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AIRLINES GET CHANCE TO SHARE VIEWS ON FEE HIKES

Sept. 16, 2002 – Airline representatives will get a chance to air their views on coming increases in airport fees at a Port Authority public meeting set for Tuesday.
The meeting, scheduled for 9 a.m. in the conference room at the Port Authority building across from the Cyril E. King Airport terminal on St. Thomas, is expected to draw officials of the territory's signatory carriers — American Airlines, Delta Air Lines, Continental Airlines and US Airways.
Under the new aviation rate schedule approved by the VIPA board, landing fees for signatory airlines will increase from $2.50 to 3.38 per 1,000 pounds, VIPA's executive director, Gordon Finch, said in a release. The 35 percent increase is scheduled to take effect with the start of the V.I. government's Fiscal Year 2003 on Oct 1.
The per passenger fee VIPA charges the airlines will go up $10. The airlines "currently pay $22 per passenger," Finch said. "With the increase, they will now have to pay $32."
Finch said in the release that the Port Authority, under its signatory agreement with the national airlines serving the territory, is not allowed to make a profit on aviation revenues; any surplus must be returned to the carriers. At the same time, the airlines have agreed to absorb any losses that VIPA might experience.
Because of last year's Sept. 11 terrorist attacks on the mainland and the resultant fall-off in air travel, Finch said recently, the Port Authority's aviation system will finish the current fiscal year about $3.3 million in the red.
Increasing the landing fees has met with stiff opposition from the private sector. (See "Airport fee hikes: solution or further problem?)
Finch said this is the first time in six years the authority has been "compelled to raise its landing and passenger fees." The last time the landing fees were raised, he said, was in 1996, and that was because insurance costs skyrocketed after Hurricane Marilyn. For the last three years, he said, the Port Authority has reduced the landing fees, because of a "steady increase in the number of passengers visiting the territory, which generated a surplus in aviation revenues."
Finch said because of Sept. 11, the territory's airports, like others across the nation, were "dramatically impacted," resulting in a 9 percent reduction in aviation revenues, especially on St. Croix, which experienced a 12.8 decrease in traffic flow.
According to Finch, the coming increase in landing fees "should not have a significant impact on the cost of airline tickets." Landing fees typically account for only about 2 percent of the cost of an airline ticket, he said, and for this reason, "some airlines do not lower ticket prices when we lower our rates."

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