O’Hare and Halfway Airport concessionaires which have shut down or seen their revenues plummet due to the coronavirus would get some reduction underneath a mayoral plan superior Friday.
Usually, airport concessionaires pay town a share of gross sales or a “minimum annual guarantee” based mostly on gross sales the earlier 12 months, whichever is larger.
That’s not attainable. The coronavirus has devastated the journey business and the airport concessionaires that depend upon crowded airports.
The reduction package deal, championed by Mayor Lori Lightfoot and superior Friday by the Metropolis Council’s Aviation Committee, would function a short lived life raft for Halfway and O’Hare concessionaires that comply with maintain their workers.
It could waive hire and charges for 2 months — April and Could — for eating places and shops.
Starting in June, these concessionaires would pay base hire solely. The “minimum annual guarantee” could be deferred. It could should be paid again at no curiosity when a concessionaire’s gross sales get better to 75% of final 12 months.
If gross sales are nonetheless depressed when the minimal annual assure is readjusted in January, the reduction will proceed till the 75% benchmark is reached.
Advertiser and web suppliers Clear Channel, JC Decaux and Boingo Wi-fi would get a two-month hire waiver.
For rental automotive corporations at O’Hare and Halfway, town is providing to waive the minimal annual assure or base hire for the months of April, Could and June. Rental automotive corporations will proceed to pay share hire, facility hire at O’Hare solely and buyer facility prices handed on to passengers as a part of the price of renting a automotive.
Aviation Commissioner Jamie Rhee portrayed the reduction package deal as “more generous” than any provided by different main airports as a result of reimbursement of the deferred hire could possibly be prolonged for so long as three years.
She famous the concessionaires haven’t obtained assist from the waves of federal stimulus packages authorized by Congress.
“We have been very liberal in working with our concessionaires. If they want to close, we’re letting ’em close,” she mentioned.
Rhee pegged present concession operations at 30% at O’Hare and 10% at Halfway, partly, due to an early cluster of coronavirus instances on the Halfway management tower that “significantly reduced flight activity before we saw the overall industry start decreasing.”
“It fluctuates day-by-day. There was one concessionaire that actually came to me and said, ‘Three weeks ago, we were thrilled that we made $600 a day. … And last Friday, we made $2,000.’ It’s not where they should be. They were at $10,000 last year. But it was certainly in the right direction.”
American Airways Chairman Doug Parker instructed analysts final month that industrwide income has fallen about 95% from what it was in April 2019. Parker predicted the restoration could be gradual and “demand for air travel will be supressed for quite some time.”
Boeing Chairman David Calhoun has predicted at the least one main airline would exit of enterprise due to the coronavirus.
On Friday, Rhee instructed aldermen that home journey will bounce again first.
“But we don’t know if that’s gonna be 50% by the end of the year or by spring of next year or that will be 75%. So we wanted the flexibility to tie [this relief] to actual revenues to trigger repayment. And that’s up to three years,” she mentioned.
Ald. Roberto Maldonado (26th) complained some concessionaires are not offering medical health insurance to their workers. He urged Rhee to not provide any form of reduction to concessionaires till that insurance coverage is reinstated.
Rhee promised to look into it. However she mentioned her main objective is worker retention.
“We’re gonna … continue to work with them. And any obligation they have to the city that we can enforce, you know we will,” the commissioner mentioned.