The staff at the Billings Logan International Airport has been negotiating a new Scheduled Airline Operating Agreement and Terminal Building Lease (Agreement) with the Airport's five airline tenants for over one year.  Recently, consensus was reached between all parties and a six year Agreement was agreed to.  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 arrangement that is in place between the City and the airlines.  The previous agreement had not been significantly updated since 1996 and this new Agreement updates the language to reflect the realities of the airline/airport world today.  The airlines that have signed the Agreement are Alaska/Horizon, Allegiant, Cape Air, Delta, and United.  The Agreement term is July 1, 2013 to June 30, 2019. 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 the five airlines serving the Billings market; or
• Disapprove the Scheduled Airline Operating Agreement and Terminal Building Lease, and provide staff with guidance on how to proceed.

The five airlines that have signed this Agreement provide the Airport with an estimated $3,000,000 in revenues annually. Since the amount the airlines pay is dependent on contributions from other revenue sources and the amount of expenses in a given year, their rentals and fees can vary from year to year.  The Agreement's rate making methodology ensures that the Airport will have the funding it needs to operate each year.

Staff recommends that City Council approve and the Mayor execute the five Scheduled Airline Operating Agreement and Terminal Building Leases with the airlines that currently serve Billings.