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City Hikes Landing Fees at LAX by Another 32%; Airlines Protest : Transportation: The carriers, which are still seeking relief from the last round of increases, call the move 'unjustified.'

June 22, 1995|JAMES F. PELTZ | TIMES STAFF WRITER

The city of Los Angeles, which infuriated the nation's airlines two years ago by tripling landing fees at Los Angeles International Airport, hiked the fees another 32% on Wednesday.

In approving the increase that is effective July 1, the city's Board of Airport Commissioners cited the need for additional revenue to keep pace with the growth at LAX, where passenger and cargo traffic have been steadily climbing.

But the airlines, which are still asking U.S. regulators for relief from the earlier fee hike, promptly protested again.

The carriers' trade group, the Air Transport Assn. in Washington, blasted the new increase as "unjustified" and said it reflects "the anti-business approach" that Mayor Richard Riordan "has chosen to pursue with the airlines."

Ted Stein, president of the Board of Airport Commissioners, said: "Mayor Riordan stands for pro-business, but not business as usual. We have tried to work with the airlines, but we insist that the control of LAX will be in the [Department of Airports'] hands, not in the airlines' hands."

It's unclear how much passengers are being affected by the rising fees, either through fare increases or through some of the dozens of carriers that use LAX reduce their service there.

Airlines juggle a myriad of factors in setting schedules and fares--not the least of which is simply what their competitors are doing--which makes it hard to pinpoint how the higher LAX fees come into play. But an executive at one major airline said privately that the carriers do try to pass the higher LAX fees on to consumers whenever possible.

Fares in general have been rising lately, but that has been attributed mostly to growing passenger traffic and the airlines' decision to set aside fewer cheap seats in order to bolster their earnings.

A spokeswoman for Southwest Airlines called the new fee "unfortunate" but declined to comment on its impact on fares and service.

American Airlines issued a statement saying the higher fee is troublesome when "you have an industry such as ours that is struggling to generate consistent, adequate profits."

But Stein said the airport's growing business in recent years shows that the first fee hike, at least, is not curbing the airlines' use of LAX.

LAX's traffic has climbed 13% in the past two years to more than 51 million passengers annually, Stein said. He also said airlines sold $11.6 billion in tickets for flights that involved using LAX in 1994--while the carriers' landing fees there totaled less than 1% of that, or $104 million.

The commissioners raised the LAX fee to $2.06 per 1,000 pounds gross landing weight, from $1.56--which would raise the cost of landing a Boeing 747, for instance, to about $1,190 from $900.

"I can tell you that to run LAX last year, it took the department more than $1.56" per 1,000 pounds, Stein said. "How do I run my airport if I don't have the revenue to make it work?"

Stein also said LAX's new fee would still be low relative to airports in New York, Honolulu, Detroit and Denver, which charge between $2.23 and $4.10 per 1,000 pounds--even though LAX is the nation's fourth-busiest airport for passengers, and the world's second-busiest cargo airport behind Tokyo's Narita Airport.

The ATA declined to say what it will do to counter the new fee, which was approved by the airport commissioners at the same time they approved a $523.6-million operating budget for the fiscal year starting July 1.

After the last LAX fee hike in 1993, the airlines went to court to block the increase and LAX threatened to deny carriers' landing rights if they didn't pay up.

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