The Federal Aviation Administration Office of Civil Rights’ National Airport Policy and Compliance Team has updated its guidance on long-term and exclusive agreements for sponsors and tenants at airports.
The guidance, which covers the airport concessionaire disadvantaged business enterprise program, is aimed to provide guidance and does not create new legal mandates. It “sets forth the FAA’s and the department’s interpretation of long-term exclusive lease agreements, which are generally (with exception) prohibited in the (ACDBE) regulation, 49 CFR Part 23.”
It defines exclusivity as “an entire category (lodging, retail, food service, dining services, transportation, parking, etc.) or a subset of a category of a particular business opportunity that is limited to a single business entity on an entire airport or in a terminal depending on the size of the airport. … Exclusivity should also be viewed in light of a significant or major discrete area that will vary from airport to airport. In some airports, particularly small airports, exclusivity may be defined as the entire airport. On the other hand, airports that have multiple terminals or concourses/hubs may define exclusivity more narrowly. Let’s say an airport has five gates, one sit down restaurant, and the limited use of taxi service – in this scenario, exclusivity would be defined as the entire airport. However, if an airport has four terminals and multiple gates in each terminal, each terminal may be viewed separately in terms of exclusivity. At a minimum, each terminal would be evaluated in terms of exclusivity based on the fact that the business opportunities, including those for ACDBEs, are primarily exposed to that terminal only and not the customer traffic for the entire airport. Other distinct areas for consideration are concourses, hubs, or a major grouping of facilities that has its own unique identity and customer traffic flow.”
In addition, it defines long-term as “any lease agreement between a sponsor and a concessionaire that is more than five years in length. More than five years includes any combination of base term and options (e.g., options to expand, options to lease a new section or terminal, etc.) if the effect is to promote an exclusive arrangement.”
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