REPORT TO THE CITY COUNCIL
FROM: HENRY THOMPSON, Director of Aviation
Airports Department
BY: MELISSA GARZA-PERRY, Airports Properties Manager
Airports Department
MICHAEL VASQUEZ, Airports Property Supervisor
Airports Department
SUBJECT
Title
Actions related to the Non-Exclusive License Agreement with New Tech Aircraft Services, Inc. (dba. NTAS Maintenance & Engineering), a California Corporation, to Provide On-Call Maintenance to Large Transport Category Aircraft Operated by Southwest Airlines Company, a Texas Corporation, at Fresno Yosemite International Airport. (Council District 4)
1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines; and
2. Approve a Non-Exclusive License Agreement (License) with New Tech Aircraft Services, Inc. (dba. NTAS Maintenance & Engineering), a California Corporation (Licensee), to Provide On-Call Maintenance to Large Transport Category Aircraft Operated by Southwest Airlines Company, a Texas Corporation (Southwest), at Fresno Yosemite International Airport (FAT) for the Term of two (2) years, not to exceed the Ending Date of April 30, 2027. The minimum amount of potential revenue generated by this License is approximately $6,000 (in monthly license fees) per year in addition to an eleven percent (11%) of Licensee’s monthly gross revenues from all its operations at FAT. The minimum total anticipated revenue during the life of this License is approximately $12,000.00, plus eleven percent (11%) of Licensee’s monthly gross revenues from all its operations at FAT.
Body
RECOMMENDATION
Staff recommends that the City Council (Council) adopt a finding of Categorical Exemption, pursuant to Section 15301 of the California Environmental Quality Act (CEQA) Guidelines, and authorize the City Manager, or designee, to execute this two (2) year License with New Tech Aircraft Services, Inc. (dba. NTAS Maintenance & Engineering), a California Corporation (Licensee), to continue operating and providing On-Call Maintenance to Large Transport Category Aircraft operated by Southwest at FAT. The minimum amount of potential revenue generated by this License is approximately $6,000.00 annually. However, this License also contains a provision for the City of Fresno, Airports Department (Airports), to collect eleven percent (11%) of New Tech’s total monthly gross revenues from all its operations at FAT, as Licensee is exploring opportunities to expand its on-call services to other large transport category aircraft operators, in addition to Southwest, at FAT. The total anticipated minimum revenue during the life of this License is approximately $12,000.00.
EXECUTIVE SUMMARY
Licensee is operating as the on-call maintenance provider to the large transport category aircraft operated by Southwest at FAT. However, Licensee is exploring opportunities to expand its current operations and providing on-call maintenance services to other large transport category aircraft operated by other commercial airlines at FAT. Licensee had been operating under a temporary use permit (TUP) since August 12, 2024. Consequently, Licensee’s TUP expired on March 1, 2025, and is currently operating as a holdover. This License would allow Licensee to continue operating at FAT potentially through April 30, 2027.
BACKGROUND
Licensee has operated as the on-call maintenance provider as a Mobile Service Provider (MSP) as defined under the Minimum Standards for FAT, to the large transport category aircraft operated by Southwest at FAT, since August 12, 2024. On May 1, 2024, Southwest and Licensee entered into an Aircraft On-Call Servicing Agreement for a term of three (3) years, which has an expiration date of April 30, 2027. Consequently, in the Summer of 2024, Southwest approached Airports, to allow Licensee to operate at FAT as Southwest’s on-call maintenance service provider to its large transport category aircraft operating on the airfield. Consequently, Airports issued a TUP to Licensee, after the requisite insurance was reviewed and approved by Risk Management, allowing Licensee to operate at FAT. As previously mentioned, the TUP expired on March 1, 2025, and Licensee has been operating as a holdover. Please be advised, this proposed License does not contemplate the leasing of any rentable space within FAT’s terminal building, as Licensee is categorized as being a MSP, they are a company that conducts one or more authorized revenue generating aviation activities on or at FAT but does not directly lease space from Airports. Consequently, Licensee is responsible for finding appropriate hangar space (via sublease) from one of the Fixed Based Operators that are located on FAT’s general aviation ramp, which is located away from FAT’s terminal building and west of the airfield’s existing Air Traffic Control Tower. Moreover, this proposed License’s End Date corresponds to the expiration date of the Aircraft On-Call Servicing Agreement between Southwest and Licensee, which is April 30, 2027. Currently, Licensee’s on-call services are exclusive to Southwest, but Licensee is exploring opportunities to expand its services to other commercial airlines that currently operate large transport category aircraft at FAT. Thereby, this proposed License includes a percentage rent provision, where Airports would receive a monthly percentage rent equal to eleven percent (11%) of Licensee’s monthly gross revenue from all its operations at FAT. Thus, under this proposed License, the minimum annual amount of potential revenue generated by Licensee’s operations at FAT would be approximately $6,000.00. In addition, this proposed License would allow Licensee to continue to operate, without any disruption, as the on-call maintenance service provider to Southwest’s large transport category aircraft currently servicing FAT.
The City Attorney has reviewed and approved this License as to form, and Risk Management has reviewed and approved all insurance requirements.
ENVIRONMENTAL FINDINGS
This License falls within the Class 1 Categorical Exemption for Existing Facilities set forth in CEQA Guidelines, Section 15301 for existing facilities, as it involves no alteration of existing facilities, with no or negligible expansion of airport facility use. Furthermore, the “Common Sense” exception set forth in CEQA Guidelines, Section 15601(b)(3) applies to this project.
LOCAL PREFERENCE
Local preference is not applicable because this is not an award of product, services or construction agreement.
FISCAL IMPACT
The minimum total potential revenue during the life of this License will be approximately $12,000. All revenue will be deposited into the Airports Enterprise Fund and will contribute to the operation and maintenance of FAT. There is no impact to the General Fund or ratepayers of the City of Fresno from this item.
Attachments:
Non-Exclusive License Agreement
Categorial Exemption