8o. Memo

SLOA IV Term Extension

AGENDA MEMORANDUM                        Item No.          8o 
ACTION ITEM                            Date of Meeting    September 13, 2022 

DATE:     August 9, 2022 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Lance Lyttle, Managing Director, Aviation Division 
Jeff Moken, Interim Director, Aviation Business and Properties 
SUBJECT:  Two-year Term Extension for the 2018 – 2022 Signature Lease and Operating
Agreement (“SLOA”) IV Between the Port and the Airlines Operating at Seattle-
Tacoma International Airport 
Request Commission authorization for the Executive Director to execute a two-year extension
to SLOA IV, extending the termination date from December 31, 2022, to December 31, 2024.

The Port of Seattle owns and operates the Seattle-Tacoma International Airport and has the
authority to grant to Airlines certain rights and privileges concerning the occupancy and use of 
the Airport. Airlines that desire to occupy or use certain Airport premises and facilities and to
acquire from the Port certain rights and privileges in connection with its use of the Airport
enter into a mutual agreement known as the Signatory Lease and Operating Agreement. The
currently executed agreement – SLOA IV – terminates on December 31, 2022. T he Port and
Airline negotiation committee have met since Fall of 2021 to consider future revisions to SLOA 
IV.  However, due to uncertainty over long-term capital programs, ongoing economic impact
and business recovery from COVID-19, along with SLOA IV’s general effectiveness, the Port and
Airline  negotiation  committee  reached  agreement  to  maintain  the  current  SLOA  for  an
additional two years. 

The general scope and content of SLOV IV extension remains unchanged with exception to the
following adjustments triggered by or related to change in expiration date: 
1.  “Expiration Date” adjusted to December 31, 2024. 
2.  4.3.3 Add Common Use Gate caps for 2023 (22 Gates) and 2024 (22 Gates). 
3.  6.3.1 MII: pro rata increase to Management Reserves from $150MM to $210MM. 

Template revised January 10, 2019.

             COMMISSION AGENDA – Action Item No. _8o_                                Page 2 of 3 
Meeting Date: September 13, 2022 
4.  6.4 MII: pro rata increase to Discretionary Projects from $30MM to $42MM. 
5.  8.18.2 Annual adjustment to actual for final year of agreement. Substitute “2024” for 
6.  8.19.3 Revenue sharing. Add 2023 and 2024 to list of years with no revenue sharing. 
7.  8.5.5 Gate definition. Substitute “2024” for “2022”. 
8.  4.4 & 4.5 Gate preference.  Stating mutual agreement during FY 2023 and FY 2024 for 67
preferential gates. 
9.  Update contract requirements - SLOA Section 17 Update - FAA required contract clauses to
conform to current requirements. 
Commission Approval – September 13, 2022 
Airline Approval – November 13, 2022 
Lease Amendment Effective – January 1, 2023 
Alternative 1 – Negotiate SLOA V 
(1) Holistic revision and amendments to areas of unique or mutual interest. 
(2) Agreement on a new lease provides level of certainty for both the Port and the Airlines
through the term of the new agreement. 
(1) Insufficient time to conduct a thorough review and obtain necessary approvals. 
(2) Mutual agreement would be difficult to achieve due to COVID-19’s state of recovery
that both the airlines and Port are experiencing. 
This is not the recommended alternative. 
Alternative 2 – Reject approval of SLOA IV extension and implement rates in accordance with
Resolution 3677, as amended. 
(1) Port has complete control of the assignment of gates. 
(2) Capital approval involves consulting with airlines, but there is no majority-in-interest
(MII) vote. 
(1) Failure to reach agreement indicates airport and its major airline customers are not in
(2) Rate methodology does not offer economies of scale to benefit airlines with multiple
flights per day (most fees are based on a per-use basis), consequently, the largest
airlines, including the hub airlines, tend to oppose this. 

Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. _8o_                                Page 3 of 3 
Meeting Date: September 13, 2022 
(3) While the rate methodology incorporated into Resolution 3677, as amended, was
designed to conform to federal Department of Transportation requirements and thus
withstand a legal challenge, airlines at SEA could mount a legal challenge. 
This is not the recommended alternative. 
Alternative 3 – Approve SLOA IV Two-Year Extension 
(1) Maintains a consistent number of preferential gates at 67 which yields operational 
control, predictability, and continuity for both the Port and Airlines. 
(2) Permits  the  Port  and  Airlines  to  maintain  a  seamless  and  effective  contractual 
agreement from a governance perspective. 
(3) Allows for sufficient time to negotiate SLOA V and thus address or resolve areas of
unique interest. 
(4) Provides additional time for the Port and Airlines  to recover from COVID-19 and
associated impacts to commercial business plans and operations. 
(1)   Will require a two-year delay on addressing and resolving areas of unique interest. 
This is the recommended alternative. 
None. The Port and Airlines will follow all existing lease provisions that have a financial impact. 
February 27, 2018 – The Commission authorized SLOA IV 

Template revised June 27, 2019 (Diversity in Contracting).


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