Financial support for airport concessionaires approved by Chicago City Council

The City of Chicago’s Council has announced that it has approved a concessions relief programme, that was introduced in April 2020 by Mayor Lori E. Lightfoot and the Chicago Department of Aviation (CDA), to provide financial assistance to concessionaires at O’Hare International Airport (ORD) and Chicago Midway International Airport (MDW).

The vendors at both airports have been hit particularly hard by the COVID-19 pandemic and its effects on the global aviation industry, and the proposed support package provides the necessary assistance to help these businesses to continue operations.

Lightfoot said: “Many airport concessionaires are small, local and diverse businesses. They are the lifeblood of our airports, providing local flavour and culture to the traveller experience. The slowdown in travel has had a profound impact on these businesses and we are determined to provide the kind of assistance that ultimately may make the difference between staying in business or closing for good.”

The concessions relief programme grants CDA with the authority to provide financial relief to airport concessionaires – including restaurants, shops, advertisers and rental car operators – which are groups that, by and large, did not receive direct assistance from the federal government beyond what is generally available to small businesses.

This temporary relief can take the form of rent reductions, adjustments to minimum rent, rent deferral, reduced security deposit or letter of credit requirements, relaxation of mandatory minimum or maximum operating space requirements, short extensions of term to extend amortisation of costs, and authorisation of operational alternatives (like kiosks, mobile carts, etc.), or other relief consistent with Federal Aviation Administration (FAA) guidance and legal requirements.

Chicago’s Department of Aviation Commissioner, Jamie L. Rhee, said: “We all know that these are not ordinary times at Chicago’s airports, and, unfortunately, one of the parties that has been hit the hardest is our concessionaires – which have not had access to the same kinds of federal resources as the airlines. This is a creative approach to bridge that divide and provide some real relief — and some breathing room — for these critical airport businesses. Supporting our entire concessions community and keeping them operating during these unprecedented times will lead to the continued health of the full Chicago airport system moving forward, beyond COVID-19.”

In a further effort to assist concessionaires, CDA teamed up with the Department of Procurement Services (DPS) to announce a programme that enlists established Assist Agencies to provide support and technical services for small, diverse airport businesses, including concessionaires that are suffering because of COVID-19. Resources that foster and enable business sustainability and job retention will be a particular focus.

In its ongoing commitment to transparency and accountability, all relief associated with the concessions relief programme must have the approval of the City’s Corporation Counsel and Chief Financial Officer, and CDA will submit a report to the Aviation Committee quarterly on the status of all relief granted. Relief may not exceed three years, and will include workforce retention requirements.

While official passenger traffic data at Chicago’s airports do not yet reflect the true impacts of the COVID-19 pandemic, the Transportation Security Administration (TSA) has indicated that passenger throughput at its security screening checkpoints nationwide has dropped by 90 per cent nationwide since the pandemic began.

According to industry analysts, airlines cancelled 65 per cent of all scheduled flights during April 2020. While O’Hare – the busiest airport in the world by operations in 2019 – continues to accommodate a high volume of flights, daily operations in May 2020 are typically a third of what they would normally be, while Midway is operating at approximately 50 per cent. As a result, many airport concessionaires are closed, or operating at greatly reduced hours.

“Our goals are simple: that we have sustainability and continuity amongst our concessions partners; that they’re employing people; and that they’re able to pay us back,” said Rhee.

Since the earliest days of the pandemic, CDA has been in consultation with its fellow airport operators to come up with solutions for common problems. Airports Council International (ACI) North America has regularly brought together its members to share best practices and strategies during the COVID-19 pandemic.

Kevin M. Burke, President and CEO of ACI North America, said: “The Chicago Department of Aviation’s membership in ACI North America strengthens the entire airport industry. It is important for airports like Chicago O’Hare and Chicago Midway to have a seat at the table as we begin the recovery process following the significant disruption the travel industry has experienced as a result of the coronavirus health pandemic.”

He continued: “Airports have greatly benefitted from learning about the best practices being implemented at Chicago’s airports to ensure the health and safety of the travelling public as we navigate this complex crisis. At the same time, Chicagoans are being well served by its airports through the mutual exchange of best practices and industry intelligence being shared among our nation’s leading airports.”

Rhee said: “Every airport in the country is facing the same set of challenges, and every airport also has its own unique operational standard. Working with ACI North America and our sister airports – particularly other large hubs – to come together and talk these issues through fosters creative solutions – and is a great benefit to Chicago’s aviation community.”