DOT Regulators Agree With Both Sides
Federal regulators with the US Department of Transportation
ruled Friday Los Angeles International Airport had discriminated
against low-cost and foreign airlines when it demanded a sharp
increase in their rents earlier this year. They also determined LAX
was completely justified in raising some other fees in response to
increased operational costs.
In its ruling, the DOT ordered LAX to refund some of the funds
collected, but the total amount was unknown as of Friday, according
to the Los Angeles Daily Breeze.
Several of the airlines involved called the ruling a "clear
victory", and were hoping it would prompt negotiations with the
airport. LAX officials said they were "gratified" by the DOT's
ruling because it "upheld significant elements of the new airline
rates and charges."
The DOT took issue, in particular was airport management
rewriting the formula used to calculate rent then only applying it
to airlines with an expired or month-to-month lease agreement. Then
LAX began charging for common area use, such as lobbies and
restrooms, the same as space the carriers actually use, such as
ticket counters and gates.
Ticket prices have felt the impact of this battle. In April,
United Airlines, LAX's largest carrier, added a $10 surcharge on
departing passengers to offset a $10 million annual rent increase,
according to the San Diego Union Tribune. An increase the carrier
said was "in clear violation" of their lease agreement with the
airport operator, Los Angeles World Airports. Delta Air Lines
matched the $10 increase, as well.
Then, in May, as ANN reported, US
Administrative Law Judge Richard C. Goodwin found the increased
terminal fees LAWA imposed on low-cost and international carriers
were "unreasonable and discriminatory."
During the course of a
seven-week investigation, Goodwin held a 15-day hearing in Los
Angeles, where numerous airport and airline officials told their
sides of the story. The judge reviewed 11,000 pages of documents
and 500 exhibits, according to the Los Angeles Times.
The agency's "entire accounting system is suspect and cannot be
relied upon to provide accurate and timely information," Goodwin
Some of the airlines that raised their ticket prices have said
they might consider dropping them again.
"It's too early to tell what impact the ruling will have on
fares," said Amanda Tobin Bielawski, a spokeswoman for Alaska
Airlines. "We're still reviewing it."
LAX has contended all along the higher charges are in response
to it's own rising costs and cites the nearly five-fold increase in
security costs as an example.