After a two year battle with Los Angeles International airport, airlines won a decisive round when a Department of Transportation ombudsman backed an internal investigation which found $32.7 million in airport revenues collected from landing fees had been improperly used.
From the improper spending of $33,750 for a parade float, to more than $9 million in lost rental income from airport property given over to the city without any charges, the DOT report portrayed an airport and city administration boldly flouting federal law which prohibits airport revenues from being used to cover city expenses. Airlines first alleged such malpractice in 1993, when the city's mayor, Richard Riordan, trebled landing fee charges from 50 cents per 1,000 pounds of landing weight to $1.56. Last July, that figure rose to $2.06.
In backing the report the ombudsman, Judge Burton Kulko, recommended that landing fees be cut to $1.96, and airlines be reimbursed for the excess dating back to July. DOT secretary Federico Peña is expected to back Kulko's recommendations. But the Air Transport Association is pursuing claims that earlier hikes in charges were also inappropriate and argues that landing fees should be closer to $1.70.
LAX is now indicating it will appeal at least part of the ruling. The city's airport authority began to restore good will with the airlines when it announced in early December that a significant portion of a $150 million excess in collected passenger facility charges would go to a new terminal at Los Angeles/ Ontario. This will significantly defray new costs at the airport for airlines.
Mead Jennings
Source: Airline Business
