Tuesday, November 20, 2018
TKC EXCLUSIVE!!! WHO WILL CONTROL NEW KANSAS CITY AIRPORT?!?!
The struggle to build a new single-terminal airport in Kansas City has seen one scandal after the next and tonight our tax fighter friends raise some important questions and even more interesting dox appearing FIRST for the consideration of our blog community.
Here's the news with the most important part highlighted . . .
CFRG: It's all about control! // Airline lease agreement manual attached.
We encourage every member of the City Council to read the attached manual published by the Transportation Research Board. It goes into great detail about the structure and negotiation of Airport / Airline Rental Agreements. CFRG warned early on the main purpose of pushing for a new terminal was so the airlines could negotiate a new agreement. Under the current “compensatory” agreement, the airlines are under contract for 30 years. Under the new “residual" agreements, the term is 5 years. Which means if the airlines aren’t satisfied with the airport after 5 years, they can walk away and leave Kansas City taxpayers with a $3-4 billion dollar debt.
“with...the advent of a new Airline Agreement concept called the "Residual Airline Agreement" vs. the old Compensatory Airline Agreement that airports have used in the past. The Compensatory Airline Agreement held the airport liable if the airline went broke, could not pay or went out of business. The Compensatory Airline Agreement was more costly because operating cost were elevated to cover up and down years because of length of the agreement i.e. 30 yrs. The new Residual Airline Agreement is negotiated on a much shorter term i.e. 5 years and then renegotiated based on current cost of the airport operations taking into account current enplaned passenger, concessions, etc. Approximately 45% of the major airports now operate under the Residual Airline Agreement. “
The real danger is turning over total control of our airport to the airlines. If the new agreement is not properly negotiated by professionals, the airlines will be able to decide who gets to expand facilities and or routes, who gets to fly in and out of Kansas City and so on. The city loses control of the airport.
It is critical Kansas City gets the proper professionals to negotiate any new agreement with the airlines. We could end up like Denver. Their project went from $1.5 billion to over $5 billion. The major airlines took control after the smaller, low fare operators were squeezed out because of rising rental costs. The majors could then charge higher fees for tickets, etc.
The remodel plan is looking better every day.
You decide . . .