With all aspects of the business aviation industry feeling the economic effects of the Covid-19 pandemic, the National Air Transportation Association (NATA) has issued a white paper on recommended practices for airport sponsors and commercial aviation businesses with regard to lease issues.
The organization encourages establishing a dialog between the airports and their business tenants who may be experiencing financial hardship, including possible discussions of options for “the deferral and/or abatement of leasehold obligations during the coronavirus pandemic.” Such assistance should be uniform and equitable for similarly situated tenants.
While NATA noted that current FAA guidance permits airports to either waive or defer aeronautical rents, they are cautioned against any consideration of non-aeronautical fees and rents that could shift costs to aeronautical users. According to NATA, any assistance offered should be based on the urgency of the current public health crisis and in balance with the financial needs of both the airport and its commercial tenants.
As airports ponder issuing such financial relief, there are several factors to be considered if an essential aeronautical activities provider such as an FBO or an MRO was forced to cease operations due to economic distress—would the airport sponsor be in a position to provide those essential commercial services, and how long and how much money would it take to replace that tenant and restart those activities?