Well putting on my bush lawyer hat I humbly suggest I am right and retread 7 is wrong. If you read the preceding sections from RP07 (thanks Hiro) you will see that either party can terminate the agreement iaw section 27. The additional bit of para 2.2 "...save that the Period of Validity shall then be for a two year period from 1st January 2009 to 31st December 2010" is referring to the agreement being renewed but obviously with a new Period of Validity.
That is - if the agreement is renewed in entirety then it is exactly the same EXCEPT for the Period of Validity - which will be for the 2 years vice the 20 month previous validity. If the agreement is not renewed the "...save that" section does not apply.
Bottom line, either party can terminate RP07 in writing by 30 Sep 08, and then we would be back to Company Policy and AFTLS as of 1/1/09 - clear as mud?