When it rains it pours

[wnbubbleboy]

The state is assessing airlines operating at Baltimore-Washington International Thurgood Marshall Airport $25 million in new charges, including $13 million it says is owed by dominant carrier Southwest Airlines.

Airport officials said the additional charges were being imposed to cover increased expenses, including higher security and utility costs. In Southwest's case, the state said it found that it had been undercharging the airline for its new terminal space.

Southwest Chief Financial Officer Laura H. Wright disclosed the "surprise audit settlement charge" that it is negotiating with the Maryland Aviation Administration during the airline's first-quarter earnings conference call yesterday. The charge is in addition to the $32 million in rent and fees Southwest paid the airport in fiscal 2007, an amount BWI officials expect the airline to also owe this year.

The additional charges could affect Southwest's growth plans at BWI, given the industry's current challenging financial climate, company spokeswoman Whitney Eichinger said.








http://www.baltimoresun.com/business/bal-b...0,3645817.story

 

[mga707]

WN has played hardball with airports that want to screw over their cash cow before (ELP), and I wouldn't be surprised to see them do it again.

 

[hp_fa]

BWI is not ELP as far as size and importance. Also, I would expect that if WN does indeed owe the money that BWI will have learned lessons from the way US screwed over PIT and the way NW may be trying to screw over MSP.

 

[wnbubbleboy]

With the risk of getting to polictal outside of the water cooler:

Marylanders elected a new democratic governer who's drive to be the next presidental canidate and is instituting policy that is driving people and business out in droves.

All I can say it's going to get a lot worse here. The state is sorta of a tick that sees us as a big cash cow to bleed.

 

[whlinder]

With the PHL operation BWI surely doesn't suck as much traffic from DE and PA as it used to. With UA bleeding may as well pick up the hub and move it over to IAD. Who needs the new terminal anyway?

 

[jimntx]

We all want government to be responsible and spend only what is coming in. No deficit spending. Make everyone pay their fair share--no tax breaks for the wealthy, for instance. But, when it is our own ox being gored, well that government has just become the reincarnation of the Soviet Union.

The questions to ask...
1. Is the Airport Authority (or whoever is responsible for operation of BWI) trying to eliminate a deficit?
2. Are they trying to raise funds for improvements to the facility, or provide funding for a bond sale which will finance said improvements?
3. O,r are they trying to make the airport a profit-making operation?

If the answer is anything but #3, then the fee increases are probably justified. We all (me included) scream about our taxes until it is our house on fire. Then we want the fire department to show up, pronto.

Why is it that we as airline employees weep and wail about the ridiculously low fares that passengers are paying? And, I agree that fares are too low. Yet, when an airport operation tries to raise fees to break even or pay for improvements, then they are just thieves and Communists.

Why should the taxpayers of Maryland subsidize airline operations at BWI? Airport authorities have always been set up to be self-supporting entities with a minimum of government funding--whether that government be city, state, or Federal. Government funding for airports has traditionally been upfront, "let's get this baby built" money, not daily operational funding. And, if your argument is that this is the wrong time to be raising fees because we are all struggling with the fuel price issue, do you think that the airport operation is immune to the current inflationary pressures?

I'm not trying to start an argument or even disagree with you necessarily, it's just that we have only heard one side of the story.

 

[wnbubbleboy]

The state has struck a deal with the airlines that use Baltimore-Washington International Thurgood Marshall Airport not to collect $32.2 million of the $57.3 million in terminal rents and other fees it undercharged them over the past four years.

The Maryland Aviation Administration said it plans to recover only $25.04 million of those uncollected fees over the next five years. Southwest Airlines, BWI's dominant carrier, has agreed to pay $12.2 million of that sum - in exchange for reduced rents and landing fees in the future, company spokeswoman Whitney Eichinger said.

Before reaching that agreement, Southwest had said last month that BWI could become too expensive an airport for the low-cost carrier.

"We negotiated a settlement, and we'll pay it out over five years, in exchange for significant cost reductions at the airport," Eichinger said.

One major reason for the shortfall is that BWI officials overstated the square footage of the terminal they built for Southwest, which meant it charged the airline less rent per square foot than it had intended after the terminal opened in May 2005.

The $12.2 million Southwest has agreed to now repay the airport is in addition to the $32 million in rent and fees it paid BWI for operations in fiscal year 2007, BWI spokesman Jonathan Dean said.

Under a five-year agreement BWI signed with the airlines in 2003, terminal rents and landing fees could be increased as airport operating and maintenance costs rose. But BWI officials miscalculated operating expenses, particularly security and utility costs, Dean said. Also, capital projects and related interest payments were overlooked in calculating the fees each airline owed, according to the MAA. The $57.3 million in undercharges covers fiscal years 2004 through 2008.





http://www.baltimoresun.com/business/bal-b...0,3187061.story