Miami traffic up 2.8% as DFA settles in

By Administrator |

Miami International Airport (MIA) has reported that total passenger traffic for 2005 rose by 2.8% to 31m passengers in 2005 compared with 2004, although that total is still 3.3m less than its all time high

of a decade ago.
Domestic passengers increased by 3.6% and Dade County Aviation Department is hoping that the increase may now allow it to consider some lowering of fees it charges to airlines using the airport.
Construction delays at the airport?s new North Terminal in particular have hit the airport hard and so much so that it is currently charging its airline customers an $18.10 average per passenger user fee.
The growth of services by American Airlines is the main reason for the increase in passengers and American now accounts for 67% of all MIA's passenger traffic. American uses MIA primarily as a gateway to Latin America and the Caribbean.
With the new South Terminal opening later this year, MIA has been lobbying low-cost airlines to come to the airport and pressing carriers already flying to Miami to increase flights.
Any increase in the number of international flights would obviously be good news for Duty Free Americas Miami (DFAM) which took over the concession from Starboard Cruise Services (DFS Group) recently.
Duty Free Americas Miami offered a minimum annual guarantee (MAG) to the airport of $20m which was just ahead of the $18.5m offered by Dufry Miami Retail Partnership and about $9m more than two other contenders, Worldwide Duty Free Retailer, and Miami Duty Free. Starboard Cruise Services (DFS Group) didn?t bid.
DFAM is also committed to paying around $9m in construction costs to build new stores. According to Miami-Dade County Board of County Commissioners? Office of the Commission Auditor, DFAM?s commitments include a minimum annual guarantee of $20,018,770, with the cost of rent at MIA (calculated as of October 1, 2005) standing at $59.77 per square foot. DFAM was required to have a MAG and Rent Performance Bond which equals 75% of the MAG and rents for the current year of operation.
DFAM was also required to provide an irrevocable letter of credit or cash as Payment Security in an amount equal to three times the minimum monthly guarantee, plus rental and applicable taxes.
The good news for DFAM is that Dade County appears to be making concessions to the amounts payable considering that the North Terminal (which forms part of the contract) is not open and looks like being considerably delayed.

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