Landing Fees

[joefremont]

Landing fees is an idea that keeps coming up and I had an idea on it I thought I would put forward. Landing fees of course cover more than just the touch down, they cover gate charges, baggage claim, security fees, etc.

The basic landing fee is based in the MLW of an aircraft and the size of the airport and would be charged on a per 1000 kg basis, with a minimum fee also based on the airport size and could increase based on how busy the airport is. The could be on the order of:

Super Airport Per 1000kg: 16v$ Minimum: 400v$
International Per 1000kg: 12v$ Minimum: 200v$
Intercontinental Per 1000kg: 8v$ Minimum: 100v$
Regional Per 1000kg: 6v$ Minimum: 50v$
Municipal (and others) Per 1000kg: 4v$ Minimum: 25v$

These fees would be applied to flights, half to the arriving and half to the departing. However you could reduce them by leasing gates on a monthly basis. The gates would be of the same size ranges as maintenance centers and would be able to handle up to 4 arrivals and 4 departures per day each and would reduce the landing fee by 50%, basically by waving the fee on departure.

The lease rate is still to be determined but I am thinking along the lines that with a 25x multiplier a gate should pay for itself with after 8-12 flights per month.

I would not cap the number of gates at could be rented at an airport although the cost may go up based on the number rented. I could foresee some airline trying to corner the market on gates at an airport and that would not make me happy.

For diversions and technical stops the departure fee could also be waved as long as no cargo is loaded or unloaded and the flight leaves within a short time, probably 4 hours.

Here are some example landing fees I calculated based on our more popular aircraft.

https://docs.google.com/spreadsheets/d/ ... sp=sharing

And for your reference, the landing fee listed here for super airports is very close to what San Francisco International (KSFO) charges.

Ideas?

[YoloWingPixie]

Looking at the numbers I think this is fantastic! The prices definitely seem fair. For instance, it looks like you would save half your landing fees landing at LaGuardia vs JFK which is nice.

+1 on this

[DesertSaker1]

This would be so cool. I love the idea about leasing gates!

[Mesquaki]

+2 on this as well. It is a solid idea.

[joefremont]

Thinking on how this would work with fleets and partner airlines. I figure a gate would be rented by a specific fleet and there would be a setting on weather other fleets in the VA and/or partner airlines can use it. I don't really want these to become a profit centers but should be able to offset the cost. So maybe for other fleets and for partners you could select Yes, No and some combination that covers 1/4 and 1/2 of what the owning fleet pays for rent for the day.

Edit: On further though, I should not make that too complicated. I think the way you will do it is you can set for other fleets or partners is you can set it to 'not allowed' or a percent from 0% to 25% in 5% steps. The money you will receive will be a percentage of the landing fee. Since you would be able to save up to half, at best you should share the savings 50/50 with the partner. Also since it will be multiplied money the party with the gate will get the lower of their multiplier or the partners multiplier, with maybe a max of 100x.

Also maybe will just worry about keeping track of four arrivals a day per gate. As long as the aircraft arriving arrived at the gate within the limit, we won't worry about if more than four leave the same day, as long as when the aircraft departs the gate is still leased.

[YoloWingPixie]

Perhaps you could simplify management even more and attach the rates to the VA Office rates? Thereby also requiring an office to rent gates. The gates could be rented out of the office as well.

[joefremont]

Perhaps you could simplify management even more and attach the rates to the VA Office rates? Thereby also requiring an office to rent gates. The gates could be rented out of the office as well.

Possible, So far offices are thought of a place where a representative of the company would work out of and would 'negotiate' things on behalf of the airline. Biggest impact is that your parking rates are cheaper if there is an office. But a maintenance center or warehouse also counts, since you would have employees there also. It is totally reasonable that if there is an office that landing fees and gate leasing would also get a discount.

[joefremont]

Did some poking around. Noticed that in the last 60 days there have been 7 flights by Cessna 172's into super airports, these flights had an average profit of 348v$. If I was to implement a 400$ minimum landing fee for super airport that would wipe them out. Now KSFO in its document shows a minimum landing fee for general aviation aircraft which is half that of commercial aircraft so we might do a rule where if your using a single engine piston aircraft of less than 2500 kg MLW then the minimum fee is half the normal which would not completely wipe out the profit, just most of it.

Thoughts?

[YoloWingPixie]

Did some poking around. Noticed that in the last 60 days there have been 7 flights by Cessna 172's into super airports, these flights had an average profit of 348v$. If I was to implement a 400$ minimum landing fee for super airport that would wipe them out. Now KSFO in its document shows a minimum landing fee for general aviation aircraft which is half that of commercial aircraft so we might do a rule where if your using a single engine piston aircraft of less than 2500 kg MLW then the minimum fee is half the normal which would not completely wipe out the profit, just most of it.

Thoughts?

I feel like the lack of profitability of flying a 172 into KSFO is in the spirit of the landing fee idea though. That's a rather extreme case and it would make sense you would need higher ticket prices to cover that landing fee, or you would need to get a little more creative with your route selection and go to a nearby airport. KOAK, KHAF, KSQL all serve the same immediate geographic area and that C172 flight would be profitable to those airports.

[Mesquaki]

Did some poking around. Noticed that in the last 60 days there have been 7 flights by Cessna 172's into super airports, these flights had an average profit of 348v$. If I was to implement a 400$ minimum landing fee for super airport that would wipe them out. Now KSFO in its document shows a minimum landing fee for general aviation aircraft which is half that of commercial aircraft so we might do a rule where if your using a single engine piston aircraft of less than 2500 kg MLW then the minimum fee is half the normal which would not completely wipe out the profit, just most of it.

Thoughts?

Having a C172 in our fleet ourselves, we have no issue with the above. We'd rather you keep it as easy and simple for yourself for future updates and additions. It is just as simple for us to relocate the C172 to a smaller airport in the area and stick to routes around a larger airport as mentioned above. If we have to fly to a super airport to link up with a route, that is on us and we have no issue paying the fees set out and losing the profit on that flight. Besides, the C172 for us is just to relax and enjoy a certain area. Easy for us to hop in our airliner and recoup the loss.

[joefremont]

Been contemplating some costs for gate leases. One thing to remember in these discussions is that the landing fees are going to be applied to the base costs of the flights before the revenue is multiplied, while the gate lease costs are going to be paid using post multiplier money. My thoughts are that an airline using a 25x multiplier should break even on leasing a gate when its used from 6-12 times per month. The gate sizes should correspond to the maintenance center sizes which are:

Small: Up to 8000kg DOW (2 size points)
Medium: 72000kg (6 size points)
Large: 162000kg (9 size points)
Extra Large: 288000kg (12 size points)

Based on the above criteria, one possible formula for the cost would the max DOW size in kg, multiplied by the landing fee per 1000kg divided by 10, so the monthly cost at a super airport for each gate size would be>

Small $12,800
Medium $115,200
Large $259,200
Extra Large $460,800

For a Municipal airport (our smallest class) those same fees would be:

Small $3,200
Medium $28,800
Large $64,800
Extra Large $115,200

Looking at these numbers and looking at the size classes, think it might make sense to add an additional gate size in between the current small and medium, maybe reclassify 'small' as 'GA Small' and have the gate sizes:

GA Small: Up to 8000kg DOW (2 size points)
Small: 32000kg (4 size points)
Medium: 72000kg (6 size points)
Large: 162000kg (9 size points)
Extra Large: 288000kg (12 size points)


Thoughts?

[YoloWingPixie]

My thoughts are that an airline using a 25x multiplier should break even on leasing a gate when its used from 6-12 times per month.

I understand the argument here, however I think this makes gates ultimately only beneficial for a hub airport as I would imagine the majority of airlines probably *don't* go to the majority of their spokes 12 times a month. Do you want gates to be applicable to all the regularly scheduled spokes? If so, I would think that the prices should be half of what is proposed. If not, the pricing makes sense to me.

[joefremont]

My thoughts are that an airline using a 25x multiplier should break even on leasing a gate when its used from 6-12 times per month.

I understand the argument here, however I think this makes gates ultimately only beneficial for a hub airport as I would imagine the majority of airlines probably *don't* go to the majority of their spokes 12 times a month. Do you want gates to be applicable to all the regularly scheduled spokes? If so, I would think that the prices should be half of what is proposed. If not, the pricing makes sense to me.

it is true that airlines are going to have to be very strategic about how many gates they lease or your going to lose money. i just did a quick check in the database. In the last 30 days there have been about 150 occurrences of an airline having 10 or more arrivals at a given airport, and that was by about 75 different airlines, so 2 on average. For airlines that are using a multiplier above 25x it will be more lucrative but airlines are going to have to be more careful.