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Agenda Item
ASR
Control 21-000691 |
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MEETING DATE: |
08/24/21 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
2 |
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SUBMITTING
Agency/Department: |
John Wayne Airport
(Approved) |
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Department contact
person(s): |
Barry A. Rondinella (949) 252-5183 |
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Dave Pfeiffer (949) 252-5291 |
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Subject: Approve Airline Lease with
Air Canada
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ceo CONCUR |
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Clerk of the Board |
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Concur |
Approved Agreement to Form |
Discussion |
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4/5 Vote |
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Budgeted: Yes |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
No |
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Current Fiscal Year Revenue: See Financial Impact Section
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Prior Board Action: 11/03/2020
#6 |
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RECOMMENDED ACTION(S):
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1. |
Approve and execute the Certificated Passenger Airline Lease with Air Canada for a term effective October 1, 2021, through December 31, 2025. |
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2. |
Authorize the Airport Director or authorized designee to allocate one Regulated Class A Average Daily Departure, effective October 1, 2021, through December 31, 2025, and associated seat capacity, effective October 1, 2021, through December 31, 2022, consistent with the terms of the Phase 2 Commercial Airline Access Plan and Regulation. |
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3. |
Authorize the Airport Director or authorized designee to approve early possession for construction and installation of improvements prior to lease commencement provided all insurance and deposits have been received. |
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4. |
Authorize Airport Director or authorized designee to make minor modifications and amendments to the lease that do not materially alter the terms or financial obligations to the County and perform all activities specified under the terms of the lease. |
SUMMARY:
Approval of the Certificated Passenger Airline Lease between the County of Orange and Air Canada, a Canadian Corporation, and approval of the allocation of operating capacity will allow Air Canada, a new carrier from the commercial air carrier new entrant waiting list, to initiate operations at John Wayne Airport.
BACKGROUND INFORMATION:
John Wayne Airport (JWA) seeks Board of Supervisors (Board) approval of the Certificated Passenger Airline Lease (Lease) with Air Canada for a term of approximately four years and three months, beginning on October 1, 2021, and expiring on December 31, 2025. The Lease does not currently include subcontractors or pass through to other providers. See Attachment B for the Contract Summary Form.
On November 3, 2020, the Board approved the air carrier allocations for the 2021 Plan Year (January 1, 2021, through December 31, 2021) consistent with the Phase 2 Access Commercial Airline Plan (Plan). In accordance with these allocations and the provisions of the Plan, JWA requests authorization to allocate one Class A Average Daily Departure and the associated seat capacity to Air Canada, a new entrant air carrier currently on the commercial air carrier new entrant waiting list. Air Canada will initiate operations on October 1, 2021, and provide international service to air passengers through and in Terminal A, with initial service to Vancouver, Canada.
Compliance with CEQA: This project is a necessarily included element of the project considered in Final Environmental Impact Report (EIR) No. 617, certified by the Board on September 30, 2014, for the JWA Settlement Agreement Amendment, which adequately addressed the effects of the project. No substantial changes have been made in the project, no substantial changes have occurred in the circumstances under which the project is being undertaken and no new information of substantial importance to the project, which was not known, or could not have been known, when the Final EIR No. 617 was certified, has become known; therefore, no further environmental review is required.
FINANCIAL IMPACT:
The estimated revenue to John Wayne Airport for Air Canada's Lease term of October 1, 2021, through December 31, 2025, will be approximately $3,615,907, based on current airline rates and charges and capacity allocation. Revenue for this lease is included in the FY 2021-22 Budget for Airport Operating Fund 280 and will be included in the budgeting process for future years. Estimated revenues for the duration of the lease using current rates are as follows:
FY Amount
2021-22 $638,101
2022-23 $850,802
2023-24 $850,802
2024-25 $850,802
2025-26 $425,400
Total
$3,615,907
The lease contains language allowing the County to terminate for convenience for any reason and without cause upon 30 days' written notice.
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A - Certificated Passenger Airline Lease with
Air Canada (PM 1121-0300-0094)
Attachment B - Contract Summary Form