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Going it alone: Establishing rates and charges by ordinance. A brief guide
Journal of Airport Management,
10
(3),
253-265
(2016)
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.
Keywords: airport rates; rates and charges; rates by resolution; ordinance-based rates; compensatory rates; landing fees; terminal rents
The full article is available to subscribers to the journal.
Author's Biography
David Y. Bannard is a partner with Foley & Lardner LLP. His practice is focused on representing airports in a wide variety of matters, including negotiating use and lease agreements, financings, regulatory and rate-setting issues, leasing, financing, work-outs, safety management systems and concessions agreements. An experienced bond lawyer, he serves in a variety of capacities for revenue bond financings, including as Bond Counsel to the Massachusetts Port Authority and the Greater Orlando Aviation Authority. David has over 20 years of experience with airport law, in both private and public sector practice. He currently represents a wide variety of airports across the USA, ranging from large to small hubs. Before joining Foley, Mr. Bannard served as the Deputy Chief Legal Counsel of the Massachusetts Port Authority. He oversaw Massport’s transactional legal work, participated in the issuance of nearly US$2bn of revenue bonds, and was charged with legal oversight of Massport’s financial matters, as well as over most significant airport development projects. He also acted as Massport’s legal liaison to the Central Artery/Tunnel (‘Big Dig’) project. David currently serves as treasurer of the Federal Bar Association’s Transportation and Transportation Security Section and is past chair of the ACI-NA Associates Board. He holds his law degree cum laude from Boston College Law School, where he was an editor of the Boston College Law Review, as well as a Masters in music from Northwestern University and a Bachelors in music education from Indiana University.
