"D/FW Airport could cut landing fees"

Wednesday, June 9, 2004

D/FW Airport could cut landing fees
The Dallas (TX) Morning News


Buoyed by better than expected passenger traffic, food sales and parking
revenue, officials at Dallas/Fort Worth International Airport hope to
reduce some fees paid by their most important airline tenants. 

On Thursday, the airport's board of directors is expected to cut major
airlines' landing fees by 20 percent to $2.13 per thousand pounds of
landing weight. 

The reduction would be the second time in three months that the airport
has lowered the fees, which were set at $2.97 per thousand pounds when
the fiscal year began in October. 

"Travel is coming back, and our revenues are beating projections," said
Kevin Cox, D/FW's senior executive vice president and chief operations
officer. 

Overall airport revenues are up 4.9 percent from forecasts. Parking
revenue has climbed nearly 15 percent since October, and the sales of
food, beverages and gifts at the airport have risen 7.1 percent. 

If approved, the reduction from the current $2.69 per thousand pounds
would save the airport's major airlines $6 million between July and
September, on top of savings from the prior decrease. 

American Airlines Inc. said the maximum landing weight for a frequent
D/FW flier, a McDonnell Douglas MD-80, is 130,000 pounds. 

The discounted landing fees would apply only to "signatory" airlines.
D/FW is a "residual" airport, meaning that any expenses not covered by
landing fees, gate leases and nonairline revenue such as parking must be
made up by its "signatory" airlines. 

In exchange for taking on financial responsibility for the airport,
those airlines get reimbursed whenever revenues exceed expenses. Even
with the proposed fee reduction, D/FW officials expect to be $11 million
ahead of budget for the fiscal year ending in September. 

Landing fee rates are set for each fiscal year, based on revenue and
expense projections. With the SkyLink people-mover system and new
Terminal D coming online in 2005, airport officials expect those rates
to climb. 

Any reduction in fees - even a temporary one - is welcome news to D/FW's
largest tenants. 

A spokeswoman for Delta Air Lines Inc. said the airport's second-largest
operator was "delighted" about the reduction. 

An official of Fort Worth-based American said the proposed fee reduction
in part reflected the benefit felt when the airline shifted much of its
business from its St. Louis hub last November. 

Airport officials are also expected to approve changes to an airline
assistance program that would provide additional incentives to carriers
launching new service as D/FW gears up to open its new international
terminal next year. 

If approved, the program would more than double the amount available to
carriers launching certain types of international service and open the
door to existing carriers who want to start service in the airport's
largest 25 domestic markets. The changes to the program would be
temporary, expiring in September 2005, two months after the
international terminal is scheduled to open. 

The program aims to attract new service at a time when the industry is
focused on cost-cutting, rather than growth. 

"It's another tool," Mr. Cox said. "It's not going to be the thing that
attracts a carrier, but we hope it will at least get their attention."


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