timz
Posts: 6100
Joined: Fri Sep 17, 1999 7:43 am

How Much Do Airports Charge Airlines...

Mon Jan 29, 2001 9:28 am

...in landing fees?

Someone said the new Denver airport has the highest fees in the country-- anybody know what they do charge? How do they compare with other new airports, like Osaka and Hong Kong and Kuala Lumpur and Munich? And any other airports, while we're at it.
 
watewate
Posts: 2216
Joined: Sun Nov 12, 2000 6:00 am

RE: How Much Do Airports Charge Airlines...

Mon Jan 29, 2001 9:45 am

I don't know the specifics but I've heard KIX is the second most expensive in the world. With the building of another runway (unneeded), airlines are expecting to pay more in the future to fly in/out of KIX. No wonder airlines are fleeing the airport in droves.
 
Spaceman
Posts: 525
Joined: Wed Jul 26, 2000 3:28 pm

RE: How Much Do Airports Charge Airlines...

Mon Jan 29, 2001 12:19 pm

From previous posts, I've read that London Heathrow charges 5,000 bucks for a 777 or 747 to land. JFK was also about that price. The most expensive airport to land is the Kansai airport, which charges more than $8,000. Many airlines are pulling out of Kansai because it's too expensive.
 
Guest

RE: Spaceman

Mon Jan 29, 2001 12:45 pm

...or because it's sinking...

Chicago Meigs charges $30 for a landing fee (Cessna).
 
Spaceman
Posts: 525
Joined: Wed Jul 26, 2000 3:28 pm

RE: Spaceman

Mon Jan 29, 2001 12:56 pm

Yes I'm aware of that it's sinking. So are they trying to reimburse the cost of building the airport before it sinks into the sea? That is charging alot of money????
 
Airbus A380
Posts: 508
Joined: Sat Jan 06, 2001 3:54 am

RE: How Much Do Airports Charge Airlines...

Mon Jan 29, 2001 1:49 pm

So how about Changi?

I heard CIAS/SATS/CAAS (whichever is correct) charges somewhere between SGD3000-SGD5000 per hour for an aircraft a few years ago. Is it still the same price today or has it increased/decreased now? Wondering......hmmmmmm
 
Tom in NO
Posts: 6725
Joined: Thu Nov 11, 1999 10:10 am

RE: How Much Do Airports Charge Airlines...

Tue Jan 30, 2001 10:51 am

I hate to do this to you guys, but I need to pass along a quick airport economics lesson, especially to those who are interested in, as we call them "rates and charges", those at US airports. Airports outside the country may be different.

Here in the US, there are basically three ways rates and charges are computed. They are:
1) compensatory
2) residual
3) hybrid of the above

Each of the above assumes that the following are examples of how airports generate income:
1) landing fees
2) space rental
3) concession fees
4) garage fees
5) rental car fees
6) other tenant fees

The way that most airport compute their landing fees is to assume a certain level of revenue (income) from ALL areas EXCEPT airline landing fees. Tat amount is totalled up, and the number set aside for the moment. The amount that is needed to then operate the airport for the given period of time is then figured in.

Then, an equation is set up:
Amount needed to operate the airport MINUS the total non-landing fee revenues EQUALS the amount needed to be made up via landing fees.

From that number, an landing fee is generated. At MSY, we consult with each of our signatory airlines (airlines that sign long-term leases, and have a say in airport development), then write up the landing fees, which are agreed to by the airlines.

As an aside, MSY used to have the second highest landing fees in the US (behind JFK), but they have since come down.

Hope this helps, and wasn't too confusing.

Tom in NO (at MSY)

P.S. I would imagine, based on my knowledge of rates and charges, that a major reason reason behind the high overseas landing fees have to do with new airports, and probably construction fees that went way over budget.
"The criminal ineptitude makes you furious"-Bruce Springsteen, after seeing firsthand the damage from Hurricane Katrina
 
timz
Posts: 6100
Joined: Fri Sep 17, 1999 7:43 am

Landing Fees Pay Operating Costs Only?

Wed Jan 31, 2001 9:09 am

So who pays the non-operating costs at MSY-- say, if they need to extend the runway or something? What if MSY decided they needed a new airport? Surely landing fees at the new airport would have to contribute to paying off the construction bonds?
 
Tom in NO
Posts: 6725
Joined: Thu Nov 11, 1999 10:10 am

RE: How Much Do Airports Charge Airlines...

Wed Jan 31, 2001 1:27 pm

Typically, most non-operating costs are due to either construction, or the paying down of revenue bonds from earlier construction. These costs are among those included in the airport's overall costs for the year, hence they are passed on to the tenants (who, of course, pass them on to the paying passenger).

As for construction, and this varies according to the type of poject, the FAA will pay from 75 to 90 percent of the project cost, with the airport picking up the rest (and these are also included in the budget).

Occasionally, for projects that will not directly affect the aeronautical use of the airport, or the traveling public in accessing the airport, the airport will have to pick up the entire cost. An example of this would be an on-airport hotel, such that MSY is about to embark upon.

Airport income and expense budgeting is not an excat science. There's a lot of planning involved, using past historical budgets and expense reports, crystal ball gazing into the future, etc. One thing to note is that while it's tough to exactly balance the airport budget, there are items in place to either increase revenues from year to year in case of shortfalls, or has happened before, give tenants credits for overages.

This is a very complex subject (MSY has 8-odd people in our Accounting department, that this stuf is all they do), and let me tell you, some of it is tough to understand.

Tom in NO (at MSY)
"The criminal ineptitude makes you furious"-Bruce Springsteen, after seeing firsthand the damage from Hurricane Katrina

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