Airlines to Pay Higher LAX Fees : Aviation: City will get up to $18 million in back payments by Friday. Accord is a victory for Riordan, but carriers will continue legal fight to overturn increases.

In a clear victory for Mayor Richard Riordan’s Administration, the airline industry reluctantly agreed Wednesday to pay steeper landing fees imposed last July, while extracting only minor concessions from the city, which had threatened to ban defiant airlines from its airport.

The agreement came after almost 20 hours of difficult, wearying talks over two days and was announced by a beaming U.S. Secretary of Transportation Federico Pena, whose office had brokered the negotiations over the fees at Los Angeles International Airport.

The airlines agreed to pay the new fees under protest and will continue their legal fight to overturn them. The City Council raised the fees in July, from 51 cents to $1.56 per 1,000 pounds.

Pena called the agreement a “triple win--a win for the traveling public, the airport authority and the airline industry.”

Riordan, who did not participate in the Washington talks, joined in the new feeling of cooperation. “You’re going to see the airlines and the mayor loving each other . . . for the future,” Riordan said.

But despite the air of courtesy and good feeling that washed over the former adversaries during the late afternoon ceremony announcing the pact, the airline industry had little to cheer.

The airlines had shown willingness to pay some or all increased fees into an escrow account pending a ruling on their lawsuit contesting the increase, but were unable to get the city to budge on that point.

“We still believe that the cost of running the airport is lower than the projected $1.56/1,000 pounds and believe that can be demonstrated in court,” said James E. Landry, president of the Air Transport Assn., the industry group that sued the city over the higher fees.

Under the agreement, the airlines must pay the city as much as $18 million in back payments by Friday. As one of its concessions, the city waived the penalties on the unpaid fees. The city also agreed not to raise the fees before June 30 of next year.

“After July 1, 1994, the city will review its annual budget to determine if another fee is warranted,” said Ted Stein, president of the city’s board of airport commissioners.

The now-resolved crisis mirrors increasingly hostile relations nationwide between governments that operate airports and the airline industry.

“The airline industry is experiencing financial stress,” Pena said. “The cities and airport authorities have their own stresses, and the tensions between the parties . . . will be played out in a different atmosphere than in the last decade.”

In response, Pena vowed that his department would take a stronger role in trying to head off such battles. Next week he will make a detailed policy announcement on how the Transportation Department will monitor and mediate similar airport controversies. He said Wednesday that the department “will be involved (earlier) to ensure that there will be no reappearance of the . . . crisis situation that we reached in the Los Angeles case.”

The crisis developed last week when the city informed 75 airlines that they would be denied operating privileges at LAX starting Dec. 4 if they continued to refuse to pay the higher fees.

To avert a virtual shutdown of the nation’s third largest airport, the two sides were called to Pena’s office at 9 a.m. Tuesday to begin their talks. Just before midnight, the negotiators announced they had reached “an agreement in principle.” But it took almost six more hours Wednesday to work through legal details.

As the talks opened Tuesday, the three dozen negotiators, lawyers and aides met to stake out their positions on a wide range of issues.

“There were a lot of disputed points,” recalled Stein, who headed the city’s delegation.

“We wanted to appear reasonable and didn’t want to antagonize,” said Stein, who was praised afterward by Pena as a steadying force during the talks. “But we said at the very first that the $1.56 was non-negotiable--that it wasn’t going to be $1.55.

“(The airlines’) favorite phrase was that we had a gun to their head (because of the lockout threat). We said that if they paid the fees under protest (the threat) would go away.”

From that point, the factions broke into separate groups. The airlines wound up in Pena’s conference room, while Stein and other city officials set up shop in the former Coast Guard mess room.

Federal Aviation Administration Administrator David Hinson performed the role of shuttle diplomat.

The large number of airline representatives and the difficulty of reaching consensus among them slowed the talks down considerably, said Stein.

Because of the diverse points of view among carriers and the Air Transport Assn.--and because some airlines were more eager to settle--the talks dragged on until Tuesday evening, when the agreement began to take shape.

At about 8 p.m., Pena called for two members from both camps to join him in a separate room. Stein and Harold J. McElninny, a private attorney hired specially for the negotiations, faced off against William D. Temko, an attorney working for the airlines and the Air Transport Assn., and Richard Anderson, representing Northwest Airlines.

With Pena mediating, the final agreement was hammered out. Then it went to the lawyers for final polishing.

On Wednesday, the document was signed by Stein, Driscoll and City Atty. James K. Hahn. Nine carriers, the Air Transport Assn. and the Federal Express Corp. signed for the airline industry.

U.S. District Judge A. Wallace Tashima is expected to rule Monday on the airline industry’s suit against the city, which claims that the new fees are unreasonable.