On June 2, 2017, American Airlines will begin non-stop service between Billings and Dallas/Fort Worth, TX.  This new service is the result of a lot of community effort to attract American Airlines and then support the new service with a combination of marketing funds, landing fee waivers, and a revenue guarantee for the first year of service.  American Airlines will be operating out of the Airport's Terminal Building and they desire to lease ticket counter, office, and hold room space, and would like to enter into the Airport's standard Scheduled Airline Operating Agreement and Terminal Building Lease.  This Agreement lays out the terms for a passenger airline to operate at the Billings Logan International Airport and to lease space in the Terminal Building.  This Agreement also dictates the financial arrangements for rental adjustments and landing fee calculations.  Since part of the incentive package to entice American Airlines to begin the new service between Billings and Dallas included waiving the landing fees for a one year period, the Agreement reflects the one year landing fee waiver.  A copy of the Agreement is on file in the City Clerk's Office.

City Council may:

• Approve the Scheduled Airline Operating Agreement and Terminal Building Lease with American Airlines, Inc.; or
• Disapprove the Scheduled Airline Operating Agreement and Terminal Building Lease, and provide staff with guidance on how to proceed.

It is estimated that in the first year, Terminal rents paid by American Airlines will be approximately $150,000.  In future years the landing fee will also be collected and total revenues collected will be closer to $200,000.

Staff recommends that the City Council approve the Scheduled Airline Operating Agreement and Terminal Building Lease at the Billings Logan International Airport with American Airlines, Inc.