Exhibit 10.10
                      [LOGO FOR CHAUTAUQUA AIRLINES, INC.]
                                    AGREEMENT
                                     between
                            CHAUTAUQUA AIRLINES, INC.
                                       and
                             THE FLIGHT DISPATCHERS
                                in the employ of
                            CHAUTAUQUA AIRLINES, INC.
                                as represented by
                   TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO
             [LOGO FOR TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO]
                      FEBRUARY 19, 2001 - FEBRUARY 19, 2007
                            Signed February 19, 2001
                                TABLE OF CONTENTS
--------------------------------------------------------------------------------
Section    Title                                                          Page
1          Recognition and Scope...............................              4
2          Definitions.........................................              6
3          Compensation........................................              8
4          Work Schedules and Vacations........................             10
5          Seniority...........................................             13
6          Training............................................             14
7          Sick Leave..........................................             15
8          Probation...........................................             16
9          Leave of Absence....................................             17
10         Benefits............................................             18
11         Furlough and Recall.................................             19
12         Grievance Procedures................................             21
13         System Board of Adjustment..........................             24
14         Union Security......................................             27
15         General.............................................             35
16         Duration............................................             38
                                       2
                                    AGREEMENT
                                     between
                               CHAUTAUQUA AIRLINES
                                       and
                               FLIGHT DISPATCHERS
                                in the employ of
                               CHAUTAUQUA AIRLINES
                                as represented by
                   TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO
This Agreement is made and entered into in accordance with the provisions of
Title II of the Railway Labor Act, as amended by and between CHAUTAUQUA
AIRLINES, hereinafter known as the "Company", and the FLIGHT DISPATCHERS in the
service of CHAUTAUQUA AIRLINES, who are represented by the TRANSPORT WORKERS
UNION OF AMERICA, AFL-CIO, hereinafter known as the "Union". In making this
Agreement, the Company and the Union and the represented employees recognize
their duty, individually and collectively, to comply and cooperate with the
intent and purpose of this Agreement.
                                       3
                                    SECTION 1
                              RECOGNITION AND SCOPE
A.  Recognition
The Union is recognized by the Company, in accordance with the National
Mediation Board Certification Case R-6673 dated July 22, 1999, as the duly
designated and authorized bargaining agent with respect to rates of pay, rules
and working conditions of Flight Dispatchers in the employ of the Company.
B.  Scope
It is understood and agreed that all dispatch functions as detailed in Section
II (Definitions) of this Agreement as well as, at a minimum, in the Chautauqua
Airlines, General Policies Manual, Revision 14, dated 20Jul00, will be performed
by the employees covered under this Agreement and in accordance with the terms
and conditions of this Agreement. It is specifically understood that the scope
of this work includes all FAR Part 121 flying by pilots on the Chautauqua Pilots
System Seniority List, performed in accordance with the terms and conditions of
their Agreement, with the exception of training and delivery flights.
C.  Operational efficiency
The purpose of this Agreement is, in the mutual interest of the Company and of
the employees, to provided for the operation of the services of the Company
under methods which will further, to the fullest extent possible, the safety of
air transportation, the efficiency of operation, and the continuation of the
employment under conditions of reasonable hours, proper compensation, and
reasonable working conditions. It is recognized by this Agreement to be the duty
of the Company and the employees, to cooperate fully both individually and
collectively.
D.  Management Rights
The rights of ownership, the management of the Company and the direction of the
working forces, including the right to hire, promote, demote, discharge and
discipline for cause, transfer, layoff, and recall, the right to direct, plan
and control operations, and to establish work schedules, and the right to
determine the type of work to be performed, and the right to introduce new and
improved methods, equipment or facilities, and to change existing methods,
equipment and to determine the location of the Company's facilities, and the
right to lease facilities or equipment, and the right to establish or change
Company rules, and in general to maintain discipline and efficiency, are vested
exclusively with the Company so long as the exercise of such rights shall not be
in conflict with the specific provisions of this agreement.
E.  No strike/lockout
                                       4
It is the intent of the parties of this Agreement that the procedure set forth
herein and in the Railway Labor Act, as amended, for the resolution of disputes
shall serve as a means of peaceable settlement of all disputes that may arise
between them and that, therefore:
         1.       The Company shall neither cause nor permit any lockout of
                  employees covered hereunder during the life of this Agreement;
                  and
         2.       Neither the Union nor the employees covered hereunder, both
                  individually and collectively, shall authorize, cause,
                  sanction or engage in any strike against the Company, illegal
                  picketing of the Company's premises, slowdown, sit-down,
                  walk-off, work stoppage, or curtailment of work of any kind,
                  during the life of this Agreement.
F.  Supervisor qualification shifts/operational emergencies
It is understood and agreed that, in order to maintain their proficiency,
qualified supervisors may be scheduled up to twenty (20) hours per year to
perform the functions of a Flight Dispatcher. Qualified supervisors may also
perform the functions of a Flight Dispatcher in the event of an operational
emergency. Supervisors may not be used to avoid the payment of overtime.
It is further understood and agreed that qualified supervisors and other
employees may assist in performing the functions of a Dispatch Coordinator
necessary to complete a particular operation. Supervisors may not be used to
avoid the payment of overtime.
                                       5
                                    SECTION 2
                                   DEFINITIONS
1.       The term "employee" shall mean an employee of Chautauqua Airlines,
         Inc., who is covered by this Agreement.
2.       The term "Dispatch Coordinator," as used herein, shall mean an employee
         selected by the Company who may perform the duties of a Flight
         Dispatcher and, in addition, is the lead Flight Dispatcher on Duty.
         This position is responsible for coordinating the day to day activities
         of flight dispatch with the appropriate departments, government
         agencies, and other effected parties, as applicable. This position will
         also have the responsibility of assuring that shift opening and closing
         procedures are completed, a shift turnover log is filled out and other
         responsibilities, as designated by the Company, are completed.
3.       The term "Flight Dispatcher," as used herein, shall mean an employee
         who has been designated as such by the Company and holds a currently
         effective Aircraft Dispatcher's Certificate, who is regularly assigned
         to be responsible for operational control concerning the dispatch,
         release and movement of Company aircraft.
4.       The term "Check Dispatcher," as used herein, shall mean an employee who
         has been designated as such by the Company to perform FAA-mandated
         competency checks of the Flight Dispatchers.
5.       The term "Relief Flight Dispatcher," as used herein, shall mean a
         Flight Dispatcher who holds a permanent position and who is required to
         work other than the normal work cycle on a pre-planned basis to cover
         known open time and in order to provide qualified relief for Flight
         Dispatchers for vacation, qualification trips and training, and any
         other abnormality as agreed to by the Union on a non-precedent setting
         case by case basis.
6.       The term "special assignment," as used herein, shall mean the
         assignment of Flight Dispatcher to duties in lieu of regular Flight
         Dispatcher activities, but such assignment must be directly related to
         the dispatch function.
7.       The term "work cycle," as used herein, shall mean the basic rotation of
         work days and regular days off established for the quarterly work
         period, prior to overlay of such factors as vacations, qualification
         flights, training, relief schedules, etc.
8.       The term "bid line" as used herein, shall mean the specific assignment
         of individual employees by calendar quarter to a work cycle, adjusted
         for such
                                       6
         factors as vacations, qualification, training relief schedules, etc.
         The bid lines shall be subject to quarterly bidding procedures.
9.       The term "Work Schedule," as used herein, shall mean a cycle of
         workdays and days off, developed by the Company, to which an individual
         Flight Dispatcher is assigned.
10.      Wherever the term "Flight Dispatcher" appears in this Agreement, the
         provisions of the paragraph in which it appears shall apply to Dispatch
         Coordinators, Flight Dispatchers, Check Dispatchers and Relief Flight
         Dispatchers, unless otherwise stated.
                                       7
                                    SECTION 3
                                  COMPENSATION
A.       Minimum Rates of Pay per Hour
             Longevity   Salary at  DOS plus   DOS plus   DOS plus   DOS plus
                          signing    1  year    2 years    3 years    4 years
         -----------------------------------------------------------------------
                                                       
             Hire date     11.15     11.49       11.83     12.19      12.55
              6 Months     11.46     11.80       12.16     12.52      12.90
               1 Year      11.67     12.02       12.38     12.75      13.14
           1 1/2 Years     11.93     12.28       12.65     13.03      13.42
              2 Years      12.25     12.62       13.00     13.39      13.79
              3 Years      12.72     13.10       13.49     13.90      14.32
              4 Years      13.17     13.56       13.97     14.39      14.82
              5 Years      13.65     14.06       14.48     14.92      15.37
              6 Years      14.18     14.61       15.05     15.50      15.96
              7 Years      14.84     15.29       15.74     16.22      16.70
              8 Years      15.13     15.58       16.05     16.53      17.03
              9 Years      15.44     15.90       16.38     16.87      17.38
              10 Years     15.74     16.21       16.70     17.20      17.72
              11 Years     16.15     16.63       17.13     17.65      18.18
       Any Flight Dispatcher(s) currently on the Chautauqua Flight Dispatcher
       Seniority List whose pay falls below that of a any newly-hired Flight
       Dispatcher(s) that is (are) brought in above minimum salary levels
       outlined above, shall have his/her pay rate adjusted to that of the newly
       hired Flight Dispatcher (s).
       Employees with more than twenty (20) years of active service will receive
       premium pay as follows: $.50 per hour per year to a maximum of $2.50.
B.       Overtime
         1.       Overtime will be at time and a half (1.5 times a Flight
                  Dispatcher's applicable hourly rate) when a Flight
                  Dispatcher's time worked (including vacation and sick time) is
                  in excess of eighty (80) hours within a single pay period.
         2.       In the event that the Company is unable to cover an open shift
                  with overtime, the Company reserves the right to assign the
                  shift to the most junior, available, qualified Flight
                  Dispatcher.
C.       Holiday Pay
         1.       Holidays eligible for holiday pay are those identified in the
                  most current Chautauqua Human Resources Policies and Benefits
                  Manual, dated 06Jun96.
                                       8
         2.       All Flight Dispatchers will receive eight (8) hours of
                  straight time pay on the holidays listed in paragraph C1 of
                  this Section.
         3.       Flight Dispatchers who work on the holidays designated above
                  will, in addition to the pay provided for in paragraph C2, be
                  compensated at the rate of 1.5 times their hourly rate for all
                  hours worked on the holiday.
D.       Override for Dispatch Coordinator
         1.       Effective on the date of signing, a Flight Dispatcher shall
                  receive an override of $.75 per hour while working the
                  Dispatch Coordinator position.
         2.       Effective on January 1, 2003, this override shall increase to
                  $1.25 per hour.
E.       On-The-Job Training Pay
         Flight Dispatchers who perform on-the-job training of new, unqualified
         Flight Dispatchers shall be compensated at a rate $.60 per hour higher
         than their current salary while performing such training.
F.       Check Dispatcher Qualification
         Effective on the date of signing, a Flight Dispatcher qualified as a
         Check Dispatcher shall receive an override of $.60 per hour while
         performing Flight Dispatcher competency checks.
                                       9
                                    SECTION 4
                           WORK SCHEDULES AND VACATION
A.       Work Schedules
         Work Schedules, designated as either fixed or relief, are based on days
         on and days off and are determined and planned by the Company in
         accordance with the provisions outlined below.
B.       Fixed Work Schedules
         1.       Work Cycles which are fixed in nature shall be composed of
                  four (4) consecutive workdays followed by three (3)
                  consecutive days off.
         2.       Workdays within a fixed work cycle shall be planned as ten
                  (10) hour shifts (inclusive of shift overlap).
         3.       For the purpose of bidding a fixed work cycle, a proposed Work
                  Schedule shall be published a minimum of forty-five (45) days
                  in advance of each calendar quarter for the following ninety
                  (90) days.
         4.       The awards of bid lines for the fixed Work Cycles shall be
                  posted a minimum of thirty (30) days before each calendar
                  quarter for the following ninety (90) days.
C.       Relief Work Schedules
         1.       Relief Work Schedules shall be composed of a mixture of
                  variable days on and variable days off, but shall not exceed
                  one-hundred and sixty (160) hours in a four week period and
                  the Company shall strive to create as many 4/3 work cycles as
                  possible.
         2.       In the event that operational requirements necessitate, the
                  company may, with fourteen (14) days prior notice, add a bid
                  line (or bid lines) that does not follow the basic work cycle
                  outlined in Section 4 (A). The basic work cycle and schedule
                  for this (these) line(s) shall be five (5) days of work, with
                  no shift scheduled for more than eight hours (8), followed by
                  two (2) days off.
         3.       For the purpose of bidding a relief Work Cycle, a proposed
                  Work Schedule shall be published a minimum of fourteen (14)
                  days in advance for the following calendar month.
         4.       The awards of bid lines for the relief Work Cycles shall be
                  posted a minimum of seven (7) days before the first day of the
                  following calendar month.
                                       10
D.       Training
         For the purposes of training only, a Flight Dispatcher working a fixed
         work cycle may be moved off his/her fixed rotation with a minimum of
         thirty (30) days notice.
E.       Ratio of Fixed and Relief Lines
         1.       A minimum of fifty (50) percent of the bid lines within the
                  department shall be fixed lines as outlined in this Section.
         2.       A maximum of fifty (50) percent of the bid lines within the
                  department may be relief lines as outlined in this Section.
F.       Schedule start time changes
         1.       In the event that operational requirements necessitate, such
                  as a permanent flight schedule change or charter operation,
                  the Company may, with seven (7) days prior notice, change the
                  start time of a shift by up to two hours.
         2.       Nothing in this Section will prevent the Company from changing
                  a Flight Dispatcher's Work Schedule to accommodate assigned
                  classroom training or specific familiarization flights
                  assigned by the Company. There must be a minimum ten (10) hour
                  break between training and other assignments.
         3.       Shift start times may be rotated as outlined in F. 1. above,
                  but there shall not be more than one change creating two
                  different shift start times within a five (5) day period. The
                  Company shall endeavor to publish consistent rotation of shift
                  start times for the work schedules developed for bidding and
                  the work schedules published. Such rotation is subject to
                  change by the Company in accordance with F. 1. above.
G.       Schedule Evaluation Meeting
         1.       A meeting between the Company and the Union shall be held on
                  or before March 1st, 2003, in order to evaluate the
                  flexibility and feasibility of revising the items contained in
                  Paragraphs A through D above.
         2.       Any change to such items must be agreed to by both the Company
                  and the Union and revised by Letter of Agreement.
H.       Extraordinary Circumstances
                                       11
         If, due to an extraordinary event, changes are necessary to the fixed
         or relief work schedules that have already been awarded, the Company
         will meet with the Union to seek input as to how best implement a
         re-bid.
I.       Vacation
         1.       Flight Dispatchers shall receive vacation in accordance with
                  the provisions of the Benefits Section of the Chautauqua Human
                  Resources Policies and Benefits Manual, dated 6/6/96. The
                  number of vacation hours shall not be reduced below those set
                  forth therein.
         2.       Vacations will be bid no later than the 15th day of the month
                  prior to each calendar quarter. Awards will be subject to
                  operational requirements and awarded in seniority order, as
                  reflected on the Chautauqua Flight Dispatcher Seniority List.
         3.       At the time vacations are bid, employees may defer four (4)
                  days annually of his/her vacation entitlement to be utilized
                  as single vacation days ("DAT"). Such days must be utilized
                  within the calendar year. Requests to utilize DAT days must be
                  made fifteen (15) days in advance of the required
                  publication/posting date of the monthly work schedule. DAT
                  awards will be subject to operational requirements and must be
                  taken after use of regular vacation bids.
         4.       Vacation days remaining but not yet used by the December 15th
                  bid of each year may be carried over to the next calendar
                  year, to a maximum carryover of 40 hours.
                                       12
                                    SECTION 5
                                    SENIORITY
A.  Chautauqua Flight Dispatcher Seniority List
Dispatch employees holding an Aircraft Dispatcher Certificate shall be placed on
the Chautauqua Flight Dispatcher Seniority List in order of their hire date as a
Flight Dispatcher. Should two (2) or more employees have the same seniority
date, they shall be placed on the Chautauqua Flight Dispatcher Seniority List in
order of their birth date with the oldest being listed first.
B.  Accrual
Seniority shall continue to accrue until such time as the employee separates
from the Company or as otherwise provided in this Agreement.
C.  Dispatch Management
Dispatch Management shall be listed on the Chautauqua Flight Dispatcher
Seniority List in order of their hire date into a Flight Dispatcher position.
D.  Management Seniority
Managers shall retain and continue to accrue seniority while in a managerial
position.
E.  Displacement Protection
No Flight Dispatcher on the Chautauqua Flight Dispatcher Seniority List shall be
displaced or furloughed as the result of any manager or supervisor returning to
a dispatch position.
F.  Managerial Exemption
Dispatch management shall not be entitled to utilize the provisions of Sections
12 or 13 of this Agreement. This shall apply to both discipline and contract
interpretation issues.
G.  Posting
The Company shall update and distribute the Chautauqua Flight Dispatcher
Seniority List annually to the Union and all Flight Dispatchers during January
of each year.
                                       13
                                    SECTION 6
                                    TRAINING
A.  Required Training
Flight Dispatchers may be assigned to attend training on their days off provided
that such training shall not result in a Flight Dispatcher being scheduled for
more than six (6) consecutive days. Pay for training accomplished on days off
shall be compensated at the overtime rate.B. Route Familiarization Flights
Route familiarization shall be accomplished on workdays if possible or, if on
days off, will be compensated at the overtime rate. The Company shall provide
hotel accommodations, when applicable, and paid expenses in accordance with
Company Policy.
C.  Dispatch Management
Flight Dispatchers assigned by the Company as a Check Dispatcher during a shift
shall receive additional compensation as set forth in Section 3E of this
Agreement.
                                       14
                                    SECTION 7
                                   SICK LEAVE
A.  Paid Sick Time
Flight Dispatchers shall receive paid sick time in accordance with the
provisions of the Chautauqua Human Resources Policies and Benefits Manual, Dated
06Jun96. The number of annual sick hours and the maximum sick bank hours shall
not be reduced below the levels set forth in the Human Resources Policies and
Benefits Manual, dated 06Jun96.
B.  Sick Pay Bank
The maximum six-hundred sixty (660) hour Sick Pay Bank may be accrued pursuant
to the table below. The maximum sick bank is divided into accounts of
three-hundred sixty (360) and three-hundred (300) hours. Only after accruing the
maximum three-hundred sixty hours (360) in the first account may an employee
begin accruing toward the maximum three-hundred (300) hours in the second
account. The three-hundred (300) hour account may be used only for major,
long-term illness or injury (i.e. longer than thirty (30) calendar days), and
then only after the three-hundred sixty (360) hour regular account has been
exhausted. Upon retirement, employees are entitled to be paid for all accrued
but unused Sick Pay Bank hours.
              Years of Service      Pay Period Accrual      Annual Accrual
            --------------------- ----------------------- -------------------
                                                         
                  1st Year              .92 Hours              24 Hours
                  2nd Year              1.54 Hours             40 Hours
                  3rd Year              1.85 Hours             48 Hours
                  4th Year              2.15 Hours             56 Hours
                  5th Year              2.77 Hours             72 Hours
                                       15
                                    SECTION 8
                                    PROBATION
A.  Probation
An employee shall be on probation for his/her first six (6) months of active
service with the Company as a Flight Dispatcher.
B.  Adjustments to Length
Time off due to sickness, injury, leave of absence, furlough or discipline will
not be counted toward completion of the active service requirement for
completion of an employee's probationary period.
C.  Applicability
A Flight Dispatcher on probation shall not be entitled to utilize the grievance
and/or System Board procedures of this Agreement for any disciplinary action,
including discharge. In any case, should a Flight Dispatcher on probation be
afforded a grievance or System Board hearing, by law or otherwise, the Company
shall not be required to prove "just cause" in any disciplinary or discharge
grievance or System Board hearing.
                                       16
                                    SECTION 9
                                LEAVE OF ABSENCE
A.  Leave of Absence
When requirements of service will permit, an employee hereunder may be granted a
leave of absence in accordance with Company policy, as stated in the Human
Resources Policies and Benefits Manual, dated 06Jun96.
                                       17
                                   SECTION 10
                                    BENEFITS
A.  Benefits
Flight Dispatchers shall be provided a minimum level of coverage as outlined in
the Health Benefits Section of the Chautauqua Human Resources Policies and
Benefits Manual, dated 6/6/96.
                                       18
                                   SECTION 11
                               FURLOUGH AND RECALL
A.  Involuntary Furlough
       1.     The Company shall notify the Union prior to official announcement
              and implementation of a furlough of Flight Dispatchers.
       2.     In the event of a furlough, Flight Dispatchers will be furloughed
              in inverse order of seniority from the Chautauqua Flight
              Dispatcher Seniority List.
       3.     The Company shall provide fifteen (15) days notification of
              furlough or pay in lieu thereof, except in case of emergency, act
              of God, or where there is no work because of a labor dispute, or
              other circumstances over which the Company has no control.
       4.     A furloughed Flight Dispatcher shall retain all seniority and
              longevity accrued prior to the time of furlough for a period not
              to exceed three (3) years. He/She shall continue to accrue
              seniority but not longevity while on furlough. At the time of
              furlough, Flight Dispatchers must provide the proper contact
              information to Flight Operations management.
       5.     A furloughed Flight Dispatcher shall retain medical coverage, as
              provided prior to furlough, for a period of sixty (60) days
              following the date of furlough. Flight Dispatchers with less than
              24 months of service at the time of furlough shall be responsible
              to pay the employer portion of the medical cost during the sixty
              (60) day period.
       6.     Flight Dispatchers on furlough for less than thirty (30) days
              shall continue to accrue longevity for benefit and pay purposes
              during the period on furlough.
       7.     Flight Dispatchers who remain on furlough at the end of three (3)
              years from the effective date of the furlough shall be released
              from employment with Chautauqua Airlines, and their names shall be
              deleted from the Chautauqua Flight Dispatcher Seniority List.
B.  Recall
       1.     The Company shall notify the Union prior to official announcement
              and implementation of a recall of Flight Dispatchers.
       2.     Flight Dispatchers shall be recalled in order of seniority from
              the Chautauqua Flight Dispatcher Seniority List.
                                       19
       3.     A written recall notice shall be sent to each Flight Dispatcher
              entitled to recall to the last address provided to the Company. A
              Flight Dispatcher shall be given fifteen (15) days from his/her
              receipt of the notice of recall to return to duty, and must notify
              Flight Operations within ten (10) days from the date of receipt of
              the written recall notice of his/her response to the recall on the
              date specified in the recall notice. Upon request, a recalled
              Flight Dispatcher shall have the fifteen (15) day period to report
              for duty extended for a period of up to an additional period of
              fifteen (15) days (i.e. to a maximum of 30 days from receipt of
              notice of recall) should the Flight Dispatcher need the additional
              time to relocate in order to resume his/her position as a
              Chautauqua Flight Dispatcher.
       4.     The Company shall make a reasonable effort to provide space
              available air transportation on Chautauqua aircraft to Flight
              Dispatchers being recalled.
       5.     If the Company is unable to contact a furloughed Flight Dispatcher
              for recall or if the Flight Dispatcher fails to notify the Company
              of his/her response by the deadline date, the Company will
              consider the Flight Dispatcher to have voluntarily resigned
              his/her employment with Chautauqua Airlines, Inc.
       6.     Flight Dispatchers on furlough shall retain recall rights for up
              to three (3) years from the date of furlough and thereafter shall
              be released from full-time employment with Chautauqua Airlines,
              Inc.
▇.       ▇▇▇▇▇▇▇▇▇
       1.     In the event of a reduction in force or when the Company decides
              to close a station, Flight Dispatchers at that station, with at
              least one (1) year of service as a Flight Dispatcher, who decide
              not to transfer to another station will receive eighty (80) hours
              of severance pay, at the employee's current hourly rate.
       2.     In addition to the eighty (80) hours outlined in A. above, Flight
              Dispatchers shall receive additional hours of severance pay in
              accordance with the schedule below:
                  Yrs. of Service   Number of Additional Hrs. for Each Yr of Service
                  ---------------   ------------------------------------------------
                                                  
                  For Years 1-10                     Eight (8) Hours
                  For Years 11-15                    Sixteen (16) Hours
                  For Years 15+                      Twenty-Four (24) Hours
                                       20
                                   SECTION 12
                              GRIEVANCE PROCEDURES
       A.     A grievance is defined as a claim or dispute by an employee or
              group of employees covered by this Agreement concerning the
              interpretation and/or application of the Agreement or disciplinary
              or discharge action taken against the employee.
       B.     Grievances Other Than Those Involving Discipline and Discharge
              PRE-GRIEVANCE DISCUSSION
              Any employee covered by this Agreement who believes that he/she
              has a grievance concerning the meaning or application of the terms
              of the Agreement shall, within fifteen (15) days after the
              employee has, or reasonably should have had, knowledge of the
              matter giving rise to the grievance, request an informal
              discussion with the Dispatch Manager, or his/her designee to
              attempt to resolve the dispute. The employee shall present his/her
              grievance in person. The Dispatch Manager, or designee, shall meet
              with the employee within ten (10) days of receiving a request for
              a discussion. The employee is permitted to have present a Union
              representative of his/her choice at the meeting.
              STEP 1
              Should the result of the pre-grievance discussion be
              unsatisfactory to the employee or should the discussion fail to
              take place within the ten day period, the employee may file a
              grievance in writing to the Director of System Operations Control.
              Such grievance shall be filed within ten (10) days of the
              pre-grievance discussion deadline. The written grievance shall
              include a statement of the facts of the grievance and list the
              section(s) of the Agreement that relate to the dispute. The
              Director of System Operations Control, or designee (a person other
              than the person who conducted the pre-grievance discussion), shall
              investigate the grievance and provide a written response within
              fifteen (15) days of receipt of the grievance. Should the employee
              find the decision of the Director of System Operations Control, or
              designee, unsatisfactory, the grievance may be appealed to Step 2.
              The appeal to Step 2 shall be made in writing within thirty (30)
              days of the employee's receipt of the Step 1 decision.
              STEP 2
              Representatives for the Union and the Company shall meet once each
              calendar
                                       21
              quarter to discuss and attempt to resolve all grievances
              appealed to Step 2. All resolutions of grievances at Step 2
              shall be final and not subject to further appeal. Should the
              Union and Company representatives be unable to reach agreement
              on a resolution to a grievance, the Union may appeal the
              grievance to the Chautauqua Dispatchers' System Board of
              Adjustment within sixty (60) days of the Step 2 meeting in
              accordance with the procedures set forth in Section 15 of the
              Agreement.
       C.     Grievances Involving Discipline and Discharge
              STEP 1
              All actions by the Company concerning the discipline or discharge
              of an employee covered by this Agreement shall be confirmed in
              writing to the employee with a copy of such written confirmation
              supplied to the Union. An employee may, within five (5) days of
              receipt of written confirmation of the discipline or discharge
              file an appeal of the Company's action with the Director of System
              Operations Control. The Director of System Operations Control, or
              designee, shall investigate the facts related to the discipline or
              discharge and render a written decision to the employee with a
              copy to the Union within fifteen (15) days of receipt of the
              appeal. Should the decision of the Director of System Operations
              Control, or designee, be unsatisfactory to the employee, the
              dispute may be appealed by the employee to Step 2. The appeal to
              Step 2 shall be made in writing within fifteen (15) days of the
              employee's receipt of the Step I decision.
              STEP 2
              Representatives for the Union and the Company shall meet once each
              calendar quarter to discuss and attempt to resolve all grievances
              appealed to Step 2. All resolutions of grievances at Step 2 shall
              be final and not subject to further appeal. Should the Union and
              Company representatives be unable to reach agreement on a
              resolution to a grievance, the Union may appeal the grievance to
              the Chautauqua Dispatchers' System Board of Adjustment within
              sixty (60) days of the Step 2 meeting in accordance with the
              procedures set forth in Section 15 of the Agreement.
D. General
     1.    All written communication required by this Section shall be either
           delivered in person, with a signature and date confirming receipt, or
           shall be sent by certified mail with a return receipt.
     2.    The Company shall inform an employee in advance of any meeting with
           such employee that may result in discipline or discharge. Nothing
           herein shall be construed to restrict the right of an employee
           covered by this Agreement to have
                                       22
            a Union Representative present during any meeting concerning
            discipline or discharge.
     3.     All "days" as referred to in this Section are calendar days.
     4.     The time limits specified herein may be extended by mutual agreement
            between the Company and the Union.
                                       23
                                   SECTION 13
                         SYSTEM BOARD OF ADJUSTMENT
       A.     Establishment and Purpose
              In compliance with Section 204, Title 11, of the Railway Labor
              Act, as amended, there is hereby established a System Board of
              Adjustment for the purpose of adjusting and deciding disputes
              which may arise under the terms of this Agreement and which are
              properly submitted to it. This board shall be known as the
              Chautauqua Dispatchers' System Board of Adjustment (hereinafter
              referred to as the "Board").
       B.     Composition of the Board
              1.    The Board shall consist of one (1) member appointed by the
                    Company and one (1) member appointed by the Union. A third
                    member shall be added to the Board to serve as a neutral
                    referee for the purpose of hearing an arbitration conducted
                    pursuant to this Section. The Company and the Union shall
                    advise each other in writing of the name, position, address
                    and phone number of their initial appointments to the Board
                    and any subsequent replacement appointments.
              2.    A Chairperson and Vice Chairperson of the Board will be
                    selected from the Board members. The office of Chairperson
                    shall alternate yearly between the Company Board member and
                    the Union Board member, with the Chairperson position being
                    held by the Union-appointed Board member in even-numbered
                    years. Whenever the position of Chairperson is filled by a
                    Company-appointed Board member, the position of Vice
                    Chairperson shall be filled by the Union-appointed Board
                    member and vice versa.
              3.    Whenever the Board is convened to hear an arbitration, the
                    Company and Union may elect to appoint an alternate to serve
                    as a Board member for the arbitration.
              4.     The appointment of a neutral referee shall be by mutual
                     agreement between the parties from the panel described in
                     paragraph G below or, if the parties are unable to reach
                     agreement, by the alternate strike method whereby each
                     party shall alternately strike the name of a panel member
                     with the last remaining panel member being the neutral
                     referee for the subject arbitration.
       C. Jurisdiction of the Board
                                       24
              The Board shall have jurisdiction over and shall consider all
              disputes properly submitted to it that are covered under the terms
              of this Agreement and that arise through grievance out of disputed
              interpretations or applications of this Agreement or that involve
              discipline or discharge. The jurisdiction shall not extend to
              proposed changes in hours of employment, rates of compensation, or
              working conditions nor shall the Board have the authority to alter
              the express terms of this Agreement.
       D.     Submission of Disputes
              Disputes properly submitted to the Board shall be addressed to the
              Chairperson with copies to the Vice Chairperson and the Vice
              President-Flight Operations. The written appeal shall include:
              o The grievant's name and address,
              o A statement of the question at issue,
              o A summary of the facts giving rise to the grievance,
              o A statement setting forth the position of the grievant,
              o A statement setting forth the position of the Company,
              o The relief sought, and
              o A copy of the Step 2 decision.
       E.     Convening the Board
              The Board will docket a grievance for an arbitration at the
              earliest date of availability for the selected arbitrator but not
              earlier than thirty (30) days from the date of filing with the
              Board Chairperson unless the parties mutually agree to an earlier
              date. Arbitrations involving the discharge of an employee shall be
              docketed for hearing within ninety (90) days from the date of
              filing with the Board Chairperson unless the parties mutually
              agree to a later date.
       F.     Decisions of the Board
              Decisions of the Board shall be by a majority vote and shall be
              final and binding on all parties.
       G.     Neutral Referees
                                       25
              1.    The Company and the Union shall select a panel of nine (9)
                    neutral referees (arbitrators) who will serve as the third
                    member of the Board for the purpose of conducting
                    arbitrations. The selection of the panel shall be by mutual
                    agreement between the Company and the Union. If the parties
                    are unable, within sixty (60) days from the signing of this
                    Agreement, to agree on a full panel, the Chairperson and
                    Vice Chairperson of the Board shall mutually petition the
                    National Mediation Board and/or the American Arbitration
                    Association for the names of three arbitrators for each
                    unfilled position on the panel. Upon receipt of the names,
                    the Company and the Union shall attempt to mutually agree on
                    a member from each group of three names. In the event the
                    parties are unable to mutually agree within ten (10)
                    business days of receipt of the names, each remaining open
                    position shall be filled utilizing the alternate strike
                    method with each group of three names. The last remaining
                    name in each group shall fill the applicable open position
                    on the panel.
              2.    Once the panel is established, the Company and the Union may
                    mutually agree to change the membership of the panel at any
                    time. Further, either the Company or the Union may
                    unilaterally remove a member from the panel, provided the
                    panel member is not serving as the neutral referee for an
                    arbitration that has commenced. The Company or the Union may
                    not exercise a unilateral removal more often than once in
                    any six (6) month period.
       H.     Board Records
              The Board shall maintain a complete record of all matters properly
              submitted to it and of all findings and decisions made by it. The
              aforementioned "complete record" does not necessarily include a
              stenographic transcript of all testimony of all witnesses who
              appear before the Board.
       I.     Hearings
              1.    Arbitration hearings shall be conducted in Indianapolis,
                    Indiana unless the Company and the Union mutually agree to
                    an alternate location.
              2.    The parties should attempt to agree on a statement of issue
                    to present to the Board prior to the commencement of the
                    hearing. Should they be unable to agree, both parties shall
                    submit their version of a statement of issue and shall
                    provide the other party no later than the day prior to the
                                       26
                    arbitration with a copy of the statement of issue they
                    intend to submit to the Board.
              3.     The parties should utilize joint exhibits whenever
                     possible.
       J.     General
              1.    All members of the Board shall be free to discharge their
                    duties in an independent manner and witnesses shall be free
                    to testify without fear of recrimination by either of the
                    parties.
              2.    Each party will assume the expenses of its Board member, or
                    alternate, and its own witnesses.
              3.    When it is mutually agreed that a stenographic transcript is
                    to be made of a hearing, one-half the costs shall be borne
                    equally by each party. Should one of the parties have
                    stenographic transcript made, that party shall pay the
                    complete cost of the transcript. The other party shall,
                    however, be provided with a copy of the transcript upon
                    request by paying one-half of the costs.
              4.    Costs associated with a hearing (e.g. hearing room rental,
                    the arbitrator's fees and expenses) shall be borne equally
                    by the Company and the Union.
                                       27
                                   SECTION 14
                                 UNION SECURITY
A.       Conditions
     1.  Each employee now or hereafter employed as a Flight Dispatcher under
         this Agreement shall, as a condition of continued employment in such
         work, within sixty (60) days following the beginning of such employment
         or the effective date of this Section, whichever is later, become a
         member of, and thereafter maintain membership in good standing (as
         herein defined) in the Union, except as provided otherwise herein. Such
         condition shall not apply with respect to any employee to whom such
         membership is not available upon the same terms and conditions as are
         generally applicable to any other member of his/her classification, or
         with respect to any employee to whom membership is denied or terminated
         for any reason other than the failure of the employee to tender the
         dues uniformly required of other members of his/her classification as a
         condition of acquiring or retaining membership.
     2.  The condition of payment shall be met if the amount due is tendered to
         the Treasurer of the Union in person or is mailed to him/her within the
         prescribed time limits.
     3.  For the purpose of this Section, "membership in good standing in the
         Union" shall consist of the payment by the employee, not later than the
         last day of the second following calendar month, of dues for each
         calendar month, initiation fees and assessments (not including fines
         and penalties), which are uniformly required of his/her classification
         as a condition of acquiring or retaining membership.
     4.  The employee may have his/her monthly membership dues deducted from
         his/her earnings as provided in paragraph B1 of this Section, or he/she
         may pay his/her membership dues directly to the Union. Initiation fees
         must be paid directly to the Union.
     5.  Any employee who fails to voluntarily acquire and maintain membership
         in the Union shall not be required, as a condition of continued
         employment, to become a member of the Union as set out in this section.
         Such employee shall be required, beginning sixty (60) says following
         the beginning of employment as a Flight Dispatcher or the effective
         date of this Section, whichever is later, to pay the Union each month a
         service charge equal to the Union's regular and usual dues. Any such
         employee who, subsequent to the effective date of this Section and
         during the term of this Agreement, joins the Union, must thereafter
         maintain his/her membership in the Union as provided in this Section.
                                       28
     6.  Notwithstanding any other provisions contained in this Agreement, if
         any person is transferred or promoted to a position in which he/she is
         not covered by this Agreement, the provisions of this Section shall be
         inoperative as to such employee. This paragraph shall not apply to an
         employee who is transferred or promoted on a "Temporary" or "Acting"
         basis.
     7.  When any person holding seniority under this Agreement returns to a
         position covered by this Agreement from furlough, leave of absence,
         military leave, or a position in which he/she was not covered by this
         Agreement, the appropriate provisions of this Section shall, at time of
         return, apply in the same manner as if he/she had been actively
         employed in such position on the effective date of this Section.
     8.  When an employee becomes delinquent by not meeting the requirements of
         this Section for "membership in good standing in the Union," or
         paragraph 5 above, the following procedure shall be observed.
         (a)      The Treasurer of the Union shall notify the employee by
                  certified mail, return receipt requested, copy to the
                  Company's Vice President-Flight Operations, that the employee
                  is delinquent in the payment of dues as specified herein and
                  accordingly is subject to discharge as an employee of the
                  Company. Such letter shall also notify the employee that
                  he/she make the required payments within thirty (30) calendar
                  days of the date of mailing of the notice or be subject to
                  discharge under the terms of this Agreement. If the notice
                  above is not received by the employee or is delayed in
                  reaching such employee as the result of the employee's failure
                  to keep both the Company and the Union informed as to his
                  correct mailing address, no extension in the time limit
                  specified in the original notice is required.
         (b)      Upon the expiration of the thirty (30) day period following
                  the mailing of the notice in subsection 8(a) above, if the
                  employee still remains delinquent the Treasurer of the Union
                  may certify in writing to the Company's Vice President-Flight
                  Operations that the employee has failed to make the required
                  payment within the thirty (30) day grace period and is,
                  therefore, to be discharged.
         (c)      Within fifteen (15) days after receipt by the Company of the
                  Union's certified notice in subsection 8(b) above that the
                  employee is to be discharged, the Company shall discharge the
                  employee from its services for failure to pay or to tender
                  dues or service charges as required under this Section.
     9.  Appeal
         (a)      If the employee discharged or to be discharged under this
                  Section contends that he/she is not properly subject to
                  discharge under the terms of this
                                       29
                  Section he/she may protest such action to the Chautauqua
                  Flight Dispatcher's System Board of Adjustment provided that
                  such protest in writing is mailed to the Board within (10)
                  days after the date the employee is notified of such action.
                  This protest shall be submitted in duplicate to the Chairman
                  of the System Board of Adjustment, with one copy to be mailed
                  of the Vice President-Flight Operations, at such address as
                  he/she may from time to time designate, and the other copy to
                  be mailed in care of the Treasurer of the Union. The letter to
                  the Chairman of the Board and both copies shall be sent by
                  registered mail, return receipt requested. In the event no
                  protest is so filed within the above time limits, the action
                  will be considered as proper and will be final and binding
                  upon all parties concerned. Within thirty (30) days of receipt
                  of such a protest, the System Board of Adjustment will meet
                  and consider the dispute. A representative of the Company, a
                  representative of the Union, and the employee affected will be
                  allowed to present to the Board all evidence and argument
                  pertinent to the issue. Prior to the expiration of the workday
                  following such Board meeting, the Board will issue either a
                  majority decision or a notice of deadlock. If a majority
                  decision is issued, it will be final and binding upon all
                  parties concerned. If a deadlock is reached, and if at the
                  time of the deadlock the Board cannot agree upon a neutral to
                  sit with the Board to decide the dispute, the Board will
                  immediately request the National Mediation Board to appoint a
                  neutral, and the Board will meet with him/her at the earliest
                  opportunity and decide the dispute. At the meeting the Board,
                  sitting with a neutral, a representative of the Company, a
                  representative of the Union, and the employee affected, will
                  be allowed to present to the Board all evidence and arguments
                  pertinent to the issue. A majority decision of the Board,
                  including the neutral, will be issued within thirty (30) days
                  after such meeting and will be final and binding upon all
                  parties concerned. The expenses and reasonable compensation of
                  the neutral selected as provided herein shall be borne equally
                  by the parties to this Agreement.
         (b)      The provisions of Section 12 shall not apply to disputes
                  arising under this Section, and the provisions of this
                  Agreement establishing a System Board of Adjustment shall
                  apply to such disputes except as they are superseded by the
                  above provisions relating to procedure for handling disputes.
         (c)      The effective date of an employee's discharge under this
                  Section will be held in abeyance during the time that a
                  dispute is unsettled as to whether or not the individual is
                  properly employed under the provisions of the Section. If a
                  decision is made that the employee should be discharged, the
                  discharge shall be effected the day following the issuance of
                  the decision. In the event a reduction in force occurs during
                  such time as an employee's status is being protested under the
                  provisions of this Section, such employees will considered as
                  having seniority under this Agreement for purposes of
                  effecting the reduction.
                                       30
10.      Time limits specified in this Section may be extended in individual
         cases only, and then only by written agreement between the Company and
         the Union.
11.      An employee discharged under the provisions of this Section shall be
         deemed to have been "discharged for just cause" within the meaning of
         the terms of this Agreement.
12.      All letters and notices provided for by this Section shall be sent by
         registered mail, return receipt requested. Such letters and notices or
         copies sent to the Union shall be addressed to the Treasurer of the
         Union at such address as he/she may from time to time designate. Such
         letters and notices or copies sent to the Company shall be addressed to
         the Company's Vice President-Flight Operations at such address as
         he/she may from time to time designate.
13.      Nothing in this Section shall require the Company to terminate the
         employment of any employee until the services of a qualified
         replacement are available except that the provisions of this paragraph
         will not permit the Company to retain an employee in its employment in
         excess of ninety (90) calendar days from the date of the Union's notice
         given pursuant to the paragraph A(8)(c) of this Section.
14.      For the purposes of this Section, when an employee is discharged or
         resigns and he/she returns more than twelve (12) months from the date
         of discharge or resignation, he/she will be considered as a new
         employee for purposes of this Agreement.
15.      Both the Union and the Company, or either of them, shall have the right
         at any time, to notify individual employees directly of any provisions
         of this Agreement.
16.      When new employees are hired or transferred into classifications
         covered by this Agreement the Company will furnish monthly to the Union
         the names, classification, point of employment and payroll register
         number of such new employees. The Company will furnish to the Union the
         names, present and previous classification, point of employment and
         payroll register number of all employees who may transfer out of
         classifications covered by this Agreement; in addition, the Company
         will furnish to the Union the names, location, payroll register number
         and status of employees covered by this Agreement who terminate their
         payroll status for any reason, such listing will be furnished monthly.
B.  DUES CHECK - OFF
1.       During the life of this Agreement the Company will deduct from the pay
         of each Flight Dispatcher and remit to the Union monthly membership
         dues or service charges uniformly levied in accordance with the Railway
         Labor Act, as amended, and the constitution and bylaws of the Union,
         provided such Flight Dispatcher voluntarily executes the agreed form,
         which is hereinafter included in this Agreement to be known as
         "check-off form," which shall be prepared and furnished
                                       31
         by the Union. The Company will not be required to deduct monthly
         membership dues from the pay of employees covered by this Agreement
         unless the Company has received a check-off form and has not received a
         notice of revocation thereof.
                          ASSIGNMENT AND AUTHORIZATION
                            FOR CHECK-OFF UNION DUES
                  TO CHAUTAUQUA AIRLINES
                  I, ___________, hereby assign to the Transport Workers
                  Union of America, AFL-CIO, Union dues from any wages earned
                  or to be earned by me as your employee and authorize and
                  direct you to deduct the sum of $___________ each month,
                  which are the monthly membership dues (or such monthly
                  membership dues as may hereinafter be established by the
                  Union as dues for employees in my present or future
                  classification under the Agreement upon notification to the
                  Company by the Treasurer of the Union) from one pay check
                  per month and to remit same to the Treasurer of the Union.
                  This assignment and authorization may be revoked by me in
                  writing after the expiration of one (1) year from this
                  date, or upon the termination date of the applicable
                  
collective bargaining agreement between CHAUTAUQUA
                  AIRLINES, and the Union in effect at the time this is
                  signed, whichever occurs sooner. This authorization and
                  direction is made subject to the provisions of the Railway
                  Labor Act, as amended, and in accordance with existing
                  Agreement between the Union and the Company.
                  Employee Payroll No.
                  Job Classification
                  Department Location
                  Date
                  Signature of Employee
                  Street Address
                  City and State
2.       When a Flight Dispatcher properly executes such check-off form, the
         Treasurer of the Union shall forward the original signed copy to the
         Company's Manager - Payroll. A check-off form must be completed in a
         legible manner or it will be returned to the Treasurer of the Union for
         correction. Any notice of revocation as provided for in this Section or
         the Railway Labor Act, as amended, must be in writing, signed by the
         employee and two copies delivered by registered or certified mail,
         addressed to the Treasurer of the Union. Dues deductions will be
         continued
                                       32
         until one (1) copy of such notice of revocation is received by the
         Company's Manager - Payroll, from the Treasurer of the Union. Check-off
         forms and notices received by the Company's Manager - Payroll will be
         stamp-dated on the date received and will constitute notice to the
         Company on the date received and not when mailed.
3.       When a check-off form, as specified herein, is received by the Manager
         - Payroll fifteen (15) days or more before the issuing date of the
         first bi-weekly paycheck of the month, deductions will commence with
         such paycheck and continue thereafter until revoked or canceled as
         provided in this Section. The Company will remit to the Union a check
         in payment of all dues collected as soon after the payday on which
         deductions were made, as practicable and within thirty (30) days. The
         Company remittance of Union membership dues to the office of the
         Treasurer of the Union will be accompanied by two (2) copies of a list
         for each location which includes (1) names, (2) employee register
         numbers and (3) individual amounts deducted.
4.       An employee who has executed a check-off form and who has been (1)
         transferred or promoted to a job not covered by this Agreement,
         (excluding transfers or promotions on a "Temporary" or "Acting" basis),
         (2) who has taken a leave of absence without pay, (3) who quits or
         resigns from the Company, (4) who is laid off, or is (5) otherwise
         terminated from the employ of the Company, shall be deemed to have
         automatically revoked his/her assignment as of the date of such action
         and if he/she (1) transfers back or returns to a job covered by this
         Agreement, (2) returns from leave of absence, (3) is rehired, (4) is
         recalled or (5) re-employed, further deductions of Union dues will be
         made only upon execution and receipt of another check-off form.
5.       Collection of initiation fees, as well as any back dues or service
         charges owed at the time of starting deductions for an employee,
         collection of dues or service charges missed because the employee's
         earnings were not sufficient to cover the payment of dues for a
         particular pay period, and collection of dues or service charges missed
         because of accidental errors in the accounting procedure, will be the
         responsibility of the Union and will not be the subject of payroll
         deduction. It will be the Union's responsibility to verify apparent
         errors with the individual Union member before the representative
         contacts the Company's Manager - Payroll.
6.       Deductions of membership dues shall be made from one (1) paycheck each
         month provided there is a balance in the paycheck sufficient to cover
         the amount after all other deductions authorized by the employee or
         required by law have been justified. In the event of termination of
         employment, there shall be no obligation of the Company to collect dues
         until all such other deductions (including money claims of the Company
         and the Credit Union) have been made, and such obligation to collect
         dues shall not extend beyond the pay period in which the employee's
         last day of work occurs.
                                       33
C.  General
1.       This Section shall be in force only so long as the Union continues as
         the recognized representative of the employees under this Agreement.
2.       The Company shall not be liable for any wages or other claims
         (including discharge) of any Flight Dispatcher which may result from
         action taken by the Company pursuant to a written order by an employee
         or an authorized Union representative under the terms of this Section.
3.       As used herein, the word "Union" means Local 540, and "Treasurer of the
         Union" means Treasurer of Local 540 where applicable.
                                       34
                                    ▇▇▇▇▇▇ ▇▇
                                     GENERAL
A.       The Company shall share the expense of providing each Flight Dispatcher
         with a bound, printed copy of this Agreement with the union.
B.       All orders to and requests from a Flight Dispatcher involving
         transfers, promotions, demotions, layoff, re-employment, leaves of
         absence, or anything affecting his/her pay or status, shall be writing.
C.       The Company will meet with the Union to review new technology that the
         Company may introduce that directly relates to the Flight Dispatcher
         position.
D.       For the term of this Agreement, neither the Union nor any employees
         represented by the Union will authorize, support or engage in any
         strikes, work stoppages, slowdowns, job actions (including any sympathy
         strike or refusal to cross picket lines established by other unions)
         directed against the Company. The Company reserves the right to
         discipline, up to and including discharge, any employee who violates
         any portion of this provision. Further, the Company shall not cause,
         permit, or engage in any lockout of its Flight Dispatchers during the
         term of this Agreement.
E.       Should any part hereof or any provisions herein contained be rendered
         invalid by reason of any existing or subsequently enacted legislation
         or act of any authorized agency of government or by any decree of a
         court of competent jurisdiction, such invalidation of such part or
         portion of this Agreement shall not invalidate the remaining portions
         thereof, and they shall remain in full force and effect. Upon the
         request of either party hereto, subsequent to any such invalidation,
         the Company and the Union shall meet to discuss whether any
         modifications to this Agreement are necessary.
F.       A Flight Dispatcher shall be permitted to attend any formal
         investigation of a Chautauqua aircraft incident or accident, as such
         terms are defined by the NTSB, in which a Flight Dispatcher is believed
         to be involved.
G.       The Company shall provide space for a Union bulletin board in the
         general work area of the Flight Dispatchers. Such bulletin board must
         be lockable and shall be for the exclusive use of the Union. Materials
         posted shall be limited to official Union business and shall not
         contain any editorial material contrary to the interests of the
         Company.
H.       Flight Dispatchers will be afforded travel benefits similar to those
         extended to other employee groups as established by company policy as
         may be amended by
                                       35
         the Company from time-to-time. Whenever the Company intends to modify
         its online employee travel policy it shall provide the Union thirty
         (30) days notice of the change. The Union will have an opportunity to
         comment on the change and such comments will be considered by the
         Company. The Company shall make available to Flight Dispatchers, each
         year, a list of carriers with which it has jumpseat agreements.
I.       Flight Dispatchers who at the time of retirement are covered by this
         Agreement shall receive retiree travel privileges in accordance with
         the Company's Employee Handbook.
J.       Flight Dispatchers who are furloughed/severed under the terms of this
         Agreement, as the result of a reduction in force will be granted, upon
         request, one (1) free round trip space available pass on Company
         aircraft for the purpose of seeking employment. Such pass may be to any
         point on the Company's system within the continental limits of the
         United States, to the extent permitted by law.
K.       In accordance with applicable law, there shall be no discrimination
         against Flight Dispatchers covered by this Agreement because of race,
         color, creed, national origin, religion, sex, age, handicap or
         disability, or veteran status (including Vietnam era veteran and
         special disabled veteran status).
L.       The Section Chairman or alternate designee performing official Union
         business shall be granted time off from work to a maximum aggregate of
         96 unpaid hours per calendar year. All time granted will be contingent
         upon there being adequate schedule coverage.
M.       The Company will continue providing for direct deposit (electronic
         transfer) of paychecks.
N.       Flight Dispatchers covered under this Agreement shall be given time off
         for jury duty as per applicable state law. Time off will be without pay
         unless the applicable state law changes.
O.       Flight Dispatchers shall be authorized to occupy cockpit jumpseats on
         Company aircraft in accordance with the provisions of the Company's
         General Operations Manual. Chautauqua Flight Dispatchers will have
         higher priority than pilots and dispatchers employed by other carriers.
P.       The Company will continue to provide the Flight Dispatchers with free
         parking at their work location.
Q.       Upon written request to the Dispatch Manager, a Flight Dispatcher's
         complete personnel file will be made available to him/her during
         regular business hours.
                                       36
R.       The Company will not use discipline letters more than three (3) years
         old during the grievance process involving a Flight Dispatcher.
S.       The Company will allow an opportunity for input from the Union
         regarding functionality and ergonomics before introducing new equipment
         or new furniture into the Dispatch Office, or before the Company
         relocates the Dispatch Office.
T.       No Flight Dispatcher covered under this Agreement shall be required to
         perform the duties of employees who are conducting a legal strike or
         other job action against the Company.
                                       37
                                   SECTION 16
                                    DURATION
This Agreement shall become effective upon signing and shall continue in full
force and effect through February 19, 2007 and shall renew itself for yearly
periods thereafter unless written notice of intended change is served in
accordance with Section 6, Title I, of the Railway Labor Act, as amended, by
either party hereto not sooner than one-hundred twenty (120) days but not less
than sixty (60) days prior to February 19, 2007 or a subsequent anniversary of
such date, unless the parties mutually agree otherwise.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement this 18th day
of February 2001.
For    CHAUTAUQUA, AIRLINES INC.         For    THE TRANSPORT WORKERS
                                         UNION OF AMERICA, AFL-CIO
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇                     By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
   ---------------------------------        ---------------------------------
   ▇▇▇▇▇ ▇▇▇▇▇▇                             ▇▇▇▇▇ ▇▇▇▇▇▇
   Vice President,                          TWU Local 540,
         Flight Operations                        President
                                       38
                               LETTER OF AGREEMENT
                                     between
                            CHAUTAUQUA AIRLINES, INC.
                                       and
                             THE FLIGHT DISPATCHERS
                                in the service of
                            CHAUTAUQUA AIRLINES, INC.
                                as represented by
                             TRANSPORT WORKERS UNION
                               OF AMERICA, AFL-CIO
                                    OVERTIME
The letter shall serve as a temporary agreement between the parties above to
provide interim relief while new dispatchers are being trained.
     1.  During the month of September 2000, Flight Dispatcher and Dispatch
         Coordinator shifts worked on overtime shall be paid at the rate of time
         and one half, with an additional stipend of $60.00 per day.
     2.  If, in the event that a staffing situation continues to exist at the
         end of September 2000, the Union and the Company shall meet to discuss
         an extension.
AGREED AND ACCEPTED:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇                             /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------           ---------------------------------
By:  ▇▇▇▇▇ ▇▇▇▇▇▇                            ▇▇▇▇▇ ▇▇▇▇▇▇
President                                    Vice President, Flight Operations
Transport Workers Union, Local 540           Chautauqua Airlines, Inc.
                                       39
                               LETTER OF AGREEMENT
                                     between
                            CHAUTAUQUA AIRLINES, INC.
                                       and
                             THE FLIGHT DISPATCHERS
                                in the service of
                            CHAUTAUQUA AIRLINES, INC.
                                as represented by
                             TRANSPORT WORKERS UNION
                               OF AMERICA, AFL-CIO
                               COMPENSATION SCALE
The letter shall serve as an agreement between the parties mentioned above as to
the minimum base rates of pay for the Flight Dispatchers of Chautauqua Airlines,
Inc. that will go into effect on February 19, 2006.
                                 Longevity      Effective
                                                 2/19/06
                             -------------------------------
                                               
                                 Hire date        12.93
                                 6 Months         13.29
                                  1 Year          13.53
                               1 1/2 Years        13.82
                                  2 Years         14.20
                                  3 Years         14.75
                                  4 Years         15.27
                                  5 Years         15.83
                                  6 Years         16.44
                                  7 Years         17.20
                                  8 Years         17.54
                                  9 Years         17.90
                                 10 Years         18.25
                                 11 Years         18.73
AGREED AND ACCEPTED:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇                           /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------        -----------------------------------
By:  ▇▇▇▇▇ ▇▇▇▇▇▇                          ▇▇▇▇▇ ▇▇▇▇▇▇
President                                  Vice President, Flight Operations
Transport Workers Union, Local 540         Chautauqua Airlines, Inc.
                                       40
                               LETTER OF AGREEMENT
                                     between
                            CHAUTAUQUA AIRLINES, INC.
                                       and
                             THE FLIGHT DISPATCHERS
                                in the service of
                            CHAUTAUQUA AIRLINES, INC.
                                as represented by
                             TRANSPORT WORKERS UNION
                               OF AMERICA, AFL-CIO
                              FILLING OF VACANCIES
This Letter shall serve as an agreement between the parties mentioned for the
policies to be followed in the event that Flight Dispatcher vacancies need to be
filled.
A.   Filling of Vacant Work Schedules
     1.  A Permanent Vacancy on a fixed or rotating Work Schedule shall be
         filled by awarding the bid of the most senior Flight Dispatcher who had
         bid to move to the open Work Schedule. Any fixed or rotating Work
         Schedule opened by the award of such bid shall be filled by the most
         senior Relief Dispatcher who desires to move to the open fixed or
         rotating Work Schedule. Should there be no bids and should no Relief
         Dispatcher wish to move to the open fixed or rotating Work Schedule,
         the Company may assign the most junior qualified Relief Dispatcher to
         the open Work Schedule.
     2.  A vacancy that is expected to last less than sixty (60) days shall be
         considered a temporary vacancy and will be filled using Relief
         Dispatchers.
     3.  The selection of Flight Dispatchers to fill Special Assignment Work
         Schedules shall be the sole decision of the Company from among those
         Flight Dispatchers who have indicated their desire for the Special
         Assignment. Should no Flight Dispatcher express an interest for a
         particular Special Assignment and the Company deems it necessary to
         fill the Special Assignment, the most junior qualified Flight
         Dispatcher may be assigned.
AGREED AND ACCEPTED:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇                            /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------          -----------------------------------
By:  ▇▇▇▇▇ ▇▇▇▇▇▇                           By:  ▇▇▇▇▇ ▇▇▇▇▇▇
President                                   Vice President, Flight Operations
Transport Workers Union, Local 540          Chautauqua Airlines, Inc.
                                       41