IBJNews

Pact cuts costs for airlines at Indianapolis International

Back to TopCommentsE-mailPrintBookmark and Share

A new financial agreement with airlines using Indianapolis International Airport was approved Friday morning, settling what had been a fractious battle with airlines that had complained about having to foot part of the bill for FedEx Corp.’s local expansion.

Total costs in rents, landing fees and other charges for airlines are set to decrease over the five-year term of the agreement, according to the Indianapolis Airport Authority. Cost per enplaned passenger will gradually fall to $8.86 in 2015 from $10.50 this year.

The cost-per-enplanement had been estimated at $13, previously.

The airport said it will reduce its capital improvement program by $150 million over the term of the agreement as part of a cost-containment strategy.

“”We believe this agreement demonstrates our door is wide open for continued dialogue with airline executives about new and expanded air service in Indianapolis, especially to key West Coast markets,” Marsha Stone, chief financial officer of the Indianapolis Airport Authority, said in a statement.

According to the agreement, a landing fee of $1.95 per 1,000 pounds is forecast to drop to $1.80 by 2015 instead a previously projected $2.15.

 The new fee structure “helps ensure the continued success of FedEx,” the authority said.

FedEx’s Indianapolis cargo hub was at the center of what could have been disasterous outcome for the airport.

As IBJ previously reported, Northwest Airlines, Delta Air Lines, AirTran Airways, Continental Airlines and Southwest Airlines filed a complaint against the airport authority with the Federal Aviation Administration in 2007.

They alleged the FedEx expansion at Indianapolis could cost them an additional $23 million in landing fees through 2028.

That’s because the authority promised to reduce landing fees for FedEx at the same time it committed to spending $49 million for a new aircraft parking apron at the company’s hub.

The FAA dismissed the airlines' complaint in August 2008, but did so in part because it said the issue wasn’t yet ripe for FAA review. It noted the authority had yet to impose on airlines the costs related to the FedEx expansion.

Among other nods to airlines in the new airline agreement is cutting the term in half, to five years. Terminal rent remains constant at $95 per square foot. The airport authority also pledges to shave its operating and maintenance costs by $65 million.

 

ADVERTISEMENT

  • Curious too
    Is this why airline service here is so wretched?
  • $215 Million Question
    Interesting that the FedEx cargo-hub expansion cost was $214 million.

  • Question
    How is the airport going to shave $215 million in maintenance/operating/CAPEX expenses? What is being eliminated?

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I keep wondering why I keep hearing about this problem of corporations leaving America, and I never hear a reasonable proposal to lower corporate tax rates and raise personal rates on income from capital gains and dividends, especially for high earners. It is just too simple of a solution for Congress to embrace?

  2. Are you financially down and you need money to settle your dept,or you need money to start up a business or to invest on a huge business,we also offer Loans to individuals, Firms and cooperate bodies at low interest rate , loan terms determinant,Loan amount between the sum of $5,000.00 to $100,000,000.00. US Dollars And Euro. Loan for developing businesses a competitive edge/ business expansion. We Offer The Following Kinds Of Loans. Personal Loans (Secure and Unsecured) Business Loans (Secure and Unsecured) Consolidation Loan FIRST INFORMATIONS NEEDED ARE: BORROWER’S DATA’S INFORMATION,FILL AND RETURN FOR QUICK START UP PROCESS. Name:_________ Last Name:_________ Age:_________ Contact Address:_________ Country:_________ Amount Needed as Loan:_________ Loan Duration:_________ Phone Number__________ Monthly Income/Yearly Income:_________ Purpose for Loan:_________ Occupation:_________ How Soon is Loan Needed__________ Email via: albertbrownfirm@outlook.com

  3. is a disaster. SR37 already needs to be built to interstate standards between 465 and SR144. Southport Road is a mess each morning and evening.

  4. Bass Pro Shops would be good for the mall as well as a Giant Eagle Market District or a Jungle Jim's International Market Place grocery store like the one near Cincinnati Ohio.A Disney quest indoor theme park would be good.An Academy outdoor store would be good too.Indoor Circus shows and magic shows would be good as well. A casino with sports bar would be good.A Disney theater inside that shows movies and Broadway shows would work.Nashville Tennessee concert shops with indoor neon lights would be good.How about a theater that shows travel shows and theme parks. A train store would be good.How about a giant toy store with high tech video games.

  5. This development is in addition to Allpoints Midwest 5, Aitrtek, a recent FedEx and more in Plainfield. Greenwood and Brownsburg also have similar projects.

ADVERTISEMENT