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 wrote.

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.

FMI: www.lawa.com, www.dot.gov