Jet Fuel Consortiums


Representative Engagements / Experience

  • Assisting airline representatives in forming new entities for the fuel consortium group; negotiating and educating airport authorities on the role of the consortium and its interaction with the airport authority. Startups often occur when new facilities are planned for the airport (e.g., new terminal building or new fuel facilities), and this requires negotiation with airport authority on the design of new facilities, perhaps involving third-party financing of new facilities; negotiating and drafting agreements with the airport authority and/or third parties for leases and other use rights for the fuel facilities; and preparing and drafting standard forms of agreements used for the consortium, such as the Interline Agreement (governing the relationship, duties, and obligations of the member airlines), Maintenance and Operations Agreements (between the airline fuel consortium and the third party that operates the fuel facilities—setting forth respective rights and obligations of the parties), and Non-Contracting User Agreements (allowing access to the fuel system by airlines and other parties that are not members of the fuel consortium group).
  • Providing advice regarding the structure of the fuel consortium entity, entity formation, drafting organizational documents, serving as corporate secretary, providing corporate housekeeping and advice on securities law issues; issuing stock in C corporations, general corporate advice, attending annual meetings and generally operating as general counsel to the fuel consortium.
  • Assisting with financing for construction of new fuel facilities to serve the airport, expansion of existing facilities, or retrofit or upgrade of existing facilities to comply with new regulatory requirements. We assist in identifying sources of capital, negotiating and documenting financing transactions (loan, secured notes, etc.), working with member airlines to obtain financing consents and opinion letters, and effecting client compliance with post-closing covenants, reports, and other requirements.
  • Negotiating and documenting all real estate transactions, and providing advice on general real estate, land use, and zoning issues that may arise.
  • Working on remediation of fuel releases; negotiating consent decrees with environmental authorities; and providing compliance counseling on a wide variety of environmental issues (air quality, hazardous waste disposal, release reporting), environmental permitting, and environmental audits.
  • Providing expert legal advice to the fuel consortium when it is threatened with litigation. Typically, this includes contractual disputes, often involved with new facility construction. Fuel consortiums initiate litigation to obtain cost of damage to facilities or when threatened with litigation in connection with improper operation of fuel facilities equipment. Litigation skills are sometimes needed to resolve development conflicts with fuel facilities where third parties propose construction that could hinder safe operation of the fuel distribution system.
  • Providing state and local legal advice on property taxation issues, in addition to that associated with occasional issues with federal excise tax that affects the airlines’ owning the fuel; the manner in which fuel facilities are operated may affect individual airlines’ tax liability.
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