Official Statement Airport Commission City and County of San ...
Official Statement Airport Commission City and County of San ...
Official Statement Airport Commission City and County of San ...
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During Fiscal Year 2008-09, the <strong>Airport</strong> accounted for approximately 40.7% <strong>of</strong> total air cargo at the three<br />
<strong>San</strong> Francisco Bay Area airports, compared with 42.7% in Fiscal Year 2007-08. Oakl<strong>and</strong> accounted for<br />
approximately 53.2% <strong>and</strong> <strong>San</strong> Jose accounted for approximately 6.0% <strong>of</strong> the total air cargo in the Bay Area during<br />
Fiscal Year 2008-09. The <strong>Airport</strong> h<strong>and</strong>led approximately 23.0% <strong>of</strong> domestic loaded <strong>and</strong> unloaded cargo <strong>and</strong><br />
approximately 93.7% <strong>of</strong> the Bay Area’s international loaded <strong>and</strong> unloaded air cargo. Oakl<strong>and</strong> had the largest share<br />
<strong>of</strong> the domestic air cargo market (approximately 68.9% compared to approximately 67.5% during Fiscal<br />
Year 2007-08), which is attributable to its traffic in express package shipments, an activity that requires significant<br />
l<strong>and</strong> area that is not available at or in the vicinity <strong>of</strong> the <strong>Airport</strong>. Due to the large international component in the<br />
overall cargo mix at the <strong>Airport</strong> <strong>and</strong> a deeper decline in international cargo, the total cargo tonnage decline at the<br />
<strong>Airport</strong> was more severe compared to the other Bay Area airports which have cargo mixes that are primarily<br />
domestic. During June <strong>of</strong> Fiscal Year 2008-09, this resulted in a 2.0 percentage point decline in cargo tonnage<br />
market share for the <strong>Airport</strong>, <strong>and</strong> an increase in cargo tonnage market share <strong>of</strong> 2.1 percentage points at Oakl<strong>and</strong><br />
while the market share for <strong>San</strong> Jose was virtually unchanged.<br />
During December 2009, the <strong>Airport</strong> accounted for approximately 40.7% <strong>of</strong> total air cargo at the three <strong>San</strong><br />
Francisco Bay Area <strong>Airport</strong>s, compared with 34.7% for December 2008. Oakl<strong>and</strong> accounted for approximately<br />
53.1% <strong>and</strong> <strong>San</strong> Jose accounted for approximately 6.2% <strong>of</strong> the total air cargo in the Bay Area during December 2009.<br />
The <strong>Airport</strong> h<strong>and</strong>led approximately 23.5% <strong>of</strong> domestic loaded <strong>and</strong> unloaded cargo <strong>and</strong> approximately 94.7% <strong>of</strong> the<br />
Bay Area’s international loaded <strong>and</strong> unloaded air cargo during December 2009.<br />
The <strong>Commission</strong> expects the <strong>Airport</strong> to continue to be the major air traffic center for the Bay Area based on<br />
air traffic projections, the substantial investment by a number <strong>of</strong> major airlines at the <strong>Airport</strong>, terminal facility<br />
improvements <strong>and</strong> passenger preferences stemming from the <strong>Airport</strong>’s location, service <strong>and</strong> frequent flights to<br />
domestic <strong>and</strong> international destinations.<br />
The primary competitor <strong>of</strong> the <strong>Airport</strong> on the West Coast for international passengers is Los Angeles<br />
International <strong>Airport</strong> (LAX), rather than Oakl<strong>and</strong> or <strong>San</strong> Jose. During Fiscal Year 2008-09, international passenger<br />
traffic (enplanements <strong>and</strong> deplanements) at the <strong>Airport</strong> decreased 7.7% compared to a decrease <strong>of</strong> 12.2% at LAX for<br />
the same period. During June 2009, international passenger traffic at the <strong>Airport</strong> decreased 8.0% compared to a<br />
decrease <strong>of</strong> 15.9% at LAX for the same period.<br />
Existing Airline Agreements<br />
Three types <strong>of</strong> agreements (collectively referred to as the “Lease Agreements”) are currently in effect<br />
between the <strong>City</strong>, acting through the <strong>Commission</strong>, <strong>and</strong> certain airlines (the “Signatory Airlines”) operating at the<br />
<strong>Airport</strong>: the original Lease <strong>and</strong> Use Agreements (the “Original Agreements”), the amended Lease <strong>and</strong> Use<br />
Agreements (the “Amended Agreements”), <strong>and</strong> the Lease <strong>and</strong> Operating Agreements (the “Operating Agreements”).<br />
Certain non-signatory airlines at the <strong>Airport</strong> operate under short-term month-to-month operating permits while the<br />
remaining non-signatory airlines use <strong>Airport</strong> facilities on an itinerant basis.<br />
In 1981, as a result <strong>of</strong> litigation in 1979 between the <strong>City</strong> <strong>and</strong> certain airlines regarding the operation <strong>and</strong><br />
finances <strong>of</strong> the <strong>Airport</strong>, the <strong>City</strong> entered into a Settlement Agreement (the “Settlement Agreement”) <strong>and</strong> the Original<br />
Agreements with 15 Signatory Airlines <strong>of</strong> which 14 are currently operating at the <strong>Airport</strong>. In connection with the<br />
opening <strong>of</strong> the ITC in 2000, eight <strong>of</strong> the original Signatory Airlines entered into Amended Agreements that provide<br />
for increased common use facilities <strong>and</strong> equipment in the ITC. In addition, 13 <strong>of</strong> the 16 non-signatory foreign flag<br />
airlines currently operating in the ITC became Signatory Airlines in 2000 by entering into Operating Agreements<br />
which are substantially similar to the Amended Agreements. Thus, there are at present a total <strong>of</strong> 27 Signatory<br />
Airlines, <strong>of</strong> which seven do not lease space in the new ITC <strong>and</strong> thus have not signed the Amended Agreement, <strong>and</strong><br />
20 have signed either the Amended Agreement or the Operating Agreement in order to lease space in the new ITC.<br />
Although the Amended Agreements <strong>and</strong> the Operating Agreements differ from the Original Agreements with<br />
respect to the use <strong>of</strong> the ITC, all <strong>of</strong> the Lease Agreements incorporate the same provisions with regard to the<br />
calculation <strong>and</strong> periodic adjustment <strong>of</strong> terminal rentals <strong>and</strong> l<strong>and</strong>ing fees, <strong>and</strong> airline review <strong>of</strong> proposed capital<br />
projects.<br />
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