Tuesday, June 9, 2009

Um, let's look at some basics of economics - Ontario International Airport proposes to increase fees

The Riverside Press-Enterprise has been covering the economics of Ontario International Airport. On March 31, I quoted from a March 29 article that noted that Ontario International Airport has seen a huge decline in passenger traffic, which occurred right after its airport expansion. As a result of this, the airport has jacked up its landing prices, which means that airlines have no inclination to land here.

Well, the Press Enterprise has returned to the story. And the airport, suffering from declines in traffic...wants to INCREASE its landing fees.

Ontario International Airport, already a costly alternative for airlines looking to do business in Southern California, will propose raising its airline landing fees by nine cents to $2.79 starting July 1.

The airport has already increased parking rates and cut costs, but airport spokeswoman Maria Tesoro-Fermin said the fee increase is expected to offset the airport's revenue losses -- a result of airline cutbacks.

Needless to say, the airport's remaining customers aren't thrilled.

David Castelveter, spokesman for the Air Transport Association, said now is not the time to charge airlines more to do business at airports when the industry is poised to lose billions of dollars to fuel costs, business travel cutbacks and a marketplace of travelers unwilling to spend.

"It's like being nibbled away by geese," he said of incremental fee increases that are sometimes just several pennies more than they were before. "It all adds up ... every penny matters now."

Obviously the airport is hoping that a nine cent fee increase won't be big enough to cause other customers to follow JetBlue out of the airport. But we'll see.

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