Report Prepared by: Rhett Williams Airport Manager
Title
SUBJECT: Recommendation to the Merced City Council Regarding a Draft Lease Agreement with Contour Airlines with the Merced Yosemite Regional Airport
REPORT IN BRIEF
Review of a draft lease agreement between City of Merced and Contour Airlines to make a recommendation to Merced City Council.
RECOMMENDATION
Regional Airport Authority - Adopt a motion recommending approval of the lease agreement and intended terms with Contour Airlines to the Merced City Council.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Deny; or,
3. Continue to a future meeting (date and time to be specified in the motion).
DISCUSSION
The Department of Transportation (DOT) has awarded Contour Airlines a four-year contract to provide commercial air service to Merced Yosemite Regional Airport as part of the Essential Air Service (EAS) program. The new DOT contract allows Contour Airlines to begin service on July 1, 2026, and will expire on June 30, 2030, unless extended by the DOT.
Key terms of the Lease Agreement include the following:
Rent: The rents to be paid by Contour Airlines shall be the sum of the following:
Year 1: $9,115.69 per month
Year 2: $9,389.16 per month
Year 3: $9,670.84 per month
Year 4: $9,960.96 per month.
Beginning July 1, 2026, rent shall increase three percent (3%) annually on January 1st of each year.
Landing Fees: Contour Airlines will also pay landing fees of $93.00 per landing.
CAM Charges: As compensation for common area maintenance (CAM), Contour Airlines will pay a CAM fee each year and adjust (3%) annually increase.
Year 1 (July 1, 2026, to June 30, 2027) $2,526.15 per month
Year 2 (July 1, 2027, to June 30, 2028) $2,601.93 per month
Year 3 (July 1, 2028, to June 30, 2029) $2,679.98 per month
Year 4 (July 1, 2029, to June 30, 2030) $2,760.32 per month
Should Contour Airlines exceed 10,000 revenue passenger enplanements in a fiscal year, the City will reduce the r...
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