"Peak Hour Pricing: Logan files to levy $150 charge to depart, land at busiest times"

Thursday, May 6, 2004

Logan files to levy $150 charge to depart, land at busiest times
By Keith Reed
The Boston (MA) Globe


Airlines serving Logan International Airport could face an additional
$150 fee for takeoffs and landings at peak travel times under a plan the
Massachusetts Port Authority submitted to federal regulators yesterday.

The so-called peak-pricing plan seeks to address long flight delays at
the airport by giving airlines the option to reschedule their flights to
less congested times, or pay the fee for using peak periods. The plan
was submitted to the Federal Aviation Administration, fulfilling a
condition imposed on Massport when its plan for a fifth Logan runway was
approved.

Under the plan, flight schedules would be fed into a computer for
analysis about six months in advance. Massport would identify times when
congestion would be likely to cause delays of 15 minutes or more in any
three-hour period. The airlines would then be notified and given the
option of adjusting their schedules or paying the fee.

Operators of private aircraft and small airlines, such as charter
services, would also be subject to the fee if they take off or land
during peak times.

Massport officials acknowledged the plan is, at best, an attempt to
pacify all sides, from airlines likely to balk at the fees, to
passengers concerned about long delays, to regulators that want to head
them off.

If the plan runs into serious opposition, it could go the way of an
ill-fated similar rule, adopted in 1988, that was struck down by a judge
after small-aircraft operators sued, claiming it was discriminatory.

"We are going to be challenged on it," said Massport's chief executive,
Craig Coy. "If we go too far in one direction, we'll get sued. If you go
too far in the other direction, we'll get sued. We need to succeed here,
but we have to thread a needle."

Logan has long been one of the most congested US airports, consistently
ranking between third and ninth for the number of delays per 1,000
takeoffs and landings between 1991 and 2001, according to the FAA.

To eliminate delays, Massport has pushed for a fifth runway. It says
that about 30 percent of the delays are caused by stiff northwest winds
that prevent planes from taking off and landing. Those efforts were
rebuffed for years by legal challenges from nearby residents, the City
of Boston, and several other municipalities.

Logan won FAA approval for the new runway in August 2002, provided it
submits a plan to address other delays -- those caused by passenger
demand -- prior to breaking ground for the runway. A judge lifted a
decades-old injunction against the runway project last year, and
Massport filed its plan yesterday. It hopes to open the new runway by
2006.

The fee plan still faces several hurdles, though. The FAA could reject
it, recommend changes, or leave it as is. Massport's board must review
the plan -- it has not yet given final approval -- and public hearings
probably will be held.

The plan also is likely to face stiff criticism from the airlines,
because it could lead to higher costs for the struggling industry,
especially as demand rises.

Airlines currently pay Massport $3.59 per pound in takeoff and landing
fees -- in effect meaning that at busier times, when delays are likely,
their planes will also be heavier and costlier to operate.

Several airlines yesterday declined to comment on the proposed
surcharge, saying they were not familiar with the plan.

A trade group, the Air Transport Association, said it typically opposes
such fees, however.

"In general, the airline industry opposes efforts to address congestion
by imposing monetary penalties," said Jack Evans, a spokesman. "That's
because they don't address the core problem: the lack of capacity to
meet rising passenger demand."

The current plan is not the first to call for a surcharge at peak times,
nor is Massport alone in investigating the idea. Philadelphia
International Airport, which is planning a large-scale construction
project, also is considering so-called demand management fees, said Jim
Peters, the FAA's New England spokesman.

In 1988, Massport started charging all carriers $91 per landing, plus 45
cents per 1,000 pounds of plane weight, in an effort to cut congestion.
The fees were struck down after six months by a federal judge who ruled
that they discriminated against the owners of small aircraft, whose
costs at Logan rose while those of larger aircraft operators fell.

This time around, Massport's aviation director, Tom Kinton, said he
hopes to convince the airlines there is an upside, since the tradeoff is
a new runway.

"What I've tried to say to them is if you come out with the guns
blazing, if you fight us on this, think about what the FAA is trying to
get accomplished here," he said. "If you want more runways at other
airports, this might be the way to do it."


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