ACRP Legal Research Digest 6: The Impact of Airline Bankruptcies on Airports

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Abstract

Airline bankruptcies not only pose significant financial hardship on airports dependent on airlines for revenue, but also raise significant legal issues concerning treatment of airlines' obligations to airports under the bankruptcy process. The objective of this report is to examine those legal issues presented by the filing of airline bankruptcies that are relevant to airports, and to explore how airport lawyers and courts have responded to those issues. The report is intended to provide a solid understanding of the basics of bankruptcy theory and law relevant to airport operating agreements with airlines, and to identify issues such as lease recharacterization and payment of stub period rent that particularly affect airports dealing with airlines in bankruptcy. Such an understanding should assist airport lawyers in conducting research on bankruptcy-related issues in their own jurisdictions, in negotiating agreements that include appropriate protections of the airport's interests in the event of airline bankruptcy, and in mitigating damages to the airport's financial interests in the event of bankruptcy under existing as well as future agreements.

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Waite, J. K. (2009). ACRP Legal Research Digest 6: The Impact of Airline Bankruptcies on Airports. Transportation Research Board of the National Academies, Washington, D.C.

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