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Wed, Mar 19, 2003

50% Higher Regulatory Expense at LAX

Somebody Has to Pay -- And Ultimately, It's You!

The Los Angeles Board of Airport Commissioners approved filing a request on Tuesday, a request with the Federal Aviation Administration (FAA), to increase the passenger facility charge (PFC) at Los Angeles International Airport (LAX) to $4.50 from the current $3, effective June 1, 2003. The charge, collected by airlines from each enplaned passenger, funds noise mitigation and residential acquisition in communities surrounding LAX.

The FAA approved the $3 charge in 1997, and airlines began collecting the charge in February 1998, to raise a total of $150 million for soundproofing and residential acquisition. Los Angeles World Airports (LAWA), the Los Angeles City department that owns and operates LAX and three other Southern California airports, then began its residential soundproofing program in Los Angeles, as well as a matching grants program for the soundproofing programs of the cities of El Segundo and Inglewood, and Los Angeles County.

LAWA later amended the application in 1998 to add a land acquisition component to its program. The FAA granted LAWA permission to collect the $3 charge through June 2004, raising an additional $290 million for residential land acquisition. This second amendment asking for an increase to $4.50 per passenger reflects higher costs for soundproofing residences and acquiring residential property. If the FAA approves this second amendment, LAWA expects to receive an additional $260 million for these programs, including $80 million for residential soundproofing in Los Angeles, $10 million for soundproofing grants in neighboring cities, and $170 million to acquire properties in the Manchester Square and Belford residential areas.

If approved by the FAA, collection of the charge by airlines for this second amendment would begin June 1, 2003, and end July 1, 2006.

FMI: www.faa.gov; www.lawa.org

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