Industry Research

INDUSTRY OMEN: LAX Fees For Operators Soar By 33%

Posted on September 22, 2010 by LCT Staff - Also by this author - About the author

The latest trip ticket fee hike at the Los Angeles International Airport disproportionately slams California chauffeured transportation operators and shows how regulators are becoming bolder in recouping lost public revenues.

LOS ANGELES — The trip fee for a limousine operator to access LAX will jump from $3 to $4 per trip starting Oct. 1 as the airport tries to boost revenues to cover construction costs and offset losses from a decline in passenger traffic since 2000.

And the fee increase could potentially be the first of several to come since the Board of Airport Commissioners, which approved the fee hike resolution Aug. 9, plans to review fees twice a year. The next review is scheduled for May 2011.

During meetings with operators and members of the GREATER CALIFORNIA LIVERY ASSOCIATION this summer, Ryan Yakubik, director of finance, said the fee increases are designed to “fully recover the costs of operating and maintaining the airport facilities used directly by commercial ground transportation companies who benefit and generate income from their access to the airport and its passengers,” according to a GCLA report. Ryan described these fees as “privilege fees for companies that benefit from and rely upon the presence of the entire Airport, such that the company could not remain in business were it not for LAX.”

The LAX decision comes despite a submission to LAX Board of Commissioners by Los Angeles operator Jonna Sabroff on Aug. 9 titled “Comparison of Current & Proposed Commercial Vehicle Assessment by LAX,” that was compiled based on 2009 LAX data.

The comparison shows that limousine trip ticket fees generated $1,556,665, or $3 per trip, for 511,207 trips in 2009. Taxicabs, however, netted $667,604, or 50 cents per trip, for 1,355,208 trips in 2009. Such a disparity means limousine companies in 2009 paid 30% of trip ticket costs but took up only 16% of commercial ground transportation access at LAX. Taxicabs paid 10% of trip ticket fees for 40% of total airport ground transportation access. What’s more, taxicab trip ticket fees were not increased at all under the latest measure.


LAX also blatantly discriminates against limousine operators when it comes to ease of access and client service. Taxicabs have designated curb space for pick ups and drop- offs, and do not have to pay parking fees. LAX does not provide limousines with any designated curb space for pick ups and requires chauffeurs to pay for parking and walk into terminals to greet clients. Parking in the inner loop area parking decks is limited and inadequate.

To improve access quality and discourage future fee hikes, Jonna Sabroff, President of Integrated Transportation Services, Inc., (ITS) has outlined several strategies for Southern California limousine company owners to consider:

• Understand the background for why LAX is increasing fees. LAX has increased its debt by billions of dollars to pay for the Bradley West expansion and other projects. This will result in hundreds of millions of dollars in additional debt service payments that cannot be serviced by the airlines alone. Compounding the problem is the fact that LAX passenger traffic still has not recovered from the terrorist attacks of Sept. 11, 2001. In 2000, there were more than 67 million passengers who used LAX compared to fewer than 57 million passengers last year.

• Start lobbying efforts now to prevent LAX from continuing to over-assess the limousine industry. “We must present facts to the airport staff and commissioners, City Council members and the mayor if we are to gain their support and fair treatment.”

• To accomplish that, limousine companies must do what other business groups do. Taxi franchises, restaurants, hotels, and attractions join together to hire professional lobbyists and attorneys to represent them in regulatory and fees assessment matters. “We cannot continue to handle these matters on an ad hoc basis as we have attempted unsuccessfully to do in the past.”

• What competent business owner would decide to pay $44,000 per month in additional fees instead of $5,000 per month for representation? Limousine companies using LAX will spend an estimated $528,000 per year based on 2009 revenue.

• Start lobbying for improvements in the way limousine companies work with the Airport to improve the passenger experience for first and business-class passengers at LAX.

• Lobby for designated curb space for limousine companies at LAX for pick ups.

• Develop a trip ticket payment plan for companies wishing to avoid trip ticket booth and save time at LAX.

• Stop the overly aggressive police enforcement by against legal limousine operators at LAX; instead we need police to focus on ridding the airport of illegal operators.

• Work with LAX to locate parking for limousine companies to cut down on the congestion in the holding lots for all vehicles and in particular the larger vehicles such as executive vans and mini-coaches.

Sources: Martin Romjue, LCT Magazine; GCLA

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