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OCR for page 86
86 Guidebook for Managing Small Airports
Today, more and more leases reflect a partnership arrangement rather than a landlord/tenant
relationship. Although airport and airline management quite often disagree about issues, as well
as the need and timing for various facilities at an airport, their shared goal is to serve the travel-
ing public. To do so they need to work together both operationally and financially. The overall
goal of airport management should be to secure a positive working relationship with its airline
partner(s) that is good for the airline, the airport, and the community in which it serves. In addi-
tion to an operational plan that provides for the timely needs of the respective airlines, a mech-
anism is needed that defines the financial arrangement between the parties. Many variations exist
in the types of services and facilities that are included in the cost assessment.
The most common financial mechanisms used to obtain a revenue stream from airlines are a
square footage charge for rented space and a landing fee based on aircraft weight. Airports have
traditionally used a compensatory or a residual ratemaking methodology, or a combination of
both, to cover different financial aspects of the relationship. These rates may be calculated to
(1) recover the airport's specific costs for providing facilities to the airlines (compensatory
approach) or (2) balance the airport's overall budget after revenues from non-airline sources are
subtracted from the total expense (residual approach). More detailed definitions of the various
financial mechanisms in use by airports are described in Airport Planning and Management (6).
Standard Lease Requirements
Lease agreements between an airport and airlines vary considerably from airport to airport.
This variation is due to factors such as the size and complexity of the airport, its view on long-
term versus short-term commitments, and the community's or airport authority's view on what
items are important beyond the basics. Space does not allow the inclusion of sample lease agree-
ments in this guidebook. The next section of this chapter will provide the reader with sources to
find lease information. However, the following outline example of an airportairline lease may
provide some insight into the items normally included in such a lease:
· Preamble
· Article I. Definitions
· Article II. Term
· Article III. Grant of Rights
· Article IV. Airline Premises
· Article V. Calculation of Rates and Charges
· Article VI. Identification and Allocation of Revenues and Expenses
· Article VII. Payment of Airline Fees and Charges
· Article VIII. Principles Relating to Rates and Charges
· Article IX. Not Utilized
· Article X. Maintenance, Operation, Use and Condition of Premises
· Article XI. No Other Charges
· Article XII. Indemnity and Insurance
· Article XIII. Quiet Enjoyment
· Article XIV. Inspection by Airport/Community
· Article XV. Rules and Regulations
· Article XVI. Assignment and Sublease
· Article XVII. Surrender of Possession and Holding Over
· Article XVIII. Taxes
· Article XIX. Default and Cancellation
· Article XX. Damage and Destruction
· Article XXI. Prohibited Uses
· Article XXII. Improvements
