Trillion Aviation

Use and Lease Agreement drafting and negotiations

Trillion principles served as major airline representatives in lease agreement negotiations throughout North America. In their time with the airlines and now as airport consultants, the Trillion principals have a strong understanding of the economic model alternatives for rate making methodologies for non-hub and small hub airports and the variety of airport business applications and the strengths and weaknesses of each. This is the area where Trillion Aviation can bring the breadth of having worked with dozens of similarly situated non-hub and small hub airports in North America to the discussion. While no two airport are the same, there are elements of similarity where having a broad perspective is essential and industry “best practices” can be applied to arrive at the best alternative for each airport. Our best practices approach is to develop the mission statement as well as goals and objectives for the particular contract or discipline at the airport on the front end and then customize the contract to achieve the mission. The airline lease agreement will be the single most important agreement at an airport and will become the foundation of the business deals negotiated with all other tenants.

Trillion has been an industry leader in trying “bridge the gap” in developing airline contracts that meet the needs of legacy airlines and the ultra-low cost carriers. These two different types of airlines have different needs from the airport and there needs to be a balance between the classes of carriers so that there is a fair and equitable system so that the airlines pay for what they use. Trillion has repeatedly dealt with this sensitive issue and has developed a model that achieves that goal.

This process will involve developing strong and knowledgeable positions for consideration by the client prior to negotiations with the airline. Bringing as many industry-wide examples as possible to the client allows the airport to analyze and review alternatives and develop positions to counteract potential objections by the airlines.

The airlines demand that airports are held accountable for all aspects of non-airline revenue and spending and are hesitant to support capacity related capital projects at small hub and non-hub airports where the cost of the construction is paid for in rates and charges. Trillion professionals have served as industry experts on behalf of airports as they have performed technical and operational review of designs, existing space, and subsequent funding alternatives as well as value engineering exercises. Airports that develop aggressive funding plans and minimize the impact of construction costs on rates and charges are more likely to gain airline support for necessary capital spending. Because Trillion has worked with the volume of airports the airlines have had and Trillion has had the exposure to all forms of airport financing available, Trillion is in a unique position to help guide these discussions with the airlines.

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