The Los Angeles Board of Airport Commissioners approved an agreement with five airlines Tuesday, January 29th, to settle a dispute regarding terminal fee increases at Los Angeles International Airport (LAX).
Under the settlement, approved in closed session, Delta, Northwest, American, Continental and United airlines agreed to pay for terminal maintenance and operation costs dating back to 2006, totaling approximately $11 million per year. The agreement settles a lawsuit filed by American, Continental and United over increased maintenance and operation expenses at the airport.
Los Angeles World Airports, the city agency that operates LAX, has agreed to credit the five airlines about $20 million for expenses collected during the fee dispute. As part of the settlement, a maintenance account will be established in which Los Angeles World Airports will pay $35 million for infrastructure investment.
The five airlines have also agreed to pay their share of costs for a new $219 million central utility plant.
“The Board of Airport Commissioners believes that the settlement with these five legacy air carriers at LAX is a positive step toward improving LAWA’s relationships with the airlines,” commission vice president Val Velasco said in a statement. “The board is pleased that these airlines recognize the need to help pay for LAX’s security-related costs, which have increased dramatically since September 11th, 2001.
“The settlement also creates a framework for future negotiations and demonstrates the willingness of LAWA and these airlines to work together to modern- ize LAX and address how LAX’s capital improvement program will be financed.”
Dave Messing, a spokesman for Continental, said the airline is also ready to move forward with the airport department.
“We’re pleased to have reached a settlement and to be able to move forward with LAWA,” Messing said.
The increased terminal fees nearly tripled maintenance and operation costs for the airlines. Airport officials attributed the fee hikes to improvement projects and increased security-related costs at the airport.
The airlines argued that the increases would force them to raise ticket prices, and American, Continental and United filed a lawsuit that challenged the hikes. Other airlines at LAX have also disputed the fee increases.