Latest Legal Update - Airport Responses to COVID19

Dear Clients, Friends and Colleagues:

It has been some time since we have sent a general update on COVID-19 issues to our clients and colleagues.  Despite considerable developments affecting response to the pandemic, federal policy implementation has been fairly steady for the last month or two as airports have adapted to the pandemic and are beginning to face the complexities of resuming service in this new world.

We did want to make you aware of a few new policy developments that might affect you.  Like usual, this is just a brief summary and we would be happy to discuss your own particular situation at any time.

New FAA Policy Statement on Relief to Tenants
FAA yesterday released a statement (released yesterday but dated June 22) from FAA Associate Administrator Kirk Shaffer with regard to airport sponsors’ ability (and obligation) to provide relief to tenants.  We can only speculate on the genesis of the statement but it contains some interesting assertions about sponsor’s authority and responsibility that do not appear entirely in accord with long-standing FAA policies on revenue use.  The statement will undoubtedly affect sponsors’ negotiating leverage in working out individualized arrangements with both aeronautical and non-aeronautical tenants.  Of particular moment in the statement is the Associate Administrator’s assertions about sponsor’s responsibility to provide relief to non-aeronautical tenants.  Given the author, we must presume that this statement reflects agency policy.  A copy of the statement is attached.

 DOT Guidance on Airports’ Role in COVID-19 Response
Last Friday, the federal government finally released its long-awaited guidance on the respective roles of airlines, airports and federal agencies in preparing airports for a growth in passengers in the midst of the pandemic. The. Departments of Transportation (“DOT”), Homeland Security (“DHS”) and Health and Human Services’ (“HHS”) guidance for airports and airlines, “Runway to Recovery” is attached.  The document provides several recommendations to help prevent the spread of COVID-19 in airports and on aircraft.  The guidance recommends that the measures “should be implemented as soon as feasible” if they are not already in place.  Nothing in the guidance is binding at this time, and as many lawyers already understand, there are serious legal impediments to many health measures that are under consideration.  Since it is only advisory, the guidance document does not purport to address or resolve those thorny issues.

 The document is too long to summarize in detail but some of the recommendations that are most important include the following:

  • Airports should communicate with passengers and employees prior to arrival at the airport in order to educate persons about the health processes at the airport.  Airports are referred to the Centers for Disease Control (“CDC”) website for a toolkit.
  • Airports and their vendors should “use appropriate measures in any shared spaces to assist people in social distancing.”.
  • Airports are “strongly encouraged to require that everyone correctly wear a mask or cloth face covering in shared spaces” with accommodations for persons with disabilities or ailments who cannot wear masks; airports should have masks available for those who arrive without one.
  • Airports should require all areas with potential for human contact and transmission be disinfected per schedules recommended by CDC and the Occupational Safety and Health Administration with particular attention to high-touch surfaces; hand sanitizer stations and disinfecting wipes should be provided.
  • Temperature screening was not specifically recommended in this document but the guidance notes that airports or airlines that implement temperature screenings should consider the following: “If conducted, pre-travel temperature screening of passengers should be done in accordance with the protocols of the relevant health authorities and should not create significant passenger flow delays or crowding, which can create additional exposure risks. The screening should include the passenger health attestation and may include visual observations conducted by trained staff.  If conducted, temperature screening could occur upon arrival at the airport . . .  airline check-in . . . or before or after entering the ‘sterile’ gate areas.”  The guidance goes on to explain that screening of international passengers should not disrupt the federal inspection services.
  • If an airport, airline, or other authority makes the decision that it will bar those with temperatures over a certain threshold from flying, the policy should be transparent, posted in advance, and all passengers should be directly notified of the policy before making a decision on whether they will attempt to fly or not. The guidance does not describe the complex legal and policy issues for airports who make such a decision.
  • Airports should prohibit people waiting for arriving passengers from accessing the baggage claim area unless special accommodations are necessary for passengers that require assistance. 

Bankruptcy Matters
As many observers forewarned, bankruptcies will be a regrettable, but inevitable, effect of the pandemic.  We are representing a few dozen airport sponsors in the rapidly proceeding Advantage/EZ Rent-A-Car bankruptcy and in the continuing Hertz (and affiliates) bankruptcy.  You have probably heard about some foreign air carrier bankruptcies which present unique issues for a handful of airports.  We are following those cases closely as well.  While we are hoping it will not happen, many airport sponsors are preparing for the likelihood that we will see more bankruptcies, including, potentially, cases involving U.S. airlines. Prudence dictates that sponsors conduct financial and legal analyses of these potential scenarios now and on an on-going basis until we have more clarity as to when substantial passenger levels will return.  Some commentators believe that any such airline bankruptcies could be filed in the fourth quarter of 2020 or early 2021 (at the earliest) given the restrictions imposed by the receipt of CARES Act financing. 

 If you have any particular bankruptcy issues, feel free to contact me or my bankruptcy partners, Dave Bannard and Eric Smith.

 As always, we hope that you, your family and colleagues are staying safe and well.  Our thoughts are with all of you in these crisis-filled times.

Eric T. Smith
Attorney at Law
Kaplan Kirsch & Rockwell LLP
202.955.5600   |   202.955.5616
1634 Eye (I) Street, NW | Suite 300   |   Washington,  DC   20006
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