Officials at Los Angeles International Airport may raise rent
for some airlines, which carriers say could translate to fare
increases for travelers. It is not yet clear, however, how soon the
changes will occur.
Los Angeles World Airports, the agency which runs LAX, is funded
partly by the landing and terminal fees that airlines are required
to pay, and authorities said the new rates are meant to reflect how
much space carriers actually use.
“Currently, the tenants are not paying for all the space
they use exclusively, nor for a share of the common area expenses,
nor for a share of the full cost of maintaining and operating the
terminals,” Patricia Tubert, LAWA deputy executive director
for real estate and economic development, said in a statement.
“The airlines have enjoyed a low-cost operating
environment here at LAX,” Tubert said.
She added that the extra money from a rent increase will go
toward upkeep and modernization of airport facilities, as well as
security costs.
But officials from some airlines told airport commissioners that
the proposed increase will make LAX one of the most expensive
airports at which they operate and could lead to higher ticket
prices for travelers.
“This will damage our ability to offer low fares,”
said Bob Montgomery, vice president of properties for Southwest
Airlines.
But Nancy Castles, a spokeswoman for LAWA, said even if rent
does increase, travelers will not face higher fares this holiday
season or in the near future.
The proposal is scheduled to be discussed at the airport board
of commissioners’ Dec. 4 meeting, and even then the board
could opt to defer the vote to a later date.
LAWA will also implement the rent increases incrementally,
Tubert said, allowing airlines time to adjust their pricing
strategies.
Tubert estimated that the additional cost per passenger would
increase in increments ranging between $1.07 and $2.85. She said
she did not expect fares to increase to the point where airlines
will lose any customers.
Danielle Ryan, a second-year English and psychology student,
said although she was not happy about the prospect of fare
increases, it probably would not affect her travel habits.
“It’s a sad day for the Southwest devotees, but
unless they change a lot, the fares will still probably be the best
deal,” she said. “Given that I’m so used to
flying Southwest, I’d probably just stick with it out of
habit.”
If the rent increases are approved, they will not apply to all
airlines that operate out of LAX.
Only airlines with short-term leases on space at the airport,
such as Southwest, U.S. Airways and Alaska Air Group, will face
increased costs right off the bat, though Tubert said some carriers
with long-term leases will also pay additional maintenance and
operations fees.
She added that when airlines with long-term leases, such as
United, American and Delta, renegotiate those agreements, the rent
increases may be incorporated into the new leases.
Castles said airlines with long-term leases will not be
immediately subject to the proposed rent hikes because they have
already invested hundreds of millions of dollars in modernizing the
airport’s terminals.