Airlines Sue LAX over Doubled Maintenance fees

Three airlines sued the city of Los Angeles in federal court this week, alleging that a move by airport commissioners to double terminal maintenance fees at LAX violates long-term leases they signed with the city in the 1980s.

The new charges, set to go into effect Feb. 1, are retroactive, requiring United, American and Continental airlines to pay at least $15 million more in maintenance costs for the 2006 calendar year, according to the suit, filed late Thursday in U.S. District Court by Los Angeles-based Paul, Hastings, Janofsky & Walker.

Over the remainder of the 40-year leases, the increases would amount to an additional $500-million charge for carriers at Los Angeles International Airport operating under long-term leases, the complaint alleged.

Los Angeles World Airports, which operates LAX, says it needs the additional money to pay for increased security costs incurred since the Sept. 11, 2001, terrorist attacks and to upgrade systems and terminals at the aging airport. But carriers say the terms of their leases require that both parties agree to the formula used to calculate maintenance fees.

"The leases say that the methodology has to be one that is accepted by mutual agreement of the parties," said Robert S. Span, an attorney with Paul Hastings. "It's our belief that LAWA cannot unilaterally change the way it calculates" these charges.

The suit is the latest development in a battle between carriers and the city's airport agency over higher terminal fees at LAX.

Low-cost carriers in Terminals 1 and 3 are expected to file a complaint with the federal Department of Transportation next month, alleging that a move by commissioners to quadruple their rents is discriminatory.

The suit by the larger carriers alleges that the new fees require carriers to pay to maintain portions of the airport that they do not occupy, such as roadways used by private vehicles, shuttles and taxis.

Airlines also contend the airport agency is incorrectly calculating maintenance costs.

"We think there's been double counting of some items," he added.

In a strongly worded written response, city officials said the leases require the carriers to pay "full costs of maintaining and operating LAX facilities." The officials added that the airport agency has paid most of the security cost increases since 9/11 even though the airlines have acknowledged responsibility for them.

"We are disappointed by the action taken by our tenants, who have chosen to pursue what could be protracted and costly litigation for all of us," the statement said. It added that LAX has the lowest terminal rents and fees among the nation's major airports.

But the three carriers who brought the suit also argued that the airport agency cannot raise maintenance costs to fund upgrades at LAX.

"We really would like to see L.A. be a world-class airport," said Megan McCarthy, a spokeswoman for United. "But we see that as a separate discussion" from maintenance and operational costs.



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