Memorandum Of Agreement On Airport Improvement Fees
These two ratios represent the Authority`s ability to generate revenue to service debt [interest and principal repayment] for existing debts. The DSCR is a simple measure of earnings before interest, taxes, depreciation and amortization [“EBITDA”). The precondition is that the Authority has a ratio of 1.00 or higher. In other words, the Authority must produce sufficient EBITDA to meet its debt servint obligations in a 1-to-1 ratio. The DGSCR provides a broader overview of the relationship by allowing the inclusion of the unused portion of the credit facilities. The ratio must be greater than or greater than 1.25. The GDSCR is the most important report, as non-compliance can lead to a standard event [after a hardening period of 12 to 24 months]. A default event is a serious event in which bondholders can take control of the airport in the event of a default. Due to the strength of the credit facilities, the GDSCR is significantly higher than 1.25 and non-compliance is not currently considered a risk. The airport improvement fee [“AIF”] is a passenger fee set by each airport, which is levied by the air carriers on behalf of the airport and paid monthly to the authority. YOW`s last increase in ALTERNATIF FONDS was in 2014.
Hedge funds have been used since May 1999 for the FIA`s capital infrastructure and debt servious, in accordance with the FIA`s agreement with the signatory airlines. The agency had planned to spend $48 million on investments in 2020. Currently, the Agency has withdrawn most projects and reduced its planned expenditures by between $16 million and $20 million. For the period 2021 to 2024, the Agency has an annual capital infrastructure envelope of approximately $80 million, which is equivalent to the $170 million in the 2020-2024 business plan. Major activities and projects have been postponed and postponed. Spending of $15 million per year should be considered optimistic, given that, given the aging of airport infrastructure, there will be pressure to increase this level of investment, particularly because quantities are coming back and putting pressure on them. With the significant decline in passenger volume, the production of hedge funds for the entire FIA capital infrastructure and related debt servint has been significantly affected and will remain significantly lower throughout the recovery period. The MoU establishes a strategic partnership and a long-term cooperation agreement between the government and IATA. It recognises that cooperation in aviation safety and the introduction of modern technologies are particularly beneficial in improving efficiency and stimulating sustainable growth in the civil aviation sector. Effective October 1, 2020, the Authority proposes to increase the ALTERNATIF FONDS by $5.00 from $23.00 to $28.00. This fee applies to passengers on planes (connecting passengers do not pay this fee). The Authority last increased this levy in 2014.
The $5.00 increase represents a 21% increase and is expected to generate an additional $7 million in revenue in terms of investment in flights and travel in 2021, equivalent to 3 million passengers and load factors between 60 and 70%. The Authority will continue to have one of the lowest hedge funds among tier 1 airports, with only Toronto and Vancouver under $25.00. Another factor to consider is compliance with debt pacts as described in Master Trust Indenture [“MTI”).00 The ITM is the debt holder agreement, which sets out the conditions and structure of the authorities` debt outstandings. The ITM contains several agreements that the Authority must comply with as part of its agreement with bondholders. There are two critical alliances; the first is the debt hedging ratio [DSCR] and the second is the gross debt coverage rate [“GDSCR”). The Authority`s credit facilities are robust enough to help the Authority cope with this event