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PDF Concession Policy 1. Overview 1 If an airport operator closes a concourse or a terminal, it would need to eliminate some concession spaces from its contracts, which may render some deals no longer viable. Many airport agreements allow for a suspension of MAGs in the event of a severe enplanement decrease. them from immediately acquiescing to their advertisers' perfectly justifiable requests is the cold draught of the minimum annual guarantee (MAG). While the model has primarily been used for duty free concessions, it has worked equally well for other types of concessions. The concept is not uncommon. Attention: Finance & Administration Division . The funds are coming directly from the U.S. Treasurys General Fund to prevent, prepare for, and respond to the impacts of the COVID-19 public health emergency. While this model is new, a unified strategy could bring about a unique airport concession experience to the benefit of all participants. (1) On-Airport (% of Gross Receipts). Given that we are considering a new paradigm, airports and concessionaires may wish to consider three other business structure options. Airlines have a significant stake in the quality of the concession program because of its impact on the passenger experience. The city named the Vantage Airport Group to run the concessions when the new terminal opens in 2023. The Airport has also experienced a reduction in passengers and operations as a result of . In a 6-to-3 vote on Monday, June 8, the council approved temporarily revising the Minimum Annual Guarantee, which is a fixed amount restaurants guarantee they will pay the city to do business at . Minimum Annual Guarantee (MAG) - The amount proposed and/or agreed to by the Concessionaire, that Concessionaire guarantees as minimum payment per year to DFW. However, there is no relief of the obligation to withhold and remit the corresponding employee share. How does the Airport Authority charge rent? The single factor most tied to concession success is the footfall past the concession locations. Some larger airports take a percentage of every sale. With standard concession management programs, the airport operator assumes all of the risk for leasing the property but stands to profit the most by receiving a larger amount of generated revenues. Some airports have had huge success in meeting ACDBE goals with the developer model. Kona International Airport at Keahole is located on the western coast of the Island of Hawaii, approximately 10 miles from the town of Kailua Kona. While the bulk of the $10 billion appropriated for airport sponsors can be used, if necessary, to make bond principal and interest payments, airport sponsors may be faced with difficult decisions about how to prioritize needs during the financial stress.