Airport Use Agreements

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Bilateral agreements are an integral part of the working relationship between airports and airlines. In the United States, the three types of airport operating agreements are the residual method, the compensation method and the hybrid method. Under a residual agreement, the financial risk of the host airport is borne by the signatory airlines and, in return, the signatory airlines pay reduced user charges. However, under a compensation agreement, airports bear their own financial risks in the absence of a signatory airline. A hybrid agreement combines the characteristics of residual and compensatory agreements.