Consent 1.D.
Regular City Council Meeting
- Meeting Date:
- 02/24/2020
- TITLE
- Approval of Amendment One to Scheduled Airline Operating Agreement and Terminal Building Lease with American Airlines Inc.
- PRESENTED BY:
- Kevin Ploehn
- Department:
- Airport
Presentation:
No
PROBLEM/ISSUE STATEMENT
On February 28, 2019, the Airport held a meeting with the airlines to discuss the Airport's upcoming Terminal Expansion Project and the next Passenger Facility Charge application. In this meeting, the participating airlines and Airport staff discussed the June 30, 2019 expiration of the existing Scheduled Airline Operating Agreement and Terminal Building Lease and changes that the document might require during the construction of the Terminal Expansion Project. It was agreed that the first thing that should be completed is to extend the term of the existing Airline Agreement until the project start date, providing additional time to put in place an interim agreement to cover the timeframe of the construction project. Amendment One to the Airline Agreement extends the term to March 31, 2020. Airlines that have signed and returned Amendment One to their Airline Agreements are: Allegiant Air, LLC, United Airlines, Inc., Horizon Air Industries, Inc., and Delta Air Lines, Inc. Amendment One for these airlines was approved by the City Council on November 12, 2019. Since Frontier Airlines returned to the Airport after the current Airline Agreements were implemented, Frontier Airlines' Agreement already included the March 31, 2020 expiration date, so no amendment was required for Frontier's Agreement. American Airlines Inc. had not yet signed and returned Amendment One to its Airline Agreement for the November 12, 2019 City Council action. American Airlines Inc. has now signed and returned Amendment One to its Airline Agreement, and the Amendment now requires approval by the City Council.
ALTERNATIVES ANALYZED
City Council may:
- Approve Amendment One to the Scheduled Airline Operating Agreement and Terminal Building Lease with American Airlines, Inc.; or
- Disapprove Amendment One to the Scheduled Airline Operating Agreement and Terminal Building Lease with American Airlines, Inc. and provide direction to staff on how to proceed.
FINANCIAL IMPACT
The revenue the City will receive from the four airlines for operating under Amendment One to the Airline Agreement for lease space, joint use space, common use space, and landing fees for the term July 1, 2019 to March 31, 2020, was estimated to be $1,228,000. The revenue the City will receive from American Airlines, Inc. operating under Amendment One to the Airline Agreement for space and landing fees for the term July 1, 2019 to March 31, 2020, is estimated to be $172,000.
RECOMMENDATION
Staff recommends that the City Council approve and the Mayor sign Amendment One to the Scheduled Airline Operating Agreement and Terminal Building Lease with American Airlines, Inc.