"Orlando airport to raise charge for fliers"

Thursday, May 18, 2006

Airport to raise charge for fliers
The increase will bring OIA's facility fee to $4.50, in line with other
large U.S. airports.
By Beth Kassab
The Orlando (FL) Sentinel


Flying out of Orlando International Airport is likely to soon cost
passengers an extra $1.50 as part of a plan to raise more money for
improvements to baggage security systems and other building projects.

The increase in what's known as the "passenger facility charge" from $3 to
$4.50 will bring Orlando International in line with what other large
airports charge customers.

Orlando International now ranks as the 12th-busiest airport in the nation in
terms of passenger traffic, according to Airports Council International. The
other top 11 airports already charge passengers $4.50, the maximum allowed
by the Federal Aviation Administration.

Jeffry Fuqua, chairman of the Greater Orlando Aviation Authority, said
Wednesday he didn't know why the airport didn't raise the fee before.

"That's a good question," he said. "We're trying to catch up."

Orlando plans to collect $1.1 billion from the charges through 2018. The
money will help pay for projects such as an estimated $100 million
behind-the-scenes baggage conveyor and security system now under
construction and, eventually, a second terminal that could carry a $2
billion price tag.

Because the increase is passed directly to the passenger through each
airline ticket, it won't affect the airlines' cost of doing business in
Orlando, a key factor when airlines are deciding where to offer service.

Referring to a report in Wednesday's Wall Street Journal, airport officials
cited examples such as Toronto Pearson International Airport, where
elaborate terminal improvements have raised the amount airlines pay to fly
there to more than $50 per passenger -- a figure the carriers are barely
able to stomach. By comparison, Orlando's rate is $4.71.

The extreme alternative is to have cheap, but sparse conditions, such as
terminals with no restrooms or amenities, which is the case at the Schiphol
Airport in Amsterdam.

"Either solution is equally unacceptable here in Orlando," Fuqua said.

The FAA, which helped create the passenger facility charge program in 1990
as a way for airports to raise money for certain projects, is encouraging
airports to start charging the maximum as FAA discretionary funds are being
depleted, Fuqua said.

Implicit in that advice, he said, is the notion that the FAA may be less
likely to award additional money to an airport that isn't already taking
full advantage of the fee.

"They think, 'You're not trying to help yourself, why should we help you,' "
Fuqua said.

The authority is likely to vote on the increase in the next few months.

At the same time, it also is considering other ways to increase revenue
while keeping stable the fees the financially troubled airlines pay to
operate in Orlando.

One possibility involves the airport's fuel storage and pipeline facilities.
The airport stores about 9 million gallons of jet fuel, roughly equivalent
to one week's supply.

The airport could begin charging more to flow fuel through its underground
system to customers across airport property. Officials are looking to put a
new agreement in place by 2008.

Even further in the future are opportunities to make money from airport land
close to a planned University of Central Florida medical school and
potential VA hospital.

The authority approved Wednesday an agreement with the developers of Lake
Nona, the upscale golf course community neighboring the southeast border of
the airport. Lake Nona is donating the land for the medical school and
hospital complex.

The agreement allows, among other things, Lake Nona to put more residential
development in an area previously off limits because of potential aircraft
noise in return for the airport gaining guaranteed road access to its
property.

The deal will "maximize the value" of airport land that could one day be
developed as an extension of the proposed medical complex in the area, said
Orlando Mayor Buddy Dyer, though he said no concrete plans for development
are in place.

In addition, the authority approved contributing $1.1 million to widen South
Narcoossee Road, another connector between the airport and Lake Nona.

The road will have six lanes from State Road 417 south to the Osceola County
line.

"I think $1 million is a very good investment for that property," Dyer said.

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