Title
American Airlines Passenger Boarding Bridges
Description
This report requests the Transportation, Infrastructure and Innovation Subcommittee to recommend that the City Council approve the purchase of seven passenger boarding bridges (Bridges) from American Airlines for $4.1 million in exchange for rent credits at the Phoenix Sky Harbor International Airport (Airport) terminals and airfield.
THIS ITEM IS FOR CONSENT ACTION.
Report
Summary
American Airlines currently leases 25 bridges as part of its Terminal 4 operations at the Airport. The Bridges are of varying age and condition. The Bridges are owned by the City of Phoenix and were installed in 1990. The Bridges have frequent mechanical failures that lead to aircraft delays. As an integral part of American Airlines’ operation, it has proposed the structure of this transaction in order to actively manage the Bridge specifications and installation. American Airlines is also able to quickly procure the Bridges at a significant discount due to its purchasing volume. If approved, the Aviation Department will provide rent credits to American Airlines in the amount of $4.1 million as consideration for the seven Bridges. The City will then lease the Bridges back to American Airlines at the rate of $3,014 per month per Bridge.
Contract Term
The term of the lease for each Bridge will be month-to-month and will be consistent with the American Airlines' lease of the associated gate.
Financial Impact
$4.1 million in rent credits will be amortized over the 30-year life of the Bridges at the imputed interest rate of 4.7 percent and charged to American Airlines at the rate of $3,014 per month per bridge.
Concurrence/Previous Council Action
This item was recommended by the Phoenix Aviation Advisory Board on Aug. 20, 2020.
Location
Phoenix Sky Harbor International Airport, 3400 E. Sky Harbor Blvd.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.