PORT OF SEATTLE
MEMORANDUM 
COMMISSION AGENDA                      Item No.         3c 
ACTION ITEM 
Date of Meeting      September 8, 2015 
DATE:     September 3, 2015
TO:       Port of Seattle Commission
Ted Fick, Chief Executive Officer
FROM:    Mike Merritt, Commission Chief of Staff
SUBJECT:  Forum on Seattle-Tacoma International Airport's International Arrivals Facility
(IAF), Wrap-Up and Next Steps

SYNOPSIS
Introduction
The Port of Seattle is developing a new International Arrivals Facility at Seattle-Tacoma
International  Airport  (STIA)  to  replace  the outmoded  arrivals  hall  in  the South  Satellite
constructed in early 1970s to meet the demands of growing international air travel.
The airport staff started planning and design of the IAF in 2008 with the engagement of the
airlines.  Earlier this year, as the Port moved toward engaging a firm to finalize design and
construct the project, several of the airlines raised concerns about the overall cost and proposed
funding plan of the IAF. While the airlines support the need for improvements to the arrivals
facility, the issues identified by the airlines included:
Significant increases in cost estimates for the IAF
The proposed location and plan
Financing elements, particularly the significant use of the Passenger Facility Charges
(PFCs) for the new IAF
Allocation of gates among international airlines and the need to upgrade the aging South
Satellite
Concerns relating to airline engagement throughout initial project programing.
As a result, on May 26, 2015, the Port Commission initiated a 90-day review of the IAF. For
this review, the Commission directed staff to utilize outside experts to both verify the earlier
programming work and to review the financing plan and sought additional input from all airlines
serving Sea-Tac Airport. The Commission expressed its intent to move forward with the IAF

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015 
Page 2 of 11 
program and noted that this 90-day process would be "a pause" to ensure the planning and design
would proceed based on learnings gained during the pause period. 
As part of the May 26 action, directed staff to model a preliminary funding plan for the facility
that would result in rates and charges competitive with comparable airports, a judicious use of
airport cash, and avoid creating competitive advantage or disadvantages among airline tenants. 
Outside Experts Hired to Review 
Staff initiated work and engaged two airline-industry finance experts to review the port's
proposed funding approach and to provide the Commission with an overview of financing
models of IAFs around the country and in particular the use of PFCs as a funding mechanism.
Staff also identified accomplished airport planning and programming experts to perform an
review of the various studies accomplished to date and provide their own analysis.
Airline Participation 
Over 40 airline representatives attended the July 14 and July 28 Commission meetings and
participated in follow-up meetings with the Port CEO, Airport Director, and staff on July 15 and
July 29 respectively. As a result of these meetings, over 110 questions were answered by airport
staff.  In addition, staff created a SharePoint site accessible to airlines to enable their review of
those answers along with the original planning and design documentation. 
As the 90-day period was in its final month, the Commission held a round table discussion with
both domestic and international airline property representatives.  During the discussion, each
airline was able to voice their primary concerns and they answered several questions from
commissioners. All the airlines expressed their appreciation of the open process, many which
noted its unprecedented nature.  International foreign-flag airlines noted appreciation for two
primary things:
1.  The airport decision to make the Concourse A gates common use, and 
2.  A need to fully renovate the aging South Satellite.
One airline suggested studying the idea of towing aircraft as a way to eliminate the need for
building the IAF  staff has subsequently studied the idea, found it to not be feasible, discussed
results with the airline, and posted results for all airlines to view.  Multiple airlines commented
on funding while noting that those decisions rest with the Commission.
Continuing Collaboration with Airlines 
While the original 90-day period expired, similar collaborative work with the airlines will
continue throughout the IAF validation process, an effort which began on July 20 and will
continue through November. Six meetings have been scheduled to allow ample opportunity for
airline technical input as the validation process moves forward.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015 
Page 3 of 11 


Next Steps 
The validation process will narrow multiple design configuration alternatives to a single
recommendation which will enable the IAF team to produce a target budget and schedule. This
information leads to the first of two major authorization requests to the Commission.
1.  December  2015  when  staff  intends  to  bring  forward  a  significant  request  for
authorization to initiate full design; mobilization, accomplish enabling construction
activities such as utilities, moving facilities out of the footprint of the construction area,
materials ordering, and early major construction work of the facility.
2.  Second quarter of 2017 when the design-builder has progressed enough (approximately
60% design) to provide a guaranteed maximum price for consideration by the
Commission.
The current estimated cost of the project is $608 million which requires a Majority-In-Interest
(MII) ballot to be sent to the airlines for their consideration.  If the MII (defined as (1) airlines
with 55% of airline payments to the airport, and (2) 55% of signatory airlines) vote is against the
project, then the project would be delayed by 6 months.   It is staff's recommendation and
intention to mail the ballot in September to ensure that the delay period does not in turn cause the
project to be delayed, the impact of which could cause inflationary construction costs estimated
at $7.8 million.   It is an important priority to keep costs down wherever possible, a fiscal
responsibility to King County constituents and the airline partners.  Initiating the balloting
process during this recommended timeframe significantly aids the project in terms of schedule
and cost.
BACKGROUND 

Program History 
From 2008 to April 2015 the staff convened twenty-one meetings with the Airline Airport
Affairs Committee (AAAC) in which the IAF was discussed. An additional eighteen meetings 
were held with the international station managers association from 2012 to April 2015. 
In February 2008, airport staff met the AAAC to discuss the growing congestion at the existing
Federal Inspection Services area within the South Satellite (SSAT) where international arriving
passengers arrive for passport screening by U.S. Customs and Border Protection and other
screenings by US Agriculture, etc. Airport staff and the AAAC met again twice in 2009 on the
same subject.  The AAAC received reports about international passenger growth, and were
presented ideas of how to alleviate the corresponding congestion within the South Satellite.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015 
Page 4 of 11 
During 2010 and 2011, communications intensified within the AAAC group as demonstrated by
discussion occurring at essentially every meeting throughout the two year period.
Those discussions centered on finding ways to solve the congestion by trying to expand
within the satellite to provide short-term and medium term-relief.
In addition, during that period, the airlines were asked if they would consider adjusting
their flight schedules to lessen peak needs. The airlines were clear that they did not want
to change their current flight schedule which affects their wider network or to limit their
future scheduling possibilities.
The airlines ultimately determined that expenditures within the SSAT were unwise as
compared to embarking on a permanent longer term solution outside the SSAT.
It was also determined that growth in international Federal Inspection Service (FIS) 
passengers would exceed the capacity of the mid-term project before it could be
completed.
Portions of this work with the airlines were brought to the Port Commission in 2010 and 2011
via three briefings regarding the situation and thinking about the alternatives.
Definition Work 
In the following years, definition work for the IAF got underway to define the basic parameters
of the program that would be necessary to meet the long term needs. Coordination work with the
AAAC occurred twice in 2013 and four times in 2014. In addition four added meetings were 
held in October and November of 2014 to specifically focus on related costs of various elements 
within the IAF programming layout.  Coordination with the Airline Station Managers occurred
fourteen times in the two year period.   Briefings and Action requests to the Commission
happened five times in 2013 and 10 more times in 2014.
During this multi-year period, staff began briefing the Commission regarding the needs to serve
growing international traffic.  From 2010-2014, staff briefed the Commission fourteen times.
The Commission passed nine action items relating to the IAF from 2013-2015, including the
authorization  of  design-build  methodology,  issuing  the  Request  for  Proposal  (RFP),  and
executing the contract with the design-build team. 

LEARNINGS FROM THE COMMISSION DIRECTED 90-DAY REVIEW 
Finance Plan: 
Staff has outlined a potential funding plan for the IAF that would rely on a combination of Port
cash, revenue bond proceeds and Passenger Facility Charges. This is only a preliminary plan and
would be subject to future revisions and final approval near the end of construction period in
2019.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015
Page 5 of 11





Staff initiated work and identified two finance experts to review use of PFC's as a funding
mechanism, and to review practices of other airports in financing their IAFs to gauge whether
Seattle's approach is consistent with industry practice. One expert works primarily for airports,
and one works primarily for airlines.  Both were given the same objectives and asked to work
together since data from both airports and airlines would be valuable.  Professional service
contracts were put in place, and the finance experts began their research and analysis. Testimony
occurred on July 14 and July 28. Th e results of their testimony included two primary points
noted below:
1.  The percentage of PFCs proposed by STIA to fund the IAF fell within the middle range
of 11 other airports that have built international facilities within the last twenty years.
Int'l Facility PFC Funding Percent 
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
DEN  SFO  MSP DTW BOS DFW  IAH  IAD  ATL  MIA  LAX  SEA

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015
Page 6 of 11
2.  The percentage of PFCs used to fund international facilities across the country typically
exceeds the percent of international passengers to total passengers.  Again STIA's
proposed use of PFC's is in appropriate alignment with other airports.
90%                                     Int'l Facility PFC Funding
Percent
80%
Int'l Passengers as % of
70%                                     Total
60%
50%
40%
30%
20%
10%
0%
BOS  ATL  IAH  IAD  MSP DTW  SEA  DEN DFW  LAX  SFO  MIA

The  use PFCs is an important principle in keeping the international arrival charge at a
competitive price compared to peer-airports when the IAF opens.  A point was made by the
finance experts that although FAA approves the projects that are eligible to receive PFC's, it is
the airport's governing board that gets to choose what level of PFC's to use.
IAF Project Programming 
Staff also identified recognized airport programming experts.  Each expert was given the same 
briefing  materials  by  the  Airport  Planning  Department  regarding  the  various  studies
accomplished to date. The experts had discussions with each other to assure full understanding,
but  set  about  creating  independent  presentations  to  the  commission  with  their  own
recommendations of what else a final designer might investigate more fully or add to the scope.
The experts testified on July 28 to the Commission that the amount of planning that staff has
accomplished was thorough and done to a better level of rigor than in many airports.  One also
noted that based upon his experience an airport should not expect to achieve full agreement of
every airline since they have varying needs and competitive positions.  Their suggestions
centered mostly around future flexibility and their suggestions have been given to the design
builder and are now being considered in the Validation Phase of the project that will yield at a
target budget and schedule in December.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015 
Page 7 of 11 
Airline Engagement 
Over 40 airline representatives attended the July 14 and July 28 public meetings and participated
in follow-up meetings with the Port CEO, Airport Director, and staff on July 15 and July 29
respectively.  On July 29 an additional afternoon meeting was held to allow Alaska, Delta,
Southwest, and United Airlines to seek information and ask questions. The airlines listed many
questions for the airport staff to investigate and respond. As a result of these meetings over 110
questions were answered by airport staff and the answers along with the original planning and
design documentation were posted to a SharePoint site that both the airlines and airport could
access to keep up with the rapid pace of information exchange.
Technology and Pre-clearance 
During the course of the process the several airlines also expressed interest in ensuring the IAF
would incorporate new technology for processing arriving passengers and would reflect potential
expansion of pre-clearance of passengers for entry to the US at foreign airports.  The airlines
sought an evaluation of how those potential changes could affect the design of future arrivals
facility improvements. Federal Customs and Border Protection (CBP) attended the July 28
Commission meeting and testified about the crowding in the small spaces today, that added
kiosks and staff scheduling has occurred, and that they plan to make Sea-Tac Airport's IAF a
flagship in the industry in terms of technology.  They will upgrade to the latest technology in a
manner that exceeds their current design guidelines, a direction from CBP Commissioner Gil
Kerlikowske. 
Regarding pre-clearance, the CBP leaders also testified to this aspect. Foreign airports pay for
the entire cost of facilities and 90 percent of the CBP staff to be stationed there.  Facilities have
not been built and will take many years to do so in several of the future market airports.  Port
staff also examined the future foreign markets that staff believes new international flights to Sea-
Tac Airport will originate from over the next five-plus years, and determined that while overall
preclearance may help alleviate some pressure for gates at a new IAF, it would not diminish
demand enough to warrant not building a new IAF. An added consideration might be that if a
terrorist or a major political event happens at one of those locations, one cannot predict whether
those foreign preclearance locations would remain open. 
Concerns of International Foreign Flag Airlines: 
Also during the course of the 90-day review, the foreign flag carriers saw their two main
concerns addressed. First, they requested that they be able to use the future wide body gates on
Concourse A that would connect to the IAF because they would be the closest to the processing
facility.  The airport confirmed new common use gating criteria that will enable any international
carrier to have access to Concourse A gates within a set of protocols.  Second, the foreign flag

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015 
Page 8 of 11 
carriers stated in testimony to Commission that the South Satellite facility was not up to par with
Concourse A and the future North Satellite that will be fully occupied by Alaska Airlines.
Certain international airlines described the South Satellite concourse as "the least best" STIA
concourse, "third world," "cramped," etc. The Commission noted the airlines' concern about the
46-year-old South Satellite and as a result staff has added the start of the renovation of the South
Satellite to the coming 5 year capital plan for approval this year.
Alternatives Analysis that led to the current IAF site and layout plan 
Alaska Airlines questioned how earlier design alternatives were winnowed to lead to the current
IAF site and layout plan.  The Airport offered two meetings for Alaska to help them understand
the multi-year history  of the planning process and how the scoring of alternatives was
determined. Alaska was able attend meeting s on August 5 and August 31, 2015. As a side note
the three independent airport programming experts testified on July 28 to Commission that they
believed the planning process that ultimately sited the IAF was "holistic," a "thorough
examination," the "due diligence exceeded industry norms," and "well thought out and very
comprehensive".
Gating Challenges and Towing Potential 
As the 90-day period was in its final month, the Commission held a round table discussion noted
above  with both domestic and international airline property representatives.   During the
discussion, airlines were able to voice concerns and they answered several questions from
commissioners.
During the roundtable discussion, Alaska Airlines suggested a less costly approach could be
expansion and improvement of the existing federal inspection facility at the South Satellite.
Since the South Satellite would lack the space to park wide-body aircraft at times of peak
demand, Alaska Airlines raised the possibility of towing aircraft off the international gates.
While Alaska was not proposing this as a firm alternative, it did suggest that it would be worthy
of analysis to see if possible.  As a result, airport staff has done further demand analysis which
determined that the South Satellite does not have enough wide body aircraft gates to meet
demand even if aircraft are towed off when there is ample time between arrival and departure.
As part of that demand analysis, staff found other gates on adjacent concourses would be full
with domestic aircraft during the day. As a result the towing operation would require the use of
a large number of remote hardstands for aircraft repositioning.
In addition, towing slows other aircraft movements across the ramp which creates congestion,
and approximately 130 aircraft are already towed daily at the airport. It is noteworthy that at the
August 11 roundtable conversation the airlines expressed mixed views of towing.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015 
Page 9 of 11 
The Airline Technical Representatives (ATR), which are two consultants employed to participate
in the design process on behalf of the airlines, conducted a review of this information. They
prepared a report to Alaska Airlines stating that construction of the proposed new IAF is
preferable a South Satellite option. The ATR concluded a South Satellite option would be more
difficult to phase and construct, and would take longer to build, will have greater impacts on
arrivals operations during construction, and falls short of the number of needed aircraft parking
locations.  It was noted that the cost of a South Satellite option could be slightly less than the
proposed design. 
The report has been posted on the airline SharePoint site for all airlines to review. The airport
has also requested that the ATR's perform an independent review of the work that includes
updated programming and design document information and then report out to the airlines.
Southwest Airlines noted during the round table discussion that they would gain assurance once 
the ATR had analyzed the programming information and had reported out.
Delta commented that "if you don't have capacity you cannot grow." British Airways said "they
chose to not put an A380 in Seattle" because of gating, congestion at peak, and arrival charge.
Similarly Lufthansa indicated that they lose passengers to other West Coast gateways such as
Vancouver, B.C. and San Francisco because of Seattle's congestion.

NEXT STEPS 
As was expressed during the August 11 airline roundtable, the 90-day review was a helpful
process for the airlines to answer questions and concerns, as well as refresh everyone, including
the Port Commission and senior leadership, on the history behind evolution of the IAF program.
The involvement of an ATR has proved to be invaluable and as a result, airport staff included
support from an ATR as a part of their 2016 budget request. 
The review has provided extensive opportunity for airlines and staff to better understand
concerns and issues related to project design and funding.  Outside experts affirmed the sound
planning behind the design, and that the preliminary funding plan elements fall within the norm
of approaches used by other peer airports.
Four leading international airlines  Delta, British Airways, Lufthansa and Hainan Airlines  
have all indicated their support for the project. 
As noted earlier, however, Alaska Airlines and other domestic airlines have expressed concern
about the cost of the project and that the funding plan, in their view, places a disproportionate
share of the IAF costs on their passengers. The funding plan will be subject to further review by
the airlines and the Port Commission as the project progresses, guided by the key objectives
contained in the May 26.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015 
Page 10 of 11 
As the validation process continues, airport staff will continue to engage our airline partners and
report regularly to the Port Commission.  Six more meetings have been scheduled with the
airlines so they can view the progress of the IAF validation in person.
Mailing the IAF voting ballot to the airlines in September maintains the IAF schedule and avoids
cost growth due to delay and inflation.

ATTACHMENTS TO THIS BRIEFING 
none 

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
August 11, 2015, Forum on Seattle-Tacoma International Airport's  IAF: Airline
Roundtable 
July 28, 2015, Forum on Seattle-Tacoma International Airport's  IAF: Financing,
Planning, and Technology 
July 14, 2015, Forum on Seattle-Tacoma International Airport's  IAF: Introduction
Financing, Planning, and Technology 
June 23, 2015, Discussion of an IAF 90-day public outreach effort Authorization to
negotiate and execute a design-build contract with a design-build team and commence
contract validation period for the IAF Program 
May 26, 2015, Approval of a motion providing guidance for modeling funding of the
Airport 5-year Capital Improvement Program. 
April 28, 2015  Service Agreement for Commissioning Services 
April 28, 2015  Request Authorization to Execute Lease Agreement with SeaTac
Ventures  2010  LLC  for  IAF  Program  Management  Office  Space  near  Sea-Tac
International Airport 
February 24, 2015  Service Agreement for IAF Consultant Program Leader 
January 27, 2015  IAF Funding Plan 
January 27, 2015  IAF RFP Advertisement 
January 13, 2015  IAF Update 
December 2, 2014  IAF Scope and Budget Update 
October 28, 2014  IAF Q3 Quarterly Briefing 
August 19, 2014  IAF Q2 Quarterly Briefing 
August 5, 2014  IAF RFQ Advertisement

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 3, 2015 
Page 11 of 11 
July 22, 2014  IAF Progress Briefing 
June 10, 2014  IAF Update and Quarterly Briefing 
May 6, 2014  IAF Project Delivery Briefing 
April 22, 2014  Capital Program Briefing 
March 11, 2014  IAF Master Planning authorization 
February 25, 2014  IAF Program Briefing 
November 19, 2013  International Arrivals Facility Construction Management, testing
and inspection; surveying and locating and safety service agreements 
July 23, 2013  International Arrivals Facility Project & Program Support; and Price
Factor Design-build Methodology authorization 
July 9, 2013  Sea-Tac Airport International Arrivals Facility Briefing 
July 9, 2013  Alternative Public Works Contracting Briefing 
April 9, 2013  Sea-Tac Airport International Arrivals Facility Briefing 
June 26, 2012  Briefing on Airport Terminal Development Challenges at Seattle-
Tacoma International Airport 
June 14, 2011  International Air Service Growth and Future Facility briefing. 
February 2, 2010   Briefing on South Satellite Passenger Growth and Facility
Considerations, Delta's Proposed Airline Lounge and Other Possible Future Aviation
Projects