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Going it alone: Establishing rates and charges by ordinance. A brief guide

Author

Listed:
  • Bannard, David Y.

Abstract

This paper examines the federal legal requirements relating to airport ratemaking in the USA and demonstrates that establishing rates by ordinance or resolution is not only consistent with federal law, but also provides certain benefits to airport operators. Airport operators are permitted to establish rates and charges for the use of their airport by air carriers, by ordinance — an agreement between the airport and the carriers serving the airport is not required. Rates established by ordinance must be fair, reasonable and not unjustly discriminatory and should be established on a compensatory basis; however, different methods may be used for recovering the airport’s costs. Before establishing a new method for imposing rates and charges, and generally before establishing new rates periodically, an airport operator must consult with the air carriers using the airport. Although establishing rates and charges by ordinance is complicated and challenging, it provides necessary flexibility for airport operators and also establishes the baseline when seeking to negotiate an agreement with the air carriers operating at the airport.

Suggested Citation

  • Bannard, David Y., 2016. "Going it alone: Establishing rates and charges by ordinance. A brief guide," Journal of Airport Management, Henry Stewart Publications, vol. 10(3), pages 253-265, June.
    • Handle: RePEc:aza:jam000:y:2016:v:10:i:3:p:253-265
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    More about this item

    Keywords

    airport rates; rates and charges; rates by resolution; ordinance-based rates; compensatory rates; landing fees; terminal rents;
    All these keywords.

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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