Airport Agreements

Bilateral contracts are an integral part of the working relationship between airports and airlines. In the United States, the three types of airport use agreements are the residual method, the clearing method and the hybrid method. As part of a residual agreement, the financial risk of the host airport is borne by the signatory airlines and, in return, the signatory airlines pay reduced fares for users. However, under a compensation agreement, airports bear their own financial risks in the absence of a undersigned airline. A hybrid agreement combines the characteristics of residual and compensatory agreements. Under a hybrid agreement, for example, airports generally bear their own financial risks in operating the terminal, while the signatory airlines take responsibility for the financial risks associated with operating the airfield. The purpose of this document is to determine whether these three types of trade agreements affect the operational effectiveness of airports. Based on annual data from 59 U.S. Hub airports for 2009-2016, we find that airports with residual agreements tend to have lower operational efficiency. This means that, although the signatory airlines pay advantageous airport fees and charges under a residual agreement, an increase in airport inefficiency may jeopardize the potential benefits of the agreement. Air Services Agreements (ASAs) are formal contracts between countries – Memorandums of Understanding (Memorandum of Understanding) and formal diplomatic notes. It is not mandatory to have an ASA for the operation of international services, but cases where contract-free services exist are rare.

17 An effective starting point for an airport manager to include environmental sustainability in contracts is where efforts are most important. In this context, the scope of the treaty could maximize environmental sustainability performance. To understand the best chances in airport contracts, some airport operators audited current contracts and the environmental impacts of the activity for each contract. Flughafen Zurich AG, the manager of Zurich Airport, robustly monitors the environmental impact of any stakeholder activity where there is an agreement or contract.