September 9, 2008

Airport Fees in Focus in Orlando, Fla.

Fees airlines pay to airports have suddenly come into focus as U.S. carriers struggle with rising jet fuel costs, industry observers said.

Aviation consultant Darryl Jenkins told the Orlando (Fla.) Sentinel that airlines were especially concerned with airport fees at tourist destinations, where profit margins for the airlines are frequently lower than they are at business destinations.

Orlando International Airport has recently negotiated contracts offering various incentives to Aer Lingus, British Airways, Lufthansa and Virgin Atlantic. The discounts generally last two years, but major domestic airlines have recently asked for a share of the largess.

The airport's largest carriers have asked for a "most-favored nation" clause to be inserted into their next long-term contract with the airport, the Sentinel reported. The clause would guarantee the airlines pay the airport's lowest rental rates.

The incentives vary from airline to airline. In total, the airport is losing $15,000 a week in reduced fees, the report said.

But, "you've got to factor in the whole picture," airport spokeswoman Carolyn Fennell said.

Part of the equation is the hundreds of millions of dollars tourists bring to the community,

The incentives are "a cost of doing business," Fennel said.