SLOA V

Overview

8o_suppItem No.

December 10, 2024Date of Meeting

• SLOA is a contractual relationship between the airlines and the Port of Seattle (POS)

• The existing SLOA IV with air carriers at SEA expires Dec. 31, 2024

• Today, SLOA represents over $559 million in annual revenue to the Port (60% of total Port

revenues) and is forecast to increase to nearly $1.05 billion in annual revenue by 2034

• There are currently 42 active signatory airlines and four non-signatory airlines (non-signatory

airlines must sign an operating agreement and pay a 25% premium)

• Non-terminal real estate (e.g., hangars, cargo facilities) are addressed in separate bi-lateral leases

• SLOA V negotiations with the airlines focused on 3 primary areas

– Financial and business terms

– CIP collaboration and implementation

– SEA gate rights and use

Signatory Lease and Operating Agreement (SLOA)

Goals

• Manage and develop SEA, in alignment with the Port of Seattle mission and vision, for the benefit of the Puget

Sound and greater Washington State region.

• Maintain the authority to control limited facilities and rebuild the aging airport while still maintaining competitive

costs with peer airports.

• Sustain the important and mutually beneficial partnership between the Port and the airlines operating at SEA

Port SLOA V Goals and Objectives

Objectives

 Ability to expand and/or upgrade existing facilities to achieve an optimum level of service at SEA, consistent

with its brand, NW sense of place and architectural vision

 Maintain the authority to operate SEA in the most efficient and financially responsible way possible

 Progress SEA’s environmental sustainability and social responsibilities

 Provide a fair playing field regarding access to facility resources while enhancing the competitive position of

SEA

SEA Business

Deal with

Airlines

Airlines pay

fair share of

Airport costs

Financial and Business Terms

Advances initial

$8+ billion in

SEA investment

over term of

SLOA

Airline backstop

and financial

metrics support

POS bond ratings

Key Points

• 10-year agreement

• Port retains control over use

of its non-aeronautical

revenues

• Continued cost recovery rate

setting needed to produce

key financial metrics and

maintain high credit ratings

• Airline provide SEA a

financial “backstop”, ensuring

payment of all Airport debt

obligations

• Parking rate stabilization and

phase-in plan

SEA Forecast Annual Debt Service Before Offsets

Estimated Costs of Major 10-year

CIP Projects

$800MMain Terminal

(MTIP)

$1.8BSCE (SoCoEvo)

$1.0BSTS Replace

$394MCCE

$545MNorth Main

Terminal

$569MAirfield Pavement

$954MBaggage

Optimization

$255MHVAC Replacement

$204MUtility Master Plan

$153MAirline Realignment

$125MConcourse A

Improvements

$105MMT Low voltage

Annual debt service payments will rise substantially over the next ten years as CIP projects are included in the

airline rate base, increasing airline costs.

$100

$200

$300

$400

$500

$600

$700

2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Annual Debt Service Payment net of cap i by Cost Center (2024-2035)

Terminal Building Airfield Movement Area Airfield Apron Area Other Baggage System Gate Utilities Non-Airline Roads IWS

$ in Millions

Airline Payments - 10-year Forecast

$559

$643

$713

$773

$832

$895

$946

$983

$1,023

$1,057

$400

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Projected Airline Payments (millions)

Total Estimated Payments: $8.424B

Collaboration/

Engagement

Issue

Resolution

Efficient

Project

Delivery

CIP Collaboration & Implementation

• Expedite project delivery through

early engagement and issue

resolution

• Removes Airline Majority-in-Interest

rights for dis-approval of CIP projects



Stronger collaboration structure that

delivers high value projects

benefiting SEA and Airlines

• Major project briefings to

receive airline feedback

during project development

• 360 review of airline concerns

by SEA executives across all

major airport disciplines

• Agreed upon escalation

process for resolving specific

issues

• Review and recommendation

by committee with SEA and

airline representatives for

Managing Director

consideration

New Checkpoint Engagement New Issue Escalation/Resolution

Establishes collaboration and escalation protocols between the Port and the airlines when planning and

implementing major capital projects at SEA

SEA Gate Rights and Use



Enhanced gate use protocols will improve gate efficiency and maintain existing flight schedules while the South Concourse is

under construction



Introduction of a gate Minimum Use Requirements (MUR) gives the Port the right to take back underutilized preferential gates



All South-Concourse gates will be designated for common-use once the South Concourse project starts



Newly constructed gates will be allocated for preferential use and

common use



Two gates will remain available to preferential-use carriers to backfill

gates that are out for construction

Fixed 67 preferential gates with MUR

SLOA V maximizes passenger airline gate-use during South Concourse construction to

maintain airline existing schedules



Airlines using preferential use gates must average at least 6 turns per

day on each gate



Airlines will lose preferential use gates that fall below the minimum for

the remainder of the agreement, making them available for common use

New Minimum Use Requirements (MUR)

Thank you

Q&A