Compensatory Use and Lease Agreements
Under these types of agreements, which are progressively in use at more modern and successful airports, the airline pays only for the facilities and services actually used. The airport assumes the responsibility for meeting the costs of operation like any other owner. One survey reported that 20 percent of these types of agreements have Mil clauses. Compensatory agreements, without Mil clauses, allow the airport full latitude in the use of its funds and allow the incentive to add additional services in the interest of the public and the airport instead of the interests of the incumbent airlines at the airport.
Hybrid Use and Lease Agreements
These agreements typically exclude nonaeronautical uses (restaurants, rental car operations, etc.) from the residual pool, so that an airline’s guarantee is limited to the cost of aeronautical operations only. The airport retains earned revenues from its nonaeronautical operations while being guaranteed a break-even on airfield activities. Seventy – four percent of these agreements contain Mil clauses, the average length of which is 20 years. While these agreements are anticompetitive with respect to capital improvement and expansion projects, they do give the airport the incentive to expand its nonaeronautical sources of income.
■ Gate Leasing Arrangements
Airport gates obviously are a finite commodity and an essential element of both airline service and competition in the airline industry. In combination with overriding use agreements, or as separate undertakings with airlines, airports have normally utilized three methods of allocating gate use to airlines serving that airport:
1. Exclusive-use contracts
2. Preferential-use contracts
3. Airport controlled gates