Alaska International Airport System Set for Dramatic Rate Hike

The cost of rent at Alaska’s largest airports will more than double in some instances under a proposal agreed to last month by the Department of Transportation and Public Facilities.

Airlines and contractors leasing space at Ted Stevens Anchorage International Airport (ANC) and Fairbanks International Airport (FAI) have largely managed to avoid rent increases for the better part of a decade. Now, Alaska International Airport System, the operator of two of Alaska’s busiest commercial airports, is looking to make up for lost time. Officials won approval to double the rents of some tenants.

The Alaska Department of Transportation and Public Facilities quietly approved the dramatic jump in rents last month, after years of declining to allow any increases at all. Tenants leasing land at ANC will see annual rates increase from nine-cents-a-square-foot to 18-cents-a-square-foot. Likewise, rents at FAI are set to grow to twelve-cents-a-square-foot.

Anchorage Airport Manager John Parrott acknowledges that some smaller airlines will feel a bit of sticker shock, but he pointed out that the managers have attempted to make incremental increases more in step with inflation several times over the last five years. “There is no arguing that’s a significant increase,” he told The Alaska Dispatch News. “There was a great concern about the state of the economy at that point. Many Alaskans, such as those in the tourism industry, are doing well. The current situation is not as universal as the 2009 situation.”

Perhaps not surprisingly, those who do business at Alaska’s international airports are somewhat less sanguine about the prospect of 100 percent rent increases. “The proposed land rent increases are excessive and unreasonable,” Alaska Air Carriers Association wrote in a letter asking regulators to instead consider approving a more modest ten percent rate hike. “In a slowing economy there is no way for commercial aviation to absorb such huge cost increases.”

[Photo: WIKIMEDIA COMMONS]