On June 30, 2006, the two-year Scheduled Airline Operating Agreement and Terminal Building Lease (the Airline Agreement) with the signatory airlines expired. Due to the bankruptcies and other financial difficulties that the airline industry suffered at that time, the airlines would only consider short-term agreements. Since then the airline industry has continued to change with additional bankruptcies, mergers and consolidations. As a result, upon each expiration date, Staff has negotiated either one or two-year extensions to the Airline Agreement. The existing Airline Agreements with Delta Air Lines, United Airlines, Horizon Air Industries, and Allegiant Air expired on June 30, 2012. Staff has once again negotiated a one-year extension of the airlines' respective agreements, with a new termination date of June 30, 2013. Frontier Airlines did not sign an Airline Agreement and continues to operate under City ordinance. Silver Airways (formerly Gulfstream International Airlines), the Essential Air Service provider, operates under an Operating Permit with the Airport, which renews automatically each year until April 30, 2015.  Copies of the Amendments are on file in the City Clerk's office.

The City Council may:

• approve each Airline Agreement amendment, extending the term of the Airline's Agreement to June 30, 2013, or
• not approve each Airline Agreement amendment, extending the term of the Airline's Agreement to June 30, 2013.

These Amendments extend the term of each Airline's Agreement and helps to ensure the Airport's fiscal viability through June 30, 2013. The total budgeted airline revenue for the City is estimated at $3,041,454 for FY13.

Staff recommends that City Council approve the Amendment to each of the Scheduled Airline Operating Agreements with Horizon Air (dba Alaska Airlines), United Airlines, Delta Air Lines (as assignee and successor to Northwest Airlines), and Allegiant Air, extending the Agreement expiration date to June 30, 2013.