How do airport user charges affect the airport-airline relationship and airline’s operations?

Week 5:

In what ways can an airport’s level of service (LOS) standard be measured and

evaluated by airport managers, and what are current air travellers’ expectation of

services for an international gateway hub?

Week 6:

Discuss why airport security has become a key issue for airport management, and

identify the main security activities that can be found at the typical international

airports.

Week 7:

Using the Asia-Pacific LCCs as the examples, and discuss how their growth has

changed the LCC-Airport relationship recently.

Week 8:

How do airport user charges affect the airport-airline relationship and airline’s operations?

Airport user charges refer to the fees paid by airline for facilitates and services offered by

airports. In general, airport access is a prerequisite for an airline’s competitiveness and success.

This cardinal requirement applies to both traditional airlines like Full Service Airlines (FSAs), as

well as, LCCs. For this reason, airports and airlines are the major and most significant exchange

partners in the aviation industry (Oum & Fu, 2008). However, their reciprocal systematic

connection which is essentially their actual business linkage is usually characterized by

skepticism and emotional issues. Airport user charges are one of the major sources of the issues

that characterize airport-airline relationship.

Even though, the International Airport Transport Association (IATA) prohibits

discrimination on airport user charges, airports retains control over aviation fees to a certain

extent. This means that operations of a new airline seeking to enter a given region can be

adversely affected where Airport user charges are too high for new entrants. Likewise, the

operations of an already well-established airline seeking to expand its services may be adversely

impacted upon by high Airport user charges. As a result, for LCCs whose selection of airport is

relatively flexible may engender constant switching of airports a trend that may easily end up

straining airport-airline relationship.

Since airport user charges especially aeronautical service fee is a major cause of conflict

of interests and other problems that characterize airport-airline relationships, various airports

have strived to create close relationships with airlines.

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