Laxintl From United States of America, joined May 2000, 22236 posts, RR: 51 Posted (6 years 7 months 1 day 17 hours ago) and read 5315 times:
LAX to Raise the Rent on Airlines
Carriers, whose fees may double, say passengers ultimately will wind up paying more.
Airlines will have to pay far more to operate at Los Angeles International Airport under a new leasing policy approved Monday by airport commissioners -- and some carriers said passengers would feel the difference.
The new policy could more than double the amount of rent and other fees that some carriers pay for their space at LAX. Airport managers say they need to raise the rents to better reflect the costs of running and improving the airport.
While this has been in works for a long time(2004), the airport has moved ahead with its plans to revise the lease and rental policy at the airport.
The crux of the issue has to do with the airport raising both its actual lease rates and more controversially the new policy of charging for a portion of common use areas, not just actually leased facilities such as back office/gate/ticket counter space.
Basically airlines would be now liable for the entire terminal lease based on pro-ration of their overall activity at the facility as currently practiced at several other major US airports.
Initially affected airlines are those in T-1, T-3, and portion of T-6 (CO, Copa, AeroMexico), while the remainder of the airports carriers will see such similar lease changes as their current leases become due for renewal.
At the end of the day, many view such moves as the airports desire to make it more costly to do business at LAX in support of the Masterplan court settlement, thus provide economic impetus to shift activities to other regional airports such as ONT.
From the desert to the sea, to all of Southern California
PanAm747 From United States of America, joined Feb 2004, 4242 posts, RR: 9 Reply 2, posted (6 years 7 months 1 day 15 hours ago) and read 5097 times:
Quote: Good, lets weed out the weak and unworthy carriers at LAX like those who dont want to pay the current rent.
Let's go one further - let's prove once and for all to those in Southern California that think LAX is going to continue to expand (so their own airports can be phased out) that the future is now - if you want to fly out of LAX, be prepared to pay $$$$$$$$ for the privilege.
Pan Am:The World's Most Experienced Airline - P(oor) S(ailor's) A(irline): San Diego's Hometown Airline-Catch Our Smile!
Laxintl From United States of America, joined May 2000, 22236 posts, RR: 51 Reply 4, posted (6 years 7 months 1 day 13 hours ago) and read 4874 times:
Quoting Gmcc (Reply 3): You mean they might have money to do something about the timewarp in T-3
I seriously doubt that. LAWA did sink a little bit of money in to the terminal recently, however for something major to happen tenant(s) need to step up and fund a remodel as has been done at near every other terminal in recent years.
Quoting PanAm747 (Reply 2): Let's go one further - let's prove once and for all to those in Southern California that think LAX is going to continue to expand (so their own airports can be phased out) that the future is now - if you want to fly out of LAX, be prepared to pay $$$$$$$$ for the privilege.
Agreed. I believe LAWA will use the economic carrot & stick approach to influence airline and consumer patterns.
It will be interesting to see next summer when landing fee rates are up for adjustment. I'd be willing to bet the LAX fees see a good size increase compared to those of ONT.
From the desert to the sea, to all of Southern California
AADC10 From United States of America, joined Nov 2004, 1863 posts, RR: 0 Reply 5, posted (6 years 7 months 1 day 13 hours ago) and read 4874 times:
Quoting Futurecaptain (Reply 1): Good, lets weed out the weak and unworthy carriers at LAX like those who dont want to pay the current rent.
With this rent increase, they are clearly going after WN, US, AS and CO. Even when UA, AA, DL and NW's leases are up for renewal, their rates will not go up as much since they had substantial investments in the terminal renovations. DL and NW are even negotiating more favorable leases under Ch. 11. This is not going to push out the weak carriers, it is going to push out the lowest fare and short haul carriers.
Landing fees and leases at LAX have been relatively low, particularly when compared with SFO. Since some construction on the airfield will go forward landing fees will rise and with the terminal leases going up, that is going to put pressure on WN mostly. Be prepared to drive to ONT to get a cheap WN fare to LAS or OAK.
UA will probably the biggest beneficiary of the rent increases.
AS739X From United States of America, joined Apr 2003, 5834 posts, RR: 23 Reply 6, posted (6 years 7 months 1 day 11 hours ago) and read 4750 times:
FutureCaptain: Yes, well thought (sarcasim).
Alaska is furious over this move. We have been working with the airport for over a year on a new facility. Moving to a new terminal, re-designing T-3 to no avail. And now LAX raises or rent a very sub par terminal. The same Alaska that is the largest US carrier internationally (in regards to movement at currently 12 daily) which I wouldnt call one of the weaker airlines. Alaska, the same airline that proposed a complete upgrade on T-3 funding the work itself over 5 years ago. The same airline that can't get any more gates cause ever new carrier into LAX seems to be directed into the time-warp T-3. LAWA continues to make no sense to me and just treats one if its best tenants like crap. IMHO! Just another reason I see Alaska increasing Mexico and other destinations from San Francisco. At least SFO has a modern international terminal
ASLAX
"Some pilots avoid storm cells and some play connect the dots!"
DesertFlyer From United States of America, joined Nov 2005, 476 posts, RR: 0 Reply 7, posted (6 years 7 months 1 day 11 hours ago) and read 4727 times:
Quoting AS739X (Reply 6): I see Alaska increasing Mexico and other destinations from San Francisco.
I think that would be good. Maybe with such high fees, other airlines would be willing to move routes up to SFO instead of LAX. It is an easier airport to connect at and like you said, the Int. terminal is top notch. In all reality, this is just something I would like to see happen and I have no info on the business side of things and I'm sure there are reasons why this won't happen.
Laxintl From United States of America, joined May 2000, 22236 posts, RR: 51 Reply 8, posted (6 years 7 months 1 day 11 hours ago) and read 4680 times:
Quoting AS739X (Reply 6): The same airline that can't get any more gates cause ever new carrier into LAX seems to be directed into the time-warp T-3.
Make room for Spirit. They will be moving over to T-3 in December.
Quoting DesertFlyer (Reply 7): Maybe with such high fees, other airlines would be willing to move routes up to SFO instead of LAX.
Even with the latest round of fee increases, LAX is still one of the cheaper airports in the country cost wise. As far as movement of routes to SFO, that will do nothing to support the much larger traffic demand the LA metro area has over the Bay Area.
Quoting AS739X (Reply 6): Alaska is furious over this move.
While AS will be getting a sizable rate increase to just shy of $1million per month, they have been enjoying the fruits living off month-to-month under the expired lease and its extremely low rates now since May 2001!
Like them or not, the newly introduced rental rates are much more in line with the economic realities of market pricing and are being implement across the board as older leases expire.
IMO, one well written clause of the new leases allow LAWA to recapture under utilized facilities for reassignment to other airlines and hopefully put and end to facility squatting which has taken place by more then one airline in recent years.
From the desert to the sea, to all of Southern California
Lightsaber From United States of America, joined Jan 2005, 10882 posts, RR: 100 Reply 9, posted (6 years 7 months 1 day 10 hours ago) and read 4596 times:
Quoting PanAm747 (Reply 2): Let's go one further - let's prove once and for all to those in Southern California that think LAX is going to continue to expand (so their own airports can be phased out) that the future is now - if you want to fly out of LAX, be prepared to pay $$$$$$$$ for the privilege.
Man... my company is already considering relocating out of LA... Its so damn expensive to do business out here! I love the place... but eventually one has to pay for it.
Is LGB going to have its quota lifted? SNA? Quite bluntly, BUR and ONT might as well be in another state for me. The drive to/from them can take hours. Actually, SNA is too far out of the way...
LAX has been an airport for decades. It should be expanded. A city either grows or it rots. Ok, one alternative is good rail access is provided to ONT... otherwise its not of use to me. The time tax is too high.
What's bad is that these fees aren't being raised for some great new project (e.g., the western terminal). Its purely a scheme to raise funds at LAX for the city.
Personally, I think the decision to cap pax traffic out of LAX is going to bite the city and state. But hey, only my With San diego sending an estimated 8 million pax/year to LAX... Santa Barbara, etc. What are they going to do, charge a higher fee for people who live outside of LA county? (Illegal, FYI)? The reality is, high wage jobs tend to fly more.
The noise from the airport is dropping. Build the west terminal and a proper rail system for LA... But sigh... that's a pipe dream.
This fee raise is silly. It will come out of the wages of airline employees in the long term. Or maybe the airlines cap employee travel out of LAX? Trust me, no one is going to like it when the passanger cap it hit at LAX. Not the airline employees... Not the passangers or their companies... and eventually not the city of LA.
I'm not thinking LA's slide of convention market share is over...
Laxintl From United States of America, joined May 2000, 22236 posts, RR: 51 Reply 10, posted (6 years 7 months 1 day 10 hours ago) and read 4549 times:
Quoting Lightsaber (Reply 9): Its purely a scheme to raise funds at LAX for the city
Actually none of the revenue's at LAX go to the City general fund, or the other way around either. The airport is a self sustaining entity thats run along a quasi public/private corporation setup. The airport is fully responsible for its own budget profit/loss and has the ability to issue its own bonds along with business dealings outside LA City. (Look at how LAWA manages ONT and PMD which are located far outside LA City boundaries).
There was a little political battle over this a few years ago when the City tried to divert "borrow" airport funding for non airport related budgetary needs that went to court and even got the Federal Government involved.
From the desert to the sea, to all of Southern California
Gmcc From United States of America, joined Apr 2006, 186 posts, RR: 0 Reply 11, posted (6 years 7 months 1 day 10 hours ago) and read 4542 times:
Quoting Lightsaber (Reply 9): Is LGB going to have its quota lifted? SNA?
SNA's cap of 10.8 million is in place till 12/31/2015. I don't think it will go up after that as Stop Polluting Our Newport, read NIMbY, will probably take the county to court to stop any further expansion. It is a shame because I saw a plan once for adding a second commerical runway to SNA but it is now probably forgotten in some county archive.
Quoting Lightsaber (Reply 9): Personally, I think the decision to cap pax traffic out of LAX is going to bite the city and state.
High speed rail will bring everyone in from Palmdale.
Flybyguy From United States of America, joined Jun 2004, 1791 posts, RR: 1 Reply 13, posted (6 years 7 months 1 day 9 hours ago) and read 4454 times:
This sounds like simple supply and demand... demand is high to fly out of LAX and supply (space for expansion) is limited. Considering that LAX is a big business travelers airport (Asia, Mexico, and the East Coast) I'm confident businesses will pay more for the convenience of flying their people out of LAX. The only people that will be weeded out of LAX are low yield leisure travelers and airline companies whose clientele out of LAX are comprised of a large number of such people. So perhaps ONT and LGB will see an increase in leisure passenger numbers because of this rent hike... but I would stake money that the business travel numbers remain widely unaffected.
I wish there was a way not to squeeze the little guy here, but more and more in America it becomes painfully apparent that money talks and if you don't have it, you get kicked to the curb.
"Are you a pretender... or a thoroughbred?!" - Professor Matt Miller
Lightsaber From United States of America, joined Jan 2005, 10882 posts, RR: 100 Reply 14, posted (6 years 7 months 1 day 9 hours ago) and read 4368 times:
Quoting Gmcc (Reply 11): High speed rail will bring everyone in from Palmdale.
And you know how much money those people in Palmcaster have....
Actually, just some rail to ONT would make a difference. (That is rail from the westside/southbay to ONT.)
Quoting Flybyguy (Reply 13): This sounds like simple supply and demand...
But there are plans to expand LAX. They are going to put more distance between the runways and upgrade the radars. That will allow 50% more flights. If they let the West terminal be built, that would double terminal capacity.
The only one benifiting from a cap, long term, is NIMBYs.
LA business will suffer. Its not just the little guy.
Quoting Flybyguy (Reply 13): The only people that will be weeded out of LAX are low yield leisure travelers and airline companies whose clientele out of LAX are comprised of a large number of such people.
e.g., Conventions, bankers, etc. I once read that the conerstone on which a city builds wealth is transportation. LA is cutting off its nose to spite its face here...
Quoting Laxintl (Reply 10): The airport is a self sustaining entity thats run along a quasi public/private corporation setup.
Is that still in place? If so I withdraw some of my objection. But where is the money being spent? If it was for a new west terminal, I'd be happy! Runway spacing?
Right now LA's economy is effectively subsidized by being the US's trans-pacific hub. But then again, I'm an economic bear. I think we're at 6 months from a downturn. Hopefully I'm wrong. Once business is lost from a city, its far more expensive to attract it back. Constricting air travel is not going to make LA more popular to business...
Lax44 From United States of America, joined May 2005, 62 posts, RR: 0 Reply 15, posted (6 years 7 months 1 day 7 hours ago) and read 4239 times:
So when does LAWA estimate LAX will reach 75 million pax per year?
From their own statistics they are nowhere near their 2000 high of 67 million, with 61 million in 2005 and pax totals seeing about the same levels this year.
LACA773 From United States of America, joined Nov 2004, 3752 posts, RR: 2 Reply 16, posted (6 years 7 months 1 day 5 hours ago) and read 4130 times:
Quoting AS739X (Reply 6): Alaska is furious over this move. We have been working with the airport for over a year on a new facility. Moving to a new terminal, re-designing T-3 to no avail. And now LAX raises or rent a very sub par terminal. The same Alaska that is the largest US carrier internationally (in regards to movement at currently 12 daily) which I wouldnt call one of the weaker airlines. Alaska, the same airline that proposed a complete upgrade on T-3 funding the work itself over 5 years ago. The same airline that can't get any more gates cause ever new carrier into LAX seems to be directed into the time-warp T-3. LAWA continues to make no sense to me and just treats one if its best tenants like crap. IMHO! Just another reason I see Alaska increasing Mexico and other destinations from San Francisco. At least SFO has a modern international terminal
ASLAX
AS739X, I completely agree with everything that you have to say in your posting. It's like damn, man. What are they going to do to us now. AS has handed LAWA a lot of business with their flight increases to Mexico, Canada etc., and while AS has tried on numerous ocasions to negotiate with LAWA to renovate or completely replace T3, they have basically ignored, said they were not interested. Instead of raising your lease/rent fees and the such, they should give AS a substanatial discount for having to use such a diapidated dump of a terminal, and for that amount of rent per month, AS shouldn't have to share the terminal with any more than one carrier.
Laxintl From United States of America, joined May 2000, 22236 posts, RR: 51 Reply 17, posted (6 years 7 months 1 day 5 hours ago) and read 4085 times:
Quoting Lightsaber (Reply 14): But where is the money being spent? If it was for a new west terminal, I'd be happy!
The new rental rates will be a drop in the bucket generating less then $60 million in annual revenues that will go towards the $6 billion or so of green lighted Master Plan projects including the Midfield Satellite concourse.
Funding for the Master plan is exclusively coming from passenger facility charges, landing fees, airport facility leases, concession fees, airport revenue bonds along with Federal and state grants. The Master Plan will receive no funding from the general fund of the City.
Quoting LACA773 (Reply 16): they should give AS a substanatial discount for having to use such a diapidated dump of a terminal
They have. Each terminal has been assessed on its own merits. For instance the square footage rental cost of T-3 is approximately 20% lower then T-1.
Quoting LACA773 (Reply 16): for that amount of rent per month, AS shouldn't have to share the terminal with any more than one carrier.
If that was the case AS would have to pay the entire rental cost of T-3.
Under the new formula which takes into consideration factors such as square footage rented, flight and passenger activity, AS ends up paying for about 55% of the terminals cost. It would actualy be advantageous for AS to have other carriers in the terminal increase activities as it would help offset AS's burden of the total facility cost.
From the desert to the sea, to all of Southern California
KC135TopBoom From United States of America, joined Jan 2005, 11738 posts, RR: 51 Reply 18, posted (6 years 7 months 19 hours ago) and read 3600 times:
Quoting Laxintl (Reply 10): Actually none of the revenue's at LAX go to the City general fund, or the other way around either. The airport is a self sustaining entity thats run along a quasi public/private corporation setup. The airport is fully responsible for its own budget profit/loss and has the ability to issue its own bonds along with business dealings outside LA City. (Look at how LAWA manages ONT and PMD which are located far outside LA City boundaries).
There was a little political battle over this a few years ago when the City tried to divert "borrow" airport funding for non airport related budgetary needs that went to court and even got the Federal Government involved.
That is correct, US Federal Law forces airports to be self supporting, and revenue cannot be shared with the owner city/county. The FAA is very strict on this, and watches it very closely.
Quoting Lightsaber (Reply 14): But there are plans to expand LAX. They are going to put more distance between the runways and upgrade the radars. That will allow 50% more flights.
No, all they are doing is moving the south runway 50' further south. This will not increase capacity at all, it will only bring LAX into compliance (finally) with the FAA directives on runway spacing (minimum is 1200', measured centerline to centerline).
Quoting Lax44 (Reply 15): So when does LAWA estimate LAX will reach 75 million pax per year?
Raising terminal rent (and the flying public ultimetly paying it) will slow down that goal. I might add that LAX currently handles about 60M-61M passengers per year, well behind ORD, ATL and DFW (all with much lower landing fees and terminal rents).
This is not a smart move by the LAWA Board. I'll be that AA, UA, DL, NW, CO, WN, and AS all challange the new rates in court.
Terminal Rentals /sq ft
LAX - $17.00 - 21.67 NEW RATES dependant on which facility
ATL - $11.25 - 32.50 (2005) dependant on which facility
DFW -$30.78 - 42.46 dependant on which facility
ORD - $36.44 - 77.33 dependant on which facility
Off course beyond these fees airports charge per passenger terminal fee's and often for parking also, however LAX still remains one of the lowest of the major airports in the country.
As a side note, LAX is often compared to SFO. However that cities landing fees an rentals have for ages been also consistently higher by a wide margin than that of LAX.
From the desert to the sea, to all of Southern California
Lightsaber From United States of America, joined Jan 2005, 10882 posts, RR: 100 Reply 21, posted (6 years 7 months 14 hours ago) and read 2741 times:
Quoting KC135TopBoom (Reply 18): No, all they are doing is moving the south runway 50' further south. This will not increase capacity at all, it will only bring LAX into compliance (finally) with the FAA directives on runway spacing (minimum is 1200', measured centerline to centerline).
Moving the south runway 50' allows for a taxiway. A taxiway allows for a lot more movements.
Not to mention the plan to move the northernmost runway 250ft further north. Oh, I realize they aren't acting on it yet. But there is still the plan. That puts the two north runways 1000' apart. Thus heavies on the two northern runways can land or takeoff in clear weather without imposing delays onto operations on the other northern ruway. This, in addition to the radar upgrades, will increase LAX's operation capacity by a third (movements). Or more precisely, from 850 to 1150 landings during the 7am to 9pm "day" per the FAA. I don't consider 300 landings added trivial... I certainly won't say that it doesn't increase capacity at all.
Not to mention the runway realignment at LAX will cut runway incursions in the United States in HALF (round numbers).
And if you've ever been to LAX, you know the busy "day" doesn't end before midnight. Although it shocking how few movements occur before 7am yet how many aircraft push back within 15 minutes of 7am... Its almost like a lightswitch is turned on...
And then there are the plans for the West Terminal. Its going to happen some day. The only question is when.
Quoting KC135TopBoom (Reply 18): minimum is 1200', measured centerline to centerline).
Then LAX is in trouble. The two southern runways will only be 785 ft centerline to centerline after the current move. Recommended for new runways is 1200'. Recommendation is not the same as a directive... The two northern runways are planned to be 1000 ft centerline to centerline after the move.
Sllevin From United States of America, joined Jan 2002, 3376 posts, RR: 6 Reply 22, posted (6 years 7 months 11 hours ago) and read 2665 times:
Quoting Lightsaber (Reply 9): LAX has been an airport for decades. It should be expanded.
I disagree. What needs to happen is that BUR, LGB, and SNA need to lift their caps to allow increased air traffic to them. Who wants to be forced to drag all the way to LAX when they live 5 or 10 minutes from one of the alternates?
I'm all for higher fees to help pressure the other communities to allow expansion. I want to see more flights into the LA area, but not all at LAX!
Visakow From United States of America, joined May 2006, 85 posts, RR: 0 Reply 23, posted (6 years 7 months 11 hours ago) and read 2629 times:
Quoting DesertFlyer (Reply 7): Quoting AS739X (Reply 6):
I see Alaska increasing Mexico and other destinations from San Francisco.
I think that would be good. Maybe with such high fees, other airlines would be willing to move routes up to SFO instead of LAX. It is an easier airport to connect at and like you said, the Int. terminal is top notch. In all reality, this is just something I would like to see happen and I have no info on the business side of things and I'm sure there are reasons why this won't happen.
I agree with both of these along with what Iv'e found to be a much higher level of customer service. Well they just seem friendlier, more affable and tolerant from San Fran going north. It is probably just LAX, though, as I've never had a problem in Fresno or San Diego either being that they too have been reasonably pleasurable experiences when I fly.
Laxintl From United States of America, joined May 2000, 22236 posts, RR: 51 Reply 24, posted (6 years 7 months 10 hours ago) and read 2593 times:
Quoting Sllevin (Reply 22): I'm all for higher fees to help pressure the other communities to allow expansion. I want to see more flights into the LA area, but not all at LAX!
Agreed.
As much as I'd like to see a much larger and better LAX, the airport and City of LA simply cannot continue support regions air transport needs into the future.
One way or the other, the many community airports must take part in a larger solution. If this means LAWA needs to apply economic pressure to create such impetus I'm all for it.
From the desert to the sea, to all of Southern California
25 Gmcc: Ultimately I think LAWA is trying to implement the terms of the settlement agreement as best they can. It appears from the settlement agreement calls
26 PanAm747: You have a better chance of seeing Pope Ellen DeGeneres than you do of EVER seeing BUR, LGB, or SNA expanding significantly. Same with CLD or SAN. Th
27 KC135TopBoom: That is the primary reason for the work on the south runway complex. LAX is the runway incursion capital of the US, by far. As I said, it is not an i
28 Lightsaber: Oh, I'm all for lifting the caps at the other airports. A friend of mine dug up an old article showing how SNA was planned with two commercial runway
29 Gmcc: Not if the NIMBY groups get their way which they probably will. If they can afford a $14 million house they can probably stop airport expansion. I re
30 Hawaiian717: LGB was in the middle of nowhere when it was built.
31 Laxintl: And so was LAX. The area chosen for what was called Mines Field consisted of all ranches in the late 1920s without any nearby developments, let alone
32 Jacobin777: Got no problems with that...bring 'em our way.... Some of the alternatives here at SFO are to build runways in the bay (dredging up the water, etc),
33 Laxintl: To add to this story, a group of T1 & T3 LCC airlines are trying to make public noises about the approved rate increases and are threatening legal act
34 SANFan: Will be interesting to see what WN's reaction ultimately is to a hefty rent increase. I think we all know what usually happens (e.g., ELP, SEA, SLC, e
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From United States of America, joined May 2000, 22236 posts, 
With San diego sending an estimated 8 million pax/year to LAX... Santa Barbara, etc. What are they going to do, charge a higher fee for people who live outside of LA county? (Illegal, FYI)? The reality is, high wage jobs tend to fly more. 
Trust me, no one is going to like it when the passanger cap it hit at LAX. Not the airline employees... Not the passangers or their companies... and eventually not the city of LA. 
Runway spacing? 
Agreed. 
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