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Executive Travel | ON THE MOVE / KAREN SCHWARTZ

Fees at Some Airports Are Rapidly on the Rise

July 24, 1996|KAREN SCHWARTZ

They've got you coming and going.

In hidden but growing expenses that seem destined to raise the cost of flying, airports are increasing fees and imposing surcharges to help defray their costs.

Some of these fees are paid by the airlines themselves. But like merchants hit up for more rent or taxes, the airlines are likely to pass the added financial burden to travelers.

"Sooner or later somewhere down the line, the purchaser pays, however many times it's removed," said Chris Privett, a spokesman for the American Society of Travel Agents.

The cost of the direct airport fees represents about 5% of the airlines' overall expenses, a slight increase from a decade ago, said Barney Parrella, a spokesman for the Airports Council International-North America, a trade group.

But the size of these fee increases at some airports has far outpaced the overall rate of inflation, which is about 3%. At Los Angeles International Airport, for example, fees have tripled since 1993, even with a partial rollback.

Sure, it's more pleasant to travel through a dazzling airport with plush lounges and high-tech moving walkways. Renovations from San Francisco to Charlotte, N.C., have expanded the gates, repaved the tarmacs, brightened the lights and made the terminals resemble chic shopping malls. More controversial has been the use of fees to pay for expenses not directly related to the airport itself--the main bone of contention over the fee increase at LAX.

The trouble with the fees is that someone has to pay for them. Most commercial airports are self-supporting and don't directly receive general tax revenue. Enter the world of airport fees, a hodgepodge of charges collected from airlines, other airport tenants and the passengers themselves.

This world is hard to untangle, even among aviation industry experts. For instance, some of the nation's 420 commercial airports charge airlines a fee for each landing. A few charge instead for each takeoff.

They base fees on criteria such as plane weight and size, but each has a different formula. Moreover, the fees can pay for a range of expenses, making it difficult to know which fee pays for what.

The complexity of airport-fee finances emerged last month when the government agency that runs the Newark, N.J., airport upped the fee it charges passenger airlines by 25%, to $4 per 1,000 pounds of aircraft weight. The additional revenue is intended to pay for a $350-million monorail that shuttles passengers between the terminals and parking lots.

That's in addition to a $3 surcharge the Federal Aviation Administration has allowed the airport to collect from every passenger since 1992 to pay for a $250-million monorail link to trains serving the Northeast.

Both the fee and surcharge come atop a 10% tax on domestic plane tickets that the federal government had been collecting until it lapsed with the budget impasse in January.

The ticket tax is certain to be collected again. It contributed more than 90% of the $6 billion raised annually for the Aviation Trust Fund, which pays for improvements to the air traffic control system and provides grants to airports.

The increase in fees at Newark, collected from planes taking off, means it will cost Continental Airlines about $540 in fees for a 737 flight, an increase of about $150, said Karla Villalon, an airline spokeswoman. The airlines provide the airport with the weight estimate.

Besides takeoff and landing fees, more than half of all U.S. airports impose a passenger surcharge, collected by the airline as an add-on to the ticket price, Parrella said.

In use since 1992, each surcharge, called a passenger facility charge, or PFC, must be spent on a specific capital improvement project approved by the FAA. No passenger can be charged more than $12 in surcharges per round-trip.

Nationally, PFCs raise slightly more than $1 billion a year. They are closely regulated, but runway fees aren't.

Although Continental, which handles two-thirds of the traffic at Newark, didn't resist the hike in take-off fees there, not all increases go through without protest.

At Atlanta's Hartsfield International Airport, plans for a runway for commuter planes were shelved last month when the city and the airlines couldn't agree on how to pay for the $418-million project.

The airlines wanted a $3 PFC, but city officials wanted to double the current landing fee of 51 cents per 1,000 pounds of weight.

Most controversial, however, are the skyrocketing landing fees at Los Angeles International Airport.

In December, the U.S. Department of Transportation ordered a partial roll-back in the landing fee to $1.68 per 1,000 pounds from $2.06. Three years ago, the rate was 51 cents. (LAX stopped collecting a $3 PFC in January.)

The landing fee increase still galls the airlines partly because of evidence that LAX and some other airports aren't necessarily using the money for improvements.

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