SOURCE: Los Angeles World Airports

February 20, 2007 18:52 ET

LAWA Issues Statement in Response to Airlines' DOT Claim

The Following Statement Was Issued Today by Los Angeles World Airports (LAWA), the City Agency That Operates Los Angeles International Airport (LAX) and Other Local Airports, Regarding a Claim Filed With the U.S. Department of Transportation by Airlines Currently Operating at Terminals 1 and 3 at LAX

LOS ANGELES, CA -- (MARKET WIRE) -- February 20, 2007 --The action by seven airlines occupying LAX Terminals 1 and 3 signifies their ongoing refusal to pay their full and fair shares of LAWA's costs of operating those terminals for their benefit.

Each of the seven airlines had leases with LAWA which expired between May 2001 and August 2004. Each has been operating from LAX without a lease ever since. The payments made by those airlines since their leases expired have caused LAWA to subsidize the airlines' operations at LAX. Simply put, the complaint the airlines filed seeks to continue to force LAWA to subsidize their operations at LAX in order to boost their bottom lines.

In recent years, LAWA has absorbed the increasing costs to maintain and operate its terminals and other facilities at LAX without passing on those costs to airline tenants, which as a public agency it is required to do. As a result, much needed airport improvements have not been made.

Since the 2001 terrorist attacks, LAWA has shouldered the burden for increased security costs at LAX, which represent almost half of the incremental cost change proposed by LAWA. Over the course of more than 100 meetings between airport and airline representatives, the airlines have acknowledged their need to pay their respective shares of those costs, but have yet to do so.

LAX has been one of the least costly U.S. airports for the airlines and will still be more affordable than other large, metropolitan airports, even when the carriers pay their full and fair share of costs.

The cost per enplaned passenger at Terminals 1 and 3 has been approximately $6 and, even with the proposed increase of roughly $5 per passenger -- almost half of which is directly attributable to new security costs -- operating at LAX will continue to be more affordable than airports in Chicago, Miami, New York, San Francisco and Washington, DC, among others. The incremental cost increase, if fully passed on to passengers, represents about one percent of an average domestic roundtrip fare.

The continuing effort to establish new five-year lease agreements with carriers operating at Terminals 1 and 3 is part of a comprehensive plan to improve management of the airport and utilization of its gates, increase competition among carriers and enhance the airport experience for travelers.

We recognize that the actions taken by LAWA represent a change and may not be well received by some airlines that would rather operate as they have for many years with LAWA subsidizing their operations. But the management model utilized for many years at LAX is outdated and does not reflect the current aviation environment.

LAWA officials have worked tirelessly to find a mutually acceptable resolution for the agency and the airlines. And, while the airlines have chosen to pursue an adversarial course, we continue to believe a reasonable solution is possible, one that is based on the true costs of operating at LAX and has minimal impact on the airlines and their customers.

Contact Information

    Thomas Winfrey
    (310) 646-5260