Airports want to raise fees
TEXT OF STORY
MARK AUSTIN THOMAS: Have you bought a plane ticket lately? If so then you know lots of airlines are hiking fares. Southwest has increased its ticket price five times this year alone. It could get worse. Many airports are trying to squeeze higher landing and terminal fees from the airlines. Steve Tripoli says that means “you know who” could be left holding the bag.
STEVE TRIPOLI: Airport finance expert Gerald Dillingham says terminal rents go up for three reasons: to pay for safety improvements, gate expansions and new retail and parking areas.
GERALD DILLINGHAM: And you have to make a distinction between what’s needed and what might be wanted.
So the friction’s over which improvements airports want airlines to pay for. Douglas Kilcommons analyzes airport finances for Fitch Ratings.
DOUGLAS KILCOMMONS: It just becomes a complicated situation when the airlines feel, that the existing space at the existing airport is not being fully utilized, and they feel that there’s no benefit for the higher fees.
Cost-conscious airlines are sensitive about that because it can directly affect their business. Again, Gerald Dillingham.
DILLINGHAM: To the extent that the airlines have to pay more, then you’re going to probably see that reflected in ticket prices at some point.
And in a cutthroat competitive environment that makes airlines more likely to push back when airports try to raise the rent.
I’m Steve Tripoli for Marketplace.
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