Common use of Cost of Service Clause in Contracts

Cost of Service. A. United shall bear all costs of providing the service described and provided for in this Agreement, including by way of illustration but not by way of limitation, the costs of all required aircraft, equipment and facilities (including facilities for ticketing, baggage handling, and like services); personnel; ground costs, including landing fees and use charges; credit card commissions; travel agent commissions; deicing; and fuel ferrying. Guarantor shall waive any and all landing fees and facility rents and other charges for the Term of this Agreement, to the extent attributable to the COU Flights. For the avoidance of doubt, if United operates flights to and from COU in addition to the COU Flights, the waiver of landing fees provided herein shall apply only to the COU Flights and, the waiver of facility rents and other charges will be reduced in proportion to the number of flights attributable to the COU Flights. B. United and Guarantor acknowledge that United may be required to cancel or divert flights, including COU Flights, due to mechanical problems, weather conditions, or other circumstances beyond the reasonable control of United. If circumstances or conditions result in canceled or diverted COU Flights, United, at its sole cost, shall have the obligation to provide alternate air and/or ground transportation to COU, from the airport to which the COU Flight is diverted, for passengers who are ticketed on the COU Flights to COU in compliance with United’s standard procedures for such circumstances. The costs of any cancelled COU Flights shall not be included in the calculation of any Guaranteed Amount. C. The amounts/percentages referred to in Section 3 hereof are based on United’s assumed total cost of jet fuel (into plane) inclusive of all charges including taxes and into plane fees (the “Assumed Baseline Fuel Cost”) for the COU Flights. The Assumed Baseline Fuel Cost for the COU Flights shall be $1.97 per gallon. Notwithstanding anything contained herein to the contrary, the parties will adjust the Per Round-Trip Cost referenced in Section 3, and hence the Guaranteed Amount owed on a cent for cent basis to the extent the monthly average cost of fuel varies, either up or down, from the Assumed Baseline Fuel Cost to take into account changes in the price of fuel. At the end of each month, United will determine, through United’s FPS, the monthly average cost of jet fuel per gallon for the COU Flights (the “Average FPS Fuel Cost”). If the Average FPS Fuel Cost for the applicable COU Flights varies from the Assumed Baseline Fuel Cost for the applicable COU Flights, the Guaranteed Amount will be adjusted as follows: (I) by $15 for the per ▇▇▇▇▇ difference between the Assumed Baseline Fuel Cost for the COU Flights for that month and the Average FPS Fuel Cost for such COU Flights for that same month. For example: If United determines that the Average FPS Fuel Cost in December for the COU Flights is $1.99 per gallon, then the Per Round-Trip Cost used in calculating the Guaranteed Amount in December for the COU Flights will reflect an increase of $30 per each COU Flight round-trip.