The U.S. Department of Transportation (DOT) upheld new maintenance and operation terminal fees at Los Angeles International Airport while disapproving other fees, concluding a review of…
The U.S. Department of Transportation (DOT) upheld new maintenance and operation terminal fees at Los Angeles International Airport while disapproving other fees, concluding a review of complaints filed by 28 airlines against the city.
Los Angeles World Airports (LAWA), which runs Los Angeles International (LAX), adopted new terminal fees in December 2006 to cover the costs of security, roadway access and other services. Seven U.S. airlines that operate in Terminals 1 and 3 and 21 foreign carriers operating at the Tom Bradley International Terminal filed complaints with DOT, charging that the fees were unjustly discriminatory, unreasonable and excessive.
Under law, the fees that airports charge airlines must be fair and reasonable and not unjustly discriminatory, and DOT is charged with resolving many airport-airline fee disputes. After the carriers filed their complaint, the Department assigned the case to a DOT administrative law judge (ALJ), who issued his recommended decision on May 15. DOT’s final decision modifies the recommended decision of the ALJ, who found nearly all of the new charges were unreasonable and unjustly discriminatory.
While upholding the terminal fees, DOT also said that LAWA’s use of fair market value to set fees at one domestic terminal was not reasonably applied because LAWA failed to use objective methods to determine market value. However, the Department added, a market-based terminal fee would be permitted if it was based on either negotiation with the airlines or on an objective appraisal of fair market value.
In addition, the Department said the new fee structure to capture the costs of restrooms, lobbies and other common areas was unjustly discriminatory because the fees did not apply to all airlines at the airport.
The Department will decide within the next 30 days the amount of refunds LAWA owes the carriers.
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