SOURCE: Los Angeles World Airports

April 11, 2007 18:32 ET

Statement From Los Angeles World Airports (LAWA) Regarding United Airlines Fare Increase for Los Angeles Passengers

LOS ANGELES, CA -- (MARKET WIRE) -- April 11, 2007 -- Los Angeles World Airports (LAWA), parent agency of Los Angeles International Airport (LAX), issued the following statement regarding the announcement by United Airlines that it is increasing ticket prices for Los Angeles passengers by $10 per passenger.

United Airlines' $10 increase in ticket prices for Los Angeles passengers wildly exceeds the airline's full and fair share of the costs to maintain and operate its terminal facilities at LAX. United appears to be exploiting a justified increase in its maintenance and operations costs in order to dramatically increase profits on Los Angeles passengers.

In 2006, United reported more than 4,885,353 enplaned passengers at LAX. Assuming the same level of traffic this year, the airline's $10 increase per passenger will generate more than $48 million in additional revenue. Yet, United claims the increase in ticket prices is necessary to pay higher maintenance and operations costs totaling $10 million.

Under the terms of their existing leases, United and other carriers are responsible for the full costs of maintaining and operating LAX facilities and LAWA has the right to pass along increases in its costs of operating the terminals, which it does for the benefit of the airlines. LAWA has discussed with the airlines their responsibility to pay fair and reasonable costs to maintain and operate their respective terminals and other facilities at LAX, particularly in the years following the 2001 terrorist attacks. Since then, LAWA has largely shouldered the increased security-related costs itself.

The subsidization of these costs on behalf of the air carriers has become onerous and unfair and LAWA is seeking to recover those costs associated with the terminals. For its part, however, United appears intent on exploiting the matter in order to boost profits, at the expense of its Los Angeles customers.

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