VANGUARD AIRLINES INC \DE\
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>0005.txt
<TEXT>

                         AGREEMENT

                          between

                  VANGUARD AIRLINES,INC.

                          and the

                          PILOTS

                            of

                 VANGUARD AIRLINES,INC.

                   as represented by the

          VANGUARD AIRLINES PILOTS ASSOCIATION

                Effective:  June 1, 2000

<PAGE>

                    TABLE OF CONTENTS
Section

1    Recognition and Purpose of Agreement
2    Definitions
3    General
4    Seniority
5    Compensation
6    Scheduling
7    Filling of Vacancies and Reduction in Force
8    Travel Expenses
9    Moving Expenses
10   Vacations
11   Sick Leave
12   Leaves of Absence
13   Insurance
14   Grievances
15   System Board of Adjustment
16   Retirement
17   Physical Standards
18   Hours of Service
19   Furlough and Recall
20   Training
21   Association Business
22   Management Rights
23   Duration

Letters of Agreement

1.   Copies From Personnel Files
2.   Reserve Minimum Bid Period Guarantee
3.   Signing Bonus
4.   Net Profit Bonus
5.   Stock Option Grant
6.   Implementation

Appendix
Seniority List

<PAGE>

SECTION 1  RECOGNITION AND PURPOSE OF AGREEMENT

A.   In accordance with and to the extent
required by Certification Number R-6655, dated March
9,1999, by the National Mediation Board, the
Vanguard Airlines, Inc. (the "Company")
recognizes the Vanguard Airlines Pilots
Association (the "Association") as the sole
collective bargaining representative of the
pilots employed by the Company for the
purposes of the Railway Labor Act, as
amended.

B.   Purpose of Agreement

The purpose of this Agreement is to establish
the working relationship between the
Association and the Company and the terms and
conditions of employment for pilots; to
provide for orderly collective bargaining
relations between the Association and the Company and a
method for the disposition of grievances, to
provide for the operation of the Company
under methods that will further the safety of
air transportation, the efficiency of
operation and the continued employment of all
pilots under reasonable working conditions
and proper compensation.  It is recognized to
be the duty of the Association, the Company
and the pilots to cooperate for the
attainment of these purposes.

C.   Sole Agreement

This Agreement supersedes all existing or
previously executed agreements between the
Company and the Association or any other
labor organization or individual with respect
to the rates of pay, rules, or working
conditions covered by this Agreement in
accordance with the provisions of the Railway
Labor Act, as amended.  Any and all
subsequent modifications to this Agreement
will be reduced to writing, properly executed
by the authorized representatives of each
party, and become a part of this Agreement.

D.   Successorship

As a condition of any sale, transfer, or
assignment of the Company, the Company will
require any successor, purchaser, assignee,
or transferee of the Company to assume and be
bound by the Agreement.

E.   Mergers And Acquisitions

1.   Nothing in this Agreement will prevent
the Company from acquiring, establishing or
merging with any other carrier. If the
Company enters into an agreement to acquire
another air carrier or entity, it will notify
the Association in writing as soon as
relevant proprietary, confidentiality or
legal concerns permit.

<PAGE>

2.   Integration Of Seniority Lists
If the Company acquires or is acquired by
another air carrier and the acquisition
affects the seniority rights of pilots and
the surviving air carrier determines to
operate the air carriers as a "single
carrier," provisions will be made for the
integration of seniority lists in a fair and
equitable manner as set forth below.

a.   Negotiations

The method of integration will be determined
through direct negotiations between
representatives designated by the
Association, the Company, the acquiring
carrier, if applicable, and  representatives
of the pilots from the acquired or acquiring
air carrier.

b.   Arbitration

If negotiations to integrate the seniority
lists are not successfully concluded, the
matter will be referred to binding
arbitration pursuant to Sections 3 and 13 of
the Allegheny-Mohawk LPPs.

c.   Fence Agreement

The Association, the Company, the acquiring
carrier, if applicable, and representatives
of the pilots from the acquired or acquiring
air carrier will formulate a fence agreement
prior to an integration of the seniority lists.
Such fence agreement will provide that the pilots
of the Company and the pilots of the acquired
or acquiring carrier will each operate
pursuant to their collective bargaining
agreement or terms and conditions of
employment with their respective seniority
lists until the operations are merged.  These
discussions shall not be pursuant to Section
6 of the Railway Labor Act, and reaching an
agreement shall not be a prerequisite for
closing, or any other aspect, of the
transaction or operations pursuant to the
transaction.

<PAGE>

d.   No System Flush

Implementation of an integrated seniority
list or a fence agreement will not result in
a system flush, i.e., a system bid will not
be automatically triggered by the
implementation of the integrated system
seniority list or the fence agreement.

F.   The Company may assign or contract out
flying if such conduct is necessary to
accomplish the needs of the service and the
Company does not have sufficient aircraft or
pilots, or appropriately trained pilots,
available to perform the flying assigned or
contracted out.  Flying performed by another
carrier whereby the other carrier transports
passengers pursuant to a code-share agreement
or a marketing agreement is permitted by this
Agreement and there will be no contractual
restrictions on such flying or on any other
flying performed pursuant to any other
marketing or alliance agreement or
arrangement.

G.   No Strike Commitment

There will be no lockout, strike, sympathy
strike, slowdown, or other organized job
action during the term of this Agreement or
during Section 6 negotiations for an amended
agreement.  Nothing in this Agreement will
preclude the Company, or the Association, in
its discretion, from seeking judicial relief
with respect to any illegal self help,
strike, sympathy strike or other job action.

<PAGE>

SECTION 2 DEFINITIONS

A.   "ACTIVE SERVICE" means a period of time
when a pilot is on pay status, and during the
first thirty (30) days of personal leave,
military leave and family leave, furlough and
while receiving pay in lieu of notice.

B.   "AIRCRAFT TYPE" means any variation of a
particular model of aircraft and related
models so long as the related model requires
no transition training.

C.   "ASSOCIATION" means the Vanguard
Airlines Pilots Association.

D.   "AVAILABLE" means, with respect to a
pilot, ready to perform flight duty as
scheduled or assigned.  Examples of
unavailability include furlough, unpaid leave
of absence or other inactive status.  A pilot
on paid sick leave or vacation is not
unavailable.

E.   "BID PERIOD" means the period from the
first day of,to and including the last day of, each
calendar month of the year, except that
January, February and March will each be
considered a thirty (30) day month through
the addition of January 31st and March 1st to
the month of February.  Leap year will make
February a thirty-one (31) day month.

F.   "BLOCK TO BLOCK" means that period of
time beginning when an aircraft first moves from the ramp
blocks under its own power or by push back
for the purpose of flight and ending when the
aircraft comes to rest at the next point of
landing or returns to the ramp.

G.   "BUILDUP LINE" means a line that is
blank when posted for bid and subsequently to which are
added trips and days off and posted for
secondary bid by pilots who were awarded a
buildup line on the initial bid.

H.   "CAPTAIN" means a pilot who is in
command of the aircraft and its crew while on-duty and who
is responsible for the manipulation of, or
who manipulates, the controls of an aircraft
including taxiing, takeoff and landing of
such aircraft, who is properly qualified and
designated by the Company to serve and who
holds a currently effective airman's
certificate authorizing him to serve as such
pilot.

I.   "CATEGORY" means a combination of a
pilot's status and aircraft type (e.g., Captain B-737-XXX).

J.   "COMPANY" means Vanguard Airlines, Inc.

<PAGE>

K.   "CURRENTLY QUALIFIED" means qualified to
perform Part 121 flying in a category, including
recency of experience requirements.

L.   "DATE OF HIRE" means the first day a
pilot is placed on the Company payroll incident to his most
recent continuous employment as a pilot.

M.   "DEADHEAD" means the transport by air or
surface vehicle of a pilot from one point to another
pursuant to and under the direction of
Company orders.

N.   "DOMICILE" means a geographical location
designated by the Company at which pilots may be based.

O.   "FIRST OFFICER" means a pilot who is
designated second in command of the aircraft and its
crew while onduty and who is responsible for
the manipulation of, or who manipulates, the
controls of an aircraft, including taxiing,
takeoff and landing of such aircraft, who is
properly qualified and designated by the
Company to serve and who holds a currently
effective airman's certificate authorizing
him to serve as such pilot.

P.   "JUNIOR AVAILABLE" means the least
senior available pilot who can be contacted and would be legal
to accept an assignment pursuant to Sections
6.K.3.b.(5)-(6) that would not conflict with
another scheduled assignment.

Q.   "JUNIOR ASSIGNMENT" means an involuntary
assignment to fly on a scheduled day off pursuant to
Sections 6.K.3.b.(5)-(6).

R.   "LINE" means a regular, buildup or reserve line.

S.   "LINE VALUE" means the scheduled unit value of a
pilot's line.

T.   "LONGEVITY" means a length of time beginning on a
pilot's date of hire and accrued for active
service as provided in this Agreement, except
for a pilot who was previously, but continuously, employed by the
Company in another capacity, in which case
his longevity date for purposes of benefits
accrual, but not pay, will be his earliest
date of hire minus any appropriate periods of
non-active service.

U.   "ON CALL PERIOD" means the time during which a pilot
on reserve must be contactable for the purpose of receiving an assignment.

V.   "OPEN TIME" means flying that is unassigned.

<PAGE>

W.   "PILOT" means an employee covered by this Agreement
whose name appears on the Vanguard Airline Pilots Association Seniority List.

X.   "POSITION" means a combination of a pilot's category and domicile.

Y.   "REGULAR LINE" means a line containing trips and scheduled days off.

Z.   "RELEASE TIME" means the time that a pilot is released from
duty for a legal rest break. This time will be fifteen (15) minutes
following the block in of the last flight in a duty period, or if
the pilot is required to reposition an aircraft or perform other
duties, release time will be computed from the time the duties are complete.

AA.  "REPORT TIME" means the later of the
time a pilot is scheduled to report for duty
or when the pilot actually reports for duty.
Report time shall be scheduled for sixty (60)
minutes prior to flight departure at domicile
(forty-five (45) minutes at layover
stations).

BB.  "RESCHEDULE" means a change to a pilot's schedule, which
may include, e.g., the addition and/or deletion of flight assignments.

CC.  "RESERVE LINE" means a line containing days off and days of reserve duty.

DD.  "RESERVE PERIOD" means one or more consecutive days of reserve.

EE.  "SENIORITY" means a length of time beginning on a pilot's date of hire,
established, accrued and retained as a pilot in accordance with this Agreement.

FF.  "STATUS" means captain or first officer.

GG.  "SUPERVISORY PILOT" means a pilot
designated by the Company who is responsible
for managing pilots and administering
Company policy.

HH.  "TRAINING PILOT" means a pilot selected
by the Company to serve in a training and/or
checking function, e.g., line check airman,
proficiency check airman and pilots serving
as ground instructors.

II.  "TRIP" means a flight or group of
flights in a duty period(s).

<PAGE>

JJ.  "TURN" means an additional assignment
on a day when a pilot has performed flight
duty that is scheduled to depart after the
pilot was scheduled to have been released
after completing his previously assigned
flight duty.

KK.  "UNIT" means the first 244 statute
miles between airports according to the CAB
book of airport to airport mileage.  Every
forty miles thereafter equals one-tenth of a
unit.

LL.  "VACANCY" means an open position, in
excess of the number of pilots already in
that position, as determined by the Company.

<PAGE>

SECTION 3 GENERAL

A.   Gender

Wherever pilots are referred to in this
Agreement in either the masculine or feminine
gender, it shall be understood to mean both
male and female pilots, as may be
appropriate.


B.   Non-Discrimination


There shall be no discrimination by either
party against any pilot covered by this
Agreement because of age, race, sex, color,
religion, disability or national origin.


C.   Hold Harmless


The Company will indemnify, defend, and hold
harmless each of the FAA licensed pilots in
the employ of the Company, and the personal
estates of such pilot personnel from and
against any and all liabilities, losses,
damages, claims, suits, judgments and all
expenses (including reasonable attorneys'
fees) arising therefrom or related thereto
for personal injury or death, or damage to
property of any person and or entity
whomsoever, resulting from or arising out of
any act or omission of such pilot personnel
in the course and scope of such pilot's
employment, provided that such pilot was not
impaired by alcohol or drugs at the time of
the alleged act or omission and further
provided that the alleged act or omission was
neither expected nor intended by the pilot.
The pilot will cooperate fully with the
Company, its insurers and any attorneys
retained to represent any of them in the
defense of any claims covered hereby.  The
Company will have the right to select any
attorney(s) retained pursuant to this
paragraph and will have the right to direct
and control the defense of any matter covered
by this paragraph.


D.   New Aircraft Type


1.   Should the Company place into revenue
service aircraft other than the aircraft for which
rates of pay are specified in this Agreement,
the Association and the Company will meet
ninety (90) days, if possible, but no later
than sixty (60) days before the aircraft is
scheduled to be placed in revenue service for
the purpose of negotiating rates of pay for such
aircraft.

<PAGE>

2.   If no agreement has been reached by the
ninetieth (90th) day after the date the aircraft is
placed in revenue service, the parties will
submit the issue to an arbitrator for final
and binding arbitration.

a.  The partie will mutually agree
upon the selection of an arbitrator.  If
mutual agreement is not possible, the
arbitrator will be selected from the list of
arbitrators contained in Section 15 by
alternately striking names until one (1)
remains.  The parties will determine the
order of striking by the toss of a coin. The
winner of the coin toss will have the choice
of striking first or second.

b.   The arbitration will be held at the
earliest possible date consistent with the
arbitrator's schedule.  Fees and expenses of
the arbitrator, as well as costs of the
hearing room and the stenographic report,
will be shared equally by the parties.

c.   Closing arguments may be made
in lieu of post hearing briefs, provided that
no party will be precluded from filing a post
hearing brief.  The arbitrator's decision
containing the pay scales and subsequent
periodic increases, if any, for the aircraft
for the duration of the Agreement shall be
issued within sixty (60) days following the
submission of any post hearing brief.

3.   Time limits may be extended by the
mutual agreement of the parties.

4.   Should the Company place into revenue service
aircraft other than the aircraft for which
rates are specified in this agreement the
pilots will, upon qualification, begin flying
and continue to fly the aircraft.  Rates of
pay will be retroactive to the first day the
aircraft was placed into revenue service.

5.   The arbitrator's decision shall be based upon an
industry standard comprised of similarly
situated carriers and other relevant factors
as presented by the Company and the
Association.

E.   The Company and the Association will
share the cost of reproduction of this Agreement.

F.   Pilots will be entitled to the same pass
policy as prescribed for all employees as set forth in
the Company's employee manual, as amended
from time to time.

G.   Should any provision of this Agreement
be declared illegal by any court of competent
jurisdiction, such provision will immediately
become null and void, leaving the remainder
of the Agreement in full force and effect,
and the parties would attempt to negotiate a
substitute provision.

<PAGE>

H.   Personnel Files

1.   A pilot will be given access to his personnel
file during office hours with reasonable
notice.

2.   Before placing an item of a
derogatory nature in a pilot's personnel file, the pilot will
be provided with a copy of such item and will
be required to initial the file copy of such
item.  A pilot who disputes the contents of
an item placed in his personnel file may
provide a written, signed and dated response
to such item for placement in his personnel
file provided that he submits such item to
the Company no later than the date on which a
grievance would be required to be filed over
the contents of the item to which he is
responding.

3.   If there has been no intervening
incident of discipline, the Company will not use a
derogatory item contained in a pilot's
personnel file in an arbitration after a
period of two (2) years.  Upon request by the
pilot or the Association, the derogatory item
will be removed from the pilot's personnel
file after two (2) years if there has not
been any intervening incident of discipline,
consistent with legal obligations.  This
paragraph does not apply to training records
or to former pilots.

I.  Parking at Domiciles

The Company will provide parking at a pilot's domicile.

J.   Uniforms

1.   Pilots will wear the uniform in
accordance with the Flight Operations Procedures Manual as
changed from time to time by the Company.

2.   The Company will discuss proposed
changes to the uniform with the Association before
implementing the changes.

3.   The cost of a pilot's initial
uniform from a designated vendor may be payroll deducted at
the pilot's election.  A pilot desiring to
have such payroll deduction will execute an
appropriate authorization form.

<PAGE>

4.   The Basic Uniform will consist of
two pair of trousers, two shirts, one jacket and one tie.
If the Company initiates a required change to
the Basic Uniform, the Company will pay the
cost of such new required uniform items
unless the Company provides a reasonable
period to phase in the change.

K.   The Association Chairman, or his
designee, will meet with the Vice President-
Operations, or his designee, at least twice
yearly, or by mutual agreement, to discuss
matters of mutual interest.

L.   Missing, Internment, Prisoner or Hostage
of War and Hijacking

     1.   Compensation

A pilot, who while acting in the course and
scope of his employment, becomes
involuntarily missing, is interned or held
hostage through no fault of his own will be
paid his minimum bid period guarantee, minus
applicable deductions.  If a pilot is
incarcerated, payments will continue until
released or until proof of death is
established in fact, or until there is
reasonable presumption of death.  If a pilot
is missing, payments will continue until
proof of death is established in fact, or
until there is reasonable presumption of
death, to a maximum of thirty-six (36)
months.  The minimum bid period guarantee
will be paid to the beneficiary or
beneficiaries designated in writing by the
pilot as set forth below.

2.   Benefits, Seniority and Longevity Accrual

A Pilot will accrue benefits, seniority and
longevity during a period in which he is
receiving payments pursuant to paragraph 1.,
above.

3.   Direction Of Payments

Payments owed to a pilot pursuant to
paragraph 1., above, will be disbursed by the
Company in accordance with written direction
from the pilot.  The Company will require
each pilot to execute and deliver to the
Company such written direction.  Any payments
due a pilot pursuant to paragraph 1., above,
that are not covered by a written direction
will be held by the Company for such pilot
and in the event of his death will be paid to
the legal representative of his estate.

4.   Payments made by the Company in good faith
pursuant to this section will relieve the
Company of making any further payments with
respect to such pilot.

5.   Form For Payment Direction

The direction will be in substantially the following form:

<PAGE>

     TO:  Vanguard Airlines, Inc.

You are hereby directed to pay all
compensation due me under the terms of the
collective bargaining agreement between
Vanguard Airlines, Inc. and the Vanguard
Airlines Pilots Association, while missing,
or resulting from death or any other
condition that makes direct payment to me
impossible under the Agreement, as follows:

1.   ---- percent to [name]  ----------------
[address] -----------------------------------
as long as living,  and thereafter to [name]
-------[address] ----------------------------
------as long as living.

2.   ----- percent to[name]  ----------------
[address] -----------------------------------
as long as living,  and thereafter to [name]
------------------[address] -----------------
--------------as long as living.

The balance, if any, and any amounts accrued
after the death of all persons named in the
above designation will be held for me, or in
the event of my death before receipt thereof,
will be paid to the legal representative of
my estate.

This direction may be modified from time to
time by letter signed by the undersigned, and
any such modification will become effective
upon receipt of such
letter by the Company.

Payments made by the Company pursuant to this
direction will fully relieve the Company from
the obligation of making any other payment
with respect thereto.

The undersigned pilot is responsible for
ensuring that an up-todate address is kept on
file with the Company for the designated
beneficiaries identified above.

<PAGE>

--------------------        ----------------------
Pilot Name (Print)          Witness Name (Print)


----------------------       ---------------
Signature                    Signature


--------------------        ---------------
Date                        Date

<PAGE>

SECTION 4  SENIORITY

A.   Commencement, Accrual and Retention

1.   The seniority and longevity of a pilot
shall accrue from his date of hire, as defined in
Section 2.L. An employee of the Company who
transfers to a pilot position will retain his
Company longevity for purposes other than pay
from his most recent hire date with the
Company.

2.   When two or more pilots have the
same date of hire, their relative rank on the seniority
list shall be determined by the last four (4)
digits of their social security number
(highest social security number equals first
placement on list).  When two or more pilots
who have the same date of hire also have the
same last four digits, their relative
seniority position shall be determined by
drawing lots.

3.  Once a pilot has established a
relative seniority placement on the seniority
list in accordance with this Agreement, he
shall not lose that relative placement,
except as provided in this Agreement.

4.   When a junior pilot is upgraded
before a senior pilot, the senior pilot shall retain his
relative position on the seniority list.

5.   A pilot shall forfeit all
employment and seniority rights and his name shall be
removed from the seniority list under the
following conditions:

a.   He resigns or retires;

b.   He is discharged;

c.   He declines recall or fails to
notify the Company of his intent to return to
work from furlough in accordance with Section
19; or

d.   He fails to return to work at the
expiration of a leave of absence in
accordance with Section  12.

6.   Transfer To Supervisory Or Other Position

a.   A pilot who transfers to a
supervisory or other position in the Flight
Operations Department will retain and
continue to accrue seniority and longevity.

<PAGE>

b.   A pilot who transfers to a
position in the Company outside of the Flight
Operations Department will retain but not
accrue seniority and longevity for pay
purposes.  Such pilot will continue to accrue
longevity for purposes other than pay.

c.   If a pilot returns to line
flying, such return shall be coordinated with
the Vice PresidentOperations, including the
timing of his return.  The Company will not
be required to run a training class solely to
coordinate such return.

B.   Seniority List

The seniority list in effect on the date of
execution of this Agreement is attached
hereto as an Appendix.  The seniority list
will contain the names of all pilots entitled
to seniority, whether active or inactive,
their relative rank and their date of hire.
An updated list will be posted no later than
January 2 of each year.

C.   Protests

1.   Any alleged error or omission
affecting a pilot's seniority on any list on
which his name first appears must be
protested by him in writing to the Vice
President-Operations within sixty (60) days
of the posting of such initial or changed
list.  A pilot shall be responsible for
monitoring any list(s). A pilot making no
protest within this time may not thereafter
protest the same alleged error or omission on
any subsequent list.

2.   A pilot on furlough or leave of
absence on the day a seniority list is posted shall have
sixty (60) days from return to service to
protest his relative seniority position in
accordance with Section C.1., above.

D.   Probation Period

1.   A pilot shall be on a probationary
status with the Company beginning on his date of hire and
ending when he achieves fifteen (15) months
of active service.  If a pilot who has
achieved at least twelve (12) months of
active service successfully completes his
first annual proficiency check, he will be
deemed to have completed his probationary
period.  A pilot who completes a successful
upgrade to captain will be deemed to have
completed his probationary period.

2.   A pilot who is on probation will not have
access to the grievance or system board of
adjustment provisions of this Agreement with
respect to discipline or discharge issues,
nor will such access be allowed on his
behalf.

<PAGE>

SECTION 5 COMPENSATION

A    The following rates of pay will be
credited for each unit of flight pay earned by pilots qualified
in aircraft with ninety (90) through and
including one hundred and fifty (150) seats
in accordance with their longevity and the
Agreement:

     1.   Captains

      Effective   Effective Effective  Effective Effective
Year  06/01/00    06/01/01  06/01/02   06/01/03  6/01/04

1     50.00       51.25     52.53      53.84     55.19
2     56.00       57.40     58.84      60.31     61.81
3     60.50       62.01     63.56      65.15     66.78
4     63.00       64.58     66.19      67.84     69.54
5     66.80       68.47     70.18      71.94     73.73
6     71.90       73.70     75.54      77.43     79.36
7     75.00       76.88     78.80      80.77     82.79
8     80.50       82.51     84.58      86.69     88.86
9     85.50       87.64     89.83      92.07     94.38
10    88.00       90.20     92.46      94.77     97.14
11    91.00       93.28     95.61      98.00    100.45

    2.  First Officers

      Effective  Effective  Effective  Effective Effective
Year  06/01/00   06/01/01   06/01/02   06/01/03  6/01/04

1     27.50       28.05      28.61     29.18     29.77
2     30.25       30.86      31.47     32.10     32.74
3     33.50       34.17      34.85     35.55     36.26
4     36.75       37.49      38.23     39.00     39.78
5     39.78       40.58      41.39     42.21     43.06

B.   Minimum Bid Period Guarantee

A pilot who is available for an entire bid
period will receive a minimum bid period
guarantee of seventy-five (75) units.  The
minimum bid period guarantee will be
prorated for periods of unavailability.

<PAGE>

C.   Training Pay

A pilot will be credited for each day of
training in an amount equal to the greater
of the value of scheduled trips missed or
three (3) units per day.  A pilot in
training for an entire bid period will
receive the minimum bid period guarantee.

D.   Reposition Pay

A pilot who is required to reposition an
aircraft will be credited with 0.5 units for
each such occurrence.  For purposes of this
Section, a reposition begins when an aircraft
first moves from the blocks under its own
power for purposes other than flight and ends
when the aircraft blocks in at its newly
relocated position.

E.   Holiday Pay

1.   For any duty day scheduled to begin or
end on New Years Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving or Christmas, a
pilot, other than a pilot on reserve, will be
credited with double the units actually flown
on the holiday or ten (10) units, whichever
is greater.  A pilot will receive holiday pay
only for the first duty period that touches a
given holiday.

2.   Trips for which a pilot would
otherwise be pay protected under this
Agreement will be pay protected on a holiday,
but the pay credit will not be doubled for
instances when the pilot does not actually
perform the scheduled or assigned flight
duty.

3.   A pilot on reserve on a holiday
will be credited for double the units
actually flown in the first reserve on call
period worked by that pilot that touches a
given holiday.

F.   Deadhead

1.   A pilot will be credited with one
(1) unit of flight pay credit for each two
(2) units of scheduled deadhead.

2.   A pilot will be credited with one
(1) unit of flight pay credit for each one
(1) unit of unscheduled deadhead.

3.   A pilot who deadheads in connection
with a reserve assignment will be credited
with one (1) unit of flight pay credit for
each two (2) units of deadhead.

<PAGE>

G.   Callout Pay

A pilot who is called to the airport to fly
but does not fly due to a Company error in
calling him out will be credited with one (1)
unit.

H.   Junior Assignment Pay

A pilot who is junior assigned in accordance
with Section 6.K.3.b.(5)-(6) will be credited
with one and one-half times his normal rate
of pay for all units junior assigned and
actually flown on his scheduled day off
pursuant to the junior assignment.

I.   Turn Pay

A pilot who is turned will be credited with
one and onehalf times his normal rate of pay
for all units actually flown pursuant to the
turn assignment.

J.   Airport Reserve

A pilot who is assigned to airport reserve
will be credited with the greater of four (4)
units for an eight (8) hour reserve on call
period (three (3) units for a six (6) hour
reserve on call period) or actual units
flown.

K.   Rescheduling and Cancellation

1.   A pilot, other than a reserve pilot,
whose trip is canceled will be handled as follows:

a.   If the trip was canceled due
to circumstances within the control of the
Company (i.e. for marketing reasons) or, in
any event, within twenty-four (24) hours of
scheduled departure and the pilot has been
placed on reserve, assigned an alternative
trip or released from duty by the Company,
the pilot will be credited with the greater
of the original scheduled value of the
trip(s) or the actual value of the trip(s)
that he flies.

b.   If the pilot is assigned to
reserve, the reserve will commence two (2)
hours prior to the original scheduled report
time and end at the original scheduled duty
out time.  A pilot assigned to a trip after
being placed on reserve will not be assigned
a trip that commences after the original
scheduled duty out time.

<PAGE>

2.   An air return will be credited one
(1) unit of pay.  If the air return segment later
cancels, the pilot will be credited with the
greater of the pay credit pursuant to
paragraph K.1.a.b. or the pay credit for the
air return.

3.   A gate return will receive no pay credit.

4.   If there is an in-flight diversion, the pilot
will be credited with the unit value from the
city of origin to the diversion city plus the
unit value from the diversion city to the
destination.

5.   If a pilot must drop time due to a
Company assigned trip(s) that creates an
illegality, the pilot will be pay protected
provided that he flies all legal portions of
the trip(s).  Time lost as a result of
voluntary schedule changes by the pilot, such
as trades and picking up open time, will not
be pay protected.

L.   Line Check Airmen

A line check airman will be credited with an
additional ten percent (10) override.

M.   Proficiency Check Airmen

1.   A proficiency check airman who is
available for an entire bid period will receive a minimum
bid period guarantee of 94.5 units.  The
minimum bid period guarantee will be prorated
for periods of unavailability.

2.   A proficiency check airman will be
assigned by the Company to a schedule consisting of
sixteen days of work.  A proficiency check
airman who performs additional assigned work
on days other than the sixteen days assigned
by the Company will be paid for such work
above his guarantee.

N.   Duty Hour Pay

A pilot will be credited with the greater of
his flight pay credit for units flown in any
duty period or duty hour pay equal to one
unit for every two hours of duty in the duty
period.

<PAGE>

SECTION 6 SCHEDULING

A.   Association Scheduling Committee
The Company and the Association Scheduling
Committee will meet periodically at the
request of the Scheduling Committee Chairman
or the Vice President- Operations to discuss
scheduling issues.

B.   Preparation of Bid Package

1.   Line Construction

a.   The Company will construct regular lines
and buildup/reserve lines.

b.   Regular lines shall contain
trips for an aircraft-type and domicile of the line being
constructed and days off.

c.   Buildup/reserve lines will be blank when posted.

d.   The Company may withhold up to five
percent (5%) of the available time for its own use (e.g.,
for training and for management flying).

2.   The bid package will contain the
following information:

a.   Date issued;

b.   Bidding deadlines;

c.   General information

(1)  Recurrent ground training information, including pilots
who are in their prior, grace or due month;

(2)  Awarded vacation by position and name;

(3)  Hotel information;

(4)  Crew Scheduling telephone number(s) and
designated fax number(s);

d.   The Company and the VAPA Scheduling Committee will
mutually agree upon other appropriate
information to be included in the bid
package.

<PAGE>

C.   Bidding of Lines

1.   Eligibility to Bid

a.   A line may be bid by a pilot who is
currently qualified and available to fly at least fifty percent
(50%) of the month.  A pilot who has
vacation for more than fifty percent
(50%) of a month may bid a line if he is
otherwise eligible to bid.

b.   A pilot who is not eligible to bid a
line pursuant to paragraph C.1.a., above,
shall, as soon as possible after becoming
available, coordinate his return to duty
with Crew Scheduling and will be assigned
a buildup or reserve line with prorated
minimum days off.

2.   A pilot will bid for a line on the
designated bid form.  Bid
forms shall be signed and submitted to
Crew Scheduling:

a.   By placement in designated containers.

b.   By faxing to a designated fax machine(s). The
Company shall not be responsible for fax errors or
problems.

c.   By hand delivery to Crew Scheduling.

d.   By electronic message, should that method be made available.

e.   By any other method agreed upon by the Company and the
Association Chairman.

3.   The burden of bidding will be solely upon the
pilot.If a pilot does not properly submit a bid
form or his bid form does not have
sufficient choices, he will be assigned a
line by the Company after all other
pilots have been awarded their lines.

4.   Line check airmen will bid a line with
other pilots. The first officer line associated with
the right seat of each line awarded to a
line check airman may not be awarded to
another pilot.  If the associated first
officer line is not awarded to another
pilot, it will be used for training or
will be placed into open time.

<PAGE>

D.   Initial Bid

1.   The Bid Package will be made available to
pilots by 1200 hours local time on the 8th of each
month.

2.   A pilot must bid by 1200 hours local time
on the 14th of each month.

3.   All lines shall be awarded in accordance
with pilot bids in seniority order.

4.   The results of the award shall be available
by 1200 hours local time on the 15th of each month.

E.   Transition Award

After the close of the initial bid, the
transition award will be completed as follows:

1.   Pilots with Month-to-Month Conflicts

A pilot whose schedule for the
current month conflicts with his schedule
for the ensuing month will have the trip,
or conflicting portions of the trip, in
the ensuing month dropped from his line
into open time.

2.   Pilots with Vacation
A pilot whose schedule for the ensuing
month conflicts with his vacation shall
have each trip(s) or portion(s) of a
trip(s) that conflicts with his vacation
dropped into open time.

3.   Pilots with Training

a.   A pilot in his prior, due
or grace month may be assigned to a
proficiency check and/or other recurrent
training schedule.  Any conflicting
trip(s) or portion(s) of a trip(s) will
be dropped into open time.

b.   A pilot whose schedule for
the ensuing month conflicts with training
shall have each trip(s), or portion(s) of
a trip(s), that conflicts with training
dropped into open time.

4.   Other Known Authorized Unavailability

A pilot whose schedule for the ensuing
month conflicts with any other known
authorized unavailability shall have
trip(s) or portions of trip(s) that
conflict with such unavailability dropped
into open time.

<PAGE>

5.   When making adjustments
pursuant to this paragraph E.
for FAR 121.471(a)(3) (30 in 7), Crew
Scheduling may drop a trip, or portion
thereof, in anticipation of such
regulatory conflict if the trip, or
portion thereof, schedules the pilot for
more than 27.5 hours, block-to-block, in
seven (7) consecutive calendar days.

6.   When making adjustments
pursuant to this paragraph E.
for FAR 121.471(a)(2) (100 in a month),
Crew Scheduling may drop a trip, or
portion thereof, in anticipation of such
regulatory conflict if the trip, or
portion thereof, schedules a pilot for
more than 97.5 hours, block-to-block, in
a calendar month.

7.   The completed transition award
will be made available by 1200 hours
local time on the 19th of each month.

8.   If a pilot's line value is
decreased below the original
posted value as a result of the
transition award, the Company may assign
additional flying to such pilot, but such
additional flying cannot result in more
than one (1) additional scheduled duty
day in the month for the affected pilot.

F.   Initial Open Time Trades

1.   Initial open time is the open
time that is available
after the construction of the regular
lines plus the time dropped in the
preparation of the transition award
pursuant to paragraph E., above, but not
including any open time that may be
withheld pursuant to paragraph B.1.d., above.

2.   The Company will post available initial
open time by 1200 hours local time on the 19th of each
month.

3.   Regular line holders may
request to trade with initial
open time by submitting a bid on the
designated form or by any other method
mutually agreed upon by the Company and
the Association Chairman.  Such request
must be submitted by 1200 hours local
time on the 22nd of each month.

4.   Initial open time trades will
not normally be granted
if the requested trade(s):

a.   reduces the pilot's line
value more than four (4) units.

b.   reduces the pilot's line
value below the minimum monthly
guarantee.

<PAGE>

c.   Increases the pilot's line value more than six (6) units.

d.   lowers the pilot's
scheduled number of duty days by more
than one (1).

5.   The limitations contained in
paragraph F.4., above, are
to be applied to the total net change for
all requested initial open time trades.
The limitations may be waived by the
Company.

6.   Initial open time
trades will be awarded in the following
order provided that the award of such
time does not conflict with FARs or any
other provision of this Agreement or, if
after July 1 in any calendar year, create
a projection to exceed annual flight time
limitations:

a.   Award additional flying to
bidders in seniority order whose total remaining
line value is lower than their original
line value.

b.   Award to remaining bidders in seniority order.

7.   When processing initial open
time affected by FAR
121.471(a)(3) (30 in 7), Crew Scheduling
may decline to award or assign initial
open time if such award or assignment
schedules a pilot for more than 27.5
hours, block-to-block, in seven (7)
consecutive calendar days.

8.   When processing initial open
time affected by FAR
121.471(a)(2) (100 in a month), Crew
Scheduling may decline to award or assign
initial open time if such award or
assignment schedules a pilot for more
than 97.5 hours, block-to-block, in a
calendar month.

     9.   Initial open time awards and
assignments will be made
available by 1200 hours local time on the
23rd of the month.

G.   Construction of Buildup and Reserve Lines

1.   Buildup lines shall be
constructed by adding trip(s) and days off.

2.   Reserve lines shall be
constructed containing periods
of availability and days off.

H.   Secondary Bid for Buildup/Reserve Lines

1.   The Company will post constructed buildup
and reserve lines for bid by pilots who were awarded
buildup/reserve lines in the initial bid
award by 1200 hours local time on the
23rd of the month.

<PAGE>

2.   Buildup/reserve line award
holders will submit a bid on
the designated form by 1200 hours local
time on the 25th of the month.

3.   The Company will award buildup
and reserve lines by
1200 hours local time on the 26th of the
month.

4.   The burden of bidding will be
solely upon the pilot.
If a pilot does not properly submit a bid
form or his bid form does not have
sufficient choices, he will be assigned a
line by the Company after all other
buildup and reserve pilots have been
awarded their lines.

I.   Initial Open Time Bid

1.   Concurrently with posting the
buildup/reserve lines for
bid, the Company will post available
initial open time, i.e., open time that
remains available after the construction
of the buildup and reserve lines, but not
including any open time that may be
withheld pursuant to paragraph B.1.d.,
above.

2.   Bids for initial open time will
be submitted on the
designated form by 1200 hours local time
on the 26th day of the month.

3.   The Company will award bids for
initial open time in seniority order.

4.   When processing initial open
time affected by FAR
121.471(a)(3) (30 in 7), Crew Scheduling
may decline to award initial open time if
such award schedules a pilot for more
than 27.5 hours, block-to-block, in seven
(7) consecutive calendar days.

5.   When processing initial open
time affected by FAR
121.471(a)(2) (100 in a month), Crew
Scheduling may decline to award initial
open time if such award schedules a pilot
for more than 97.5 hours, block-toblock,
in a calendar month.

6.   Initial open time bids will be
awarded provided that
the award of such time does not conflict
with FARs or any other provision of this
Agreement or, if after July 1 in any
calendar year, create a projection to
exceed annual flight time limitations.

7.   Awards for initial open time
will be made available by
1200 hours local time on the 28th day of
the month.

<PAGE>

 J.   Final Schedules

The Final Schedules shall be posted in
the crew lounge in each domicile and by
any other method mutually agreeable to
the Company and the Association Chairman.

K.   Open Time

1.   Posting and Bidding

a.   Open time shall include charters,
flying not included in the lines, flying
remaining uncovered and all additional
flying that becomes available throughout the month.

b.   The Company will post an open time
list by 0800 each day.

c.   A pilot desiring to pick up or trade
for specific open time trips posted for bid shall
submit a written bid on the designated
bid form.  A pilot who has submitted a
bid for open time may withdraw the bid at
any time before it is awarded if another
bid for that trip remains on file.

2.   The Company shall have discretion to
grant or deny a trade with open time.

3.   Bids to pick up open time shall
be awarded or assigned,
at the Company's discretion, as follows:

a.   At any time up to seventy-
two (72) hours before
the scheduled departure, a trip may be
awarded to a voluntary bidder.

b.   Within seventy-two (72)
hours before the scheduled
departure, the Company may:

(1)   assign the trip to a reserve pilot; or

(2)  assign the trip to a pilot by rescheduling him; or

(3)  Award the trip to any other pilot, on a firstcome, first-served
basis, who has volunteered for open time
within the seventy-two (72) hour limit;
or

(4)  Assign the trip to a supervisory pilot; or

<PAGE>

(5)  Assign the trip to the most junior available pilot in
position in domicile in reverse order of
seniority, except, if none are available,
then the most junior available captain in
that aircraft type in domicile; or

(6)  Assign the trip to
the most junior available pilot in
category system wide in reverse order of
seniority, except, if none are available,
then the most junior available captain in
that aircraft type in the system, or

(7)  Assign the trip for
use by the Training Department for OE
and/or other training purposes.

4.   When processing open time
affected by FAR 121.471(a)(3)
(30 in 7), Crew Scheduling may not award
or assign such open time if such award or
assignment schedules a pilot for more
than 27.5 hours, block-to-block, in seven
(7) consecutive calendar days.

5.   When processing open time affected
by 121.471 (a)(2) (100 in a month), Crew Scheduling may not
award or assign such open time if such
award or assignment schedules a pilot for
more than 97.5 hours, block-toblock, in a
calendar month.

L.   Mutual Trades

Mutual trades with other pilots for
trips, or portions of trips, days off, or
reserve days will be subject to the
following:

1.   Requests for mutual trades must be
submitted in writing to Crew Scheduling at least forty-
eight (48) hours prior to the
first scheduled departure of the trip or,
in the case of reserve day trades, at
least forty-eight (48) hours prior to the
beginning of the first reserve day
involved in the trade.

2.   Reserve days may be traded with
Company approval for an
equal number of reserve days (but not for
trips or portions thereof) provided that
the approval of such trade would not
diminish reserve coverage.

3.   Trades must not conflict with FARs,
or any other provisions
of this Agreement, or, if after July l in
any calendar year, create a projection to
exceed annual flight time limitations.

4.   When processing mutual trades
affected by FAR 121.471(a)(3) (30 in 7), Crew Scheduling
may decline to approve a trade if it
schedules a pilot for more than 27.5
hours, block-toblock, in seven (7)
consecutive calendar days.

<PAGE>

5.   When processing mutual trades
affected by FAR 121.471(a)(2)
(100 in a month), Crew Scheduling may
decline to approve a trade if it
schedules a pilot for more than 97.5
hours, block-to-block, in a calendar
month.

6.   Pilots in different domiciles may
trade trips. However, the
Company will not be required to assume
any of the costs associated with such
trades, such as transportation,
deadheading, lodging, etc.

     7.   A pilot is responsible for
his original trip or reserve
day until his trade request has been
approved. Trades are approved when the
pilot obtains confirmation from Crew
Scheduling.

8.   Trips traded do not have to be of
equal value. However, a
pilot who loses time because of a trip
trade shall have his guarantee adjusted downward by
the same amount.

9.   The Company may waive the limitations of
paragraphs L.1-6, above.

10.  The Company will not be
required to assume additional costs
associated with trades such as
transportation, deadheading, lodging,
etc.

M.   Rescheduling

1.   Pilots may be rescheduled to
meet the needs of the Company.

2.   If a regular or buildup pilot
has been removed from a
trip(s), or a portion of a trip(s), and
Crew Scheduling has no flight assignment
for the pilot, he may be placed on
reserve or released.  If placed on
reserve, the pilot's on call period will
end at his previously scheduled release
time, although if given a flight
assignment before his release, such
assignment may extend beyond his
previously scheduled release time.

N.   Reserve Duty

1.   Reserve Days Off

a.   Flying Into A Day Off

(1)  When a flight to
which a reserve pilot is scheduled,
rescheduled or assigned returns to his
domicile after 0300 local time on a day

<PAGE>

off, that day off will be moved to a
later reserve day in the month.  The
selection of the substitute day off will
be by mutual agreement between the pilot
and Crew Scheduling.

(2)  If there are no remaining reserve
days in the month, or if the pilot and
Crew Scheduling cannot agree upon a
substitute day off, the pilot will be
credited with 4.17 units in the current
month.

(3)  The original day off will become a
reserve day; i.e., the Company may
continue to use the reserve pilot (for a
flight assignment or as an on-call
reserve) and/or may place the pilot in
rest and assign an on-call period for
later in the day.

b.   The Company may move reserve days.

(1)  A pilot holding a reserve line may
designate in writing no later than 1200
hours local time on the 28th of the
preceding month a block of up to three
(3) consecutive days off that are not
subject to movement by the Company.

(2)  When the Company moves a day off,
the former day off must be either
immediately before or immediately after a
reserve period.

(3)  The selection of the substitute day
off will be by mutual agreement between
the pilot and Crew Scheduling.  If there
are no remaining reserve days in the
month, or if the pilot and Crew
Scheduling cannot agree upon a substitute
day off, the pilot will be credited with
4.17 units in the current month.

c.   A pilot holding a reserve line will
not be junior assigned pursuant to Sections 6.K.3.b.(5)-(6).

2.   Reserve Days On

a.   A reserve pilot may be assigned to
perform duty between 0001 on the first day of his
reserve period and ending at 2400 on the
last day of his reserve period.  A
reserve period is one or more
consecutive days of reserve.

<PAGE>

b.   Reserve duty day shall start at the
beginning of the assigned on-call period.

c.   A pilot may be assigned duty prior
to the end of his reserve
on-call duty period that will extend
beyond or commence after the end of his
reserve on-call duty period.

d.   The Company may reschedule
reserve duty periods.

3.   Call out

a.   Except for airport reserves, a pilot
on reserve will be notified of his assignment at
least two hours (2:00) before his
required report time (measured from the
initial call from Crew Scheduling), but a
reserve pilot will use his best efforts
to report earlier when requested.

b.   A pilot on reserve is
responsible for providing
Crew Scheduling with a telephone number
where he may be contacted.  Such number
may be a telephone, a pager or a cell
phone number.  The reserve pilot is
responsible for maintaining the telephone
or paging device in good operating order
and for being within contact range.

c.   Once Crew Scheduling
places a call to a reserve
pilot's contact number, the reserve pilot
shall call back no later than fifteen
(15) minutes after the call from Crew
Scheduling.  Such time shall be included
in the reserve pilot's minimum
notification time provided for in
paragraph N.3.a., above.

4.   A reserve pilot may bid for and be
awarded open time at the Company's discretion.

5.   Airport Reserve

a.   A pilot assigned to airport reserve
will be capable of performing an
immediate assignment at the assigned
airport.

b.   The period of airport
reserve will be either eight (8) or six (6) hours on call
per shift, at Company discretion.

c.   A pilot assigned to
airport reserve will begin his duty period at report.

d.   If a pilot assigned to airport reserve
is not assigned a trip during his on call
period, he will be released to rest at
the end of his on call period.  Once
assigned, a trip may begin or extend
beyond the airport reserve pilot's on
call period.

<PAGE>

6.   General

a.   A reserve who completes a duty
assignment before the end of his reserve
on-call period will remain subject to
call out until the end of his reserve on-
call period unless released by the
Company.

O.   Duplicate Trips

If two or more regular lineholders
are scheduled to fly the same trip on the
same day, the senior pilot will have the
choice of whether to remain on the trip,
unless the trip is scheduled to be flown
on a different aircraft-type.  The pilot
removed from the trip shall be placed on
reserve, assigned an alternate trip(s) or
released and will be credited with the
greater of the scheduled value of the
original trip, or what he flies.

P.   Displacements

When a pilot is displaced from his
trip(s) or portion thereof by a
supervisory or training pilot, or to
accommodate training, he will be placed
on reserve and will be credited with the
greater of the scheduled value of the
original trip(s) or with what he flies.
Any trip(s) assigned to such a pilot
while on reserve will not be scheduled on
a pilot's scheduled days off.

Q.   In unusual circumstances, if it is
necessary to make
substantial changes to some or all of the
awarded schedule, the Company will offer
to meet with the Association Chairman, or
his designated representative, to discuss
such changes.

R.   A pilot cannot pick up open time or
accept a trade that
conflicts with another assignment without
the express written agreement of the
Company.

<PAGE>

SECTION 7 FILLING OF VACANCIES AND REDUCTION IN FORCE

A.    Staffing
Staffing needs will be determined by the
Company and met through
a combination of permanent and temporary
positions.

B.  Permanent Positions

1.   A permanent position vacancy
shall be filled when a
position is anticipated to exist for more
than three (3) months.

2.   A permanent position shall be
awarded to each pilot who
is not on furlough.

C.   Temporary Positions

1.   A temporary position is a position
anticipated to exist for three (3) months or less.

2.   Temporary positions will be
identified in the monthly
bid package and shall be awarded in order
of seniority among available currently
qualified bidders.  The bid package shall
identify the positions from which bids
will be accepted.  If there are
insufficient available currently
qualified bidders, the temporary
positions will be assigned to available
currently qualified pilots in inverse
seniority order.  Should a temporary
position become available after the bid
package publication, but before the Final
Schedule, it may be filled by available
currently qualified reserve pilots in the
domicile and, if there are no available
currently qualified reserve pilots in the
domicile, then it may be filled by
available currently qualified reserve
pilots from another domicile.

3.   A pilot holding a temporary
position will bid a monthly
schedule in his temporary position in
accordance with his seniority.

4.   A pilot assigned to a temporary
position at a domicile
other than his permanent domicile, will
be paid per diem expenses in accordance
with Section 8.A.

5.   A pilot assigned to a temporary
position at a domicile
other than his permanent domicile will be
provided with lodging in accordance with
Section 8.B.

<PAGE>

D.   Standing Bid Form
     1.   A pilot shall have on file with
the Company a completed
standing bid form on which a pilot may
indicate his desired order of preference
for positions in descending order.  A
pilot may inspect his standing bid form
at any reasonable time during regular
office hours.

     2.   A pilot may change his standing
bid form at any time.
Changed forms shall be signed and dated
and submitted to the Chief Pilot's
Office.

     3.   If a pilot does not have a
standing bid form on file or
his standing bid form does not indicate
sufficient choices, he shall be
considered to be bidding for his current
position.  If his seniority no longer
entitles him to such position, the
Company may assign such pilot to a
position.

     4.   Standing bid forms are
effective upon
receipt by the
Company.  A pilot's standing bid form on
file shall be canceled when he submits a
new standing bid form.

E.     Position
Notices
     1.   Position Notices shall be
numbered
consecutively using
a numbering system indicating the year
and notice number, e.g., 99-01, 99-02,
etc.
2.   A Position Notice will remain posted
for at
least
fourteen (14) days and shall include the
following: a.  The number of vacancies
and/or reductions by
position.
b.   The anticipated effective date of
the position
and/or reduction.
          c.   A deadline date for bid
closing.
3.   A Position Notice may be cancelled
or amended at
any
time.
     4.   The Final Award Sheet shall be
posted no
later than ten
(10) days after the bid closing date.
5.   A Final Award may be cancelled at
any time.
6.   Where the need to fill a position or
for a
reduction is due to emergency, strikes,
acts of God or other causes beyond the
control of the Company, the time limits
set forth in this Section may be altered
as necessary by the Company.

<PAGE>

7.   A new hire pilot will be assigned a
position.
F.   Awarding Positions
     1.   The awarding of vacancies
and/or reductions
will be
determined from the standing bid forms on
file at the time of the closing, using
seniority or inverse seniority order as
applicable.
     2.   A pilot who cannot hold his
permanent
position is
considered displaced.  No pilot may be
displaced by a pilot who is junior to
him.  A displaced pilot, by order of
seniority, shall be afforded the
following options:
          a.   Captains and first
officers may
displace:
               (1)  the most junior pilot
in the same category in the system, or,
if unavailable;
               (2)  a more junior pilot
in the same status in another aircraft-
type in the current
domicile, or, if unavailable;
               (3)  the most junior pilot
in the same status in another aircraft-
type in the system.
          b.   Alternatively, captains
may displace:
               (1)  the most junior pilot
in a lower status in the same aircraft-
type in the same domicile or, if
unavailable;
               (2)  the most junior pilot
in a lower status in another aircraft-
type in the system.
               3.   Notwithstanding the
options provided in paragraph 2., above,
the Company may assign any displaced
pilot to a lower status in the same
aircraft-type, or into a status and
aircrafttype for which the pilot has
previously been initially qualified.  If
such assignment occurs, the pilot will be
paid according to the status and aircraft-
type to which his seniority
entitles him.
     4.   If there are insufficient
bidders, a vacant
position(s)
will be filled by assignment in inverse
seniority order.

<PAGE>

     5.   Training Freeze.

          a.   A pilot who is within
thirty (30) days of starting
initial, upgrade or transition training
will be frozen for eighteen (18) months
from initial qualification in his new
position, or, if he fails to successfully
complete the training, he will be
precluded from bidding for any other
position that requires training for
twenty-one (21) months from the date that
he is notified in writing that he is
removed from training.

          b.   The Company may waive a freeze.

    6.   Seniority notwithstanding, the
Company may:

          a.   Bypass a captain bidding
for a category with a lower hourly rate of pay.

          b.   Bypass a pilot for a
captain position and award it
in seniority order to a first officer who
was previously initially qualified in
such position but was displaced from it
within the immediately preceding six (6)
months, provided that the pilot has bid
for such position.

          c.   Bypass a pilot on leave of
absence unless such
pilot provides a written statement to the
Company at least five (5) days before
such position is awarded that he will
return from the leave of absence on or
before the date when any required
training commences for such position, or,
if no training is required, on or before
the position's effective date.

          d.   Bypass a first officer for
upgrade to captain who
does not meet the following minimum
requirements:

        (1)  ATP written passed.

        (2)  Current First Class Medical Certificate.

        (3)   1000 hours in type at the Company.

          e.   Bypass a first officer for
a position in the same
status in a different aircraft type.

          f.   If there are no
appropriate candidates for
upgrade, the Company may hire qualified
pilots for placement directly into a
captain vacancy. A pilot hired directly
into a captain vacancy will not be
awarded a first officer position if there
is a furloughed senior pilot who has not
been offered recall from furlough.

<PAGE>

          g.   The Company may waive the
requirements of Sections 7.F.6.a-e.

G.   Opening of Domiciles

     1.   The Company shall give at least
thirty (30) days notice
before opening a new domicile.

     2.   A pilot who is awarded or
assigned a permanent position
in a different domicile will be given at
least three (3) days from the date of the
posting of the Final Award Sheet in which
to report.

<PAGE>

SECTION 8  TRAVEL EXPENSES

A.   Per Diem

A pilot will receive a meal expense
allowance of $30.00 per overnight layover
that involves two duty periods separated
by a legal rest break away from domicile.
In addition, a pilot will receive a meal
expense allowance of $30.00 for a stand-
up overnight that includes a scheduled
sit time of six (6) or more hours at an
outstation.

B.   Lodging

1.   The Company will provide lodging at
all stations where
pilots overnight during line operations
for required rest away from their
domicile.  The Company will consider the
suggestions of the VAPA Hotel Committee
with respect to overnight lodging. The
Company will use the following guidelines
when selecting hotels. The parties
recognize that deviations from these
guidelines may occur.

     a.   Hotels will have interior
entrances to rooms;

     b.   Hotels will provide in-room
wake up services (phone and
clock);

     c.   Hotel rooms will be cleaned
daily, sheets changed with
every crew change, and will be free from
insects and rodents.  If not, another
room will be provided;

     d.   An ironing board and iron
will be available;

     e.   Pilots in the same crew will
be assigned rooms on the
same floor;

     f.   Food services will be located
within a reasonable proximity;

     g.   Hotels should have exercise
facilities on site or by
agreement with a local establishment;

     h.   Pilots will not be required
to leave a credit card to
get local phone service.  The Company
will use its best efforts to have local
telephone access charges waived by the
lodging provider.

2.   All additional charges for room
service, restaurant, pay
television, telephone toll charges and
other incidental expenses shall be the
responsibility of the pilot.  Such
charges shall be cleared when the pilot
checks out of the lodging.

3.   The Company will provide
transportation between the airport
and the lodging facility for pilots on
layover.

<PAGE>

SECTION 9  MOVING EXPENSES

A.   The Company will pay moving expenses
as set forth below when
a pilot is required by the Company to
move his principle residence to a new
domicile location.  Such requirement must
be stated in writing by the Vice
President-Operations.

B.   A pilot who is eligible for Company-
paid moving expenses may
elect to have his move paid from a
location other than the domicile from
which he is being transferred to any
location within seventy-five (75) miles
of the location to which the pilot
is required to move by the Company.
However, the Company's responsibility
shall not exceed the cost of moving the
pilot from his former domicile to the
location to which he is required to move.
This cost restriction will not apply to
pilots on the seniority list on the date
this Agreement is signed.

C.   The Company will not pay the moving
expenses for a new hire pilot to his initial
assignment or award unless the Company
requires the pilot to move his principle
residence to that location.

D.   In those circumstances stated above
where a pilot's move is at Company expense, the
following charges will be paid by the
Company.

1.   Transportation charges for up to,
but not exceeding,
13,500 pounds of personal household
goods.

2.   Transportation of two (2)
automobiles at the
rate of $.20 per mile by the most direct AAA
routing.

 3.   Meal expenses at the per diem rate set
forth above and reasonable lodging
expenses comparable to that used on
scheduled overnights while en route to
the new domicile and for up to three (3)
days following arrival at the new
domicile, or until arrival of household
effects, whichever comes first. One (1)
night en route shall be allowed by the
most direct AAA routing for each 400
miles, or portion thereof, in excess of
the first 400 miles.

E.   Moving expenses will be paid only
for eligible moves that occur within one hundred
eighty (180) days following the pilot's
required move to his new domicile.  It is
the pilot's responsibility to contact the
moving company approved and specified by
the Company.  If no moving company is
specified, the pilot must obtain two bids
from different carriers and submit them
to the Company for approval.  The pilot
is responsible for scheduling the move.
The pilot will not pay the carrier.
Credit arrangements will be made, and the
Company will be billed.  The pilot will
reimburse the Company for charges in
excess of covered charges.

<PAGE>

SECTION 10 VACATIONS

A.  Vacation Accrual

     1.   Vacation credit shall be
accrued and earned for months of active
service at the following rates in
accordance with a pilot's longevity:

               Years          Accrual
               1-5            1.167 days per month
               6+             1.75 days per month

     2.   Vacation will be taken in the
following calendar year.

3.   Vacation accrual is based only on
active service, unless otherwise stated.

     4.   For purposes of this Section,
fifteen (15) or more days of active service shall
constitute a full month of service.

B.   Vacation Pay

Vacation will be credited at the rate of
twenty (20) units per vacation week or
2.86 units per day, as appropriate.  A
pilot holding a reserve line when he
takes vacation will be credited with
twenty (20) units per vacation week or
2.86 units per day,
as appropriate, plus a prorated reserve
minimum bid period guarantee.

C.   The Bidding Process

               1.   No later than
October 1 of each year, the Company
will publish a list showing the
projected number of vacation days that
will be accrued by each pilot as of
December 31.  If a discrepancy is
noted, a pilot should notify the
Company in writing within fourteen (14)
days.

     2.   No later than October 15 of
each year, the Company will
post a vacation bid package, by
position, covering the ensuing calendar
year.  A vacation period will consist of
seven (7) days commencing on a Monday
and ending on a Sunday.

     3.   Each pilot shall bid the
number of days of vacation he
is projected to have accrued as of
December 31 of that year in seven (7)
day periods.   In order to be awarded
two consecutive vacation periods, a
pilot's seniority must be sufficient to
hold each period.

<PAGE>

     4.   Annual vacation bids will close
on November 15.  Pilot
vacation awards will be granted in
seniority order and with respect to the
position a pilot holds on November 1.
After awarding vacation bids, the
Company shall place all published, but
unawarded, periods, into open monthly
vacation.  Annual vacation bid awards
will be published on December 1.

     5.   A pilot who does not bid a
vacation or does not bid a
vacation period(s) he can hold will be
assigned a vacation period(s) by the
Company after all other vacation bids
have been awarded.

     6.   After the Company makes the
monthly final bid award,
the Company and a pilot may agree to
slide a pilot's vacation forward or
backward to integrate the pilot's awarded
vacation with his bid schedule.

     7.   The Company will remove trips
that conflict with a
pilot's vacation from a pilot's awarded
line.  The Company may remove partial
trips at the beginning or end of a
pilot's vacation.  The Company may
substitute a different trip(s) for trips
that affect the beginning or end of a
pilot's vacation, but such trip(s) cannot
interfere with the pilot's scheduled
day(s) off without the pilot's consent.

D.   Vacation Cancellation

     1.   Before any vacations are
canceled, the Company will ask
for volunteers who are willing to change
their vacation.  If there are not enough
volunteers, pilot vacations will be
canceled in reverse order of seniority by
status, equipment and domicile.

2.   If a pilot's vacation is canceled,
he will have the following choices:

a.   Choose a vacation period, in
seniority order, from vacation periods
available or made available in the
remainder of the same calendar year.

b.   If no vacation period is
available, the pilot may elect to have
the canceled vacation time added to his
next year's vacation or sell the vacation
back to the Company at the status he held
at the time the vacation was originally
scheduled to be taken.  A pilot who
elects to sell his vacation will be paid
over and above any other pay received for that
bid period.

<PAGE>

E.   Bid Changes

     1.   Position Changes

A pilot who changes position pursuant to
Section 7 will keep his annual vacation
award, provided the awarded period(s) is
available in open vacation in the new
position.  If the same period(s) is not
available in the new position, the pilot
shall bid for a vacation period(s) of his
choice from open vacation in the new
position during the remaining calendar
year.  If there is no open vacation in
his position the pilot may 1) carry over
the vacation to the next year, or 2)
receive vacation pay in lieu of
rescheduling or postponing such vacation.

     2.   Awarded or Assigned Training

a.   Training to Maintain Current
Qualification Training that is required
for the maintenance of a pilot's current
qualification (e.g., proficiency checks,
recurrent training or other required
special training) will not be scheduled
to conflict with a pilot's vacation.

b.   Training Other Than to Maintain
Current Qualification
If a pilot is scheduled for training (for
other than to maintain current
qualification) that conflicts with his
vacation, he shall rebid such vacation
from open vacation in his position,
unless he and the Company mutually agree
that he will take the vacation.
If there is no open vacation in his
position the pilot may, at his option, 1)
postpone the vacation to the next year,
or 2) receive vacation pay in lieu of
rescheduling such vacation.

3.   A pilot may request that the Company
buy back his vacation.

     4.   A pilot may request to carry
over some or all of his scheduled vacation.

F.   Vacation Trades

     1.   Vacation periods that become
available due to
resignations, terminations, leaves of
absence, position changes or trades with
open vacation will be placed in open
vacation and made available for bid or
trade by pilots in the same position
unless the Company anticipates that it
will be necessary to postpone vacations
in those periods.  A trade with open
vacation must include picking up an
available period(s) in the same calendar
year in exchange for the vacation period(s) placed in open
vacation.

<PAGE>

     2.   A pilot may not bid or trade
for a vacation period
that, if awarded, would create a conflict
with his previously scheduled training or
for a vacation period in which the
Company is postponing vacation for that
pilot's position.

     3.   Pilots in the same status,
equipment and domicile may
trade vacations with written notice to
Crew Scheduling.

     4.   Vacation trades must be
complete before the bid package
for any affected bid period is published.
Thereafter, vacation trades require the
agreement of the Company.

G.   General

     1.   A pilot who resigns with at
least (14) days notice,
retires, is discharged for just cause or
is furloughed, and the estates of
deceased pilots shall be paid for unused
earned and accrued vacation at his then-
current rate of pay.  A pilot who gives
fourteen (14) days notice of resignation
will be paid for unused vested and
accrued vacation provided he completes
his schedule as it existed on the date of
notice (i.e. he does not call in sick or
otherwise not be available on any day of
such period).  If such pilot calls in
sick or is otherwise unavailable during
his notice period, the value of the
flying that he fails to perform will be
deducted from his vacation payout.

<PAGE>

SECTION 11  SICK LEAVE

A.   Accrual

     1.   After a pilot has achieved six
(6) months of active
service as a pilot with the Company, he
will be credited with twenty (20) units
of sick leave credit. Thereafter, a pilot
will accrue 3.34 units of sick leave
credit on the first of each month for the
previous month's active service, provided
the pilot was available for at least
fifteen (15) days in that month.

     2.   The maximum sick leave accrual
will be two hundred and
twenty-five (225) units.

B.   Pay and Usage

     1.   A pilot who is unable to fly a
scheduled trip(s) as a
result of illness or injury will be
credited with the value of the trip(s)
missed on the day(s) that he was
unavailable because he was ill or injured
and will have the same value deducted
from his sick leave credit, beginning
with the second consecutive day of sick
leave.

     2.   A pilot who has a reserve day
who is unable to perform
assigned duty as a result of illness or
injury will be credited with    4.17
units and will have the same value
deducted from his
sick leave credit, beginning with the
second consecutive day of sick leave.

     3.   A pilot who does not bid a
line, or have a schedule for
a month, and who is ill or injured will
be credited for monthly guarantee and
have such hours deducted from his sick
leave credit.

     4.   A pilot who is unable to work
as a result of illness or
injury who does not have sick leave
credit or who exhausts sick leave credit
shall be transferred to a medical leave
of absence pursuant to Section 12.  A
pilot who takes leave for his illness or
injury under the Family and Medical Leave
Act after exhausting sick leave may be
required by the Company to use any
accrued vacation credit as permitted
under the Act.

     5.   A pilot who is able to return
to work from sick leave
shall notify Crew Scheduling of his
availability as soon as possible and
shall coordinate his return to duty with
Crew Scheduling.  Crew Scheduling will
return the pilot to his scheduled trip,
assign him another trip, place the pilot
on reserve or release the pilot until his
next scheduled trip.  If a pilot is
placed on reserve or assigned another
trip, neither the reserve on call period
nor the alternative trip will be
scheduled to extend into a scheduled day
off without the pilot's consent.

<PAGE>

     6.   If a pilot is returned to his
original trip, he shall
be credited pursuant to Section 5 for the
remainder of the trip. If he is assigned
to a different trip, he shall be credited
for the new trip pursuant to Section 5.
If he is assigned to reserve, he shall be
paid pursuant to Section 5.  If the pilot
is not returned to his original trip,
assigned a different trip, or assigned to
reserve, he shall be on day(s) off.

C.   General

     1.   A pilot who is unable to report
for an assignment as a
result of illness or injury, shall call
Crew Scheduling as soon as possible.  If
a pilot reasonably believes that he will
be unable to report for an early morning
departure, he should, whenever possible,
contact Crew Scheduling the night before.

     2.   If a pilot calls in sick within
two (2) hours of his
scheduled report time, he may be deemed
to be a no show for such assignment.

     3.   A pilot who is on sick leave
shall call in daily.  This
requirement may be waived by the Chief
Pilot on an individual basis.

     4.   A pilot on sick or medical
leave is not eligible for
non-revenue travel unless approved in
writing by the Chief Pilot.

     5.   A pilot who does not complete
his assigned or awarded
schedule during the notice of resignation
period required by Section 10.G.1. as a
result of illness or injury will not be
paid sick leave.

6.   A pilot who calls in sick may
be required to provide a
physician's note (which may be from a
physician selected by the Company).  If
the Company selects the physician, the
Company will pay the cost of obtaining
the physician's note if such cost is more
than the pilot would have otherwise
incurred if he had selected the
physician.  The note will indicate, at a
minimum, the date and time that the pilot
was personally seen by the physician, the
nature and expected duration of the
illness or injury and whether the illness
or injury prevents the pilot from
performing pilot duties.  If the Company
requires any further information to
assess the pilot's fitness for duty, the
pilot will cooperate in obtaining or
providing such information.

<PAGE>

SECTION 12 LEAVES OF ABSENCE

A.   Personal Leave

1.   A pilot, upon written request
specifying the reasons for such leave, may be granted an
unpaid personal leave at the Company's
discretion.  An extension of a personal
leave may be requested in writing and may
be granted at the Company's discretion.
A request for a personal leave or an
extension of a personal leave will not be
considered granted unless it is stated in
writing, signed by the Chief Pilot,
specifying the starting and ending dates
for the leave or extension of the leave.

2.   A pilot may request to return from a
personal leave before its expiration date.  Such
request will be considered by the Company
in light of the needs of the Company.

B.   Medical Leave

1.   A pilot who is unable to perform the
duties to which he is assigned due to illness or
injury, and who has exhausted his sick
leave benefits shall be placed on an
unpaid medical leave.  A
pilot who has exhausted his sick leave
benefits may elect to use his earned and
accrued vacation before being placed on a
medical leave.

2.   A medical leave shall not exceed a
total continuous period
of thirty-six (36) months without the
written agreement of the Company and the
Association.

3.   During the first thirty (30) days of
a medical leave, a
pilot will retain and accrue seniority
and longevity. Thereafter, a pilot will
retain and accrue seniority. A pilot
will not accrue sick leave, vacation or
other benefits while on a medical leave.
A pilot on a medical leave as a result of
an on the job injury will accrue
insurance benefits, seniority and
longevity during the leave.

C.   Military Leave

1.   A pilot who is a member of the Armed
Forces of the United
States, including the United States Coast
Guard, shall be granted an unpaid
military leave in accordance with
applicable law and this Agreement.

2.  Re-employment rights and benefits shall
be in accordance with applicable law.

<PAGE>

          a.   A pilot who has entered
the Armed Services of the
United States or any of the military
reserves for active duty, mandatory
training, or service will be
granted a military leave without pay for
the duration of such training or service
in accordance with the provisions of
applicable federal law.  The request for
this leave should be submitted in writing
to the Chief Pilot as far in advance as
possible.  When possible, the request
will include a copy of the official
orders.  If the orders are not available
at the time the pilot makes the request,
they should be
provided to the Company as soon as
practicable.

          b.   The pilot should plan
for military leave and cover
it in the following order:

        (1)  Bid for time off;

               (2)  Swap for time off;

               (3)  Request day off.

     3.   A pilot may elect to receive
earned and accrued
vacation pay for time on military
leave.

D.   Jury Duty Leave

1.   A pilot shall provide the Chief
Pilot with a copy of the
summons or notice of jury duty as soon
as practicable after receipt of such
documents.  A pilot shall concurrently
provide the Company with authorization
to intercede with the appropriate
authorities for the purpose of removing
him from jury duty.

2.   A pilot who is required to serve
on jury duty shall be
granted a leave of absence for that
purpose.

3.   A pilot who is called for jury
duty shall be credited with
the value of the first ten days of
scheduled trips missed as a result of
serving jury duty.  Such jury duty
leave pay shall be offset by any amount
the pilot receives from the court.  The
pilot shall provide the Company, upon
request, with reasonable documentation
regarding the identification of days
spent on jury
duty and pay received for the jury
duty.

4.   Immediately upon release from jury
duty, a pilot shall
notify Crew Scheduling of his
availability for flying status.

<PAGE>

5.   A pilot on jury duty leave shall
continue to accrue
seniority, longevity and all benefits as
if he had been in active service.

E.   Bereavement Leave

1.   Bereavement leave to attend to
related matters as a result
of a death in the immediate family of
three (3) consecutive days will be
extended to all pilots.  For purposes of
this Section, the immediate family is
defined as the spouse, parents, siblings,
children, stepchildren, grandparents, and
grandchildren of the pilot, and the
parents of the pilot's spouse.

2.   A pilot on bereavement leave will
be credited with the value
of the scheduled trip(s) missed for the
first three (3) scheduled duty days
during such leave.  A pilot on reserve
will continue to receive his reserve
minimum bid period guarantee.

3.   In order to obtain such leave, a
pilot must notify the Chief
Pilot and Crew Scheduling as soon as
possible after learning of the death.
The leave period shall be scheduled so
as to include the day of the funeral.

4.   Additional time requested for
leave will be handled in
accordance with Section 12.A., above.  If
the request for such additional time is
granted, the pilot may elect to receive
earned and accrued vacation pay for such
time.

F.   Maternity Leave

1.   A pilot who is pregnant will be
granted a maternity
leave in accordance with applicable law.

2.   A pilot shall notify the Company as
soon as practicable upon
confirmation of her pregnancy.  Upon
confirmation of a pregnancy, the pilot
must furnish the Company with a letter
from her physician indicating the
expected due date of the child and her
ability to perform all duties required of
her position.  A form letter shall be
provided by the Company for this purpose
and must be signed by the physician.
Upon request, a pilot must provide
periodic recertification by her physician
that she can perform all pilot duties.

3.   A pregnant pilot shall be permitted
to continue in active
service until her physician determines
that she is no longer able to perform
pilot duties.  The pilot must advise the
Company of her physician's recommended
leave date as soon as practicable. Any
disagreement as to her fitness to
continue in service shall be resolved in
accordance with Section 17.

<PAGE>

4.   A pilot who ceases to perform pilot
duties as a result of
maternity shall be placed on sick leave.
Following exhaustion of sick leave
benefits, the pilot shall be placed on
unpaid medical leave.  A pilot who has
exhausted her sick leave benefits may
elect to use her earned and accrued
vacation before being placed on medical
leave.

5.   A pilot shall return to active
service following termination
of pregnancy on the later of the
expiration of her leave or her
physician's certification of her fitness
to return.

 6.   A pilot placed on maternity leave
may request to work
in other jobs she is capable of and
qualified to perform.  If the Company
offers an alternative job, the
compensation, terms and conditions of
that job will be as determined by the
Company.

G.   FMLA Leave

FMLA leave shall be granted in accordance
with applicable law.

H.   General

     1.   A pilot's return to active
service will be coordinated
with Flight Operations Administration.
The pilot shall be assigned to the first
available training class to qualify the
pilot in the status to which he is
returning.

2.   During the first thirty (30) days of
a leave of absence, a pilot shall retain and accrue
seniority, longevity, vacation and sick
leave benefits. Thereafter, except as
otherwise provided in this Agreement, or
as required by law, and until the end of
a leave of absence, a pilot shall retain
and accrue seniority, and retain but not
accrue longevity, vacation or sick leave
credits.

<PAGE>

SECTION 13    INSURANCE

Pilots will be entitled to participate
in the insurance benefits that are
available to employees of the Company
generally, and such participation will
be on the same terms as are available
to other employees generally.

<PAGE>

SECTION 14  GRIEVANCES

A.   Grievances for Other than Discipline

     1.   A grievance under this Section
is a dispute between the
parties arising out of the interpretation
or application of any of the terms of
this Agreement. Any pilot or group of
pilots, or the Association on behalf of
the pilot group, who have a grievance
concerning any action of the Company
affecting them shall be entitled to have
such grievance handled in accordance with
this procedure.

     2.   Prior to the filing of a
grievance, the pilot(s) shall
discuss the matter with his Chief Pilot
in an effort to resolve it.  The pilot(s)
may be accompanied by an elected
Association representative at this
meeting.

     3.   A grievance under this Section
must be submitted to the
Chief Pilot, or his designee, in writing,
within thirty (30) days after the
grievant or the Association knew or
reasonably should have known of the event
giving rise to the grievance.  A
grievance shall contain a reference to
the provision(s) of this Agreement
alleged to have been breached, a
reasonably detailed statement of the
facts involved and the relief requested.

     4.   A hearing shall be held by the
Chief Pilot, or his
designee, within fourteen (14) days after
he receives the written grievance.
Within fourteen (14) days following the
conclusion of the hearing, the Chief
Pilot, or his designee, will render his
decision in writing either granting or
denying the grievance.  He will furnish
the grievant and the Association a copy
of his decision.

     5.   If the decision of the Chief
Pilot is not satisfactory
to the grievant(s), it may be appealed in
writing to the Vice President-Operations,
or his designee, within fourteen (14)
days after receipt by the Association of the
decision.

     6.   A hearing shall be held by the
Vice President- Operations, or his designee, within
fourteen (14) days after he receives the
written appeal.  Within fourteen (14)
days following the conclusion of the
hearing, the Vice President-Operations,
or his designee, will render his
decision in writing either granting or
denying the appeal.  He will furnish the
grievant and the Association a copy of
his decision.

     7.   If the decision of the Vice
President- Operations is not
satisfactory to the grievant, it may be
appealed by the Chairman of the
Association to the System Board of
Adjustment within thirty (30) days after
receipt by the Association of the
decision.

<PAGE>

B.   Disciplinary Grievances

     1.   Except for a probationary
pilot, a pilot will not be
disciplined without just cause.

     2.   A pilot will be notified in
writing of discipline.  A
pilot so disciplined will be granted a
hearing provided he files a written
grievance with the Chief Pilot, or his
designee, within fourteen (14) days of
the date upon which he receives written
notice of such discipline.

     3.   Such hearing shall be held
before the Chief Pilot, or
his designee, within fourteen (14) days
after he receives the written grievance
from the pilot.  The grievant shall have
the right to be represented by an
Association representative(s).
Such representative shall not interfere
with the conduct of the hearing.  Within
fourteen (14) days following the
conclusion of the hearing, the Chief
Pilot, or his designee, will render his
decision in writing either granting or
denying the grievance.  He will furnish
the grievant and the Association a copy
of his decision.

     4.   If the decision of the Chief
Pilot is not satisfactory
to the grievant(s), it may be appealed in
writing to the Vice President-Operations,
or his designee, within fourteen (14)
days after receipt by the Association of
the decision.

5.   A hearing shall be held by the Vice
President- Operations, or his designee, within
fourteen (14) days after he receives the
written appeal.  Within fourteen (14)
days following the conclusion of the
hearing, the Vice President-Operations,
or his designee, will render his decision
in writing either granting or denying the
appeal.  He will furnish the grievant and
the Association a copy of his decision.

     6.   If the decision of the Vice
PresidentOperations is not
satisfactory to the grievant, it may be
appealed by the Chairman of the
Association to the System Board of
Adjustment within thirty (30) days after
receipt by the Association of the
decision.

          7.   If a pilot is held out of
service without pay pending investigation
and the pilot is subsequently
disciplined, such discipline shall be
retroactive to the date of his being held
out of service, and if the penalty is a
lesser penalty than that incurred during
the withholding from service, the pilot
shall be made whole for the difference.

<PAGE>

C.   General

     1.   If any decision made by the
Company under the
provisions of this Section is not
appealed by the Association within the
time limit prescribed for such appeal,
the decision of the Company shall become
final and binding.  If the Company fails
to hold a hearing or render a decision
within the time limit prescribed, the
grievance shall be considered denied, and
the grievance shall proceed to the System
Board of Adjustment.  All time limits in
this Section may be extended, in writing,
by mutual agreement.

          2.   When it is mutually agreed
that a stenographic report is to be taken
of the investigation or hearing, in whole
or in part, the cost will be borne
equally by both parties to the dispute.
If it is not mutually agreed that a
stenographic report be taken, any
stenographic report taken of such
investigation and hearing made by either
of the parties shall be furnished to the
other party, upon request, provided that
the cost of such stenographic report so
requested shall be borne equally by both
parties.

          3.   Except as provided in
paragraph B.2., above, all written notification shall be
delivered in person, by certified mail,
return receipt requested, or by any other
expedited method, such as Express Mail,
provided that such method documents the
sender and the recipient by signature and
date.

     4.   The Company may require the
grievant(s) to attend any
hearing held pursuant to this Section.
If the Company requires the grievant(s)
to attend such hearing at a time when the
grievant was scheduled to fly, and the
grievant(s) loses a trip, or portion of a
trip, because of attendance at such
hearing, the pilot will be credited with
the value of the lost trip, or portion
thereof.

     5.   The grievant(s) shall have the
right to be represented
at such hearing by an Association
representative.
The Association may be represented by any
person it may choose and designate.  Such
representative shall not interfere with
the conduct of the hearing.

<PAGE>

SECTION 15 SYSTEM BOARD OF ADJUSTMENT

A.   General

Pursuant to Section 204, Title II, of the
Railway Labor Act, as amended, a System
Board of Adjustment is established for
the purposes of adjusting and deciding
grievances allowable under the terms of
this Agreement.  The Board shall be known
as the "Vanguard Pilots' System Board of
Adjustment," hereinafter known as the
"Board."  Grievances appealed to the
Board shall be processed as set forth in
this Section.

B.   Composition of the Board

1.   The Board shall consist of four (4)
members who are
employees of the Company and who shall be
referred to as "Board Members."  Two (2)
Board Members will be appointed by the
Company, and two (2) Board Members will
be appointed by the Association.

     2.   Board Members shall serve until
notice is given by the
party who appointed that Board Member
that a replacement Board Member has been
appointed.

     3.   A Board Member from each side
shall serve as Chairman
and Vice Chairman in alternate years with
an Association Board Member serving as
Chairman during odd numbered years.  When
an Association Board Member is Chairman, a
Company Board Member shall be Vice
Chairman, and vice versa.  For example,
in 1999, an Association Board Member
would be Chairman and a Company Board
Member would be ViceChairman.  The
Chairman, or in his absence the Vice
Chairman, shall preside at meetings of
the Board and at hearings and shall have
a vote in connection with all actions
taken by the Board.

C.   Jurisdiction of the Board

The Board shall have jurisdiction over
disputes that are covered under the
terms of this Agreement and that arise
through grievance out of disputed
interpretations or applications of this
Agreement involving any grievant covered
by this Agreement. The jurisdiction of
the Board shall not extend to proposed
changes in hours of employment, rates of
compensation or working conditions. It
shall have jurisdiction over questions
involving discipline, discharge,
interpretation, and application of the
terms of this Agreement and may provide
compensatory awards.  The Board shall not
consider any grievance that has not been
handled in accordance with Section 14 and
properly submitted to it by the Chairman
of the Association or the Company's Vice
President Operations.  Monetary awards
issued by the Board must be calculated by
the Board upon proof of actual damages by
the grievant. The Board shall not have
authority to award punitive damages.  The
Board may retain jurisdiction over a case
by majority vote.

<PAGE>

D.   Convening the Board

Upon receipt of notice of the submission
of a dispute, the parties shall mutually
agree upon a date for the hearing of such
dispute.  The Chairman shall give the
necessary notices in writing of such
hearing to the Board Members and to the
parties.

E.   Board Procedures.

Grievances properly submitted to the
Board shall be acted upon as follows:

1.   Disputes shall be submitted in
writing to the Board
within thirty (30) days following the
decision specified at Sections 14.A.6.
and 14.B.5.  No matter shall be
considered by the Board that has not been
handled in accordance with the appeals
provisions of this Agreement.  Cases
shall be heard in the order in which they
are appealed to the Board except that
cases involving discharge may, by mutual
agreement, be advanced ahead of other
pending cases.

     2.   The submission to the Board
shall include:

          a.   The grievant's name;

          b.   A statement of the question(s) at
issue;
          c.   A statement of the facts;

          d.   The section(s) of the
Agreement alleged to have been violated;

          e.   The position of the grievant and/or
Association;

          f.   The position of the Company, if known;
and
          g.   The relief requested.

     3.   A majority vote of the Board in
all cases properly
referable to it shall be final and
binding.

<PAGE>

 4.   The Board shall render a decision
within thirty (30)
days unless mutually agreed otherwise by
the parties.

F.   Board Action

1.   Should a decision not be reached
within thirty (30)
days following the conclusion of a Board
hearing, the Board shall be considered
deadlocked unless extended by mutual
agreement.  In such case, the Chairman
shall, within five (5) working days,
notify the parties in writing that such
deadlock exists.

2.   In case of deadlock, the Company and
the Association
shall have thirty (30) days to appoint a
neutral arbitrator by mutual agreement to
sit with the Board as its Chairman.  If
the parties are unable to agree upon a
neutral arbitrator, the parties shall
choose a neutral arbitrator from the
following list by alternately striking
names.
          a.   Richard I. Bloch

          b.   John E. Dunsford

          c.   Herbert Fishgold

          d.   Lawrence T. Holden

          e.   John La Rocco

          f.   Dennis Nolan

          g.   Anthony Sinicropi

          h.   Nicolas H. Zumas

          i.   Carol Wittenberg

The Association shall strike first in
even numbered years and the Company shall
strike first in odd numbered years.
Either party may remove an arbitrator
from the above list in any six (6) month
period.  Such arbitrator shall be
replaced with another arbitrator who is
selected by mutual agreement of the
parties.  A replacement shall be named
before any further case appointment is
made. Such neutral arbitrators shall be
members of the National Academy of
Arbitrators and shall have aviation case
experience.

<PAGE>

     3.   The arbitrator shall be
designated as the Board
Chairman and he or she shall preside
throughout the hearing of the case at
issue.

   4.   Board Members shall be free to
discharge their duties
in an independent manner, and witnesses
shall be free to testify in good faith,
without fear of recrimination by either
party or by other pilots.

G.   General

     1.   Third Party Representation.
A grievant may be represented at Board
hearings by such person(s) as he may
choose and designate, and the Company may
be represented by such person(s) as it
may choose and designate.  If a grievant
chooses to be represented in a Board
proceeding by a representative other than
an Association representative, the
grievant shall be responsible for the
fee, if any, of such representative of
his choosing and for the expenses
incurred by such representative,
including any expenses or fees
attributable to witnesses that such
representative calls upon to testify, and
the Association and the Company shall not
be liable for such fees and expenses.  If
a grievant will be represented by a
representative other than an Association
representative, such grievant shall
notify the Company of the name, address
and telephone number of such
representative no later than thirty (30)
days before such hearing.

     2.   Witnesses

Either party may call witnesses at any
hearing of the Board.  On request of any
Board Member, the Board will summon any
witness. The number of witnesses summoned
at any one time shall not be greater than
the number that reasonably can be spared
from the operation without interference
with the operation of the Company.
Evidence may be presented orally, in
writing, or both.  A party shall have the
right to file a post hearing brief.  A
reasonable deadline for
filing such briefs may be set by the
Board, and the parties may, by mutual
agreement, extend such deadline.

     3.   The Board shall meet in the
city where the General
Offices of the Company are located or at
any other mutually agreed upon location.

     4.   Expenses

The expenses and reasonable compensation
of the neutral arbitrator will be borne
equally by the Company and the
Association.  Each party (i.e., the
Company and the Association) will assume
the compensation, travel expense and
other expenses of the Board Members
selected by that party,  the witnesses
called by that party and any other
personnel required by that party to
attend.  The Company and the Association
shall share equally the cost of

<PAGE>

facilities and support equipment.
Employees who serve as Board Members,
witnesses and other personnel whose
attendance at Board meetings is required
shall be released from duty to attend
Board hearings upon reasonable notice as
required by the Company and provided that
they can reasonably be spared from the
operation without interference with the
operation of the Company.

     5.   Stenographic Report
When it is mutually agreed that a
stenographic report is to be taken of the
hearing, in whole or in part, the cost
will be borne equally by both parties to
the dispute.  If it is not mutually
agreed that a stenographic report be
taken, any stenographic report taken of
such hearing made by either of the
parties shall be furnished to the other
party, upon request, provided that the
cost of such stenographic report so
requested shall be borne equally by both
parties.

     6.   The Board shall maintain a
complete record of pending
proceedings.  After a final decision has
been rendered by the Board, the parties
will maintain their respective records
from the proceeding.

     7.   Unless the parties agree in
writing to the contrary,
each grievance presented to the Board
shall be heard as a separate case.

    8.   By written mutual agreement, the
parties may agree to bypass any step in this Section.

<PAGE>

SECTION 16    RETIREMENT

The Company will provide retirement
benefits in the form of a 401(k) plan,
and pilots will be entitled to
participate in such plan on the same
terms as employees in the Company
generally.

<PAGE>

SECTION 17 PHYSICAL STANDARDS

A.   The medical standards required of a
pilot shall be those established by the
Federal Aviation Administration (FAA),
including its waiver policy, for the
pertinent class of medical certification.
Pilots may select medical examiners of
their choice to meet FAA requirements and
shall notify the Company of any
examination results.

B.   If the Company questions whether a
pilot meets the medical standards of
Paragraph A., above, or is otherwise
believed to be medically unfit to
exercise the privileges of his flight
certification, the Company may require a
pilot to submit to a medical examination
or medical test in addition to those
required by the FAA regulations. The
examination may be by a Companydesignated
medical examiner, and the pilot will,
upon request, be furnished with a copy of
the medical examiner's report.

C.   Any pilot who fails to pass such
physical examination or medical test required by
the Company may, at his option, have a
review in the following manner:

     1.   He may employ an FAA-qualified
medical examiner of his own choosing and at his
own expense for the purpose of conducting
a physical examination or test.

     2.   A copy of the findings of the
pilot's medical examiner shall be furnished to
the Company. If such findings verify the
findings of the Company medical examiner,
disposition of the pilot will be in
accordance with other provisions of this
Agreement.

     3.   If the findings of the Company's medical
examiner and the pilot's medical examiner
disagree on the pilot's qualification to
exercise the privileges of his Medical
Certificate, the Company will, at the
written request of the pilot, ask the two
examiners to agree upon a third,
qualified and disinterested medical
examiner, preferably a specialist, for
the purpose of making further physical
examination or test.

     4.   The case shall be settled on the basis
of the findings of the disinterested medical examiner.

5.   The expense of employing the disinterested
medical examiner shall be borne one-half
(1/2) by the pilot and one-half (1/2) by
the Company.  Copies of such medical
examiner's report shall be furnished to
the Company and to the pilot.

<PAGE>

D.   A captain who is unable to maintain
his First Class Medical Certificate, but is able to
maintain a Second Class Medical
Certificate, may, at his option, continue
in the service of the Company as a first
officer, provided he is able to
demonstrate the appropriate
qualifications and proficiency, and he
will be paid at the applicable first
officer rate.

<PAGE>

SECTION 18  HOURS OF SERVICE

A.   Days Off

Regular, buildup and reserve line holders
will be scheduled for at least twelve
(12) days off in each bid period.

B.   Flight Time Limits

   Flight time limitations will be in
accordance with the FARs.

C.   Duty Time Limits

     1.   A pilot will not be scheduled
for a duty period in
excess of fourteen (14) hours.

     2.   Actual duty periods will not
violate the FARs.

D.   Rest Periods

     1.   A pilot will be scheduled to
receive a rest period of
at least ten (10) hours from block in to
block out.

2.  Actual rest periods will not violate the FARs.

     3.   A pilot's 24-in-7 rest period
required by the FARs will be in domicile.

<PAGE>

SECTION 19   FURLOUGH AND RECALL

A.   Furlough

     1.   Pilots will be furloughed in
reverse order of
seniority.  Pilots will be given fourteen
(14) days written notice of furlough
except in cases of emergency, strikes,
acts of God, or other causes beyond the
control of the Company.  Written
notification will be sent by certified
mail, express delivery or by any other
method that documents the sender,
recipient and date of sending.  Notice is
effective when sent.

     2.   Before a furlough takes place,
the Company may offer
voluntary leaves of absence to pilots to
minimize the effects of the furlough.

     3.   A pilot who is furloughed will
retain seniority, but
not accrue longevity or other benefits
during his furlough.

     4.   At the Company's option, a
captain may be bypassed for
furlough in order to furlough a senior
first officer. A first officer furloughed
while a junior captain remains in active
service will not be removed from the
seniority list as a result of not having
been recalled from furlough for sixty
months pursuant to Section    19.B.3.,
below, so long as the junior pilot
remains in active service.

B.   Recall

     1.   Recall will be offered in
seniority order by sending a
written recall notice by certified mail,
express delivery or by any other method
that documents the sender, recipient and
date of sending to the address on file
with the Chief Pilot pursuant to Section
C., below.

     2.   A pilot will have eighteen (18)
days from the date
recall notices are sent out to notify the
Company in writing that he is accepting
recall.  He will return (in seniority
order) only as vacancies occur.   A pilot
who accepts recall will have fourteen
(14) days after acceptance of recall to
report for duty from furlough.

     3.   A pilot on furlough status will
retain his seniority
under this Agreement until (1) the pilot
fails to accept recall as provided in
this Section or (2) the pilot has not
been recalled from furlough within sixty
(60) months.  In either event, the pilot
will be removed from the seniority list
and will not be entitled to recall.

<PAGE>

C.   Address

A furloughed pilot shall have on file
with his Chief Pilot the address to which
he desires notice of recall or any other
communication from the Company to be
sent.  The Company will be deemed to have
complied with its notice obligations
under this Section by sending notices to
that address.

<PAGE>

SECTION 20 TRAINING

A.   The Company will establish, in
accordance with applicable FARs, training
requirements for pilots.

B.   Initial, Upgrade and Transition
Training:

     1.   Training activities will not
be scheduled for more than
twelve (12) out of any fourteen (14)
consecutive days.

     2.   A pilot must successfully
pass ground training before
progressing to flight training.

     3.   There shall be a minimum rest
period of ten (10) hours
between ground training and the
commencement of flight training.

4.   A pilot shall have a minimum of ten (10) hours
scheduled between any two (2) flight
training sessions.  This requirement may
be waived by the pilot.  A pilot shall
actually receive a minimum of ten (10)
hours between a flight training session
and a flight check.

5.   A pilot who successfully passes
ground and flight training, but fails the first flight
check shall be provided additional
training and a second flight check.

  6.   The opportunity to upgrade from first
officer to captain shall be based on individual
seniority, subject to the following:

          a.   A first officer may
decline the offer to upgrade three times.
The fourth time the offer to upgrade is
made, the first officer must accept and
successfully complete the captain upgrade
process. Failure to complete the upgrade
process may be grounds for termination.

          b.   When the decision to begin
the upgrade process is made, the first
officer must successfully complete a pre-
class examination given by a Company PC
Check Airman.  If the pre-class
examination is not successfully
completed, the candidate shall return to
the first officer position.  Such pilot
shall not be eligible for upgrade for a
period of four (4) months. Further
attempts at captain upgrade shall be at
the discretion of the Company.

          c.   If the first officer
successfully completes the pre-class
examination, he shall begin upgrade
training.  If there is a failure to
complete any portion of the upgrade
training, the first officer must pass a

<PAGE>

right seat proficiency check and the
candidate shall return to the first
officer position for a period of at least
four (4) months. Any further attempts at
captain upgrade shall be at the
discretion of the Company.  Failure to
complete a satisfactory right seat PC
check after being unsuccessful in the
upgrade training may be grounds for
termination.

     7.   Non-recommendation for a flight
check will be deemed a
failure of that training program.

8.   Voluntary withdrawal from a training
program shall be deemed a failure of that training
program, except that withdrawal for good
cause (such as personal hardship), as
determined in the Company's discretion,
may not be deemed a failure.

C.   Recurrent Checks:

1.   If a recurrent proficiency check is
conducted outside a
pilot's domicile at a location to which
the pilot must deadhead, the pilot will
be scheduled for either:

          a.   a minimum of ten (10)
hours of rest between release from line
duty and his deadhead flight to the
location of a recurrent proficiency
check; or

          b.   a minimum of eight (8)
hours of rest between his deadhead flight
to the location of a proficiency check
and the commencement of the proficiency
check.

     2.   A pilot who fails to pass any
recurrent proficiency
check shall be given additional training
in the area(s) in which he failed to
demonstrate acceptable proficiency.

     3.   The eligibility for additional
training or an
additional flight check for any pilot who
is unable to demonstrate acceptable
proficiency after a second check shall be
at the Company's discretion.

     4.   A pilot who fails to
successfully complete a flight
check will be placed in a non-pay status
until he is requalified.

     5.   If the Company elects to use
any method of training
such as "home study" that does not
involve a formal ground school to comply
with the FAA ground school requirements,
a pilot will be credited with one (1)
unit at his applicable rate for each four
(4.0) hours of FAA-approved training
credit earned in home study, prorated.

<PAGE>

The Company will notify the Association,
upon request, of the amount of credit it
receives from the FAA for home study.

<PAGE>

SECTION 21   ASSOCIATION BUSINESS

A.   Flight Pay Loss

1.   Requests for leaves of absence for
Association representatives to
participate in Association business will
be made in writing at least seven (7)
days in advance to the Vice President-
Operations, or his designee.  The Company
will approve the requests in writing,
provided that Company operations will not
be adversely affected.

2.   The Company will pay pilots during
such approved leaves on a flights missed
basis for the scheduled value of such
flights. During such Association leave,
the pilot will continue as an active
pilot, accruing seniority, longevity and
benefits.

3.   Within forty-five (45) days
after it receives the
Company's invoice, the Association will
reimburse the Company for money paid out
pursuant to this provision plus thirty
percent (30%) to cover administrative
expenses and benefits.

B.   Dues Check-Off

     1.   During the life of this
Agreement, the Company agrees
to deduct from the pay of each pilot
covered by this Agreement, and remit to
the Association, membership dues and/or
service charges uniformly required by the
Association, as a condition of acquiring
or retaining membership and in accordance
with the provisions of the Railway Labor
Act, as amended, provided such pilot
voluntarily executes the following agreed
upon form.  This form, also to be known
as the "Check-Off Form," will be prepared
and furnished by the Association.

     2.   When a pilot covered by this
Agreement properly
executes such "Check-Off Form," the
Association will
forward an original copy to the Payroll
Department at the Company.  Any "Check-
Off Form" that is incomplete or
improperly executed will be returned to
the Association.  Any notice of
revocation as provided for in this
Agreement or the Railway Labor Act, as
amended, must be in writing, signed by
the pilot and delivered by certified
mail, addressed to the Payroll Department
with a copy to the Association.  "Check
Off Forms" and notices received by the
Payroll Department will be stamp-dated on
the date received and will constitute
notice to the Company on the date
received.

<PAGE>

     3.   When a "Check-Off Form" is
received by the Payroll
Department on or before a given pay day,
deductions will commence with the first
regular paycheck following said pay day,
and will continue thereafter until
revoked or canceled.  The Company will
remit to the Association a check in
payment of all dues and/or service
charges collected in a given month as
soon after the end of a month as
possible.  These remittances will be
subject to normal accounting practice
with respect to adjustments necessary
because of the methods involved in the
deduction procedure.  The Company
remittance of the Association dues and/or
service charges to the Association will
be accompanied by a list of names of the
pilots for whom deductions have been made
in that particular period.

     4.   No deductions of the
Association dues will be made from
the wages of any pilot who has executed a
"Check-Off Form" and who has been
transferred to a job not covered by this
Agreement, who is on leave without pay or
on furlough.  Upon return to work within
a classification covered by this
Agreement, deductions will be
automatically resumed provided the pilot
has not revoked the assignment.

     5.   A pilot who has executed a
"Check-Off Form" and who
resigns or is otherwise terminated from
the employ of the Company will be deemed
to have automatically revoked his
assignment and if he is recalled or re
employed, further deductions of the
Association dues will be made only upon
execution and receipt of a new "Check-Off
Form."
     6.   Collections of any back dues owed at the
time of starting deductions for any pilot, and
collection of dues missed because the
pilot's earnings were not sufficient to
cover the payment of dues for a
particular pay period, will be the
responsibility of the Association and
will not be the subject of payroll
deductions.

C.   Agency Shop

     1.   Each pilot covered by this
Agreement will be required,
as a condition of employment, beginning
thirty (30) days after
the effective date of this Agreement, or
after the completion of his initial
operating experience, whichever is later
(1) to be or become a member of the
Association, or (2) to pay to the
Association a monthly service charge for
the administration of this Agreement and
representation of the pilot.  Such
monthly service charge will be equal to
the

<PAGE>

Association's regular monthly dues and
periodic assessments that would be
required to be paid by such pilot if a
member; provided that neither membership
nor the payment of a service charge will
be required in respect to any such pilot
(a) for whom membership is not available
upon the same terms and conditions
generally applicable to any other member,
or (b) as to whom membership was denied
or terminated for any reason other than
the failure to tender periodic dues,
initiation fees and assessments uniformly
required by the Association as a
condition of acquiring or retaining
membership. A pilot will not be required
to pay dues, assessments or any service
charge while performing, or for a time
during which he performed, work not
covered by this Agreement, including, but
not limited to supervisory pilot duties.

2.   If any pilot who is required under
this Agreement to
make payment of a service charge and/or
membership dues, and/or initiation fees,
and/or periodic assessments becomes
delinquent in accordance with the
Association's Constitution and By-Laws in
the making of such payments, the
Association will notify such pilot by
certified mail, return receipt requested,
copy to the Vice President-Operations,
his successor or designee, that he is
delinquent in the payments specified and
the total amount of money due and the
period for which he is delinquent and
that he is subject to discharge as an
employee of the Company. The notice of
delinquency required under this paragraph
will be deemed to be received by the
pilot, whether or not it is personally
received by him, when mailed by the
Association by certified mail, return
receipt requested, postage prepaid to the
pilot's last known address, or to any
other address that has been designated by
the pilot.  It will be the duty of every
pilot to notify the Association of every
change in his home address, or of an
address where the notice required by this
paragraph can be sent and received by the
pilot.

     3.   If, upon the expiration of the
fifteen (15) day period,
the pilot still remains delinquent, the
Association will certify in writing to
the Vice PresidentOperations of the
Company, his successor or designee, copy
to the pilot, both by certified mail,
return receipt requested, that the pilot
has failed to remit payment within the
grace period allowed and is therefore
discharged.  The Vice President-
Operations, or his designee, will within
five (5) days, terminate the service of
such employee as a pilot.

 4.   A protest by a pilot who is to be
discharged as a
result of an interpretation or
application of the provisions of this
Section will be subject to the following
procedure:

   a.   A pilot who believes that the
provisions of this Section have not been
properly interpreted or applied as they
pertain to him, may submit his request
for review in writing within five (5)
days from the date of his notification by
the Vice President-Operations, or his
designee, as provided in paragraph A.3.,
above.  The request must be sent by

<PAGE>

certified mail, return receipt requested,
to the Vice PresidentOperations, or his
designee, who
will review the protest and render a
decision in writing no later than five
(5) days following receipt of the
protest.

          b.   The Vice President-
Operations, or his designee,
will forward his decision to the pilot
with a copy to the Association, both by
certified mail, return receipt requested.
Said decision will be final and binding
on all interested parties unless appealed
as hereinafter provided.  If the decision
is not satisfactory to either the pilot
or the Association, then either may
appeal within ten (10) days from the
receipt of the decision, by filing notice
of such appeal.  Such notice will be sent
to the other party and to the Company, by
certified mail, return receipt requested.
Appeal will be directed to a neutral
referee who may be agreed upon by the
pilot and the Association within ten (10)
days of receipt of the notice of appeal.
In the event the parties fail to agree
upon a neutral referee within the
specified period, either the pilot or the
Association may request the National
Mediation Board to name such neutral
referee.  The hearing before the neutral
referee will be held as soon as possible,
and the neutral referee will be requested
to render a decision within thirty (30)
days after the hearing. The decision of
the neutral referee will be final and
binding on all parties to the dispute.
The fees and charges of such neutral
referee will be borne equally by the
pilot and the Association.

     5.   A pilot discharged by the
Company under the
provisions of this Section, will be
deemed to have been "discharged for
cause" within the meaning of this
Agreement.

     6.   The Company will not be liable
for any claim of a pilot discharged by the
Company pursuant to this Section.
Moreover, the Association will indemnify
the Company and hold the Company harmless
from any and all claims that may be made
by an employee(s), former employee or any
other person against the Company by
virtue of the application or
misapplication of any of the terms of
this Section.

<PAGE>

     ASSIGNMENT AND AUTHORIZATION
     FOR CHECK-OFF OF UNION DUES

TO:       Vanguard Airlines, Inc.

ATTN:     Payroll Department

I, ----------------------------, hereby
assign to the Vanguard Airlines Pilots
Association (the "Association"), my
Association dues and/or service charges
from my wages earned or to be earned by
me as your employee.  I authorize and
direct you to deduct ______ of my gross
wages which is the monthly equivalent of
my monthly membership dues, or such
monthly equivalent as may hereafter be
established by the Association.  This
assignment, authorization, and direction
may be revoked by me in writing on
January 1 of any year provided the
revocation notice is received by the
Company fifteen (15) days in advance of
that date, or upon the termination date
of the labor agreement 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 the existing Agreement
between the Association and the Company.

Signature of pilot: ---------------------

Address of pilot: -----------------------
Membership Number: ----------------------
Location: ------------------------------
Date:-----------------------------------

<PAGE>

SECTION 22 MANAGEMENT RIGHTS

A.   The Company retains the sole and
exclusive right and
discretion to operate, control and manage
its business, direct its workforce and
exercise all traditional management
rights, powers, or authority it had prior
to signing this Agreement, except those
modified specifically by this Agreement.
Included by way of description and not by
way of limitation are rights to direct
the working force and determine its size
and composition; to assign and reassign
duties, to determine qualifications for
initial and continued employment, to
schedule and utilize management pilots,
maintain order and efficiency; hire,
transfer, demote and promote pilots and
discipline, suspend, and discharge
pilots; assign and reassign work to
pilots; determine the size, type and
number of aircraft equipment and supplies
to be used in providing its service and
to determine what equipment will be
utilized and allocated to particular
routes, to transfer equipment from one
base of operations to another, to
determine the base or bases of operation
for pilots and equipment, extend,
maintain, curtail or terminate its
operations in whole or in part; determine
the nature and extent of services to be
rendered; determine the business concerns
with whom it will deal and the customers
it wishes to serve; establish and enforce
quality standards for its services;
determine and change methods, processes
and techniques of operation; determine
when and if vacancies will be filled;
when to furlough and recall pilots,
establish and modify rules and
regulations and procedures and require
observance thereof.  A right of
management will not be impaired, waived
or surrendered by any contrary course of
conduct or practice.

B.   The exercise of any right reserved
herein to management in a
particular manner, or the non-exercise of
such right, shall not operate as a waiver
of the Company's rights hereunder, or
preclude the Company from exercising the
rights in a different manner.  Any past
practice, policy, interim agreement, or
other understanding established prior to
the date of this Agreement shall not
create any contractual or legal
obligation to continue such practice,
policy, agreement or understanding
following the effective date of this
Agreement.

<PAGE>

SECTION 23  DURATION

This Agreement shall become effective on
June 1, 2000 and
shall continue in full force and effect
through June 1, 2004, except as otherwise
specifically provided herein, and will
renew itself without change until each
succeeding June 1 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 at least
sixty (60) but not more than one hundred twenty
(120) days prior to June 1, 2004 or June
1 in any year thereafter.

IN WITNESS WHEREOF, the parties hereto
have signed this Agreement this 1st day of June, 2000.

FOR VANGUARD AIRLINES, INC.       FOR VANGUARD AIRLINES, INC.
                                  PILOTS ASSOCIATION

/s/ William F. McKinney            /s/ Arvil Taylor
---------------------------        ---------------------------
Captain William F. McKinney        Captain Arvil Taylor
Vice President-Operations          Chairman


/s/ Brian S. Gillman               /s/ George Rachis
---------------------------        -------------------------
Brian S. Gillman                   Captain George Rachis
Vice President and                 Negotiating Committee
General Counsel

                                   /s/ Charles O'Dell
                                   ------------------------
                                   Captain Charles O'Dell
                                   Negotiating Committee

<PAGE>

                     LETTER OF AGREEMENT

                      BY AND BETWEEN

                    VANGUARD AIRLINES,INC.

                          AND THE

                          PILOTS

                            OF

                  VANGUARD AIRLINES, INC.

                      AS REPRESENTED BY THE

          VANGUARD AIRLINES PILOTS ASSOCIATION

          --------------------------------------
               COPIES FROM PERSONNEL FILES
          --------------------------------------

For a period of sixty (60) days after the execution of the parties' initial
collective bargaining agreement, a pilot may request, and the Company will
provide, a copy of any item(s) in the pilot's personnel file.

     Dated: June 1, 2000



FOR VANGUARD AIRLINES, INC.   FOR VANGUARD AIRLINES, INC.
                              PILOTS ASSOCIATION

/s/ William F. McKinney        /s/ Arvil Taylor
----------------------------  ----------------------------
Captain William F. McKinney   Captain Arvil Taylor
Vice President-Operations     Chairman

/s/ Brian S. Gillman           /s/ George Rachis
---------------------------    ----------------------------
Brian S. Gillman               Captain George Rachis
Vice President and             Negotiating Committee
General Counsel

                               /s/ Charles O'Dell
                               ---------------------------
                               Captain Charles O'Dell
                               Negotiating Committee

<PAGE>

                    LETTER OF AGREEMENT

                     BY AND BETWEEN

                  VANGUARD AIRLINES,INC.

                        AND THE

                        PILOTS

                         OF

                VANGUARD AIRLINES,INC.

               AS REPRESENTED BY THE

        VANGUARD AIRLINES PILOTS ASSOCIATION

       ----------------------------------------
      RESERVE MINIMUM BID PERIOD GUARANTEE
      -----------------------------------------

Pilots on the seniority list on the date
of signing of this letter of agreement
will be subject to Section 5.B. Minimum
Bid Period Guarantee, except that such
pilots will be credited with eighty (80)
units for a reserve line.
     Dated: June 1, 2000

FOR VANGUARD AIRLINES, INC.        FOR VANGUARD AIRLINES, INC.
                                   PILOTS ASSOCIATION

/s/ William F. McKinney            /s/ Arvil Taylor
----------------------------       ----------------------------
Captain William F. McKinney        Captain Arvil Taylor
Vice President-Operations          Chairman

/s/ Brian S. Gillman                /s/ George Rachis
----------------------------       ----------------------------
Brian Gillman                      Captain George Rachis
Vice President and                 Negotiating  Committee
General Counsel

                                   /s/ Charles O'Dell
                                   ---------------------------
                                   Captain Charles O'Dell
                                   Negotiating Committee

<PAGE>

                         LETTER OF AGREEMENT

                            BY AND BETWEEN

                        VANGUARD AIRLINES,INC.

                              AND THE

                              PILOTS

                               OF

                        VANGUARD AIRLINES,INC.

                       AS REPRESENTED BY THE

               VANGUARD AIRLINES PILOTS ASSOCIATION
               --------------------------------------
                              SIGNING BONUS
               --------------------------------------

WHEREAS the Company and the Association
have concluded their negotiations for a
first collective bargaining agreement and
such agreement was ratified on the first
attempt;

THEREFORE, the parties hereby agree as
follows:

1.   Each pilot who is qualified as a
Captain on the date of
signing of this Agreement who does not
hold options granted pursuant to grants
approved by the Company's Board of
Directors on July 2, 1997 or May 15, 1998 will be
granted an option to purchase two
thousand (2000) shares of
the common stock, par value $.001 per
share,  of Vanguard Airlines, Inc.

2.   Each pilot who is qualified as a
Captain on the date of
signing of this Agreement who holds
options granted pursuant to grants
approved by the Company's Board of
Directors on July 2, 1997 or May 15,
1998 will be granted an option to
purchase one thousand (1000) shares of
the common stock, par value $.001 per
share, of Vanguard Airlines, Inc.

3.   Each pilot who is qualified as a
first officer on the date
of signing of this Agreement will be
granted an option to purchase one
thousand (1000) shares of the common
stock, par value $.001 per share, of
Vanguard Airlines, Inc.

<PAGE>

4.   All options granted pursuant to
this letter of agreement
will be granted in accordance with the
terms and conditions of the Vanguard
Airlines, Inc. 1994 Stock Option Plan
or the Vanguard Airlines, Inc. 2000
Stock Option Plan, as the case may be.

     Dated: June 1, 2000

FOR VANGUARD AIRLINES, INC.        FOR VANGUARD AIRLINES, INC.
                                   PILOTS ASSOCIATION

/s/ William F. McKinney            /s/ Arvil Taylor
----------------------------       ----------------------------
Captain William F. McKinney        Captain Arvil Taylor
Vice President-Operations          Chairman

/s/ Brian S. Gillman               /s/ George Rachis
----------------------------       ----------------------------
Brian S. Gillman                   Captain George Rachis
Vice President and                 Negotiating Committee
General Counsel

                                   /s/ Charles O'Dell
                                   ---------------------------
                                   Captain Charles O'Dell
                                   Negotiating Committee

<PAGE>

                          LETTER OF AGREEMENT

                            BY AND BETWEEN

                        VANGUARD AIRLINES,INC.

                              AND THE

                              PILOTS

                               OF

                      VANGUARD AIRLINES, INC.

                        AS REPRESENTED BY THE

               VANGUARD AIRLINES PILOTS ASSOCIATION

             ---------------------------------------
                        NET PROFIT BONUS
            -----------------------------------------

WHEREAS the Company and the Association
have concluded their negotiations for a
first collective bargaining agreement and
desire to provide an incentive for pilots
to exercise every reasonable effort to
promote the profitability of the Company,
recognizing that the Company's
profitability is a mutual interest and
objective.

THEREFORE, the parties hereby agree as
follows:

1.   For each quarter in which the
Company realizes a net profit
for the quarter ended of at least five
percent (5%), as reported in the
Company's financial statements prepared
in accordance with generally accepted
accounting principles, the Company will
accrue for each crewmember as follows:

     a.   Five dollars ($5.00) for each
unit earned as a result
of actual flight time at the controls
while a captain during the quarter;

     b.   Two dollars ($2.00) for each
unit earned as a result of
actual flight time at the controls while
a first officer during the quarter;

c.   One thousand one hundred twenty-five
dollars ($1125.00)
or five dollars ($5.00) for each unit

<PAGE>

earned as a result of actual flight time
at the controls while a captain during
the quarter, whichever is greater, for
each proficiency check airman. A
proficiency check airman is not eligible
for payments pursuant to paragraphs 1.a.
or 1.b. of this letter of agreement;

     d.   The accrued amounts provided
     for in paragraphs 1.a.-c.,
above, will be paid no later than April
15 in the subsequent calendar year if the
Company realizes a net profit for the
fiscal year ended of at least five
percent (5%), as reported in the
Company's financial statements prepared
in accordance with generally accepted
accounting principles.  If the Company
does not reach that level of
profitability for the year, no payments
will be made with respect to quarters in
that year.  Amounts accrued during any
year and not paid at year end pursuant to
this paragraph will not be carried over
to the subsequent year.

2.   For each quarter in which the
Company realizes a net profit
for the quarter ended of at least ten
percent (10%), as reported in the
Company's financial statements prepared
in accordance with generally accepted
accounting principles, the Company will
accrue for each crewmember as follows:

     a.   Seven and one-half dollars
($7.50) for each unit earned
as a result of actual flight time at the
controls while a captain during the
quarter;

     b.   Two dollars ($2.00) for each
unit earned as a result of
actual flight time at the controls while
a first officer during the quarter;

  c.   One thousand six hundred eighty-
seven dollars and fifty
cents ($1687.50) or seven and one-half
dollars ($7.50) for each unit earned as a
result of actual flight time at the
controls while a captain during the
quarter, whichever is greater, for each
proficiency check airman.  A proficiency
check airman is not eligible for payments
pursuant to paragraphs 2.a. or 2.b. of
this letter of agreement;

d.   The accrued amounts provided for in
paragraphs 2.a.-c., above, will be paid no later than April
15 in the subsequent calendar year if the
Company realizes a net profit for the
fiscal year ended of at least ten percent (10%),
as reported in the Company's financial
statements prepared in accordance with
generally accepted accounting principles.
If the Company does not reach that level
of profitability for the year, no
payments will be made with respect to
quarters in that year pursuant to
paragraph 2 hereof.  Amounts accrued
during any year and not paid at year end
pursuant to this paragraph will not be
carried over to the subsequent year.

3.   Paragraphs 1. and 2., above, will
not be pyramided; i.e., if
payments pursuant to paragraph 2., above,
are triggered, there
will be no payments pursuant to paragraph 1.

4.   A pilot must be an employee of the
Company at the time any
payment hereunder is actually issued to
qualify for such payment.

5.   Payments made pursuant to this
letter of agreement will be
subject to all normal withholding
requirements.

6.   Payments made pursuant to this
letter of agreement will not
be considered base salary for
purposes of the Company's matching
contribution, if any, to the
Company's 401(k) plan.

     Dated: June 1, 2000

FOR VANGUARD AIRLINES, INC.     FOR VANGUARD AIRLINES
                                PILOTS ASSOCIATION


/s/ William F. McKinney         /s/ Arvil Taylor
----------------------------    ----------------------------
Captain William F. McKinney     Captain Arvil Taylor
Vice President-Operations       Chairman

/s/ Brian S. Gillman            /s/ George Rachis
----------------------------    ----------------------------
Brian S. Gillman                Captain George Rachis
Vice President and              Negotiating Committee
General Counsel

                                 /s/ Charles O'Dell
                                -----------------------------
                                Captian Charles O'Dell
                                Negotiating Committee

<PAGE>

                         LETTER OF AGREEMENT

                            BY AND BETWEEN

                        VANGUARD AIRLINES,INC.

                              AND THE

                              PILOTS

                                OF

                        VANGUARD AIRLINES, INC.

                          AS REPRESENTED BY THE

               VANGUARD AIRLINES PILOTS ASSOCIATION

            -----------------------------------------
                       STOCK OPTION GRANT
            -----------------------------------------

WHEREAS the Company and the Association
have concluded their negotiations for a
first collective bargaining agreement.
THEREFORE, the parties hereby agree as
follows:

1.   The Company will grant an option to
purchase 500 shares of
the common stock, par value $.001 per
share, of Vanguard Airlines, Inc.
pursuant to, in the Company's discretion,
the Company's 1994 Stock Option Plan or
the 2000 Stock Option Plan to each pilot
who is on the Company's pilot seniority
list on the date of execution of this
letter of agreement and who remains
employed by the Company as a captain on
July 1, 2001.

2.   The Company will grant
an option to purchase 500 shares of
the common stock, par value $.001 per
share, of Vanguard Airlines, Inc.
pursuant to, in the Company's discretion,
the Company's 1994 Stock Option Plan or
the 2000 Stock Option Plan to each pilot
who is on the Company's pilot seniority
list on the date of execution of this
letter of agreement and who remains
employed by the Company as a captain on
July 1, 2002.

3.   The Company will grant
an option to purchase 500 shares of
the common stock, par value $.001 per
share, of Vanguard Airlines, Inc.
pursuant to, in the Company's discretion,
the Company's 1994 Stock Option Plan or

<PAGE>

the 2000 Stock Option Plan to each pilot
who is on the Company's pilot seniority
list on the date of execution of this
letter of agreement and who remains
employed by the Company as a captain on
July 1, 2003.

4.   The Company will grant
an option to purchase 500 shares of
the common stock, par value $.001 per
share, of Vanguard Airlines, Inc.
pursuant to, in the Company's discretion,
the Company's 1994 Stock Option Plan or
the 2000 Stock Option Plan to each pilot
who is on the Company's pilot seniority
list on the date of execution of this
letter of agreement and who remains
employed by the Company as a captain on
July 1, 2004.

5.   On the fifth (5th)
anniversary date of his date of hire, the
Company will grant to each pilot who is
on the Company's pilot seniority list on
the date of execution of this letter of
agreement and who has a date of hire
subsequent to July 2, 1997 an option to
purchase 1000 shares of the common stock,
par value $.001 per share, of Vanguard
Airlines, Inc. pursuant to, in the
Company's discretion, the Company's 1994
Stock Option Plan or the 2000 Stock
Option Plan.

6.   On the date he completes his initial
upgrade to captain at
the Company, including successful
completion of his operating experience,
the Company will grant to each pilot who
is a first officer at the Company on the
date of execution of this letter of
agreement an option to purchase 1000
shares of the common stock, par value
$.001 per share, of Vanguard Airlines,
Inc. pursuant to, in the Company's
discretion, the Company's 1994 Stock
Option Plan or the 2000 Stock Option
Plan.

7.   All options granted pursuant to this
letter of agreement
will be granted in accordance with the
terms and conditions of the Vanguard
Airlines, Inc. 1994 Stock Option Plan or
the Vanguard Airlines, Inc. 2000 Stock
Option Plan, as the case may be.
Dated:   June 1, 2000.

FOR VANGUARD                       FOR VANGUARD AIRLINES
AIRLINES, INC.                     PILOTS ASSOCIATION

/s/ William F. McKinney             /s/ Arvil Taylor
----------------------------       ------------------------
Captain William F. McKinney        Captain Arvil Taylor
Vice President-Operations          Chairman

<PAGE>


/s/ Brian S. Gillman               /s/ George Rachis
----------------------------       --------------------------
Brian S. Gillman                   Captain George Rachis
Vice President and                 Negotiating Committee
General Counsel

                                   /s/ Charles O'Dell
                                   --------------------------
                                   Captain Charles O'Dell
<PAGE>

                         LETTER OF AGREEMENT

                            BY AND BETWEEN

                        VANGUARD AIRLINES, INC.

                              AND THE

                              PILOTS

                                OF

                        VANGUARD AIRLINES, INC.

                       AS REPRESENTED BY THE

               VANGUARD AIRLINES PILOTS ASSOCIATION
             ------------------------------------------
                         IMPLEMENTAITON
             -----------------------------------------

WHEREAS the Company and the Association
have concluded their negotiations for a
first collective bargaining agreement;
and

THEREFORE, the parties hereby agree as
follows:

1.   The Company will implement the
bidding provisions of Section 6
(Scheduling) in June 2000 and will fully
implement the remaining provisions of
Section 6, Section 18 (Hours of Service)
and Section 20 (Training) effective July
1, 2000.

2.   All other sections of the Agreement
will become effective upon signing.

Dated:   June 1, 2000.

FOR VANGUARD                       FOR VANGUARD AIRLINES
AIRLINES, INC.                     PILOTS ASSOCIATION

/s/ William F. McKinney            /s/ Arvil Taylor
----------------------------       ----------------------------
Captain William F. McKinney        Captain Arvil Taylor
Vice President-Operations          Chairman

<PAGE>

/s/ Brian S. Gillman               /s/ George Rachis
----------------------------       ----------------------------
Brian S. Gillman                   Captain George Rachis
Vice President and                 Negotiating Committee
General Counsel

                                   /s/ Charles O'Dell
                                   ---------------------------
                                   Captain Charles O'Dell
                                   Negotiating Committee
<PAGE>

APPENDIX


</TEXT>
</DOCUMENT>
