A group of 32 carriers are protesting against a plan by Los Angeles International Airport to finance expansion by increasing fees.
American, Continental and United Airlines have filed a lawsuit against the fees hike, which will be heard in federal court. A separate regulatory complaint has been filed by 22 international and seven US carriers with the Transportation Department. The parallel tracks may lead to a more timely resolution.
The lawsuit is one of the largest yet in the increasingly crowded arena of airport-airline disputes. Its outcome could shape airport rate setting strategies just as the legal basis for airport rates and charges comes up for congressional scrutiny later this year as part of the FAA reauthorisation process.
Major airline and airport lobby groups are seeking to participate in the proceedings because they believe the case will be precedent-setting.
Los Angeles World Airports is bringing in higher charges |
The fees in question stem from major revisions last year by the airport operator Los Angeles World Airports to the basic charges, including fees for maintaining common areas as well as base rents for gates and concourse areas. The seven US low-cost carriers that are objecting are operating under month-to-month leases, while the three large legacy carriers that filed the lawsuit are covered by longer-term leases.
The 22 international carriers are focusing on $575 million worth of improvements and upgrades to the international terminal, where they operate under leases that expire in April. The annual base rate at the international terminal will increase from $23.50 a square foot to $27.59, a considerable increase from the 2005 base rate of $19.35.
The low-cost carriers would see their rents rise from $76 million last year to about $293 million over a five-year period. The airport would generate about $42 million per year from the increases.
The airlines argue that the fee increases are unreasonable and were arrived at unilaterally by the airport agency without consultation, and that they are "discriminatory" because carriers with expired leases face far higher fee increases than others.
The airport says the carriers have failed to pay their fair share of improvements, which it argues are desperately needed because its market share among international gateways is shrinking as other southern California airports become more attractive.
Source: Airline Business
