US airports, like airlines, can levy peak charges
An airline challenge to the 2008 Department of Transportation rule allowing airports to hike landing fees during peak times, was rejected by a federal appeals court yesterday.
- A federal appeals court rejected an airline challenge to the 2008 Department of Transportation rule allowing airports to increase landing fees during peak times.
- Airlines have been imposing higher fares for travel during peak times since November 2008, expanding the definition of peak times beyond traditional holiday periods.
- The rule was intended to encourage airlines to schedule flights more efficiently during peak times by reducing the number of flights and using larger aircraft.
- The US Court of Appeals for the District of Columbia Circuit dismissed objections from the Air Transport Association (ATA) that the rule encouraged discriminatory pricing and that the Department did not have the authority to impose such a regulation.
- ExpressJet, JetBlue, United Airlines, Continental, and American Airlines experienced significant gains in their share prices as the US corporate reporting season began with positive earnings from Alcoa and Intel.
- This information is based on the daily share price movements of selected airlines in North and South America.
Of course the challenge had been on rocky ground ever since the airlines themselves began not only imposing higher fares for travel during peak times in Nov-2008, but expanding the list of when peak times are peak beyond the usual holiday periods. Airports have yet to impose the peak-period pricing.
The rule was designed to force airlines to efficiently schedule aircraft during peak times by trimming the number of flights and using larger aircraft. In a 27-page opinion, The US Court of Appeals for the District of Columbia Circuit rejected the ATA objections that the rules encouraged discriminatory pricing, saying the department showed creativity "that should be welcomed on its merits, not spurned for its novelty." ATA also said the Department did not have the authority to impose such a regulation.
See related report: House tackles ancillary revenues at hearing today
Buoyant day on the market
In share trading yesterday, ExpressJet (+6.6%) bounced back from falls the previous day, while JetBlue (+5.3%), United Airlines (+4.8%), Continental (+4.5%) and American Airlines (+4.1%) were all strongly higher as the US corporate reporting season started with a bang with healthy earnings from Alcoa and Intel.
North & South America selected airlines daily share price movements (% change): 13-Jul-2010
Source: Centre for Asia Pacific Aviation & Yahoo! Finance