United renegotiates lease with SFO

San Francisco International Airport and its biggest tenant, UAL Corp’s United Airlines, have renegotiated the airliner’s long-term leases and agreed on a new rent payment schedule for the bankrupt airline. United, with about half of all flights and passengers, is the dominant airline at SFO where the carrier accounts for 27 percent of the airport’s annual revenue.
The agreement, which still has to be approved by the San Francisco Board of Supervisors and a U.S. Bankruptcy Court judge, extends United’s leases at its vast SFO maintenance center, Terminal 3, an air cargo facility, service equipment and flight kitchen center and an aircraft hangar. The pact also puts United on a three-year payment schedule for nearly $10 million of past due rent, at 2.5 percent interest.
Talks between SFO and United began quietly in January. An agreement to lock in all of United’s long-term leases and collect rents were the city’s prime goals. United, in turn, extended all its major leases until at least 2011, with an option to renew them through 2023.