) or more
of the outstanding voting securities of such corporation or is a person or
entity in which such corporation has a ten percent (10%) or greater direct or
indirect equity interest. In addition, the term "Affiliate," when used with

B-1
<PAGE> 62

reference to any person or entity, shall also mean any other person or entity
that, directly or indirectly, controls or is controlled by or is under common
control with such person or entity. As used in the preceding sentence, (A) the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of the entity
referred to, whether through ownership of voting securities, by contract or
otherwise and (B) the terms "controlling" and "controls" shall have meanings
correlative to the foregoing. Notwithstanding the foregoing, neither the Company
nor any Fidelity Fund will be deemed to be an Affiliate of AmWest or any of its
partners.

"Alliance Agreements" shall have the meaning set forth in the Investment
Agreement.

"AmWest Director" shall mean a director of the Company designated by AmWest
pursuant to Section 2.1(a).

"Annual Meeting" shall mean an annual meeting of the shareholders of the
Company.

"Board" shall mean the Company's Board of Directors.

"Bylaws" shall mean the Restated Bylaws adopted by the Company in
accordance with Section 303 of the General Corporation Law pursuant to the Plan.

"Citizens of the United States" shall have the meaning set forth in Section
1301, Title 49, United States Code, as now in effect or as it may hereafter from
time to time be amended.

"Continental" shall mean Continental Airlines, Inc. or any successor.

"Creditors' Committee Director" shall mean a director of the Company
designated by the Creditors' Committee or otherwise pursuant to Section 2.1(b).

"Effective Date" shall mean the date upon which the Restated Certificate of
Incorporation becomes effective in accordance with the Plan and the General
Corporation Law.

"Equity Committee Director" shall mean a director of the Company designated
by the Equity Committee or otherwise pursuant to Section 2.1(b).

"Fidelity Fund" shall mean a fund or account managed or advised by Fidelity
Management Trust Company or any of its Affiliates or successor(s).

"GPA Director" shall mean a director of the Company designated by GPA
pursuant to Section 2.1(c).

"Independent Company Director" shall mean a director of the Company
designated pursuant to Section 2.1(b).

"Independent Directors" shall mean, collectively, the Creditors' Committee
Directors, the Equity Committee Director, and the Independent Company Director.

"Mesa" shall mean Mesa Airlines, Inc. or any successor.

"Public Offering" shall have the meaning set forth in Section 4.2.

"Restated Certificate of Incorporation" shall mean the Restated Certificate
of Incorporation adopted by the Company in accordance with Section 303 of the
General Corporation Law pursuant to the Plan.

"Stockholder Representatives" shall mean the persons identified as such in
the recitals set forth above; provided that in the case of the death,
resignation, removal or disability of a Stockholder Representative, his or her
successor shall be designated by the remaining Stockholder Representatives, and
upon providing a written acknowledgment to such effect to all other parties
hereto and agreeing to be bound and subject to the terms hereof, shall become a
Stockholder Representative.

"Third Annual Meeting" shall mean the first Annual Meeting after the third
anniversary of the Effective Date.

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<PAGE> 63

2. DESIGNATION AND VOTING FOR COMPANY DIRECTORS.

2.1 Until the Third Annual Meeting, subject to the exception set forth in
Section 4.7(a), the Board shall consist of up to fifteen (15) persons, of whom
nine (9) persons shall be AmWest Directors, five (5) persons shall be
Independent Directors and up to one (1) person shall be a GPA Director, all
designated in accordance with the following procedure:

(a) The AmWest Directors designated on Exhibit A hereto shall serve
until the first Annual Meeting following the Effective Date and until the
successor to each such director shall be duly elected and qualified, or
until their death, disability, removal or resignation. No less than thirty
(30) days in advance of each Annual Meeting prior to (but not including)
the Third Annual Meeting, and no less than five (5) days in advance of any
other meeting of the Board at which a director will be elected to sit on
the Board in a seat vacated by an AmWest Director because of death,
disability, removal, resignation, or otherwise, AmWest shall give written
notice to the other parties hereto designating the individual or
individuals to serve as AmWest Directors. For so long as AmWest and/or its
Affiliates holds at least five percent (5%) of the voting equity securities
of the Company, GPA agrees to vote the Common Stock held and controlled by
it and to cause the GPA Director to vote or provide written consents in
favor of such designees and to take any other action necessary to elect
such designees. The Stockholder Representatives agree to recommend to the
Independent Directors to vote or provide written consents in favor of such
designees and to take any other action necessary to elect such designees.

(b) Three (3) Creditors' Committee Directors, one (1) Equity Committee
Director, and one (1) Independent Company Director, each as designated on
Exhibit A hereto, shall serve until the first Annual Meeting following the
Effective Date and until the successor to each such director shall be duly
elected and qualified, or until their death, disability, removal or
resignation. Until the Third Annual Meeting, the Company shall nominate for
reelection, and AmWest and GPA shall vote the Common Stock held and
controlled by them in favor of, each Independent Director designated on
Exhibit A for so long as he or she continues to serve on the Board. No less
than five (5) days in advance of any meeting of the Board at which a
director will be elected to sit on the Board in a seat vacated by an
Independent Director because of death, disability, removal, resignation or
otherwise (a "Successor Independent Director"), and no less than thirty
(30) days in advance of an Annual Meeting prior to (but not including) the
Third Annual Meeting at which the term of any Successor Independent
Director will expire, the Stockholder Representatives shall give written
notice to the other parties hereto designating the individuals to serve as
Independent Directors; except that if the Creditors' Committee or the
Equity Committee remain in effect, they shall have the right to designate
the Creditors' Committee Directors and the Equity Committee Director,
respectively, or the individuals to fill vacancies thereof, by giving
written notice to the other parties hereto in accordance with the terms set
forth above and provided that the Stockholder Representatives shall select
any Successor Independent Director to replace the Independent Company
Director from among the executive officers of the Company. Each of AmWest
and GPA agrees to vote the Common Stock held and controlled by them and to
cause the AmWest Directors and the GPA Director, respectively, to vote or
provide written consents in favor of such designees and to take any other
action necessary to elect such designees; provided that each Independent
Director shall be reasonably acceptable to AmWest at the time of his or her
initial designation.

(c) The GPA Director designated on Exhibit A hereto shall serve until
the first Annual Meeting following the Effective Date and until the
successor to such director shall be duly elected and qualified or until his
or her death, disability, removal, or resignation. No less than thirty (30)
days in advance of each Annual Meeting prior to (but not including) the
Third Annual Meeting, and no less than five (5) days in advance of any
other meeting of the Board at which a director will be elected to sit on
the Board in a seat vacated by the GPA Director because of death,
disability, removal, resignation or otherwise, GPA shall give written
notice to the other parties hereto designating the individual to serve as
GPA Director. Unless the rights of GPA hereunder have been terminated
pursuant to Section 6.2, AmWest agrees to vote the Common Stock held and
controlled by it, and to cause the AmWest Directors, and the Stockholder
Representatives agree to recommend to the Independent Directors, to vote or
provide written consents in

B-3
<PAGE> 64

favor of such designee and to take any other action necessary to elect such
designee; provided that the GPA Director shall be reasonably acceptable to
AmWest at the time of his or her initial designation.

(d) Except as otherwise provided herein, each of AmWest, the
Stockholder Representatives, and GPA agrees to nominate or cause the
nomination of the AmWest Directors, the Independent Directors, and the GPA
Director, respectively, in accordance with the Bylaws.

(e) Notwithstanding the foregoing, no party hereto shall be obligated
to vote any shares for which the voting rights have been suspended, whether
voluntarily or involuntarily.

(f) In the event that AmWest, the Creditors' Committee or Equity
Committee (for so long as each is in existence and has the ability to
designate a director as herein provided), the Stockholder Representatives,
or GPA shall fail or refuse to designate a nominee to the Board for a
position allocated to and to be filled by such group or entity as herein
provided, such position shall not be filled and shall remain vacant unless
and until such designation shall be made as herein provided.

(g) In the event that the rights and obligations of GPA with respect
to this Agreement are terminated in accordance with Section 6.2, GPA agrees
to cause the resignation of, or provide notice to the other parties hereto
as provided in subsection (h)(i) below requesting removal of the GPA
Director, at which time the Board shall be reduced to fourteen (14)
persons.

(h) The parties hereto agree to (i) vote the Common Stock held and
controlled by them in favor of the removal from the Board, upon notice by
the group or entity having the right to designate such director under this
Section 2.1 and requesting such removal, of any person or persons
designated to the Board by such group or entity, and (ii) to vote the
Common Stock held and controlled by them (other than stock held
individually by any Stockholder Representative) and to cause (or in the
case of the Stockholder Representatives, recommend to) the directors
designated by them to vote or take such action as may be required under the
General Corporation Law or otherwise to implement the provisions of this
Agreement. The group or entity who has nominated any director in accordance
with this Agreement shall have the exclusive right to remove or replace
such director by written notice as herein provided; except that nothing in
this agreement shall be construed to limit or prohibit the removal of any
director for cause.

2.2 Until the Third Annual Meeting, at least eight of the AmWest Directors,
at least two of the Creditors' Committee Directors, the Equity Committee
Director, and the Independent Company Director shall each be Citizens of the
United States.

2.3 AmWest agrees that no AmWest Director shall be an officer or employee
of Continental.

3. VOTING ON CERTAIN MATTERS.

3.1 Any Director who is selected by, or who is a director of, Continental
shall recuse himself or herself from voting on, or otherwise receiving any
confidential information regarding, matters in connection with negotiations
between Continental and the Company (including, without limitation, negotiation
between Continental and the Company of the Alliance Agreements) and matters in
connection with any action involving direct competition between Continental and
the Company. Any Director who is selected by, or who is a director, officer or
employee of, Mesa shall recuse himself or herself from voting on, or otherwise
receiving any confidential information regarding, matters in connection with
negotiations between Mesa and the Company (including, without limitation,
negotiation between Mesa and the Company of the Alliance Agreements) and matters
in connection with any action involving direct competition between Mesa and the
Company.

3.2 Until the Third Annual Meeting, the affirmative vote of the holders of
a majority of the voting power of the outstanding shares of each class of common
stock of the Company entitled to vote (excluding any shares owned by AmWest or
any of its Affiliates, but not, however, excluding shares owned, controlled or
voted by Mesa or any of its transferees that are not otherwise Affiliates of
AmWest), voting as a single class, shall be required to approve, adopt or
authorize:

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<PAGE> 65

(a) Any merger or consolidation of the Company with or into AmWest or
any Affiliate of AmWest;

(b) Any sale, lease, exchange, transfer, or other disposition by the
Company of all or any substantial part of the assets of the Company to
AmWest or any Affiliate of AmWest;

(c) Any transaction with or involving the Company as a result of which
AmWest or any of AmWest's Affiliates will, as a result of issuances of
voting securities by the Company (or any other securities convertible into
or exchangeable for such voting securities), acquire an increased
percentage ownership of such voting securities, except for (i) the exercise
of Warrants issued under the Plan, (ii) the conversion of Class A Common
held by it to Class B Common, or (iii) otherwise pursuant to a transaction
in which all holders of Class B Common may participate on a pro rata basis
at the same price per share and on the same economic terms, including,
without limitation, (A) a tender or exchange offer for all shares of the
Common Stock and (B) a Public Offering; or

(d) Any related series or combination of transactions having or which
will have, directly or indirectly, the same effect as any of the foregoing.

At the request of any party proposing such a transaction and subject to
approval by the Board, the Company agrees to put to a vote of the shareholders
the approval of any transaction referred to in subparagraphs (a) through (d)
above (excluding the excepted transactions referred to in clauses (i), (ii), and
(iii) of subparagraph (c)) at the next regular or any duly convened special
meeting of the shareholders of the Company. The voting requirements specified
above shall not be applicable to a proposed action which has been approved or
recommended by at least three Independent Directors.

4. FURTHER COVENANTS.

4.1 Neither AmWest nor any partner or Affiliate of AmWest or of any partner
of AmWest shall sell or otherwise transfer any Common Stock (other than to an
Affiliate of the transferor) if, after giving effect thereto and to any related
transaction, the total number of shares of Class B Common beneficially owned by
the transferor is less than twice the total number of shares of Class A Common
beneficially owned by the transferor; provided, however, that nothing contained
in this Section 4.1 shall prohibit any owner of Common Stock from selling or
otherwise transferring, in a single transaction or related series of
transactions, all shares of Common Stock owned by it, subject to the remaining
provisions of this Agreement.

4.2 AmWest agrees that its constituent documents shall at all times require
that this Agreement be binding upon all general and limited partners of AmWest
and any Affiliate of AmWest or such partners who hold or receive shares of the
Company for their own account or direct the voting of any shares held by AmWest
and upon any assignees or transferees in a single transaction or a related
series of transactions of all or substantially all of the Common Stock owned by
AmWest or any of its partners or Affiliates of AmWest or any of their partners;
except any assignment or transfer made contemporaneous with the consummation of
the Plan to any Fidelity Fund or Funds; and except any assignee or transferee
who acquires such Common Stock pursuant to (i) a tender or exchange offer open
to all shareholders of the Company on a pro rata basis at the same price per
share and on the same economic terms, (ii) a distribution registered under the
Securities Act of 1933 (as amended, the "Securities Act") (a "Public Offering"),
or (iii) a transfer made pursuant to Rule 144 (as amended, "Rule 144") under the
Securities Act. AmWest shall not sell or transfer (including upon dissolution of
AmWest) any Common Stock held by it to any of its general or limited partners,
to any Fidelity Fund, or to any Affiliate of AmWest or such partners and AmWest
shall not sell or transfer all or substantially all of the Common Stock held by
it in a single transaction or a related series of transactions, except in
accordance with clauses (i), (ii) or (iii), above, unless and until it causes
any assignee or transferee to provide a written acknowledgment to the other
parties hereto that it accepts and is bound and subject to the terms of this
Agreement.

4.3 AmWest covenants and agrees that it shall not sell, in a single
transaction or a related series of transactions, shares of Common Stock
representing fifty one percent (51%) or more of the combined voting power of all
shares of Common Stock then outstanding, other than (i) pursuant to or in
connection with a tender or exchange offer for all shares of Common Stock and
for the benefit of all holders of Class B Common

B-5
<PAGE> 66

on a pro rata basis at the same price per share and on the same economic terms,
(ii) to any Affiliate of AmWest, (iii) to any Affiliate of AmWest's partners,
(iv) pursuant to a bankruptcy or insolvency proceeding, (v) pursuant to a
judicial order, legal process, execution or attachment, or (vi) in a Public
Offering.

4.4 Within ten (10) days of the Effective Date, AmWest shall file with the
Securities and Exchange Commission, a Schedule 13D pursuant to Regulation 13D-G
("Regulation 13D-G") under the Securities Exchange Act of 1934 (as amended, the
"Exchange Act"), and shall amend such filing as required by Regulation 13D-G.
Each other party hereto covered by such filing covenants and agrees to promptly
provide to AmWest all information pertaining to such party and necessary to make
such amendments and to notify AmWest of any changes in facts or circumstances
pertaining to such party that would require any amendments under Regulation
13D-G.

4.5 AmWest agrees that it shall not cause any amendment to the provisions
of the Restated Certificate of Incorporation or the Bylaws or otherwise take any
action that supersedes or materially adversely affects or impairs the rights and
obligations of the parties under this Agreement or is contrary to the provisions
of this Agreement.

4.6 (a) Each certificate evidencing shares of Common Stock issued to AmWest
or any of its partners, GPA and any of their respective Affiliates, and any
assignee or transferee bound by the terms hereof, including shares of Common
Stock issued in connection with the exercise of any warrant, so long as such
Common Stock is held by them and prior to the termination or expiration of this
Agreement, shall be conspicuously stamped or marked with a legend including
substantially as follows:

THE RIGHTS AND OBLIGATIONS OF THE HOLDER OF THIS CERTIFICATE SHALL BE
SUBJECT TO THE TERMS AND PROVISIONS OF THAT CERTAIN STOCKHOLDERS' AGREEMENT
DATED , 1994, COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL
OFFICE OF AMERICA WEST AIRLINES, INC.

and each such certificate, for so long as such certificate is held by AmWest or
any of its partners and any of their respective Affiliates and any assignee or
transferee bound by the terms hereof and prior to the termination or expiration
of this Agreement, shall include in such legend the following:

THIS CERTIFICATE AND ANY INTEREST HEREIN MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE AFORESAID STOCKHOLDERS'
AGREEMENT.

(b) All certificates evidencing shares of Common Stock and warrants of the
Company that have not been registered pursuant to the Securities Act of 1933, as
amended, and that are not exempt from registration under Section 1145 of the
Bankruptcy Code, shall at all times be conspicuously stamped or marked with a
legend including substantially as follows:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
THEREUNDER (THE "SECURITIES ACT") OR UNDER THE SECURITIES LAWS OF ANY
STATE; AND SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED OTHER THAN IN
ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR AN
EXEMPTION THEREFROM AND FROM ANY APPLICABLE STATE SECURITIES LAWS.

(c) Upon the termination of this Agreement, the Company shall, without
charge and upon surrender of certificates by the holders thereof and written
request cancel all certificates evidencing shares of Common Stock bearing the
legend described in subparagraph (a) above and issue to the holders thereof
replacement certificates that do not bear such a legend for an equal number of
shares held by such holders. Upon the transfer of any Common Stock bearing the
legend described in subparagraph (a) above to a party not bound and subject to
by this Agreement, the Company shall, without charge and upon the surrender of
certificates by

B-6
<PAGE> 67

the holders thereof and written request cancel all certificates evidencing such
shares of Common Stock and issue to the transferee thereof replacement
certificates that do not bear such a legend.

4.7 During the term of this Agreement, AmWest shall not cause the issuance
of any preferred stock that would (a) increase the number of directors in excess
of the number provided in Section 2.1 (except for increases caused by a
provision allowing holders of preferred stock to elect additional directors in
the event of nonpayment of dividends) or (b) eliminate or reduce the number of
Creditors' Committee Directors, Equity Committee Director, Independent Company
Director, or GPA Director.

5. RIGHTS UPON BREACH.

5.1 Each party hereto recognizes and agrees that a violation of any term,
provision, or condition of this Agreement may cause irreparable damage to the
other parties which is difficult or impossible to quantify or ascertain and that
the award of any sum of damages may not be adequate relief to such other
parties. Each party hereto therefore agrees that in the event of any breach of
this Agreement, the other party or parties shall, in addition to any remedies at
law which may be available, have the right to obtain appropriate equitable
(including, but not limited to, injunctive) relief. All remedies hereunder shall
be cumulative and not exclusive.

5.2 In addition to any other remedies available at law or in equity, each
party hereto agrees that the Company shall have the right (a) to withhold
transfer, and to instruct any transfer agent for securities of the Company to
withhold transfer, of any certificates evidencing shares of Common Stock held by
AmWest or any partner or Affiliate of AmWest or transferee if the Company
reasonably believes that such transfer would not be in material compliance with
the terms and provisions of this Agreement, unless the transferee provides to
the Company an opinion of legal counsel reasonably acceptable to the Company
that such transfer will be in material compliance with the terms and provisions
hereof, and (b) to require any person requesting such transfer to provide such
information as may reasonably be requested by the Company regarding ownership of
securities, affiliations, if any, between AmWest and the transferee and such
other matters pertaining to the transfer as may be appropriate to enable the
Company to determine the compliance of the proposed transfer of securities with
the terms and provisions of this Agreement.

6. TERMINATION.

6.1 This Agreement shall automatically terminate without any action by any
party on the day immediately preceding the Third Annual Meeting and shall not be
extended except in accordance with Section 7.3. Upon such termination, the
rights and obligations of each party hereunder shall terminate and the
provisions of this Agreement shall be of no force and effect; provided that no
such termination shall relieve any person or entity from liability for breach or
default of this Agreement prior to such termination.

6.2 GPA's rights and obligations under this Agreement (other than its
obligations under Section 2.1(g)) shall terminate immediately and without notice
upon the earlier of (a) termination of this Agreement under Section 6.1, (b) the
sale or transfer by GPA of equity securities of the Company resulting in the
holding by GPA of less than two percent (2%) of the voting equity securities of
the Company (on a fully diluted basis), or (c) any occurrence, other than as
described in clause (b) above, resulting in the holding by GPA of less than two
percent (2%) of the voting equity securities of the Company (on a fully diluted
basis) if (i) the Company files a Form 10-Q under the Exchange Act, or other
written report or statement, that is delivered to GPA and a copy to the party
designated in Section 7.1, reflecting information as to the Company's total
issued and capital stock from which GPA can determine whether it holds less than
two percent (2%) of the voting equity securities of the Company (on a fully
diluted basis) and (ii) GPA continues to hold less than two percent (2%) of the
voting equity securities (on a fully diluted basis) for greater than thirty-five
(35) days after delivery of such Form 10-Q, or provision of such report or
statement to GPA. GPA acknowledges that the Company's continuing with its
existing procedures for the distribution of Form-10-Qs constitutes delivery to
GPA within the meaning of this Section 6.2.

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<PAGE> 68

7. MISCELLANEOUS.

7.1 All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
or by facsimile transmission or mailed (first class postage prepaid) or by
prepaid express courier at the following addresses or facsimile numbers:

<TABLE>
<S> <C>
If to AmWest: AmWest Partners, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: James G. Coulter
Fax Number: (817) 871-4010
with a copy to: Arnold & Porter
1200 New Hampshire Ave., N.W.
Washington, D.C. 20036
Attention: Richard P. Schifter
Fax Number: (202) 872-6720
and a copy to: Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske
Fax Number: (216) 586-7864
If to GPA: GPA Group plc
GPA House
Shannon, Ireland
Attention: Patrick H. Blaney
Fax Number: 353 61 360220
with a copy to: Paul, Hastings, Janofsky & Walker
399 Park Avenue, 31st Floor
New York, New York 10022
Attention: Marguerite R. Kahn
Fax Number: (212) 319-4090
If to
:
If to
:
If to
:
If to the Company: America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, Arizona 85034
Attention: General Counsel
Fax Number: (602) 693-5904
with a copy to: Andrews & Kurth, L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Attention: David G. Elkins
Fax Number: (713) 220-4285
</TABLE>

All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 7.1, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 7.1, be deemed given upon receipt, and (iii) if
delivered by mail or by express courier in the manner described above to the
address as provided in this Section 7.1, be deemed given upon receipt (in each
case regardless of whether such notice is received by any other person to whom a
copy of

B-8
<PAGE> 69

such notice, request or other communication is to be delivered pursuant to this
Section 7.1). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice as provided in this Section 7.1 specifying such change to the other
parties hereto. Nothing in this Section 7.1 shall be deemed or construed to
alter the notice provisions contained in the Bylaws.

7.2 This Agreement shall in all respects be governed by and construed in
accordance with the laws of the State of Delaware without reference to
principles of conflicts or choice of law under which the law of any other
jurisdiction would apply.

7.3 This Agreement may only be amended, waived, supplemented, modified or
extended by a written instrument signed by authorized representatives of each
party hereto.

7.4 This Agreement shall inure to the benefit of and be binding upon each
of the parties hereto and their respective successors and permitted assigns.

7.5 This Agreement may be executed by the parties hereto in counterparts
and by telecopy, each of which shall be deemed to constitute an original and all
of which together shall constitute one and the same instrument.

7.6 If any term or provision of this Agreement shall be found by a court
of competent jurisdiction to be illegal, invalid or unenforceable to any extent,
the remainder of this Agreement shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.

7.7 The parties hereto intend that in the case of any conflict or
inconsistency between this Agreement and the Restated Certificate of
Incorporation or the Bylaws, that this Agreement shall control, and therefore in
the event that any term or provision of this Agreement is rendered invalid,
illegal or unenforceable by the Restated Certificate of Incorporation or the
Bylaws, the parties agree to amend the Restated Certificate of Incorporation or
the Bylaws (as the case may be) so as to render such term or provision valid,
legal and enforceable, if and to the extent possible.

B-9
<PAGE> 70

IN WITNESS WHEREOF, the parties hereto, by their respective officers
thereunto duly authorized, have executed this Agreement as of the date first
written above.

AMWEST PARTNERS, L.P.

By: AmWest Genpar, Inc.,
its General Partner

By:
Name:
Title:

GPA GROUP PLC

By:
Name:
Title:

[Stockholder Representative]

AMERICA WEST AIRLINES, INC.

By:
Name:
Title:

B-10
<PAGE> 71

PLAN OF REORGANIZATION

EXHIBIT C

GPA TERM SHEET
<PAGE> 72

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 73

GPA TERM SHEET

This Term Sheet, dated as of June 13, 1994, sets forth the principal terms
and conditions (the "Terms and Conditions") of the treatment to be afforded to
the claims and interests of GPA Group plc and its affiliates (individually and
collectively, "GPA") pursuant to a joint plan of reorganization (the "Plan") of
America West Airlines, Inc. (the "Company") to be proposed and sponsored by the
Company in conjunction with AmWest Partners, L.P. ("AmWest") under and in
accordance with the Third Revised Investment Agreement, dated as of April 21,
1994, between the Company and AmWest (the "Investment Agreement") and the Third
Revised Interim Procedures Agreement, dated as of April 21, 1994, between the
Company and AmWest (the "Interim Procedures Agreement"). Except as otherwise
defined herein, capitalized terms used herein have the meanings stated in the
Investment Agreement.

Termination of
Put Agreement............ On the Effective Date, GPA shall (i) cancel all
rights of GPA to put any aircraft to the Company
pursuant to the A320 Put Agreement, dated as of
June 25, 1991, between the Company and GPA, as
amended by the First Amendment thereto, dated as of
September 1, 1992 (as so amended, the "Put
Agreement") and the related Agreement Regarding
Rights of First Refusal for A320 Aircraft, dated as
of September 1, 1992 (the "First Refusal
Agreement"), among the Company, GPA and Kawasaki
Leasing International Inc., and (ii) waive, and
covenant not to seek or assert, any and all claims
of any kind or nature arising out of or in
connection with the Put Agreement and/or the First
Refusal Agreement, other than claims for
reimbursement of expenses incurred by GPA in
connection therewith. As of the date of this Term
Sheet, GPA has been fully reimbursed by the Company
for all expenses incurred by GPA in connection with
the Put Agreement and the First Refusal Agreement.

Aircraft and Engine
Subleases.................. On the Effective Date, the Company shall ratify
(without modification or amendment) all of its
obligations (including, without limitation, rental
obligations) under and in connection with (i) the
sixteen separate Aircraft Sublease Agreements
between the Company and GPA, and (ii) the three
separate Engine Sublease Agreements between the
Company and GPA (in each case, as such Sublease
Agreement is more fully described on Schedule I to
the Put Agreement and, in each case, as such
Sublease Agreement was assumed by the Company
pursuant to Section 365 of the Bankruptcy Code).

DIP Financing.............. On the Effective Date, all amounts due and owing by
the Company under the debtor-in-possession
financing provided to the Company by GPA and other
debtor-in-possession lenders shall be paid in full
(it being understood that, upon receipt of such
amounts, GPA shall take all such actions as are
required to be taken by GPA pursuant to the
documents relating to such financing to cause and
evidence the release of all liens securing such
financing and the termination of the transactions
relating to such financing).

Common Stock............... On the Effective Date, GPA shall receive 900,000
shares of the Class B Common Stock of the Company
(the "Class B Common Stock"), which shares shall
represent two percent of the total amount of the
Common Stock of the Company (without giving effect
to exercise of the warrants described below and in
the Investment Agreement) and which Class B Common
Stock shall have the terms and provisions
contemplated in the Investment Agreement.

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<PAGE> 74

Warrants................... On the Effective Date, GPA shall receive warrants
to purchase up to 1,384,615 shares of Class B
Common Stock, which shares shall represent 2.5% of
the Common Stock of the Company on a fully diluted
basis and which warrants shall be exercisable at a
price determined in accordance with, and have such
other terms and provisions as are described in, the
Plan.

Cash....................... On the Effective Date, GPA shall receive
$30,525,000 in cash.

Board Seat................. Pursuant to and in accordance with the terms,
provisions and conditions to be contained in a
Stockholders' Agreement to be entered into among
the reorganized Company, AmWest, GPA and certain
other parties, and for so long as GPA owns at least
two percent of the voting equity securities of the
Company (on a fully diluted basis), GPA shall be
allocated one seat, out of a total of fifteen
seats, on the Board of Directors of the reorganized
Company. The member of the Board of Directors of
the reorganized Company designated by GPA shall be
reasonably acceptable to AmWest at the time of his
or her initial designation (it being understood
that each of the persons currently serving as
"independent directors" of AWA, Patrick Blaney,
John Tierney and Declan Traecy shall be acceptable
to AmWest for such purposes). AmWest and GPA will
execute a voting agreement or similar arrangement
pursuant to which (i) AmWest will agree to vote in
favor of GPA's nominee to the Board of Directors of
the reorganized Company, and (ii) GPA will agree to
vote in favor of AmWest's nine nominees to the
Board of Directors of the reorganized Company, in
each case, for so long as (a) AmWest owns at least
five percent of the voting equity securities of the
Company (on a fully diluted basis), and (b) GPA
owns at least two percent of the voting equity
securities of the Company (on a fully diluted
basis).

New Puts................... GPA will be granted the right to deliver or put to
the Company, and the Company will be obligated to
lease from GPA, during the period beginning not
later than June 30, 1995 and ending on June 30,
1999 (the "New Put Period"), up to eight new or
used aircraft of types consistent with the
Company's fleet plan and requirements (such right
being referred to herein as the "New Put Right").

Each lease entered into by the Company in
connection with the exercise by GPA of the New Put
Right shall provide for the payment by the Company
of a fair market rental for the related aircraft,
taking into consideration whether the related
aircraft is new or used, the specifications and
condition of the related aircraft and all
provisions of such lease that are relevant to the
overall cost to the Company of the related
aircraft, and determined at or about the time of
delivery of such aircraft to the Company on the
basis of operating lease rentals then prevailing in
the marketplace for comparable operating leases of
comparable aircraft to airlines of comparable
creditworthiness to the Company (at or about the
time of delivery of such aircraft to the Company
and without regard to the prior pendency of the
Case); each such lease will be for a lease term
determined as hereinafter described; and each such
lease shall have such other terms and provisions
and be in such form as is agreed upon by the
Company and GPA and attached to the agreement
between the Company and GPA pursuant to which GPA
is granted the New Put

C-2
<PAGE> 75

Right (such agreement being referred to
herein as the "New Put Agreement").

The specific number, types and delivery dates for
the aircraft which GPA will be entitled to deliver
to the Company (and which the Company will be
obligated to lease from GPA) in a particular year
during the New Put Period (as well as whether such
aircraft will be new or used aircraft) will be
determined on the basis of mutual agreement by the
Company and GPA, taking into account the Company's
fleet requirements for such year, the availability
to GPA for purposes of the New Put Agreement (in
light of applicable commercial constraints) of
aircraft during such year and the number of
aircraft theretofore delivered and thereafter
remaining to be delivered by GPA to the Company
under the New Put Agreement; provided, however,
that if, on or prior to the Mutual Agreement
Deadline (as such term is hereinafter defined) for
a particular year, the Company and GPA shall not
have mutually agreed upon the specific number,
types and delivery dates for the aircraft which GPA
will be entitled to deliver to the Company (and
which the Company will be obligated to lease from
GPA) during such year (as well as whether such
aircraft will be new or used aircraft), GPA will
have the right to put to the Company (and the
Company will be obligated to lease from GPA without
any necessity for further agreement of the Company)
up to the Maximum Number (as such term is
hereinafter defined) of aircraft for such year,
with (i) the specific types of such aircraft being
selected by GPA from among the Eligible Types (as
such term is hereinafter defined), (ii) such
aircraft being new or used aircraft as selected by
GPA, and (iii) the specific delivery dates for such
aircraft being selected by GPA, in each case, upon
at least 150 days' prior written notice by GPA to
the Company; and provided further, however, that,
unless GPA and the Company shall otherwise agree in
writing (whether by reason of mutual agreement
relevant to a particular year or otherwise), GPA
will not have the right to put to the Company more
than five used aircraft during the New Put Period.
As used herein, the term "Mutual Agreement
Deadline" means (i) with respect to each of 1995
and 1996, January 31, 1995, and (ii) with respect
to each ensuing year during the New Put Period,
January 1st of the preceding year. As used herein,
the term "Maximum Number" means (i) with respect to
1995, two, and (ii) with respect to each ensuing
year during the New Put Period, three. As used
herein, and unless GPA and the Company shall
otherwise agree in writing, the term "Eligible
Types" means, with respect to the types of aircraft
which GPA will be entitled to put to the Company
without the necessity for further agreement of the
Company, Boeing 737-300 aircraft, Boeing 757
aircraft and Airbus A320 aircraft.

The aircraft which GPA will be entitled to deliver
or put to the Company (and which the Company will
be obligated to lease from GPA) may be new or used
aircraft; provided, however, that unless GPA and
the Company shall otherwise agree in writing, GPA
will not have the right to deliver or put to the
Company more than five used aircraft during the New
Put Period; and provided further, however, that any
such aircraft which is an Airbus A320 aircraft will
(i) be new ex factory or like-new having no greater
than 100 flight hours of commercial service, (ii)
have IAE V2500A-5 engines if (a) the Company has or
is scheduled to have IAE V2500A-5 engines in its
fleet on the delivery date for such aircraft,

C-3
<PAGE> 76

(b) the Company is scheduled to have IAE
V2500A-5 engines in its fleet within 24
months of the delivery date for such
aircraft, or (c) if new A320 aircraft
powered with IAE V2500A-1 engines are not
or are not scheduled to be generally
available from the airframe and engine
manufacturers on the delivery date for
such aircraft, or have IAE V2500A-1
Engines (upgraded to maximum performance)
if any of the conditions described in the
preceding clauses (a), (b) and (c) is not
fulfilled, and (iii) have such other
specifications (including configuration)
as are substantially the same as those of
other A320 aircraft in the Company's fleet
or as are otherwise mutually agreed upon
by GPA and the Company and, in either
case, incorporated in the New Put
Agreement; and provided further, however,
that any such aircraft which is not an
A320 aircraft will have such
specifications (including configuration
and engines) as are substantially the same
as those of other aircraft of the same
type in the Company's fleet or as are
otherwise mutually agreed upon by GPA and
the Company and, in either case,
incorporated in the New Put Agreement; and
provided further, however, that any such
aircraft which is a used aircraft will (i)
be fresh from (or have no more than 150
flight hours beyond) "C" or annual check,
(ii) if maintained under a program
involving block "D" check, be in at least
half-time condition or if maintained under
a program involving segmentation of "D"
check, be no more than 12 months from next
scheduled major check on airframe and
engines, and (iii) be in such other
condition (consistent with operating lease
return conditions currently prevailing in
the operating lease marketplace) as is
mutually agreed upon by GPA and the
Company and incorporated in the New Put
Agreement.

The lease term shall be (i) not more than eighteen
years and not less than (a) ten years for any new
A320 aircraft, or (b) seven years for any other new
aircraft, and (ii) not more than seven years and
not less than three years for any used aircraft.
Unless otherwise mutually agreed in writing by the
Company and GPA, (i) the lease term for a new
aircraft shall be the minimum term applicable to
such aircraft, and (ii) the lease term for a used
aircraft shall be five years.

Conditions................. The obligation of GPA to consummate the
transactions contemplated by this Term Sheet
(including, without limitation, the cancellation of
GPA's rights and claims under and in respect of the
Put Agreement and the First Refusal Agreement)
shall be subject to the satisfaction of the
following conditions: (i) the Plan shall provide
for, and be consummated in accordance with, all of
the Terms and Conditions (it being understood that
all of the Terms and Conditions are integral to the
treatment of GPA's claims and interests and that no
one Term or Condition is of greater significance
than any other Term or Condition); (ii) the Plan
shall provide for, and be consummated with, the
capital structure of the reorganized Company being
as described in the Investment Agreement, the
consideration distributed pursuant to the Plan
being as described in the Investment Agreement
(except for changes approved in writing by GPA and
Permitted Reallocations (as such term is
hereinafter defined), and the economic interests of
GPA not being diluted from those contained in the
Investment Agreement and this Term Sheet; (iii) the
Company shall have paid or reimbursed GPA for all
expenses reasonably incurred by GPA in connection
with the transactions contemplated by this Term
Sheet, including, without limitation, the
reasonable fees and

C-4
<PAGE> 77

expenses of GPA's counsel and financial
advisor (other than the fees of such
financial advisor that are in the nature
of "success fees"); (iv) there shall have
been executed and delivered, in form and
substance reasonably satisfactory to GPA,
all such definitive documentation as is
necessary or reasonably advisable to
implement the transactions contemplated by
this Term Sheet (including, without
limitation, documentation providing to GPA
such registration rights as are reasonably
acceptable to GPA with respect to the
securities of the reorganized Company that
are acquired by GPA in the transactions
contemplated by this Term Sheet); and (v)
the Board of Directors of GPA (or an
appropriate committee thereof) shall have
approved the execution and delivery by GPA
of the aforesaid definitive documentation
(it being understood that, within ten
business days following the date of this
Term Sheet, GPA shall deliver to AmWest
and the Company a certified copy of a
resolution evidencing the approval by the
Board of Directors of GPA (or an
appropriate committee thereof) of this
Term Sheet and the transactions
contemplated hereby). As used herein, the
term "Permitted Reallocation" shall mean
changes in the allocation among the
Unsecured Creditors, AmWest (and its
Affiliates) and the Equity Holders of the
aggregate consideration payable to such
persons and entities as set forth in the
Investment Agreement, without (i) increase
or decrease in the aggregate amount
thereof, or (ii) change in the terms and
conditions of such consideration from
those set forth in the Investment
Agreement unless, in any such case, AmWest
shall have obtained the prior written
consent of GPA.

The obligations of the Company and AmWest to
consummate the transactions contemplated by this
Term Sheet shall be subject to the satisfaction of
the following conditions: (i) the transactions
contemplated by the Investment Agreement (other
than those contemplated by this Term Sheet) shall
have been consummated; (ii) there shall have been
executed and delivered, in form and substance
reasonably satisfactory to the Company and AmWest,
all such definitive documentation as is necessary
or reasonably advisable to implement the
transactions contemplated by this Term Sheet; and
(iii) there shall have been delivered to the
Company and AmWest a certified copy of a resolution
evidencing the approval by the Board of Directors
of GPA (or an appropriate committee thereof) of
this Term Sheet and the transactions contemplated
hereby.

Other...................... Nothing contained in this Term Sheet shall limit,
restrict or impair in any manner or to any extent
the treatment afforded by the Plan to any allowed
administrative claim of GPA arising from the
fulfillment by GPA of its deficiency guarantee
obligations to General Electric Capital Corporation
with respect to aircraft formerly leased by the
Company from General Electric Capital Corporation
(it being acknowledged that such treatment shall be
in accordance with Section 1129(a)(9)(A) of the
Bankruptcy Code).

C-5
<PAGE> 78

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<PAGE> 79

PLAN OF REORGANIZATION

SCHEDULE 1

SECTION 1110 STIPULATIONS
<PAGE> 80

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 81

SECTION 1110 STIPULATIONS

I. Leased Aircraft And Engines. The leases of the following aircraft and
engines have been assumed as modified pursuant to the stipulations set
forth opposite the aircraft or engine:

<TABLE>
<C> <S> <C>
1. N137AW Stipulation Regarding Aircraft Lease With Bay Air Lease
II approved September 6, 1991, as modified by
Supplemental Stipulation approved September 11, 1992, and
as further modified by Order dated June 3, 1993.
2. N138AW Joint Stipulation With Respect to Bankruptcy Code
N141AW Section 1110 and Related Matters Between America West
N189AW Airlines, Inc., CIT and Certain Other Parties With
Respect to Certain Aircraft, Engines and Equipment, Also
Concerning Related Lease Modifications and Lease
Assumption approved September 10, 1991 [Stipulation also
covers N144AW and N304AW], as modified by Supplemental
Stipulation (N138AW, N141AW, N189AW, N144AW) approved
September 11, 1992 [Also covers N144AW].
3. N147AW Letter Agreement approved October 9, 1991, as modified by
a Stipulation approved September 11, 1992.
4. N150AW Stipulation and Order Regarding Aircraft Lease With
Respect to One Boeing 737-300, FAA Reg. No. N150AW,
Assuming Lease and Providing For Adequate Protection and
Section 1110 Compliance approved September 12, 1991, as
modified by Supplemental Stipulation (N150AW) approved
September 11, 1992.
5. N151AW Stipulation and Order Regarding Aircraft Lease With
Respect to One Boeing 737-300, FAA Reg. No. N151AW,
Assuming Lease and Providing For Adequate Protection and
Section 1110 Compliance approved September 12, 1991, as
modified by Supplemental Stipulation (N151AW) approved
September 11, 1992.
6. N164AW Stipulation Regarding Aircraft Leases with Ansett
N165AW Worldwide Aviation (USA) approved September 6, 1991, as
N166AW modified by Supplemental Stipulation approved September
N167AW 11, 1992 [Supplemental Stipulation also covers 509DC].
N168AW
N169AW
N172AW
N173AW
N174AW
N175AW
7. 509DC Stipulation Regarding Aircraft Lease With Ansett
Worldwide Aviation (USA) approved September 6, 1991 as
modified by Supplemental Stipulation approved September
11, 1992 [Supplemental Stipulation also covers other
aircraft].
</TABLE>

1-1
<PAGE> 82

<TABLE>
<C> <S> <C>
8. N178AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters, Including Assumption of
Agreement Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc. and
Certain Other Parties With Respect to One Boeing 737-277,
FAA Reg. No. N178AW and Related Engines and Equipment,
Also Concerning Related Lease Modification approved
September 6, 1991, as modified by Joint Supplemental
Stipulation With Respect to Modification of Previously
Authorized Stipulation Under Bankruptcy Code Section 1110
and Related Matters, Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-277, FAA Reg. No.
N178AW and Related Engines and Equipment, Also Concerning
Related Lease Modifications.
9. N188AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters, Including Assumption of
Agreement Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc. and
Certain Other Parties With Respect to One Boeing 737-277,
FAA Reg. No. N188AW and Related Engines and Equipment,
Also Concerning Related Lease Modification approved
September 6, 1991, as modified by Joint Supplemental
Stipulation With Respect to Modification of Previously
Authorized Stipulation Under Bankruptcy Code Section 1110
and Related Matters, Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-277, FAA Reg. No.
N188AW and Related Engines and Equipment, Also Concerning
Related Lease Modifications.
10. N180AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters, Including Assumption of
Agreement Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc. and
Certain Other Parties With Respect to One Boeing 737-277,
FAA Reg. No. N180AW and Related Engines and Equipment,
Also Concerning Related Lease Modification approved
September 6, 1991, as modified by Joint Supplemental
Stipulation With Respect to Modification of Previously
Authorized Stipulation Under Bankruptcy Code Section 1110
and Related Matters, Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-277, FAA Reg. No.
N180AW and Related Engines and Equipment, Also Concerning
Related Lease Modifications.
</TABLE>

1-2
<PAGE> 83

<TABLE>
<C> <S> <C>
11. N182AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters, Including Assumption of
Agreement Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc. and
Certain Other Parties With Respect to One Boeing 737-277,
FAA Reg. No. N182AW and Related Engines and Equipment,
Also Concerning Related Lease Modification approved
September 6, 1991, as modified by Joint Supplemental
Stipulation With Respect to Modification of Previously
Authorized Stipulation Under Bankruptcy Code Section 1110
and Related Matters, Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-277, FAA Reg. No.
N182AW and Related Engines and Equipment, Also Concerning
Related Lease Modifications.
12. N186AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters, Including Assumption of
Agreement Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc. and
Certain Other Parties With Respect to One Boeing 737-277,
FAA Reg. No. N186AW and Related Engines and Equipment,
Also Concerning Related Lease Modification approved
September 6, 1991, as modified by Joint Supplemental
Stipulation With Respect to Modification of Previously
Authorized Stipulation Under Bankruptcy Code Section 1110
and Related Matters, Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-277, FAA Reg. No.
N186AW and Related Engines and Equipment, Also Concerning
Related Lease Modifications.
13. N187AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters, Including Assumption of
Agreement Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc. and
Certain Other Parties With Respect to One Boeing 737-277,
FAA Reg. No. N187AW and Related Engines and Equipment,
Also Concerning Related Lease Modification approved
September 6, 1991, as modified by Joint Supplemental
Stipulation With Respect to Modification of Previously
Authorized Stipulation Under Bankruptcy Code Section 1110
and Related Matters, Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-277, FAA Reg. No.
N187AW and Related Engines and Equipment, Also Concerning
Related Lease Modifications.
</TABLE>

1-3
<PAGE> 84

<TABLE>
<C> <S> <C>
14. N181AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters, Including Assumption of
Agreements Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc.,
and Certain Other Parties With Respect to One Boeing
737-277, FAA Reg. No. N181AW and Related Engines and
Equipment, Also Concerning Related Lease Modification
approved September 6, 1991, as modified by Supplemental
Stipulation (N181AW) approved September 11, 1992.
15. N185AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters, Including Assumption of
Agreements Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc.,
and Certain Other Parties With Respect to One Boeing
737-277, FAA Reg. No. N185AW and Related Engines and
Equipment, Also Concerning Related Lease Modification
approved September 6, 1991, as modified by Supplemental
Stipulation (N185AW) approved September 11, 1992.
16. N302AW Stipulation Regarding Aircraft Lease With Meridian Trust
Company, as Owner Trustee, Providing for Section 1110
Compliance and Assumption of Lease (N302AW) approved
September 6, 1991, as modified by Supplemental
Stipulation (N302AW) approved September 11, 1992.
17. N303AW Stipulation Regarding Aircraft Lease With Meridian Trust
Company, as Owner Trustee, Providing for Section 1110
Compliance and Assumption of Lease (N303AW) approved
September 10, 1991, as modified by Supplemental
Stipulation (N303AW) approved September 11, 1992.
18. N304AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Between America West Airlines,
Inc., CIT and Certain Other Parties With Respect to
Certain Aircraft, and Related Engines and Equipment, Also
Concerning Related Lease Modification and Lease
Assumption approved September 11, 1991 [also covered
certain other aircraft], as modified by Supplemental
Stipulation (N304AW) approved September 11, 1992.
19. N305AW Joint Stipulation and Related Matters, With Respect to
Bankruptcy Code Section 1110 Including Assumption of
Agreements Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc.,
and Certain Other Parties With Respect to One Boeing
737-3G7, FAA Reg. No. N305AW and Related Engines and
Equipment, Also Concerning Related Lease Modifications
approved September 6, 1991, as modified by Supplemental
Stipulation (N305AW) approved September 11, 1992.
</TABLE>

1-4
<PAGE> 85

<TABLE>
<C> <S> <C>
20. N313AW Joint Stipulation With Respect to Bankruptcy Code Section
N314AW 1110 And Related Matters, Including Assumption of
N315AW Agreement Pursuant to Bankruptcy Code Section 365 and
N316AW Modification of Automatic Stay Pursuant to Bankruptcy
and spare Code Section 362, Between America West Airlines, Inc.,
engines And Certain Other Parties With Respect to Four Boeing
737-3s3 Aircraft, FAA Reg. Nos. N313AW, N314AW, N315AW,
and N316AW and Related Engines and Equipment, And Also
Concerning Related Lease Modification approved September
6, 1991, as modified by Supplemental Stipulation approved
September 11, 1992.
21. N620AW Stipulation Regarding Aircraft Leases and/or Agreements
N621AW with GPA Group plc, GPA Leasing USA I, Inc., GPA Leasing
N622AW USA SUB I, Inc. and Industrial Bank of Japan and Order
N624AW approved September 5, 1991.
N625AW
N626AW
N627AW
N628AW
N629AW
N631AW
N632AW
N633AW
N634AW
N635AW
N636AW
N637AW
IAE Engine MSN V0025
IAE Engine MSN V0049
IAE Engine MSN V0019
22. N901AW Stipulation of America West and The Boeing Company as to
N902AW the Assumption of Six (6) Boeing Aircraft Subleases
N903AW approved September 12, 1991, as modified by a
N904AW Supplemental Stipulation Relating to Six (6) Boeing
N905AW Aircraft Subleases approved September 11, 1992.
N906AW
23. N910AW Joint Stipulation With Respect to Bankruptcy Code
Section 1110 and Related Matters, Including Assumption of
Agreements Pursuant to Bankruptcy Code Section 365 and
Modification of the Automatic Stay Pursuant to Bankruptcy
Code Section 362, Between America West Airlines, Inc.,
and Certain Other Parties With Respect to One Boeing
757-2G7, FAA Reg. No. N910AW and Related Engines and
Equipment, Also Concerning Related Lease Modification
approved September 6, 1991, as modified by Supplemental
Stipulation (N910AW) approved March 17, 1993.
24. Rolls Royce Stipulation with PLM Equipment Growth Fund V and First
RB211-535 Security Bank of Utah, N.A. approved January 22, 1992.
EX Engine
Serial No.
30668
</TABLE>

1-5
<PAGE> 86

<TABLE>
<C> <S> <C>
25. One CFM56 Stipulation Regarding Aircraft and Engine Leases with
-3-B1 Progress Potomac Capital Ventures approved January 29,
One CFM56 1992.
-3-B2 Engine
(serial nos.
720-955 and
722-127)
26. Rolls Royce Joint Stipulation and Order with Respect to Assumption of
RB211-535E Engine Lease and Compliance with Bankruptcy Code Section
Engine 1110 and Engine, Related Matters Between America West
Serial No. Airlines, Inc., and Certain Other Parties with Respect to
30764 One Rolls-Royce RB211-535E4 Gas Turbine Engine, Serial
No. 30764 approved September 25, 1991.
27. One CFM Stipulation Authorizing Assumption of Unexpired Equipment
56-331 Leases and the Debtor to Enter Into Transactions Other
Engine Than In the Ordinary Course of Business approved
(Serial No. September 26, 1991.
724-700),
Three JT8D-
15A Engines
(Serial Nos.
655150, 687314
and 708313),
and Three
JT8D-9A Engines
(Serial Nos.
674267, 674452
and 674623)
28. N126AW(C-GCPW) Aircraft sublease agreements between America West
N127AW(C-GAPW) Airlines, Inc. and Canadian Airlines International Ltd.
N128AW(C-GBPW) dated May 1, 1989, as assumed and modified by Stipulation
Regarding Aircraft Subleases with Canadian Airlines
International Ltd. approved September 6, 1991, and by
Supplemental Stipulation approved September 11, 1992.
Such subleases were extended, as modified, by Extension
Agreement dated April 1, 1994, and approved May 5, 1994.
</TABLE>

II. Financed Aircraft And Spare Parts. The financings of the following aircraft
and spare parts have been assumed as modified pursuant to the listed
stipulations:

<TABLE>
<C> <S> <C>
1. N149AW Stipulation approved September 6, 1991 as modified by
Supplemental Stipulation approved September 11, 1992.
2. N160AW Joint Stipulation With Respect to Bankruptcy Code
Section 1110 and Related Matters Including Modification
of the Automatic Stay Pursuant to Bankruptcy Code
Section 362, Between America West Airlines, Inc., and
Certain Other Parties With Respect to One Boeing 737-3G7,
FAA Reg. No. N160AW, and Related Engines and Equipment,
and Modification of Related Agreements approved September
6, 1991, as modified by Supplemental Stipulation (N160AW)
approved September 11, 1992.
</TABLE>

1-6
<PAGE> 87

<TABLE>
<C> <S> <C>
3. N154AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N154AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N154AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
4. N155AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N155AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N155AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
5. N156AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N156AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N156AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
</TABLE>

1-7
<PAGE> 88

<TABLE>
<C> <S> <C>
6. N157AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N157AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N157AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
7. N158AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N158AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N158AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
8. N306AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N306AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N306AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
</TABLE>

1-8
<PAGE> 89

<TABLE>
<C> <S> <C>
9. N307AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N307AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N307AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
10. N308AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N308AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N308AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
11. N309AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N309AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N309AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
</TABLE>

1-9
<PAGE> 90

<TABLE>
<C> <S> <C>
12. N311AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-3G7 FAA Reg. No.
N311AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation with
Respect to Modification of Previously Authorized
Stipulation Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to One Boeing 737-3G7, FAA Reg. No. N311AW,
and Related Engines and Equipment, and Modification of
Related Agreements.
13. N179AW Joint Stipulation With Respect to Bankruptcy Code Section
N184AW 1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to Two Boeing 737-277's, FAA Reg.
Nos. N179AW and N184AW, and Related Engines and
Equipment, and Modification of Related Agreements
approved September 6, 1991, as modified by Joint
Supplemental Stipulation With Respect to Modification of
Previously Authorized Stipulations Under Bankruptcy Code
Section 1110 and Related Matters Including Modification
of the Automatic Stay Pursuant to Bankruptcy Code Section
362, Between America West Airlines, Inc., and Certain
Other Parties With Respect to Three Boeing 737-277's, FAA
Reg. Nos. N179AW, N183AW and N184AW, and Related Engines
and Equipment approved September 11, 1992. [Supplemental
Stipulation also covers other aircraft.]
14. N183AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Including Modification of the
Automatic Stay Pursuant to Bankruptcy Code Section 362,
Between America West Airlines, Inc., and Certain Other
Parties With Respect to One Boeing 737-277, FAA Reg. No.
N183AW, and Related Engines and Equipment, and
Modification of Related Agreements approved September 6,
1991, as modified by Joint Supplemental Stipulation With
Respect to Modification of Previously Authorized
Stipulations Under Bankruptcy Code Section 1110 and
Related Matters Including Modification of the Automatic
Stay Pursuant to Bankruptcy Code Section 362, Between
America West Airlines, Inc., and Certain Other Parties
With Respect to Three Boeing 737-277's, FAA Reg. Nos.
N179AW, N183AW and N184AW, and Related Engines and
Equipment approved September 11, 1992. [Supplemental
Stipulation also covers other aircraft.]
</TABLE>

1-10
<PAGE> 91

<TABLE>
<C> <S> <C>
15. N908AW Joint Stipulation With Respect to Bankruptcy Code Section
1110 and Related Matters Between America West Airlines,
Inc., and Certain Other Parties With Respect to One
Boeing 757-2G7 Aircraft, FAA Reg. No. N908AW and Related
Engine and Equipment, and Modification of Related
Agreements approved September 6, 1991, as modified by
Supplemental Stipulation approved September 11, 1992.
16. N909AW Stipulation Regarding Leases, Aircraft Mortgages and/or
Security Agreements With The Industrial Bank of Japan,
Limited, Los Angeles Agency, II Wing Leasing
International Co., Ltd., JJ Wing Leasing International
Co., Ltd., KK Wing Leasing International Co., Ltd., LL
Wing Leasing International Co., Ltd., MM Wing Leasing
International Co., Ltd. and NN Wing Leasing International
Co., Ltd. approved September 6, 1991, as modified by
Supplemental Stipulation approved September 11, 1992.
</TABLE>

III. Financed Spare Parts. The financings of the following spare parts shall be
performed in accordance with the following stipulations:

<TABLE>
<C> <S> <C>
1. AIFS/ASCO Stipulation and Order Regarding Rights Under Section 1110
of the Bankruptcy Code of Airbus Industry Financial
Services ("AIFS") and Airbus Service Company, Inc.
("ASCO") dated August 30, 1992, regarding that certain
Amended and Restated Loan Agreement and that certain
Security Agreement, both dated as of November 27, 1990
and between AIFS and America West Airlines, Inc. ("AWA")
and Letter Agreement No. 1, dated as of September 28,
1990, between AWA and AVSA, S.A.R.L. ("AVSA") as assigned
and assumed by ASCO pursuant to that certain Assignment
and Assumption Agreement, dated as of December 3, 1990,
between AVSA and ASCO.
</TABLE>

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[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 93

PLAN OF REORGANIZATION

SCHEDULE 2

CERTAIN FINAL ORDERS ON
SETTLEMENT AGREEMENTS
<PAGE> 94

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 95

CERTAIN FINAL ORDERS ON
SETTLEMENT AGREEMENTS

1. Motion for Authority to Compromise controversies with GE Entities filed
September 13, 1993 and Order granting same filed October 8, 1993.

2. Motion for Authorization to Compromise Controversy with McDonnell
Douglas Finance Corporation filed March 11, 1993 and order granting same filed
March 31, 1993.

3. Motion for Authorization to Compromise controversies with Household
Commercial of California and Seventh HFC Leasing filed July 6, 1993 and order
granting same filed August 25, 1993.

4. Motion for Authority to Compromise Controversies with Citicorp North
America, Inc. filed December 23, 1993 and order granting same filed January 19,
1994; Motion for Authority to Amend Settlement Agreement between America West
and Citicorp filed March 18, 1994 and order granting same filed on March 30,
1994.

5. Motion for Authority to Compromise Controversies with Export Development
Corporation and Gilman Montrose Timber and Leasing Company filed December 22,
1993 and order granting same filed January 19, 1994.

6. Motion for Authorization to Compromise Controversy with the Internal
Revenue Service filed February 14, 1994 and order granting same filed March 16,
1994.

7. Motion for Authorization to Enter into Credit Card Processing Agreement
and Granting Security Interests and Modifying Agreements with First Interstate
Bank of Arizona, N.A. and Order granting same filed March 31, 1993.

8. Order Authorizing Debtor to Assume Caterair Agreement and Addendum filed
September 19, 1991.

2-1
<PAGE> 96

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 97

PLAN OF REORGANIZATION

SCHEDULE 3

CERTAIN ASSUMED AGREEMENTS
<PAGE> 98

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 99

CERTAIN ASSUMED AGREEMENTS

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
DELTA AIRLINES, INC. ................... Datas II Participating Carrier Agreement between
Delta Airlines, Inc. and AWA, Inc.
NORSTAN FINANCIAL SERVICES.............. Equipment Lease No. 1027-001 and 1027-002 dated
10/1/90 and 4/1/91 between Norstan Financial
Services Inc. and AWA, Inc.
AVSA S.A.R.L............................ Airbus A320 Purchase Agreement dated as of 9/28/90
between AVSA S.A.R.L. and AWA, Inc., as previously
amended and as modified pursuant to the terms
agreed to in the Term Sheet executed 2/24/94; such
agreement not to be subject to the provisos set
forth in subsection 5.1.1 or the provisions of
subsections 5.1.3 or 5.1.4 of the Plan
AIR FRANCE.............................. Passenger Interline Agreement
BELL ATLANTIC SYSTEMS
LEASING............................... Communication Controllers Lease Agreement dated
2/1/91 between Pacific Atlantic Leasing (formerly
Bell Atlantic) and AWA, Inc.
BELL ATLANTIC SYSTEMS
LEASING............................... Communications Equipment Lease Agreement dated
6/1/91 between Pacific Atlantic Leasing (formerly
Bell Atlantic) and America West Airlines, Inc.
BELL ATLANTIC SYSTEMS
LEASING............................... B757-200 Flight Simulator Lease Agreement, dated
7/1/90 between Bell Atlantic Systems Leasing and
AWA, Inc.
COMPUTER SYSTEMS OF
AMERICA INC. ......................... Equipment Lease No. AZ-048-5093 dated 4/7/88
between Computer Systems of America, Inc. and AWA,
Inc.
COMPUTER SYSTEMS OF
AMERICA INC. ......................... Equipment Lease No. AZ-048-5092 dated 4/7/88
between Computer Systems of America, Inc. and AWA,
Inc.
COMPUTER SYSTEMS OF
AMERICA INC. ......................... IBM PS-2 Lan System Lease Agreement dated 12/1/90
between Computer Systems of America and AWA, Inc.
COMPUTER SYSTEMS OF
AMERICA INC. ......................... Equipment Lease No. NV-048-5090 dated 4/7/88
between Computer Systems of America, Inc. and AWA,
Inc.
COMPUTER SYSTEMS OF
AMERICA INC. ......................... Equipment Lease No. AZ 129-6447 dated 12/15/89 be-
tween Computer Systems of America, Inc. and AWA,
Inc.
FORSYTHE MCARTHUR
ASSOC INC. ........................... Equipment Lease No. F 15358 dated 11/14/90 between
Forsythe McArthur and AWA, Inc.
HONEYWELL INC. ......................... Madison I & II Security Equipment Lease dated
8/21/90 between Honeywell Protection Service and
AWA, Inc.
AIR BC.................................. Passenger Interline Agreement
AER LINGUS.............................. Employee Interline Agreement
</TABLE>

3-1
<PAGE> 100

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
AER LINGUS.............................. Cargo Interline Agreement
AER LINGUS.............................. Passenger Interline Agreement
AERO CALIFORNIA......................... Passenger Interline Agreement
AERO MEXICO............................. Passenger Interline Agreement
AERO MEXICO............................. Cargo Interline Agreement
AERO MEXICO............................. Employee Travel Agreement
AERO PERU - EMPRESSA DE................. Passenger Interline Agreement
AEROLINEAS ARGENTINAS................... Cargo Interline Agreement
AIR BC.................................. Employee Travel Agreement
AIR CANADA.............................. Employee Travel Agreement
AIR CANADA.............................. Passenger Interline Agreement
AIR CHINA............................... Cargo Interline Agreement
AIR FRANCE.............................. Employee Travel Agreement
AIR INDIA............................... Employee Travel Agreement
AIR INDIA............................... Passenger Interline Agreement
AIR INTER............................... Passenger Interline Agreement
AIR JAMAICA............................. Employee Travel Agreement
AIR LANKA............................... Passenger Interline Agreement
AIR MIDWEST............................. Employee Travel Agreement
AIR MIDWEST............................. Passenger Interline Agreement
AIR NEVADA.............................. Employee Travel Agreement
AIR NEVADA.............................. Passenger Interline Agreement
AIR NEW ZEALAND......................... Employee Travel Agreement
AIR NEW ZEALAND......................... Cargo Interline Agreement
AIR NEW ZEALAND......................... Passenger Interline Agreement
AIR TAHITI.............................. Employee Travel Agreement
AIR TAHITI.............................. Passenger Interline Agreement
AIR WISCONSIN, INC. .................... Employee Travel Agreement
AIR WISCONSIN, INC. .................... Passenger Interline Agreement
ALASKA AIRLINES......................... Employee Travel Agreement
ALASKA AIRLINES......................... Cargo Interline Agreement
ALASKA AIRLINES......................... Passenger Interline Agreement
ALITALIA................................ Employee Travel Agreement
ALITALIA................................ Passenger Interline Agreement
ALL NIPPON AIRWAYS - ANA ............... Passenger Interline Agreement
ALM ANTILLEAN AIRLINES.................. Passenger Interline Agreement
ALOHA AIRLINES, INC. ................... Passenger Interline Agreement
ALOHA AIRLINES, INC. ................... Employee Travel Agreement
ALOHA ISLAND AIR........................ Employee Travel Agreement
ALOHA ISLAND AIR........................ Passenger Interline Agreement
ALPHA AIR............................... Employee Travel Agreement
</TABLE>

3-2
<PAGE> 101

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
ALPHA AIR............................... Passenger Interline Agreement
AMERICAN AIRLINES, INC. ................ Employee Travel Agreement
AMERICAN AIRLINES, INC. ................ Passenger Interline Agreement
AMTRAK.................................. Passenger Interline Agreement
ANSETT OF AUSTRALIA..................... Employee Travel Agreement
ANSETT OF AUSTRALIA..................... Cargo Interline Agreement
ANSETT OF AUSTRALIA..................... Passenger Interline Agreement
ANSETT OF NEW ZEALAND................... Employee Travel Agreements
ANSETT OF NEW ZEALAND................... Passenger Interline Agreement
ARKIA (ARKIA-ISREALI
AIRLINES)............................. Passenger Interline Agreement
ASIANA AIRLINES......................... Cargo Interline Agreement
ASIANA AIRLINES......................... Passenger Interline Agreement
AUSTRALIAN AIRLINES..................... Passenger Interline Agreement
AUSTRIAN AIRLINES....................... Employee Travel Agreement
AUSTRIAN AIRLINES....................... Cargo Interline Agreement
AUSTRIAN AIRLINES....................... Passenger Interline Agreement
AVENSA.................................. Passenger Interline Agreement
AVIANCA................................. Passenger Interline Agreement
BAHAMASAIR.............................. Employee Travel Agreement
BAR HARBOR AIRLINES D/B/A/.............. Employee Travel Agreement
BIG SKY AIRLINES........................ Employee Travel Agreement
BIG SKY AIRLINES........................ Passenger Interline Agreement
BRITISH AIRWAYS, INC. .................. Employee Travel Agreement
BRITISH AIRWAYS, INC. .................. Cargo Interline Agreement
BRITISH AIRWAYS, INC. .................. Passenger Interline Agreement
BUSINESS EXPRESS........................ Passenger Interline Agreement
BUSINESS EXPRESS........................ Employee Travel Agreement
BWIA INTERNATIONAL
A (TRINIDAD).......................... Employee Travel Agreement
BWIA INTERNATIONAL
A (TRINIDAD).......................... Passenger Interline Agreement
CANADIAN AIRLINES....................... Passenger Interline Agreement
CANADIAN AIRLINES....................... Employee Travel Agreement
CANADIAN AIRLINES....................... Cargo Interline Agreement
CATHAY PACIFIC.......................... Cargo Interline Agreement
CATHAY PACIFIC.......................... Passenger Interline Agreement
CAYMAN AIRWAYS LTD. .................... Employee Travel Agreement
CAYMAN AIRWAYS LTD. .................... Passenger Interline Agreement
CHALK'S INTERNATIONAL
AIRLINES.............................. Employee Travel Agreement
CHINA AIRLINES.......................... Cargo Interline Agreement
</TABLE>

3-3
<PAGE> 102

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
CHINA AIRLINES.......................... Passenger Interline Agreement
COMAIR, INC............................. Employee Travel Agreement
CONQUEST AIRLINES....................... Passenger Interline Agreement
CONTINENTAL AIRLINES, INC. ............. Cargo Interline Agreement
CONTINENTAL AIRLINES, INC. ............. Employee Travel Agreement
CONTINENTAL AIRLINES, INC. ............. Passenger Interline Agreement
CROSSAIR (CROSSAIR A.G.)................ Passenger Interline Agreement
DELTA AIRLINES, INC. ................... Employee Travel Agreement
DELTA AIRLINES, INC. ................... Passenger Interline Agreement
DRAGONAIR, 12/F, TOWER 6................ Passenger Interline Agreement
EAST WEST AIRLINES, LTD................. Employee Travel Agreement
EAST WEST AIRLINES, LTD. ............... Passenger Interline Agreement
EGYPTAIR................................ Employee Travel Agreement
EGYPTAIR................................ Passenger Interline Agreement
EL AL ISRAEL AIRLINES LTD. ............. Employee Travel Agreement
EL AL ISRAEL AIRLINES LTD. ............. Passenger Interline Agreement
EMPIRE AIRWAYS.......................... Passenger Interline Agreement
EQUITORIANA............................. Passenger Interline Agreement
ERA AVIATION............................ Employee Travel Agreement
ERA AVIATION............................ Passenger Interline Agreement
EXEC EXPRESS II, INC. .................. Passenger Interline Agreement
FINNAIR................................. Passenger Interline Agreement
FIRST AIR............................... Passenger Interline Agreement
FRONTIER FLYING SERVICE................. Employee Travel Agreement
GARUDA INDONESIA........................ Cargo Interline Agreement
GARUDA INDONESIA........................ Passenger Interline Agreement
GP EXPRESS.............................. Employee Travel Agreement
GP EXPRESS.............................. Passenger Interline Agreement
GRAND AIRWAYS........................... Passenger Interline Agreement
GREAT LAKES AVIATION LTD. .............. Employee Travel Agreement
GREAT LAKES AVIATION LTD. .............. Passenger Interline Agreement
HARBOR AIRLINES......................... Employee Travel Agreement
HARBOR AIRLINES......................... Passenger Interline Agreement
HAWAIIAN AIRLINES, INC. ................ Employee Travel Agreement
HAWAIIAN AIRLINES, INC. ................ Passenger Interline Agreement
HENSON AVIATION, INC. .................. Employee Travel Agreement
HORIZON AIRLINES ....................... Employee Travel Agreement
HORIZON AIRLINES ....................... Passenger Interline Agreement
HUB EXPRESS............................. Passenger Interline Agreement
IBERIA.................................. Passenger Interline Agreement
ICELANDER............................... Employee Travel Agreement
</TABLE>

3-4
<PAGE> 103

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
ICELANDER (ICELANAIR)................... Passenger Interline Agreement
JAPAN AIR SYSTEM/DOMESTIC
TOA................................... Employee Travel Agreement
JAPAN AIR SYSTEM/DOMESTIC
TOA................................... Passenger Interline Agreement
JAPAN AIRLINES.......................... Cargo Interline Agreement
JAPAN AIRLINES.......................... Passenger Interline Agreement
JAPAN AIRLINES.......................... Employee Travel Agreement
JAPAN ASIA AIRWAYS...................... Employee Travel Agreement
JAPAN ASIA AIRWAYS...................... Passenger Interline Agreement
KLM ROYAL DUTCH AIRLINES................ Passenger Interline Agreement
KLM ROYAL DUTCH AIRLINES................ Employee Travel Agreement
KOREAN AIRLINES......................... Passenger Interline Agreement
KOREAN AIRLINES......................... Employee Travel Agreement
KUWAIT AIRWAYS.......................... Cargo Interline Agreement
LANCHILE................................ Passenger Interline Agreement
LAS VEGAS AIRLINES...................... Passenger Interline Agreement
LAUDA AIR LUFTFAHRT..................... Passenger Interline Agreement
LOT-POLISH AIRWAYS...................... Employee Travel Agreement
LOT-POLISH AIRWAYS...................... Passenger Interline Agreement
LTU..................................... Passenger Interline Agreement
LTU..................................... Employee Travel Agreement
LUFTHANSA............................... Passenger Interline Agreement
LUFTHANSA............................... Employee Travel Agreement
MALAYSIA AIRLINES....................... Passenger Interline Agreement
MALEV HUNGARIAN AIRLINES................ Passenger Interline Agreement
MALEV HUNGARIAN AIRLINES................ Employee Travel Agreement
MARKAIR, INC. .......................... Employee Travel Agreement
MARKAIR, INC. .......................... Passenger Interline Agreement
MARTINAIR HOLLAND....................... Passenger Interline Agreement
MESA AIRLINES SHUTTLE................... Employee Travel Agreement
MESA AIRLINES SHUTTLE................... Passenger Interline Agreement
MESABA AVIATION......................... Employee Travel Agreement
MESABA AVIATION......................... Passenger Interline Agreement
METRO AIRLINES.......................... Employee Travel Agreement
METRO AIRLINES.......................... Passenger Interline Agreement
MEXICANA AIRLINES....................... Passenger Interline Agreement
MEXICANA AIRLINES....................... Employee Travel Agreement
MEXICANA AIRLINES....................... Cargo Interline Agreement
MIDDLE EAST AIRLINES.................... Passenger Interline Agreement
MIDWEST EXPRESS AIRLINES,
INC. ................................. Employee Travel Agreement
</TABLE>

3-5
<PAGE> 104

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
MILITARY AIRLIFT COMMAND................ Passenger Interline Agreement
N.P.A., INC. DBA UNITED EXPRESS......... Employee Travel Agreement
N.P.A., INC. DBA UNITED EXPRESS......... Passenger Interline Agreement
NIPPON CARGO AIRLINES
CO. LTD. ............................. Cargo Interline Agreement
NIPPON CARGO AIRLINES
CO. LTD. ............................. Passenger Interline Agreement
NORTHWEST AIRLINES, INC. ............... Employee Travel Agreement
NORTHWEST AIRLINES, INC. ............... Passenger Interline Agreement
OLYMPIC AIRWAYS......................... Passenger Interline Agreement
ONTARIO EXPRESS DBA..................... Employee Travel Agreement
PAKISTAN INTERNATIONAL
AIRWAYS............................... Passenger Interline Agreement
PHILIPPINE AIRLINES..................... Employee Travel Agreement
PHILIPPINE AIRLINES..................... Cargo Interline Agreement
PHILIPPINE AIRLINES..................... Passenger Interline Agreement
PLUNA (PRIMERAS LINEAS)................. Passenger Interline Agreement
QANTAS AIRWAYS.......................... Employee Travel Agreement
QANTAS AIRWAYS.......................... Cargo Interline Agreement
QANTAS AIRWAYS.......................... Passenger Interline Agreement
REEVE AIRWAYS........................... Employee Travel Agreement
REEVE AIRWAYS........................... Passenger Interline Agreement
ROCKY MOUNTAIN AIRWAYS.................. Employee Travel Agreement
ROYAL AIR MAROC......................... Passenger Interline Agreement
ROYAL JORDANIAN......................... Cargo Interline Agreement
ROYAL JORDANIAN......................... Passenger Interline Agreement
SABENA.................................. Cargo Interline Agreement
SABENA.................................. Employee Travel Agreement
SABENA.................................. Passenger Interline Agreement
SAUDI ARABIAN AIRLINES.................. Passenger Interline Agreement
SAUDI ARABIAN AIRLINES.................. Employee Travel Agreement
SCANDINAVIAN AIRLINES
SYSTEM................................ Employee Travel Agreement
SCANDINAVIAN AIRLINES
SYSTEM................................ Passenger Interline Agreement
SCENIC AIRLINES, INC. .................. Employee Travel Agreement
SCENIC AIRLINES, INC. .................. Passenger Interline Agreement
SIMMONS AIRLINES, INC. ................. Employee Travel Agreement
SINGAPORE AIRLINES...................... Passenger Interline Agreement
SINGAPORE AIRLINES...................... Employee Travel Agreement
SKYWEST AIRLINES INC. .................. Employee Travel Agreement
SKYWEST AIRLINES INC. .................. Passenger Interline Agreement
</TABLE>

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<PAGE> 105

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
SOUTH AFRICAN AIRLINES.................. Passenger Interline Agreement
SOUTHWEST AIRLINES...................... Employee Travel Agreement
SUNAIRE EXPRESS......................... Employee Travel Agreement
SUNAIRE EXPRESS......................... Passenger Interline Agreement
SWISSAIR................................ Employee Travel Agreement
SWISSAIR................................ Cargo Interline Agreement
SWISSAIR................................ Passenger Interline Agreement
TACA INTERNATIONAL...................... Passenger Interline Agreement
TAP AIR PORTUGAL........................ Employee Travel Agreement
TAP AIR PORTUGAL........................ Cargo Interline Agreement
TAP AIR PORTUGAL........................ Passenger Interline Agreement
THAI AIRWAYS............................ Employee Travel Agreement
THAI AIRWAYS............................ Cargo Interline Agreement
THAI AIRWAYS............................ Passenger Interline Agreement
TIME AIR................................ Passenger Interline Agreement
TIME AIR................................ Employee Travel Agreement
TOWER AIR............................... Passenger Interline Agreement
TOWER AIR............................... Employee Travel Agreement
TRANS WORLD AIRLINES, INC. ............. Cargo Interline Agreement
TRANS WORLD AIRLINES, INC. ............. Passenger Interline Agreement
TRANS WORLD AIRLINES, INC. ............. Employee Travel Agreement
UNITED AIRLINES, INC. .................. Passenger Interline Agreement
UNITED AIRLINES, INC. .................. Employee Interline Agreement
UNITED AIRLINES, INC. .................. Cargo Interline Agreement
US AIR INC. ............................ Employee Travel Agreement
US AIR INC. ............................ Passenger Interline Agreement
UTA FRENCH AIRLINES..................... Passenger Interline Agreement
UTA FRENCH AIRLINES..................... Employee Travel Agreement
VARIG BRAZILIAN AIRLINES................ Passenger Interline Agreement
VENEZOLANA INTL. DE
AVIACIO SC............................ Employee Travel Agreement
VIASA................................... Passenger Interline Agreement
VIRGIN ATLANTIC AIRWAYS................. Passenger Interline Agreement
VIRGIN ATLANTIC AIRWAYS................. Employee Travel Agreement
WESTAIR COMMUTER........................ Employee Travel Agreement
WESTAIR COMMUTER........................ Passenger Interline Agreement
WINGS WEST AIRLINES, INC. .............. Employee Travel Agreement
CARGOLUX AIRLINES INT'L................. Interline Agreement
</TABLE>

3-7
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<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
AIRPORT AUTH. OF WASHOE COUNTY.......... Airline Operat. Agrmnt & Terminal Bldng Lease dated
10/8/81 between Airport Authority of Washoe Cnty &
Frontier Airlines (as predecessor in interest to
AWA, Inc. which assumed the lease after Frontier's
bnkrptcy) as amended on 4/20/89, 6/22/89, &
10/10/91
AIRPORT REVENUE FUND;
STAPLETON INT......................... City and County of Denver Agreement and Lease at
Stapleton International Airport between the City
and County of Denver and AWA, Inc.
ALBUQUERQUE INTERNATIONAL............... Air Freight Facility Lease and Agreement by and
between the City of Albuquerque and AWA, Inc.
ALBUQUERQUE, CITY OF.................... Scheduled Airline Operating & Terminal Building
Lease dated 10/7/87 by and between the City of
Albuquerque and AWA, Inc.
AUSTIN, CITY OF......................... Austin Airport Use and Lease Agreement as amended
5/1/90 by and between the City of Austin and AWA,
Inc.
AVIATION DEPARTMENT..................... La Guardia Airport Agreements AGA-152, AGA-170,
AGA-187, AGA-217 and AGA-153
BOSTON LOGAN INTL. AIRPORT.............. Airport Lease Agreement between the Massachusetts
Port Authority and AWA, Inc.
BURBANK-GLENDALE-PASADENA............... Airport Use Agreement dated 9/1/84 by and between
Burbank-Glendale-Pasadena Airport Authority and
AWA, Inc.
CITY OF CHICAGO......................... Airport License and Agreement by and between the
City of Chicago and AWA, Inc.
CITY OF HOUSTON......................... Use and Lease Agreement dated 1/1/90 by and between
the City of Houston and AWA, Inc.
CITY OF KANSAS CITY..................... Kansas City International Airport Use and Lease
Agreement, dated 12/9/88 by and between Kansas
City, Missouri and AWA, Inc.
CITY OF LONG BEACH...................... Commercial Use Permit by and between the City of
Long Beach Airport Bureau and AWA, Inc.
CITY OF SAN JOSE........................ Operations Space Lease dated 7/25/88 by and between
the City of San Jose and AWA, Inc.
CITY OF ST. LOUIS....................... Lambert -- St. Louis International Airport
Preferential Use Gate Space Permit, dated 5/15/91
by and between the City of St. Louis and AWA, Inc.
CLARK COUNTY DEPT OF AVIAT.............. Scheduled Airline Operating Agreement and Terminal
Building Lease dated 9/11/87 between Clark County
and AWA, Inc.
COLORADO SPRINGS AIRPORT................ Lease Agreement dated 6/28/83 between City of
Colorado Springs and AWA, Inc.
COUNTY OF ORANGE........................ Certified Passenger Airline Lease dated 9/4/90 by
and between County of Orange and AWA, Inc. as
amended by First Amendment dated 6/1/91
DALLAS/FT. WORTH AIRPORT................ DFW Airport Board Permit No. 237633 dated 7/15/90
by and between the DFW Int'l Airport Board and AWA,
Inc.
</TABLE>

3-8
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<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
EL PASO INTERNATIONAL
AIRPORT............................... Certified Passenger Airline Lease dated 10/1/89 by
and between the City of El Paso and AWA, Inc.
LOS ANGELES, CITY OF.................... Lease Agreement covering premises in Terminal One,
LAX, by and between the City of Los Angeles and
AWA, Inc.
MARYLAND AVIATION ADMIN................. Lease Agreement dated 8/7/87 between State Aviation
Administration of the Maryland Dept. of
Transportation and AWA, Inc. as amended by
Supplement No. 1, dated 3/24/88
MCKENZIE PROPERTIES..................... Lease Agreement for Reservation Facilities at Reno
dated 6/1/87 between McKenzie Properties and AWA,
Inc.
METROPOLITAN WASHINGTON................. Airport Use Agreement and Premise Lease dated
2/27/90 by and between Metropolitan Washington
Airports Authority and AWA, Inc.
MINNEAPOLIS/ST PAUL INTL................ Terminal Building Agreement dated 5/15/88 by and
between Metropolitan Airport Commission and AWA,
Inc. as amended by 1989 Amendment to 1962 Airport
Bldng Lease dated 11/1/90, and amendments 1 through
8
NORTHWEST AIRLINES, INC. ............... Cargo Bldng Sublease dated 11/1/88 by and between
Northwest Airlines and AWA, Inc., for facilities
located at 2121 Air Cargo Road
NORTHWEST AIRLINES, INC. ............... Sublease Agreement for use of certain passenger
handling and aircraft servicing facilities located
at Minneapolis/St. Paul Int'l Airport dated 10/8/89
by and between Northwest Airlines, Inc. and AWA,
Inc.
NORTHWEST AIRLINES, INC. ............... Letter of Agreement for Concourse "E", O'Hare Int'l
Airport between Northwest Airlines, Inc. and AWA,
Inc.
NORTHWEST AIRLINES, INC. ............... O'Hare Int'l Airport Gate Use Agreement dated
4/1/90 by and between Northwest Airlines and AWA,
Inc.
NORTHWEST AIRLINES, INC. ............... Cargo Building Sublease at Salt Lake City dated
1/1/89 by and between Northwest Airlines, Inc. and
AWA, Inc.
OMAHA AIRPORT AUTHORITY................. Omaha Agreement & Lease for Scheduled Airline
Operations by and between Airport Authority of the
City of Omaha and AWA, Inc.
PORT AUTHORITY OF NY & NJ............... Newark Int'l Airport Agreements ANA-516, ANA-524,
ANA-473 and AWA-525
PORT AUTHORITY OF NY & NJ............... John F. Kennedy Int'l Airport Agreements AYC-018
and AYB-881
PORT OF OAKLAND......................... License and Concession Agreement dated 1/1/91 by
and between the Port of Oakland and AWA, Inc.
PORT OF PORTLAND........................ Passenger Airline Operating and Lease Agreement by
and between the Port of Portland and AWA, Inc.
PORT OF SEATTLE......................... Basic Airline Lease and Agreement No. M-06181-0-BAS
by and between the Port of Seattle and AWA, Inc.
SACRAMENTO, COUNTY OF................... Scheduled Airline Operating Agreement and Terminal
Building Lease dated 7/1/90 between the County of
Sacramento and AWA, Inc.
</TABLE>

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<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
SALT LAKE CITY TREASURER................ Airport Use Agreement dated 2/1/81 as assumed on
11/26/86 from Frontier Airlines by and between Salt
Lake City Corp. and AWA, Inc.
SAN DIEGO UNIFIED PORT DIST............. Rental Agreement and Landing Permit at San Diego
Int'l Airport by and between the San Diego Unified
Port District and AWA, Inc.
SAN FRANCISCO AIRPORT COMM.............. Airline Operating Permit #1874 dated 5/1/90 by and
between the City & County of San Francisco and AWA,
Inc. and Airport Commission City and County of San
Francisco, Space or Use Permit #1876, 1877, 1878,
and 2031, dated 5/1/90
TUCSON AIRPORT AUTHORITY................ Air Cargo Sublease dated 12/1/86 between the Tucson
Airport Authority and AWA, Inc.
TUCSON AIRPORT AUTHORITY................ Airport Use Agreement dated 11/1/84 by and between
the Tucson Airport Authority and AWA, Inc.
WICHITA AIRPORT AUTHORITY............... Airline Airport Agreement dated 4/1/85 by and
between the Wichita Airport Authority and AWA, Inc.
AIRCRAFT SERVICES INT'L................. Into-plane Service Agreement dated 10/87 for
Albuquerque, Burbank, Portland, and San Diego
ALLIED AVIATION SERV INTL., dba......... Into-plane Service Agreement for airports located
at Washington D.C., Dallas
OGDEN ALLIED............................ Forth Worth, Newark, Houston, JFK, La Guardia,
Kansas City, & St. Louis
AMOCO OIL CO............................ Fuel Purchase Agreement for airports located at
Columbus and Midway
AMR COMBS............................... Into-plane Service Agreement for Denver
ARCO PRODUCTS........................... Fueling Purchase Agreement dated 7/90 for Burbank,
Los Angeles, Portland, San Diego, Seattle, San
Jose, Orange County, and Tucson
ARIZONA FUELING......................... Cost Sharing Agreement dated 9/29/79 as amended on
9/1/82, 3/4/86 and 12/1/91 by and among Arizona
Fueling Facilities Corporation and America West
Airlines, Inc. and certain other airlines.
Option Agreement dated 12/14/90 by and between
Arizona Fueling Facilities Corporation and America
West Airlines, Inc.
ATLANTIC AVIATION....................... Into-plane Service Agreement for San Jose
CALNEV PIPE LINE CO..................... Pipeline Agreement dated 10/84
CHEVRON U.S.A., INC..................... Fuel Purchase Agreement for Long Beach, Orlando,
Oakland, Tampa, Reno, and Las Vegas
CITGO PETROLEUM CORP.................... Fuel Purchase Agreement for Newark and LaGuardia
COLORADO JET CENTER..................... Into-plane Service Agreement for Colorado Springs
CONOCO, INC............................. Fuel Purchase Agreement for Wichita, Kansas City,
Omaha, and Minneapolis
CONTRACTING AIRLINES AT................. Fuel Consortium Agreement for Minneapolis
</TABLE>

3-10
<PAGE> 109

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
DIAMOND SHAMROCK REFNG & MKTG........... Fuel Purchase Agreement for Colorado Springs and
Denver
DYNAIR FUELING INC...................... Into-plane Service Agreement for Phoenix, Las
Vegas, Reno and Oakland
EXXON................................... Fuel Purchase Agreement for Atlanta
HUDSON GENERAL.......................... Into-plane Service Agreement for Boston, Los
Angeles, and Salt Lake City
KOCH REFINING........................... Fuel Purchase Agreement for Dallas-Forth Worth
LAGUARDIA FUEL FAC CORP................. La Guardia Airline Fuel Consortium Agreement
LASFUEL CORP............................ Las Vegas Airline Fuel Consortium Agreement
LOCKHEED AIR TERMINAL, INC.............. Into-plane Service Agreement for Ontario
MOBIL OIL CORPORATION................... Fuel Purchase Agreement for Boston, Baltimore,
Phoenix, and Atlanta
OAKLAND FUEL FACILITIES................. Oakland Airline Fuel Consortium Agreement
OASIS AVIATION INC...................... Into-plane Service Agreement for El Paso
ONTFUEL CORP............................ Ontario Airline Fuel Consortium Agreement
RENO FUELING FACILITIES
CORP.................................. Reno Airline Fuel Consortium Agreement
SALT LAKE CITY CORPORATION AND.......... Salt Lake City Airline Fuel Consortium Agreement
SHELL OIL COMPANY....................... Fuel Purchase Agreement for Washington DC, El Paso,
Houston, Milwaukee, Ontario, and St. Louis
SKY HARBOR AIR SERVICE.................. Into-plane Service Agreement for Omaha
SNAFUEL INC............................. Orange County Airline Fuel Consortium Agreement
TRANS WORLD AIRLINES, INC............... Into-plane Service Agreement for San Francisco
TUCSON AIRPORT AUTHORITY................ Into-plane Service Agreement for Tucson
VAN DUSEN AIRPORT SERVICES.............. Into-plane Service Agreement for Austin, Baltimore,
Milwaukee, Minneapolis, and Seattle
ABACUS DISTRIBUTION SYSTEMS............. Participating Carrier Agreement dated 1/1/90
between Abacus Distribution System PD LTD and AWA,
Inc.
AMADEUS MARKETING S.A.R.L............... Participating Carrier Agreement by and between
Amadeus Marketing S.A.R.L. and AWA, Inc.
GETS MARKETING CO....................... GETS Participation Agreement dated 9/28/90 between
GETS Marketing Company and America West Airlines,
Inc.
INFINI TRAVEL
INFORMATION INC....................... Infini Participating Carrier Agreement dated
12/1/90 between Infini Travel Information, Inc. and
AWA, Inc.
JAPAN AIRLINES.......................... Participation Agreement dated 12/1/90 between Japan
Airlines Company, Ltd. and AWA, Inc.
SABRE TRAVEL INFO. NETWORK.............. Sabre Participating Carrier Agreement dated 6/15/87
between American Airlines, Inc. and AWA, Inc.
SYSTEM ONE HOLDINGS INC................. System One Participating Airline Agreement dated
11/1/88 by and between System One Direct Access,
Inc. and AWA, Inc.
</TABLE>

3-11
<PAGE> 110

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
WORLDSPAN, L.P. ........................ Worldspan Participating Carrier Agreement dated
February 1, 1991 between Worldspan L.P. and AWA,
Inc.
HONEYWELL INC........................... Credit Union Security Equipment Lease dated
11/22/89 between Honeywell Protection Services and
AWA, Inc.
HONEYWELL INC........................... Company Store Security Equipment Lease dated
11/22/89 between Honeywell Protection Services and
AWA, Inc.
PRO SERVE MARKETING, INC. .............. Advertising and Use Agreement dated 2/4/91 between
Pro Serve Marketing, Inc. and AWA, Inc. for scoring
and video system at McKale Center
GPA..................................... Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-1 (N620AW)], dated September
28, 1990, between GPA Leasing USA I, Inc. and
America West Airlines, Inc. (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-1 (N620AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
I, Inc. (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to Assignment of Sublease
[GPA 1989 BN-1 (N620AW)], dated as of September 21,
1990, between GPA Leasing USA I, Inc. and
Wilmington Trust Company (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-1 (N620AW)], dated as of September 21, 1990,
between GPA Leasing USA I, Inc. and America West
Airlines, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-2 (N622AW)], dated September
28, 1990, between GPA Leasing USA I, Inc. and
America West Airlines, Inc. (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-2 (N622AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
I, Inc. (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
</TABLE>

3-12
<PAGE> 111

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-2 (N622AW)], dated as of
September 21, 1990, between GPA Leasing USA I, Inc.
and Wilmington Trust Company (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-2 (N622AW)], dated as of September 21, 1990,
between GPA Leasing USA I, Inc. and America West
Airlines, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-3 (N621AW)], dated September
28, 1990, between GPA Leasing USA I, Inc. and
America West Airlines, Inc. (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-3 (N621AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
I, Inc. (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-3 (N621AW)], dated as of
September 21, 1990, between GPA Leasing USA I, Inc.
and Wilmington Trust Company (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-3 (N621AW)], dated as of September 21, 1990,
between GPA Leasing USA I, Inc. and America West
Airlines, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-4 (N625AW)], dated September
28, 1990, between GPA Leasing USA I, Inc. and
America West Airlines, Inc. (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-4 (N625AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
I, Inc. (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
</TABLE>

3-13
<PAGE> 112

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-4 (N625AW)], dated as of
September 21, 1990, between GPA Leasing USA I, Inc.
and Wilmington Trust Company (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-4 (N625AW)], dated as of September 21, 1990,
between GPA Leasing USA I, Inc. and America West
Airlines, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-5 (N624AW)], dated September
28, 1990, between GPA Leasing USA I, Inc. and
America West Airlines, Inc. (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-5 (N624AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
I, Inc. (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-5 (N624AW)], dated as of
September 21, 1990, between GPA Leasing USA I, Inc.
and Wilmington Trust Company (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublessee Consent and Agreement to Amendment No. 1
to Assignment of Sublease [GPA 1989 BN-5 (N624AW)]
by America West Airlines, Inc. relating to
Amendment No. 1 to Assignment of Sublease [GPA 1989
BN-5], dated as of October 1, 1991, between GPA
Leasing USA I, Inc. and Wilmington Trust Company
(such agreement not to be subject to the provisos
set forth in subsection 5.1.1 or the provisions of
subsections 5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-5 (N624AW)], dated as of September 21, 1990,
between GPA Leasing USA I, Inc. and America West
Airlines, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
</TABLE>

3-14
<PAGE> 113

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-6 (N626AW)], dated September
28, 1990, between GPA Leasing USA Sub I, Inc. and
America West Airlines, Inc. (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-6 (N626AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
Sub I, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-6 (N626AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublessee Consent and Agreement to Amendment No. 1
to Assignment of Sublease [GPA 1989 BN-6 (N626AW)]
by America West Airlines, Inc. relating to
Amendment No. 1 to Assignment of Sublease [GPA 1989
BN-6], dated as of October 1, 1991, between GPA
Leasing USA Sub I, Inc. and Wilmington Trust
Company (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-6 (N626AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-7 (N628AW)], dated September
28, 1990, between GPA Leasing USA Sub I, Inc. and
America West Airlines, Inc. (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-7 (N628AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
Sub I, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
</TABLE>

3-15
<PAGE> 114

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-7 (N628AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-7 (N628AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-8 (N627AW)], dated September
28, 1990, between GPA Leasing USA Sub I, Inc. and
America West Airlines, Inc. (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-8 (N627AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
Sub I, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-8 (N627AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-8 (N627AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-9 (N629AW)], dated September
28, 1990, between GPA Leasing USA Sub I, Inc. and
America West Airlines, Inc. (such agreement not to
be subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
</TABLE>

3-16
<PAGE> 115

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-9 (N629AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
Sub I, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-9 (N629AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-9 (N629AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-10 (N631AW)], dated
September 28, 1990, between GPA Leasing USA Sub I,
Inc. and America West Airlines, Inc. (such
agreement not to be subject to the provisos set
forth in subsection 5.1.1 or the provisions of
subsections 5.1.3 or 5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-10 (N631AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
Sub I, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-10 (N631AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublessee Consent and Agreement to Amendment No. 1
to Assignment of Sublease [GPA 1989 BN-10 (N631AW)]
by America West Airlines, Inc. relating to
Amendment No. 1 to Assignment of Sublease [GPA 1989
BN-10], dated as of October 1, 1991, between GPA
Leasing USA Sub I, Inc. and Wilmington Trust
Company (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
</TABLE>

3-17
<PAGE> 116

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Sublease Tax Indemnification Agreement [GPA 1989
BN-10 (N631AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-11 (N632AW)], dated
September 28, 1990, between GPA Leasing USA Sub I,
Inc. and America West Airlines, Inc. (such
agreement not to be subject to the provisos set
forth in subsection 5.1.1 or the provisions of
subsections 5.1.3 or 5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-11 (N632AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
Sub I, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-11 (N632AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-11 (N632AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1989 BN-12 (N633AW)], dated
September 28, 1990, between GPA Leasing USA Sub I,
Inc. and America West Airlines, Inc. (such
agreement not to be subject to the provisos set
forth in subsection 5.1.1 or the provisions of
subsections 5.1.3 or 5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1989 BN-12 (N633AW)], dated
as of September 21, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
Sub I, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
</TABLE>

3-18
<PAGE> 117

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1989 BN-12 (N633AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1989
BN-12 (N633AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1990 AWA-13 (N634AW)], dated
September 28, 1990, between GPA Leasing USA Sub I,
Inc. and America West Airlines, Inc. (such
agreement not to be subject to the provisos set
forth in subsection 5.1.1 or the provisions of
subsections 5.1.3 or 5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1990 AWA-13 (N634AW)],
dated as of September 21, 1990, by America West
Airlines, Inc. and accepted and agreed to by GPA
Leasing USA Sub I, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1990 AWA-13 (N634AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1990
AWA-13 (N634AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1990 AWA-14 (N635AW)], dated
September 28, 1990, between GPA Leasing USA Sub I,
Inc. and America West Airlines, Inc. (such
agreement not to be subject to the provisos set
forth in subsection 5.1.1 or the provisions of
subsections 5.1.3 or 5.1.4 of the Plan).
</TABLE>

3-19
<PAGE> 118

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1990 AWA-14 (N635AW)],
dated as of September 21, 1990, by America West
Airlines, Inc. and accepted and agreed to by GPA
Leasing USA Sub I, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1990 AWA-14 (N635AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1990
AWA-14 (N635AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1990 AWA-15 (N636AW)], dated
September 28, 1990, between GPA Leasing USA Sub I,
Inc. and America West Airlines, Inc. (such
agreement not to be subject to the provisos set
forth in subsection 5.1.1 or the provisions of
subsections 5.1.3 or 5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1990 AWA-15 (N636AW)],
dated as of September 21, 1990, by America West
Airlines, Inc. and accepted and agreed to by GPA
Leasing USA Sub I, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1990 AWA-15 (N636AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1990
AWA-15 (N636AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
</TABLE>

3-20
<PAGE> 119

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Sublease Supplement No. 1 to Aircraft Sublease
Agreement [GPA 1990 AWA-16 (N637AW)], dated
September 28, 1990, between GPA Leasing USA Sub I,
Inc. and America West Airlines, Inc. (such
agreement not to be subject to the provisos set
forth in subsection 5.1.1 or the provisions of
subsections 5.1.3 or 5.1.4 of the Plan).
Letter Agreement No. 1 relating to Aircraft
Sublease Agreement [GPA 1990 AWA-16 (N637AW)],
dated as of September 21, 1990, by America West
Airlines, Inc. and accepted and agreed to by GPA
Leasing USA Sub I, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1990 AWA-16 (N637AW)], dated as of
September 21, 1990, between GPA Leasing USA Sub I,
Inc. and Wilmington Trust Company (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1990
AWA-16 (N637AW)], dated as of September 21, 1990,
between GPA Leasing USA Sub I, Inc. and America
West Airlines, Inc. (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Supplement No. 1 to Engine Sublease
Agreement [GPA 1990 AWA-E1 (MSN V0025)], dated
February 8, 1991, between GPA Leasing USA I, Inc.
and America West Airlines, Inc. (such agreement not
to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Letter Agreement No. 1 relating to Engine Sublease
Agreement [GPA 1990 AWA-E1 (MSN V0025], dated as of
December 12, 1990, by America West Airlines, Inc.
and accepted and agreed to by GPA Leasing USA I,
Inc. (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1991 AWA-E1 (MSN V0025)], dated as of
March 15, 1991, between GPA Leasing USA I, Inc. and
Wilmington Trust Company (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
</TABLE>

3-21
<PAGE> 120

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Sublease Tax Indemnification Agreement [GPA 1991
AWA-E1 (MSN V0025)], dated as of March 15, 1991,
between GPA Leasing USA I, Inc. and America West
Airlines, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Purchase Agreement Warranties Assignment [GPA 1991
AWA-E1 (MSN V0025)], dated March 17, 1991, among
GPA Leasing USA I, Inc., America West Airlines,
Inc. and Wilmington Trust Company and accepted by
IAE International Aero Engines, AG (such agreement
not to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Sublease Supplement No. 1 to Engine Sublease
Agreement [GPA 1990 AWA-E2 (MSN V0049)], dated
February 8, 1991, between GPA Leasing USA I, Inc.
and America West Airlines, Inc. (such agreement not
to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Letter Agreement No. 1 relating to Engine Sublease
Agreement [GPA 1990 AWA-E2 (MSN V0049)], dated as
of December 12, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
I, Inc. (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1991 AWA-E2 (MSN V0049)], dated as of
March 15, 1991, between GPA Leasing USA I, Inc. and
Wilmington Trust Company (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1991
AWA-E2 (MSN V0049)], dated as of March 15, 1991,
between GPA Leasing USA I, Inc. and America West
Airlines, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Purchase Agreement Warranties Assignment [GPA 1991
AWA-E2 (V0049)], dated March 17, 1991, among GPA
Leasing USA I, Inc., America West Airlines, Inc.
and Wilmington Trust Company and accepted by IAE
International Aero Engines, AG (such agreement not
to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
</TABLE>

3-22
<PAGE> 121

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Sublease Supplement No. 1 to Engine Sublease
Agreement [GPA 1990 AWA-E3 (MSN V0019)], dated
February 8, 1991, between GPA Leasing USA I, Inc.
and America West Airlines, Inc. (such agreement not
to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Letter Agreement No. 1 relating to Engine Sublease
Agreement [GPA 1990 AWA-E3 (MSN V0019)], dated as
of December 12, 1990, by America West Airlines,
Inc. and accepted and agreed to by GPA Leasing USA
I, Inc. (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Sublessee Consent and Agreement by America West
Airlines, Inc. relating to the Assignment of
Sublease [GPA 1991 AWA-E3 (MSN V0019)], dated as of
March 15, 1991, between GPA Leasing USA I, Inc. and
Wilmington Trust Company (such agreement not to be
subject to the provisos set forth in subsection
5.1.1 or the provisions of subsections 5.1.3 or
5.1.4 of the Plan).
Sublease Tax Indemnification Agreement [GPA 1991
AWA-E3 (MSN V0019)], dated as of March 15, 1991,
between GPA Leasing USA I, Inc. and America West
Airlines, Inc. (such agreement not to be subject to
the provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
Purchase Agreement Warranties Assignment [GPA 1991
AWA-E3 (MSN V0019)], dated March 17, 1991, among
GPA Leasing USA I, Inc., America West Airlines,Inc.
and Wilmington Trust Company and accepted by IAE
International Aero Engines, AG (such agreement not
to be subject to the provisos set forth in
subsection 5.1.1 or the provisions of subsections
5.1.3 or 5.1.4 of the Plan).
Letter Agreement, dated April 15, 1994, by America
West Airlines, Inc. and acknowledged, agreed and
accepted by GPA Leasing USA I, Inc. and GPA Leasing
USA Sub I, Inc. (such agreement not to be subject
to the provisos set forth in subsection 5.1.1 or
the provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
</TABLE>

3-23
<PAGE> 122

<TABLE>
<CAPTION>
VENDOR NAME TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>
Aircraft Finance Agreement dated as of August 25,
1990 between GPA Group plc and America West
Airlines, Inc., as amended by Amendment No. 1 to
Aircraft Finance Agreement dated as of September
21, 1990 between GPA Group plc and America West
Airlines, Inc., and as supplemented and modified by
Letter Agreement No. 1 dated August 25, 1990 from
GPA Group plc and accepted and acknowledged by
America West Airlines, Inc., Letter Agreement No. 2
dated August 25, 1990 from GPA Group plc and
accepted and acknowledged by America West Airlines,
Inc., Letter Agreement No. 3 dated August 25, 1990
from GPA Group plc and accepted and acknowledged by
America West Airlines, Inc., Letter Agreement No. 4
dated August 25, 1990 from GPA Group plc and
accepted and acknowledged by America West Airlines,
Inc., and Waiver Letter dated February 8, 1991 from
GPA Group plc, GPA Leasing USA I, Inc. and GPA
Leasing USA Sub I, Inc. and accepted and agreed to
by America West Airlines, Inc., to the extent that
such Aircraft Finance Agreement, as so amended,
modified and supplemented, is referenced in any of
the Sublease Agreements assumed by America West
Airlines, Inc. pursuant to that certain Stipulation
Regarding Aircraft Leases and/or Agreements with
GPA Group plc, GPA Leasing USA I, Inc., GPA Leasing
USA Sub I, Inc. and Industrial Bank of Japan and
Order approved September 5, 1991 and any of the
agreements and instruments identified in this
Schedule 3 to which either GPA Leasing USA I, Inc.,
GPA Leasing USA Sub I, Inc. or GPA Group plc is a
party (such agreement not to be subject to the
provisos set forth in subsection 5.1.1 or the
provisions of subsections 5.1.3 or 5.1.4 of the
Plan).
</TABLE>

3-24

<PAGE> 1
Exhibit 10.1

===============================================================================

$77,560,621.60

FOURTH AMENDED AND RESTATED

CREDIT AGREEMENT

among

AMERICA WEST AIRLINES, INC.

VARIOUS LENDERS

and

BT COMMERCIAL CORP.

as ADMINISTRATIVE AGENT

_______________________________

Dated as of June 30, 1994

_______________________________

================================================================================
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.02 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 27

SECTION 2. LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.01 Commitments and Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.02 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.03 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.04 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.06 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.07 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.08 Principal Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.09 Interest Period Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.11 Cost Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.12 Distribution of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

SECTION 3. FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.01 Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.02 Fees of Administrative Agent and Collateral Agent . . . . . . . . . . . . . . . . 37

SECTION 4. PREPAYMENTS; PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.02 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.03 Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

SECTION 5. CONDITIONS PRECEDENT AND RELATED PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.01 Conditions to the Effective Date . . . . . . . . . . . . . . . . . . . . . . . . 41
5.02 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.03 Conditions Precedent to Amendment Effective Date . . . . . . . . . . . . . . . . 49
5.04 Conditions Precedent to Second Amendment Effective Date . . . . . . . . . . . . . 54
5.05 Conditions Precedent to Third Amendment Effective Date . . . . . . . . . . . . . 61
5.06 Conditions Precedent to Fourth Amendment Effective Date . . . . . . . . . . . . . 66

SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.02 Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.04 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.05 Priority; Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 71
</TABLE>

-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
6.06 Financial Statements; Financial Condition; Undisclosed Liabilities;
etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.07 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.08 True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.09 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . 73
6.10 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.11 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.12 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
6.13 Compliance with Statutes, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 75
6.14 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.15 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . 77
6.16 End of Fiscal Year; Fiscal Quarters . . . . . . . . . . . . . . . . . . . . . . . 77
6.17 The Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.18 Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
6.19 GPA Agreements/Kawasaki Agreements . . . . . . . . . . . . . . . . . . . . . . . 78

SECTION 7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
7.01 Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
7.02 Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.03 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . 84
7.04 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.05 Compliance with Statutes, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.06 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . . . . . . . . . . 86
7.07 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
7.08 Minimum Designated Collateral Balances . . . . . . . . . . . . . . . . . . . . . 86
7.09 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
7.10 Cash Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
7.11 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

SECTION 8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.01 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.02 Consolidation, Merger, Sale of Assets, etc . . . . . . . . . . . . . . . . . . . 97
8.03 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.04 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.05 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
8.06 Advances, Investments and Loans . . . . . . . . . . . . . . . . . . . . . . . . . 101
8.07 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.08 Limitation on Repayments, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.09 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 106
8.10 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
8.11 Chapter 11 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
8.12 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
8.13 Conversion to Chapter 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
8.14 Operation of Specified Aircraft/Engines. . . . . . . . . . . . . . . . . . . . . 107
8.15 Operating Plan Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
8.16 Slots and Routes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
8.17 Seizures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
8.18 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
</TABLE>

-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
9.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
9.02 Representations, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
9.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
9.04 The Case, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
9.05 Credit Documents and Kawasaki Credit Agreement . . . . . . . . . . . . . . . . . 112
9.06 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
9.07 GPA Agreements/Kawasaki Agreements . . . . . . . . . . . . . . . . . . . . . . . 114
9.08 Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
9.09 Casualties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
9.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
9.11 Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
9.12 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
10.01 Payment of Expenses, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
10.02 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
10.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
10.04 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
10.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . 121
10.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
10.07 Calculations; Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
10.08 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
10.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
10.10 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
10.11 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
10.12 Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
10.13 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
10.14 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
10.15 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
10.16 Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.17 Specified Lien Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.18 Administrative Agent; Collateral Agent . . . . . . . . . . . . . . . . . . . . . 127
10.19 Dating and Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
10.20 Participation by Commerce and Economic Development Commission . . . . . . . . . 128
10.21 Covenants Do Not Preclude Negotiation of a Plan of Reorganization . . . . . . . 128
10.22 Certain Consents and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . 128
</TABLE>

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<PAGE> 5
<TABLE>
<S> <C> <C>
ANNEX
Annex 1 Lenders' Commitments and Addresses

SCHEDULES
Schedule 1 A320 Leases
Schedule 2 Designated Collateral
Schedule 3 [Reserved]
Schedule 4 [Reserved]
Schedule 5 Deferral Aircraft
Schedule 6 Designated Aircraft Leases
Schedule 7 Engine Leases
Schedule 8 Real Property
Schedule 9 Liabilities and Obligations
Schedule 10 Litigation
Schedule 11 Slots, Routes and Domestic Schedule Gates
Schedule 12 Insurance Policies and Programs
Schedule 13 [Reserved]
Schedule 14 Permitted First Liens
Schedule 15 Existing Debt
Schedule 16 Existing Investments
Schedule 17 Kawasaki Leases
Schedule 18 Stipulations
Schedule 19 Aircraft Rental and Loan Reductions and
Deferrals
Schedule 20 [Reserved]
Schedule 21 [Reserved]

EXHIBITS
Exhibit A Promissory Note
Exhibit B [Reserved]
Exhibit C Officer's Certificate
Exhibit D-1 Interim Order
Exhibit D-2 Final Order
Exhibit D-3 GPA Order
Exhibit D-4 Northwest Order
Exhibit D-5 Additional Loan Order and Kawasaki Order
Exhibit D-6 Second Additional Loan Order
Exhibit D-7 Interim Extension Loan Order
Exhibit D-8 Final Extension Loan Order
Exhibit D-9 Subsequent Extension Loan Order
Exhibit E Action Plan Summary
Exhibit F Security Agreement
Exhibit G Aircraft/Engine Mortgage
Exhibit H Parts Mortgage
Exhibit I Initial Cash Management Agreement
Exhibit J-1 Real Property Mortgage
Exhibit J-2 Lessor Consent Agreement
Exhibit J-3 Senior Lender Agreement
Exhibit J-4 Assignment of Gate Leases
Exhibit K Slot Deed of Conveyance
</TABLE>

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<PAGE> 6
<TABLE>
<S> <C> <C>
Exhibit L Slot Lease Agreement
Exhibit M Collateral Certificate
Exhibit N Agency Agreement
Exhibit O Daily Cash Management Report
Exhibit P By-Law Letter Agreement
Exhibit Q Officer's Certificate
Exhibit R First Amendment to Cash Management
Agreement
Exhibit S First Amendment to Agency Agreement
Exhibit T First Amendments to Deeds of Trust
Exhibit U Amendment No. 1 to Assignment of Gate
Leases
Exhibit V-1 First Amendment to Consent of the City of
Phoenix (Hangar)
Exhibit V-2 First Amendment to Consent of the City of
Phoenix (11 acre parcel)
Exhibit W Consent of First Interstate Bank of
Arizona, N.A.
Exhibit X Kawasaki Letter Regarding Intercreditor
Agreements
Exhibit Y Officer's Certificate
Exhibit Z Second Amendment to Cash Management
Agreement
Exhibit AA Second Amendment to Agency Agreement
Exhibit BB Second Amendments to Deeds of Trust
Exhibit CC Assignment of Gate Leases Amendment No. 2
Exhibit DD-1 Second Amendment to Consent of the City of
Phoenix (Hangar)
Exhibit DD-2 Second Amendment to Consent of the City of
Phoenix (11 acre parcel)
Exhibit EE Consent of First Interstate Bank of
Arizona N.A.
Exhibit FF Letter Regarding Intercreditor Agreements
Exhibit GG First Amendment to Security Agreement
Exhibit HH Amendment No. 3 to Aircraft/Engine Mortgage
Exhibit II Amendment No. 1 to Parts Mortgage
Exhibit JJ First Amendment to Slot Lease Agreement
Exhibit KK Management Letter Agreement
Exhibit LL Northwest Release and Termination
Exhibit MM Third Amendments to Deeds of Trust
Exhibit NN Assignment of Gate Leases Amendment No. 3
Exhibit OO Third Amendments to Consents of the City of
Phoenix
Exhibit PP Second Amendment to Slot Lease Agreement
Exhibit QQ Ansett Release and Termination
Exhibit RR Amended and Restated Management Letter
Agreement
Exhibit SS Amendment No. 2 to Parts Mortgage
Exhibit TT Fourth Amendments to Deeds of Trust
Exhibit UU Assignment of Gate Lease No. 4
Exhibit VV Dial Release and Termination
</TABLE>

-v-

<PAGE> 7
THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
June 30, 1994, is entered into among AMERICA WEST AIRLINES, INC. (the
"Borrower"), a Delaware corporation, as debtor and debtor-in-possession under
Chapter 11 of Title 11 of the United States Code entitled "Bankruptcy" (the
"Bankruptcy Code"), the Lenders, and BT COMMERCIAL CORP., acting in the manner
and to the extent described in the Agency Agreement (in such capacity, the
"Administrative Agent"), and, subject to the terms and conditions set forth
herein, amends and restates in its entirety the Credit Agreement, dated as of
August 26, 1991, among the Borrower, the Existing Lenders (other than
Kawasaki), Northwest and the Administrative Agent (the "Original Credit
Agreement"), as heretofore amended and restated by the Amended and Restated
Credit Agreement, dated as of December 1, 1991, among the Borrower, the
Existing Lenders, Northwest and the Administrative Agent (such Amended and
Restated Credit Agreement being referred to herein as the "First Amended and
Restated Credit Agreement"), and as heretofore further amended and restated by
the Second Amended and Restated Credit Agreement, dated as of September 1,
1992, among the Borrower, the Existing Lenders, the Second Amendment Lenders
and the Administrative Agent (such Second Amended and Restated Credit Agreement
being referred to herein as the "Second Amended and Restated Credit
Agreement"), and as heretofore further amended and restated by the Third
Amended and Restated Credit Agreement, dated as of September 30, 1993, among
the Borrower, the Existing Lenders, the other Third Amendment Lenders and the
Administrative Agent (such Third Amended and Restated Credit Agreement being
referred to herein as the "Third Amended and Restated Credit Agreement") and
the Third Amended and Restated Credit Agreement, as amended and restated
hereby, and as further amended, modified or supplemented from time to time,
being referred to herein as this "Agreement").

R E C I T A L S:

WHEREAS, all capitalized terms used herein shall have the
meanings provided in Section 1 below;

WHEREAS, on June 27, 1991 (the "Filing Date"), the Borrower
filed a voluntary petition with the Bankruptcy Court initiating the Case and
has continued in the possession of its assets and in the management of its
business pursuant to Sections 1107 and 1108 of the Bankruptcy Code;

WHEREAS, pursuant to and subject to the terms and conditions
of the Original Credit Agreement, the Existing Lenders (other than Kawasaki)
and Northwest agreed to make Loans to the Borrower in an aggregate principal
amount not to exceed $55,000,000;

<PAGE> 8
WHEREAS, pursuant to the First Amended and Restated Credit
Agreement, the Original Credit Agreement was amended and restated to, among
other things, provide for the making of an additional Loan by Kawasaki to the
Borrower in the principal amount of $23,000,000;

WHEREAS, pursuant to the Second Amended and Restated Credit
Agreement, the First Amended and Restated Credit Agreement was amended and
restated to, among other things, provide for the making of additional Loans by
GPA Sub and the Second Amendment Lenders to the Borrower in the principal
amount of $53,000,000;

WHEREAS, simultaneously with the making of such additional
Loans by GPA Sub and the Second Amendment Lenders, the Borrower prepaid from
the proceeds of such additional Loans all of the Loans made by Northwest under
the Original Credit Agreement and outstanding under the First Amended and
Restated Credit Agreement in an aggregate principal amount of $9,876,364;

WHEREAS, after giving effect to the making of such additional
Loans by GPA Sub and the Second Amendment Lenders and the prepayment of the
Loans made by Northwest under the Original Credit Agreement, on the Second
Amendment Effective Date, there were Loans outstanding under the Second Amended
and Restated Credit Agreement in an aggregate principal amount of
$110,783,636.00;

WHEREAS, after giving effect to the making by the Borrower of
scheduled payments and mandatory prepayments of Loans pursuant to and in
accordance with the Second Amended and Restated Credit Agreement (including,
without limitation, the waiving by the Lenders of certain mandatory
prepayments), on the Third Amendment Effective Date, there were Loans
outstanding under the Second Amended and Restated Credit Agreement in an
aggregate principal amount of $91,913,239.20 (of which $8,296,641.93 were
Ansett Loans);

WHEREAS, pursuant to the Third Amended and Restated Credit
Agreement, on the Third Amendment Effective Date, the Third Amendment Lenders
extended the maturity of their Loans to the Maturity Date (as defined in the
Third Amended and Restated Credit Agreement) and the Ansett Loans matured and
were paid in full;

WHEREAS, after giving effect to the maturity and payment of
the Ansett Loans (as aforesaid) and the making by the Borrower of scheduled
payments and mandatory prepayments of Loans pursuant to and in accordance with
the Third Amended and Restated Credit Agreement, on the date hereof,

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<PAGE> 9
there are Loans outstanding under the Third Amended and Restated Credit
Agreement in an aggregate principal amount of $78,574,140.25 (of which
$1,013,518.65 are Dial Loans);

WHEREAS, the Borrower requested the Lenders to extend the
maturity of the Loans to the Maturity Date (as hereinafter defined);

WHEREAS, all of the Lenders are willing to extend the maturity
of the Loans to the Maturity Date (as hereinafter defined) but Dial desires
that the Dial Loans mature and be paid in full on June 30, 1994;

WHEREAS, after giving effect to the foregoing extension of the
maturity of the Loans to the Maturity Date (as hereinafter defined) and the
foregoing payment of the Dial Loans, there will be Loans outstanding under the
Third Amended and Restated Credit Agreement in an aggregate principal amount of
$77,560,621.60;

WHEREAS, subject to the terms and conditions set forth herein,
the Borrower, the Lenders and the Administrative Agent desire that the Third
Amended and Restated Credit Agreement be amended and restated in its entirety
to provide (among other things) for the foregoing extension of the maturity of
the Loans to the Maturity Date (as hereinafter defined) and the foregoing
payment of the Dial Loans;

NOW, THEREFORE, THE PARTIES HERETO AGREE THAT THE AMENDED AND
RESTATED CREDIT AGREEMENT IS AMENDED AND RESTATED TO READ IN ITS ENTIRETY AS
FOLLOWS:

SECTION 1. DEFINITIONS.

1.01 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

"A320 Leases" shall mean those certain Aircraft Sublease
Agreements listed on Schedule 1 hereto, as the same may be amended,
supplemented or otherwise modified.

"Additional Credit" shall have the meaning provided in Section
5.02(c).

"Additional Loan Order" shall mean an order of the Bankruptcy
Court in the form of Exhibit D-5 (as such form may be modified in a manner
acceptable to each of the

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<PAGE> 10
Lenders, in their sole and absolute discretion) to the extent, and only to the
extent, such order does not constitute the Kawasaki Order.

"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and includes any successor in such capacity.

"Affiliate" shall mean, with respect to any Person, any other
Person (i) directly or indirectly controlling (including, but not limited to,
all directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person or (ii) that directly or indirectly
owns more than 25% of the voting securities of such Person; provided, however,
in no event shall any of the GPA Entities, Kawasaki, Kawasaki Enterprises Inc.,
Kawasaki Steel Corporation or any other Lender be considered an Affiliate of
the Borrower. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such corporation, whether through the
ownership of voting securities, by contract or otherwise.

"Agency Agreement" shall mean the Agency Agreement among the
Borrower, the Administrative Agent, the Collateral Agent and the Lenders in the
form of Exhibit N hereto, as modified, supplemented or amended from time to
time.

"Agreement" shall mean this Fourth Amended and Restated Credit
Agreement, as modified, supplemented or amended from time to time.

"Aircraft/Engine Mortgage" shall mean, collectively, the
Aircraft and Engine Chattel Mortgage and Security Agreement in the form of
Exhibit G hereto, and the Spare Parts Chattel Mortgage and Security Agreement
in the form of Exhibit H hereto, as same may be amended, modified or
supplemented from time to time.

"Amended and Restated Management Letter Agreement" shall mean
a letter agreement in the form of Exhibit RR hereto, as the same may be
amended, modified or supplemented from time to time.

"Amendment Effective Date" shall have the meaning specified in
Section 5.03.

"Ansett" shall mean Ansett Worldwide Aviation, U.S.A., a
Nevada partnership, and its successors and assigns.

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<PAGE> 11
"Ansett Loans" shall mean all of the loans made by Ansett
under the Second Amended and Restated Credit Agreement and outstanding
immediately prior to the Third Amendment Effective Date in an aggregate
principal amount of $8,296,641.93.

"Asset Sale" shall mean the sale, transfer or other
disposition to any Person after the Filing Date of any property or other assets
of the Borrower; provided, however, Asset Sale shall not include the sale,
transfer or other disposition of property or other assets referred to in
Section 8.02(i) to the extent that the aggregate Net Proceeds in any one fiscal
year of the Borrower from the sale, transfer or other disposition of all such
property or other assets do not exceed $1,000,000.

"Assignment of Gate Leases" shall mean an Assignment of Gate
Leases in the form of Exhibit J-4 hereto, as same may be amended, modified or
supplemented from time to time.

"Authorized Officer" shall mean and include the Chief
Executive Officer, the Chief Operating Officer, a Senior Vice President, an
Executive Vice President, the Treasurer, an Assistant Treasurer, or the Vice
President and Controller of the Borrower.

"Aviation Act" shall mean the Federal Aviation Act of 1958, as
amended from time to time, or any similar legislation of the United States
enacted in substitution or replacement thereof.

"Bankruptcy Code" shall have the meaning provided in the first
paragraph of this Agreement.

"Bankruptcy Court" shall mean the United States Bankruptcy
Court, District of Arizona, or such other court having jurisdiction over the
Case from time to time.

"Borrower" shall have the meaning specified in the first
paragraph of this Agreement.

"Business Day" shall mean any day except Saturday, Sunday and
any other day which shall be in New York City a legal holiday or a day on which
banking institutions are authorized by law or other government action to close
and, when used with respect to a Loan or interest thereon, shall include a
London Business Day.

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<PAGE> 12
"By-Law Letter Agreement" shall mean a letter agreement in the
form of Exhibit P hereto, as same may be amended, modified or supplemented from
time to time.

"Capital Expenditures" shall have the meaning provided in
Section 8.07.

"Case" shall mean the Chapter 11 case of the Borrower pending
in the Bankruptcy Court.

"Cash Covenant Amount" shall have the meaning provided in
Section 8.15(d).

"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (ii)
domestic time deposits and certificates of deposit of any commercial bank
incorporated in the United States of recognized standing having capital and
surplus in excess of $500,000,000 and having unsecured debt rated at least A or
the equivalent thereof from Standard & Poor's Corporation (an "Eligible Bank")
on the date of making of the deposit with maturities of not more than six
months from the date of acquisition by such Person, (iii) repurchase
obligations entered into with an Eligible Bank with a term of not more than
seven days for underlying securities of the types described in clause (i)
above, (iv) commercial paper issued by the parent corporation of any Eligible
Bank on the date of the acquisition of the commercial paper (provided that the
parent corporation and the bank are both incorporated in the United States) and
commercial paper issued by any Person incorporated in the United States rated,
on the date of the acquisition of the commercial paper, at least A-1 or the
equivalent thereof by Standard & Poor's Corporation or at least P-1 or the
equivalent thereof by Moody's Investors Service, Inc., and in each case
maturing not more than six months after the date of acquisition by such Person
and (v) shares or interests in any money market mutual fund substantially all
of the assets of which are required to be invested in securities of the type
described in clause (i) above and which is rated AAA or the equivalent by
Standard & Poor's Corporation and P-1 or the equivalent by Moody's Investors
Service, Inc.

"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. Section references to the Code are to the Code, as
in effect at the date of this Agreement, and to any subsequent provisions of
the Code

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<PAGE> 13
amendatory thereof, supplemental thereto or substituted therefor.

"Collateral" shall mean all "Collateral" under, and as defined
in, the Orders or any Security Document.

"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent, or any Person engaged or otherwise designated by the
Administrative Agent to act as collateral agent, pursuant to the Agency
Agreement and the Security Documents.

"Commitment" shall mean, with respect to each Lender, (i) at
any time prior to the Second Amendment Effective Date, the amount (if any) of
such Lender's aggregate commitment to make loans under the Original Credit
Agreement, the First Amended and Restated Credit Agreement and/or the Second
Amended and Restated Credit Agreement, as set forth opposite such Lender's name
in Annex I thereto directly below the column entitled "Commitment", and (ii) at
any time on or after the Second Amendment Effective Date, the Loans of such
Lender outstanding under the Second Amended and Restated Credit Agreement, the
Third Amended and Restated Credit Agreement and this Agreement.

"Concentration Account" shall have the meaning provided in the
Initial Cash Management Agreement or any other cash management arrangements
entered into by the Borrower at the request of the Required Lenders pursuant to
Section 7.10.

"Confidential Material" shall have the meaning provided in
Section 10.13.

"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation, or (iv) otherwise to assure or hold

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<PAGE> 14
harmless or give "comfort" to the holder of such primary obligation against
loss in respect thereof; provided, however, that the term Contingent Obligation
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.

"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with and including the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of
the Code.

"Credit Documents" shall mean this Agreement, each Note, the
Agency Agreement, each Security Document, each certificate delivered hereunder
or thereunder and each other document designated as such.

"Customary Permitted Liens" shall mean

(i) Liens (other than Environmental Liens and any
Lien imposed under ERISA) for taxes, assessments or charges of any
Governmental Authority or claim not yet due or which are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being
maintained;

(ii) Liens perfected after the Filing Date under
Section 546 of the Bankruptcy Code, statutory Liens of landlords and
Liens of carriers, warehousemen, mechanics, materialmen and other
similar Liens (other than any Lien imposed under ERISA) imposed by law
created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate
provisions are being maintained;

(iii) Liens (other than any Lien imposed under
ERISA) incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and
other types of

-8-
<PAGE> 15
social security benefits or to secure the performance of tenders,
bids, contracts (other than for the repayment of Indebtedness or with
respect to leases of real or personal property), statutory obligations
and other similar obligations or arising as a result of progress
payments under government contracts;

(iv) easements (including, without limitation,
reciprocal easement agreements and utility agreements), rights-of-way
and land use covenants (whether or not recorded), which do not
interfere materially with the ordinary conduct of the business of the
Borrower and which do not materially detract from the value or
transferability of the property to which they attach or impair the use
thereof to the Borrower or as Collateral;

(v) rights of tenants, subtenants, franchisees or
parties in possession (other than a debtor in possession, trustee in
bankruptcy or receiver of the Borrower of Real Property owned or
leased by the Borrower), or options or rights of first refusal,
whether pursuant to leases, subleases, franchise agreements, other
occupancy agreements or otherwise, with respect to real property owned
by the Borrower, if such rights were vested on the Filing Date or
created thereafter in the ordinary course of business in transactions
permitted under this Agreement;

(vi) extensions, renewals or replacements of any
Lien referred to in paragraphs (i) through (iv) above, provided, that
the principal amount of the obligation secured thereby is not
increased and that any such extension, renewal or replacement is
limited to the property originally encumbered thereby;

(vii) building restrictions, zoning laws and other
statutes, laws, rules, regulations, ordinances and restrictions
related to the use of Real Property, and any amendments thereto, now
or at any time hereafter adopted by any Governmental Authority having
jurisdiction; and

(viii) pooling, interchange and other similar
arrangements customary in the ordinary course of the Borrower's
business as and to the extent permitted under the Permitted First
Liens and the Security Documents.

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<PAGE> 16
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.

"Deferral Aircraft" shall mean the aircraft described on
Schedule 5 hereto.

"Designated Aircraft Leases" shall mean those certain Aircraft
Lease Agreements listed on Schedule 6 hereto, as the same may be amended,
supplemented or otherwise modified from time to time.

"Designated Collateral" shall mean the Collateral described in
Schedule 2.

"Dial" shall mean The Dial Corp., a Delaware corporation.

"Dial Loans" shall mean all of loans made by Dial under the
Second Amended and Restated Credit Agreement and outstanding immediately prior
to the Fourth Amendment Effective Date in an aggregate principal amount of
$1,013,518.65.

"Distribution", with respect to any Person, shall mean that
such Person has declared or paid any dividend or returned any capital to, its
stockholders or authorized or made any other distribution, payment or delivery
of property or cash to its stockholders as such, or redeemed, retired,
purchased, or otherwise acquired, directly or indirectly, for consideration,
any shares of any class of its capital stock (or any options or warrants issued
by such Person with respect to its capital stock), or set aside any funds for
any of the foregoing purposes, or shall have permitted any of its Subsidiaries
to purchase or otherwise acquire for a consideration any shares of any class of
the capital stock of such Person (or any options or warrants issued by such
Person with respect to its capital stock), or shall have paid or made provision
for payment of any profit sharing arrangement. Without limiting the foregoing,
"Distributions" with respect to any Person shall also include all payments made
or required to be made by such Person with respect to any stock appreciation
rights plans, equity incentive or achievement plans or any similar plans or the
setting aside of any funds for the foregoing purposes.

"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States (expressed in dollars).

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<PAGE> 17
"Domestic Gates" shall mean each landing gate located at an
airport within the United States.

"DOT" shall mean the United States Department of
Transportation or similar regulatory authority established in replacement
thereof.

"Effective Date" shall have the meaning provided in Section
5.01.

"1110 Indebtedness" shall mean any Indebtedness secured by a
Lien described in Section 1110 of the Bankruptcy Code.

"Eligible Receivable" shall mean, at the time of any
determination thereof, any Receivable (as defined in the Security Agreement) of
the Borrower which meets the following standards of eligibility:

(i) the Borrower has lawful and absolute title to such
Receivable;

(ii) such Receivable is a valid, binding and legally
enforceable obligation of the Account Debtor (as
defined in the Security Agreement) who is obligated
under such Receivable;

(iii) such Receivable is not subject to any litigation, or
other proceeding, dispute, setoff, counterclaim or
other claim or defense on the part of the Account
Debtor denying liability under such Receivable in
whole or in part;

(iv) the Borrower has the full and unqualified right to
assign and grant Liens in such Receivable to the
Collateral Agent as security for the Obligations;

(v) such Receivable is not subject to any Lien in favor
of any other Person;

(vi) such Receivable is a bona fide Receivable consisting
of a proper and accurate amount due from the Account
Debtor arising from the sale of goods or the
rendering of services in the ordinary course of the
Borrower's business and which does not consist of a
prepaid expense, warranty payment or claim against
any manufacturer, vendor, supplier or other Person or
an adjustment for unreported

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<PAGE> 18
sales or any other travel agency adjustment,
except that 75% of the amount of an adjustment for
unreported sales or any other travel agency
adjustment may constitute an Eligible Receivable;]

(vii) with respect to such Receivable, no Account Debtor is

(a) incorporated in or primarily conducting
business in any jurisdiction located outside
the United States;

(b) an Affiliate of the Borrower;

(d) the subject of any reorganization,
bankruptcy, receivership, custodianship,
insolvency, or other like condition, except
an Account Debtor that is an airline whose
Receivable is through the Airline Clearing
House;

(e) an agency, department, or instrumentality of
the United States or any state or local
governmental authority in the United States
unless the requirements of the Assignment of
Claims Act of 1940, as amended, and any
similar state or local legislation shall have
been satisfied in respect thereof and the
Required Lenders are satisfied as to the
absence of set-offs, counterclaims and other
defenses to payment on the part of the United
States or such state or local governmental
authority; or

(f) a Person as to which the Borrower has
modified its standard terms of payment as a
result of concerns about the creditworthiness
of such Account Debtor (e.g., by requiring
prepayment or cash on delivery);

(viii) such Receivable is not outstanding more than 180 days;

(ix) such Receivable is not a Receivable owing by an
Account Debtor which, at the time of any

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<PAGE> 19
determination of Eligible Receivables, owes any
amount with respect to any Receivable that has been
outstanding more than 180 days;

(x) with respect to the Account Debtor under such
Receivable, the Borrower is not indebted to such
Account Debtor for any goods provided or services
rendered by such Account Debtor or otherwise, except
an Account Debtor that is an airline whose Receivable
is through the Airline Clearing House;

(xi) such Receivable is not payable in any consideration
other than cash and in U.S. Dollars; and

(xii) such Receivable is evidenced by an invoice or other
writing, if any, customary and appropriate in the air
transportation business, and is not evidenced by any
instrument or chattel paper.

A Receivable which is at any time an Eligible Receivable, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Receivable until such time as it once again meets all
of the foregoing requirements. Notwithstanding the provisions of the preceding
clause (iii), a Receivable which is at any time subject to a dispute on the
part of the Account Debtor denying liability under such Receivable in part
shall constitute an Eligible Receivable to the extent of the portion thereof
which is not in dispute (so long as such Receivable otherwise satisfies all of
the foregoing requirements). In addition, any such Receivable which is in
dispute as to a portion thereof shall not preclude another Receivable of the
same Account Debtor from constituting an Eligible Receivable pursuant to the
provisions of the preceding clause (ix).

"Engine Collateral" shall mean the three CFM 56-3B engines of
the Borrower bearing manufacturer's serial numbers 720601, 720772 and 720867.

"Engine Leases" shall mean those certain Engine Sublease
Agreements listed on Schedule 7 hereto, as the same may be amended,
supplemented or otherwise modified.

"Environmental Lien" shall mean a Lien in favor of any
Governmental Authority for (i) any liability under Hazardous Materials Laws or
(ii) damages arising from or

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<PAGE> 20
costs incurred by such Governmental Authority in response to a release or
threatened release of Hazardous Materials.

"ERISA" shall mean the Employees Retirement Income Security
Act of 1974, as amended from time to time. Section references to ERISA, are to
ERISA, as in effect at the date of this Agreement, and to any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or substituted
therefor.

"Event of Default" shall have the meaning provided in Section
9.

"Event of Default Collateralization Amount" shall have the
meaning provided in Section 7.10(b).

"Existing Debt" shall have the meaning provided in Section
8.05.

"Existing Lenders" shall mean GPA Leasing USA I, Inc., GPA Sub
and Kawasaki.

"Existing Secured Debt" shall mean all Indebtedness of the
Borrower secured on the Filing Date by Permitted First Liens.

"FAA" shall mean the Federal Aviation Administration or
similar regulatory authority established in replacement thereof.

"Facility Fee" shall have the meaning provided in Section 3.01.

"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.

"Filing Date" shall have the meaning provided in the second
"Whereas" clause of the recitals in this Agreement.

"Final Extension Loan Order" shall mean an order of the
Bankruptcy Court in the form of Exhibit D-8 (as such form may be modified
pursuant to Section 7.10(a) in a manner acceptable to the Required Lenders, in
their sole and absolute discretion, and as such form may otherwise be modified
in a manner acceptable to each of the Lenders, in its sole and absolute
discretion).

"Final Order" shall have the meaning provided in Section
5.02(c).

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<PAGE> 21
"First Amended and Restated Credit Agreement" shall have the
meaning specified in the first paragraph of this Agreement.

"Foreign Lender" shall have the meaning provided in Section
2.10(a).

"Fourth Amendment Effective Date" shall have the meaning
specified in Section 5.06.

"Governmental Actions" shall mean any regulations,
authorizations, applications, approvals, consents, exemptions, filings,
licenses, notices, registrations, orders, rulings, decrees, judgments, permits,
guidance, policy or program and other requirements of, to or with any
Governmental Authority.

"Governmental Authority" shall mean any government (federal,
foreign, state, local or other) and any governmental or quasi-governmental,
regulatory, judicial or public authority, board, body, commission, bureau,
agency or the like.

"GPA Agreements" shall mean, collectively, the A320 Leases,
the Engine Leases, the Put Agreement and the Designated Aircraft Leases.

"GPA Entity" shall mean GPA Group plc or any Subsidiary
thereof, and their successors and assigns.

"GPA Order" shall have the meaning provided in Section 5.01(h).

"GPA Sub" shall mean GPA Leasing USA Sub I, Inc., a
Connecticut corporation, and its successors and assigns.

"Hazardous Materials" shall mean (i) any oil, flammable
substance, explosives, radioactive materials, hazardous wastes or substances,
toxic wastes or substances, asbestos or any other materials or pollutants which
because of characteristics of flammability, ignitibility, corrossivity or
reactivity, or because they exist in such quantity or manner, are required by a
Governmental Authority to be reported or remediated; (ii) any chemical,
material substance or constituent defined as or included in the definition of
"hazardous pollutants" (under Section 112 of the Clean Air Act, as it may be
amended from time to time), "hazardous substance," "hazardous waste,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," or "toxic substances" or words of similar import under any applicable
local, state or federal law or

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<PAGE> 22
under the regulations adopted, or publications promulgated pursuant thereto,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Section
1801, et seq.; the Resource Conservation and Recovery Act, as amended, 42
U.S.C. Section 6901, et seq.; the Clean Water Act, as amended, 33 U.S.C.
Section 1251, et seq.; Toxic Substances Control Act, 15 U.S.C. Section Section
2601-2629; Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section
136-136y; or similar state statutes; and (iii) any other chemical, material or
substance, release or discharge of which or exposure to which is prohibited,
limited or regulated by any Governmental Authority or may or could pose a
hazard to the health and safety of the occupants of any of the properties of
the Borrower or the owners and/or occupants of property under, adjacent to or
surrounding any such property. References herein to Collateral in respect of
Hazardous Materials also include all property on (including but not limited to
buildings, improvements, soils or ground waters) or under the surface thereof
or adjacent thereto or surrounding the property on or under which the
Collateral is located.

"Hazardous Materials Claims" shall mean any and all
enforcement, remediation, clean-up, removal or other Governmental Actions
instituted or completed by any Person pursuant to any Hazardous Materials Laws,
or any written notice of any enforcement, clean-up, removal or other
Governmental Actions or orders pursuant to any Hazardous Materials Laws,
together with all claims made by any third party against the Borrower or any of
its properties relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from any Hazardous Materials.

"Hazardous Materials Laws" shall mean any and all federal,
state or local laws, ordinances, rules, regulations, or other enforceable
requirements now or hereafter existing or enacted relating to the environment,
health and safety, and Hazardous Materials (including, without limitation, the
use, handling, transfer, consolidation, transportation, production, disposal,
discharge or storage thereof) or to industrial hygiene or the environmental
conditions on, under or about any of the property of the Borrower, including,
without limitation, soil and groundwater conditions.

"High Density Airport" shall mean and include each of John F.
Kennedy, Washington National, Newark and O'Hare Airports.

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<PAGE> 23
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price
of property or services, (ii) the face amount of all letters of credit issued
for the account of such Person and all drafts drawn thereunder, (iii) all
liabilities of the types described in clauses (i), (ii), (iv), (v), (vi) and
(vii) of this definition and secured by any Lien on any property (including,
without limitation, a leasehold interest) owned by such Person, whether or not
such liabilities have been assumed by such Person, (iv) the aggregate amount
required to be capitalized under leases under which such Person is the lessee,
(v) all Contingent Obligations of such Person, (vi) all obligations of such
Person under "take-or-pay" or other similar arrangements and (vii) all
obligations of such Person under interest rate or currency exchange protection
or other similar agreements, provided that Indebtedness shall not include trade
payables and accrued expenses, in each case arising in the ordinary course of
business, or the Permitted Expenses.

"Initial Cash Management Agreement" shall mean the Cash
Management Agreement among the Local Bank, the Collateral Agent and the
Borrower in the form of Exhibit I hereto, as modified, supplemented or amended
from time to time.

"Inter-Creditor Agreement" means the Inter-Creditor Agreement
dated as of August 26, 1991 between the Collateral Agent, the Lenders and First
Interstate Bank of Arizona, N.A., as same may be amended, modified or
supplemented from time to time.

"Interest Payment Date" shall have the meaning provided in
Section 2.07(c).

"Interest Period" shall mean, with respect to each Loan, the
period from the date of the disbursement of such Loan to the first Interest
Payment Date and each period thereafter beginning and ending on successive
Interest Payment Dates; provided, however, that in the event that any amount is
not paid when due, "Interest Period" shall mean such period consisting of one
Business Day, one week, one month or three months as the Administrative Agent
may select in its sole and absolute discretion. The Administrative Agent shall
notify the Lenders and the Borrower of any such selection.

"Interim Extension Loan Order" shall mean an order of the
Bankruptcy Court in the form of Exhibit D-7 (as such

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<PAGE> 24
form may be modified in a manner acceptable to each of the Lenders, in its sole
and absolute discretion).

"Interim Order" shall have the meaning provided in Section
5.02(c).

"Investment Account" shall have the meaning provided in the
Initial Cash Management Agreement or any other cash management arrangements
entered into by the Borrower at the request of the Required Lenders pursuant to
Section 7.10.

"Investment Account Minimum" shall have the meaning provided
in Section 8.15(e).

"Kawasaki" shall mean Kawasaki Leasing International Inc., a
Delaware corporation.

"Kawasaki Agreements" shall mean and include (i) the Kawasaki
Leases, (ii) the Kawasaki Put Agreement, and (iii) all leases and subleases
entered into from time to time under and pursuant to the Kawasaki Put
Agreement.

"Kawasaki Credit Agreement" shall mean the Loan Restructuring
Agreement, dated as of December 1, 1991, between the Borrower and Kawasaki, as
assigned by Kawasaki to Lehman Commercial Paper Inc. and as amended,
supplemented or modified from time to time.

"Kawasaki Leases" shall mean those certain agreements listed
on Schedule 17 hereto, as the same may be amended, supplemented or modified
from time to time.

"Kawasaki Order" shall mean an order of the Bankruptcy Court
in the form of Exhibit D-5 (as such form may be modified in a manner acceptable
to Kawasaki, in its sole and absolute discretion) to the extent, and only to
the extent, such order relates to the Kawasaki Agreements (and the
authorization of the Borrower to enter into and perform its obligations under
the Kawasaki Agreements).

"Kawasaki Put Agreement" shall mean the Put Agreement, dated
as of December 1, 1991, between the Borrower and Kawasaki, as amended,
supplemented or modified from time to time.

"Kawasaki Stipulations" shall mean and include (i) the Joint
Stipulation with Respect to Bankruptcy Code Section 1110 . . . [N160AW], (ii)
the Joint Stipulation with Respect to Bankruptcy Code Section 1110 . . .
[N910AW], and

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<PAGE> 25
(iii) the Joint Stipulation with Respect to Bankruptcy Code Section 1110 . . .
[720-601, 720-772, 720-867].

"Lender" shall mean each institution listed in Annex I, as
well as any Person that becomes a "Lender" hereunder pursuant to Section 10.04.

"Lessor Lenders" shall mean (i) GPA Leasing USA I, Inc., GPA
Sub and each other Subsidiary of GPA Group plc which is or hereafter becomes a
Lender, and (ii) Kawasaki and each Subsidiary of Kawasaki Enterprises, Inc.
which is or hereafter becomes a Lender; provided that each such Person shall
only be a "Lessor Lender" at such times as such Person holds Loans hereunder.

"LIBOR" shall mean for each Interest Period:

(i) the rate of interest determined by the
Administrative Agent as follows:

(y) On the second London Business Day prior to
the first day of an Interest Period (a "LIBOR Determination Date"),
the Administrative Agent will determine the arithmetic mean of the
offered rates for deposits in United States dollars for the period in
its good faith judgment comparable to the Interest Period which appear
on the Reuters Screen LIBO Page at approximately 11:00 A.M., London
time, on such LIBOR Determination Date. "Reuters Screen LIBO Page"
means the display designated as Page "LIBO" on the Reuters Monitor
Money Rate Service (or such other page as may replace the LIBO page on
that service for the purpose of displaying London interbank offered
rates of major banks). If only one such rate is quoted, then LIBOR
shall mean such quoted rate; or

(z) If no offered rates appear on the Reuters
Screen LIBO Page, the Administrative Agent will request the principal
London offices of each of four major banks in the London interbank
market, as selected by the Administrative Agent, to provide the
Administrative Agent with its offered quotations, or the rate at which
it would offer, for deposits in United States dollars for a period
comparable to the Interest Period to prime banks in the London
interbank market at approximately 11:00 A.M., London time, on such
LIBOR Determination Date and in a principal amount equal to an amount
of not less than U.S. $1 million that is representative of a single
transaction in such market at such time, and LIBOR will be the
arithmetic mean of

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<PAGE> 26
all such quotations provided or, if only one quotation is provided,
such quotation; in either case divided by

(ii) an amount equal to one minus the aggregate (but
without duplication) weighted average of the maximum rates (expressed
as a decimal) of reserve requirements in effect from time to time
(including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of
the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in
effect) for Eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such Board) as in effect
from time to time or offshore Dollar liabilities which are required to
be maintained by a member bank of such System (such rate to be
adjusted to the next higher 1/100 of 1%).

"Lien" shall mean any mortgage, pledge, hypothecation,
encumbrance, lien (statutory or other), or other security agreement of any kind
or nature whatsoever (including, without limitation, any conditional sale or
other title retention agreement and any lease having substantially the same
effect as any of the foregoing and any assignment or deposit arrangement in the
nature of a security device).

"Lien Termination Date" shall have the meaning provided in
Section 10.17.

"Loan" shall mean a loan by a Lender to the Borrower under and
pursuant to the Original Credit Agreement, the First Amended and Restated
Credit Agreement and/or the Second Amended and Restated Credit Agreement.

"Local Bank" shall have the meaning provided in the Initial
Cash Management Agreement.

"London Business Day" shall mean any day on which dealings in
deposits in United States dollars are transacted in the London interbank
market.

"Margin Stock" shall have the meaning provided in Regulation U
of the Board of Governors of the Federal Reserve System.

"Management Letter Agreement" shall mean a letter agreement in
the form of Exhibit KK hereto, as the same may be amended, modified or
supplemented from time to time.

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<PAGE> 27
"Maturity Date" shall mean the earliest of (x) December 31,
1994, (y) the effective date of a confirmed plan of reorganization for the
Borrower under Chapter 11 of the Bankruptcy Code and (z) the date of
substantial consummation (as such term is defined in Section 1101 of the
Bankruptcy Code) of a plan of reorganization for the Borrower under Chapter 11
of the Bankruptcy Code.

"Merchant Agreement Supplement" shall mean an amendment to the
Supplement to Merchant Agreement, dated as of March 15, 1991, between the
Borrower and First Interstate Bank of Arizona, N.A., as modified, supplemented
or amended from time to time with the prior written consent of the Required
Lenders.

"Mortgage" shall mean the Mortgages in the forms of Exhibit
J-1 hereto, as same may be amended, modified or supplemented from time to time.

"Mortgaged Property" shall have the meaning provided in
Section 5.01(f).

"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA.

"Net Proceeds" shall mean for each Asset Sale the proceeds
(net of expenses actually paid by the Borrower as a result thereof) received by
the Borrower from such Asset Sale less any Existing Secured Debt or any
Indebtedness secured by a Permitted First Lien, including, without limitation,
interest period breakage or make-whole premiums payable in connection
therewith, of the Borrower required, as permitted by the Bankruptcy Court, to
be repaid with such proceeds.

"Northwest" shall mean Northwest Airlines, Inc., a Minnesota
corporation.

"Northwest Order" shall have the meaning provided in Section
5.01(h).

"Note" shall have the meaning provided in Section 2.05(a).

"Notice Office" shall mean the office of the Administrative
Agent shown opposite its name on the signature pages hereof, or such other
office as the Administrative Agent may hereafter designate in writing as such
to the other parties hereto.

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<PAGE> 28
"Obligations" and "Credit Agreement Obligations" shall mean
all amounts payable at any time or from time to time and all other liabilities
and obligations of the Borrower owing to the Administrative Agent, the
Collateral Agent or any Lender pursuant to the terms of this Agreement or any
other Credit Document.

"Official Committee" shall mean any official committee
appointed in the Case with the approval of the Bankruptcy Court.

"Operating Plan" shall mean the Borrower's Summary Pro Forma
Financial Statements, Plan Revision No. 9, June 1993 through December 1994,
dated July 15, 1993, a certified copy of which has been delivered to the
Administrative Agent and each Lender, as the same has been amended,
supplemented and modified by the Borrower's Plan Revision No. 9 Amendments,
dated September 21, 1993, a certified copy of which has been delivered to the
Administrative Agent and each Lender, and as the same may be further amended,
supplemented or otherwise modified with the consent of the Required Lenders.

"Operating Route" shall mean any Route which is being operated
such that it is not likely to be deemed "dormant" by the DOT.

"Orders" shall mean and include the Interim Order, the Final
Order, the Additional Loan Order, the Second Additional Loan Order, the Interim
Extension Loan Order, the Final Extension Loan Order and the Subsequent
Extension Loan Order.

"Original Credit Agreement" shall have the meaning specified
in the first paragraph of this Agreement.

"Payment Office" shall mean the account of the Administrative
Agent located at One Bankers Trust Plaza, New York, New York 10006, or such
other account as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.

"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA or any successor thereto.

"Pension Plan" shall mean any employee benefit plan which is
subject to the provisions of Title IV of ERISA and which is maintained for
employees of the Borrower or any member of the Controlled Group, other than a
Multiemployer Plan.

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<PAGE> 29
"Percentage" shall mean, for each Lender, a fraction
(expressed as a percentage), the numerator of which is the outstanding
principal amount of the Loans of such Lender, as in effect at the time of
determination, and the denominator of which is the outstanding principal amount
of the Loans of all of the Lenders, as in effect at such time.

"Permitted Expenses" shall mean all fees and expenses of
professionals retained pursuant to Section 327 of the Bankruptcy Code by the
Borrower or by an Official Committee, and expenses of members of an Official
Committee, and all compensation awarded under Sections 503(b)(2) through
503(b)(6) of the Bankruptcy Code, as such may be allowed by the Bankruptcy
Court and paid by the Borrower from time to time, provided, however, that upon
the occurrence of an Event of Default, then, from and after such event,
Permitted Expenses shall mean the sum of (i) all amounts previously paid by the
Borrower to professionals retained by the Borrower or an Official Committee, or
Official Committee members' expenses, and all compensation awarded under
Sections 503(b)(2) through 503(b)(6) of the Bankruptcy Code, as of the date of
such Event of Default, and (ii) $1,000,000 of such expenses if such date occurs
prior to January 1, 1992 and $2,000,000 of such expenses if such date occurs
after December 31, 1991, and, provided, further, however, that Permitted
Expenses shall not include expenses incurred in connection with any objection
to the validity, priority or extent of any Lien or priority status granted to
the Lenders hereunder or pursuant to any of the Orders or to the enforceability
of any rights granted hereunder or under the other Credit Documents, the GPA
Agreements or the Kawasaki Agreements or any of the Orders or the GPA Order or
the Kawasaki Order.

"Permitted First Liens" shall mean the Liens described in
clauses (i), (v), (vii) and (viii) of Section 8.01.

"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or
Governmental Authority.

"Projections" shall have the meaning provided in Section
6.06(e).

"Put Agreement" shall mean that certain A320 Put Agreement,
dated as of June 25, 1991, between GPA Group plc and the Borrower, as the same
may be amended, supplemented or otherwise modified from time to time.

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<PAGE> 30
"Real Property" shall mean all of the right, title and
interest of the Borrower in and to land, improvements and fixtures, including
leaseholds and Domestic Gates.

"Required Lenders" at any time shall mean Lenders the
principal amount of whose Loans outstanding exceed 75% of the total principal
amount of Loans outstanding; provided, however, that if GPA Entities shall be
the sole Lessor Lenders, the term "Required Lenders" shall mean Lenders the
principal amount of whose Loans outstanding exceed 66% of the total principal
amount of Loans outstanding; and provided further, however, that the use of the
term "Required Lenders" shall be subject to the provisions of the first
sentence of Section 10.11, which provisions may require the consent of or other
action by Lenders whose Loans exceed a greater percentage than the applicable
percentage stated in this definition.

"Routes" shall mean international route authorities held by
the Borrower.

"SEC" shall have the meaning provided in Section 7.01(e).

"Second Additional Loan Order" shall mean an order of the
Bankruptcy Court in the form of Exhibit D-6 (as such form may be modified
pursuant to Section 7.10(a) in a manner acceptable to the Required Lenders, in
their sole and absolute discretion, and as such form may otherwise be modified
in a manner acceptable to all of the Lenders, in their sole and absolute
discretion).

"Second Amended and Restated Credit Agreement" shall have the
meaning specified in the first paragraph of this Agreement.

"Second Amendment Effective Date" shall have the meaning
specified in Section 5.04.

"Second Amendment Lender" shall mean Ansett, Dial and each
Lender (other than an Existing Lender) that became a Lender and made a Loan on
the Second Amendment Effective Date.

"Section 7.10(c) Amount" shall have the meaning provided in
Section 7.10(c).

"Secured Creditors" shall mean each of the Lenders, the
Collateral Agent and the Administrative Agent.

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<PAGE> 31
"Security Agreement" shall mean a Security Agreement in the
form of Exhibit F hereto, as the same may be amended, modified or supplemented
from time to time.

"Security Documents" shall mean and include the Orders, the
Security Agreement, the Inter-Creditor Agreement, the Mortgage, the Assignment
of Gate Leases, the Aircraft/Engine Mortgage, the Slot Deed of Conveyance, the
Slot Lease, the Initial Cash Management Agreement and the other agreements
related to the Concentration Account and/or the Investment Account, and any
ancillary documentation which is required or otherwise executed to evidence
and/or perfect the liens and security interests and other rights granted to the
Collateral Agent on behalf of the Lenders pursuant to this Agreement, the
Orders, the Security Agreement, the Inter- Creditor Agreement, the Mortgage,
the Aircraft/Engine Mortgage, the Slot Deed of Conveyance, the Slot Leases, the
Initial Cash Management Agreement and the other agreements related to the
Concentration Account and/or the Investment Account.

"Slot" shall mean all of the rights, titles, interest and
privileges of an air carrier in and to the primary operating authority granted
by the FAA pursuant to Title 14, to conduct one Instrument Flight Rule (as
defined under the Aviation Act) take-off or landing in a specified one-hour or
half-hour period at a High Density Airport. The term "Slot" as used herein
shall include all Slots created after the date hereof pursuant to Title 14.

"Slot Collateral" means the Slots of the Borrower at O'Hare
Airport and John F. Kennedy Airport.

"Slot Deed of Conveyance" shall mean the Deed of Conveyance
and Assignment of Allocated Instrument Flight Rules Operations Times of the
Slots made by the Borrower in favor of the Collateral Agent in the form of
Exhibit K, as modified, supplemented or amended from time to time.

"Slot Lease" shall mean, collectively, the Slot Lease
Agreement with respect to the Slots made by the Collateral Agent to the
Borrower in form attached hereto as Exhibit L, as modified, supplemented or
amended from time to time.

"Specified Aircraft and Engines" shall mean and include the
Aircraft and Engines described on Part A of Schedule 1 to the Aircraft and
Engine Chattel Mortgage and Security Agreement in the form of Exhibit G hereto,
as such Schedule may be modified, supplemented or amended from time to time.

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<PAGE> 32
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or
one or more subsidiaries of such Person and (ii) any partnership, association,
joint venture or other entity in which such Person and/or one or more
subsidiaries of such Person has more than a 50% equity interest at the time.
Unless otherwise expressly provided, all references herein to "Subsidiary"
shall mean a Subsidiary of the Borrower.

"Subsequent Extension Loan Order" shall mean an order of the
Bankruptcy Court in the form of Exhibit D-9 (as such form may be modified
pursuant to Section 7.10(a) in a manner acceptable to the Required Lenders, in
their sole and absolute discretion, and as such form may otherwise be modified
in a manner acceptable to each of the Lenders, in its sole and absolute
discretion).

"Successor Merchant Bank Arrangement" shall have the meaning
provided in Section 7.10(a).

"Taxes" shall have the meaning provided in Section 2.10(a).

"Termination Event" shall mean (i) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued thereunder (other
than a "Reportable Event" not subject to the provision for 30-day notice to the
PBGC under such regulations), (ii) the withdrawal of the Borrower or any member
of the Controlled Group from a Pension Plan during a plan year in which it was
a "substantial employer", as defined in Section 4001(a)(2) of ERISA, (iii) the
filing of a notice of intent to terminate a Pension Plan or the treatment of a
Pension Plan amendment as a termination under Section 4041 of ERISA, (iv) the
institution of proceedings to terminate a Pension Plan by the PBGC, or (v) any
other event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan.

"Third Amended and Restated Credit Agreement" shall have the
meaning specified in the first paragraph of this Agreement.

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<PAGE> 33
"Third Amendment Effective Date" shall have the meaning
specified in Section 5.05.

"Third Amendment Lender" shall mean Dial and each Lender that
extended the maturity of its Loans on the Third Amendment Effective Date.

"Title 14" shall mean Title 14 of the Code of Federal
Regulations, Part 93, Subparts K and S, as amended from time to time or any
recodification thereof.

"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.

"United States" and "U.S." shall each mean the United States
of America.

"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, telecopier or facsimile
device, telegraph or cable.

1.02 Other Definitional Provisions. References herein to
"Sections", "Exhibits" and "Schedules" shall be to Sections of, and Exhibits or
Schedules attached to, this Agreement unless otherwise specifically provided.
References herein to "this Agreement", "herein", "hereof" or "hereunder" shall
be to this Agreement, as amended, supplemented or otherwise modified from time
to time in accordance with Section 10.11. Except as otherwise expressly
provided herein, references to other agreements or instruments shall mean such
agreements or instruments as the same may be amended, supplemented or modified
from time to time.

SECTION 2. LOANS.

2.01 Commitments and Loans.

(a) Subject to and upon the terms and conditions set
forth in the Original Credit Agreement, the First Amended and Restated Credit
Agreement and/or the Second Amended and Restated Credit Agreement, each Lender
honored its Commitment and made its Loans (it being acknowledged and agreed
that on and as of the date hereof the Loans of each Lender are outstanding in
the aggregate principal amount set forth opposite such Lender's name in Annex I
to this Agreement).

(b) Amounts prepaid or repaid under the Original Credit
Agreement, the First Amended and Restated Credit Agreement, the Second Amended
and Restated Credit Agreement,

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the Third Amended and Restated Credit Agreement and this Agreement may not be
reborrowed (it being acknowledged and agreed that the Lenders are not obligated
to make any further or additional loans under this Agreement).

2.02 [Reserved].

2.03 [Reserved].

2.04 [Reserved].

2.05 Notes.

(a) The Borrower's obligation to pay the principal of,
and interest on, all Loans made by each Lender is evidenced in part by a
promissory note duly executed and delivered to such Lender by the Borrower
substantially in the form of Exhibit A hereto (each a "Note" and collectively
the "Notes").

(b) Each Note issued to each Lender (i) is payable to the
order of such Lender and is dated the Effective Date or such later date on
which such Lender acquired or increased its Commitment, (ii) is in a stated
principal amount equal to the Commitment of such Lender as in effect on the
date of issuance thereof or the increase in the Commitment of such Lender on
the date of issuance thereof and is payable in the outstanding principal amount
of the Loans evidenced thereby from time to time, (iii) matures on the Maturity
Date, (iv) bears interest as provided in Section 2.07 in respect of the Loans
evidenced thereby and (v) is entitled to the benefits of this Agreement and all
other Credit Documents.

(c) Each Lender will note on its internal records the
amount of each Loan made by it and each payment in respect thereof and will,
prior to any transfer, record the outstanding principal amount of Loans
evidenced thereby. Failure to make any such notation shall not affect any of
the Borrower's obligations in respect of such Loans.

2.06 [Reserved].

2.07 Interest.

(a) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Loan from the date the proceeds thereof are
made available to the Borrower until maturity thereof (whether by acceleration
or otherwise) at a rate per annum which shall be 3-1/2% in excess of the
applicable LIBOR in effect from time to time; provided,

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however, that the Borrower shall pay interest in respect of the unpaid
principal amount of each Loan from and including July 1, 1994 to and including
September 30, 1994 at a rate per annum which shall be 2-1/2% in excess of the
applicable LIBOR in effect for such period.

(b) Overdue principal and overdue interest in respect of
each Loan and all other amounts not paid when due under the Credit Documents
shall bear interest at a rate per annum which shall be 5-1/2% in excess of the
applicable LIBOR for the Interest Period selected by the Administrative Agent
in effect from time to time. Interest which accrues under this Section 2.07(b)
shall be payable on demand.

(c) Except as provided in Section 2.07(b), accrued (and
theretofore unpaid) interest shall be payable in respect of each Loan in
arrears (i) on the last Business Day of each calendar quarter, (ii) at maturity
(whether by acceleration or otherwise) and (iii) after such maturity, on
demand. Each date described in clauses (i), (ii) and (iii) of the preceding
sentence of this Section 2.07(c) is referred to herein as an "Interest Payment
Date".

2.08 Principal Repayments. On the Maturity Date, the
Borrower shall repay in full the aggregate principal amount of the Loans then
outstanding (together with all accrued and unpaid interest thereon and all
other amounts due hereunder and under any other Credit Document).

2.09 Interest Period Indemnification. Without limiting
Section 2.11 hereof, the Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense, including, without limitation,
any such loss or expense arising from interest, fees or indemnities payable by
such Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder and any such loss or expense (including, without limitation, loss of
anticipated profit) incurred in liquidating or reemploying swaps, loans or
deposits from which such funds were obtained or priced, which such Lender may
sustain or incur as a consequence of (i) default by the Borrower in the payment
when due of the principal of or interest on any Loan hereunder, (ii) failure or
default by the Borrower to repay or prepay after the Borrower has given a
notice of repayment or prepayment or is required to make a prepayment pursuant
to Section 4, and (iii) the making of any repayment or prepayment of a Loan or
payment of interest in respect thereof (including, without limitation, pursuant
to Sections 4.01 or 4.02) on a day which is not the last day of an applicable
Interest Period. The Borrower shall pay to each Lender any amounts owing to
such Lender pursuant to this Section 2.09 within five (5)

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Business Days after it receives the Lender's certificate certifying in
reasonable detail the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error. Such Lender shall deliver a
copy of any such certificate to the Administrative Agent at the same time such
certificate is delivered to the Borrower.

2.10 Taxes.

(a) The Borrower shall pay all amounts payable hereunder
or under the Credit Documents to the Administrative Agent and each Lender free
and clear of, and without deduction or withholding for or on account of, any
present and future taxes, levies, imposts, duties, fees, assessments,
deductions, withholdings or other charges imposed by any country, jurisdiction
or any political subdivision or taxing authority thereof or therein, excluding
(i) net income and franchise taxes (including minimum, net worth or capital
taxes) imposed on such Person by any taxing authority of the United States of
America (or the principal country of tax residence of the ultimate parent
corporation of such Person pursuant to this Agreement) or political subdivision
thereof or by any country, jurisdiction or any political subdivision or taxing
authority thereof or therein in which the lending office with respect to the
Loans of such Lender hereunder or principal office of such Person is located
and (ii) withholding taxes described in the second paragraph of this Section
2.10(a) (all such nonexcluded taxes, levies, imposts, duties, fees,
assessments, deductions, withholdings and other charges being hereinafter
referred to as "Taxes"). If any Taxes shall be required by law to be deducted
or withheld from any payment of an amount payable hereunder or under the other
Credit Documents by the Borrower or the Administrative Agent (other than the
withholding taxes described in the next paragraph), the Borrower shall increase
the amount paid so that the Administrative Agent or such Lender receives when
due (and is entitled to retain), after deduction or withholding for or on
account of such Taxes (including, without limitation, any taxes, levies,
imposts, duties, fees, deductions, withholdings (other than withholdings
permitted pursuant to the next paragraph), assessments or other charges
applicable to additional amounts payable under this Section), the full amount
of the payment provided for herein or in the other Credit Documents. In the
event the Borrower is required by a Lender to pay any additional amount to such
Lender pursuant to this Section 2.10, such Lender will designate a different
lending office if such designation will avoid the need for, or reduce, such
additional amount and will not be otherwise disadvantageous to such Lender in
its sole and absolute judgment.

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The Borrower or the Administrative Agent may properly as
required by law deduct any withholding taxes from or in respect of any sum
payable hereunder to any Lender or the Administrative Agent and such
withholdings shall not be subject to indemnification (i) if any Lender which is
organized under the laws of a jurisdiction outside of the United States (a
"Foreign Lender") fails or is unable to furnish to the Borrower or the
Administrative Agent a statement (for example, an Internal Revenue Service Form
1001 or Form 4224) when reasonably requested by the Borrower or the
Administrative Agent which, had it been furnished, would have provided the
Borrower or the Administrative Agent a complete exemption from any duty to
withhold, (ii) if a Foreign Lender furnishes to the Borrower or Administrative
Agent a statement of the type described in preceding clause (i), but only to
the extent such statement does not provide the basis for a complete exemption
from withholding, (iii) if a Foreign Lender notifies the Borrower or the
Administrative Agent that circumstances on which such an exemption was based no
longer exist or (iv) if the taxation authority notifies the Borrower or the
Administrative Agent that the Borrower or the Administrative Agent, as the case
may be, may not rely on such a statement, that such an exemption is not
available, or that withholding is required. Each Foreign Lender further agrees
to furnish to the Borrower and the Administrative Agent annually and before the
first payment is made by the Borrower to or for the benefit of such Foreign
Lender, an appropriate statement in duplicate that the income it receives
hereunder, is, or is expected to be, either effectively connected with a United
States trade or business or exempt from withholding pursuant to the terms of an
income tax treaty (for example, an Internal Revenue Service Form 1001 or Form
4224) or otherwise is exempt from withholding tax. In addition, if (x) any
Lender fails to provide its employer identification number (or otherwise
qualify for exemption from back-up withholding), (y) there is a notified payee
underreporting, or (z) there has been a payee certification failure, the
Borrower or the Administrative Agent may properly treat itself as required by
law to deduct any back-up withholding taxes for or in respect of any sum
payable hereunder to any Lender or the Administrative Agent and such
withholding taxes shall not be subject to indemnification hereunder.

(b) The Borrower shall pay on or prior to the due date
and in accordance with applicable law (i) all past, present and future Taxes
imposed with respect to payments by the Borrower or amounts payable or deemed
payable by the Borrower under the Credit Documents or the execution, delivery,
acquisition, recordation, filing, registration, or enforcement of any Credit
Document, (ii) all past, present

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and future stamp, documentary, transfer, recording, property (real or personal
and including intangible personal property)), excise or other similar Taxes,
levies, imposts, duties, fees, assessments and other charges imposed by any
jurisdiction with respect to any payment by the Borrower under a Credit
Document or the execution, delivery, acquisition, recordation, filing,
registration, or enforcement of any Credit Document, (iii) all past, present
and future Taxes, levies, imposts, duties, fees, assessments and other charges
imposed by any jurisdiction with respect to any payment or reimbursement by the
Borrower pursuant to this Section 2.10, and (iv) any interest, penalties, or
additions to tax or other charges or expenses incurred in connection with any
amount required to be paid under this Section 2.10, unless such interest,
penalties or additions to tax are the result of the gross negligence of the
applicable Lender or the Administrative Agent.

(c) The Administrative Agent or any Lender may pay, but
shall not be obligated to pay, any amount which is to be paid by the Borrower
pursuant to this Section 2.10. The Administrative Agent or such Lender shall,
to the extent practicable, give prior notice to the Borrower of the payment of
any such amount (and, if practicable, the method of calculating such Tax), or,
if not practicable to give prior notice, shall give notice to the Borrower of
the payment of any such amount (and, if practicable, the method of calculating
such Tax) promptly thereafter. The Borrower shall, within five (5) Business
Days after demand of the Administrative Agent or any Lender and whether or not
such amount shall have been correctly or legally asserted or imposed, reimburse
the Administrative Agent or such Lender for such amount together with interest
thereon at the rate for defaults on payments then in effect from and including
the date paid by the Administrative Agent or such Lender to and excluding the
date on which the Administrative Agent or such Lender is reimbursed by the
Borrower in full. The Borrower shall also reimburse the Administrative Agent
or any Lender for any and all Taxes and interest, penalties and expenses
thereon or with regard thereto within five (5) Business Days after demand
therefor. The Borrower may contest with the relevant taxing authorities, at
the Borrower's expense, any Taxes (whether or not paid by the Administrative
Agent or the Lender) that, in the Borrower's reasonable opinion, have been
incorrectly calculated or imposed, provided, that the Borrower shall pay all
amounts owing to the Administrative Agent or respective Lenders as provided
above and shall not be permitted to await the outcome of the respective
contest. The Administrative Agent or such Lender shall cooperate with the
Borrower in any such tax contest. In the event that any amount paid by the

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Administrative Agent or any Lender pursuant to this Section 2.10 is found not
to be owed by the Borrower and is repaid or reimbursed to the Administrative
Agent or such Lender, the Administrative Agent or such Lender shall promptly
reimburse such amount (and any additional related amounts paid by the Borrower
to such Lender or the Administrative Agent pursuant to Section 2.10(a) hereof)
to the Borrower.

(d) Upon request of the Administrative Agent or any
Lender, the Borrower shall provide to the Administrative Agent or such Lender
original tax receipts, or notarized copies thereof, evidencing payment of all
applicable Taxes (whether on interest, fees or other amounts) to the
appropriate Governmental Authority within 10 Business Days of the earlier of
the date on which any such payment is due or the date of such request of the
Administrative Agent or such Lender.

2.11 Cost Indemnities. Within five (5) Business Days after
demand therefor, the Borrower agrees to pay for, reimburse and indemnify and
hold each Lender harmless from and against any and all losses, costs, expenses,
claims, charges and indemnities of any type whatsoever which are directly
related to the Loans of such Lender (including by any reasonable attribution or
allocation) which are payable by, charged to or asserted against such Lender by
any provider of funds to such Lender or provider of an interest or currency
exchange agreement to such Lender, as a result of any increased costs or
decreased rate of return applicable to such provider of funds or as a result of
a Default or Event of Default hereunder, including, without limitation, make
whole premiums, increased costs, capital adequacy charges, reserve charges, or
withholding taxes. In addition, with respect to each Lender, the Borrower
agrees to pay the following (without duplication):

(a) Increased Costs. If any applicable law, rule or
regulation or any change in any law, rule or regulation or in the
interpretation or administration thereof by any Governmental Authority
(including, without limitation, any central bank or comparable agency charged
with the interpretation or administration thereof) or compliance by any Lender
(or its lending office) with any request or directive of any such Governmental
Authority, whether or not having the force of law:

(i) shall subject any Lender (or its lending
office) to any tax, duty or other charge with respect to its Loans or
shall change the basis of taxation of payments to any Lender (or its
lending office) of the principal of or interest with respect to its
Loans or

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any other amounts due in respect of its Loans (except for changes in
the rate of tax on the overall net income of such Lender or its
lending office imposed by the jurisdiction in which such Lender's
principal office or lending office is located); or

(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit, compulsory
loan, capital adequacy or similar requirement against assets of, or
deposits or other liabilities with or for the account of, or credit or
credit commitments extended by, or any acquisition of funds by or for
the account of, any Lender (or its lending office) or shall impose on
any Lender (or its lending office) or the applicable interbank market
any other condition affecting its Loans;

and the result of any of the foregoing is to increase the cost to such Lender
(or its lending office) of maintaining its Loans, or reduce the amount of any
sum received or receivable by such Lender (or its lending office) under this
Agreement, by an amount deemed by such Lender to be material, then, within five
(5) Business Days after demand by such Lender, which demand shall be delivered
in writing to the Borrower, with a copy to the Administrative Agent, the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction for so long as such
Lender is subject to such increased cost or reduction. Such Lender will
designate a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not be otherwise
disadvantageous to such Lender in its sole and absolute judgment. A
certificate of such Lender setting forth in reasonable detail such additional
amount or amounts necessary to compensate such Lender shall be conclusive in
the absence of manifest error. In determining such amount, such Lender may use
any reasonable averaging or attribution methods.

(b) Capital Adequacy. If any Lender shall have
determined that compliance with any applicable law, rule or regulation
regarding capital adequacy or any interpretation or administration thereof, of
any Governmental Authority (including, without limitation, any central bank or
comparable agency charged with the interpretation or administration thereof),
or compliance by any Lender (or its lending office) or any corporation
controlling such Lender with any request or directive regarding capital
adequacy whether or not having the force of law of any such Governmental

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Authority, has or would have the effect of increasing the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's obligations hereunder (including,
without limitation, its Loans) or under other obligations of such type or
otherwise have the effect of reducing the rate of return on such Lender's or
any such controlling corporation's capital as a consequence of its obligations
hereunder (including, without limitation, its Loans) or under other obligations
of such type, then from time to time, within five (5) Business Days after
demand by such Lender (with a copy to the Administrative Agent), the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender or such corporation in such circumstances, to the extent such
Lender determines such increase in capital or reduction is allocable to such
Lender's obligations (including, without limitation, its Loans) hereunder. A
certificate of any Lender claiming compensation under this Section and setting
forth in reasonable detail the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, such Lender may use any reasonable averaging and attribution
methods.

2.12 Distribution of Proceeds. Upon and after the occurrence
and during the continuance of an Event of Default, if the Administrative Agent,
the Collateral Agent or a Secured Creditor receives funds in respect of any
sale, disposition, set-off or other realization on or with respect to the
Collateral, the Administrative Agent, the Collateral Agent or such Secured
Creditor shall distribute and each Secured Creditor shall apply such funds in
the following order of priority:

(i) first, to pay all fees, expenses and other
amounts due the Administrative Agent or the Collateral Agent under the
Credit Documents;

(ii) second, to pay all accrued and unpaid interest on
the Loans, pro rata, in accordance with the outstanding principal
amounts of the Loans;

(iii) third, to pay all principal of the Loans, pro rata,
in accordance with the outstanding principal amounts of the Loans; and

(iv) fourth, to pay all other Obligations, pro rata, in
accordance with the respective amounts of such Obligations which are
then due and payable to each Secured Creditor.

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Notwithstanding anything to the contrary in this Section 2.12:

(i) if at the time of receipt by the
Administrative Agent, the Collateral Agent or a Secured Creditor of
funds in respect of any sale, disposition, set-off or other
realization on or with respect to the Slot Collateral (or any part or
portion thereof) any Loans held by the GPA Entities or any accrued
interest thereon remains unpaid, the first $10 million of such funds
shall be applied to pay Loans held by the GPA Entities and any accrued
interest thereon to the holders thereof in such proportion or priority
as they may agree among themselves or, in the absence of any such
agreement, as may be directed by GPA Sub, and the balance of such
funds shall be applied to pay all other Obligations in the order of
priority set forth in the first paragraph of this Section 2.12; and

(ii) if funds in respect of any sale, disposition,
set-off or other realization on or with respect to any Collateral
other than the Slot Collateral shall be distributed to the Secured
Creditors pursuant to this Section 2.12 prior to the distribution to
the Secured Creditors pursuant to this Section 2.12 of funds in
respect of the sale, disposition, set-off or other realization on or
with respect to the Slot Collateral (or any portion thereof), then,
promptly after the final distribution to the Secured Creditors
pursuant to this Section 2.12 of funds in respect of the final sale,
disposition, set-off or other realization on or with respect to all of
the Slot Collateral, GPA Sub shall pay to each other Lender an amount
which, when added to the aggregate amount of funds theretofore
received by such Lender pursuant to this Section 2.12, shall result in
such Lender having received an aggregate amount of funds equal to the
amount of funds such Lender would have received pursuant to this
Section 2.12 had all of the proceeds of the sale, disposition, set-off
or other realization on or with respect to all of the Slot Collateral
(in the amount actually realized) been distributed to the Secured
Creditors pursuant to this Section 2.12 prior to the distribution to
the Secured Creditors pursuant to this Section 2.12 of any funds in
respect of any sale, disposition, set-off or other realization on or
with respect to any other Collateral.

Any Secured Creditor may allocate internally amounts received
hereunder in a different order, although for purposes of making subsequent
distributions pursuant to

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this Section 2.12 all such amounts shall be deemed applied in the order
required above, and any such different allocation shall have no effect on the
rights or obligations of the Borrower, the Administrative Agent, the Collateral
Agent or the other Secured Creditors hereunder. In making distributions
hereunder, the Collateral Agent shall be entitled to rely conclusively on
statements received by it from the respective Secured Creditors as to the
respective amounts owing to them pursuant to, or as described in, the relevant
provisions of this Section 2.12. Furthermore, the Collateral Agent shall be
entitled to wait for its receipt of any such information before making a
distribution in accordance with this Section 2.12. The parties expressly
acknowledge and agree that the proceeds of any sale, disposition, set-off or
other realization on or with respect to any Collateral that are referred to in
this Section 2.12 shall not, and shall not be construed to, include any such
proceeds that are received by a Secured Creditor in its capacity as the holder
of a Permitted First Lien on such Collateral.

SECTION 3. FEES.

3.01 Facility Fee.

The Borrower shall pay to the Administrative Agent on
September 30, 1994 (but only if all or any portion of the Loans are then
outstanding), for the account of and distribution to each Lender, a fee in an
amount equal to 0.75% of the principal amount of the Loans of such Lender
outstanding on the Fourth Amendment Effective Date (such fee being referred to
as the "Facility Fee").

3.02 Fees of Administrative Agent and Collateral Agent.

The Borrower shall pay to the Administrative Agent and to the
Collateral Agent, for their respective own accounts, or shall reimburse the
Lenders for payment of, such fees as the Administrative Agent or the Collateral
Agent (including, without limitation, their respective successors and assigns),
as the case may be, and the Borrower have agreed separately for performance of
the services of the Administrative Agent and the Collateral Agent hereunder and
under the other Credit Documents; provided, however, that the Borrower and the
Administrative Agent or the Collateral Agent, as the case may be, shall obtain
the prior written consent of the Required Lenders to such fees.

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SECTION 4. PREPAYMENTS; PAYMENTS.

4.01 Voluntary Prepayments. The Borrower shall have the
right to prepay the Loans, without premium or penalty (except as provided in
Section 2.09 or 2.11), in whole or in part from time to time on the following
terms and conditions: (i) the Borrower shall give the Administrative Agent
irrevocable notice in writing of its intent to make a prepayment at its Notice
Office at least one Business Day prior to the date of such prepayment, which
notice in each case shall indicate the amount of such prepayment and which
notice the Administrative Agent shall promptly transmit to each of the Lenders;
and (ii) each partial prepayment shall be in an aggregate principal amount of
at least $1 million. Each prepayment pursuant to this Section 4.01 in respect
of the Loans shall be applied pro rata to the Loans of each Lender.

4.02 Mandatory Prepayments. If on any date

(i) the required amounts of rotables, equipment
or receivables described in Section 7.08 are less in any category than
as required in Section 7.08, the Borrower shall repay on such date
that principal amount of Loans as is equal to such deficiency,
provided that in lieu of prepayment of Loans by reason of each
deficiency in the required amounts of rotables specified in Section
7.08, the Investment Account Minimum shall be increased, effective as
of the 20th day next following the last day of the month to which such
deficiency relates, by an amount equal to the amount of such
deficiency (as the amount of such deficiency is determined on the
basis of the report delivered pursuant to Section 7.01(h) and the
amount of such increase is set forth in the report delivered pursuant
to Section 7.01(o)); or

(ii) an Asset Sale is consummated, the Borrower
shall repay on the last Business Day of the month in which such Asset
Sale is consummated the Loans in an amount equal to the Net Proceeds
of such Asset Sale; provided, however, that in the event no Default or
Event of Default has occurred and is continuing or would result
therefrom and such Asset Sale is of property or other assets of the
Borrower which is not Designated Collateral, Slot Collateral or Engine
Collateral, the Collateral Agent or the Lenders shall release 30% of
the Net Proceeds to the Borrower to be used as working capital and the
remaining 70% of the Net Proceeds shall be used to prepay the Loans as
aforesaid; and provided further, however, if the

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property which is the subject of the Asset Sale is Slot Collateral (or
any part or portion thereof), the first $10 million of the Net
Proceeds from such Asset Sale shall be used to repay the Loans
(subject to and in accordance with clause (iv) of this Section 4.02)
and the balance of such Net Proceeds shall be deposited in the
Investment Account; and provided further, however, if the property
which is the subject of the Asset Sale is Engine Collateral (or any
part or portion thereof), the Net Proceeds from such Asset Sale shall
be deposited in the Investment Account; and provided further, however,
if such Asset Sale is of property or other assets of the Borrower
which is not Slot Collateral or Engine Collateral, in lieu of
prepayment of Loans by reason of such Asset Sale, the Investment
Account Minimum shall be increased, effective as of the 20th day next
following the last day of the month in which such Asset Sale occurs,
by an amount equal to the principal amount of Loans which would
otherwise be required to be prepaid pursuant to this clause (ii); or

(iii) an Event of Loss (as defined in the
Aircraft/Engine Mortgage or the Slot Lease) or other casualty or any
condemnation, taking or requisition with respect to any Collateral
occurs and (x) the property which is the subject of the loss is not
repaired or replaced so as to be of at least equal value and utility
as was the property subject thereto prior to the applicable Event of
Loss, casualty, condemnation, taking or requisition (assuming it was
in the condition required under the Credit Documents) and subjected to
the Lien in favor of the Collateral Agent in the priority contemplated
hereunder within the time period specified in and in accordance with
the provisions of the applicable Security Document or, if no time is
specified, within sixty (60) days of such casualty, the Borrower shall
repay on such date the Loans in an amount equal to the greater of the
value attributed to such Collateral on the most recent collateral
certificate delivered pursuant to Section 7.01(h) or the proceeds of
any insurance with respect thereto (after payment of any Existing
Secured Debt of the Borrower or any Indebtedness secured by a
Permitted First Lien required to be repaid with such proceeds) or (y)
the property is so repaired or replaced, the Borrower shall repay the
Loans in an amount equal to any insurance proceeds remaining after
repair or replacement of the Collateral as above provided; provided,
however, that if the Event of Loss is with respect to the Slot
Collateral (or any part or portion thereof), the repayment of Loans
shall be applied as if

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resulting from a sale of such Slot Collateral (or such part or portion
thereof) in accordance with clause (iv) of this Section 4.02; and
provided further, however, if the Event of Loss is with respect to the
Engine Collateral (or any part or portion thereof), in lieu of
repaying Loans as provided in this clause (iii), the Borrower shall
deposit in the Investment Account an amount of moneys equal to the
principal amount of Loans which would otherwise be required to be
prepaid pursuant to this clause (iii); or

(iv) Each prepayment pursuant to this Section 4.02 in
respect of the Loans shall be applied pro rata to the Loans of each
Lender; provided, however, that the first $10 million of Net Proceeds
of any sale or other disposition of the Slot Collateral (or any part
or portion thereof) shall be used to repay Loans held by the GPA
Entities to the holders thereof in such proportion or priority as such
holders may agree among themselves or, in the absence of any such
agreement, as may be directed by GPA Sub. After Loans held by the GPA
Entities have been repaid as provided in the immediately preceding
sentence, all remaining Net Proceeds of any sale or other disposition
of the Slot Collateral (or any part or portion thereof) shall be
deposited in the Investment Account. The foregoing shall not be
construed as a waiver of any of the provisions of this Agreement or
the other Credit Documents; or

(v) Notwithstanding anything in this Section 4.02 which
may be to the contrary, no deposit of moneys to the Investment Account
or increase in the Investment Account Minimum pursuant to this Section
4.02 shall result in an increase in the Investment Account Minimum for
any day to an amount in excess of the aggregate principal amount of
the Loans outstanding on such day.

4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Lender or
Lenders entitled thereto not later than 12:00 Noon (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office of the Administrative Agent. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.

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<PAGE> 47
4.04 Net Payments. All payments made by the Borrower
hereunder, under any Note or under any other Credit Document will be made
without setoff, counterclaim or other defense.

SECTION 5. CONDITIONS PRECEDENT AND RELATED PROVISIONS.

5.01 Conditions to the Effective Date. The obligation of the
Lenders (such term and all other capitalized terms used in this Section 5.01
having the respective meanings stated or ascribed in the Original Credit
Agreement and references in this Section 5.01 to "hereof" and "this Agreement"
being references to the Original Credit Agreement) to make Loans under this
Agreement became effective on the date (the "Effective Date") on which each of
the following conditions was satisfied:

(a) Execution of Agreement; Notes. (i) The Borrower,
the Administrative Agent and each institution then a Lender hereunder shall
have executed a counterpart hereof (whether the same or different counterpart)
and shall have delivered the same to the Administrative Agent at its Notice
Office or, in the case of the Lenders, shall have given to the Administrative
Agent written notice (actually received) at such office that the same has been
signed and mailed to it and (ii) there shall have been delivered to the
Administrative Agent for the account of each of the Lenders the appropriate
Note executed by the Borrower in the amount, maturity and as otherwise provided
herein.

(b) Corporate Documents; Proceedings; Officer's
Certificates. The Lenders shall have received from the Borrower a certificate,
dated the Effective Date, signed by the President and Chief Operating Officer,
Senior Vice President-Finance or the Vice President and Controller of the
Borrower and attested to by the Secretary or any Assistant Secretary of the
Borrower in the form of Exhibit C with appropriate insertions, together with
copies of the Certificate of Incorporation and By-Laws of the Borrower and the
resolutions of the Borrower referred to in such certificate, together with such
other certificate or certificates pertaining to the subject matter of the
By-Law Letter Agreement as any Initial Lender shall have requested, and the
foregoing shall be satisfactory to all of the Lenders.

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<PAGE> 48
each of the Lenders and dated the Effective Date, from (i) Daugherty, Bradford
& Fowler, covering the filing, perfection and priority of the Aircraft/Engine
Mortgages, (ii) from Streich Lang covering the due authority, legality,
enforceability and other matters related to the Credit Documents and the
requirements hereof, (iii) from Faegre & Benson covering the entry of the
Interim Order, the Final Order, the GPA Order, the Northwest Order, the taking
of any appeals therefrom and Liens on the property or other assets of the
Borrower approved by the Bankruptcy Court, if any, and (iv) from Winthrop,
Stimson, Putnam & Roberts covering the United States citizenship of the
Borrower, the Slot Lease and other matters involving the DOT and FAA, and such
other opinions with respect to other matters incident to transactions
contemplated herein, as any Initial Lender may request and as are acceptable to
all of the Lenders in their sole and absolute discretion.

(d) Slots. Title to the Slots described on Annex A to
the Slot Deed of Conveyance shall have been transferred to the Collateral Agent
pursuant to the Slot Deed of Conveyance and the Borrower shall have duly
authorized, executed and delivered the Slot Lease, which Slot Lease shall be in
full force and effect.

(e) Security Agreement. The Borrower shall have duly
authorized, executed and delivered the Security Agreement, which shall be in
full force and effect covering all of the "Collateral" referred to therein,
together with:

(i) proper Form UCC-1 financing statements and
such other proper documents for filing or recording in the appropriate
offices;

(ii) certified copies of Requests for Information
or Copies (Form UCC-11) or equivalent reports listing all effective
financing statements or other recordations that name the Borrower as
debtor that are filed in Arizona, Nevada, California, Hawaii and New
York, together with copies of such other financing statements or other
recordations (none of which shall cover the Collateral referred to in
the Security Agreement except to the extent evidencing Permitted First
Liens);

(iii) evidence that all other actions necessary or,
in the opinion of any Initial Lender, desirable to perfect and protect
the security interests created by the Security Agreement have been
taken; and

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(iv) any other documents, instruments or chattel paper
required under the Security Agreement.

(f) Mortgage. The Borrower shall have (i) duly
authorized, executed, delivered and filed with the appropriate Governmental
Authorities (a) the Mortgage, which Mortgage shall cover all of the Real
Property owned or leased by the Borrower as listed in Schedule 8 (each, a
"Mortgaged Property" and collectively the "Mortgaged Properties"), and (b) the
Assignment of Gate Leases, (ii) obtained the consent of any landlord with
respect to any Real Property leased to the Borrower by such landlord, which
consent shall be substantially in the form of Exhibit J-2 hereto, and (iii)
obtained the consent of any holder of a Permitted First Lien on such Real
Property in substantially the form of Exhibit J-3 hereto and shall have
provided to the Lenders A.L.T.A. surveys and title reports in form and
substance, and showing title vested in the Borrower and the absence of Liens
other than Permitted First Liens and Customary Permitted Liens which (except as
described in clauses (iv) and (vii) of the definition thereof) are junior and
subordinate to the Lien of the Mortgage, in form and substance acceptable to
all of the Lenders in their sole and absolute discretion with respect to all of
the Mortgaged Properties.

(g) Aircraft/Engine Mortgage. The Borrower shall have
duly authorized, executed and delivered the Aircraft/Engine Mortgage covering
all aircraft, engines and spare parts then owned by the Borrower (other than
any thereof the exclusion of which shall have been consented to by each Initial
Lender acting in its sole and absolute discretion), together with evidence of
filing for recording with the FAA of such Aircraft/Engine Mortgage and with the
priority contemplated hereby and thereby, in form and substance acceptable to
all of the Lenders in their sole and absolute discretion.

(h) GPA Agreements/Northwest Agreements. The Bankruptcy
Court shall have issued an order in the form of Exhibit D-3 hereto (as such
form may be modified in a manner acceptable to each of the GPA Entities, in
their sole and absolute discretion, the "GPA Order") authorizing the Borrower
to assume each of the GPA Agreements pursuant to Section 365 of the Bankruptcy
Code, and the Bankruptcy Court shall have issued a final order in the form of
Exhibit D-4 hereto (as such form may be modified in a manner acceptable to
Northwest in its sole and absolute discretion, the "Northwest Order")
authorizing the Borrower to enter into and perform its obligations under each
of the Northwest Agreements pursuant to applicable provisions of the

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<PAGE> 50
Bankruptcy Code and each such Order shall be in full force and effect and not
subject to any appeal, stay or injunction. The Borrower shall have (x) paid in
full all payment obligations then due (after giving effect to the rent
deferrals in the case of the Designated Aircraft Leases) under each of the GPA
Agreements, and by doing so shall have satisfied the Borrower's obligations
with respect thereto under Section 365 of the Bankruptcy Code and (y) executed
and delivered each of the Northwest Agreements, each of which shall be in full
force and effect.

(i) Payment of Fees, etc. The Borrower shall have paid
all costs, fees and expenses owing in connection with the Credit Documents and
due to the Administrative Agent, the Collateral Agent or any Lender on or
before the Effective Date (including, without limitation, legal fees and
expenses).

(j) Specified Aircraft. Immediately prior to the
effectiveness of the filing of the Aircraft/Engines Mortgage with the FAA the
Specified Aircraft and Engines shall be located in the United States of
America.

(k) Operating Plan. The Board of Directors of the
Borrower shall have adopted the Operating Plan (as defined in the Credit
Agreement) and the Borrower shall have provided evidence satisfactory to all of
the Lenders in their sole and absolute discretion that the "Action Plan
Summary" terms set forth on Exhibit E have been implemented and are in full
force and effect and the Borrower is in compliance therewith.

(l) Inter-Creditor Agreement. The Borrower and First
Interstate Bank of Arizona shall have entered into the Merchant Agreement
Supplement and the Collateral Agent, the Lenders and First Interstate Bank of
Arizona, N.A. shall have entered into the Inter-Creditor Agreement, in each
case, relating to and providing for the relative priorities of the Liens of
First Interstate Bank of Arizona, N.A. and the Collateral Agent on certain of
the Collateral, and the Bankruptcy Court shall have issued an order in
substantially the form of Exhibit C to the Merchant Agreement Supplement
authorizing the amendments effected by the Merchant Agreement Supplement; and
the Merchant Agreement Supplement, the Inter-Creditor Agreement and such order
shall be in form and substance acceptable to all of the Lenders in their sole
and absolute discretion.

(m) Lease Amendments. The A320 Leases and the Engine
Leases shall have been amended in form and substance reasonably satisfactory to
the GPA Entities party thereto to

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<PAGE> 51
provide for the elimination of the "net worth" covenant during the Case and the
reinstitution of a comparable "net worth" covenant upon the effective date of a
confirmed plan of reorganization for the Borrower under Chapter 11 of the
Bankruptcy Code.

(n) Other Funds. The Borrower shall have received
binding commitments or such other assurances, in each case as may be acceptable
to all of the Lenders in their sole and absolute discretion, for the provision
of additional funds to the Borrower, consisting of Indebtedness or equity or
proceeds from the sale of the Nagoya Route, in an aggregate amount not less
than $40 million, which, if Indebtedness, shall be (i) unsecured, but up to $30
million of which Indebtedness may have administrative priority under Section
364(c)(1) of the Bankruptcy Code which is pari passu with, but not senior to,
the Obligations, or (ii) secured for an amount of up to $30 million subject to
and in accordance with Section 8.01(vi) (and without the benefit of any
administrative priority described in the preceding clause (i) of this
paragraph), and in each case on terms and conditions acceptable to the Lenders
in their sole and absolute discretion.

(o) By-Laws and Related Actions. The Lenders (which did
not include Kawasaki) shall have received evidence, satisfactory in form and
substance to them, that all actions described in the By-Law Letter Agreement to
be taken on or prior to the Effective Date shall have been taken, including,
without limitation, the adoption of requisite resolutions of the Board of
Directors of the Borrower with respect thereto, which resolutions shall be in
full force and effect on and as of the Effective Date.

(p) Initial Cash Management Arrangements. The Borrower,
the Collateral Agent and the Local Bank shall have duly authorized, executed
and delivered the Initial Cash Management Agreement and the Borrower shall have
otherwise established an accounts receivables collection system (including,
without limitation, lock box accounts) and cash concentration and management
system, and entered into agreements related thereto, satisfactory to the
Required Lenders in their sole and absolute discretion whereby the Investment
Account has been established with the Collateral Agent in the name of the
Collateral Agent for the benefit of the Secured Creditors and the Concentration
Account has been established with the Local Bank in the name of the Collateral
Agent for the benefit of the Secured Creditors to which all cash received by,
or deposited by, or paid to the Borrower at accounts (including lock box
accounts in the name of the Collateral Agent for the benefit of the Secured

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<PAGE> 52
Creditors) at the Local Bank and all other financial institutions or otherwise
are transferred on a daily basis, all of which accounts shall be subject to a
first priority perfected security interest in favor of the Collateral Agent
under the Security Agreement and the Orders, and which arrangements shall
provide for minimum required balances in the Investment Account as set forth in
Section 7.10.

(q) Insurance Certificates and Opinions. The Borrower
shall have provided the Lenders with all insurance certificates, opinions and
schedules referred to in Section 7.03 and under the Security Documents.

(r) Consents. The Borrower shall have provided to the
Lenders the confirmation by the FAA of the transfer of the Slots as
contemplated by Section 5.01(d), the notices to the Japanese lessors under all
applicable Japanese leveraged leases, the filing under the Assignment of Claims
Act of 1940 necessary or advisable to perfect the Borrower's assignment of
claims against the United States Government and all other notices, consents,
approvals, licenses or other action as may be necessary or advisable in the
opinion of any Lender to provide the Secured Creditors with the benefits of the
Collateral, in each case in form and substance acceptable to all of the Lenders
in their sole and absolute discretion.

5.02 Conditions to All Loans. The obligation of each Lender
to make any Loans was subject, at the time of the making of such Loans and
after giving effect thereto, to the satisfaction of the following conditions
(other than, in the case of the Loans made on the Second Amendment Effective
Date, the condition set forth in the following paragraph (f)):

(a) No Default. There shall exist no Default or Event of
Default.

(b) Representations and Warranties. All representations
and warranties of or on behalf of the Borrower herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as of
the date of the making of such Loans.

(c) Orders. The Lenders shall have received a certified
copy of an order of the Bankruptcy Court in the form of Exhibit D-1 (as such
form may be modified in a manner acceptable to each of the Lenders, in their
sole and absolute discretion, the "Interim Order"), and the Interim Order shall
be in full force and effect and shall not have

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been stayed, reversed, vacated, rescinded, modified or amended in any respect
(other than modifications acceptable to each of the Lenders, in their sole and
absolute discretion), provided that upon the earlier of (i) September 25, 1991
and (ii) the making of any Loan the aggregate amount of which, when added to
the sum of the principal amount of all Loans then outstanding would exceed the
credit availability amount authorized by the Bankruptcy Court in the Interim
Order (collectively, the "Additional Credit"), each of the Lenders shall have
received a certified copy of an order of the Bankruptcy Court in the form of
Exhibit D-2, or as otherwise acceptable to each of the Lenders (the "Final
Order"), and at the time of the extension of any Additional Credit the Final
Order shall be in full force and effect, and shall not have been stayed,
reversed, vacated, rescinded, modified or amended in any respect (other than
modifications acceptable to each of the Lenders, in their sole and absolute
discretion); and if either the Interim Order or the Final Order is the subject
of a pending appeal in any respect, neither the making of the Loans nor the
performance by the Borrower of any of its obligations under any of the Credit
Documents or any other document or instrument referred to herein shall be the
subject of a presently effective stay pending appeal. Neither the GPA Order
nor the Northwest Order shall have been appealed, amended, stayed, vacated or
rescinded.

(d) Effective Date. The Effective Date shall have
occurred.

(e) Collateral Certificate. The Administrative Agent shall
have received a certificate substantially in the form of Exhibit M executed by
the Chief Financial Officer, Senior Vice President-Finance, Treasurer or Vice
President and Controller of the Borrower of the description, value and location
of the Collateral as of the date of the making of such Loans, the value of
which Collateral shall, among other things, be equal to or in excess of the
applicable value set forth in Section 7.08.

(f) Deferrals. The Borrower shall have provided evidence
in form and substance acceptable to the Required Lenders in their sole and
absolute discretion that the Borrower has obtained from the lessors and debt
holders in respect of the Deferral Aircraft rental and principal and interest
moratoriums (or rebates with respect to such obligations to adjust for such
obligations with respect to leases or debt for which rental or principal or
interest, as the case may be, is not payable during such period) in an
aggregate amount of not less than $100,000,000 (or such lesser amount as the
Required Lenders shall approve in their

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<PAGE> 54
sole and absolute discretion) and as are necessary to provide the Borrower with
the minimum number of aircraft required under the Operating Plan; and the terms
and conditions of such moratoriums shall be in full force and effect (without
any unfulfilled conditions to the effectiveness thereof or subject only to such
conditions to the effectiveness thereof as the Required Lenders shall approve
in their sole and absolute discretion) and provide for repayment of the
deferred amounts with an interest rate of not more than 10.5% per annum over a
term of not less than four years commencing December 1991 or as otherwise
approved by the Required Lenders in their sole and absolute discretion; and the
terms of the stipulations with respect to, and the documentation evidencing,
such moratoriums (or rebates) shall be satisfactory in form and substance to
the Required Lenders in their sole and absolute discretion.

(g) Governmental Action. No Governmental Action shall
purport to, and no Governmental Action or other action or proceedings shall
have been filed, instituted, threatened or issued which seeks to, enjoin or
restrain or otherwise adversely affect the making of such Loans or the proposed
use of the proceeds of any Loan or the Borrower's compliance with the terms of
the Credit Documents.

(h) Additional Corporate Documents. All corporate and
legal proceedings and all instruments and agreements in connection with the
transactions contemplated in this Agreement and the other Credit Documents
shall be satisfactory in form and substance to the Required Lenders, and the
Lenders shall have received all information and copies of all documents and
papers, including records of corporate proceedings and governmental approvals,
if any, and such additional certificates and opinions, which any Lender
reasonably may have requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate or governmental
authorities.

(i) Payment of Fees, etc. The Borrower shall have paid
all costs, fees and expenses owing in connection with the Credit Documents and
due to the Administrative Agent, the Collateral Agent or any Lender on or
before the date of the making of such Loans (including, without limitation,
legal fees and expenses).

The request by the Borrower for the making of each Loan and the acceptance by
the Borrower of each Loan constituted a representation and warranty by the
Borrower to each of the Lenders making such Loan that all the representations
and warranties in Section 6 of the Original Credit Agreement, the First Amended
and Restated Credit Agreement or the

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<PAGE> 55
Second Amended and Restated Credit Agreement, as applicable, were true and
correct on and as of the date of such Loan as though repeated thereon, that
after giving effect to such Loan no Default or Event of Default was in
existence and that applicable conditions specified in Section 5 of the Original
Credit Agreement, the First Amended and Restated Credit Agreement or the Second
Amended and Restated Credit Agreement, as applicable, were satisfied or waived
in writing as of that time.

5.03 Conditions Precedent to Amendment Effective Date. The
amendment and restatement of the Original Credit Agreement (such term and all
other capitalized terms used in this Section 5.03 having the respective
meanings stated or ascribed in the First Amended and Restated Credit Agreement
and references in this Section 5.03 to "hereof" and "this Agreement" being
references to the First Amended and Restated Credit Agreement) pursuant to the
First Amended and Restated Credit Agreement, and the obligation of each Lender
under the First Amended and Restated Credit Agreement (including, without
limitation, Kawasaki) to make Loans under the First Amended and Restated Credit
Agreement (subject to the terms and conditions thereof), became effective on
December 13, 1991 (the "Amendment Effective Date"), the date on which each of
the following conditions was satisfied or waived in writing by all of the
Lenders in their sole and absolute discretion:

(a) Execution of Agreement; Note. (i) The Borrower, the
Administrative Agent and the Lenders shall have executed a counterpart hereof
(whether the same or different counterpart) and shall have delivered the same
to the Administrative Agent at its Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent written notice (actually
received) at such office that the same has been signed and mailed to it and
(ii) there shall have been delivered to the Administrative Agent for the
account of Kawasaki a Note executed by the Borrower in the amount, maturity and
as otherwise provided in this Agreement.

(b) Corporate Documents; Proceedings; Officer's
Certificate. The Lenders shall have received from the Borrower a certificate,
dated the Amendment Effective Date, signed by the President and Chief Executive
Officer, Senior Vice President- Finance or the Vice President and Controller of
the Borrower and attested to by the Secretary or any Assistant Secretary of the
Borrower in the form of Exhibit Q with appropriate insertions, together with
copies of the Certificate of Incorporation and By-Laws of the Borrower and the
resolutions of the Borrower referred to in such certifi-

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<PAGE> 56

cate, and the foregoing shall be satisfactory to all of the Lenders.

(c) Opinions of Counsel. The Lenders shall have received
opinions, addressed to the Administrative Agent and each of the Lenders and
dated the Amendment Effective Date, from (i) Streich Lang covering the due
authority, legality, enforceability and other matters related to this Agreement
and the other Credit Documents and the requirements hereof and thereof, and
(ii) Faegre & Benson covering the entry of the Additional Loan Order and the
Kawasaki Order and the taking of any appeals therefrom and Liens on the
property or other assets of the Borrower approved by the Bankruptcy Court, and
such other opinions with respect to other matters incident to transactions
contemplated herein, as any Lender may request and as are acceptable to all of
the Lenders in their sole and absolute discretion; and Kawasaki shall have
received letters from Daugherty, Bradford & Fowler and from Winthrop, Stimson,
Putnam & Roberts entitling Kawasaki to rely on the opinions delivered by such
counsel pursuant to Section 5.01(c) of this Agreement.

(d) Cash Management Agreement. The Borrower, the
Collateral Agent and the Local Bank shall have duly authorized, executed and
delivered the First Amendment to Cash Management Agreement in substantially the
form of Exhibit R, amending the Initial Cash Management Agreement.

(e) Agency Agreement. Each of the Borrower, the
Administrative Agent, the Collateral Agent and the Lenders shall have
authorized, executed and delivered the First Amendment to Agency Agreement in
substantially the form of Exhibit S, amending the Agency Agreement.

(f) Mortgage and Assignment of Gate Leases. The Borrower
shall have (i) duly authorized, executed and delivered and filed with the
appropriate Governmental Authorities (a) the First Amendments to Deeds of Trust
in substantially the forms of Exhibits T-1, T-2 and T-3, amending each Mortgage
encumbering the Mortgaged Properties, and (b) the First Amendment to Assignment
of Gate Leases in substantially the form of Exhibit U, amending the Assignment
of Gate Leases, and (ii) provided to the Lenders title reports in form and
substance satisfactory to the Lenders, and showing title vested in the Borrower
and the absence of Liens other than Liens shown on the title reports delivered
on the Effective Date.

(g) Mortgage Consents. The City of Phoenix, as landlord,
and the Collateral Agent shall have duly authorized, executed and delivered the
First Amendments to

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<PAGE> 57
Consent Agreement in substantially the forms of Exhibits V-1 and V-2. First
Interstate Bank of Arizona, N.A., as first mortgagee, shall have duly
authorized, executed and delivered the consent letter in substantially the form
of Exhibit W.

(h) Additional Loan Order and Kawasaki Order. The
Lenders shall have received a certified copy of an order of the Bankruptcy
Court in the form of Exhibit D-5, and such order shall be in full force and
effect and shall not have been stayed, reversed, vacated, rescinded, modified
or amended in any respect (other than modifications acceptable to each of the
Lenders, in their sole and absolute discretion).

(i) Kawasaki Agreements and Kawasaki Stipulations. The
Borrower and Kawasaki shall have executed and delivered each of the Kawasaki
Agreements and each of the Kawasaki Agreements shall be acceptable in form and
substance to each of the Lenders, in their sole and absolute discretion.
Pursuant to the Kawasaki Credit Agreement, all of the credit advances payable
under the Aircraft Finance Agreement shall have been restructured into the Loan
(as defined in the Kawasaki Credit Agreement). Stipulations amending the
Kawasaki Stipulations to permit Kawasaki to terminate the lease or financing
which is the subject of each such Stipulation upon three months' notice,
exercisable after December 15, 1991, and to permit rent payments and debt
service thereunder to be brought current shall have been executed and delivered
by the respective parties thereto and approved by the Bankruptcy Court. The
Borrower shall have paid in full all payment obligations then due under each of
the Kawasaki Agreements.

(j) Intercreditor Agreements. Kawasaki shall have executed
and delivered a letter in substantially the form of Exhibit X pursuant to which
Kawasaki agrees to be bound by the provisions of the intercreditor agreements
listed on Schedule 1 to such letter.

(k) Consent of Certain Lessors. The lessors party to the
stipulations with the Borrower listed on Schedule 18 hereto shall have
consented to the lien of the Lenders pursuant to the Security Agreement on the
Borrower's right, title and interest in and to the aircraft leases identified
in such stipulations.

(l) Insurance. The Borrower shall have provided to the
Lenders all insurance certificates, opinions and schedules required by Section
7.03 and the Security Documents to be provided to the Lenders on the Effective

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<PAGE> 58
Date (as if references therein to the Effective Date were to the Amendment
Effective Date).

(m) Operating Plan. The Operating Plan, in the form and
with the content approved by each of the Lenders, acting in its sole and
absolute discretion, shall have been adopted by the management of the Borrower;
and the Borrower shall have provided evidence satisfactory to all of the
Lenders in their sole and absolute discretion that the Borrower is in
compliance with the Operating Plan (including, without limitation, the
implementation of all plans and programs required by the terms of the Operating
Plan to be implemented on or prior to the Amendment Effective Date).

(n) Credit Documents. The Borrower shall have provided
to Kawasaki (i) copies of each of the Credit Documents (including, without
limitation, the Security Documents), certified by an appropriate officer of the
Borrower as being true, correct and complete and in full force and effect on
and as of the Amendment Effective Date and (ii) evidence, reasonably
satisfactory to Kawasaki, in its sole and absolute discretion, that all actions
described in Section 5.01 of the Credit Agreement and all other actions which,
in the reasonable opinion of Kawasaki, are necessary or desirable to perfect
and protect the Liens created by the Security Documents have been taken.

(o) Payment of Fees, etc. The Borrower shall have paid
all costs, fees and expenses owing in connection with this Agreement, the other
Credit Documents and the documents referred to herein and therein and due to
the Administrative Agent, the Collateral Agent and each Lender on or before the
Amendment Effective Date (including, without limitation, legal fees and
expenses).

(p) Representations and Warranties. All representations
and warranties of or on behalf of the Borrower in this Agreement and all the
other Credit Documents shall be true and correct in all material respects with
the same effect as though such representations and warranties had been made on
and as of the Amendment Effective Date.

(q) Other Action. There shall have been taken such other
actions, and the Lenders shall have received such other documents, instruments,
opinions, reliance letters, certifications and copies of governmental consents,
permits, licenses and approvals, as any Lender shall have reasonably requested
and which are acceptable to all of the Lenders in their sole and absolute
discretion.

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On the Amendment Effective Date, Kawasaki became a Lender under the First
Amended and Restated Credit Agreement, with a Commitment equal to the amount
set forth opposite its name on Annex I attached thereto. The Borrower and each
of the Existing Lenders acknowledged that, pursuant to the Original Credit
Agreement and the By-Law Letter Agreement, the Borrower granted to each
Existing Lender certain rights of approval with respect to members of the Board
of Directors of the Borrower and the Executive Committee of such Board of
Directors. The Borrower and each Existing Lender further acknowledged that
Kawasaki was not then, and had not at any time been, a party to the Original
Credit Agreement or to the By-Law Letter Agreement, and that the Borrower did
not at any time grant to Kawasaki any rights of approval with respect to
members of the Board of Directors of the Borrower or the Executive Committee of
such Board of Directors. The Lenders, the Borrower and Kawasaki agreed that
neither Kawasaki nor any of its officers, directors or advisors would be liable
or responsible to any Person for any exercise of the rights of any Existing
Lender under the Original Credit Agreement or the By-Law Letter Agreement or
for any act or omission of any Director of the Borrower approved by any
Existing Lender. The Borrower, each Existing Lender and Kawasaki agreed and
acknowledged that no agency relationship has existed or was intended to be
created by the First Amended and Restated Credit Agreement between Kawasaki on
the one hand and any Existing Lender or any Director approved by such Existing
Lender on the other hand. On the Amendment Effective Date, the By-Law Letter
Agreement was terminated and became of no further force or effect.

Subject to and upon the terms and conditions set forth in the First Amended and
Restated Credit Agreement (including, without limitation, Section 5.02
thereof), on the Amendment Effective Date, each Lender made the Loan provided
by clause (c) of Section 2.02 thereof to be made by such Lender on the
Amendment Effective Date. All of such Loans were made simultaneously by the
Lenders following acknowledgement and agreement by the Lenders that the
Amendment Effective Date had occurred.

Notwithstanding the amendment and restatement of the Original Credit Agreement
by the First Amended and Restated Credit Agreement, all of the Obligations
continued to be secured by the Collateral (as defined in the First Amended and
Restated Credit Agreement) and the Borrower acknowledged and agreed that the
Collateral (as defined in the Original Credit Agreement) remained subject to a
lien and security interest in favor of the Collateral Agent for the benefit of
the Lenders and Northwest. The First Amended and Restated

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Credit Agreement was intended as a substitution of, and not as payment of, the
Obligations of the Borrower under the Original Credit Agreement and all amounts
outstanding and owing by the Borrower under the Original Credit Agreement were
deemed to be outstanding and owing by the Borrower under the First Amended and
Restated Credit Agreement.

5.04 Conditions Precedent to Second Amendment Effective Date.
The amendment and restatement of the First Amended and Restated Credit
Agreement pursuant to the Second Amended and Restated Credit Agreement, and the
obligation of GPA Sub and each Second Amendment Lender under the Second Amended
and Restated Credit Agreement to make Loans referred to in clause (d) of
Section 2.02 of the Second Amended and Restated Credit Agreement (subject to
the terms and conditions of the Second Amended and Restated Credit Agreement),
became effective on September 17, 1992 (the "Second Amendment Effective Date"),
the date on which each of the following conditions was satisfied or waived in
writing by all of the Lenders in their sole and absolute discretion (it being
understood that all capitalized terms used in this Section 5.04 and defined in
the Second Amended and Restated Credit Agreement have the meanings defined in
the Second Amended and Restated Credit Agreement and that all references in
this Section 5.04 to "hereof" and "this Agreement" are references to the Second
Amended and Restated Credit Agreement):

(a) Execution of Agreement; Notes. (i) The Borrower, the
Administrative Agent and each Lender shall have executed a counterpart hereof
(whether the same or a different counterpart) and shall have delivered the same
to the Administrative Agent at its Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent written notice (actually
received) at such office that the same has been signed and mailed to it and
(ii) there shall have been delivered to the Administrative Agent for the
account of GPA Sub and each Second Amendment Lender Notes for such Lenders
executed by the Borrower in the amounts, maturity and as otherwise provided in
this Agreement.

(b) Corporate Documents; Proceedings; Officer's
Certificate. The Lenders shall have received from the Borrower a certificate,
dated the Second Amendment Effective Date, signed by the President and Chief
Executive Officer, Senior Vice President-Finance or the Vice President and
Controller of the Borrower and attested to by the Secretary or any Assistant
Secretary of the Borrower in the form of Exhibit Y with appropriate insertions,
together with copies of the Certificate of Incorporation and By-Laws of the

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Borrower and the resolutions of the Borrower referred to in such certificate,
and the foregoing shall be satisfactory to all of the Lenders in their sole and
absolute discretion.

(c) Opinions of Counsel. The Lenders shall have received
opinions, addressed to the Administrative Agent and each of the Lenders and
dated the Second Amendment Effective Date, from (i) Streich Lang covering the
due authority, legality, enforceability and other matters related to this
Agreement and the other Credit Documents and the requirements hereof and
thereof, (ii) Faegre & Benson covering the entry of the Second Additional Loan
Order and the taking of any appeals therefrom and Liens on the property or
other assets of the Borrower approved by the Bankruptcy Court, (iii) Daugherty,
Fowler & Peregrin, covering the filing, perfection and priority of the
Aircraft/Engine Mortgage (and amendments thereto), and (iv) Winthrop, Stimson,
Putnam & Roberts covering the United States citizenship of the Borrower, the
Slot Lease (and amendments thereto) and other matters involving the DOT and the
FAA, and such other opinions with respect to other matters incident to
transactions contemplated herein, as any Lender may request and as are
acceptable to all of the Lenders in their sole and absolute discretion.

(d) Cash Management Agreement. The Borrower, the
Collateral Agent and the Local Bank shall have duly authorized, executed and
delivered the Second Amendment to Cash Management Agreement in substantially
the form of Exhibit Z, amending the Initial Cash Management Agreement.

(e) Agency Agreement. Each of the Borrower, the
Administrative Agent, the Collateral Agent and the Lenders shall have
authorized, executed and delivered the Second Amendment to Agency Agreement in
substantially the form of Exhibit AA, amending the Agency Agreement.

(f) Mortgage and Assignment of Gate Leases. The Borrower
shall have (i) duly authorized, executed and delivered and filed with the
appropriate Governmental Authorities (a) the Second Amendments to Deeds of
Trust in substantially the forms of Exhibits BB-1, BB-2 and BB-3, amending each
Mortgage encumbering the Mortgaged Properties, and (b) the Second Amendment to
Assignment of Gate Leases in substantially the form of Exhibit CC, amending the
Assignment of Gate Leases, and (ii) provided to the Lenders title reports in
form and substance satisfactory to all of the Lenders in their sole and
absolute discretion, and showing title vested in the Borrower and the absence
of Liens other than Liens shown on the title reports delivered on the Effective
Date.

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(g) Mortgage Consents. The City of Phoenix, as landlord,
and the Collateral Agent shall have duly authorized, executed and delivered the
Second Amendments to Consent Agreement in substantially the forms of Exhibits
DD-1 and DD-2. First Interstate Bank of Arizona, N.A., as first mortgagee,
shall have duly authorized, executed and delivered the consent letter in
substantially the form of Exhibit EE.

(h) Second Additional Loan Order. The Lenders shall have
received a certified copy of the Second Additional Loan Order, and the Second
Additional Loan Order shall be entered by the Court and in full force and
effect and shall not have been stayed, reversed, vacated, rescinded, modified
or amended in any respect (other than modifications acceptable to all of the
Lenders, in their sole and absolute discretion), and no appeal shall been taken
from the Second Additional Loan Order and the time to take any such appeal
shall have expired.

(i) Intercreditor Agreements. Each of the Lenders shall have
executed and delivered a letter in substantially the form of Exhibit FF
pursuant to which each Lender affirms or reaffirms, as the case may be, that it
shall be bound by the provisions of the intercreditor agreements listed on
Schedule 1 to such letter.

(j) Consent of Certain Lessors. The lessors party to the
stipulations with the Borrower listed on Schedule 18 hereto shall have
consented to the lien of the Lenders pursuant to the Security Agreement on the
Borrower's right, title and interest in and to the aircraft leases identified
in such stipulations.

(k) Insurance. The Borrower shall have provided to the
Lenders all insurance certificates, opinions and schedules required by Section
7.03 and the Security Documents to be provided to the Lenders on the Effective
Date (as if references therein to the Effective Date were to the Second
Amendment Effective Date).

(l) Operating Plan and Consultant's Report. The
Operating Plan and the report thereon of Simat, Helliesen & Eichner, Inc., the
Borrower's consultant, shall be satisfactory in form and content to all of the
Lenders, acting in their sole and absolute discretion, and the Operating Plan
shall have been adopted by the management and the Board of Directors of the
Borrower; and the Borrower shall have provided evidence satisfactory to all of
the Lenders in their sole and absolute discretion that the Borrower is in
compliance with the Operating Plan (includ-

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ing, without limitation, the achievement and implementation of all actions
required by, and the further cost reductions outlined in, the Operating Plan
to be achieved or implemented on or prior to the Second Amendment Effective
Date).

(m) Security Agreement. The Borrower and the Collateral
Agent shall have duly authorized, executed and delivered the First Amendment to
Security Agreement in substantially the form of Exhibit GG, amending the
Security Agreement.

(n) Aircraft/Engine Mortgage and Spare Parts Mortgage.
The Borrower and the Collateral Agent shall have duly authorized, executed and
delivered (i) Amendment No. 3 to Aircraft/Engine Mortgage in substantially the
form of Exhibit HH, amending the Aircraft/Engine Mortgage, and (ii) Amendment
No. 1 to the Spare Parts Mortgage in substantially the form of Exhibit II,
amending the Spare Parts Mortgage, together with evidence of filing for
recording with the FAA of such amendments and with the priority contemplated
hereby and thereby.

(o) Slots. The Borrower and the Collateral Agent shall
have duly authorized, executed and delivered the First Amendment to Slot Lease
Agreement in substantially the form of Exhibit JJ, amending the Slot Lease
Agreement, and all matters involving the DOT and the FAA relating to the Slots
shall be acceptable to all of the Lenders in their sole and absolute
discretion.

(p) Financial Accommodations. The Borrower shall have
received from third parties a minimum of $11 million in financial
accommodations on terms acceptable to all of the Lenders in their sole and
absolute discretion, including, without limitation, the financial
accommodations set forth on Schedule 20 hereto; and the Borrower shall have
provided evidence thereof in form and substance satisfactory to all of the
Lenders in their sole and absolute discretion.

(q) Prepayment of Northwest Loans and Release and
Termination by Northwest. Simultaneously with the effectiveness of this
Agreement and the funding by GPA Sub and the Second Amendment Lenders of the
Loans referred to in clause (d) of Section 2.02 hereof, (i) all of the Loans
made by Northwest under the Original Credit Agreement and outstanding under the
Credit Agreement shall be prepaid in full, together with accrued and unpaid
interest thereon, as provided in Section 2.04, and (ii) Northwest shall have
duly authorized, executed and delivered a Release and Termination in
substantially the form of Exhibit LL releasing all of its

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right, title and interest in and to the Collateral, the Loans and the Credit
Documents.

(r) Aircraft Rental and Loan Reductions and Deferrals.
The Borrower shall have provided evidence in form and substance acceptable to
all of the Lenders in their sole and absolute discretion that the Borrower
shall have received from aircraft providers (other than the GPA Entities)
rental and interest rate reductions, rental and principal payment deferrals and
aircraft fleet reductions in the amounts, for the periods and otherwise as set
forth in Schedule 19 (or on such other terms as all of the Lenders shall
approve in their sole and absolute discretion); and the terms and conditions of
such rental and interest rate reductions, rental and principal payment
deferrals and aircraft fleet reductions shall be in full force and effect
(without any unfulfilled conditions to the effectiveness thereof or subject
only to such conditions to the effectiveness thereof as all of the Lenders
shall approve in their sole and absolute discretion); and the terms of the
stipulations with respect to, and the documentation evidencing, such interest
rate reductions, rental and principal payment deferrals and aircraft fleet
reductions shall be satisfactory in form and substance to all of the Lenders in
their sole and absolute discretion.

(s) Corporate Governance and Related Actions. The
Borrower shall have duly authorized, executed and delivered the Management
Letter Agreement substantially in the form of Exhibit KK and the Lenders (other
than Kawasaki) shall have received evidence, satisfactory in form and substance
to all of the Lenders (other than Kawasaki) in their sole and absolute
discretion, that all actions described in the Management Letter Agreement to be
taken on or prior to the Second Amendment Effective Date shall have been taken
to the satisfaction of all of the Lenders (other than Kawasaki) in their sole
and absolute discretion.

(t) A320 Put Agreements. Pursuant to documentation,
satisfactory in form and substance to all of the Lenders in their sole and
absolute discretion, (i) each of Kawasaki and GPA Group plc shall have
cancelled its right to put A320 aircraft to the Borrower pursuant to the
Kawasaki Put Agreement and the Put Agreement, respectively, on or prior to
December 31, 1993, (ii) the Borrower shall have agreed that, if in the
discretion of its management, the Borrower increases its fleet of A320 aircraft
on or after January 1, 1993 and on or prior to December 31, 1993, then (in lieu
of taking A320 aircraft from other sources and subject to availability from
Kawasaki and the GPA Entities) the Borrower will take A320 aircraft first from
Kawasaki and

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then from the GPA Entities on the same terms and conditions as would have been
applicable under the Kawasaki Put Agreement and the Put Agreement,
respectively, had the put options thereunder not been so cancelled, and (iii)
the Borrower shall have granted to Kawasaki the right to put four A320 aircraft
(each of which shall have fewer than 100 flight hours of commercial operation)
to the Borrower during the period January 1, 1994 through December 31, 1994 on
the terms provided in the Kawasaki Put Agreement.

(u) Directors' and Officers' Liability Insurance. The
Borrower shall have provided the Lenders with evidence satisfactory to all of
the Lenders in their sole and absolute discretion that the Borrower has in
effect on the Second Amendment Effective Date (i) directors' and officers'
liability insurance, and (ii) corporate indemnification of directors, in each
case, sufficient to facilitate and support the changes in the corporate
governance of the Borrower contemplated by the Management Letter Agreement.

(v) No Material Adverse Change. In the opinion of the
Lenders, no material adverse change shall have occurred since August 18, 1992
in (i) the financial condition, business or prospects of the Borrower or (ii)
the airline industry.

(w) Credit Documents. The Borrower shall have provided
to each of the Second Amendment Lenders (i) copies of each of the Credit
Documents (including, without limitation, all amendments thereto), certified by
an appropriate officer of the Borrower as being true, correct and complete and
in full force and effect on and as of the Second Amendment Effective Date and
(ii) evidence, reasonably satisfactory to all of the Second Amendment Lenders,
in their sole and absolute discretion, that all actions described in Section
5.01 of the Credit Agreement have been taken.

(x) Payment of Fees, etc. The Borrower shall have paid
all costs, fees and expenses owing in connection with this Agreement, the other
Credit Documents and the documents referred to herein and therein and due to
the Administrative Agent, the Collateral Agent and each Lender on or before the
Second Amendment Effective Date (including, without limitation, legal fees and
expenses).

(y) Representations and Warranties. All representations
and warranties of or on behalf of the Borrower in this Agreement and all the
other Credit Documents shall be true and correct in all material respects on
and as of the Second Amendment Effective Date with the same effect as

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though such representations and warranties had been made on and as of the
Second Amendment Effective Date.

(z) Retention of Consultant. The Lenders shall have
received evidence, satisfactory to all of the Lenders in their sole and
absolute discretion, that Simat, Helliesen & Eichner, Inc. has been retained by
the Borrower as a consultant to advise and assist the Borrower with respect to
the implementation of the Operating Plan.

(aa) Other Action. There shall have been taken such other
actions, and all of the Lenders shall have received such other documents,
instruments, opinions, reliance letters, certifications and copies of
governmental consents, permits, licenses and approvals, as any Lender shall
have reasonably requested and which are acceptable to all of the Lenders in
their sole and absolute discretion.

On the Second Amendment Effective Date, each Second Amendment Lender became a
Lender under the Second Amended and Restated Credit Agreement, with a
Commitment equal to the amount set forth opposite its name on Annex I attached
thereto and the Commitment of GPA Sub was increased to the amount set forth
opposite its name on Annex I thereto. The Borrower and each of the Lenders
(other than Kawasaki) acknowledged that, pursuant to the Second Amended and
Restated Credit Agreement and the Management Letter Agreement, the Borrower
granted to each Lender (other than Kawasaki) certain rights of approval with
respect to members of the Board of Directors of the Borrower and the Executive
Committee of such Board of Directors. The Borrower and each Lender (other than
Kawasaki) further acknowledged that Kawasaki is not a party to the Management
Letter Agreement, and that the Borrower did not grant to Kawasaki any rights of
approval with respect to members of the Board of Directors of the Borrower or
the Executive Committee of such Board of Directors. The Lenders (including
Kawasaki) and the Borrower agreed that neither Kawasaki nor any of its
officers, directors or advisors would be liable or responsible to any Person
for any exercise of the rights of any other Lender under the Management Letter
Agreement or for any act or omission of any Director of the Borrower approved
by any such Lender. The Borrower and each Lender (including Kawasaki) agreed
and acknowledged that no agency relationship has existed or was intended to be
created by the Second Amended and Restated Credit Agreement, between Kawasaki
on the one hand and any other Lender or any Director approved by such Lender on
the other hand.

Subject to and upon the terms and conditions set forth in the Second Amended
and Restated Credit Agreement (including,

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without limitation, Section 5.02 thereof), on the Second Amendment Effective
Date, GPA Sub and each Second Amendment Lender made the Loan provided by clause
(d) of Section 2.02 of the Second Amended and Restated Credit Agreement to be
made by such Lender on the Second Amendment Effective Date. All of such Loans
were made simultaneously by GPA Sub and the Second Amendment Lenders following
acknowledgement and agreement by GPA Sub and the Second Amendment Lenders that
the Second Amendment Effective Date had occurred.

Notwithstanding the amendment and restatement of the First Amended and Restated
Credit Agreement by the Second Amended and Restated Credit Agreement, all of
the Obligations continued to be secured by the Collateral (as defined in the
First Amended and Restated Credit Agreement) and the Borrower acknowledged and
agreed that the Collateral (as defined in the First Amended and Restated Credit
Agreement) remained subject to a lien and security interest in favor of the
Collateral Agent for the benefit of the Secured Creditors. The Second Amended
and Restated Credit Agreement was intended as a substitution of, and not as
payment of, the Obligations of the Borrower under the First Amended and
Restated Credit Agreement and all amounts outstanding and owing by the Borrower
under the First Amended Credit Agreement were deemed to be outstanding and
owing by the Borrower under the Second Amended and Restated Credit Agreement.

5.05 Conditions Precedent to Third Amendment Effective Date.
The amendment and restatement of the Second Amended and Restated Credit
Agreement pursuant to the Third Amended and Restated Credit Agreement and the
agreement of each Lender to extend the maturity of the Loans of such Lender to
the Maturity Date (as defined in the Third Amended and Restated Credit
Agreement) became effective on September 30, 1993 (the "Third Amendment
Effective Date"), the date on which each of the following conditions was
satisfied or waived in writing by all of the Lenders in their sole and absolute
discretion (it being understood that all capitalized terms used in this Section
5.05 and defined in the Third Amended and Restated Credit Agreement have the
meanings defined in the Third Amended and Restated Credit Agreement and that
all references in this Section 5.05 to "hereof" and "this Agreement" are
references to the Third Amended and Restated Credit Agreement):

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Lenders, shall have given to the Administrative Agent written notice (actually
received) at such office that the same has been signed and mailed to it.

(b) Corporate Documents; Proceedings; Officer's
Certificate. The Lenders shall have received from the Borrower a certificate,
dated the Third Amendment Effective Date, signed by the Chairman of the Board
of Directors, the President and Chief Executive Officer, the Senior Vice
President-Finance or the Vice President and Controller of the Borrower and
attested to by the Secretary or any Assistant Secretary of the Borrower in
substantially the form of Exhibit Y with appropriate insertions, together with
copies of the Certificate of Incorporation and By-Laws of the Borrower and the
resolutions of the Borrower referred to in such certificate, and the foregoing
shall be satisfactory to all of the Lenders in their sole and absolute
discretion.

(c) Opinions of Counsel. The Lenders shall have received
opinions, addressed to the Administrative Agent and each of the Lenders and
dated the Third Amendment Effective Date, from (i) Andrews & Kurth L.L.P. and
Martin J. Whalen covering the due authority, legality, enforceability and other
matters related to this Agreement and the other Credit Documents and the
requirements hereof and thereof, (ii) Faegre & Benson covering the entry of the
Interim Extension Loan Order and the taking of any appeals therefrom and Liens
on the property or other assets of the Borrower approved by the Bankruptcy
Court, and (iii) Winthrop, Stimson, Putnam & Roberts covering the United States
citizenship of the Borrower and other matters involving the DOT and the FAA,
and such other opinions with respect to other matters incident to transactions
contemplated herein, as any Lender may request and as are acceptable to all of
the Lenders in their sole and absolute discretion.

(d) Mortgage and Assignment of Gate Leases. The Borrower
shall have (i) duly authorized, executed and delivered and filed with the
appropriate Governmental Authorities (a) the Third Amendments to Deeds of Trust
in substantially the forms of Exhibits MM-1, MM-2 and MM-3, amending each
Mortgage encumbering the Mortgaged Properties, and (b) the Third Amendment to
Assignment of Gate Leases in substantially the form of Exhibit NN, amending the
Assignment of Gate Leases, and (ii) provided to the Lenders title reports in
form and substance satisfactory to all of the Lenders in their sole and
absolute discretion, and showing title vested in the Borrower and the absence
of Liens other than Liens shown on the title reports delivered on the Effective
Date.

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(e) Mortgage Consents. The City of Phoenix, as landlord,
and the Collateral Agent shall have duly authorized, executed and delivered the
Third Amendments to Consent Agreement in substantially the forms of Exhibits
OO-1 and OO-2.

(f) Slots. The Borrower and the Collateral Agent shall
have duly authorized, executed and delivered the Second Amendment to Slot Lease
Agreement in substantially the form of Exhibit PP.

(g) Interim Extension Loan Order. The Lenders shall have
received a certified copy of the Interim Extension Loan Order, and the Interim
Extension Loan Order shall have been entered by the Bankruptcy Court and shall
be in full force and effect and shall not have been stayed, reversed, vacated,
rescinded, modified or amended in any respect (other than modifications
acceptable to all of the Lenders, in their sole and absolute discretion), and
no appeal shall been taken from the Interim Extension Loan Order.

(h) Operating Plan. The Operating Plan and the
recommendations contained in the report thereon of Simat, Helliesen & Eichner,
Inc., the Borrower's consultant, shall have been adopted by the management and
the Board of Directors of the Borrower.

(i) Payment of Ansett Loans and Release and Termination
by Ansett. Prior to or simultaneously with the effectiveness of this Agreement
and the extension of the maturity of the Loans to the Maturity Date, (i) all of
the Ansett Loans shall be paid in full, together with accrued and unpaid
interest thereon, and (ii) Ansett shall have duly authorized, executed and
delivered a Release and Termination in substantially the form of Exhibit QQ
releasing all of its right, title and interest in and to the Collateral, the
Loans and the Credit Documents.

(j) Corporate Governance and Related Actions. The
Borrower shall have duly authorized, executed and delivered the Amended and
Restated Management Letter Agreement substantially in the form of Exhibit RR
and the Lenders (other than Kawasaki) shall have received evidence,
satisfactory in form and substance to all of the Lenders (other than Kawasaki)
in their sole and absolute discretion, that all actions described in the
Amended and Restated Management Letter Agreement to be taken on or prior to the
Third Amendment Effective Date shall have been taken to the satisfaction of all
of the Lenders (other than Kawasaki) in their sole and absolute discretion.

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(k) No Material Adverse Change. In the opinion of the
Lenders, no material adverse change shall have occurred since September 15,
1993 in the financial condition, business or prospects of the Borrower.

(l) Payment of Fees, etc. The Borrower shall have paid
all costs, fees and expenses owing in connection with this Agreement, the other
Credit Documents and the documents referred to herein and therein and due to
the Administrative Agent, the Collateral Agent and each Lender on or before the
Third Amendment Effective Date (including, without limitation, legal fees and
expenses).

(m) No Default; Representations and Warranties. No
Default or Event of Default shall have occurred and be continuing on and as of
the Third Amendment Effective Date and all representations and warranties of or
on behalf of the Borrower in this Agreement and all the other Credit Documents
shall be true and correct in all material respects on and as of the Third
Amendment Effective Date with the same effect as though such representations
and warranties had been made on and as of the Third Amendment Effective Date
(it being understood and agreed that in the event of any inconsistency between
the representations and warranties of or on behalf of the Borrower in this
Agreement and the representations and warranties of or on behalf of the
Borrower in the other Credit Documents, the representations and warranties of
or on behalf of the Borrower in this Agreement shall control); and the Lenders
shall have received a certificate, dated the Third Amendment Effective Date,
and signed by the Vice President and Controller of the Borrower, to such
effect.

(n) Governmental Action. No Governmental Action shall
purport to, and no Governmental Action or other action or proceedings shall
have been filed, instituted, threatened or issued which seeks to, enjoin or
restrain or otherwise adversely affect the extension of the maturity of the
Loans to the Maturity Date (as defined herein) or the other transactions
provided for herein or contemplated hereby or the Borrower's compliance with
the terms hereof or of the other Credit Documents.

(o) Other Action. There shall have been taken such other
actions, and all of the Lenders shall have received such other documents,
instruments, opinions, reliance letters, certifications and copies of
governmental consents, permits, licenses and approvals, as any Lender shall
have reasonably requested and which are acceptable to all of the Lenders in
their sole and absolute discretion.

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On the Third Amendment Effective Date, the maturity of the Loans of each Lender
was extended to the Maturity Date and the Loans of each Lender remained
outstanding in an aggregate principal amount equal to the amount set forth
opposite such Lender's name on Annex I attached thereto (and each Lender was
deemed to have waived any mandatory prepayments of the Loans of such Lender
otherwise required pursuant to Sections 4.02(i), 4.02(ii) and 4.02(iv) of the
Second Amended and Restated Credit Agreement during the period July 1, 1993
through September 30, 1993). The Borrower and each of the Lenders (other than
Kawasaki) acknowledged that, pursuant to the Third Amended and Restated Credit
Agreement and the Amended and Restated Management Letter Agreement, the
Borrower granted to each Lender (other than Kawasaki) certain rights of
approval with respect to members of the Board of Directors of the Borrower and
the Executive Committee of such Board of Directors. The Borrower and each
Lender (other than Kawasaki) further acknowledged that Kawasaki is not a party
to the Amended and Restated Management Letter Agreement, and that the Borrower
did not grant to Kawasaki any rights of approval with respect to members of the
Board of Directors of the Borrower or the Executive Committee of such Board of
Directors. The Lenders (including Kawasaki) and the Borrower agreed that
neither Kawasaki nor any of its officers, directors or advisors would be liable
or responsible to any Person for any exercise of the rights of any other Lender
under the Amended and Restated Management Letter Agreement or for any act or
omission of any Director of the Borrower approved by any such Lender. The
Borrower and each Lender (including Kawasaki) agreed and acknowledged that no
agency relationship has existed or was intended to be created by the Third
Amended and Restated Credit Agreement between Kawasaki on the one hand and any
other Lender or any Director approved by such Lender on the other hand. On the
Third Amendment Effective Date, the Management Letter Agreement was amended and
restated in its entirety as provided in the Amended and Restated Management
Letter Agreement (and the Management Letter Agreement became of no further
force or effect).

Notwithstanding the amendment and restatement of the Second Amended and
Restated Credit Agreement by the Third Amended and Restated Credit Agreement,
all of the Obligations continued to be secured by the Collateral and the
Borrower acknowledged and agreed that the Collateral remained subject to a lien
and security interest in favor of the Collateral Agent for the benefit of the
Secured Creditors. Except as provided in the Third Amended and Restated Credit
Agreement and in the Release and Termination executed and delivered by Ansett
pursuant to the Third Amended and Restated Credit

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Agreement, the Third Amended and Restated Credit Agreement was intended as a
substitution of, and not as payment of, the Obligations of the Borrower under
the Second Amended and Restated Credit Agreement and all amounts outstanding
and owing by the Borrower under the Second Amended and Restated Credit
Agreement were deemed to be outstanding and owing by the Borrower under the
Third Amended and Restated Credit Agreement.

5.06 Conditions Precedent to Fourth Amendment Effective Date.
The amendment and restatement of the Third Amended and Restated Credit
Agreement pursuant to this Agreement, and the agreement of each Lender to
extend the maturity of the Loans of such Lender to the Maturity Date shall
become effective on the date (the "Fourth Amendment Effective Date"), which
date must occur not later than June 30, 1994, on which each of the following
conditions is satisfied unless waived in writing by all of the Lenders in their
sole and absolute discretion:

(a) Execution of Agreement. The Borrower, the
Administrative Agent and each Lender shall have executed a counterpart hereof
(whether the same or a different counterpart) and shall have delivered the same
to the Administrative Agent at its Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent written notice (actually
received) at such office that the same has been signed and mailed to it.

(b) Corporate Documents; Proceedings; Officer's
Certificate. The Lenders shall have received from the Borrower a certificate,
dated the Fourth Amendment Effective Date, signed by the Chairman of the Board
of Directors and Chief Executive Officer, the President and Chief Operating
Officer or the Vice President and Controller of the Borrower and attested to by
the Secretary or any Assistant Secretary of the Borrower in substantially the
form of Exhibit Y with appropriate insertions and modifications, together with
copies of the Certificate of Incorporation and By-Laws of the Borrower and the
resolutions of the Borrower referred to in such certificate, and the foregoing
shall be satisfactory to all of the Lenders in their sole and absolute
discretion.

(c) Opinions of Counsel. The Lenders shall have received
opinions, addressed to the Administrative Agent and each of the Lenders and
dated the Fourth Amendment Effective Date, from (i) Andrews & Kurth L.L.P. and
the Senior Vice President and General Counsel of the Borrower covering the due
authority, legality, enforceability and other matters related to this Agreement
and the other Credit Documents and the requirements hereof and thereof, (ii)
LeBoeuf, Lamb,

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Greene & MacRae covering the entry of the Subsequent Extension Loan Order and
the taking of any appeals therefrom and Liens on the property or other assets
of the Borrower approved by the Bankruptcy Court, and (iii) Daugherty, Fowler &
Peregrin, covering the filing, perfection and priority of the Aircraft/Engine
Mortgage (and amendments thereto), and such other opinions with respect to
other matters incident to the transactions contemplated herein, as any Lender
may request and as are acceptable to all of the Lenders in their sole and
absolute discretion.

(d) Mortgage and Assignment of Gate Leases. The Borrower
shall have (i) duly authorized, executed and delivered and filed with the
appropriate Governmental Authorities (a) the Fourth Amendments to Deeds of
Trust in substantially the forms of Exhibits TT-1, TT-2 and TT-3, amending each
Mortgage encumbering the Mortgaged Properties, and (b) the Fourth Amendment to
Assignment of Gate Leases in substantially the form of Exhibit UU, amending the
Assignment of Gate Leases, and (ii) provided to the Lenders title reports in
form and substance satisfactory to all of the Lenders in their sole and
absolute discretion, and showing title vested in the Borrower and the absence
of Liens other than Liens shown on the title reports delivered on the Effective
Date.

(e) Subsequent Extension Loan Order. The Lenders shall
have received a certified copy of the Subsequent Extension Loan Order, and the
Subsequent Extension Loan Order shall have been entered by the Bankruptcy Court
and shall be in full force and effect and shall not have been stayed, reversed,
vacated, rescinded, modified or amended in any respect (other than
modifications acceptable to all of the Lenders, in their sole and absolute
discretion), and no appeal shall been taken from the Subsequent Extension Loan
Order.

(f) Payment of Dial Loans and Release and Termination by
Dial. Prior to or simultaneously with the effectiveness of this Agreement and
the extension of the maturity of the Loans to the Maturity Date, (i) all of the
Dial Loans shall be paid in full, together with accrued and unpaid interest
thereon, and (ii) Dial shall have duly authorized, executed and delivered a
Release and Termination in substantially the form of Exhibit VV releasing all
of its right, title and interest in and to the Collateral, the Loans, the
Credit Documents and the Amended and Restated Management Letter Agreement.

(g) No Material Adverse Change. In the opinion of the
Lenders, no material adverse change shall have

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occurred since May 2, 1994 in the financial condition, business or prospects of
the Borrower.

(h) Payment of Fees, etc. The Borrower shall have paid
all costs, fees and expenses owing in connection with this Agreement, the other
Credit Documents and the documents referred to herein and therein and due to
the Administrative Agent, the Collateral Agent and each Lender on or before the
Fourth Amendment Effective Date (including, without limitation, legal fees and
expenses).

(i) No Default; Representations and Warranties. No
Default or Event of Default shall have occurred and be continuing on and as of
the Fourth Amendment Effective Date and all representations and warranties of
or on behalf of the Borrower in this Agreement and all the other Credit
Documents shall be true and correct in all material respects on and as of the
Fourth Amendment Effective Date with the same effect as though such
representations and warranties had been made on and as of the Fourth Amendment
Effective Date (it being understood and agreed that in the event of any
inconsistency between the representations and warranties of or on behalf of the
Borrower in this Agreement and the representations and warranties of or on
behalf of the Borrower in the other Credit Documents, the representations and
warranties of or on behalf of the Borrower in this Agreement shall control);
and the Lenders shall have received a certificate, dated the Fourth Amendment
Effective Date, and signed by the Vice President and Controller of the
Borrower, to such effect.

(j) Governmental Action. No Governmental Action shall
purport to, and no Governmental Action or other action or proceedings shall
have been filed, instituted, threatened or issued which seeks to, enjoin or
restrain or otherwise adversely affect the extension of the maturity of the
Loans to the Maturity Date or the other transactions provided for herein or
contemplated hereby or the Borrower's compliance with the terms hereof or of
the other Credit Documents.

(k) Other Action. There shall have been taken such other
actions, and all of the Lenders shall have received such other documents,
instruments, opinions, reliance letters, certifications and copies of
governmental consents, permits, licenses and approvals, as any Lender shall
have reasonably requested and which are acceptable to all of the Lenders in
their sole and absolute discretion.

On the Fourth Amendment Effective Date, the maturity of the Loans of each
Lender shall be extended to the Maturity Date and the Loans of each Lender
shall continue to be outstand-
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<PAGE> 75

ing in an aggregate principal amount equal to the amount set forth opposite its
name on Annex I attached hereto. The Amended and Restated Management Letter
Agreement (as executed and delivered on and as of the Third Amendment Effective
Date and as amended pursuant to letter agreement dated February 8, 1994) shall
remain in full force effect on and after the Fourth Amendment Effective Date
and for so long as any obligation remains outstanding hereunder or under any of
the other Credit Documents (except that Dial shall not have any rights
thereunder). The Borrower and each of the Lenders (other than Kawasaki) hereby
acknowledge that, pursuant to this Agreement and the Amended and Restated
Management Letter Agreement, the Borrower has granted to each Lender (other
than Kawasaki) certain rights of approval with respect to members of the Board
of Directors of the Borrower. The Borrower and each Lender (other than
Kawasaki) further acknowledge that Kawasaki is not a party to the Amended and
Restated Management Letter Agreement, and that the Borrower has not granted to
Kawasaki any rights of approval with respect to members of the Board of
Directors of the Borrower. Neither Kawasaki nor any of its officers, directors
or advisors shall be liable or responsible to any Person for any exercise of
the rights of any other Lender under the Amended and Restated Management Letter
Agreement or for any act or omission of any Director of the Borrower approved
by any such Lender. The Borrower and each Lender (including Kawasaki) agree
and acknowledge that no agency relationship exists or is intended to be created
hereby between Kawasaki on the one hand and any other Lender or any Director
approved by such Lender on the other hand.

Notwithstanding the amendment and restatement of the Third Amended and Restated
Credit Agreement by this Agreement, all of the Obligations shall continue to be
secured by the Collateral and the Borrower acknowledges and agrees that the
Collateral remains subject to a lien and security interest in favor of the
Collateral Agent for the benefit of the Secured Creditors. Except as provided
herein and in the Release and Termination executed and delivered by Dial
pursuant hereto, this Agreement is intended as a substitution of, and not as
payment of, the Obligations of the Borrower under the Third Amended and
Restated Credit Agreement and all amounts outstanding and owing by the Borrower
under the Third Amended and Restated Credit Agreement shall be deemed to be
outstanding and owing by the Borrower hereunder. Notwithstanding anything
herein or in any of the other Credit Documents which may be to the contrary,
for all purposes hereof and thereof, the Maturity Date shall be as provided
herein.

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SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

In order to induce the Lenders to enter into this Agreement
and to extend the maturity of the Loans to the Maturity Date, the Borrower
makes the following representations, warranties and agreements as of the Fourth
Amendment Effective Date, which shall survive the execution and delivery of
this Agreement and the extension of the maturity of the Loans to the Maturity
Date.

6.01 Corporate Status. The Borrower (i) is a duly organized
and validly existing corporation in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the power and authority to own its
property and assets and to transact the business in which it is engaged and
(iii) is duly qualified as a foreign corporation and in good standing in each
jurisdiction where the ownership, leasing or operation of its property or the
conduct of its business requires such qualification except where the failure to
be so qualified is not reasonably likely to have a material adverse effect on
the business, operations, property or other assets or condition (financial or
otherwise) of the Borrower or on the Collateral or the rights or remedies of
the Collateral Agent in respect thereof.

6.02 Corporate Power and Authority. Subject to the entry of
the Subsequent Extension Loan Order by the Bankruptcy Court, the Borrower has
the corporate power to execute, deliver and perform the terms and provisions of
each of the Credit Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
each of such Credit Documents. The Borrower has duly executed and delivered
each of the Credit Documents to which it is a party, and each of such Credit
Documents constitutes its legal, valid and binding obligation enforceable
against the Borrower in accordance with its terms.

6.03 No Violation. Neither the execution, delivery or
performance by the Borrower of the Credit Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict or be inconsistent with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except

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pursuant to the Security Documents) upon any of the property or assets of the
Borrower pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement, loan agreement or any other material agreement, contract or
instrument to which the Borrower is a party or by which its property or assets
are bound or to which it may be subject, in each case to the extent entered
into or assumed on or after the Filing Date, or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of the Borrower.

6.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except the entry of the Orders and those which have been obtained or made
or may be required to be made in the future under any Credit Document and
cannot be obtained until such future time) or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of any Credit Document or (ii) the legality, validity, binding effect or
enforceability of any Credit Document.

6.05 Priority; Security Interests.

(a) The Obligations constitute allowed administrative expense
claims in the Case having priority over all administrative expenses of the kind
specified in Section 503(b) or 507(b) of the Bankruptcy Code, except for the
Permitted Expenses and except as expressly permitted by Section 8.05(vi).

(b) The Obligations shall be at all times secured by a
Lien on the Collateral in favor of the Collateral Agent for the benefit of the
Secured Creditors, which Lien shall be a first priority Lien on all Collateral
and perfected by operation of the Orders, except that the Lien securing the
Obligations may be junior in priority to the Permitted First Liens with respect
to the property encumbered thereby. The Borrower has good and marketable title
to all Collateral owned by it free and clear of all Liens, except (i) Liens
securing the Obligations, (ii) the Permitted First Liens and (iii) other Liens
permitted by Section 8.01, all of which Liens referred to in this clause (iii)
are and shall be junior and subordinate to the Liens securing the Obligations.
All filings, notices, recordings and other actions taken or made in the United
States or any State thereof or in any other jurisdiction necessary to perfect
the Liens on the Collateral created pursuant to the Security

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Documents and the Orders have been made, given or accomplished.

6.06 Financial Statements; Financial Condition;
Undisclosed Liabilities; etc.

(a) The consolidated balance sheet of the Borrower at
December 31, 1993 and the related consolidated statements of operations,
shareholders' equity and cash flows of the Borrower for the fiscal year ended
on such date and heretofore furnished to the Lenders present fairly in all
material respects the financial position of the Borrower at the date of such
balance sheet and the results of operations of the Borrower for such periods
covered in the statements of operations except as expressly disclosed therein
and in the notes thereto in conformity with generally accepted accounting
principles and practices consistently applied.

(b) The consolidated balance sheet of the Borrower at
March 31, 1994 and the related consolidated statements of operations and cash
flows of the Borrower for the three month period ended on such date and
heretofore furnished to the Lenders present fairly in all material respects the
financial position of the Borrower at the date of such balance sheet and the
results of the operations of the Borrower for such periods covered in the
statements of operations thereby, except as otherwise disclosed therein and in
the notes thereto in conformity with generally accepted accounting principles
and practices consistently applied, subject to appropriate year-end audit
adjustments.

(c) Since May 2, 1994, there has been no material adverse
change in the business, operations, property or other assets or condition
(financial or otherwise) of the Borrower, including, without limitation, as a
result of any casualty, strike, lockout or labor dispute.

(d) Except as fully reflected in the financial statements
(including the footnotes thereto) referred to in Section 6.06(b) or in Schedule
9 hereto, there are no liabilities or obligations (excluding current
obligations and liabilities incurred in the ordinary course of business) with
respect to the Borrower of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due), which either individually or
in aggregate are or would be reasonably likely to be materially adverse to the
ability of the Borrower to satisfy the Obligations in accordance with their
terms or the ability of the Borrower to consummate the transactions
contemplated by the Credit Documents.

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(e) The projections presented in the Operating Plan (the
"Projections") are based on good faith estimates and assumptions made by the
management of the Borrower on and as of the date of the Operating Plan; and the
management of the Borrower believes that the Projections are reasonable and
attainable, it being recognized by the Lenders, however, that projections as to
future events are not to be viewed as facts and that the actual results during
the period or periods covered by the Projections may differ from the projected
results and that such differences may be material.

(f) The property register furnished by the Borrower to
the Lenders on and as of the Effective Date was a true, complete and accurate
description of all aircraft, engines, rotables, Slots, Real Property and other
material property or other material assets of the Borrower.

6.07 Litigation. Except as set forth in Schedule 10 hereto,
there are no actions, suits or proceedings, other than the Case, pending or, to
the knowledge of the Borrower, threatened that are reasonably likely to
materially and adversely affect the business, operations, property or other
assets or condition (financial or otherwise) of the Borrower or the ability of
the Borrower to perform its obligations hereunder or under any of the other
Credit Documents.

6.08 True and Complete Disclosure. All factual information
(taken as a whole) furnished on or prior to the Fourth Amendment Effective Date
by the Borrower in writing to any Lender (including, without limitation, all
information contained in the Credit Documents but excluding (i) the Projections
and any other forecasts and projections of financial information and results
submitted to any Lender, and (ii) factual information which was superseded or
replaced on or prior to the date hereof) for purposes of or in connection with
this Agreement, or any transaction contemplated herein, is true and accurate as
of the date hereof in all material respects and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.

6.09 Use of Proceeds; Margin Regulations.

(a) All proceeds of the Loans were used for the
Borrower's working capital purposes in accordance with the Operating Plan (as
defined in the Original Credit Agreement, the First Amended and Restated Credit
Agreement and/or the Second Amended and Restated Credit Agreement, as
applicable)

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including, without limitation, to pay amounts due under the A320 Leases, the
Engine Leases and the Kawasaki Leases.

(b) No part of the proceeds of any Loan were used by the
Borrower to purchase or carry any Margin Stock or to extend credit to others
for the purposes of purchasing or carrying any Margin Stock. Neither the
making of any Loan nor the use of the proceeds thereof violated or was
inconsistent with the provisions of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.

6.10 Tax Returns and Payments. The Borrower has filed all
federal income tax returns and all other tax returns required to be filed by it
and has paid all income and other taxes payable by it which have become due
pursuant to such tax returns and all other taxes and assessments payable by it
which have become due, other than those (x) not yet delinquent, (y) contested
in good faith and for which adequate reserves have been established or (z) the
payment of which is excused or stayed as a result of the Borrower's
commencement of the Case. The Borrower has paid, or has provided adequate
reserves for the payment of, all federal and state income taxes applicable for
all prior fiscal years and for the current fiscal year to the date hereof.

6.11 Compliance with ERISA.

(a) The Borrower and each member of the Controlled Group is
in compliance in all respects with any applicable provisions of ERISA and the
regulations and published interpretations thereunder including all procedural
and fiduciary provisions.

(b) No Pension Plan has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Code and no Pension Plan is
insolvent or in reorganization.

(c) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan administered by the Borrower
or any member of the Controlled Group or any administrator designated by the
Borrower or any member of the Controlled Group.

(d) There are no unfunded vested liabilities under any
Pension Plans administered by the Borrower or any member of the Controlled
Group or any administrators designated by the Borrower or any member of the
Controlled Group.

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(e) Neither the Borrower nor any member of the Controlled
Group has incurred or reasonably expects to incur any withdrawal liability
under ERISA to any Multiemployer Plan or any similar liability or exposure.

(f) Neither the Borrower nor any member of the Controlled
Group has incurred, or expects to incur, any material liability to or on
account of any Pension Plan pursuant to Section 515, 4062, 4063, 4064, 4201, or
4204 of ERISA.

(g) No Lien imposed under the Code or ERISA on the assets of
the Borrower nor any member of the Controlled Group exists or is likely to
arise on account of any Pension Plan.

6.12 Subsidiaries. There are no Subsidiaries of the Borrower
and the Borrower does not hold, directly or indirectly, legally or
beneficially, more than 5% of the outstanding voting stock or similar interests
of any other Person.

6.13 Compliance with Statutes, etc.

(a) The Borrower is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by, all Governmental Authorities, domestic or foreign, in respect of the
conduct of its businesses and the ownership of its property, except (x) such
noncompliances as are not likely to, in the aggregate, have a material adverse
effect on the business, operations, property or other assets or condition
(financial or otherwise) of the Borrower or on its ability to perform its
obligations hereunder or under the other Credit Documents or on the Collateral
or any rights or remedies of the Collateral Agent or the Lenders in respect
thereof or (y) any statute, regulation, order or restriction with which the
Borrower is not required to comply by virtue of the Bankruptcy Code, the
pendency of the Case or of any order issued in the Case.

(b) Without limiting the foregoing, no Hazardous
Materials (i) exist on, under or about the Borrower's assets or otherwise with
respect to the Collateral, or (ii) have at any time been transported to or from
such property or used, generated, manufactured, stored or disposed of on, under
or about such assets which, in the case of clauses (i) and (ii) above, would
violate any permits, regulations or other Governmental Actions or would give
rise to any Hazardous Materials Claim materially and adversely affecting any
Collateral, including, without limitation, the economic

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value, use, operation or transferability of any Collateral or for which the
Administrative Agent or any Lender could have any liability or obligation with
respect thereto or would have a material adverse effect on the business,
property or other assets, condition, financial or otherwise, or operations of
the Borrower or could give rise to an Environmental Lien. The Borrower has
obtained all permits, licenses and authorizations required under all Hazardous
Materials Laws and is in compliance with the terms and conditions of such
permits, licenses and authorizations and all applicable Hazardous Materials
Laws except where the failure to obtain such permit, license or authorization
or where such noncompliance would not affect any Collateral, would not result
in any liability of the Administrative Agent or any Lender, and would not have
a material adverse effect on the business, property or other assets, condition,
financial or otherwise, or operations of the Borrower or on its ability to
perform its obligations hereunder or under the other Credit Documents or on the
Collateral or any rights or remedies of the Collateral Agent or the Lenders in
respect thereof. The Borrower has not been notified that it is liable for any
penalties, fines or forfeitures for failure to comply with any of the foregoing
in the manner set forth above. The Borrower is in compliance with, and not in
breach of or default under, any applicable writ, order, judgment, injunction,
decree, lease, first mortgage, or other agreement or instrument to which the
Borrower is a party which would materially and adversely affect the ability of
the Borrower to operate any portion of the Real Property or personal property
owned or leased by it and no event has occurred and is continuing which, with
the passage of time or the giving of notice or both, would constitute
noncompliance, breach of or default thereunder the breach of which is likely to
have a material adverse effect on the property or other assets, business
operation, condition (financial or otherwise) of the Borrower. There are no
legal or governmental proceedings pending or, to the knowledge of the Borrower,
threatened, which (a) question the validity, term or entitlement of the
Borrower for any permit, license, order or registration required for the
operation of any facility or personal property which the Borrower currently
operates and (b) wherein an unfavorable decision, ruling or finding would have
a material adverse effect on the business, operation, property or other assets
or condition (financial or otherwise) of the Borrower or on its ability to
perform its obligations hereunder or under the other Credit Documents or on the
Collateral or any rights or remedies of the Collateral Agent or the Lenders in
respect thereof.

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6.14 Investment Company Act. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.

6.15 Public Utility Holding Company Act. The Borrower is not
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

6.16 End of Fiscal Year; Fiscal Quarters. The last day of
the fiscal year of the Borrower shall be on December 31 and the last day of
each of the fiscal quarters of the Borrower shall be on March 31, June 30,
September 30 and December 31.

6.17 The Orders. The Final Order has been entered and has
not been amended, stayed, vacated or rescinded (except (i) to the extent
superseded by the Final Order and (ii) as amended in a manner satisfactory to
all of the Lenders in their sole and absolute discretion), and the obligations
of the parties to the Credit Documents have not been stayed. Upon the maturity
(whether by acceleration or otherwise) of any of the Obligations, the Lenders
shall be entitled to immediate payment of such Obligations without further
application to or order by the Bankruptcy Court. Upon any Event of Default the
Collateral Agent shall be entitled to take the actions or enforce the remedies
set forth in the Orders and the Security Documents without further application
to or order by the Bankruptcy Court or any notice to (other than as expressly
provided in the provisos to the third to last sentence of Section 9) or consent
of any other Person. The GPA Order has been duly entered, and the GPA Order
has not been appealed, amended, stayed, vacated or rescinded. The Additional
Loan Order and the Kawasaki Order have been entered and have not been amended,
stayed, vacated or rescinded (except as amended in a manner satisfactory to all
of the Lenders in their sole and absolute discretion). The Second Additional
Loan Order has been entered and has not been amended, stayed, vacated or
rescinded (except as amended in a manner satisfactory to all of the Lenders in
their sole and absolute discretion). The Interim Extension Loan Order and the
Final Extension Loan Order have been entered and have not been amended, stayed,
vacated or rescinded (except as amended in a manner satisfactory to all of the
Lenders in their sole and absolute discretion). The Subsequent Extension Loan
Order has been entered and has not been amended, stayed, vacated or rescinded
(except as amended in a manner satisfactory to all of the Lenders in their sole
and absolute discretion).

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6.18 Operations.

(a) Set forth on Schedule 11 is a true, correct and
complete list of (x) all Slots and Routes held or used by the Borrower and (y)
all Domestic Gates owned or leased by the Borrower, in each case, as of the
Fourth Amendment Effective Date. The Borrower represents and warrants that it
holds the Slots held by it pursuant to Title 14, subject only to the
regulations of the FAA, and that it has, at all times after obtaining such
Slots, complied in all material respects with all of the terms, conditions and
regulations set forth in Title 14, including, without limitation, the usage
requirements set forth in Section 93.227 thereof, and that there exists no
material violation of such terms, conditions and regulations that gives the FAA
the right to terminate, cancel, withdraw or modify any such Slots.
Furthermore, the Borrower shall not use any Slot which is to be used in
essential air service operations (as defined by the FAA) for international or
non-essential air service operations.

(b) The Borrower is a "citizen of the United States" as
defined in section 101(16) of the Aviation Act and a duly certificated "air
carrier" within the meaning of the Aviation Act authorized to transport
passengers and cargo in domestic and international air transportation and
certificated under Sections 401 and 604(b) of the Aviation Act. All such
certificates are in full force and effect and duly issued to the Borrower by
the DOT (or the Civil Aeronautics Board) and the FAA, and the Borrower has in
full force and effect and duly issued to it all licenses, permits,
authorizations, certificates of compliance, certificates of public convenience
and necessity and other certificates (including, without limitation, air
carrier operating certificates and operations specifications issued by the FAA
pursuant to Part 121 of the Regulations of the FAA and all applicable aircraft
registration requirements of the FAA, including those set forth in Part 47 of
the regulations of the FAA) which are required by the DOT or the FAA for the
conduct of the business of the Borrower as now conducted. There are no license
fees owed on the Borrower's DOT or FAA licenses. The Borrower is in compliance
with all material requirements of the certificates and authorizations issued to
it by the DOT and the FAA.

6.19 GPA Agreements/Kawasaki Agreements. Each of the GPA
Agreements and the Kawasaki Agreements is in full force and effect, no
"Default" or "Event of Default" under and as defined in any such agreement
(other than an event of default which consists of the existence of the Case)
has occurred and is continuing and each of the representations and warranties
of the Borrower in the GPA Agreements and the

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Kawasaki Agreements is true and correct as if made on the Fourth Amendment
Effective Date (except to the extent any such representation or warranty
expressly refers to a prior date).

SECTION 7. AFFIRMATIVE COVENANTS.

The Borrower covenants and agrees that, unless the Required
Lenders otherwise consent in their sole and absolute discretion, on and after
the Fourth Amendment Effective Date and until the Loans and the Notes, together
with all interest, fees and other Obligations payable hereunder or under the
other Credit Documents, are paid in full:

7.01 Information Covenants. The Borrower will furnish to
each Lender:

(a) Weekly and Monthly Reports. By the Wednesday after
the end of each week, beginning with the first week or part thereof in which
the Fourth Amendment Effective Date occurs, internal reports on the operations
of the Borrower in respect of such week and for the period from the beginning
of the current fiscal year to the end of such week, in a format, and in a level
of detail, reasonably acceptable to and agreed upon by the Required Lenders;
and within 20 days after the end of each month, other than a month which ends a
fiscal quarter or a fiscal year of the Borrower, the balance sheet of the
Borrower as at the end of such month and the related statements of operations
and cash flows for such month and for the elapsed portion of the fiscal year
ended with the last day of such month, in each case setting forth comparative
figures for the related periods in the prior fiscal year, all of which shall be
certified on behalf of the Borrower by the Chief Financial Officer, Treasurer
or Vice President and Controller of the Borrower (subject to year-end audit
adjustments); and within 20 days after the end of each month, a report with
respect to sales of assets during such month, in a format, and in a level of
detail, reasonably acceptable to the Required Lenders and demonstrating
compliance with the provisions of Sections 8.02(i), 8.02(iii) and 4.02(ii) of
this Agreement; and within 20 days after the end of each month, a report with
respect to leases entered into during such month, in a format, and in a level
of detail, reasonably acceptable to the Required Lenders, and demonstrating
compliance with the provisions of Section 8.04 of this Agreement.

(b) Financial Statements. Within 50 days after the close
of the first three fiscal quarters in each fiscal year of the Borrower and
within 105 days after the last

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fiscal quarter in any fiscal year of the Borrower (or, if earlier, at the time
of filing with the SEC in the case of any accounting period ending after the
Effective Date), the balance sheet of the Borrower as at the end of such
quarterly period and the related statements of operations, cash flows and
stockholders' equity for such quarterly period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly period, in each case
setting forth comparative figures for the related periods in the prior fiscal
year, all of which shall be certified on behalf of the Borrower by the Chief
Financial Officer, Treasurer or Vice President and Controller of the Borrower
(subject to appropriate year-end audit adjustments in the case of statements
relating to the first three quarters of any fiscal year) and, in the case of
statements relating to the last quarter of the fiscal year and for such fiscal
year, certified by KPMG Peat Marwick or another independent certified public
accounting firm of recognized national standing selected by the Borrower and
reasonably acceptable to the Required Lenders without qualification as to the
scope of the audit or as to generally accepted accounting principles or
practices.

(c) Officer's Certificates. At the time of the delivery
of the financial statements provided for in Section 7.01(b), a certificate of
the Chief Financial Officer, Treasurer or Vice President and Controller of the
Borrower, stating that he or she has reviewed the terms of this Agreement and
the Credit Documents and has made or caused to be made under this provision a
review in reasonable detail of the transactions and condition of the Borrower
during the period covered thereby and is authorized to act on behalf of the
Borrower, to the effect that to the best of his or her knowledge, no Default or
Event of Default has occurred and is continuing, or if such Chief Financial
Officer, Treasurer or Vice President and Controller is unable to make the
certifications required herein, he or she shall supply a statement setting
forth the reasons for such inability, specifying the nature and extent of such
reasons. Such certificate shall also set forth the calculations required to
establish whether the Borrower was in compliance with each of the provisions of
Section 7.08 and Section 8, at the end of such fiscal quarter or year, as the
case may be.

(d) Notice of Default or Litigation. Promptly, and in
any event within three Business Days after the Borrower obtains knowledge
thereof, notice of (i) the occurrence of any Default or Event of Default or
(ii) any litigation or governmental proceeding not filed in the Case commenced
(x) against the Borrower which could materially

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and adversely affect the business, operations, property or other assets or
condition (financial or otherwise) of the Borrower or its ability to perform
its obligations hereunder or under the other Credit Documents or the Collateral
or the rights or remedies of the Collateral Agent in respect thereof or (y)
with respect to any Credit Document.

(e) Other Reports and Filings. Promptly, copies of (i)
all financial information, proxy materials and other information and reports
concerning material developments in the business, operations, property or other
assets or condition (financial or otherwise) of the Borrower, which the
Borrower (x) has filed with the Securities and Exchange Commission or any
governmental agencies substituted therefor (the "SEC") or any comparable agency
outside of the United States, including periodic filings required as of the
Effective Date by such agency, (y) has filed with the FAA or the DOT, or, in
each case, any comparable agency outside of the United States or (z) has
delivered to the Board of Directors, any member of an Official Committee
(exclusive of materials delivered to members of an Official Committee in their
individual non-representative capacity) or holders of, or to any agent or
trustee with respect to, Indebtedness of the Borrower in its capacity as such a
holder, agent or trustee (unless such information or materials have theretofore
been delivered to the Lenders pursuant to this Section 7.01), and (ii) all
financial and management reports regarding the Borrower in connection with any
audit by its independent accountants, including, without limitation, any report
making accounting control recommendations or noting deficiencies.

(f) Pleadings, etc. Promptly after the same is
available, (i) copies of all material pleadings, motions, applications,
judicial information, financial information and other documents not generally
noticed to all parties-in-interest on the official service list in the Case (x)
filed by or on behalf of the Borrower with the Bankruptcy Court in the Case or
(y) distributed by or on behalf of the Borrower to any Official Committee,
except information which is publicly available and information which the
Borrower reasonably believes is in the possession of, or generally available
to, the Lenders and (ii) copies of all pleadings, motions and applications
filed by third parties (it being understood that any of the foregoing relating
to ordinary course of business matters and customary for bankruptcy proceedings
shall not be deemed material for this clause (f)).

(g) Slot Use; Notice of Slot Use Prohibition. (i) In the
event that the Borrower shall have determined not

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to use any Operating Route or Slot held by it in accordance with Title 14 or
any applicable law or regulation, the Borrower shall give written notice to the
Lenders no later than three days following the date of such determination,
which notice shall identify such Slot or Operating Route, and the extent of use
of such Slot or Operating Route in the twelve months preceding such notice, and
(ii) in the event of the proposal or imposition of any law, rule or regulation
with respect to Routes or Slots, which law, rule or regulation could have the
effect of (x) prohibiting or restricting in any respect the ability of the
Borrower to acquire, hold, sell or otherwise transfer the right to hold or use
the Operating Routes or Slots, or (y) in any other respect, adversely affecting
the interests of the Lenders, the Borrower will, in each case, within three
days of such event, give written notice of such proposal or imposition.

(h) Collateral Schedules. On or before the 20th day of
each month, a certificate executed by the Chief Financial Officer, Treasurer or
Vice President and Controller of the Borrower of the existing Collateral, the
value thereof (showing, among other things, by type and category of Collateral
in detail reasonably acceptable to the Required Lenders, compliance with
Section 7.08 and Sections 4.02(i) and 4.02(ii)) and all locations thereof, plus
any additional filing, registration, or other action necessary or advisable to
fully perfect the Collateral Agent's security interest therein under applicable
law (other than under the Bankruptcy Code by reason of the Orders) in
substantially the form of Exhibit M hereto.

(i) ERISA. Promptly (and in no event later than 10 days)
after becoming aware of the occurrence of any (i) Termination Event, or (ii)
"prohibited transaction," as such term is defined in Section 4975 of the Code,
in connection with any Pension Plan of the Borrower or any trust created
thereunder, a written notice from an officer of the Borrower specifying the
nature thereof, what action the Borrower proposes to take with respect thereto,
and, when known, any action taken or threatened by the Internal Revenue Service
or the PBGC with respect thereto; and with reasonable promptness copies of
(iii) all notices received by the Borrower or any member of the Controlled
Group of the PBGC's intent to terminate any Pension Plan or to have a trustee
appointed to administer any Pension Plan; (iv) each Form 5500 annual report,
including Schedule B thereto (Actuarial Information) filed by the Borrower or
any member of the Controlled Group with the Internal Revenue Service with
respect to each Pension Plan; and (v) all notices received by the Borrower or
any member of the Controlled Group from a Multiemployer Plan sponsor concerning
the imposition or

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amount of withdrawal liability pursuant to Section 4202 of ERISA.

(j) Compliance Reports. Upon request of the Required
Lenders, (x) reports of the type described in Section 5.01(e)(ii) in each
jurisdiction in which the UCC-1 financing statements referred to in Section
5.01(e)(i) were filed and in which any other UCC-1 financing statements were
subsequently filed (which shall show UCC-1 financing statements covering all
applicable Collateral duly filed and none of which shall disclose evidence of
any Liens other than Permitted First Liens), and (y) an opinion of FAA counsel
referred to in Section 5.01(c)(i) (or other FAA counsel reasonably acceptable
to the Required Lenders) showing the filing, perfection and priority of all
Collateral covered by the Aircraft/Engine Mortgage and the absence of any Liens
other than Permitted First Liens, such opinion to be in form and substance
reasonably acceptable to the Required Lenders.

(k) Other Information. From time to time, such other
information or documents (financial or otherwise), including, without
limitation, board papers and minutes, and further including, without
limitation, revised cash flow statements and revised profit and loss
statements, in each case, supporting or relating to transactions with respect
to which the Borrower seeks or is required to obtain the consent, concurrence,
approval and/or waiver of the Required Lenders, as the Administrative Agent or
any Lender may request in its sole and absolute discretion.

(l) Board and Committee Meetings. Upon the request of
any Lender (other than Kawasaki), such Lender may (but shall be under no
obligation to) attend (on a non-participating basis) portions of meetings of
the Borrower's Board of Directors or committees thereof at which matters
relating to the Operating Plan and its implementation, monitoring and oversight
are discussed.

(m) Monthly Projections. Within ten days after the end of
each month, internal projections for the three-month period following the end
of such month, which projections shall (i) be based upon the Borrower's most
recent internal performance information, (ii) set forth profit and loss
projections on no less than a monthly basis and cash flow projections on a
daily basis, and (iii) otherwise be in a form acceptable to the Required
Lenders.

(n) Excess of "net available cash" Over $175,000,000. If on
any date the amount of "net available cash" (as such term is defined in Section
8.15(d)) exceeds

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$175,000,000, then, within two Business Days of such date, the Borrower shall
give written notice of such excess to the Lenders.

(o) Increase in Investment Account Minimum pursuant to
Sections 4.02(i) and 4.02(ii). On or before the 20th day of each month, a
certificate executed by the Chief Financial Officer, Treasurer or Vice
President and Controller of the Borrower and furnished to the Lenders, the
Collateral Agent and the Administrative Agent, setting forth (i) the amounts by
which the Investment Account Minimum is required to be increased pursuant to
Sections 4.02(i) and 4.02(ii) by reason of any deficiencies in the value of
rotables as of the last day of the preceding month and any Asset Sales during
the preceding month, and (ii) the amount to which the Investment Account
Minimum is increased by reason of such deficiencies and Asset Sales.

7.02 Books, Records and Inspections. The Borrower will keep
proper books of record and account in which full, true and correct entries in
conformity with generally accepted accounting principles and all requirements
of applicable law shall be made of all dealings and transactions in relation to
its business and activities. The Borrower will permit officers and designated
representatives of the Administrative Agent, the Collateral Agent or any Lender
to visit and inspect any of the properties of the Borrower to the extent
permitted by law, and to examine the books of account of the Borrower and
discuss the affairs, finances and accounts of the Borrower with, and be advised
as to the same by, its and their officers, all at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent, the
Collateral Agent or any Lender may request.

7.03 Maintenance of Property; Insurance. The Borrower shall
maintain or cause to be maintained in good repair, working order and condition,
excepting ordinary wear and tear and damage due to casualty, all of its
aircraft, aircraft engines, ground equipment, simulators, terminals, offices
and all other properties material to its operations and will make or cause to
be made all appropriate repairs, renewals and replacements thereof, consistent
with past practice as in effect prior to the Filing Date. The Borrower shall
maintain or cause to be maintained, with financially sound and reputable
insurers the liability and property insurance policies and programs listed on
Schedule 12 hereto or substantially similar programs or policies and amounts or
other programs, policies and amounts reasonably acceptable to the
Administrative Agent and the Required Lenders. On or before the expiration or
renewal date

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thereof, the Borrower shall deliver or cause to be delivered to the Lenders
insurance certificates and opinions evidencing compliance with the requirements
hereof and of each Credit Document for each such policy or program then in
effect: (i) the amount of such policy, (ii) the risks insured against by such
policy, (iii) the name of the insurer, each insured party under such policy and
the loss payees under any property damage insurance and (iv) the policy number
of such policy. All such policies shall contain an endorsement providing for
naming of the Administrative Agent, the Collateral Agent and the other Secured
Creditors as additional insureds, for payment to the Collateral Agent on behalf
of the Lenders in the case of hull and other property damage insurance of all
money due or to become due thereunder except to the extent the holder of a
Permitted First Lien is the loss payee for such proceeds, prior notice to the
Administrative Agent of cancellation or material changes in the terms of the
insurance and such other terms as the Administrative Agent may reasonably
request. The provisions of this Section 7.03 shall be deemed to be in addition
to, but not in limitation of, the provisions of any of the Security Documents
that require the maintenance of insurance.

7.04 Corporate Franchises. The Borrower will do or cause to
be done all things necessary to preserve and keep in full force and effect its
existence and its rights (including, franchises, licenses and patents), except
in all cases with respect to such rights, other than with respect to Slots and
Routes, where (x) the failure to do so is not reasonably likely to have a
material adverse effect on the business, operations, property, assets or
condition (financial or otherwise) of the Borrower or (y) the failure to do so
is excused by virtue of the status of the Borrower as a debtor-in-possession in
the Case or any order issued in the Case; provided, however, that in all cases
the Borrower shall preserve and keep in full force and effect all rights which
are applicable to the Collateral or the loss of which could have a material
adverse effect on the Collateral, including, without limitation, on the value
or transferability thereof.

7.05 Compliance with Statutes, etc. The Borrower will comply
with all applicable laws, statutes, regulations and orders of, and all
applicable restrictions imposed by, all Governmental Authorities, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls), except such noncompliances
as (x) are not reasonably likely to (A) result in a forfeiture or

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cancellation of the right of the Borrower to use the Slots held or used by it
or (B) in the aggregate, have a material adverse effect on the business,
operations, property or other assets or condition (financial or otherwise) of
the Borrower or (y) are excused by virtue of the status of the Borrower as the
debtor-in-possession in the Case or any order issued in the Case; provided,
however, that in all cases the Borrower shall comply with all laws, statutes,
regulations, orders and restrictions which are applicable to the Collateral or
if noncompliance therewith could have a material adverse affect on the
Collateral, including, without limitation, on the value or transferability
thereof.

7.06 End of Fiscal Years; Fiscal Quarters. After the Fourth
Amendment Effective Date, the Borrower shall not change the date on which any
of its fiscal quarters or its fiscal year shall end.

7.07 Performance of Obligations. The Borrower will perform
all of its obligations arising after the Filing Date, and not stayed as a
result of the Case, under the terms of each agreement by which it is bound,
except such non-performances as are not reasonably likely to, in the aggregate,
have a material adverse effect on the business, operations, property, assets or
condition (financial or otherwise) of the Borrower or which are described in
the Operating Plan as agreements that will not be assumed or otherwise
performed.

7.08 Minimum Designated Collateral Balances. Without
limiting any other provision of this Agreement or the other Credit Documents,
the Borrower shall maintain at all times Collateral of the following types and
with the following values as of the last day of each calendar month:

(a) Rotables Minimum Value
-------- -------------

B747-200 Rotables - $11 million
B757-200 Rotables - $23 million
B737-300 Rotables - $17 million
B737-200 Rotables - $21 million

Total Rotables - $72 million; less

for each category of rotables the amounts by which
the Investment Account Minimum is increased as the
result of a deficiency in the required value of
rotables in such category; and provided, however,
that the amount (if any) by which the aggregate value
of B757-200 and B737-300 rotables exceeds the

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aggregate minimum value specified above for B757-200 and B737-300
rotables may be added, without duplication, to (i) the value of
B737-200 rotables for the purpose of determining compliance with the
required minimum value of B737-200 rotables and/or (ii) the value of
B747-200 rotables for the purpose of determining compliance with the
required minimum value of B747-200 rotables; and provided further,
however, that if rotables of any category are the subject of an Asset
Sale, then the aggregate minimum value specified above for the
rotables of such category and for total rotables shall be reduced by
the greater of the net book value of the rotables that are the subject
of such Asset Sale (calculated as provided in the succeeding paragraph
of this Section 7.08(a)) and the gross proceeds of such Asset Sale.

The value of rotables shall be deemed to be the net book value
of the rotables after giving effect to depreciation thereof in accordance with
the Borrower's accounting principles and practices in effect as of the date
hereof (which principles and practices the Borrower represents and warrants
were in effect for the Borrower's most recent full fiscal year and agrees shall
not be changed); provided, however, that overhaul, refurbishment and other such
costs may be capitalized and included in the net book value of the applicable
rotables only to the extent such costs would be included in accordance with
such accounting principles and practices and shall in any event be included
only with respect to rotables for auxiliary power units, constant speed drives
and landing gear and, provided further, however, that in all cases, as of the
last day of each month, not less than 65% of the total value of all rotables
shall be in serviceable condition with FAA tags and in the possession of the
Borrower and no more than 35% of the total value of all rotables shall be in
the possession of overhaul agencies, vendors or any Person other than the
Borrower.

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<PAGE> 94
<TABLE>
<CAPTION>
(b) Certain
Equipment Minimum Value
--------- -------------
<S> <C>
Ground support, $30 million, less
maintenance, depreciation charges
passenger service, properly taken with
food service, respect thereto on and
telecommunication, after August 1, 1991
surface transpor- and less the principal
tation, office, amount of any Loans
computer and repaid pursuant to
storage Section 4.02(i) as the result
of a deficiency in the required
value of such equipment.
</TABLE>

The value of such equipment shall be deemed to be the net book
value thereof after deducting depreciation thereof in accordance with the
Borrower's accounting principles and practices in effect as of the date hereof
(which principles and practices the Borrower represents and warrants were in
effect for the Borrower's most recent fiscal year and agrees shall not be
changed).

<TABLE>
<CAPTION>
(c) Receivables Minimum Value
----------- -------------
<S> <C>
Non Offsettable $20 million
Eligible
Receivables

Total Eligible $65 million
Receivables less the principal
(Offsettable amount of any Loans
and Non- repaid pursuant to
Offsettable Section 4.02(i) as a
Receivables) result of a deficiency
in the required value of
total receivables;
</TABLE>

provided, however, that the amount of cash or Cash Equivalents on deposit in or
to the credit of the Investment Account which is in excess of the Investment
Account Minimum may be added to the value of Total Eligible Receivables (but
not Non-Offsettable Eligible Receivables) for the purpose of determining
compliance with the required minimum value of total receivables (but not
Non-Offsettable Receivables).

The value of Eligible Receivables shall be deemed to be the
net book value thereof after deducting an allowance for bad debts in accordance
with the Borrower's accounting principles and practices in effect as of the
date

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<PAGE> 95
hereof (which principles and practices the Borrower represents and warrants
were in effect for the Borrower's most recent fiscal year and agrees shall not
be changed).

The categorization of Non-Offsettable Receivables and
Offsettable Receivables shall be made based on the Borrower's accounting
principles and practices in effect as of the date hereof (which principles and
practices the Borrower represents and warrants were in effect for the
Borrower's most recent fiscal year and agrees shall not be changed), but in no
event shall Non- Offsettable Receivables include Receivables for goods which
have not been shipped or delivered or for services which have not been
performed, Airline Clearing House Universal Air Travel Card Receivables, travel
agency area settlement plan Receivables, travel agency non area settlement plan
Receivables, or credit card Receivables; provided, however, that to the extent
the Borrower demonstrates the sufficiency thereof through analyses and
supportive documentation acceptable to the Required Lenders, the Required
Lenders may in their sole and absolute discretion, agree to allow the Borrower
to characterize a portion of such Receivables as Non- Offsettable Receivables.

7.09 Hazardous Materials. The Borrower will handle, store,
utilize, dispose of, transport, discharge or emit any Hazardous Materials only
in accordance with applicable laws or other requirements of any Governmental
Authority. The Borrower will promptly take any and all necessary remedial
action required by any Governmental Authority or by any Hazardous Material Law
or prudent under the circumstances in response to the presence, storage, use,
disposal, transportation or discharge of any Hazardous Materials on, under or
about any of its assets which would affect the Collateral or could result in
any liability or obligation to the Administrative Agent or any Lender with
respect thereto or would have a material adverse effect upon the business,
operations, property or other assets or condition (financial or otherwise) of
the Borrower. In the event the Borrower undertakes any remedial action with
respect to any Hazardous Material on, under or about any of its assets, the
Borrower shall conduct and complete such remedial action in compliance with all
applicable federal, state and local laws, regulations, rules, ordinances and
policies, and in accordance with the orders and directives of all Governmental
Authorities except in each case where such presence, storage, use, disposal,
transportation or discharge of any Hazardous Materials is being contested in
good faith. The Borrower shall promptly notify the Administrative Agent of any
such remedial action and provide

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<PAGE> 96

to the Administrative Agent such information or reports relating thereto as it
may request.

7.10 Cash Management.

(a) The Borrower shall comply with all terms and conditions
of the Initial Cash Management Agreement and any other cash management
arrangements entered into pursuant to Section 5.01(p). In addition, the
Borrower shall institute and comply with such other account and cash management
arrangements as the Required Lenders may request in their sole and absolute
discretion, including, without limitation, changes in the banks at which the
accounts are held, the existing lock box system, the collection of receivables
and the concentration of cash. In furtherance of the foregoing, the Borrower
shall execute and deliver such additional lock box and concentration account
cash management agreements as are contemplated by the Initial Cash Management
Agreement or as the Required Lenders may request in their sole and absolute
discretion. The Borrower shall not enter into a new or revised merchant bank
arrangement with respect to the VISA/Master Card credit card program (a
"Successor Merchant Bank Arrangement") unless (i) the Borrower shall have given
to all of the Lenders at least 20 days' prior written notice of such Successor
Merchant Bank Arrangement, (ii) all documents evidencing and/or relating to
such Successor Merchant Bank Arrangement shall be satisfactory in form and
substance to the Required Lenders in their sole and absolute discretion, and
(iii) prior to or simultaneously with the entry by the Borrower into such
Successor Merchant Bank Arrangement, (a) the Borrower shall have delivered,
and/or caused to be delivered, all such amendments, supplements and/or
replacements of the Initial Cash Management Agreement and all documents
relating thereto as the Required Lenders shall have requested, each in form and
substance satisfactory to the Required Lenders in their sole and absolute
discretion, and (b) to the extent deemed necessary or appropriate by the
Required Lenders in their sole and absolute discretion, there shall have been
entered an amendment, in form and substance satisfactory to the Required
Lenders in their sole and absolute discretion, to the Second Additional Loan
Order, the Loan Extension Order and/or the Subsequent Loan Extension Order
which reflects and accommodates, on a basis no less favorable to the Lenders
than that contained in the Second Additional Loan Order, the Loan Extension
Order and/or the Subsequent Loan Extension Order in respect of the predecessor
merchant bank arrangement, any Liens on cash collateral granted pursuant to the
aforesaid documents relating to such Successor Merchant Bank Arrangement and
the release of any Liens on

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cash collateral that secure the predecessor merchant bank arrangement.

(b) The Borrower shall cause (i) to be deposited in the
Concentration Account all unrestricted cash funds of the Borrower, (ii) to be
transferred from the Concentration Account and deposited in the Investment
Account from time to time any surplus of the moneys on deposit in the
Concentration Account over an amount equal to $5 million (plus such other
amounts as may be included in the "Concentration Account Maximum" as such term
is defined in the Initial Cash Management Agreement), and (iii) to be deposited
in the Investment Account from time to time all proceeds of the investment of
moneys on deposit in the Investment Account in Cash Equivalents; provided,
however, that the Borrower may cause to be withdrawn from the Investment
Account and deposited in the Concentration Account from time to time amounts
that are required to meet the operating cash flow requirements of the Borrower
after application of amounts on deposit in the Concentration Account and
available for such purpose, so long as no Default or Event of Default shall
have occurred and be continuing on the date of each such withdrawal and so long
as after giving effect to each such withdrawal the amount on deposit in the
Investment Account shall be at least equal to the Investment Account Minimum
for such day. Amounts deposited in the Concentration Account pursuant to this
Section 7.10(b) shall be used by the Borrower to meet the cash flow
requirements of the Borrower.

(c) Notwithstanding the provisions of Section 7.10(b), the
"Section 7.10(c) Amount" (required as a condition to the use of amounts on
deposit in the Investment Account in accordance with the provisos to the
remedies of the Lenders contained in Section 9) shall, as of any day, be an
amount at least equal to the Investment Account Minimum for such day.

(d) Notwithstanding the provisions of Section 7.10(b), if at
any time following the occurrence and continuance of an Event of Default, there
shall be on deposit in the Investment Account an amount (referred to as the
"Event of Default Collateralization Amount") equal to the sum of (i) the
outstanding principal amount of the Loans, (ii) interest accrued and to accrue
on the Loans to the next Interest Payment Date for the Loans, and (iii) all
other amounts due and to become due under this Agreement to the next Interest
Payment Date for the Loans (as the Event of Default Collateralization Amount is
confirmed by the Required Lenders to the Borrower, the Collateral Agent and the
Local Bank), then the Borrower may, without the

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necessity to obtain the consent of the Required Lenders, (A) cause to be
withdrawn from the Investment Account and deposited in the Concentration
Account from time to time amounts that are in excess of the Event of Default
Collateralization Amount and are required to meet the operating cash flow
requirements of the Borrower after application of amounts on deposit in the
Concentration Account and available for such purpose, and (B) cause to be
withdrawn from the Concentration Account and used for such purpose amounts that
are from time to time on deposit in the Concentration Account; and provided
further, however, that the Borrower shall cause amounts to be withdrawn from
the Concentration Account and used for such purpose prior to causing amounts on
deposit in the Investment Account to be withdrawn and used for such purpose.

(e) At any time the amount on deposit in the Investment
Account shall be less than the Investment Account Minimum, the Borrower shall
(i) cause the Local Bank and/or the Collateral Agent to notify the Lenders of
the amount on deposit in the Investment Account and the Concentration Account
as of the close of business on each day, and (ii) furnish to the Lenders on
each day a certificate of the Chief Financial Officer, Treasurer or Vice
President and Controller of the Borrower, in the form of Exhibit O, containing
(x) a projection of the Borrower's cash inflow and cash outflow for the next
succeeding day, (y) the amount of moneys withdrawn from the Concentration
Account and the Investment Account on such day to meet the operating cash flow
requirements of the Borrower, and (z) such other information as is set forth in
and required by Exhibit O.

(f) The covenants of the Borrower contained in Sections
7.10(b), (c), (d) and (e) shall not limit, alter or modify in any respect any
provision of any cash management arrangement described or referred to in
Section 7.10(a).

7.11 Further Assurances.

(a) Whenever and so often as reasonably requested by the
Administrative Agent, the Collateral Agent or the Required Lenders, the
Borrower will promptly execute and deliver or cause to be executed and
delivered, at its own expense, all such other and further instruments,
documents or assurances, and promptly do or cause to be done all such other and
further things as may be necessary and reasonably required, in order to further
and more fully vest in the Collateral Agent all rights, interests, powers,
benefits, privileges and advantages conferred or intended to be conferred by
this Agreement, the other Credit Documents and the Orders.

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(b) The Borrower agrees that any time and from time to
time, at the expense of the Borrower, it will promptly execute and deliver all
further instruments and documents, including, without limitation, aircraft,
aircraft engines, aircraft parts mortgages and gates assignments and take all
further action that may be necessary or desirable, or that the Administrative
Agent, the Collateral Agent or the Required Lenders may request, to perfect and
protect any Lien granted or purported to be granted hereby, by the other Credit
Documents or the Orders, and including in any event the execution and delivery
of an amendment or supplement (including detailed property descriptions) to the
Mortgage in respect of Real Property acquired after the Effective Date, or to
enable the Collateral Agent to exercise and enforce its rights and remedies
with respect to any Collateral. Without limiting the generality of the
foregoing, the Borrower will record the Mortgages if not already recorded and
provide promptly upon the request of the Required Lenders A.L.T.A. title
insurance in an amount not less than the value of such Real Property as set
forth in Schedule 8 hereto with respect to the Lien of the Collateral Agent on
all or any Real Property, A.L.T.A. surveys, and a "phase I" environmental
report on Hazardous Materials with respect to Real Property, in each case in
form and substance reasonably acceptable to the Required Lenders. Also,
without limiting the generality of the foregoing, the Borrower will execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or that the
Administrative Agent, the Collateral Agent or the Required Lenders may request,
to protect and preserve the Liens granted or purported to be granted hereby and
by the other Credit Documents and the Orders.

(c) The Borrower hereby authorizes the Collateral Agent
to file one or more financing or continuation statements or other applicable
documents, and amendments thereto, relative to all or any part of the
Collateral without the signature of the Borrower, where permitted by law. A
carbon, photographic or other reproduction of the applicable Security Document
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement or other applicable document where
permitted by law. The Collateral Agent will promptly send to the Borrower any
such documents which it files without the signature of the Borrower and the
Collateral Agent will promptly send the filing or recordation information with
respect thereto.

(d) In the event that the Collateral Agent shall exercise
any of its rights and remedies pursuant to the

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Orders or any Security Document with respect to a sale of any portion of the
Collateral, the Borrower shall cooperate in good faith with the Collateral
Agent in effecting such sale and execute such agreements, documents and
instruments as requested by the Collateral Agent in connection therewith.

(e) Upon the request of the Collateral Agent, the
Borrower shall deliver certificates, chattel paper or instruments representing
any Collateral covered by any Security Document and/or take such other action
under any Security Document as the Collateral Agent may request in order to
protect the security interests purported to be granted thereby.

SECTION 8. NEGATIVE COVENANTS.

The Borrower agrees that, unless the Required Lenders
otherwise consent in their sole and absolute discretion, subject to the
provisions of Section 10.21 of this Agreement, on and after the Fourth
Amendment Effective Date and until the Loans, and the Notes, together with all
interest, fees and other Obligations payable hereunder or under the other
Credit Documents, are paid in full:

8.01 Liens. The Borrower will not create, incur, assume or
suffer to exist any Lien upon or with respect to any property or other assets
(real or personal, tangible or intangible) of the Borrower whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with or without
recourse to the Borrower), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any recording or notice statute (except in connection with the Liens
permitted below), or apply to the Bankruptcy Court for the authority to do any
of the foregoing; provided that the creation, incurrence, assumption or
existence of the following shall be permitted (and the Borrower may apply to
the Bankruptcy Court for approval of):

(i) valid and enforceable Liens in existence on
the Filing Date to the extent described in Schedule 14 hereto and to
the extent of the principal of the Indebtedness secured thereby on the
Filing Date, together with interest, fees, expenses and other charges
then and thereafter payable in respect of such Indebtedness in
accordance with the terms of such

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Indebtedness as in effect on the Filing Date, and after giving effect
to any cross-collateralization of such Indebtedness in accordance with
the terms of such Indebtedness as in effect on the Filing Date,
(including, without limitation, Liens securing Indebtedness consisting
of the payment deferrals referred to in Section 5.02(f), but excluding
in any event a Lien on any Collateral or any other Lien in favor of
First Interstate Bank of Arizona, N.A., except Liens on Collateral as
set forth on Schedule 14 attached hereto and a Lien on cash
constituting part of the "Reserve" or the "Original Reserve" in
accordance with the Merchant Agreement Supplement), without giving
effect to any extensions or replacements of such Liens, only to the
extent encumbering the assets described in such Schedule 14 on the
Filing Date and proceeds and replacement assets of a similar type (A)
if a Lien thereon was expressly provided in the security agreement
providing for the Lien referred to in Schedule 14 and only to the
extent of the principal of the Indebtedness secured thereby on the
Filing Date, together with interest, fees, expenses and other charges
then and thereafter payable in respect of such Indebtedness in
accordance with the terms of such Indebtedness as in effect on the
Filing Date, and after giving effect to any cross- collateralization
of such Indebtedness in accordance with the terms of such Indebtedness
as in effect on the Filing Date, or (B) if such Lien is approved after
the Filing Date by an order of the Bankruptcy Court as a first or
prior Lien;

(ii) Liens securing the Obligations;

(iii) Liens arising under capitalized leases to the
extent permitted by Section 8.05(iii);

(iv) Customary Permitted Liens;

(v) Liens securing purchase money Indebtedness
permitted under Sections 8.05(vii) and 8.07 incurred after the Filing
Date to acquire the property subject to such Lien so long as such Lien
attaches only to the property so acquired and the amount of the
Indebtedness incurred in connection therewith and secured by such Lien
does not exceed 95% of the acquisition price of the property subject
to such Lien;

(vi) Liens securing the Indebtedness under the Spares
Credit Agreement, dated as of September 28, 1990, between the Borrower
and IAE International Aero

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Engines AG, as amended and supplemented, and the Credit Agreement,
dated as of September 28, 1990, between the Borrower and IAE
International Aero Engines AG, as amended and supplemented, on assets
of the Borrower not subject to the Liens of such Spares Credit
Agreement and such Credit Agreement on the Filing Date but thereafter
subjected to such Liens pursuant to Section 4.03 of such Spares Credit
Agreement and Section 3.03 of such Credit Agreement, which Liens are
subject and subordinate to the Liens securing the Obligations and all
extensions, modifications, renewals and replacements thereof, provided
that, in each case, (i) the respective documentation with respect to
such Liens shall expressly provide that the holder or holders of such
Liens shall not, and shall have no right to, exercise any right to
foreclose or otherwise realize on the assets subject thereto, or
exercise any remedies thereunder, prior to the occurrence of the Lien
Termination Date hereunder, and (ii) the respective documentation with
respect to such Liens shall expressly provide that such Liens shall
terminate upon any release or termination (including any such releases
or terminations pursuant to Section 8.02 hereof or as a result of any
sale or other disposition of the Collateral as a result of the
enforcement of the remedies contained herein and in the Security
Documents) of the Liens created pursuant to the Security Documents
(other than such releases occurring solely as a result of the
occurrence of the Lien Termination Date hereunder), with the rights of
the holders of such Liens in the event of any realization or
foreclosure of the respective Collateral being only to receive any
excess proceeds remaining from such realization or disposition after
the repayment in full of all Obligations and the occurrence of the
Lien Termination Date hereunder;

(vii) Liens constituting security deposits, maintenance
reserves and similar arrangements (a) in effect prior to the Filing
Date, (b) approved by order of the Bankruptcy Court prior to the
Effective Date, (c) approved in writing by the Required Lenders (as
defined in the Original Credit Agreement, the First Amended and
Restated Credit Agreement, the Second Amended and Restated Credit
Agreement, the Third Amended and Restated Credit Agreement or this
Agreement, whichever thereof was or is in effect on the date of such
approval), and (d) granted on or after the Fourth Amendment Effective
Date in the ordinary course of the Borrower's business and operations
and aggregating not in excess of $1,500,000; and Liens on

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cash or investments constituting proceeds of drawings under letters of
credit issued for the account of the Borrower prior to the Filing Date
and held as, or in lieu of, security deposits, maintenance reserves or
similar arrangements (it being understood and agreed that each
security deposit, maintenance reserve and similar arrangement
described in this clause (vii) shall be deemed to be a "Reserve
Account" for purposes of the Initial Cash Management Agreement and
shall not constitute "net available cash" for purposes of the
covenants contained in Section 8.15(d) of this Agreement); and

(viii) Liens on cash collateral securing
the obligations of the Borrower in connection with any Successor
Merchant Bank Arrangement, provided that such Liens are in replacement
or substitution or otherwise in lieu of Liens on cash collateral
securing the obligations of the Borrower in connection with a
predecessor merchant bank arrangement, and provided further that all
documents relating to such Liens are satisfactory to the Required
Lenders, and provided further that all conditions precedent to such
Successor Merchant Bank Arrangement set forth in Section 7.10(a) have
been satisfied; and with respect to the Successor Merchant Bank
Arrangement to which Electronic Data Systems Corporation is a party,
the liens on Real Property (securing the obligations of the Borrower
in connection therewith) to which the Required Lenders consented
pursuant to letter agreement, dated April 14, 1993, with the Borrower.

8.02 Consolidation, Merger, Sale of Assets, etc. The
Borrower will not wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or any
part of its property or other assets, or enter into any partnerships, joint
ventures or sale-leaseback transactions, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property or other
assets (other than purchases or other acquisitions of inventory, materials,
equipment and other property in the ordinary course of business) of any Person,
or apply to the Bankruptcy Court to do any of the foregoing, except that the
foregoing shall not preclude (and the Borrower may apply to the Bankruptcy
Court for approval of):

(i) subject to maintaining the required levels of
certain types of Collateral described in Section 7.08, sales and
leases by the Borrower of

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inventory, materials, equipment and other property (exclusive in any
case of aircraft, engines, Real Property, Slots and receivables), in
the ordinary course of business not required to be approved by the
Bankruptcy Court under Section 363 of the Bankruptcy Code;

(ii) Capital Expenditures to the extent not in
violation of Section 8.07;

(iii) Asset Sales (exclusive of Designated
Collateral except to the extent permitted by clause (i) above) by the
Borrower for cash at fair market value (as approved by the Board of
Directors of the Borrower), so long as (x) prior to any such Asset
Sale, the Borrower shall have received written consent of the Required
Lenders with respect thereto, which consent may be withheld or granted
in their sole and absolute discretion, provided that the written
consent of the Required Lenders shall not be required with respect to
any such Asset Sale or Asset Sales if (I) (A) the net book value of
each item of the property subject to such Asset Sale or Asset Sales is
less than $50,000, (B) the proceeds of the sale or other disposition
of each such item is at least equal to 40% of the net book value of
such item, and (C) the Net Proceeds of all such Asset Sales effected
in any one month without the prior written consent of the Required
Lenders do not exceed $250,000, or (II) such Asset Sale or Asset Sales
consist of the sale or sales by the Borrower in the ordinary course of
the Borrower's business and operations to other air carriers of
rotable or expendable spare parts for aircraft or engines under
circumstances in which such other air carriers require such parts to
resolve "aircraft on the ground" situations, (y) after giving effect
to any such Asset Sale (including any such Asset Sale effected without
the written consent of the Required Lenders), the requirements of
Sections 4.02 and 7.08 are satisfied and no Default or Event of
Default shall have occurred and be continuing or would result
therefrom after giving effect thereto, and (z) the proceeds received
from the consummation of such Asset Sale are applied as provided in
Section 4.02;

(iv) terminations of leases by way of rejection
under the Bankruptcy Code and in accordance with the Operating Plan
and terminations of leases of aircraft by reason of the exercise of
call rights under such leases in accordance with the terms of such
call rights as set forth on Schedule 19; or

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(v) to the extent expressly indicated on Schedule
19 with respect to particular aircraft, transfers of such aircraft to
the holders of the Permitted First Liens on such aircraft or to the
lessors of such aircraft.

To the extent the Required Lenders waive the provisions of this Section 8.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 8.02 and/or the definition of the term "Asset Sale"
contained in Section 1.01, the Collateral Agent shall (following the
application of proceeds, if required, as provided in Section 4.02) take such
action, at the Borrower's expense, as the Borrower may reasonably request to
release the Collateral Agent's lien on the Collateral subject to the Asset
Sale, but not the proceeds thereof, so that it may be free and clear of the
Liens created by the applicable Security Document and the Orders. Nothing
contained in this Section 8.02 shall preclude the Borrower from entering into
agreements or transactions which contemplate or provide for the payment in full
of all Obligations and the occurrence of the Lien Termination Date so long as
such repayment and occurrence are conditions precedent to the consummation of
such agreements or transactions and such conditions precedent are fulfilled
(and not waived).

8.03 Distributions. The Borrower shall not authorize,
declare or pay any Distributions or apply to the Bankruptcy Court for the
authority to do so.

8.04 Leases. The Borrower will not permit the aggregate
annual minimum or base rent payments (excluding (i) any property taxes,
insurance costs, maintenance charges or other amounts paid as additional rent
or lease payments and (ii) payments arising from capitalized lease
obligations), and net of income arising from subleases to third parties entered
into or existing in the ordinary course of business to the extent permitted by
the Operating Plan, by the Borrower under agreements to rent or lease any real
or personal property to exceed 110% of the applicable amount set forth in the
Operating Plan for the applicable period set forth therein, provided that in
any event the Borrower will not, on or after the Fourth Amendment Effective
Date, enter into any agreement (including, without limitation, any agreement in
the nature of an extension or renewal) to rent or lease any aircraft or engines
(but excluding any leases entered into in accordance with or pursuant to the
Put Agreement or the Kawasaki Put Agreement or any amendment or modification to
either thereof which is referred to in Section 5.04) or any real property
(other than as

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hereinafter permitted) unless, in each case, the Required Lenders shall have
consented thereto in writing; and provided further that in any event the
Borrower will not, on or after the Fourth Amendment Effective Date, enter into
any agreement (including, without limitation, any agreement in the nature of an
extension or renewal) to rent or lease any equipment or other personal property
(not described in the preceding proviso), whether pursuant to an operating
lease, a capitalized lease or otherwise, unless (i) the aggregate amount of all
payments required or provided to be made by the Borrower during the term of
such agreement does not exceed $500,000, or (ii) the Required Lenders have
consented thereto in writing; and provided further, however, that
notwithstanding anything to the contrary contained in this Section 8.04, on and
after the Fourth Amendment Effective Date, the Borrower may enter into
agreements providing for the extension or renewal of leases of space at
airports that are not hubs of the Borrower without the necessity to obtain the
prior written consent of the Required Lenders to such agreements.

8.05 Indebtedness. The Borrower will not contract, create,
incur, assume or suffer to exist any Indebtedness, or apply to the Bankruptcy
Court for the authority to do so, except (and the Borrower may apply to the
Bankruptcy Court for approval of):

(i) Indebtedness of the Borrower incurred
pursuant to this Agreement and the other Credit Documents;

(ii) Indebtedness of the Borrower incurred prior
to, and outstanding on, the Filing Date (including Indebtedness
arising from reimbursement obligations for letter of credit drawings
occurring after the Filing Date on letters of credit outstanding on
the Filing Date) and listed on Schedule 15 hereto ("Existing Debt"),
without giving effect to any extensions, renewals or refinancings
thereof;

(iii) Indebtedness secured by Liens consisting of
(a) capitalized lease obligations outstanding on the Filing Date and
(b) capitalized lease obligations permitted under Section 8.07 up to
an aggregate principal amount at any one time outstanding of $5
million;

(iv) surety bonds and appeal bonds arising in the
ordinary course of business or in connection with the enforcement of
rights or claims of the Borrower or

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arising out of any judgment not constituting an Event of Default;

(v) Indebtedness consisting of the payment
deferrals referred to in Section 5.02(f) and Section 5.04(r);

(vi) Indebtedness of the Borrower incurred
pursuant to the Kawasaki Credit Agreement; and

(vii) Indebtedness consisting of purchase money
Indebtedness secured by a Lien permitted under Sections 8.01(v) and
otherwise permitted under Section 8.07 up to an aggregate principal
amount of $5 million.

8.06 Advances, Investments and Loans. The Borrower will not
lend money or credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other Person, or apply to the Bankruptcy Court for
the authority to do any of the foregoing, except that the following shall be
permitted (and the Borrower may apply to the Bankruptcy Court for approval
thereof):

(i) the Borrower may acquire receivables owing to
it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;

(ii) cash and Cash Equivalents to or for the
credit of the Concentration Account and the Investment Account;

(iii) the loans, advances and other investments
made by the Borrower prior to, and outstanding on, the Filing Date and
listed on Schedule 16 hereto;

(iv) the Borrower may make advances to employees
for moving, relocation and travelling expenses, drawing accounts and
similar expenditures in the ordinary course of business not to exceed
$1,000,000 at any time outstanding;

(v) cash and Cash Equivalents held as cash
collateral constituting (a) Liens permitted under Section 8.01(i)
which are not greater than the amount held on the Filing Date, except
in the case of the Lien on cash collateral in favor of First
Interstate Bank of Arizona, N.A. as and to the extent provided in
Section

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8.01(i), and (b) Liens permitted under Section 8.01(vii); and

(vi) credit extended by the Borrower (other than by means
of cash payment) in the ordinary course of business to employees in
connection with share purchases under employee benefit programs
applicable to all or substantially all employees.

8.07 Capital Expenditures. The Borrower will not make any
expenditure for fixed or capital assets (excluding expenditures for the
maintenance and repair of aircraft, engines and parts which should be
capitalized in accordance with generally accepted accounting principles, but
including capitalized lease obligations) (collectively, "Capital
Expenditures"), in excess of 110% of the applicable amount (exclusive of such
maintenance and repairs) set forth in the Operating Plan for the applicable
period set forth therein, provided that in any event the Borrower will not, on
or after the Fourth Amendment Effective Date, make any Capital Expenditure, or
enter into any agreement relating to or providing for the making of a Capital
Expenditure, unless (i) the amount of such Capital Expenditure does not exceed
$500,000, or (ii) the Required Lenders have consented thereto in writing.

8.08 Limitation on Repayments, etc. Except for

(i) payments in respect of the A320 Leases, the
Engine Leases, the Put Agreement and any leases entered into in
connection with the Put Agreement or any amendment or modification
thereto which is referred to in Section 5.04,

(ii) payments in respect of the Kawasaki Leases, the
Kawasaki Put Agreement and any leases entered into in connection with
the Kawasaki Put Agreement or any amendment or modification thereto
which is referred to in Section 5.04,

(iii) payments of scheduled lease payments under
capitalized and operating leases of the Borrower existing on the
Filing Date to the extent such leases are assumed by Borrower pursuant
to the Case and in accordance with the Operating Plan and only if the
lessors or lenders thereunder have (x) agreed to the deferral
described in Section 5.02(f) or such other deferral arrangements as
may have been disclosed to and approved by the Required Lenders as
provided in Section 5.02(f), and (y) agreed to the rental reductions
and deferrals described in Section 5.04(r) or such other

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arrangements as may have been disclosed to and approved by the Lenders
as provided in Section 5.04(r) and, in each case, the same is in full
force and effect, provided that, except as expressly set forth on
Schedule 19 with respect to a particular lease of particular aircraft,
scheduled lease payments shall not include, or be deemed to include,
any amounts payable as or constituting or representing termination or
other liquidated damage payments, but scheduled lease payments shall
include amounts necessary to meet return condition requirements upon
termination of leases upon expiration of the stated terms thereof or
upon exercise of call rights thereunder in accordance with the terms
of such call rights as set forth on Schedule 19, and provided further
that scheduled lease payments shall not include payments (or portions
thereof) that are deferred as provided in Sections 5.02(f) and 5.04(r)
(unless and until such payments (or portions thereof) are payable in
accordance with the terms of the deferrals referred to in such
Sections), and provided further that scheduled payments with respect
to a particular lease of a particular aircraft (determined as
aforesaid) may be reduced from those provided for in Schedule 19 and
the Operating Plan if (I) such reduction (x) is agreed to in writing
by the Borrower and the applicable aircraft lessor, (y) does not
involve, require or result in the payment by the Borrower, whether on
a particular payment date or over the term of the lease or otherwise,
of any amount or amounts in excess of those otherwise provided for in
Schedule 19 and the Operating Plan, and (z) does not, cannot and will
not result in a Default or an Event of Default, and (II) the agreement
relating to such reduction, together with such other documents and
information reasonably requested by the Required Lenders, has been
reviewed by the Required Lenders and approved by the Required Lenders
for purposes of ensuring compliance with the provisions of this
Section 8.08(iii) (it being understood and agreed that the approval
rights of the Required Lenders shall be limited to such purposes),

(iv) payments initially of defaulted amounts owing,
and thereafter of amounts when due, under 1110 Indebtedness
outstanding on the Filing Date to the extent such Indebtedness has
been assumed by Borrower and in accordance with the Operating Plan and
then only if lenders thereunder have (x) agreed to the deferral
described in Section 5.02(f) or such other deferral arrangements as
may have been disclosed to and approved by the Required Lenders as
provided in Section 5.02(f),

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and (y) agreed to the rental reductions and deferrals described in
Section 5.04(r) or such other arrangements as may have been disclosed
to and approved by the Lenders as provided in Section 5.04(r) and, in
each case, the same is in full force and effect, provided that, except
as expressly set forth on Schedule 19 with respect to particular 1110
Indebtedness secured by particular aircraft, the foregoing amounts
shall not include any amounts payable or accruing after or by reason
of the return, redelivery or repossession of the aircraft which
secures any 1110 Indebtedness, and provided further that the foregoing
amounts shall not include any amounts (or portions thereof) that are
deferred as provided in Sections 5.02(f) and 5.04(r) (unless and until
such payments (or portions thereof) are payable in accordance with the
terms of the deferrals referred to in such Sections), and provided
further that the foregoing amounts payable with respect to particular
1110 Indebtedness secured by particular aircraft (determined as
aforesaid) may be reduced from those provided for in Schedule 19 and
the Operating Plan if (I) such reduction (x) is agreed to in writing
by the Borrower and the applicable lender, (y) does not involve,
require or result in the payment by the Borrower, whether on a
particular payment date or over the term of the 1110 Indebtedness or
otherwise, of any amount or amounts in excess of those otherwise
provided for in Schedule 19 and the Operating Plan, and (z) does not,
cannot and will not result in a Default or an Event of Default, and
(II) the agreement relating to such reduction, together with such
other documents and information reasonably requested by the Required
Lenders, has been reviewed by the Required Lenders and approved by the
Required Lenders for purposes of ensuring compliance with the
provisions of this Section 8.08(iv) (it being understood and agreed
that the approval rights of the Required Lenders shall be limited to
such purposes),

(v) payments in respect of Existing Secured Debt from
the proceeds of Asset Sales (to the extent such Asset Sales are
permitted in accordance with the terms of this Agreement),

(vi) payments in respect of prepetition obligations
owing to Persons who because they are not citizens of, or resident in,
the United States are not subject to the jurisdiction of the
Bankruptcy Court not to exceed $4,800,000 in aggregate amount at any
time after the Effective Date and to the extent provided for in the
Operating Plan (as defined in the Original

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Credit Agreement at all times prior to the Amendment Effective Date,
the First Amended and Restated Credit Agreement at all times prior to
the Second Amendment Effective Date, the Second Amended and Restated
Credit Agreement at all times prior to the Third Amendment Effective
Date and this Agreement at all times after the Third Amendment
Effective Date),

(vii) payments of interest and payments of other
amounts not exceeding $53,015 per month under Existing Secured Debt
with respect to property necessary for the Borrower's operations in
accordance with the Operating Plan approved by the Bankruptcy Court
for adequate protection required under Sections 362 and 363 of the
Bankruptcy Code,

(viii) payments not exceeding $2,000,000 in aggregate
amount at any time after the Effective Date which are made in
accordance with the Operating Plan (as defined in the Original Credit
Agreement at all times prior to the Amendment Effective Date, the
First Amended and Restated Credit Agreement at all times prior to the
Second Amendment Effective Date, the Second Amended and Restated
Credit Agreement at all times prior to the Third Amendment Effective
Date and this Agreement at all times after the Third Amendment
Effective Date) in respect of prepetition obligations (including any
such payments required pursuant to order of the Bankruptcy Court and
any such payments in respect of the Borrower's leasehold interest in
Real Property), and

(ix) scheduled payments of principal and interest
under Existing Secured Debt not otherwise described in the preceding
clauses (i) through (viii) which (A) do not exceed $21,000,000 in
principal, plus interest thereon, during 1994, and (B) are made in
accordance with the Operating Plan on a monthly basis without increase
in any monthly payment by more than 5% of the monthly payment provided
for in the Operating Plan,

and, in each case, only so long as no Default or Event of Default has occurred
and is continuing or would result therefrom, the Borrower will not pay or apply
to the Bankruptcy Court for the authority to (w) assume or make any payments
(including, without limitation, for settlement payments) in respect of any
leases of real or personal property and executory contracts except for leases
and executory contracts (1) entered into after the Filing Date or (2) which do
not relate to aircraft and have been or will

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be assumed, and in each case in accordance with the Operating Plan on a monthly
basis without increase in any monthly payment by more than 5% of the monthly
payment provided for in the Operating Plan, (x) make any payment or prepayment
on or redemption or acquisition for value (including, without limitation, by
way of depositing with the trustee with respect thereto money or securities
before due for the purpose of paying when due) of any Indebtedness of the
Borrower incurred or created prior to the Filing Date, (y) pay any interest on
any Indebtedness or other obligations of the Borrower incurred or created prior
to the Filing Date (whether in cash, in kind securities or otherwise) or (z)
pay any amounts with respect to trade or ordinary course of business payables
or other obligations (other than payments contemplated under the Operating Plan
pursuant to and authorized by the Bankruptcy Court pursuant to its orders
styled (A) "Order Authorizing Payment or Honoring of Prepetitions Obligations
to America West Ticketholders, Other Airlines With Whom America West Has
Interline Arrangements, Travel Agents, Clearing Houses, Tour Service Providers,
Foreign Vendors, Fuel Suppliers, and Other Essential Suppliers" dated June 27,
1991; (B) "Order Authorizing Payment of Prepetition Wages, Salaries and
Commissions, Employee Business Expense Reimbursement Contributions to Employee
Benefit Plans, and other Employee Benefits" dated June 27, 1991; (C) "Order
Authorizing Payment on Honoring of Certain Prepetition Claims of Outside
Mechanics and Repairmen" dated June 27, 1991; and (D) any amended orders or
further orders with respect to the matters addressed in the orders listed
above) of the Borrower incurred or created prior to the Filing Date. Nothing
in this Section shall prevent the Borrower from paying post-petition trade
payables (including required utility deposits and aircraft maintenance) or
post-petition accrued expenses arising in the ordinary course of business.

8.09 Transactions with Affiliates. The Borrower will not,
and will not apply to the Bankruptcy Court for the authority to, enter into any
transaction or series of related transactions, whether or not in the ordinary
course of business, with any Affiliate of the Borrower, other than on terms and
conditions substantially as favorable to such Person as would be obtainable by
such Person at the time in a comparable arm's-length transaction with a Person
other an Affiliate. Nothing in this Section 8.09 shall prohibit any
transactions permitted under Sections 8.05 and 8.06.

8.10 Subsidiaries. The Borrower will not establish, create,
permit to exist or acquire any Subsidiary.

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8.11 Chapter 11 Claims. Except as expressly permitted by
Section 8.05(vi), the Borrower will not apply to the Bankruptcy Court for the
authority to incur, create, assume, suffer or permit any administrative expense
claim under Section 364, 503 or 507 of the Bankruptcy Code, Lien against the
Borrower or its property or other assets in the Case to be pari passu with, or
senior to, the Obligations and the Liens of the Collateral Agent and Secured
Creditors hereunder, except for the Permitted Expenses.

8.12 [Reserved].

8.13 Conversion to Chapter 7. The Borrower shall not without
giving the Lenders 10 Business Days prior written notice, apply to the
Bankruptcy Court to convert the Case to a case under Chapter 7 of the
Bankruptcy Code pursuant to Section 1112(a) of the Bankruptcy Code. After
giving the Lenders such notice, the Borrower shall take all actions requested
by the Lenders in connection with the protection of the Collateral and the
security interests therein securing the Obligations.

8.14 Operation of Specified Aircraft/Engines. The Borrower
shall not (i) operate any Specified Aircraft and Engines outside the United
States, Canada, Mexico or Japan, except for occasional other foreign use on
charters where the pilots used are the pilots of the Borrower and all
operational control and possession remains with the Borrower and maintenance
and insurance continue to be provided by the Borrower, or lease the same to any
other Person, or (ii) except as otherwise agreed in writing by the Required
Lenders, allow any Specified Aircraft and Engines to undergo any major
maintenance or structural work by any Person other than employees of the
Borrower or an FAA certified repair station in the United States the location
of which is set forth in Annex B to the Security Agreement (so long as it shall
have no Lien rights against any Collateral except for Liens subordinate to the
Liens in favor of the Collateral Agent contemplated hereunder to the extent (if
any) provided for in the Bankruptcy Code) or (iii) except as otherwise agreed
in writing by the Required Lenders, allow any parts covered by the
Aircraft/Engine, Mortgage or other Collateral covered by the Security Agreement
to be located any where other than the locations provided for in such Security
Document.

8.15 Operating Plan Covenants. The Borrower shall:

(a) Aircraft. Not have in its fleet on or after the
Fourth Amendment Effective Date in excess of 86 aircraft

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(exclusive of aircraft under leases entered into in accordance with or pursuant
to the Put Agreement or the Kawasaki Put Agreement or any amendment or
modification to either thereof which is referred to in Section 5.04).

(b) Operating Profit/Loss. Cause its "operating loss" or
"operating profit" to be not greater in the case of an operating loss and not
less in the case of an operating profit than (i) $7.5 million more in the case
of a loss or $7.5 million less in the case of a profit than that projected in
the Operating Plan for any calendar month including in any applicable month
operating profit for the cumulative number of prior months in such period in
excess of that projected for such period on a cumulative basis, and (ii) $15
million more in the case of a loss or $15 million less in the case of a profit
than that projected in the Operating Plan for any quarter ending March 31, June
30, September 30 or December 31. Operating profit and operating loss have the
same meanings set forth in the Operating Plan and shall be calculated in the
same manner as in the Operating Plan.

(c) Net Income/Loss. Cause its "net income" or "net
loss" to be not less in the case of income or more in the case of loss by the
same applicable variance amount set forth in clause (b) above than the amount
projected in the Operating Plan for such monthly or quarterly period described
in clause (b) above after, as the case may be, adjusting the projected net
losses during each such period by excluding losses resulting from provisions
for pre-petition claims made in the Case and other losses and write-offs which
result from the Case which do not at any time result in a cash expenditure by
the Borrower. Net income and net loss shall have the meanings set forth in the
Operating Plan and shall be calculated in the same manner as in the Operating
Plan.

(d) Cash Balance. Maintain "net available cash" (which
term shall have the same meaning as set forth in the Operating Plan and shall
be calculated in the same manner as in the Operating Plan, but shall in any
event exclude all deposits, advance payments not enumerated on Schedule 20,
holdbacks, reserves, cash collateral and other amounts held by Persons other
than the Borrower and all other cash to which the Borrower's access is legally
restricted in any way except that cash and Cash Equivalents in or to the credit
of the Investment Account shall be included in "net available cash") as of the
end of each day occurring after the Fourth Amendment Effective Date in an
amount not less than the sum of (A) $74,000,000, (B) the aggregate amount of
any Net Proceeds of the Slot Collateral (or any part or portion

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thereof) and/or the Engine Collateral (or any part or portion thereof)
theretofore required to be deposited in the Investment Account pursuant to
Section 4.02(ii), (iii) or (iv), (C) if such day is a day other than a day on
which the Loans are repaid to the full extent required pursuant to Section
4.02(ii), the aggregate amount of the Net Proceeds of Asset Sales that are
required to be applied to the repayment of the Loans pursuant to Section
4.02(ii) but that have not been so applied, and (D) the aggregate amount of all
increases in the Investment Account Minimum theretofore required and effective
pursuant to Sections 4.01(i) and (ii) (other than by reason of the deposit in
the Investment Account of the Net Proceeds of all or any portion of the Slot
Collateral and/or the Engine Collateral); and in the event that as of the end
of any day occurring after the Fourth Amendment Effective Date, the amount of
"net available cash" exceeds $175,000,000, notify the Lenders as provided in
Section 7.01(n). The amount of "net available cash" required to be maintained
pursuant to this Section 8.15(d) on a given day is referred to herein as the
"Cash Covenant Amount" for such day. Notwithstanding anything herein which may
be to the contrary and without creating any obligation on the part of any
Lender to extend, or to consent to the extension of, the Maturity Date, the
Cash Covenant Amount for each day occurring after the Maturity Date shall be
determined simultaneously with, or prior to, any extension of the Maturity
Date.

(e) Investment Account Balance. Maintain cash and Cash
Equivalents on deposit in the Investment Account as of the end of each day
occurring after the Fourth Amendment Effective Date in an amount not less than
the lesser of (i) the sum of (A) $58,930,000, (B) the aggregate amount of any
Net Proceeds of the Slot Collateral (or any part or portion thereof) and/or the
Engine Collateral (or any part or portion thereof) theretofore required to be
deposited in the Investment Account pursuant to Section 4.02(ii), (iii) or
(iv), (C) if such day is a day other than a day on which Loans are repaid to
the full extent required pursuant to Section 4.02(ii), the aggregate amount of
the Net Proceeds of Asset Sales that are required to be applied to the
repayment of Loans pursuant to Section 4.02(ii) but that have not been so
applied, and (D) the aggregate amount of all increases in the Investment
Account Minimum theretofore required and effective pursuant to Sections 4.02(i)
and 4.02(ii) (other than by reason of the deposit in the Investment Account of
the Net Proceeds of all or any portion of the Slot Collateral and/or the Engine
Collateral), and (ii) an amount equal to the aggregate principal amount of the
Loans outstanding on such day. The amount of cash and Cash Equivalents
required to be on deposit in the Investment

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Account on a given day pursuant to this Section 8.15(e) is referred to herein
as the "Investment Account Minimum" for such day. Notwithstanding anything
herein which may be to the contrary and without creating any obligation on the
part of any Lender to extend, or to consent to the extension of, the Maturity
Date, the Investment Account Minimum for each day occurring after the Maturity
Date shall be determined simultaneously with, or prior to, any extension of the
Maturity Date.

8.16 Slots and Routes. Except in the case of Slots and
Routes subject to an Asset Sale permitted in accordance with this Agreement,
the Borrower shall not fail to take all actions necessary or, in the reasonable
judgment of the Collateral Agent or Required Lenders, advisable in order to
maintain the value and utility of its respective Slots and Routes. In addition
to any other remedies for a violation of this Section 8.16, if the Borrower
does not utilize any Slots in a manner, and with a degree of frequency, needed
to assure their continued status as assets of the Borrower, then the Collateral
Agent shall be entitled (but shall not be required) to use or contract for the
use of such Slots so that same are not forfeited until such time as the
Borrower determines to fully utilize same or until same are sold by the
Collateral Agent pursuant to the exercise of its rights pursuant to the
Security Documents.

8.17 Seizures. The Borrower shall not cause, permit or
suffer to occur any seizure or similar restraint of any aircraft or other
assets owned or leased by the Borrower intended to be used or operated under
and in accordance with the Operating Plan.

8.18 ERISA. The Borrower shall not, and shall not permit any
member of the Controlled Group to:

(a) engage in any transaction in connection with which
the Borrower or any member of the Controlled Group could be subject to either a
civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Code;

(b) terminate any employee benefit plan within the
meaning of Section 3 of ERISA in a manner, or take any other action, which
could result in any liability of the Borrower or any member of the Controlled
Group to the PBGC;

(c) fail to make full payment when due of all amounts
which, under the provisions of any Pension Plan, the Borrower or any member of
the Controlled Group is required to pay as contributions thereto, or permit to
exist any

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accumulated funding deficiency, whether or not waived, with respect to any
Pension Plan;

(d) permit the current value of all vested accrued
benefits under all Pension Plans which are subject to Title IV of ERISA to
exceed the current value of the assets of such Pension Plans allocable to such
vested accrued benefits; or

(e) fail to make any payments to any Multiemployer Plan
that the Borrower or any member of the Controlled Group may be required to make
under any agreement relating to such Multiemployer Plan, or any law pertaining
thereto.

As used in this Section 8.18, the term "accumulated funding
deficiency" has the meaning specified in Section 302 of ERISA and Section 412
of the Code, the term "accrued benefit" has the meaning specified in Section 3
of ERISA and the term "current value" has the meaning specified in Section
4062(b)(1)(A) of ERISA.

SECTION 9. EVENTS OF DEFAULT.

Upon the occurrence of any of the following specified events
(each an "Event of Default"):

9.01 Payments. The Borrower shall (i) default in the payment
when due of any payment of principal of its Loans or Notes or (ii) default, and
such default shall continue for at least two Business Days, in any payment of
interest on its Loans or any Fees or any other amounts owing by it hereunder or
the Credit Documents; or

9.02 Representations, etc. Any representation, warranty or
statement made by the Borrower herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect when made; or

9.03 Covenants. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(d)(i), 7.08, 7.10, 7.11 or Section 8 or in any Security Document
or (ii) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in Sections 9.01 and 9.02
and clause (i) of this Section 9.03) contained in this Agreement or any other
Credit Document and such default shall continue unremedied for a period of 15
days after written notice to the Borrower and

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each Official Committee by the Administrative Agent or the Required Lenders; or

9.04 The Case, etc.

(a) The Case shall be dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code; a Chapter 11 trustee shall be appointed
in the Case; or an application shall be filed by the Borrower for the approval
of, or there shall arise, (i) any claims for recovery for amounts under Section
506(c) of the Bankruptcy Code arising pursuant to a final, nonappealable order
of the Bankruptcy Court from the preservation or disposal of Collateral or (ii)
any other administrative expense claim (except for the Permitted Expenses)
having any priority over, or being pari passu with, the administrative expenses
priority of the Obligations in the Case; or

(b) The Bankruptcy Court shall enter an order granting
relief from the automatic stay applicable under Section 362 of the Bankruptcy
Code to the holder or holders of any security interest in any assets which
constitute Designated Collateral or are otherwise not expressly contemplated to
be disposed of or returned by the Borrower under the Operating Plan of the
Borrower and allowing such holder or holders to foreclose or otherwise realize
upon any such security interests; or

(c) An order of the Bankruptcy Court shall be entered in
the Case appointing an examiner with powers beyond investigatory powers under
Section 1106(b) of the Bankruptcy Code; or

(d) An order of the Bankruptcy Court or any other court
shall be entered amending, supplementing, staying, vacating or otherwise
modifying any of the Orders, provided, that no Event of Default shall occur
under this clause (d) to the extent that any such amendment, supplement or
other modification is made in compliance with this Agreement and is not
adverse, in the sole and absolute judgment of the Required Lenders, to the
rights and interests of the Lenders under this Agreement and the other Credit
Documents; or

9.05 Credit Documents and Kawasaki Credit Agreement. Any
Credit Document shall, except in accordance with its terms, cease to be in full
force and effect, any Lien purported to be created by any Credit Document or
any of the Orders in any of the Collateral purported to be covered thereby
shall, for any reason, cease to be valid and perfected with the priority
contemplated hereby or the Borrower or any Official Committee shall contest,
deny or

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seek to disaffirm any of the Borrower's obligations under any Credit Document,
or, on any date which is prior to the Maturity Date, any principal of or
interest on any loan outstanding under the Kawasaki Credit Agreement shall be
paid or prepaid without the written consent of the Required Lenders (not
including Kawasaki) or any term or provision of Section 7, 8 or 10 of the
Kawasaki Credit Agreement (as in effect on the Amendment Effective Date) or of
the proviso at the end of Section 9 of the Kawasaki Credit Agreement (as in
effect on the Amendment Effective Date) shall be amended without the written
consent of the Required Lenders (not including Kawasaki), provided that a good
faith dispute regarding the factual existence of an Event of Default shall not
be considered to be an Event of Default under this Section 9.05; or

9.06 Judgments.

(a) One or more judgments as to a post-petition liability
shall be entered against the Borrower in an amount in the aggregate (to the
extent not paid or fully covered (subject to a deductible not in excess of 10%
of such liability) by insurance) of (i) $2,500,000 or more outstanding at any
one time in regard to such liability constituting or giving rise to an
administrative expense claim in the Case (not having priority over, or being
pari passu with, the administrative expenses priority of the Obligations in the
Case), or (ii) $250,000 or more outstanding at any one time in regard to any
other such liability, and either (x) enforcement by any creditor upon such
judgments occurs or is authorized pursuant to order of the Bankruptcy Court or
(y) there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgments, by reason of a pending appeal or otherwise,
shall not be in effect; or

(b) Any non-monetary judgment or order with respect to a
post-petition event shall be rendered against the Borrower which could
reasonably be expected to (i) cause a material adverse change in the condition
(financial or otherwise), business, operations or properties or other assets of
the Borrower, (ii) have a material adverse effect on the ability of the
Borrower to perform its obligations under any Credit Document, or (iii) have a
material adverse effect on the Collateral (including, without limitation, the
value or transferability thereof) or the rights and remedies of the
Administrative Agent, the Collateral Agent or any Lender under any Credit
Document, and there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

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9.07 GPA Agreements/Kawasaki Agreements. (i) Any of the GPA
Agreements or the Kawasaki Agreements is terminated, or purported in writing to
be terminated, or otherwise ceases to be in full force and effect other than
pursuant to an express termination thereof by the applicable GPA Entity or by
Kawasaki, as the case may be (except as a result of the Borrower's breach
thereunder or an "Event of Default" thereunder), or an "Event of Default"
(other than an "Event of Default" which consists of the existence of the Case)
under and as defined in any of the GPA Agreements or the Kawasaki Agreements
(other than the Kawasaki Credit Agreement) occurs and continues thereunder; or
(ii) an order of the Bankruptcy Court or any other court is entered amending,
supplementing, staying, vacating or otherwise modifying the GPA Order or the
Kawasaki Order to the extent adverse, in the sole and absolute judgment of the
GPA Entities or Kawasaki, as the case may be; or (iii) the Borrower or any
Person (including, without limitation, an Official Committee) acting by or on
behalf of the Borrower or such Person, shall contest, deny or seek to disaffirm
the Borrower's or its obligations under any GPA Agreement or any Kawasaki
Agreement; or

9.08 Governance. The By-Laws or the Certificate of
Incorporation of the Borrower shall be amended or modified after the Fourth
Amendment Effective Date without the prior written consent of the Required
Lenders (which consent may be withheld in their sole and absolute discretion);
or the Borrower or the Board of Directors or the stockholders of the Borrower
shall take or authorize any action in contravention of the By-Laws or the
Certificate of Incorporation of the Borrower or the Amended and Restated
Management Letter Agreement, in any case, without the prior written consent of
the Required Lenders (which consent may be withheld in their sole and absolute
discretion); or for any reason, without the prior written consent of the
Required Lenders (which consent may be withheld in their sole and absolute
discretion), the membership of the Board of Directors of the Borrower shall not
be in compliance with any term, condition or provision of the second paragraph
of the Amended and Restated Management Letter Agreement; or

9.09 Casualties. Any "Event of Loss" as defined in the
Aircraft/Engine Mortgage shall occur with respect to any aircraft or engine or
parts covered thereby (without giving effect to the grace periods contained in
such definitions) or any other casualty with respect to any other Designated
Collateral shall occur and the insurer of such property shall not have paid the
claim on such loss in full within 90 days of such Event of Loss; or

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9.10 ERISA. Any Pension Plan maintained by the Borrower or
any member of the Controlled Group shall be terminated within the meaning of
Title IV of ERISA or a trustee shall be appointed by an appropriate United
States district court to administer any Pension Plan, or the PBGC shall
institute proceedings to terminate any Pension Plan or to appoint a trustee to
administer any Pension Plan if as of the date thereof the Borrower's liability
or any member of the Controlled Group's liability (after giving effect to the
tax consequences thereof) to the PBGC for unfunded guaranteed vested benefits
under the Pension Plans not covered by insurance exceeds the then current value
of assets accumulated in such Pension Plan (or in the case of a termination
involving the Borrower or any member of the Controlled Group as a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA)) the withdrawing
employer's proportionate share of such excess; or the Borrower or any member of
the Controlled Group as employer under a Multiemployer Plan shall have made a
complete or partial withdrawal from such Multiemployer Plan and the Plan
sponsor of such Multiemployer Plan shall have notified such withdrawing
employer that such employer has incurred a withdrawal liability; or

9.11 Other Indebtedness. Any "event of default" under the
terms of any Indebtedness permitted by Section 8.05(vi), or other similar event
or condition which under the terms thereof would permit any holder of such
Indebtedness or Trustee on behalf of such holder, to accelerate or require
mandatory prepayment of such Indebtedness, occurs and is continuing; or

9.12 Change of Control. The acquisition, whether directly or
indirectly, by any Person or "group" (as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) (other than an employee benefit or
stock ownership plan of the Borrower) of more than 30% of the voting stock of
the Borrower shall have occurred;

THEN, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing and without further order of or application to the
Bankruptcy Court, the Administrative Agent shall upon the written request of
the Required Lenders or, in the case of an Event of Default described in
Section 9.01, 9.04 (except clause (c) thereof), 9.05 or 9.07 any Lessor Lender
(but in each case, only to the extent the respective Event of Default is
adverse with respect to such Lessor Lender or its Obligations), without notice
to the Borrower, take any or all of the following actions, without prejudice to
any other rights of the Administrative Agent, any Lender or the holder of any
Note

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to enforce its claims against the Borrower hereunder, under the other Credit
Documents or at law or in equity: (i) declare the principal of and any accrued
interest in respect of any and all Loans and all other Obligations owing
hereunder or under any other Credit Document to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Borrower; (ii)
instruct the Collateral Agent to exercise any rights or remedies in its
capacity as Collateral Agent under the Credit Documents, including, without
limitation, to sell Collateral, and to set off and apply any amounts in or to
the credit of any account to the Obligations (except for such cash as may be
required to pay unpaid Permitted Expenses then outstanding); and (iii)
terminate the ability of the Borrower to maintain Loans hereunder, whereupon
such ability shall forthwith terminate immediately and the Borrower shall repay
all Loans, unpaid accrued interest and other Obligations owing hereunder or
under any other Credit Document; provided, however, that prior to taking any
action described in the preceding clause (ii), other than any action which
precludes the withdrawal by or for the benefit of the Borrower of any funds
from the Investment Account, the Concentration Account or any other account
referred to in the Initial Cash Management Agreement (but which does not
constitute set off against such funds), the Administrative Agent, the
Collateral Agent or such Lessor Lender, as the case may be, shall have given to
the Borrower and each Official Committee not less than two Business Days' prior
written notice thereof; provided further, however, that promptly after taking
any action which precludes the withdrawal by or for the benefit of the Borrower
of any funds from the Investment Account, the Concentration Account or any
other account referred to in the Initial Cash Management Agreement, the
Administrative Agent, the Collateral Agent or such Lessor Lender, as the case
may be, shall give to the Borrower and each Official Committee written notice
thereof; and provided further, however, that the failure to give any of the
foregoing notices shall not impair or otherwise affect any action taken
pursuant to the preceding clause (ii); and provided further, however, that
notwithstanding any provision of this Agreement or the Security Documents which
may be to the contrary, the Borrower may, without further order of the
Bankruptcy Court or further consent of the Required Lenders, use amounts on
deposit in the Concentration Account and/or amounts on deposit in the
Investment Account which are in excess of the Section 7.10(c) Amount, during
the period of two Business Days after the taking by the Administrative Agent,
the Collateral Agent or any Required Lender of any action which (but for this
proviso) would preclude the withdrawal by or

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for the benefit of the Borrower of such amounts, for the purpose of making such
payments as (i) are necessary (a) to avoid immediate and irreparable harm to
property of or in the possession of the Borrower, and/or (b) to protect the
public health and safety, and (ii) do not exceed in the aggregate $2,000,000;
and provided further, however, that notwithstanding any provision of this
Agreement or the Security Documents which may be to the contrary, the Borrower
may, without further order of the Bankruptcy Court or further consent of the
Required Lenders, use amounts on deposit in the Concentration Account and/or
amounts on deposit in the Investment Account which are in excess of the Section
7.10(c) Amount for the purpose of making such payments as (i) are claimed
against the Borrower by (present or former) directors of the Borrower for
reimbursement of the costs of defending claims against such directors which are
not covered by directors' and officers' liability insurance, and (ii) do not
exceed $100,000 in the aggregate; and provided further, however, that the
Borrower shall use amounts on deposit in the Concentration Account for the
purpose described in the next preceding provisos prior to using amounts on
deposit in the Investment Account for such purpose. Nothing contained herein
or in any of the Security Documents shall be deemed to impair or restrict the
right of the Borrower to apply to the Bankruptcy Court, upon motion, notice and
hearing, to use cash collateral, other than the Section 7.10(c) Amount, subject
to and in accordance with the applicable provisions of the Bankruptcy Code (it
being acknowledged that, pursuant to the Orders, the Borrower is expressly
prohibited from seeking to use cash collateral on deposit in the Investment
Account which is not in excess of the Section 7.10(c) Amount). If any Lessor
Lender directs the Administrative Agent to take the actions described in clause
(i) of the preceding sentence, then such Lessor Lender may, except as provided
in clause (iii) of the proviso to Section 3.03(b) of the Agency Agreement,
instruct the Administrative Agent and the Collateral Agent as to the
disposition and other action to be taken in the exercise of remedies pursuant
to the Security Documents, provided that the Required Lenders may at any time
furnish such instructions with respect thereto (although the Administrative
Agent shall follow all instructions received from the respective Lessor Lender
until it receives any additional or contrary instructions from the Required
Lenders with respect thereto) so long as such instructions by the Required
Lenders will not have the effect of materially delaying such disposition or
other action, and the Administrative Agent and the Collateral Agent shall not
incur any liability from relying on any such instructions of any Lessor Lender
or the Required Lenders, as the case may be.

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SECTION 10. MISCELLANEOUS.

10.01 Payment of Expenses, etc. The Borrower agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Lenders party hereto on the
Fourth Amendment Effective Date and the Administrative Agent and the Collateral
Agent and their designees, or reimburse each of them therefor, in connection
with the preparation, execution and delivery of the Credit Documents and the
documents and instruments referred to therein, and the ongoing administration
thereof (including, without limitation, the reasonable fees and disbursements
of Paul, Hastings, Janofsky & Walker; Milbank, Tweed, Hadley & McCloy; Snell &
Wilmer; and of any local counsel, syndication expenses, the cost of
inspections, field examinations and collateral audits, the fees and expenses of
Simat, Helliesen & Eichner, Inc. (upon application to the Bankruptcy Court),
the costs of the receivables management arrangements described in Section
5.01(p)), and the reasonable fees and expenses of financial advisors to each of
the Lessor Lenders); (ii) pay all reasonable out-of-pocket costs and expenses
of the Lenders party hereto on the Fourth Amendment Effective Date and the
Administrative Agent and the Collateral Agent and their designees in connection
with any amendment, waiver or consent relating to the Credit Documents and the
documents and instruments referred to therein (including, without limitation,
the reasonable fees and disbursements of Paul, Hastings, Janofsky & Walker;
Milbank Tweed, Hadley & McCloy; Snell & Wilmer; and of any local counsel) and
of the Administrative Agent and the Collateral Agent and their designees and
each of the Lenders in connection with the enforcement of the Credit Documents
and the documents and instruments referred to therein (including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent and the Collateral Agent and their designees and for each
of the Lenders); (iii) pay and hold each of the Lenders harmless from and
against any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save each of the Lenders harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to such Lender) to pay such
taxes; (iv) indemnify the Administrative Agent and the Collateral Agent and
their designees and each Lender, and its Affiliates, and each of their
officers, directors, employees, representatives and agents from and hold each
of them harmless against any and all losses, liabilities, claims, damages, or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, any investiga-

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tion, litigation or other proceeding (whether or not any such Person is
a party thereto) related to the entering into and/or performance of any Credit
Document or the use or proposed use of the proceeds of any Loans hereunder or
the transactions contemplated in any Credit Document, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified); and (v) indemnify Kawasaki and its Affiliates, and
each of their officers, directors, employees, representatives and agents from
and hold each of them harmless against any and all losses, liabilities, claims,
damages, or expenses incurred by any of them as a result of, or arising out of,
or in any way related to, or by reason of, the By-Law Letter Agreement, the
Management Letter Agreement, the Amended and Restated Management Letter
Agreement or any rights of approval with respect to members of the Board of
Directors of the Borrower and the Executive Committee of such Board of
Directors granted to, or exercised by, the Lenders at any time party to the
Original Credit Agreement, the Amended and Restated Credit Agreement, the
Second Amended and Restated Credit Agreement, the Third Amended and Restated
Credit Agreement and this Agreement (other than Kawasaki) or any act or
omission of any Director of the Borrower approved by any such Lenders.

10.02 Survival. All indemnities set forth herein including,
without limitation, in Sections 2.09, 2.10, 2.11 and 10.01 shall survive the
execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans and the termination of this Agreement.

10.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, telecopier) and mailed (by certified or
registered mail), telegraphed, telexed, telecopied, cabled or delivered, if to
the Borrower, at its address specified opposite its signature below or in any
Credit Document executed by it; if to any Lender, at its address specified on
Annex I attached hereto; and if the Administrative Agent, at its Notice Office;
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties
hereto and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed
(by

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certified or registered mail), telegraphed, telexed, telecopied, or cabled or
sent by overnight courier, be effective upon receipt.

10.04 Benefit of Agreement.

(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective parties hereto and the
successors and assigns of the parties hereto, but no benefits hereunder shall
inure to or be enforceable by any other Person; provided however, that the
Borrower may not assign or transfer any of its rights and obligations under any
Credit Document without the prior written consent of all of the Lenders; and
provided further, however, that, although any Lender may grant participations
in its rights and obligations hereunder and under the Notes, such Lender shall
remain a "Lender" for all purposes hereunder (and may not transfer or assign
its Loans hereunder) and the participant shall not constitute a "Lender"
hereunder; and provided further, however, that no Lender shall grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement except to the extent such amendment or
waiver would (i) extend the final maturity of the Loans in which such
participant is participating, or reduce the rate of interest or Fees thereon,
or reduce the principal amount thereof, or change the date for payment of any
such amounts, or increase such participant's participating interest in any Loan
over the amount thereof then in effect, or (ii) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement, or (iii) consent to the release of all or substantially all of the
Collateral or to the release of any cash Collateral if the effect of such
release of such cash Collateral is to cause or permit the amount of cash and
Cash Equivalents on deposit in or to the credit of the Investment Account to be
reduced below an amount equal to 33- 1/3% of the aggregate principal amount of
the Loans then outstanding. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto and to be monitored solely
by the participant and such Lender) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such
participation.

(b) Notwithstanding anything to the contrary in Section
10.04(a), (x) any Lender may assign a portion of its Loans and its rights and
obligations to any of its

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Affiliates or to one or more Lenders or any of their Affiliates, and (y) any
Lender may assign a portion, in an amount of at least $1 million of its Loans
and its rights and obligations hereunder to another Person (including, without
limitation, a leasing company or credit corporation) which is not an "air
carrier" certificated under Section 401 of the Aviation Act or any Person of
which such "air carrier" is a Subsidiary, each of which assignees agrees to
become a party to this Agreement as a Lender prior to or after the date thereof
by executing an amendment to this Agreement or by executing a supplemental
agreement with the assigning Lender, provided that, in the case of each such
assignment, (i) at the time it receives a copy of the aforesaid amendment or
agreement, together with the processing fee referred to below, Annex I shall be
modified by the Administrative Agent to reflect the Loans of such assignee
Lender and of the existing Lenders, (ii) the Administrative Agent shall have
received from the parties to such assignment a processing fee of $2,500 and
(iii) the Borrower shall, if such assignee Lender so requests, issue new Notes
to such assignee Lender and to the assigning Lender in conformity with the
requirements of Section 2.05 to the extent needed to reflect the revised Loans
of the Lenders. To the extent of any assignment pursuant to this Section
10.04(b), the assigning Lender shall be relieved of its obligations hereunder
with respect to its assigned Loans.

10.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent, the Collateral Agent or any Lender or any
holder of a Note in exercising any right, power or privilege hereunder or under
any other Credit Document and no course of dealing between the Borrower and the
Administrative Agent or any Lender or the holder of any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent, or any Lender or the holder of any Note would otherwise have. No notice
to or demand on the Borrower in any case shall entitle the Borrower to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent, the Lenders or
the holder of any Note to any other or further action in any circumstances
without notice or demand.

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10.06 Payments Pro Rata.

(a) Except as otherwise provided in Sections 2.12 and
4.02, the Administrative Agent agrees that promptly after its receipt of each
payment from or on behalf of the Borrower in respect of any Obligations of the
Borrower hereunder or under any Credit Document, it shall distribute such
payment to the Lenders pro rata based upon their respective shares, if any, of
the Obligations with respect to which such payment was received.

(b) Except as otherwise provided in Sections 2.12 and
4.02, each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, or Facility Fee, of a sum which with respect to the related sum
or sums received by other Lenders is in a greater proportion than the total of
such Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the Borrower to such Lenders in such amount as shall result in a
proportional participation by all the Lenders in such amount; provided that if
all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.

10.07 Calculations; Computations.

(a) The financial statements to be furnished to the
Lenders pursuant hereto shall be made and prepared in accordance with generally
accepted accounting policies and principles consistently applied throughout the
periods involved (except as set forth in the notes thereto).

(b) All computations of interest and Fees hereunder shall
be made on the actual number of days elapsed over a period of 360 days.

10.08 GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE UNITED

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STATES OF AMERICA, TO THE EXTENT APPLICABLE, AND THE STATE OF NEW YORK.

10.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower, the Administrative Agent and each Lender.

10.10 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.

10.11 Amendment or Waiver. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the Required Lenders; provided, however, that no such
change, waiver, discharge or termination shall, without the written consent of
each Lender affected thereby, (i) extend the Maturity Date or reduce the rate
of interest or Fees thereon, or reduce the principal amount thereof, or change
the date for payment of any such amounts, or increase the Loans of any Lender
over the amount thereof then in effect, (ii) amend, modify or waive any
provision of this Section, or Sections 2, 3, 4 (except as permitted by the
following proviso to this sentence), 7.02, 7.06, 8.03, 8.11, 10.01, 10.04,
10.06, 10.07(b), 10.14 or 10.17 or any provision in the Credit Documents which
provides for a determination by all of the Lenders (including the definitions
of terms as used in the Sections and provisions referred to in this clause
(ii)), (iii) change the definition of Required Lenders or (iv) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement; and provided further, however, that no such change,
waiver, discharge or termination shall, at any time at which GPA Entities are
not the sole Lessor Lenders, without the written consent of Lenders the
principal amount of whose Loans outstanding at the time exceed 85% of the total
principal amount of Loans outstanding at the time, permit or result in (a) the
amount of cash and Cash Equivalents on deposit in or to the credit of the
Investment Account to be reduced below such amount as equals 33-1/3% of the
aggregate principal amount of the Loans then outstanding, or (b) the release to
the Borrower or other application for a purpose other than, or in a

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manner inconsistent with, the repayment of Loans or the increase of the
Investment Account Minimum as provided in Sections 4.02(ii) and (iv), of any
portion of the Net Proceeds of an Asset Sale of Designated Collateral which is
in excess of 20% of the amount of such Net Proceeds; and provided further,
however, that (i) each Lessor Lender shall have the exclusive right to waive
for itself any Event of Default under Section 9.01, 9.04, 9.05 or 9.07 or its
right to exercise remedies in respect of such Event of Default, (ii) the rights
of the Lessor Lenders under Section 9 may be amended only with the written
consent of each Lessor Lender, and (iii) no provision of Section 9.01, 9.04,
9.05 or 9.07 (or the definitions of terms as used therein) may be amended
without the written consent of each Lender. The Borrower shall give each
Lender a copy of each report, notice or other information furnished to any
other Lender pursuant to an express requirement of this Agreement; and the
Borrower shall give each Lender written notice of any amendment or waiver of
any provision of this Agreement or the other Credit Documents (which notice
shall be accompanied by a copy of such amendment or waiver). The Borrower
shall give each Official Committee written notice of any material amendment or
waiver of any provision of this Agreement. No amendments of the Agency
Agreement, or amendments of the other Credit Documents which increase, change
or modify the rights or duties of the Administrative Agent, may be made without
the consent of the Administrative Agent. No amendments of the Agency
Agreement, or amendments of the other Credit Documents which increase, change
or modify the duties of the Collateral Agent, may be made without the consent
of the Collateral Agent. Notwithstanding anything to the contrary contained
herein, the modifications contemplated by Section 10.04, to the extent needed
to make new Lenders party to this Agreement, shall be permitted in accordance
with the terms thereof. Notwithstanding anything to the contrary contained
herein, no change, waiver, amendment or modification of this sentence or of
Section 2.12 or clauses (ii), (iii) and (iv) of Section 4.02 shall in any case
be effective without the prior written consent of GPA Sub. Notwithstanding
anything to the contrary contained herein or in the Kawasaki Credit Agreement,
if all Obligations shall not have been paid in full on or prior to the Maturity
Date, the priority of the lien on and security interest in the Collateral for
the benefit of the lenders under the Kawasaki Credit Agreement shall be subject
to the prior written consent of each of the Required Lenders (not including
Kawasaki). All amendments effected in compliance with this Section 10.11 shall
be effective and enforceable against all parties hereto without further
application to, or order of, the Bankruptcy Court.

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10.12 Domicile of Loans. Except as otherwise provided in
Section 2.10(a) or 2.11(a), each Lender may transfer and carry its Loans at, to
or for the account of any branch, office, or Affiliate of such Lender.

10.13 Confidentiality. Each Lender shall hold all non-public
information furnished by or on behalf of the Borrower in connection with such
Lender's evaluation of whether to become a Lender hereunder or obtained
pursuant to the requirements of this Agreement, which has been expressly
identified as such by the Borrower by the conspicuous designation thereof as
"confidential" (collectively, the "Confidential Material"), in accordance with
its customary procedure for handling confidential information of this nature
and in any event may make disclosure reasonably required by any bona fide
transferee or participant in connection with the contemplated transfer of any
Loans or participation therein or to its accountants, professional advisors,
lawyers, investment bankers and others as required or requested by any
Governmental Authority or representative thereof or pursuant to legal process,
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify the Borrower of any request by any Governmental
Authority or representative thereof (other than any such request in connection
with an examination of the financial condition of such Lender by such
Governmental Authority) for disclosure of any such non-public information prior
to disclosure of such information, and provided, further, that in no event
shall any Lender be obligated or required to return any materials furnished by
or on behalf of the Borrower. Each of the Lenders and the Administrative Agent
agrees that it will not provide to prospective assignees, transferees or
participants any of the Confidential Material unless such Person has executed
an agreement to be bound by this Section 10.13.

10.14 Set-Off. The Borrower hereby acknowledges and agrees
that any participation referred to in this Agreement will give rise to a direct
obligation of the Borrower to the participant. The Borrower hereby authorizes
the Collateral Agent, the Administrative Agent, each Lender, and each
participant, in case of an Event of Default, at any time and from time to time,
without notice or demand, to set off and apply all deposits (general, special,
custodial or for safekeeping, time or demand, provisional or final) and other
property (including, without limitation, money and securities) at any time held
by or in the possession of or to the account of the Administrative Agent, the
Collateral Agent (including any lock box accounts, the Concentration Account,
the Investment Account and any other account or cash Collateral), such Lender
or participant, and other

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obligations at any time owing by the Administrative Agent, the Collateral
Agent, such Lender or such participant to or for the credit or account of the
Borrower, in each of which deposits, property and other obligations the
Collateral Agent, such Lender or such participant for the ratable benefit of
the Administrative Agent, and (except to the extent prohibited by the Orders)
each Lender is hereby granted a security interest as security for any and all
obligations of the Borrower now or hereafter existing under the Credit
Documents (irrespective of whether or not the Administrative Agent, the
Collateral Agent, such Lender or participant shall have made any demand for
payment and although the Borrower's obligations may be contingent and
unmatured). The rights of the Administrative Agent, the Collateral Agent, the
Lenders and their participants under this Section are in addition to other
rights and remedies (including other rights of set-off) which the Collateral
Agent, the Lenders or any such participants may have. Promptly after effecting
any such set-off, the Collateral Agent shall give the Borrower notice thereof,
but a failure to give such notice shall not impair or otherwise affect the
effectiveness of the set-off. Notwithstanding any of the foregoing, the
Administrative Agent, the Collateral Agent, the Lenders, or any participant
shall not in any event set off amounts such that the amounts remaining in all
accounts are not sufficient to cover all of the unpaid Permitted Expenses then
outstanding.

By acceptance of any interest in the Indebtedness of the
Borrower outstanding under this Agreement or any rights under any other Credit
Document, a participant agrees to share proceeds obtained by it pursuant to the
foregoing sentence in accordance with the provisions of this Agreement.

10.15 WAIVER OF JURY TRIAL. THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THE CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS
BEING ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims, and all other common law and statutory claims. The
Administrative Agent, each Lender and the Borrower warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with such
legal counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS,

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SUPPLEMENTS OR MODIFICATIONS TO THE LOAN DOCUMENTS. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
10.16 Time of the Essence. Time is of the essence as to
each provision herein or in the other Credit Documents in which time is a
factor.
10.17 Specified Lien Releases. Each of the Administrative
Agent and the Secured Creditors agrees that (i) the Collateral Agent shall
release its Lien on Collateral consisting of cash to the extent necessary to
pay Permitted Expenses, (ii) to the extent expressly provided in the
penultimate sentence of Section 8.02, the Lien of the Collateral Agent on the
assets described therein shall be released as provided therein and (iii) the
Lien of the Collateral Agent shall be released upon the first date (such date,
the "Lien Termination Date") upon which all principal of, and interest accrued
on, the Loans has been repaid in full and all other Obligations have been
repaid in full. In determining whether the test set forth in clause (iii) of
the immediately preceding sentence has been met, the Collateral Agent shall be
entitled to rely upon the Required Lenders in determining whether such test has
been met and shall be entitled to refrain from taking any action until it has
received a response to its request from the Required Lenders, and upon
receiving such response shall be entitled to rely thereon with no liability
hereunder. The occurrence of the Lien Termination Date as provided above shall
in no event affect the Borrower's obligation to pay any Obligations which
thereafter become due and payable, and shall in no event affect the
administrative expense priority granted to the Obligations by the Bankruptcy
Court. Nothing contained in this Agreement or in any Security Document shall
be construed to secure the obligations of the Borrower under the GPA Agreements
or the Kawasaki Agreements by the Collateral.

10.18 Administrative Agent; Collateral Agent. In acting
pursuant to this Agreement and the other Credit Documents, the Administrative
Agent and Collateral Agent shall act in the manner, and shall be subject to the
rights and duties, provided in the Agency Agreement, the provisions of which
are incorporated by reference herein as fully as if the terms thereof were set
forth herein in their entirety. Each Person which becomes a Secured Creditor
agrees to such provisions, and to the rights and duties of the Administrative
Agent and Collateral Agent as set forth in the Agency Agreement, and to the
indemnities contained therein, as fully as if said Secured Creditor were an
original party thereto.

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10.19 Dating and Effectiveness. Although this Agreement is
dated as of the date first written above for convenience, the actual dates of
execution hereof by the parties hereto are respectively the dates set forth
under the signatures hereto, and this Agreement shall be effective on the
Fourth Amendment Effective Date.

10.20 Participation by Commerce and Economic Development
Commission. Participation by Commerce and Economic Development Commission in
the transactions contemplated by this Agreement and the other Credit Documents
is subject to the provisions of Arizona Revised Statutes Section 38-511; and
by this reference, each of the other Credit Documents to which Commerce and
Economic Development Commission is or becomes a party shall be deemed to
include a statement to such effect.

10.21 Covenants Do Not Preclude Negotiation of a Plan of
Reorganization. Nothing contained in the covenants of the Borrower set forth
in Section 8 of this Agreement (including, without limitation, the covenants in
Section 8.08 which restrict payments by the Borrower to aircraft lessors and
financiers) shall, or shall be construed to, (i) preclude the Borrower from
negotiating any plan of reorganization or any financial or other accommodation
in anticipation of any plan or reorganization (including, without limitation,
any modification of payments by the Borrower to its aircraft lessors or
financiers) so long as, without the prior written consent of the Required
Lenders, no breach of any of such covenants and no related Default or Event of
Default occurs prior to the occurrence of the Maturity Date and the repayment
in full of the Loans and the payment in full of all of the other Obligations,
or (ii) preclude the Borrower from entering into agreements or other
contractual arrangements evidencing the results of such negotiations so long
as, pursuant to express terms, such agreements or other contractual
arrangements do not and cannot become effective prior to the confirmation of
such plan of reorganization and the repayment in full of the Loans and all
other amounts payable under the Credit Documents.

10.22 Certain Consents and Waivers. The Lenders, in their
capacities as Lenders hereunder, and as lenders under the Third Amended and
Restated Credit Agreement, hereby (i) consent to the entry by the Borrower
into, and waive any Default or Event of Default arising under the Third Amended
and Restated Credit Agreement as a consequence of the entry by the Borrower
prior to the Fourth Amendment Effective Date into, the leases of airport space
described on Schedule 22 hereto, and (ii) consent to the leasing by

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the Borrower to Strottmann International of an x-ray machine for the scanning
of cargo which is surplus to the needs of the Borrower and the subsequent sale
by the Borrower to Strottman International of such x-ray machine for a sale
price of $19,000, payable in eleven monthly installments of $1,550 (with
interest at the rate of 12% per annum) and a twelfth balloon payment of $3,439)
under circumstances in which the proceeds of such sale are retained by the
Borrower without prepayment of Loans or increase in the Investment Account
Minimum (and waive any Default or Event of Default arising under the Third
Amended and Restated Credit Agreement and/or this Agreement as a consequence of
such lease and such sale of such x-ray machine under such circumstances).

[The balance of this page is intentionally left blank.]

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<PAGE> 136
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the respective
dates set forth below.

"Borrower"

Notice Address: AMERICA WEST AIRLINES, INC.
4000 East Sky Harbor Blvd.
Phoenix, Arizona 85034
Attention: Senior Vice By:_________________________
President-Finance
Title:______________________

Date: ______________________

"Administrative Agent"

Notice Office: BT COMMERCIAL CORP.,
14 Wall Street, 3rd Fl. as Administrative Agent
New York, New York 10005
Attention: Albert Fischetti
By:___________________________

Title:________________________

Date: ________________________

"Lenders"

GPA LEASING USA I, INC.

By:__________________________

Title:_______________________

Date: _______________________

GPA LEASING USA SUB I, INC

By:_________________________

Title:______________________

Date: ______________________

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<PAGE> 137
KAWASAKI LEASING
INTERNATIONAL INC.

By:_________________________

Title:______________________

Date: ______________________

B&B HOLDINGS, INC.
d/b/a PHOENIX CARDINALS

By:________________________

Title:_____________________

Date: _____________________

BANK OF AMERICA ARIZONA

By:________________________

Title:_____________________

Date: _____________________

BANK ONE, ARIZONA, N.A.

By:________________________

Title:_____________________

Date: _____________________

COMMERCE AND ECONOMIC
DEVELOPMENT COMMISSION

By:________________________

Title:_____________________

Date: _____________________

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<PAGE> 138
DMB HOLDING LIMITED
PARTNERSHIP

By:________________________

Title:_____________________

Date: _____________________

EL DORADO INVESTMENT COMPANY

By:________________________

Title:_____________________

Date: _____________________

FIRST INTERSTATE BANK OF
ARIZONA, N.A.

By:________________________

Title:_____________________

Date: _____________________

PHELPS DODGE CORPORATION

By:________________________

Title:_____________________

Date: _____________________

PHOENIX NEWSPAPERS, INC.

By:________________________

Title:_____________________

Date: _____________________

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<PAGE> 139
PHOENIX SUNS LTD. PARTNERSHIP

By:________________________

Title:_____________________

Date: _____________________

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<PAGE> 140
ANNEX I

List of Loan Amounts and Addresses
----------------------------------

<TABLE>
<CAPTION>
Outstanding
Principal
Amount of Loans
as of the
Fourth
Amendment
Effective Date
--------------

<S> <C>
GPA Leasing USA I, Inc. $9,297,748.45
Address:
- - -------
c/o GPA Capital, Incorporated
9 West 57th Street
New York, New York 10019
Attention: General Counsel
Telephone: (212) 980-3313
Telecopy: (212) 980-6655

GPA Leasing USA Sub I, Inc $45,107,799.78
Address:
- - -------
c/o GPA Capital, Incorporated
9 West 57th Street
New York, New York 10019
Attention: General Counsel
Telephone: (212) 980-3313
Telecopy: (212) 980-6655

Kawasaki Leasing International Inc. $17,931,536.73
Address:
- - -------
65 East 55th Street
New York New York 10022
Attention: President
Telephone: (212) 223-1800
Telecopy: (212) 223-2199

B&B Holdings, Inc. $194,912.79
d/b/a Phoenix Cardinals
Address:
- - -------
8701 S. Hardy Drive
Tempe, Arizona 85284
Attention: Mr. William V. Bidwill
Telephone: (602) 379-1804
Telecopy: (602) 379-1819

</TABLE>

- 1 -
<PAGE> 141
<TABLE>
<S> <C>
Bank of America Arizona $779,629.16
Address:
- - -------
101 North First Avenue
31st Floor
Phoenix, Arizona 85003
Attention: Mr. David S. Hanna
Telephone: (602) 262-4136
Telecopy: (602) 262-4354

Bank One, Arizona, N.A. $1,013,518.65
Address:
- - -------
36th Floor
241 North Central Avenue
Phoenix, Arizona 85004
Attention: Mr. John T. Byrd
Telephone: (602) 221-2173
Telecopy: (602) 221-1535

Commerce and Economic $779,629.16
Development Commission
Address:
- - -------
3800 N. Central Avenue
Suite 1500
Phoenix, Arizona 85007
Attention: Mr. Jim Tuvell
Telephone: (602) 280-1369
Telecopy: (602) 280-1358

DMB Holding Limited Partnership $194,912.79
Address:
- - -------
4201 North 24th Street
Phoenix, Arizona 85018
Attention: Mr. Drew Brown
Telephone: (602) 956-7877
Telecopy: (602) 956-7961

El Dorado Investment Company $194,912.79
Address:
- - -------
400 E. Van Buren, Suite 650
Phoenix, Arizona 85072-2132
Attention: Mr. Gregory S. Anderson
Telephone: (602) 252-1450
Telecopy: (602) 252-3444

</TABLE>

- 2 -
<PAGE> 142
<TABLE>
<S> <C>
First Interstate Bank of $1,013,518.65
Arizona, N.A.
Address:
- - -------
100 West Washington
Phoenix, Arizona 85003
Attention: Mr. William S. Randall
Telephone: (602) 229-4547
Telecopy: (602) 229-4525

Phelps Dodge Corporation $428,794.93
Address:
- - -------
2600 North Central Avenue
Phoenix, Arizona 85004-3014
Attention: Mr. Thomas M. St. Claire
Telephone: (602) 234-8131
Telecopy: (602) 234-8150

Phoenix Newspapers, Inc. $428,794.93
Address:
- - -------
120 East Van Buren
Phoenix, Arizona 85004
Attention: Mr. Louis A. (Chip) Weil, III
Telephone: (602) 271-8478
Telecopy: (602) 271-8340

Phoenix Suns Ltd. Partnership $194,912.79
Address:
- - -------
201 East Jefferson, 4th Floor
Phoenix, Arizona 85004
Attention: Mr. Jerry Colangelo
Telephone: (602) 379-7999
Telecopy: (602) 379-7990
</TABLE>

<PAGE> 1

EXHIBIT 10.2

MANAGEMENT RESIGNATION ALLOWANCE GUIDELINES
NOVEMBER 18, 1993

PROGRAM PURPOSE

The plan is intended to provide eligible employees with reasonable
transition support in order for them to seek career opportunities outside the
company. Management can use the plan after other reasonable alternatives for
dealing with the situation have been exhausted.

ELIGIBILITY

Eligibility for the program is determined by the Company and is intended to
apply to management employees who permanently end their employment relationship
with AWA. Eligible management employees include those whose positions are
eliminated or downgraded in conjunction with a reorganization of
responsibilities or priorities within the Company or whose particular services
no longer fit the needs of the Company. All or some of the functions may be
transferred to another position or eliminated as a result of the reorganization.

All resignation allowances are subject to case-by-case review by the
Compensation Committee of the Board of Directors. All resignation allowances for
directors, senior directors and officers of the corporation and all resignation
allowances for other management personnel in amounts in excess of twenty-six
(26) weeks pay must be approved by the Compensation Committee.

The plan is not intended to relieve management of its responsibility to
appropriately deal with individual performance issues on a firm and constructive
basis. Specifically, the plan is not available for:

- Employees with less than one full year of AWA service.

- Employees subject to termination for cause, for example, an employee with
an ongoing non-performance problem.

- Employees guilty of serious misconduct, for example, stealing or willful
or negligent destruction of AWA property.

PLAN DESIGN

- The resignation allowance payments are based on Current Annual
Compensation of three (3) weeks pay for each year of full-time AWA
service (partial years to be pro-rated to date of termination) with a
four (4) week minimum and a fifty-two (52) week maximum. If applicable,
any unearned portion of a salary advance will be reimbursed to the
company or will be deducted from the resignation allowance.

- Five percent (5%) increase in allowance period for each year over age 40,
not to exceed 52-weeks combined maximum payment.

- Group medical/life coverages continue during the allowance period at the
same cost paid by active employees.

- Travel privileges on AWA continue during the allowance period. Travel
privileges with other carriers vary based on the agreements with those
carriers. All travel privileges cease if the resigned employee becomes
employed by another airline.

- The resignation date is the termination date for purposes of 401(k) and
incentive stock options.

- Outplacement services through an outplacement agency approved by Human
Resources will be made available on a case-by-case basis with a maximum
per employee cost to AWA of $5,000.
<PAGE> 2

PROCESS

1. Before discussing the resignation program with a potential candidate,
the supervising Officer or Director will review the situation with the Senior
Director, Human Resources, to confirm plan eligibility. The Senior Director,
Human Resources, will then coordinate approval of the resignation package as
required. Any exceptions to these guidelines require the advance review by Human
Resources and the approval of the CEO and the Compensation Committee of the
Board of Directors.

2. Human Resources will prepare the resignation agreement documents,
including the resignation allowance payment calculation and employee benefits
summary.

3. The supervising Officer or Director will make the offer to the employee
with appropriate coordination from Human Resources.

4. The resigned employee is "out-processed" by Human Resources, Payroll and
the various employee benefits departments.

<PAGE> 1

EXHIBIT 10.3

KEY EMPLOYEE PROTECTION AGREEMENT

KEY EMPLOYEE PROTECTION AGREEMENT ("Agreement"), dated June 27, 1994, by
and between AMERICA WEST AIRLINES, INC., a Delaware corporation (the "Company"),
and WILLIAM A. FRANKE ("Franke").

WHEREAS, Franke is the Chairman of the Board and Chief Executive Officer of
the Company; and

WHEREAS, at the time of Franke's employment as Chairman of the Board in
1992, the Company's Board of Directors and debtor-in-possession lenders agreed,
among other things, to use their best efforts to cause any plan of
reorganization filed with the Bankruptcy Court (as hereinafter defined) relating
to the Company to provide for the payment to Franke, upon substantial
consummation of such plan of reorganization, of a confirmation success bonus of
not less than $500,000; and

WHEREAS, with significant contribution from Franke in his capacities as
Chairman of the Board and Chief Executive Officer of the Company, significant
financial and operating progress has been made by the Company and other actions
have been taken which have enhanced, and in the future are expected to further
enhance, the value of the Company's estate for the benefit of its creditors and
other constituencies; and

WHEREAS, under Franke's leadership, the Company is currently endeavoring to
develop and finalize a confirmable Plan of Reorganization (as hereinafter
defined); and

WHEREAS, the services and knowledge of Franke are valuable to the Company
in many respects, including (without limitation) the rendering of advice to the
Company and its Board of Directors with respect to the difficult and complex
process of developing and finalizing a confirmable Plan of Reorganization; and

WHEREAS, the Company considers it prudent to enter into this Agreement in
order to (i) better secure Franke's continued services, (ii) ensure Franke's
continued objectivity in the event of negotiations or actions that might lead to
a Change in Control (as hereinafter defined) and (iii) define the nature and
terms of Franke's severance benefits following a Change in Control.

NOW THEREFORE, for and in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties (intending to be legally bound) hereby covenant and
agree as follows:

1. Definitions. As used in this Agreement, the following terms shall have
the respective meanings set forth below:

(a) "Bankruptcy Court" means the Bankruptcy Court for the District of
Arizona.

(b) "Board" means the Board of Directors of the Company.

(i) the individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board"), cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board; or

(ii) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
acquires the beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of 51% or more of the combined voting power
of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors.
<PAGE> 2

(d) "Company Affiliate" means any corporation, partnership or other
business entity directly or indirectly controlling, controlled by or under
common control with, the Company. As used in this definition, the term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
corporation, partnership or other business entity, whether through
ownership of voting securities, by contract or otherwise.

(e) "Confirmation Bonus" means any reorganization success bonus
payable to Franke pursuant to a Plan of Reorganization in the event such
Plan of Reorganization is confirmed and consummated.

(f) "Confirmation Date" means the date a Plan of Reorganization is
confirmed by the Bankruptcy Court.

(g) "Plan of Reorganization" means any plan of reorganization which
(i) is filed with the Bankruptcy Court and (ii) contemplates and, if
confirmed and consummated, would result in the emergence of the Company
from its Chapter 11 bankruptcy proceedings.

(h) "Severance Payment" means as specified in Section 2 below.

(i) "Termination Date" means as specified in Section 2 below.

2. Severance Payment. (a) If a Change in Control occurs in connection with
the consummation of a Plan of Reorganization and if, for any reason (including,
without limitation, a voluntary resignation or an involuntary removal but
excluding death), Franke ceases to serve as the Chairman of the Board and the
Chief Executive Officer of the Company at any time during the period of 180 days
beginning on the Confirmation Date, the Company agrees to pay to Franke,
promptly after the date on which Franke ceases to be the Chairman of the Board
and the Chief Executive Officer of the Company ("Termination Date"), a lump sum
amount (the "Severance Payment") equal to 200% of the sum of (i) Franke's annual
base salary as in effect immediately prior to the Termination Date and (ii)
Franke's annual administrative expense allowance as in effect immediately prior
to the Termination Date; provided, however, that the Severance Payment shall be
reduced by the amount of any Confirmation Bonus actually paid to Franke prior to
the Termination Date.

(b) If all or any portion of the Severance Payment is actually paid to
Franke, any Confirmation Bonus thereafter payable to Franke shall be reduced by
the amount of the Severance Payment actually paid to Franke unless the payment
of such amount to Franke was taken into account in determining the amount of
such Confirmation Bonus.

3. Medical Insurance. During the 12-month period following the Termination
Date, the Company, at its cost, shall maintain in full force and effect for the
continued benefit of Franke and Franke's dependents all benefits available to
Franke and Franke's dependents under all medical plans and programs of the
Company, provided that (i) Franke's continued participation is possible under
the terms and provisions of such plans and programs and (ii) Franke pays the
regular employee contribution, if any, required by such plans and programs. In
the event that participation by Franke (or his dependents) in any such plan or
program after the Termination Date is barred pursuant to the terms thereof, or
in the event the Company shall terminate any such plan or program, the Company
shall obtain for Franke (and/or his dependents) comparable coverage under
individual policies.

4. Life Insurance. During the 12-month period following the Termination
Date, the Company, at its cost, shall continue to provide Franke all life
insurance coverages (and in the same amounts) provided to him by the Company
immediately prior to the Termination Date.

5. Travel Privileges. The Company shall provide Franke (and wife and his
dependents) such lifetime on-line and interline, positive space travel
privileges subject to the terms of the Company's non-revenue travel policy for
retired executives as from time to time in effect.

6. Accrued Vacation Pay, etc. Promptly after the Termination Date, the
Company shall pay to Franke a lump sum amount for (i) all unused vacation time
accrued by Franke as of the Termination Date and (ii) all unpaid benefits earned
by Franke as of the Termination Date under any and all incentive compensation
plans or programs of the Company.

2
<PAGE> 3

7. Tax Withholdings. The Company shall be entitled to withhold from all
payments hereunder all applicable taxes (federal, state or other) which it is
required to withhold therefrom.

8. Successors; Binding Agreement. (a) This Agreement shall not be
terminated by the merger or consolidation of the Company whereby the Company is
or is not the surviving or resulting corporation or as a result of any transfer
of all or substantially all the assets of the Company. In the event of any such
merger, consolidation or transfer of assets, the provisions of this Agreement
shall be binding upon the surviving or resulting corporation or the person or
entity to which such assets are transferred.

(b) The Company agrees that concurrently with any merger, consolidation or
transfer referred to in paragraph (a) above, it will cause any successor or
transferee to unconditionally assume in writing all of the obligations of the
Company hereunder on terms and conditions reasonably satisfactory to Franke.
Failure of the Company to obtain such assumption prior to the effectiveness of
any such merger, consolidation or transfer shall be a breach of this Agreement
and shall entitle Franke to immediately receive the Severance Payment from the
Company and, for purposes of implementing the foregoing, the date on which such
merger, consolidation or transfer becomes effective shall be deemed to be the
Termination Date.

(c) This Agreement shall inure to the benefit of and be enforceable by
Franke's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Franke should die
while any amounts would still be payable to Franke hereunder if Franke had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to such person or persons
appointed in writing by Franke to receive such amounts or, if no person is so
appointed, to Franke's estate.

9. No Mitigation. The provisions of this Agreement are not intended to,
nor shall they be construed to, require that Franke seek or accept other
employment following a termination of employment. Except as provided in Section
1(a), the Company's obligations to make the payments to Franke required under
this Agreement or any other agreement and otherwise to perform its obligations
hereunder shall not be affected by any set off, counterclaim, recoupment,
defense or other claim, right or action that the Company may have against
Franke.

10. Expense Reimbursement. If any litigation, contest or dispute shall
arise under this Agreement involving the failure or refusal of the Company to
fully perform in accordance with the terms hereof, the Company shall reimburse
Franke, on a current basis, for all legal fees and expenses, if any, incurred by
Franke, on a current basis, for all legal fees and expenses, if any incurred by
Franke in connection with such litigation, contest or dispute, together with
interest thereon at the rate of 10% per annum, such interest to accrue from the
date the Company receives Franke's statement for such fees and expenses through
the date of payment thereof; provided, however, that in the event the final
resolution of such litigation, contest or dispute includes a finding denying, in
total, Franke's claims in such litigation, contest or dispute, Franke shall be
required to refund to the Company, over a period not to exceed 12 months from
the date of such resolution, all sums advanced to Franke pursuant to this
Section 10.

11. Assignability. The Company shall have the right to assign this
Agreement and to delegate all rights, duties and obligations hereunder, either
in whole or in part, to any affiliate of the Comapny, provided that no such
assignment or delegation shall relieve the Company of its obligations under this
Agreement.

12. Notices. All notices and all other communications to the parties shall
be in writing and addressed (i) if to the Company, at its principal office
address or such other address as it may have designated by written notice to
Franks for purposes hereof, directed to the attention of the Board with a copy
to the Secretary of the Company and (ii) if to Franke, at his residence address
on the records of the Company or to such other address as he may have designated
to the Company in writing for purposes hereof. Each such notice or other
communication shall be deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt requested, postage prepaid,
except that any notice of change of address shall be effective only upon
receipt.

3
<PAGE> 4

13. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

14. Amendments and Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by Franke and a duly authorized officer of the
Company. No waiver by either party hereto at any time of any breach by the other
party hereto of, or in compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

15. Benefits Not Exclusive. The rights of and benefits payable to Franke
or his beneficiaries under this Agreement are not exclusive and are in addition
to any rights of and benefits payable to Franke or such beneficiaries under any
other agreement between Franke and the Company or under any employee benefit
plan or compensation program of the Company.

16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

IN WITNESS WHEREOF, the Company and Franke have executed this Agreement as
of the date first above written.

AMERICA WEST AIRLINES, INC.

By: /s/ RICHARD O'BRIEN
________________________
/s/ WILLIAM A. FRANKE
________________________
William A. Franke