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Innovative Revenue Strategies – An Airport Guide (2015)

Chapter: Appendix B - Definitions and Abbreviations

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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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Suggested Citation:"Appendix B - Definitions and Abbreviations." National Academies of Sciences, Engineering, and Medicine. 2015. Innovative Revenue Strategies – An Airport Guide. Washington, DC: The National Academies Press. doi: 10.17226/22132.
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B 1 Appendix B Definitions and Abbreviations Above the Wing Services – Generally refers to: concierge services, meeng and greeng for arriving passengers and crew, airport escort through customs and immigraon, security arrangements for passengers, crew, and aircra, and certain airport ramp to city services. Agglomera on Economy and Economies of Scale – Benefits realized when businesses locate near each other ('agglomerang'). Simply put, as more firms related to each other or to a central point (such as an airport) cluster together, the costs of producon and/or transportaon may decline significantly. There may be advantages because that cluster aracts more suppliers and customers than a single business could alone, adding to the agglomeraon. AIP Appor onments – Each primary airport apporonment is based upon the number of passenger boardings at the airport. (FAA Airport Improvement Program (AIP) Handbook, Order 5100.38C.) If full funding is made available for obligaon, the minimum amount apporoned to the sponsor of a primary airport is $650,000, and the maximum is $22,000,000, in accordance with Title 49 U.S.C., Secon 47114(c)(1)(B). These funds are calculated as follows: $7.80 for each of the first 50,000 passenger boardings $5.20 for each of the next 50,000 passenger boardings $2.60 for each of the next 400,000 passenger boardings $0.65 for each of the next 500,000 passenger boardings $0.50 for each passenger boarding in excess of 1 million Air Rights Development – Air rights over a transportaon facility are sold or leased to a private developer. For airports and the Federal Aviaon Administraon (FAA), airports will somemes actually acquire air rights beyond the airport property to protect airspace. Air Rights have been sold to promote development around roads and highways. The sale of any air rights on an airport property would require the approval of the FAA. Airline Hub – An airport used by one or more airlines as a transfer point for connecng passengers or cargo. Airport City and Aerotropolis – These two terms are somemes used interchangeably. However, airport city generally refers to airport properes (inside and outside “the fence”) that host concentrated

INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE B 2 non avia on businesses that assume features of a city. These may include freight and manufacturing establishments, mul modal connec ons, and services/retail, including hotels, restaurants, entertainment, office complexes, and shopping malls. An airport city generally relies on airport users and airport tenants and their employees to be its core market, but also serve the public outside the airport. When dis nguished from an airport city concept, aerotropolis refers to a wider geography, that hosts businesses requiring significant volume of airport business travel services or air freight services, and that are supported by efficient surface transporta on connec ons to an airport. Businesses that do not have a major reliance on airport services, as well as residen al development, may be interspersed within an aerotropolis. Airport Corridor – A major highway that directly connects an airport to a nearby urban area. These connec ons may facilitate development of an airport city and/or a more extended aerotropolis. Land parcels along the corridor or near interchanges (for a limited access highway) are prime opportuni es for loca on of airport dependent businesses. The airport corridor concept may also be applied to transit. Airport Cost Center – Defined by airport operators as a department or func onal area, equipment, or person to whom direct and indirect costs are allocated. Airport Funconal Areas – Key departments or func ons at an airport. Allocated Overhead or Indirect Costs – Overheads are common costs incurred for the benefits of a number of airport cost centers. Alloca on of overheads is the process of charging overhead costs to a par cular department or cost center. If the overhead cost is associated with a single department or cost center, the whole amount is charged. For example, the whole amount of repair and maintenance expenses for a machine is charged or allocated to that department where the machine is located. Automac Vehicle Idenficaon (AVI) is a system that iden fies a vehicle as it passes through the range of its microwave or radio frequency iden fica on (RFID) devices. Vehicles must have a transponder or tags that are registered with the AVI system. Below The Wing Services – A variety of services including aircraft towing, baggage handling, potable water and lavatory services, ground power, air start, and air condi oning services. It can include catering and commissary services arrangements, aircra’ refueling arrangements, ground transporta on, cabin cleaning, and local maintenance arrangements. BHS – Baggage Handling Service. Brand Families – Over the last 15 years, the rental car industry has consolidated extensively. Eleven brands have consolidated into three dominant ‘brand families’ and today represent 96% of the rental car market: Enterprise Holding, Inc.: Enterprise, Alamo and Na onal; Avis Budget Group, Inc.: Avis, Budget, ZipCar, and Payless; Hertz Global Holdings, Inc.: Hertz, Advantage, Dollar and Thri’y.

APPENDIX B – DEFINITIONS AND ABBREVIATIONS B 3 Business Improvement District – A district voluntarily established by a group of businesses that assesses a fee on each business to fund improvements within the district. Business Rate Levy – A tax assessed to businesses to help pay for transporta€on investments. Buy In Charges/Connecon Fees – Fee charged to a private landowner to allow a direct connec€on to a transporta€on infrastructure investment. CATS – FAA Compliance Ac€vity Tracking System used by commercial airports to report financial informa€on to the FAA. CNG – Compressed Natural Gas Commissary Service Provision of beverages, food, snacks, ice and other consumables to aircra‡. Complementary Customer Services – These services are typically available to parking customers for an addi€onal charge. Examples include car washes and oil changes, pet kennels, dry cleaners, food and beverage concessions on site or the capability to order. Consolidated Rental Car Facility (CONRAC, CRCF, or RCF) – In the early 1980s, airports began to develop rental car facili€es that housed all on airport rental car companies and their associated opera€ons including rental counters, customer service, administra€ve offices, ready/return parking, fueling, and maintenance facili€es. CONRAC facili€es can be located in garage structures or remote sites on the airport. They are typically financed with a pledge of proceeds from Customer Facility Charges. Consorums –With a consor€um, the airport sponsor agrees to delegate responsibility for the financing, development, opera€on and maintenance of airport facili€es, equipment and systems. The consor€um in turn o‡en contracts with third par€es to perform specific du€es. In prac€ce, consor€ums vary from airport to airport. Most consor€ums are formed to manage shared use of equipment and fuel storage and distribu€on. There are a few instances where consor€ums of airlines operate and maintain terminal facili€es. For example, the passenger terminal at Atlanta Hartsfield Interna€onal Airport (ATL) is maintained by Atlanta Airlines Terminal Corpora€on (AATC), a corpora€on formed by a consor€um of airlines. Likewise, the Detroit Airlines' North Terminal Consor€um, Inc. (DANTeC) is a Michigan Not For Profit Company originally formed by AirTran Airways, American Airlines, Fron€er Airlines, Southwest Airlines, Spirit Airlines, US Airways, Con€nental Airlines and United Airlines. DANTeC was established for the purpose of construc€ng, installing, opera€ng, and maintaining select airline equipment and systems, and for providing other opera€ons, maintenance and support services to the airlines at the North Terminal. [h›p://www.dantecdtw.com/]. Cost Parcipaon – Sharing of costs for investment in infrastructure such as water treatment facili€es or roads that serve both a major transporta€on hub and private development. Cost Recovery – The recovery of direct, indirect and capital costs. Costs that are not directly accountable to a cost object (such as a par€cular cost center). Indirect costs may be either fixed or variable. Indirect

INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE B 4 costs include administraon, personnel, maintenance, fire and police costs, and are also known as overhead. Cross Ulizaon – An approach to managing airport operaons to maximize the efficiency of an airport’s employees and could include training an employee in mulple areas so that they can switch from one role to another depending upon where they are most needed at a given me. Customer Facility Charge (CFC) – A CFC is a fee required by an airport sponsor (established by state law, local ordinance, or resoluon) to be collected by the car rental companies from customers. CFCs collected reside in dedicated funds to pay for the cost of a CONRAC or rental car service facilies or the infrastructure that serve these facilies. CFCs are usually established ahead of a CONRAC project and are currently in place at over 110 U.S. airports. CFCs can be used to finance, design, construct, and operate: Consolidated airport car rental facilies Common use transportaon systems that move passengers between airport terminals and consolidated car rental facilies including acquision, operaon and maintenance of vehicles (for use in that system), and bus maintenance facilies Terminal modificaons solely to accommodate and provide customer access to common use transportaon systems Terminal roadway and curbside improvements, ulies, access roadways, and environmental remediaon. CFCs vary from $1.50 to $8.00 per vehicle contract day or $2.25 to $10.00 per transacon. The aggregate amount collected from CFCs cannot exceed the reasonable costs to finance, design, and construct facilies. Customer Segmentaon – A term used by market analysts to describe specific groups of customers. Examples of customer groups for airport parking are: (a) meeters and greeters; (b) weekday travelers; (c) weekend travelers; and (d) long term travelers. Development Fee – A fee charged against private developers by the county or city as a condion for granng permission to develop a specific project. The purpose of the fee is to defray the cost of expanding and extending public services to the development. Direct Contract – Airport leases individual locaons or small groups of locaons directly with the concessionaire. Duraon – Parking duraon refers to the me that a vehicle enters a parking facility and leaves it, usually tracked by an access control device such as a me stamped cket, an AVI, or credit card entry record. Dwell Time – This is the me that vehicles remain on the airport property, usually tracked by AVI systems and used for hotel, rental car, and off airport parking shušles, taxis, and buses.

APPENDIX B – DEFINITIONS AND ABBREVIATIONS B 5 Enplaned Passenger – Passengers boarding an aircraft at a specific airport. Enplaned passengers also include connecng passengers that deplane one aircra and board another aircra to connue their journey. Equity Parcipaon – A situaon in which an airport obtains, or has the right to obtain, an ownership interest in the enterprise being developed or operated at an airport. FAA – Federal Aviaon Administraon FBO – Fixed Base Operator Fee Manager – Airport has an agreement with a third party to develop, market, lease and manage concessions without directly operang any. The fee manager does not invest in facilies or operate concessions. A fee manager receives compensaon for services provided. FIDS – Flight Informaon Display System Financial Basis – The salient financial elements or factors of a transacon or operaon. Foreign Trade Zone (FTZ) – A restricted access site authorized by the Foreign Trade Zone Board and supervised by U.S. Customs and Boarder Protecon (CBP). Zones are located in or adjacent to a CBP port of entry and operated pursuant to public ulity principles under the sponsorship of a corporaon granted authority by the Board pursuant to the Foreign Trade Zones Act. Under zone procedures, the usual formal customs entry procedure and payment of dues are not required on the foreign merchandise, unless and unl, it enters customs territory for domesc consumpon, in which case, the importer normally has a choice of paying dues either on the original foreign materials or the finished product. Domesc goods moved into a zone for export are considered exported upon entering the zone for purposes of excise tax rebates and drawbacks. FTZ sites and acvies remain within the jurisdicon of federal, state and local governments and agencies. Freehold Charge – A one me charge on an increase in property values in a specified area. Front of the House/Back of the House – Front of the house refers to operaons and branding presented to the public. Back of the house is a staff only area and is used to mean the parent companies that manage a brand family. For example, Enterprise, Naonal, and Alamo are the front of the house; Enterprise Holdings is the back of the house. In the terminal, passengers deal with the front of the house; at a CONRAC, typically it is the back of the house. Greenfield Development Tax – A one me tax on the sale of permi”ng for a green field site adjacent to a transportaon facility. Gross Receipts – Total revenue Gross Revenues – In concession agreements with rental car companies, the definion of gross revenues is extremely important in determining the amount owed to the airport sponsor. To opmize revenue from car rental concessionaires involves ghtly defining gross revenue. Gross revenue is usually

INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE B 6 determined by the total charges on the face of a customer’s contract receipt, excluding taxes, CFCs, insurance proceeds, and the wholesale transfer of salvage vehicles. The defini†on of gross revenues should also include add ons such Global Posi†oning System (GPS) rentals, addi†onal driver fees, fuels sales, insurance fees, and other extra charges. GSE Storage – Ground service equipment storage Guidance Systems – Inventory and control systems that communicate with parkers either before they arrive at the airport, at the airport, or while in a parking facility. Impact Fees/Exacons – A one †me charge to a developer to mi†gate the impacts of a new development on a specific transporta†on facility. Induced Effects – Induced effects, for areas around an airport, refer to business growth as a result of land use change specifically to take advantage of connec†vity to airports. Intelligent Systems – Systems that acquire and analyze informa†on and modify opera†ons based on prior experience. An intelligent system senses its environment. Using its experience, it selects a series of ac†ons that result in the system achieving an objec†ve. Into Plane Fueling – Pumping fuel into an aircra‘. Joint Development – A partnership between a public agency and a private developer to develop a site on publicly owned land wherein the two en††es will both help pay for the costs of a development and share in the revenues generated by the development. Many airport real estate development projects are structured as joint developments. Joint Venture – Any partnership between en††es for the purpose of a specific project. A joint venture can be between two private individuals or firms and not involve a public en†ty. Land Value Taxes – Land assessed at a different rate than buildings to allow for capturing the increased value that a transporta†on facility can create for undeveloped land. Local Income or Payroll Tax – Taxes on income (accrue to individuals) or payroll (accrue to a business) with a specified area that benefits from a transporta†on investment. Long Term Management Contract or Lease – Airports have leased some or all of their opera†ons to private companies. This is usually done as a long term management contract or lease. Management companies receive a fixed fee and o‘en there is close oversight by the airport sponsor of management contracts, including approval of opera†ng budgets. Management contracts occur more frequently for general avia†on airports or smaller commercial airports where airport sponsors are seeking to improve the opera†onal and financial efficiency of an airport. With long term leases, an airport sponsor grants rights to a third party to develop and manage a property with the understanding the third party is responsible for capital improvements, management

APPENDIX B – DEFINITIONS AND ABBREVIATIONS B 7 and maintenance. Typically the third party collects rents and fees from tenants and shoulders the risk of the investment. Master Concessionaire – Airport leases all space in a category to a single operator. A master concessionaire can operate all of the concessions in several categories (food/beverage and merchandise) or may sublease some of the locaƒons to other operators. Minimum Annual Guarantee (MAG) – A MAG is the minimum annual guaranteed payment submi†ed in a bid by a concessionaire for each agreement year during the term of the concession agreement. Today, most airport sponsors ask concessionaires to bid a MAG. In some situaƒons, the sponsor will set the MAG. Mul modal Connec vity – A concentrated geographic area with immediate access to more than one major transportaƒon mode (e.g., air, freight rail, passenger rail, other transit, highway, marine), and supporƒng faciliƒes (e.g., a loading zone to support transfer of cargo from airplane to truck). Naming Rights – The right to name a facility for a period of years. Financial terms are determined at the start of the contract "naming rights" period of ƒme. Net Margin – Revenues less operaƒng expenses equals opera ng margin. Subtract debt service and amorƒzaƒon, equals net margin. Net margin is parƒcularly important when evaluaƒng the financial performance of an airport facility such as a parking garage because the capital costs of construcƒon are factored in. If airports are looking at individual parking faciliƒes, the allocaƒon of administraƒon and debt to a specific facility also is an important calculaƒon. Net Margin = Parking Revenues – Operaƒng Expenses – (Debt Service + Amorƒzaƒon) Net Revenue—means Gross Revenue less operaƒon and maintenance expenses, capital costs and taxes if any. Origin and Des na on Markets –Markets where passengers begin or end a trip. Parking Access and Revenue Control Systems – This is a system that many airports or their contractors use to operate their parking faciliƒes. These systems come in modules that include vehicle access, parking entry, payment, accounƒng and reporƒng funcƒons. Parking Transac on – A transacƒon is one use of a parking facility. The number of transacƒons is equivalent to the number of customers. Par cipatory Leases – A lease in which an airport sponsor receives a percentage of gross revenue and parƒcipates in a share of the Net Revenue as though the airport sponsor was an equity parƒcipant. Passenger Facility Charges (PFCs) – PFCs were first authorized by Congress in 1990 and are ƒed directly to local airport related projects that (1) preserve or enhance safety, security and capacity of the naƒonal air transportaƒon system, (2) reduce noise from an airport that is part of the system or (3) provide opportuniƒes for enhanced compeƒƒon between or among air carriers. Original legislaƒon permi†ed airports to charge a PFC in $1.00 increments up to $3.00. The legislaƒon changed in 2000 under the

INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE B 8 Wendell H. Ford Aviaon Investment and Reform Act for 21st Century (AIR 21), allowing airports to charge up to $4.50 (although addional regulatory hurdles were added). There have been no adjustments to the PFC program since 2000. (Source: ACI NA) Payment in Lieu of Taxes (PILOT) – A payment made to local governments in exchange for eliminaon of property taxes on a private development project. Percentage Rent – Concession fees paid to the airport sponsor are usually based on the greater of a minimum annual guarantee (MAG) or a percentage of the concessionaire’s gross receipts from sales where gross receipts are clearly defined in the agreement. Percentage of gross receipts is usually in the 10% to 15% range, although duty free is somewhat higher and adversing, considerably higher. Preferenal Use – Preferenal or shared use contractual arrangements represents a shared control between the airport and the airline tenant; the airline tenant acknowledges that under specified circumstances, the airport sponsor can allow use of the leased facility by other airlines. Prime Concessionaire – Airport leases packages of locaons to one or two Prime Concessionaires each of which has mulple locaons (more than 3) within the airport. Privazaon—Sale or lease of a publicly owned property to private corporaons or other enes. In 1996, Congress established the Airport Privazaon Pilot Program (APPP) that authorized the FAA to allow up to five airports to sell or lease an airport and to exempt the airport sponsor from grant assurances and federal requirements that would otherwise require the sponsor to repay federal grants, return property acquired with federal assistance and use the proceeds from the airport’s sale or lease only for airport purposes. The 2012 Reauthorizaon Act increased thenumberof parcipang airports from five to ten. A number of airports have considered parcipang in the Pilot Program. Stewart Internaonal Airport was the first commercial service airport to parcipate when New York’s Empire State Development Corporaon awarded a 99 year lease with Naonal Express Group (NEG) PLC. However, the airport remained privazed from March 2000 unl October 2007 when the Port Authority of New York and New Jersey bought out the long term lease from NEG and took over operaons of the airport. Four other airports have acve applicaons to parcipate in the program: Chicago Midway Internaonal, Gwinne¦ County Briscoe Field (Georgia), Luis Munoz Marin Internaonal (Puerto Rico), and Hendry County Airglades (Florida) and several airports have withdrawn or terminated applicaons. Airport privazaon under this program offers municipalies a potenal immediate cash windfall; however, the impacts of full privazaon on air service or general aviaon remain largely untested. Privilege Fees – A privilege fee is charged to on airport concessionaires and somemes to off airport rental car companies. For on airport concessionaires the privilege fee is the greater of the minimum annual guarantee (MAG) or 10% of gross revenues. Also, many airport sponsors charge privilege fees to off airport parking and rental car operators that are located within a certain radius of the airport (typically five miles). The off airport privilege fee is usually levied monthly and the fee is usually 8% to 10% of gross revenues. Off airport rental car companies do not pay a MAG. Profit Sharing – An evolving trend is for airports to parcipate in the profit generated by a concessionaire, or other lessee on airport property. The typical structure of these arrangements is for the airport sponsor to have a standard agreement with the lessee that sets the MAG or percentage of gross receipts, whichever is higher. Once a certain level of business is a¦ained, a profit sharing formula

APPENDIX B – DEFINITIONS AND ABBREVIATIONS B 9 is ac vated. This allows an airport to offer a lower basis for ini al startup of commercial ac vity and services, and to share in profitability once the business is established. The profit sharing arrangement can be defined in agreements in a number of ways such as a percentage (25% to 50%) of net revenues,1 a fixed sum, or a sliding scale based uponprofitability. The exact terms of profit sharing must be carefully defined in agreements especially if net revenues are the determining factor for ac va on of a revenue sharing formula. Public Private Partnership (PPP) – A contractual agreement between public and private sector en es that includes ac ve private sector par cipa on in the design, building and opera on of transporta on facili es. Quick Turnaround Facility (QTA) – Separate or as a part of a CONRAC, an airport sponsor may construct a quick turnaround facility, usually in a garage near the terminal, to provide refueling, fluid top off, and washing services for rental car agencies that serve the airport. These services can be provided by the airport via direct contract, by individual rental car companies, or by consor ums. RDC – Receiving and distribu on center Refresh Requirements—Renewing, renova ng and improving a facility to increase its useful life. Rents and Conngent CONRAC Rent – On airport rental car companies typically pay the MAG or Privilege Fee and rent on all the facili es they use including: rental car counters, office space, storage space, and ready/return stalls. In the terminal, the rents are based on the prevailing rental rate that is paid by the airlines for similar space. For other facili es, ground rent is charged for the space occupied and set to recover all direct and indirect costs associated with the space including an allocated por on of debt service. CFCs are intended to cover CONRAC debt service, coverage and opera ons and maintenances. If the CFCs are insufficient to cover the costs and expenses associated with the CONRAC, airport sponsors can include a provision in rental car concession agreements to remedy deficiencies through collec on of con ngent rents to produce enough revenue for the CONRAC to pay all obliga ons when due. Revenue— Amount generated from sale of goods or services, or any other use of capital or assets, associated with the main opera ons of an airport before any costs or expenses are deducted. Revenue is shown usually as the top item in an income (profit and loss) statement from which all charges, costs, and expenses are subtracted to arrive at the net income of the firm. Revenue Sharing – Revenue sharing can go both ways. The airport sponsors some mes share revenues with others or requires revenues to be shared with them. Revenue, Aeronaucal Operang – Income to the airport that comes from aeronau cal uses by airlines, aircraš owners, and fixed base operators (FBOs). Aeronau cal use is any ac vity that involves, makes 1 Net revenues are gross revenues less opera on and maintenance expenses, capital costs and taxes if any

INNOVATIVE REVENUE STRATEGIES – AN AIRPORT GUIDE B 10 possible, is required for the safety of, or otherwise directly related to the operaon of aircra­. Aeronaucal use includes services provided by air carriers related directly and substanal to the movement of passengers, baggage, mail, and cargo on the airport. Individuals and businesses, when engaged in the operaon of aircra­ or flight support, are aeronaucal users. Source: ACI NA Benchmarking Survey, FAA Form 127. Revenue, Non Aeronaucal Operang – Income to the airport not derived from aeronaucal uses. Non aeronaucal revenues include land rentals and non terminal improved facilies; food, beverage, and retail, rental cars; parking, hotel, ground transportaon; ulies sale/resale. RON Parking – “Remain over Night” aircra­ parking. Royales – Usage based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, somemes an intellectual property right. Royales are typically a percentage of gross or net sales derived from use of an asset or a fixed price per unit sold of an item. but there are also other modes and metrics of compensaon. A royalty interest is the right to collect a stream of future royalty payments; royalty interests are o­en used in the oil industry and music industry to describe a percentage ownership of future producon or revenues from a given leasehold, which may be divested from the original owner of the asset. Sale of Development Sites – Public agencies sell publicly owned land adjacent to a transportaon facility to a developer. Somemes, agencies buy land in ancipaon of the construcon of the facility, and sell at a higher price once the facility is built, thus capturing the increase in land value created by the infrastructure investment. Sale of development sites on airport property would, however, require FAA approval and release. Sales Tax – States, counes or municipalies can levy special sales taxes in an area the receipts of which can help to finance a transportaon project. Special sales taxes have been used to finance primarily public transit projects. However, a poron of receipts from hotel occupancy taxes (a form of sales tax) has been used by communies to support air service development. Signatory Airlines – Airlines that sign an airport airline lease and operang agreement at a parcular airport that specifies use of airport facilies, duraon of agreement and terms. Special Assessment District/Beerment District – A group of properes that will benefit from a public investment are assessed a fee to help pay for the investment. Street Pricing – Pricing comparable to what is paid for retail goods and services outside the airport. Supplier Rebates – Payment by a supplier to encourage an acon or an operaonal emphasis. Tax Increment Financing – Within a specified district, bonds are used to pay for infrastructure that will help increase the value of the land within the district. All increases in property taxes collected as a result of the increase in value are set aside to pay off the bonds.

APPENDIX B – DEFINITIONS AND ABBREVIATIONS B 11 Third Party Developer – Airport has an agreement with a third party to develop, market, lease, and manage the concessions without directly opera ng any. The third party developer nego ates concession agreements on behalf of the airport sponsor. Developers are paid a por on of concession revenue for the services provided. Developers can be required to make investments in facili es, equipment and common spaces. Transfer of Development Rights – The rights to develop a specified property based on the underlying zoning are sold to a developer and transferred to another site within a given jurisdic on. Transporta on Fees – Airport sponsors levy fees to recover roadway, traffic control, and terminal costs from off airport parking operators, rental car companies, and hotel shu‰les. Transporta on fees can be a percentage of gross revenues, a charge per day, per trip, or on a transac onal basis. Transporta on U lity Fee – A fee imposed on individual land uses (e.g., residen al, office, retail) based on the amount of traffic that a par cular use generates on a transporta on facility. Trunk to Truck – A parking service that picks up the customer at the car, delivers to the terminal, and at the end of the trip, delivers the customer back to his/her car. Turnaround Time – The  me during which the aircraŽ must remain parked at the gate. Value Added Parking Products – These are premium parking products that offer higher levels of service than tradi onal parking products such as valet parking, reserved or guaranteed parking spaces. Airports are experimen ng with various value added products to see which ones have trac on.

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TRB’s Airport Cooperative Research Program (ACRP) Report 121: Innovative Revenue Strategies – An Airport Guide describes a broad range of tools and techniques to improve airport revenue streams, recover costs, and achieve operational efficiencies. The report identifies customer needs; airport-provided services and shared services, facilities, and equipment; revenue participation in real estate and natural resource development; value capture and other financing opportunities; and improvements to existing airport businesses.

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