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PIT To Pay Settlement To Fraport USA

Pittsburgh International Airport (PIT) has agreed to pay $10.5 million to Fraport USA in a settlement of litigation between the airport and its concessions developer.

“The Allegheny County Airport Authority and Fraport have agreed to settle our litigation dispute,” said Jeff Letwin, solicitor for the Allegheny County Airport Authority, in a statement. “As part of the agreement, Fraport will not return as master concessionaire at Pittsburgh International Airport.” He noted that PIT will continue to manage concessions and retail partners directly, as it has for the past year.

“The settlement – $10.5 million – is in the best interest of both parties. This is good news and is something that we have been seeking,” Letwin continued. “We look forward to moving on and enhancing the passenger experience at PIT both at the existing terminal and new terminal opening in 2025 as we go further for all.”

Fraport officials did not respond to a request for comment by press time.

The settlement ends more than a year of litigation between the two parties. Fraport employees at PIT were evicted in June 2022 after the airport claimed the developer had defaulted on its lease, in part due to security breaches. Fraport, which has served as developer of the concessions program at PIT since 1992 and was operating under a lease signed in 2012, filed a lawsuit claiming the contract was terminated illegally.

The Allegheny County Court of Common Pleas concluded that the master lease that governed the relationship between the parties was more of a service contract than an actual lease. But the Pennsylvania Superior Court reversed that ruling. It concluded that after Fraport declined a $5 million offer from the airport authority to terminate the lease, which was set to end in 2029, the airport authority interfered with Fraport’s property rights and effectively forced the result it wanted. The court decided that the agreement between the authority and Fraport Pittsburgh was in fact a lease. The authority had appealed that decision.

The $10.5 million settlement is more than double the $5 million the airport initially offered Fraport to buy out its lease last year. Fraport had countered requesting a buyout of $20 million.