Most of Airport Landing Fee Increase Upheld : Regulation: Federal agency OKs higher rate imposed by Riordan administration. Industry officials vow an appeal.

TIMES STAFF WRITER

The federal Department of Transportation on Friday upheld most of the city's recent increase in landing fees at Los Angeles International Airport, handing Mayor Richard Riordan a victory in his bitter battle with the airline industry.

The final Department of Transportation decision allows the city to charge airlines about $22 million more than last year. Airlines will now pay $1.97 per 1,000 pounds landed, less than the $2.06 Riordan's administration initiated in July, but nearly quadruple the $0.51 rate he inherited when elected in 1993.

"I'm just flying without an airplane right now," Airport Commission President Ted Stein said Friday. "They got 9 cents out of the whole $2.06. I'm pretty happy with that."

The airlines have "basically conceded this time that they got their butts kicked," Stein added. "It's time that they finally realized our rates were reasonable and let's get on with running an airport."

Indeed, the airline industry did admit defeat Friday in a marathon struggle that threatened to close the nation's third-largest airport in 1993 and has challenged Riordan's reputation as a business-friendly mayor.

But the industry has not given up, and leaders vowed Friday to take their fight to Capitol Hill.

"Today's decision pays lip service to the congressional mandate prohibiting cities, like Los Angeles, from diverting airport revenues to pay for general public services," said Carol Hallett, president of the Air Transport Assn. "The time has come for City Hall to end its shenanigans."

The battle began shortly after Riordan took office, when he raised the fee from $0.51 per 1,000 pounds landed to $1.56 in July, 1993, following up on a campaign promise to make Los Angeles International Airport produce more revenue. A 29-cent portion of the current fee remains in dispute, its fate to be decided next spring by a U.S. District Court.

Despite the Department of Transportation's reduction of the original increase, Riordan officials increased the rate again this summer to $2.06 per 1,000 pounds, arguing that they needed to charge the airlines more for police and fire services, soundproofing, debt service and attorneys' fees stemming from the dispute.

A Department of Transportation administrative judge ruled the day before Thanksgiving that about 30% of the 1995 increases were illegal. Friday's ruling reverses that judge's decision in part, saying the city can charge extra for police services but not for one of the two special firefighting units stationed at the airport.

Hallett of the Air Transport Assn. was outraged at the findings.

"Los Angeles-area citizens are waking up to the fact that the landing fee increases are nothing more than hidden taxes," she said, arguing that the airport generates about $1 billion a year in revenue and will help fund non-aviation-related expenses. "You tell me who is kidding whom."

But Riordan said the ruling shows that his increased fee policy was fair all along.

"That policy was implemented to ensure that the airport recovers all of the costs of services provided to the airlines operating at Los Angeles," the mayor said. "The airlines are going to have to realize that the people of Los Angeles own the airports, not the airlines."

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