Tulsa airport trust, American Airlines amend lease agreement
BY D.R. STEWART World Staff Writer
Friday, December 14, 2012
12/14/12 at 4:32 AM
See previous stories about American Airlines and its Tulsa operations.
American Airlines and the Tulsa Airports Improvement Trust have agreed to an amendment of American's lease agreement under which the bankrupt carrier will assume its leases at Tulsa International Airport and pay TAIT $265,621 in pre-bankruptcy rent payments and landing fees.
TAIT board members on Thursday approved the amendment, which is subject to the approval of the U.S. Bankruptcy Court for the Southern District of New York, where American parent AMR Corp. filed its Chapter 11 bankruptcy reorganization petition on Nov. 29, 2011.
Nancy McNair, TAIT's legal counsel, said American has analyzed the terminal space it needs in the future, confirmed their lease and agreed to pay TAIT $265,621 owed in terminal and cargo building lease payments and airfield landing fees.
TAIT, in turn, will pay American $145,930 for its share of revenue-sharing funding received by the trust during the past year, officials said.
Trustees received and filed TAIT's accountant's report on the trust's financial report for the year ended June 30, 2012, compared with a year earlier.
The auditing firm of McGladrey LLP, Kansas City, Mo., prepared the financial report, a "Report to the Board of Trustees," and a report on the Passenger Facility Charge Program.
"We encountered no disagreements with management over the application of significant accounting principles, the basis for management's judgments on any significant matters, the scope of the audit or significant disclosures to be included in the financial statements," McGladrey said in its report to the trustees. "No significant issues arising from the audit were discussed or were the subject of correspondence with management."
The auditor's financial report found operating revenue, including lease rates and service fees, for the year ended June 30 decreased 2.6 percent, to $30.697 million, from 2011. The decrease was due to a 0.4 percent drop, to 1,355,785, in passenger enplanements in 2012 compared with a year earlier, McGladrey said.
Operating expenses, including depreciation and amortization, in the year ended June 30 decreased 1.4 percent, the auditor found, while non-operating expenses decreased 6.7 percent due to lower interest costs as some debt matured during the year.
McGladrey summarized TAIT's financial position as of June 30:
- The trust's net position increased $10.53 million, from $241.17 million at June 30, 2011, to $251.695 million at June 30.
- Total liabilities decreased $7.36 million, from $177.18 million at June 30, 2011, to $169.82 million at June 30.
- Cash and cash equivalents decreased $8.39 million, from $43.03 million at June 30, 2011, to $34.64 million at June 30.
In its review of TAIT's $4.50-per-passenger Passenger Facility Charge Program, McGladrey said the firm did not identify "any deficiencies in internal control over compliance that we consider to be material weakness... ."
TAIT received $5,348,647 in PFC revenue in the year ended June 30, earned $34,851 in interest, for a total of $5.38 million, and disbursed $5.47 million, mostly on terminal and concourse renovation projects, the audit found.
TAIT began the 2012 fiscal year with $6.14 million in cash in its PFC account. the auditor said.
The board approved a second amendment to an agreement for services with PathWays Consulting of Tulsa in an amount not to exceed $23,000.
PathWays, the firm founded by Terry Simonson, Mayor Dewey Bartlett's former chief of staff, was hired at a not-to-exceed cost of $36,000 by TAIT a year ago to study development of an intermodal transportation facility at Tulsa International Airport.
Airports Director Jeff Mulder said donors ranging from the City of Tulsa ($50,000), the Oklahoma Department of Transportation ($15,000), Oklahoma Turnpike Authority ($15,000), Manhattan Construction ($5,000) and the Burlington Northern Santa Fe Railway ($2,500) have contributed $123,500 toward a feasibility study of the intermodal project.
"Amendment No. 2 is to complete the project," Mulder said, including additional research to define the containerized cargo market in northeastern Oklahoma. "But (also) to go beyond the research, to develop plans, confirm a location and do more research on relocating the downtown rail yard is going to take $200,000 to do all that work."
Chairman Charles Sublett recommended approval of the amendment, adding that Simonson has the intermodal project moving. Trustee Mary Smith, who with other trustees voted unanimously for the amendment, said she is impressed by the team Simonson has assembled.
Tulsa Airports Improvement Trust’s actions on Thursday
• Approved an amendment
to American Airlines’ lease
agreement — subject to
approval by the U.S. Bankruptcy
Court — that includes
American’s confirmation of
its terminal and cargo leases
at Tulsa International Airport
and payment to TAIT of
$265,621 in pre-bankruptcy
terminal and cargo building
rents and airfield landing
fees
• Received and filed an
auditor’s report on TAIT’s
2012 fiscal year financial
statements and a report on
its Passenger Facility Charge
Program
• Approved a second not-toexceed
$23,000 amendment
to TAIT’s service agreement
with PathWays Consulting of
Tulsa to complete coordination
and planning for an intermodal
transportation facility
at Tulsa International Airport
Source: Tulsa Airports Improvement Trust
Original Print Headline: Tulsa airport trust, AA amend lease agreement
D.R. Stewart 918-581-8451
don.stewart@tulsaworld.com
