FlyerTalk Forums - View Single Post - More a la carte fees coming to CO - Interview with Jeff Smisek
Old Oct 30, 2009 | 6:56 pm
  #72  
tex1899
 
Join Date: May 2008
Location: God's Country
Programs: UA, AA, HH, MR
Posts: 415
Let's see...if I recall, within the retail leasing industry some tenants pay some/all of their rent based upon the store's sales; this gives the landlord an incentive to do things to attract potential customers.

If Continental begins charging for meal, then restaurants in airports will probably see an uptick in sales. Perhaps CO is looking at the following scenario:

CO: "Mr. Airport (landlord), if we can help increase the revenues for your other tenants (restaurants) (assuming rent is at least in part based upon revenues), would you be willing to reduce our rent, or do something for us?"
Airport: "This is something we can explore."

CO knows it can cater fewer meals b/c X% of passengers won't pay for their meals, which means its catering operation will be slightly smaller (fewer expenses). Since meals will be paid for, the waste factor (meals uneaten) should go down, which reduces expenses further. And fewer catered meals means less weight, which means less fuel burned. Some passengers won't want to pay $10 for (below) average grub at an airport, so they won't bring any food on board (less fuel burned), while some people will pay $10 (more fuel burned, but overall probably less than with free meals).

I'm not sure how leasing contracts work within airports, but if I can bring additional business to one of my suppliers and/or my landlord, I'm going to expect something in return. Yes? No? Maybe? Over-analyzing things? It's been nearly 8 years since I took a real estate course.
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