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2 Guidebook for Developing and Managing Airport Contracts
sell bonds without long-term leases. The most common lease term in the industry today is 5 years.
This is tied in part to the PFC requirement that leases for exclusive space can be no greater than
five years. In addition, as monumental changes take place in the airline industry (e.g., bankrupt-
cies, mergers, and hub closures) and the overall fluid airline economic picture, airports prefer the
greater flexibility of the shorter term (in addition to other flexibilities in the agreements).
Some airports have created even greater flexibility by including option terms in the agreement,
either airport unilateral or by mutual agreement.
See CRP-CD-81 (enclosed herein), Appendix to Chapter 1, Airline Agreements, for excerpts
from the PDX Airline Agreement for provisions regarding the extension of the agreement by
mutual agreement.
1.2 Control of Space
A strong trend in airline agreements is for the airport to have greater control over its facili-
ties. This is driven by (1) needs and requirements to maximize use of facilities, (2) an affirmative
obligation imposed by federal statute requiring airports to accommodate all carriers desiring to
operate at their airports; and (3) a desire to minimize costs that result from the construction of new
facilities and overall good husbandry of airport resources.
To increase their control, airports are shifting from exclusive-use premises to preferential and
common/joint-use premises. There are a multitude of combinations of these constructs which in
turn are driven by existing and projected airline activity, current space and planned construction
of additional space, historical anomalies, and the existence of a hub or heavily dominant carrier,
and other airport-specific drivers.
The general trend is for ticket counter and airline ticket office (ATO) space to be designated
preferential space. This gives the airport flexibility in accommodating changing dynamics. How-
ever, based on the particular circumstances, airports continue to lease ticket counters and ATO
space on an exclusive basis. This is motivated by availability of this type of space and airline con-
cerns about proprietary functions, labor agreements and security (e.g., ticket stock and check out
procedures). Every airport must customize its own requirements.
Gates (which include holdrooms, loading bridges, and apron parking) are most frequently leased
on a preferential or common-use basis. In addition, many airports have utilization requirements
related to the ability to lease a preferential gate.
See CRP-CD-81 (enclosed herein), Appendix to Chapter 1, Airline Agreements, for excerpts
from the STL and BWI Airline Agreements for provisions regarding minimum gate utilization
requirements.
Many airports strive to have a combination of preferential-use gates (the majority of gates)
and common-use gates to create flexibility to accommodate new entrants and increased flight
activity by incumbent carriers.
Baggage claim and tug roadway space is most commonly leased on common/joint-use basis,
the notable exceptions being unit terminals or special facilities. The most frequently used formula
for allocation of costs in these areas is a 20/80 formula (20% based on number of carriers and 80%
based on deplaned passengers), however, many airports use a 10/90 formula. Generally, the air-
ports do not have a strong preference for any one formula; the decision is frequently driven by the
airlines' preference.
One issue that has been largely resolved is how to count deplaned passengers (i.e., total deplaned
passengers versus deplaned destination passengers). The strong trend is for deplaned passengers
to be defined as deplaned destination passengers for purposes of calculating the airlines' rela-
