HomeMy WebLinkAbout(0002) IR 10324 - Amazon.com Services Access Permit Alliance AirportINFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 10324
To the Mayor and Members of the City Council September 24, 2019
Page 1 of 2
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SUBJECT: CARGO CARRIER OPERATING AGREEMENTS WITH
rrA AMAZON.COM SERVICES, INC. AFFILIATE AIRLINES AND RELATED ACCESS
PERMIT AT FORT WORTH ALLIANCE AIRPORT
The purpose of this report is to inform the City Council about two related items:
(1) New Cargo Carrier Operating Agreements between the City of Fort Worth and Amazon.com
Services Inc.'s Affiliate Airlines at Fort Worth Alliance Airport; and
(2) A separate Access Permit between the City of Fort Worth and Amazon.com Services, Inc.
Carlo Carrier Operating Agreements
Amazon.com Services, Inc. (Amazon) is opening a regional air hub adjacent to Fort Worth Alliance Airport
(Alliance) and construction is nearing completion with operations expected to begin by October of this
year. The City of Fort Worth will grant Amazon's affiliate airlines permission to use the airport via a Cargo
Carrier Operating Agreement, which will set the amounts for landing fees and other special charges
assessed at Alliance.
There is currently only one other operating agreement in place at Alliance, which is with Federal Express
Corporation (FedEx) and which was executed on March 26, 1996 ("FedEx Agreement"). The FedEx
Agreement is coming to an end within the next year and a half on March 31, 2021, and negotiations have
begun on a new Operating Agreement with FedEx that would begin immediately after the current FedEx
Agreement terminates.
In order to provide the same landing fee rates for FedEx and Amazon, the Operating Agreements with
Amazon's affiliate airlines will only have a term for a year and a half and will have the same landing fee
rate as the FedEx Agreement of $1.49 per thousand pounds. Beginning April 2021, unless negotiated
sooner, new operating agreements will be executed between the City of Fort Worth and both FedEx and
Amazon's affiliate airlines specifying uniform terms and new landing fee rate structures. The agreements
with Amazon's affiliates that will be executed now will allow Amazon to begin their operations and flights
out of Alliance while the longer -term operating agreements are being negotiated.
Amazon currently has two affiliate airlines that will be operating out of Alliance, Atlas Air and Air
Transport Services Group, Inc. (the "Airlines"). More affiliates of Amazon may be introduced later. The
Airlines are entering into operating agreements with the City on the following terms:
• A term beginning October 1, 2019 and expiring March 31, 2021;
• Landing Fees are based on the maximum landing weight of aircraft landing at the Airport at a rate
of $1.49 per thousand pounds.
• Special Charges by the City are assessed for: parking on a public ramp, special licenses and permits,
special services requested by the Airline and costs for removing disabled aircraft. The rate for the
Special Charges is based on reasonable, documented out-of-pocket costs and expenses plus twelve
percent (12%).
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 10324
To the Mayor and Members of the City Council September 24, 2019
Page 2 of 2
i
r
SUBJECT: CARGO CARRIER OPERATING AGREEMENTS WITH
rrA AMAZON.COM SERVICES, INC. AFFILIATE AIRLINES AND RELATED ACCESS
PERMIT AT FORT WORTH ALLIANCE AIRPORT
The Cargo Operating Agreement is projected to generate approximately $2 million over the initial term of
the agreement.
Under the management agreement between the City of Fort Worth and Alliance Air Services, which
manages Alliance, Alliance Air Services receives seventy-five percent (75%) of funds collected under the
Cargo Carrier Operating Agreements and the City receives twenty-five percent (25%) of these funds. The
funds are disbursed monthly to the City of Fort Worth Aviation Department. Cargo Operating Agreements
comply with airport policy as well as City, state, and federal guidelines.
Access Permit for Amazon.com Services, Inc.
The Fort Worth Alliance Airport Access Ordinance requires off -airport users to obtain from the City a
permit for access and use of the airport facilities. Amazon is leasing an off -airport parcel and will obtain an
access permit under which Amazon's affiliate airlines will access that parcel. Amazon will pay an annual
fee of $19,800, in accordance with the Access Ordinance, which may be increased in accordance with the
schedule of rates and charges, which are updated and published by the City annually.
If you have any questions about this information, please contact Aviation Director Bill Welstead at 817-
392-5400.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS