San Francisco Airport, United Reach Payment and Lease Pact

San Francisco International Airport and its biggest tenant, United Airlines, have reached a new payment and lease plan that would allow the airline, which is operating under Bankruptcy Court protection, to stay at SFO until at least 2011.

The plan, if approved by the San Francisco Board of Supervisors and a U.S. Bankruptcy Court judge, would extend United’s leases over its large maintenance center, aircraft hangar, air cargo facility and terminal.

The plan also would allow United parent UAL Corp. to pay the nearly $10 million it owes in past rent over a three-year period, at 2.5% interest.

The arrangement is expected to help both parties by giving SFO long-term stability from its dominant carrier and allowing United to continue using SFO as an international gateway and maintenance center.

“It’s a very strong sign of United’s commitment to San Francisco,” said John Martin, the airport’s director. “Overall, it’s a good deal for the city and the airport.”

“SFO is an important hub for us,” United spokesman Stephan Roth said. “We have a lot invested there, and we’re looking to continue.”

Both SFO and United have been hurting from a decline in travel after the 2001 terrorist attacks, last year’s SARS outbreak in Asia and the war in Iraq. Passenger traffic at SFO dropped to 31 million from 40 million for the 2002 fiscal year. United has been in Chapter 11 bankruptcy protection since December 2002.

The deal could help United eventually land a $1.8-billion federal loan guarantee from the Air Transportation Stabilization Board, which would help it emerge from Chapter 11 by the end of summer.