PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA  STAFF BRIEFING        Item No.       7d 
Date of Meeting  February 2, 2010 

DATE:      January 27, 2010 
TO:         Tay Yoshitani, Chief Executive Officer 
FROM:     Mike Ehl, Director Airport Operations 
SUBJECT:   Briefing on South Satellite Passenger Growth and Facility Considerations, Delta's
Proposed Airline Lounge and other Possible Future Aviation Projects 
BACKGROUND 
The South Satellite and associated international arrivals facilities opened in 1973. Since then
there have been minimal changes to the overall facilities apart from a gate area expansion in the
mid-1980s and a concession redevelopment in the late 1990s. In the last decade, Seattle-Tacoma
International Airport (Airport) has focused most of its capital resources in the Main Terminal and
Concourses, most notably with the Central Terminal Expansion and South Terminal Expansion
Project (which includes Concourse A and the Gina Marie Arrivals Hall). With recent changes in
the airline industry, a changing perspective on the Airport's international market position, and
the prospect of further airline re-alignments, there is need for new attention and considerations
toward a major renewal, replacement, and/or expansion of the South Satellite and international
arrival facilities.
In the last three years, a variety of airlines has begun new service to international destinations
from Seattle. This is in contrast to other west coast airports where international routes have
either stayed relatively flat or declined as indicated within the attached slides. Northwest
Airlines had earlier announced a new route to Bejing from Seattle; however, that was stalled for
a period of time as a result of broader economic concerns. Thereafter , merger discussions
ensued between Northwest Airlines and Delta Air Lines.
Delta Air Lines and Northwest Airlines merged in October 2008. This combination created the
world's largest airline, as measured in passengers. Their pre-merger market share at the Airport 
was 12.6% (Delta 5.8%, Northwest 6.8%). The Port responded to their merger with assistance in
co-locating their ticketing and gate operations. This co -location was completed in June 2009. 
More recently, Delta announced new planned international services to both Beijing and Osaka,
as well as increased frequencies to Amsterdam. If these new services prove to be successful,
there are potential opportunities for Delta to further increase international traffic through the
Airport as their focus city on the West Coast.

COMMISSION AGENDA  STAFF BRIEFING 
Tay Yoshitani, Chief Executive Officer 
January 27, 2010 
Page 2 

Delta has submitted certain projects to the Airport in order to optimize their merged activities
and to accommodate their known traffic levels for 2010. Delta and the Port have also discussed
additional projects that would be necessary to facilitate more air service routes that could expand
their business activities at the Airport. Such projects would be either developed and managed by
Delta (a tenant project), or developed and managed by the Airport (a Port Project). A list of
projects under consideration to be initiated, and some completed, in 2010 follows:
South Satellite ramp level office improvements to improve staff efficiency (tenant
project) 
Ticket counter improvements to increase passenger processing capacity (tenant project) 
South Satellite concourse level gate and concession enhancements to maximize facility
flexibility, revenue opportunities, and provide an improved level of service for increased
passengers levels (Port project) 
Concourse B gate improvements to add flexibility to accommodate Delta peak-hour
domestic flights that cannot be accommodated on the South Satellite (Port project) 
Capacity enhancements within the international arrivals area to improve peak-hour
processing of arriving and transferring passengers and baggage (Port project) 
Abatement of hazardous materials (asbestos, etc.) to allow construction of a 6,500 square
feet airline lounge on the roof of the South Satellite (tenant or Port project) 
Construction of the 6,500 square feet rooftop lounge at the South Satellite (tenant project) 
Certain tenant projects qualify for a reimbursement from the Port when the tenant's construction
project improves the value of a Port asset and/or increases the ability for the Port to collect
increased rent above and beyond what it would have prior to the tenant improvement. The
rooftop lounge, for example, qualifies for partial reimbursement under a procedure formalized in
2009 and noted within Resolution 3605 section 2.4. It is anticipated that reimbursement
agreements related to the above projects will be prepared by staff and brought to Commission for
authorization.
STAFF BRIEFING 
Today's staff briefing will focus on the support required for Delta to construct a new airline
lounge, branded as the "Delta Sky Club." Accommodating Delta's premium business
passengers, especially on international routes, is critical to the success of their business model in
Seattle. Although Delta currently has use of the lounge previously known as Northwest World
Club at the South Satellite, (approximately 4,000 square feet) it is too small for their combined
operation and expanded service. Hence, they have provided the Port a Letter of Intent to build a
new 6,500 square foot lounge on the roof of the South Satellite. Final design for the expansion is
not yet complete, therefore only range of magnitude cost estimates are available. It is expected
that the lounge may cost between $6 and $8 million dollars, where the Airport tenant
reimbursement share may be approximately in the sixty to sixty-five percent range. This

COMMISSION AGENDA  STAFF BRIEFING 
Tay Yoshitani, Chief Executive Officer 
January 27, 2010 
Page 3 

expansion of leasable space will generate an additional $550,000 in rent payments from Delta to
the Airport each year.
There are additional benefits to the Port resulting from Delta's proposal to build this lounge and
vacate the existing Northwest World Club. The Port intends to relocate the existing Port
common-use lounge "Club International" to this newly vacated location. Club International 
provides a common-use airline lounge for carriers that are too small to build out and
independently lease their own. Currently, both Asiana and Hainan Airlines utilize the Port's
existing Club International facilities and three other carriers have expressed interest if the
facilities were improved. This new location would suspend the need for the Port to make major
re-investments into the existing Club International facility. This improved facility and location
will further assist the Port in marketing to new international airlines and routes. Delta will
benefit from the Port's vacation of the existing Club International footprint, located on the
Mezzanine Level of the South Satellite, which is expected to meet some of Delta's unmet office
space needs.
Staff will present an update on Delta's overall design, schedule, and cost estimate in advance of
the later authorization request that will enable Delta and the Port to move forward. Staff will
also cover the Port's hazardous material remediation strategy and overall financial commitments
related to this project. Other related projects will be presented at future dates in 2010. 
ATTACHMENT 
PowerPoint