Landing Fee Hike Threatens to Close LAX

Los Angeles officials warned Tuesday that they will order a virtual shutdown of Los Angeles International Airport next week if airlines operating there continue to defy demands that they pay landing fees that were tripled earlier this year.

Seventy-five air carriers received notices Tuesday afternoon that they will be banned from the airport starting Dec. 4 if they refuse to pay the higher fees, said Jack Driscoll, executive director of the city’s Department of Airports.

A shutdown of LAX would be unprecedented and devastating to domestic and international air travel. The 75 carriers that have refused to pay account for about 90% of the nearly 2,000 daily takeoffs and landings at LAX. Among them are all of the nation’s major airlines and many international carriers. Twenty-one smaller carriers are paying the increased charges.

Each side accused the other of forcing a crisis at the airport. City officials are guilty of “strong-arm tactics” and “intimidation,” said an official at the Air Transport Assn., the trade organization that represents the major air carriers. Airport Commission President Ted Stein countered by accusing the airlines of “holding the passengers, the public, hostage.”

Despite the rhetoric, both sides said they are hopeful of a compromise that will allow airlines to keep using the airport.

Air Transport Assn. President James Landry said late Tuesday that the airlines today will ask U.S. Secretary of Transportation Federico Pena to guarantee their access to the nation’s third-busiest airport.

“The secretary must act in this matter, which is a much bigger threat to the nation’s aviation system” than the just-concluded strike by American Airlines flight attendants, Landry said.

Another airline official argued that Pena should act because international air carriers could be shut out of LAX. “International relations have to be taken into account,” said the official, who asked not to be named.

Senior officials in the U.S. Department of Transportation have already been trying to negotiate a settlement between the airlines and Los Angeles officials. But sources familiar with the talks said it is unlikely that Pena will attempt to issue an order to either side. More likely, they said, he will try to reach a settlement through negotiations.

Airport officials said they have been more than patient with the airlines, agreeing to let them use LAX for the last month while they asked the federal courts to prevent a lockout.

The series of appeals ended in failure last week when U.S. Supreme Court Justice Sandra Day O’Connor rejected an emergency appeal from the airlines for a guarantee of their airport access.

Airport officials said they voluntarily observed a one-week “cooling off” period after O’Connor’s action, saying they did not want to threaten an airport shutdown over the busy Thanksgiving weekend and that they wanted to give the airlines more time to pay without causing a showdown.

But Stein said the airlines used the extra time to lobby in Congress and the news media against the increase. At a Tuesday press conference at LAX, Stein announced: “Los Angeles’ patience has run out with airlines that have decided they are above the law.”

Airport officials said that, under their proposed action, they will permit airlines involved in the dispute to land at LAX. “The question is how they would take off again,” Stein said.

Tuesday’s letter notifies the airlines of a series of actions to prevent them from flying out of the airport beginning at 12:01 a.m. Dec. 4.

Employee security identification badges would be revoked. Permits for operating trucks on the airfield would be canceled. Airfield buses would be shut down. Gates and other facilities would be closed.

Officials at the Department of Transportation and the Federal Aviation Administration said they believe that a lockout of so many air carriers would be unprecedented.

Tuesday’s action is the latest escalation of a struggle that began in June when the Airport Commission and the City Council approved the higher fees. Rates jumped to $900 for a Boeing 747 carrying an average load. The higher fees are expected to eventually bring in about $70 million a year compared, to the $24 million that they raised in the past.

Airport officials said they had been subsidizing airlines operations for more than a quarter-century. They said the higher fees are comparable to those at other major airports and provide enough money for current operations and future capital improvements.

The airlines contend that the hidden reason for the fee increase is to beef up the airport’s operating surplus so city officials can eventually divert funds to the city treasury to pay for more police. Such a diversion is illegal under federal law, but city officials have said they would try to obtain an exemption.

Airline executives say they are already reeling under industrywide losses of more than $10 billion over three years and cannot absorb higher costs.

The Department of Airports first attempted to lock out the airlines in September, sending warning notices to carriers operating at Terminal 1. The airport temporarily agreed to suspend the action, however, when the airlines filed an appeal in federal court.

U.S. District Judge A. Wallace Tashima last month declined to issue an injunction keeping LAX open to carriers that refuse to pay. He said the airlines could pay the higher fees and recover any overpayment later, through legal action or a hearing before the Federal Aviation Administration.

Both the U.S. 9th Circuit Court of Appeals and Justice O’Connor upheld his judgment.

The airlines’ underlying claim, that increased charges are unreasonable, is still pending in Tashima’s court.

The airlines contend that they have made several compromise proposals, including an interim landing fee that would be less than double the old fees, or the placement of the disputed funds in an escrow account. The city has left “little room for compromise, by insisting on its earlier proposal,” Landry said.

Stein said that the city has already lost $16 million in unpaid fees and that the airline proposals are unreasonable because they give the city less money than it must have to run LAX.

* AMERICAN RECOVERS: American Airlines restored operations as flight attendants returned to work. D1.