360
Opinion of the Court
lines occupy).4 General aviation, however, is charged at a lower rate. The Airport recovers from that user group a per gallon fuel flowage fee for local aircraft and a landing fee for aircraft based elsewhere. These fees account for only 20% of the airfield costs allocated to general aviation.
In relation to costs, the Airport thus "undercharges" general aviation. At the same time, measured by allocated costs, the Airport vastly "overcharges" the concessions. The Airlines pay a cost-based per square foot rate for their terminal space. The concessions, however, pay market rates for their space.5 Market rates substantially exceed the concessions' allocated costs and yield a sizable surplus.6 The surplus offsets the general aviation shortfall of approximately $525,000 per year, and has swelled the Airport's reserve fund by more than $1 million per year.
B
Using the "Buckley methodology" just described, the Airlines and the Airport periodically negotiated and agreed upon fees to be charged through December 31, 1986. Following a new rate study made in 1986, the Airport proposed increased fees beginning January 1, 1987. App. 193 (Plaintiffs' Exh. 6). The Airlines objected to the higher fees and failed to reach an agreement with the Airport. Ultimately, the County Board of Aeronautics adopted an ordinance unilaterally increasing the fees.7 On the effective date of
4 The Airlines are also charged for the cost of providing "crash, fire, and rescue" services, and amortization fees for assets acquired by the Airport.
5 Most concessions pay 10% of their gross receipts as rent for space.
6 For example, the Airport's annual net revenues from 1987 to 1989 ranged from approximately $1.6 million to $1.9 million. App. 278-279 (Plaintiffs' Exhs. 301 and 355).
7 The ordinance increased aircraft landing fees by $.20 per thousand pounds, and increased terminal rent charges by $6.67 per square foot for prime heated and air-conditioned space, $.59 per square foot for nonprime air-conditioned space, and $1.84 per square foot for nonprime, heated, nonair-conditioned space. The ordinance also decreased aircraft parking fees by $.12 per thousand pounds. 738 F. Supp. 1112, 1115 (WD Mich. 1990).
Page: Index Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: October 4, 2007