The opinion of the court was delivered by: Gershon, District Judge.
Unless otherwise indicated, the following facts are undisputed.
Defendant Atlas is a Delaware corporation with its principal
place of business in Colorado. Atlas is a public company doing
business in New York. Atlas was organized in 1992 and began
operations upon Federal Aviation Administration certification in
February 1993. It operates Boeing 747 cargo aircraft worldwide.
Atlas does not operate its own scheduled service. Rather, Atlas
leases out its aircraft and crew to other airlines which need
additional cargo capacity, but which choose not to undertake the
investment of acquiring additional aircraft and crew. These
leases are called ACMI or "wet" leases; "ACMI" stands for
aircraft, crew, maintenance and insurance, which are the four
elements Atlas provides in a wet lease. The customer airline
provides route authority, traffic rights, landing rights, cargo
and rental payments. Atlas and the customer agree on a flight
schedule and a required minimum monthly number of flight hours.
Plaintiff Air Support is a New York corporation organized in
1989, which began operations in 1994. Air Support's principal
place of business is in New York. Its sole shareholder and
full-time employee is Carsten Petersen ("Petersen"), a Danish
citizen. Air Support's business is to broker wet leases and
charters between airlines and wet lease operators such as Atlas.
While working for another company in 1993, Petersen met the
principals of Atlas at JFK International Airport.
On September 8, 1994, Atlas and Air Support entered into an
agreement (the "First Contract"). The First Contract was in the
form of a letter from David M. McElroy, then the Chief Operating
Officer of Atlas, to Carsten Petersen, the President of Air
Support. The First Contract, signed by both parties and with a
handwritten date of September 8, 1994, provided in pertinent part
This letter will confirm our agreement whereby you
will seek to obtain charter contracts, leases or
cargo loads for Atlas Air, Inc.
1. You will solicit business in the following
geographical areas: South America, Central America,
Europe (except KLM, Air France, Lufthansa, Cargolux,
British Airways), Middle East (except Saudia,
Emirates). . . .
4. Atlas will pay you a commission on any contract
with a new carrier where you have previously secured
the business equal to 3% of the actual net proceeds,
payable within 10 days of receipt of payment from the
contracting party. You should clear prospective
clients with Mr. McElroy or Mr. Chowdry, to avoid
parties Atlas has previously contacted. Commissions
on contract renewals from your clients will be
mutually agreed upon.
5. This agreement may be terminated by either party
on 30 days advance written notice. . . .
7. You are an agent of Atlas in connection with any
transaction accepted hereunder. . . .
8. This Agreement will be governed by the laws of the
State of New York, USA, and any litigation related
hereto must be conducted before the courts of that
state to whose jurisdiction you hereby consent.
9. This is the full and complete contract between the
parties, and no other written or oral understandings
are effective. This agreement cannot be amended
orally or by course of dealing, but only by a written
agreement signed by both parties.
On May 3, 1995, Atlas notified Air Support that it would be
terminating the First Contract with Air Support on June 2, 1995,
pursuant to the First Contract's 30-day notice provision.
The facts preceding the signing of the wet lease between
Scandinavian Airline Systems ("SAS") and Atlas are undisputed. On
November 16, 1993, Air Support's Petersen supplied a written
analysis to Atlas regarding eastbound cargo routes from the
United States to the Far East through Scandinavia. On November
18, 1993, Petersen wrote to Atlas that SAS was closing its
Copenhagen-Los Angeles route and reducing its Scandinavia-New
York service by fifty percent, thereby intensifying the demand
for cargo service over these routes.
In March 1994, Petersen contacted SAS headquarters in Sweden on
behalf of Atlas. Petersen also contacted Henric Nauckoff, SAS
Director of Cargo Sales and Services in North America. On March
9, 1994, Petersen submitted a report to Atlas in which Petersen
analyzed various scenarios under which Atlas could possibly do
business with SAS, including a standard ACMI or wet lease,
charters, or a joint venture between Atlas and SAS since it
appeared that SAS desired some degree of risk-sharing, that is,
that Atlas would bear part of the cost should SAS's planes end up
not being fully loaded.
On March 10, 1994, Atlas's McElroy sent SAS an introductory
letter proposing a straight (i.e., no risk-sharing) agreement
between SAS and Atlas, to start in April 1994, under which SAS
would pay Atlas $6,000 per block hour. The letter also stated
that "Atlas will consider a reduce [sic] rate during marketing
development period and/or a joint venture proposal for the
On April 22, 1994, SAS employee Einar Longva wrote a letter to
Atlas's Vice-President of Operations, James T. Matheny, in which
he referenced a trip to Europe which Matheny had taken to meet
with SAS. Petersen had arranged the trip and attended the meeting
in question. In his letter to Matheny, on which Petersen was
copied, Longva stated that "we would, at this time, based on a
cooperation formula which at a later stage could develop into a
firm long term wet lease agreement on traditional terms and
conditions, like to propose" a risk-sharing lease agreement.
On May 6, 1994, Atlas's Matheny prepared a draft of a response
to Longva's proposal, which Matheny first sent to Petersen for
comments. In the final version of this letter, dated May 6, 1994,
Atlas made a modified risk-sharing proposal to SAS, stating
"Atlas is certainly willing to share the risk of developing this
routing." On May 26, 1994, SAS responded to Matheny's
risk-sharing proposal of May 6, 1994, with a counter-proposal in
which Atlas would bear more of the risk. On that same day,
Matheny responded to SAS's counter-proposal with a letter stating
that "we will study your proposal carefully and provide a
response in the very near future. I am confident that we can come
to agreement on terms which will be acceptable to both airlines
and result in a profitable venture for this freighter route. We
look forward to finalizing an agreement soon."
There are no communications in the record between SAS and Atlas
from May to October 1994. On November 7, 1994, Petersen sent SAS
route information regarding distances between New York,
Stockholm, Tokyo and Hong Kong. On November 8, 1994, Petersen
sent a letter to executives Michael Chowdry, John Blue and David
McElroy of Atlas, which stated that:
On November 9, 1994, Petersen wrote to SAS with a proposal for
SAS to wet-lease "a Boeing 747-200F, once weekly from New York
via Gothenburg to Japan." Drafts of proposals were then exchanged
between Atlas and SAS. On January 16, 1995, David McElroy of
Atlas sent a letter to SAS summarizing the proposed terms for the
"start-up phase of your service." These terms included some
risk-sharing. On January 30, 1995, Air Support's Petersen sent
Atlas a memo which stated that "according to my [Petersen's]
sources, Atlas Air, Inc. will get the contract."
On April 3, 1995, without notifying Air Support, Atlas's
Matheny sent SAS a letter stating:
As follow up to our most recent discussions
concerning freighter service for SAS, we have tried
hard to procure additional aircraft, but without
success. Currently, the aircraft we are adding to our
fleet are committed to long term, full utilization
Regrettably, Atlas will not have aircraft
availability with which to provide service to SAS