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UA Adds $10 LAX "Rent" Surcharge To Tickets  
User currently offlineLaxintl From United States of America, joined May 2000, 25532 posts, RR: 50
Posted (7 years 5 months 3 weeks 3 days 10 hours ago) and read 6318 times:

Now I wonder what happens if airlines win their suit against the airport? People also get their money back, or UA simply pockets the extra cash?

Will be interesting to see if any other carriers follow.


United Airlines to add $10 surcharge on LA flights
Wednesday April 11,


NEW YORK (Reuters) - United Airlines said on Wednesday that passengers on its flights originating at Los Angeles International Airport will each pay a $10 surcharge to offset a rent increase, effective immediately.

In December, Los Angeles World Airports (LAWA) raised the rent for all LAX airlines to finance airport upgrades. United, the largest airline at LAX, said it would pay an additional $10 million annually and that it believed the increase was in clear violation of its long-term lease agreement with LAWA.

United, a unit of UAL Corp. said it had joined several other airlines in a lawsuit against LAWA. A spokesman for LAWA was not immediately available for comment.


Full story;
http://biz.yahoo.com/rb/070411/united_surcharge.html?.v=3

[Edited 2007-04-11 19:10:43]


From the desert to the sea, to all of Southern California
46 replies: All unread, showing first 25:
 
User currently offlineSirOmega From United States of America, joined Sep 2005, 735 posts, RR: 0
Reply 1, posted (7 years 5 months 3 weeks 3 days 9 hours ago) and read 6259 times:

Quoting Laxintl (Thread starter):
Now I wonder what happens if airlines win their suit against the airport? People also get their money back, or UA simply pockets the extra cash?

Lawyers. They'll pocket the cash.


User currently offlineSearpqx From Netherlands, joined Jun 2000, 4344 posts, RR: 10
Reply 2, posted (7 years 5 months 3 weeks 3 days 9 hours ago) and read 6244 times:

Quoting Laxintl (Thread starter):
said it would pay an additional $10 million annually

Ok, so they'll recoup their cost at the millionth passenger. Considering they carried 4.9MM pax out of LAX last year, what are they going to do with extra $3.9MM?



"The two most common elements in the universe are Hydrogen and stupidity"
User currently offlinePolymerPlane From United States of America, joined May 2006, 991 posts, RR: 3
Reply 3, posted (7 years 5 months 3 weeks 3 days 9 hours ago) and read 6244 times:

I thought it's illegal in the US to put "surcharges" for you cost of doing business. Anyway it might not matter. People will just choose other airlines that is cheaper overall.

Cheers,
PP



One day there will be 100% polymer plane
User currently offlineLaxintl From United States of America, joined May 2000, 25532 posts, RR: 50
Reply 4, posted (7 years 5 months 3 weeks 3 days 9 hours ago) and read 6196 times:

The best part about the whole thing is such a move plays right into LAWA's hands particularly if all airlines were to adopt such a similar surcharge.

The airport is hoping to curtail demand at the airport and has found economic disincentives as being the best method. Who knows maybe a $10 difference will mean someone will use other regional airports instead achieving exactly what LAWA wants.

A funny thing about this UA move is however is from my understanding the 28 or so carriers that are contesting the new rental rates are paying the fees into a trust fund till the case is decided. So its not like UA is quite yet out of the money, unless of they internally conceded they have lost and will be subject to the new rates anyhow.



From the desert to the sea, to all of Southern California
User currently offlinePanAm747 From United States of America, joined Feb 2004, 4242 posts, RR: 8
Reply 5, posted (7 years 5 months 3 weeks 3 days 9 hours ago) and read 6169 times:

For travellers originating in southern California, the surcharge might not even be noticed - it is very rare indeed when an airfare is more expensive than SAN, SNA, or BFL, than it is from LAX.

As an example, I am considering flying to Halifax this summer. Cheapest price out of SAN - almost $800. Cheapest price (and more flights to choose from) out of LAX - $450.

As much as I LOATHE Los Angeles traffic, I can take Amtrak for $25 roundtrip and then a shuttle to LAX or drive up and leave my car at a friend's house.

So the price goes up to $460...I still come out ahead.



Pan Am:The World's Most Experienced Airline - P(oor) S(ailor's) A(irline): San Diego's Hometown Airline-Catch Our Smile!
User currently offlineGo3Team From United States of America, joined Mar 2004, 3267 posts, RR: 16
Reply 6, posted (7 years 5 months 3 weeks 3 days 9 hours ago) and read 6162 times:

Quoting PolymerPlane (Reply 3):
I thought it's illegal in the US to put "surcharges" for you cost of doing business.

When was the last time you bought a car, rented a car, etc.?



Yay Pudding!
User currently offlineStitch From United States of America, joined Jul 2005, 31060 posts, RR: 87
Reply 7, posted (7 years 5 months 3 weeks 3 days 9 hours ago) and read 6148 times:
Support Airliners.net - become a First Class Member!

Quoting PolymerPlane (Reply 3):
I thought it's illegal in the US to put "surcharges" for you cost of doing business.

That hasn't stopped the airlines - or freight companies - from continuously adding "fuel surcharges" measuring in the scores of dollars to their fares and rates.


User currently offline707lvr From United States of America, joined Jun 2004, 585 posts, RR: 2
Reply 8, posted (7 years 5 months 3 weeks 3 days 9 hours ago) and read 6115 times:

If you want to bring as much ill-will as you possibly can down upon your company, while making a self-satifying point, this is definitely the way to go!! Still, I'm sure that thousands and thousands of PAX will come to United's defense and rush home to write stern letters to Los Angeles.

User currently offlinePolymerPlane From United States of America, joined May 2006, 991 posts, RR: 3
Reply 9, posted (7 years 5 months 3 weeks 3 days 8 hours ago) and read 6039 times:

Quoting Stitch (Reply 7):

That hasn't stopped the airlines - or freight companies - from continuously adding "fuel surcharges" measuring in the scores of dollars to their fares and rates.

Sorry I did not make my self clear. What I tried to say is that you can't quote a price excluding the cost of doing business, unlike in Europe, where you can advertise 1 dollar fare, with $200 fuel surcharge, $50 FA surcharge, etc.

Quoting Go3Team (Reply 6):

When was the last time you bought a car, rented a car, etc.?

Last time I bought a car was 3 years ago and rented a car 1 year ago. I did not notice a car advertised at $100 price with $20,000 engine and seats surcharges. I know there is dealer's fee, but that is different since you're buying a car, and the dealer helps connecting you with the manufacturer. This is parallel with travel agency fees we see so often now.

Cheers,
PP



One day there will be 100% polymer plane
User currently offlineGo3Team From United States of America, joined Mar 2004, 3267 posts, RR: 16
Reply 10, posted (7 years 5 months 3 weeks 3 days 8 hours ago) and read 5964 times:

Quoting PolymerPlane (Reply 9):
Last time I bought a car was 3 years ago and rented a car 1 year ago. I did not notice a car advertised at $100 price with $20,000 engine and seats surcharges. I know there is dealer's fee, but that is different since you're buying a car, and the dealer helps connecting you with the manufacturer. This is parallel with travel agency fees we see so often now.

Look closely at your paperwork for your car, or rental. There are usually a few fees besides the dealers processing fee. Some rental agencies will add fees if it is a high demand area. A few weeks ago in Vegas, I had such a fee.

It's usually much easier to add a $10 fee, then it is to change all of the fares for LAX. Either way, surcharges get added all of the time, in the normal course of business. Not being able to charge for certain things, and lose money in the process isn't good business practice.



Yay Pudding!
User currently offlineUAL777 From United States of America, joined Aug 2003, 1556 posts, RR: 5
Reply 11, posted (7 years 5 months 3 weeks 3 days 8 hours ago) and read 5945 times:

Quoting Stitch (Reply 7):

That hasn't stopped the airlines - or freight companies - from continuously adding "fuel surcharges" measuring in the scores of dollars to their fares and rates.

LOL. That is because for every $1 per barrel oil prices go up, it costs the airlines $80-100 million (depending on the airline). Margins for airlines are VERY thin.



It is always darkest before the sun comes up.
User currently offlineD950 From United States of America, joined Jul 2004, 493 posts, RR: 2
Reply 12, posted (7 years 5 months 3 weeks 3 days 6 hours ago) and read 5790 times:

Quoting PolymerPlane (Reply 3):
I thought it's illegal in the US to put "surcharges" for you cost of doing business

Hell, Hertz has a surcharge just for the privelage of renting @ ONT.



Resting on your laurels is a synonym for flirting with disaster
User currently offlineStitch From United States of America, joined Jul 2005, 31060 posts, RR: 87
Reply 13, posted (7 years 5 months 3 weeks 3 days 6 hours ago) and read 5781 times:
Support Airliners.net - become a First Class Member!

Quoting PolymerPlane (Reply 9):

Sorry I did not make my self clear. What I tried to say is that you can't quote a price excluding the cost of doing business, unlike in Europe, where you can advertise 1 dollar fare, with $200 fuel surcharge, $50 FA surcharge, etc.

Don't know about that. I do know the fares advertised in the US papers do not include all those surcharges, but the "boilerplate legalese" in ultra fine print usually notes "taxes and other fees not included" so when you book the ticket and it comes out a lot higher, you can't cry "bait and switch".  Smile


User currently offlineBicoastal From , joined Dec 1969, posts, RR:
Reply 14, posted (7 years 5 months 3 weeks 3 days 5 hours ago) and read 5654 times:

I'd love to have UA charge more at LAX and IAD in order to fund new/improved gate areas. United's gates at both of those airports are pathetic.

User currently offlinePolymerPlane From United States of America, joined May 2006, 991 posts, RR: 3
Reply 15, posted (7 years 5 months 3 weeks 3 days 5 hours ago) and read 5617 times:

Quoting Stitch (Reply 13):

Don't know about that. I do know the fares advertised in the US papers do not include all those surcharges, but the "boilerplate legalese" in ultra fine print usually notes "taxes and other fees not included" so when you book the ticket and it comes out a lot higher, you can't cry "bait and switch". Smile

For airfare the fees are usually government fees, not the airlines. If you see the price advertisement, it's actually higher than the quoted air fare in your final invoice. Tax is a different ball game.

Cheers,
PP



One day there will be 100% polymer plane
User currently offlineLaxintl From United States of America, joined May 2000, 25532 posts, RR: 50
Reply 16, posted (7 years 5 months 3 weeks 3 days 3 hours ago) and read 5512 times:

Guys here is another funny point to this seeming bogus surcharge. I wonder what the additional $38 million is for?

From today's LAWA new release  Wink


STATEMENT FROM LOS ANGELES WORLD AIRPORTS (LAWA) REGARDING UNITED AIRLINES FARE INCREASE FOR LOS ANGELES PASSENGERS


United Airlines’ $10 increase in ticket prices for Los Angeles passengers wildly exceeds the airline’s full and fair share of the costs to maintain and operate its terminal facilities at LAX. United appears to be exploiting a justified increase in its maintenance and operations costs in order to dramatically increase profits on Los Angeles passengers.

In 2006, United reported more than 4,885,353 enplaned passengers at LAX. Assuming the same level of traffic this year, the airline’s $10 increase per passenger will generate more than $48 million in additional revenue. Yet, United claims the increase in ticket prices is necessary to pay higher maintenance and operations costs totaling $10 million.

Under the terms of their existing leases, United and other carriers are responsible for the full costs of maintaining and operating LAX facilities and LAWA has the right to pass along increases in its costs of operating the terminals, which it does for the benefit of the airlines. LAWA has discussed with the airlines their responsibility to pay fair and reasonable costs to maintain and operate their respective terminals and other facilities at LAX, particularly in the years following the 2001 terrorist attacks. Since then, LAWA has largely shouldered the increased security-related costs itself.

The subsidization of these costs on behalf of the air carriers has become onerous and unfair and LAWA is seeking to recover those costs associated with the terminals. For its part, however, United appears intent on exploiting the matter in order to boost profits, at the expense of its Los Angeles customers.


http://www.lawa.org/lax/newsDisplay.cfm?newsID=914



From the desert to the sea, to all of Southern California
User currently offlineBicoastal From , joined Dec 1969, posts, RR:
Reply 17, posted (7 years 5 months 3 weeks 3 days 3 hours ago) and read 5474 times:

Quoting Laxintl (Reply 16):
I wonder what the additional $38 million is for

Hopefully to improve the shoddy terminal and other of its facilities at LAX. IAD needs the same surcharge.


User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 18, posted (7 years 5 months 3 weeks 3 days 2 hours ago) and read 5412 times:

obviously LAWA is not pleased although they can't stop UA from charging what they want for their services.

US airlines do have to disclose carrier imposed surcharges in any advertising. If they advertise fares to/from LAX, they will have to include this LAX surcharge in the advertised fare. Gov't fees do not have to be included in the advertised fare but have to be disclosed in the fine print.


User currently offlineN1120A From United States of America, joined Dec 2003, 26536 posts, RR: 75
Reply 19, posted (7 years 5 months 3 weeks 2 days 20 hours ago) and read 5207 times:

How f'ing ridiculous is this anyway? Why isn't UA tacking on $30 at ORD or DEN if this is the case?


Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineCoa747 From , joined Dec 1969, posts, RR:
Reply 20, posted (7 years 5 months 3 weeks 2 days 12 hours ago) and read 4573 times:

LAWA is a joke. I'm not defending United here but when you neglect your infastructure for decaded then the cost of fixing or replacing said infastructure is bound to be astronomical! Terminal 6 is a great example it still retains the 1950's welcome to the jet age look. I doubt much has been done with that terminal for decades. Terminal 3 received only a cosmetic makeover recently but LAWA did nothing to improve the facility beyond adding pretty tile to the walls and some new paint. United should take care of its facilities at LAX which are rather worn and I don't support a 10 dollar surcharge by them. LAWA can't be blamed for United's poor management in recent years. There is enough blame to go around between LAWA and United. American's terminal at LAX is a good of example of an airline taking care of its space. US Airways wins the award for worst neglected terminal facilities hands down ever seen their junky terminal at PHL?

User currently offlineYyz717 From Canada, joined Sep 2001, 16285 posts, RR: 56
Reply 21, posted (7 years 5 months 3 weeks 2 days 10 hours ago) and read 4201 times:

This is a good idea on UA's behalf, in theory. Pasengers need to realize that the cost of air travel includes airport rent to airlines to cover capital projects and operating costs. We all want to fly out of attractive airports but not at the cost of expensive air travel though. The greater the breakdown of ticket cost, the more informed the travelling public will be. Excessive airport rent or capital projects can be reigned in by airlines and/or the travelling public with this info. The latter is more effective as the true grass roots stakeholders.

As to the applicability or reasonableness of THIS specific $10 levy, I have no opinion though.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineN1120A From United States of America, joined Dec 2003, 26536 posts, RR: 75
Reply 22, posted (7 years 5 months 3 weeks 2 days 10 hours ago) and read 4088 times:

Quoting Coa747 (Reply 20):
LAWA is a joke.

What are you talking about? LAWA is an economically viable entity that keeps costs down while not being a blood sucking burden on the local and regional governments. That is saying something given what other airport authorities do, not to mention the outrageous actions of privatized airport consortiums in Europe.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlinePolymerPlane From United States of America, joined May 2006, 991 posts, RR: 3
Reply 23, posted (7 years 5 months 3 weeks 2 days 10 hours ago) and read 4035 times:

Quoting Yyz717 (Reply 21):


This is a good idea on UA's behalf, in theory. Pasengers need to realize that the cost of air travel includes airport rent to airlines to cover capital projects and operating costs. We all want to fly out of attractive airports but not at the cost of expensive air travel though. The greater the breakdown of ticket cost, the more informed the travelling public will be. Excessive airport rent or capital projects can be reigned in by airlines and/or the travelling public with this info. The latter is more effective as the true grass roots stakeholders.

Why? Cost has never been the factor in determining price, especially in a market as competitive as LAX. The only way to increase price is through reduction of supply.

If it is as simple as what you are saying, all airlines would not have cut their costs, as they can just put "surcharges" in their tickets. The fact is price is set regardless of the costs, rather the airlines adjust their costs to match the price.

Cheers,
PP



One day there will be 100% polymer plane
User currently offlineNYC2theworld From United States of America, joined Mar 2007, 664 posts, RR: 0
Reply 24, posted (7 years 5 months 3 weeks 2 days 9 hours ago) and read 3884 times:

Quoting Yyz717 (Reply 21):
This is a good idea on UA's behalf, in theory. Pasengers need to realize that the cost of air travel includes airport rent to airlines to cover capital projects and operating costs. We all want to fly out of attractive airports but not at the cost of expensive air travel though. The greater the breakdown of ticket cost, the more informed the travelling public will be. Excessive airport rent or capital projects can be reigned in by airlines and/or the travelling public with this info. The latter is more effective as the true grass roots stakeholders.

As to the applicability or reasonableness of THIS specific $10 levy, I have no opinion though.

So what is the passenger facility charge that I pay for whenever I fly? Whenever the PANYNJ do improvements I don't see airlines imposing a new fee to pay for the construction...when the Airtrains (both EWR and JFK) were built, when COs global gateway project was built, B6s new terminal, etc., etc. CO helped pay through its various funding sources (NOT AN EXTRA FEE(for the Global Gateway)) B6 paid some (for its terminal), PFC were used, PANYNJ bonds and such were used for construction costs. As for operating expenses, that's what my ticket is for. To pay the airline for its operating costs, which include, its rent and upkeep of its facilities at its various stations.



Always wonderers if this "last and final boarding call" is in fact THE last and final boarding call.
25 Bond007 : Yes, which is why so many airlines lost so much money when their prices were lower than their costs! Yes, correct! Right, but their only reason for d
26 Jetblast25 : These extra charges are done as surcharges rather than built into the fare so fares appear lower when listed on the internet. The internet ranks base
27 Bond007 : Not true, or legal in the USA. Correct....well actually not 'disclose' it clearly must be included. From DOT: "The DOT allows per-person, government-
28 Yyz717 : On the contrary, cost is the only primary and consistent factor in determining price, muddied by events such as seat sales, competitive pressures, pr
29 Post contains images Laxintl : UA adds the $10 in the base fare. For example.. picked a random date of May 26th at united.com LAX-SFO One-Way Traveler Base fare Taxes & fees* Total
30 PolymerPlane : Not true at all... don't tell the cost of providing a last minute ticket between say DFW and LAX for tomorrow 4/12 and coming back 4/13 is $869, on t
31 Bond007 : Well, this is negated by the next part of your sentence. Unfortunately they do last. If prices were determined purely by cost, then airlines would al
32 Post contains links FATFlyer : It appears US and DL have also added the $10 surcharge at LAX. Other airlines are considering it. A battle between Los Angeles International Airport a
33 RDUDDJI : Well, since US and DL matched UA...hopefully it will stick and make LAWA look stupid. Hopefully the airlines will also win their suit against the air
34 Yyz717 : You've just contradicted yourself. The common element here is the base price $645 ($869-$224) which likely covers the cost (more or less) and represe
35 PolymerPlane : Read again my post. You misunderstood me. We can agree that the cost of providing a service from DFW to LAX r/t is roughly the same at any given day.
36 Post contains links FATFlyer : The list grows, there is a report that NW will also add a $10 surcharge. But supposedly CO will NOT impose the charge. http://www.btnmag.com/business
37 Laxintl : If that is the case, then you the consumer is the one that looses. You end paying for a fee the airlines dont have to pass on to LAWA. And if the air
38 Post contains links Laxintl : Looks like SWA also says no to the surcharge LAX: United 'exploiting' dispute to boost profits with $10 fee US Airways "quickly matched" a $10 surchar
39 RafflesKing : Hmmm...why is it that in addition to the surcharges, I'm finding flights pricier for the same dates? I.e. PHL-LAX and BWI-LAX June 10th-16th is $100 p
40 Sparklehorse12 : This is QF behaviour.......the notion of charging a surcharge becuase of the increase cost of doing business is utterly inexcusable..........
41 RDUDDJI : not true, I don't fly to LAX so it won't affect me at all. I'm fine with an airport raising the rent...but LAX broke the contract with the carriers a
42 Bond007 : Sometimes, but that wasn't the only factor you mentioned! The other 2 factors last indefinitely, otherwise we'd always have the same prices between t
43 WN230 : But based on that quote, can we look at the positive side of this as it looks like LAWA (and most likely UA) wants to revamp the airport to better se
44 MEACEDAR : My uncle just booked LAX-MCO with UA in the summer and he said the samething occcured. Wonder what will happen...
45 Isitsafenow : The rent-a-car guys have some stupid surcharge on just about any airport in the USA. I rented a car at MCI in March. The weekend rate was$ 20.99 day
46 Post contains images Laxintl : UA as of late Friday has dropped the inflated "surcharge". Suppose it did not help UA's perceived cause that other major airlines at LAX including AA
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