Correction: Referring to a proposal for a new terminal services permit at Bill and Hillary Clinton National Airport/Adams Field during a Dec. 10 meeting of the Little Rock Municipal Airport Commission’s lease committee, attorney Carolyn Witherspoon said, “If [airport service companies] don’t want to do business on our property, they don’t have to apply for a permit.” This article incorrectly attributed the quote to Ron Mathieu, the airport’s executive director.
Companies serving the airlines and other tenants at Bill and Hillary Clinton National Airport/Adams Field soon will have to obtain a permit and pay for the right to conduct business on airport property.
The Little Rock Municipal Airport Commission last week approved the staff proposal to create the permit.
The companies affected by the new permit, regulations and fees include those providing ground handling, ramp services, passenger ground equipment, porter services, aircraft cleaning and baggage delivery. About nine service companies now operate at the airport, according to airport staff.
Tenants were briefed on the proposed permit at a recent meeting, but the staff is only now beginning to schedule meetings with the affected service providers, according to Shane Carter, an airport spokesman.
Airport staff, at a meeting of the commission's lease committee last week, characterized the proposal less as a new source of revenue and more as a way to keep track of companies working on airport property.
As of now, the airport has no contractual relationship with the service companies. The airport typically has contracts with other tenants, such as the airlines, which have a formal agreement with the airport, pay landing fees and lease space at the ticket counters and gates.
"It is important to know who is doing what out on the ramp," said Bryan Malinowski, the airport's deputy executive director, who added that the permit is an accepted practice in the airport industry.
An airport at which Malinowski used to work, Fort Lauderdale-Hollywood International Airport, issues permits to more than 50 service companies working for the airlines, according to James Kelly, the airport property manager for airlines for the Broward County Aviation Department, which manages the airport.
"It's an industry standard to have some kind of way to regulate the service providers," Kelly said. "We've done it for many years."
The permit has grown in importance as major airlines, which once provided their own services, have subcontracted them out to other companies, Kelly said.
The change "has just made it more complex from a security and oversight standpoint," he said.
The fee for a terminal service permit at Fort Lauderdale-Hollywood is 5 percent of gross revenue on the first $500,000 annually. Four percent is charged on gross revenue between $500,000 and $1 million and 3 percent on gross revenue above $1 million.
McCarran International Airport in Las Vegas also requires a permit for its 37 airline service providers, said Christine Crews, an airport spokesman.
Most providers are charged 5 percent of gross revenue annually, Crews said. Catering companies that provide in-flight meals for airlines are charged 8 percent of gross revenue.
Under the Clinton National proposal, the service providers would be charged 5 percent of their gross revenue annually, which airport staff said is a recognition that their income is derived from the facilities the airport provides. The proposal adopted by the commission also gives the airport staff discretion to negotiate a permit fee in lieu of the 5 percent of gross revenue.
The permit would set forth contractual terms for performing services on airport property and provide a direct relationship between the airport and service provider and protection for the airport, including proof of liability insurance.
"This is a best practices," Malinowski said. "We think it's worth doing."
Malinowski, in response to some concern about the fee among commission members, said it could be phased in over a period of time. The fee ultimately would be passed along when the service companies negotiate new agreements with the airlines or other tenants with whom they have a business arrangement.
Still, he played down the fee, which he said wasn't a "big revenue generator."
Ron Mathieu, the commission's executive director, recently told commission members that the airport wouldn't compel anyone to pay the fee.
"If they don't want to do business on our property, they don't have to apply for a permit," he said.
One commission member, Bob East, thought it was important for the airport to be able to track which companies were at the airport and whether they had insurance coverage.
Other companies operating on airport property already pay similar fees, he added.
Metro on 12/22/2014