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Airlines and L.A. to Meet on Fee Feud : Airport: Talks in Washington will seek to avoid a threatened LAX shutdown on Saturday. The firms may pay the higher landing charges under protest.

TIMES STAFF WRITERS

Locked in a high-stakes showdown over increased airport landing fees, Los Angeles city officials and airline representatives have agreed to meet today at the Department of Transportation in an attempt to avoid a threatened shutdown of Los Angeles International Airport on Saturday.

Federal officials who have been trying to nudge the two sides together for about a month were able to arrange the talks Monday, after city officials attended oral arguments before the U.S. Supreme Court on a similar landingfee dispute in Michigan.

Today’s talks will come as hundreds of worried ticket-holders are calling reservation offices in Los Angeles to ask whether they will be able to fly out of the city this weekend. Most are being told not to be alarmed and that--despite the heated exchanges between the city and the airlines--their flights will depart as scheduled.

“We are just telling people that USAir does not anticipate any interruption in our operations at LAX,” said USAir spokesman Bryan Enarson, echoing comments of most airlines.

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Airline officials, who continued to take a tough public stance against fees that were tripled last summer, conceded privately that they may have to pay the higher charges under protest.

“I don’t believe the airlines, the DOT or the (Federal Aviation Administration) will allow the operation of LAX to be shut down,” said one airline executive, who asked to remain anonymous. “Whatever has to be done by Friday will be done--that can be anything from paying the fees to the DOT saying they are not going to let (the city) shut it down.”

Los Angeles airport officials and airline executives have been fighting since late June, when the Airport Commission and City Council tripled the fees charged for landing at LAX. Seventy-five airlines that account for 90% of the flights at LAX have refused to pay the higher charges and have gone to federal court to protect their access to the airport.

But the federal courts have declined to get involved and last week, airport executive director Jack Driscoll took the unprecedented step of notifying the carriers that have not paid that they will be banned from the airport at midnight Friday.

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At issue are the funds that Mayor Richard Riordan says the city needs to run the nation’s third-largest airport. But airlines say they are being unfairly asked to prop up the city treasury. Potentially left in the lurch are the roughly 2,000 flights and 120,000 passengers who pass through LAX every day.

In advertisements in Monday’s Times and today’s Daily News, the city warns would-be passengers that they may have to change their travel plans.

But officials at the Department of Transportation said Monday they will do whatever possible to end the standoff.

“It is a top priority of the Department of Transportation to prevent disruption to the traveling public and to the national aviation system,” department spokesman Richard Mintz said in announcing the talks, tentatively scheduled to begin at 9 a.m.

Airport Commission President Ted Stein will lead a Los Angeles delegation that is expected to meet with executives from as many as 10 airlines and with representatives of the Air Transport Assn. of America, a trade association of major U.S. carriers.

The meeting will be mediated by Steve Kaplan, the transportation department’s general counsel, and David Hinson, administrator of the Federal Aviation Administration. Transportation Secretary Federico Pena is not expected to join the talks.

“The first words will probably be, ‘C’mon guys, can’t we work this thing out?’ ” said an industry source.

But Stein took a harder line. “We have not been summoned. We have said all along that if the secretary (of transportation) calls a meeting, we would go. But the fees must be paid. That is non-negotiable.”

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The city has insisted the airlines pay the full fee, even if under protest. The fees were raised from 51 cents per 1,000 pounds to $1.56 per 1,000 pounds, or the equivalent of $900 for a Boeing 747. Eight major airports charge higher landing fees: La Guardia ($3.50), Kennedy ($2.40), Newark ($2.37), Seattle ($2.01), Chicago’s O’Hare ($1.89), Denver ($1.76), Dallas ($1.75) and Boston ($1.69).

Under the old formula, United Airlines paid the highest monthly landing fees at LAX ($346,000) followed by Delta ($275,000).

Several airline executives said Monday that despite their anger over the increased fees, they are nearing decisions to pay the higher fees to maintain their operations in Los Angeles.

Most have suggested that they pay the disputed funds into an escrow account--where they would remain unspent until either the courts or the FAA rules whether the charges are fair. “The airlines are just looking for some sort of assurance the money won’t be spent before the dispute is resolved,” said one airline representative.

But Los Angeles has rejected this approach, saying it needs all the money now to run the airport.

And airline executives did not seem optimistic about receiving much help from the Clinton Administration. “The Department of Transportation has given us no indication they are willing to take a position on this issue,” said Delta Airlines spokesman Bill Berry.

The agreement to join the talks was reached midday Monday in the Supreme Court building, after Stein, Driscoll and City Atty. James K. Hahn met with transportation department representatives.

Stein and the others had just listened to oral arguments before the Supreme Court on a Michigan case that mirrors the LAX dispute. In that case, the court is expected to determine how much local governments can charge airlines to maintain public airports.

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Congress has said that governments can levy “reasonable” airport fees, but has never defined what that means, and lower federal judges have been unable to devise a workable test.

Edward C. DuMont, assistant to the U.S. solicitor general, argued on behalf of local officials, saying that rate-setting policies should be handled administratively, presumably by the Transportation Department or the FAA. He also suggested that, in disputed cases, the fees be paid under protest.

In questioning attorneys for both sides, the justices clearly seemed to be wary of taking on the rate-setting role. At one juncture, Chief Justice William H. Rehnquist said: “If this is turned over to the judiciary, you could have 92 district courts ruling on rates.”

The airline industry’s aggressive opposition to the fee hike at LAX is designed primarily to make officials at other airports think twice before considering similar increases, said some industry observers.

“The industry is afraid that if other cities see the airlines roll over at Los Angeles, they will likely be tempted to do the same thing,” said David Hoppin, an airline industry consultant in Washington.

The landing fees, lease payments for gate space and other airport-related expenses make up only 3% to 5% of an airline’s total operating expenses, according to estimates. In contrast, jet fuel generally accounts for about 35% of a carrier’s costs.

Times staff writer Jesus Sanchez contributed to this report.


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